November 10, 2011
Taiyo Nippon Sanso Corporation

Consolidated Financial Performancefor the First Two Quarters of Fiscal Year 2012
(Based on Japan GAAP)

1. Financial results for the first two quarters (April 1, 2011 – September 30, 2011)(1) Operating results
Net sales(¥ million)

YoY
Change(Amounts less than ¥1 million are omitted)
Operating income
Ordinary income(¥ million)

Net income

YoYChange(¥ million)

YoYChange(¥ million)

YoY
ChangeFirst two
234,799(1.1)%
15,774(12.5)%
quarters ofFY2012First two237,306
16.2%
18,03741.3%
quarters ofFY2011
Note: Comprehensive income
First two quarters of FY2012: ¥5,192 million (up 119.8%)
First two quarters of FY2011: ¥1,623 million (-%)

16,005(10.3)%

8,414(17.7)%

17,83644.3%

10,222

49.7%

First two quarters of FY2012

Earnings pershare (Yen)
21.13

Diluted earnings
per share (Yen)-First two quarters of FY2011

25.57

-

Total assets(¥ million)
584,428

Net assets(¥ million)
208,090

Equity ratio (%)

207,41631.2(2) Financial position
First two quarters ofFY2012 (September 30, 2011)
FY2011 (March 31, 2011)617,676
Reference: Equity
First two quarters of FY2012: ¥193,052 million
FY2011 full term: ¥192,571 million

133.0

2. Forecasts for business operations for FY2012 (full term; April 1, 2011 –March 31, 2012)
Net sales(¥ million)

Operatingincome
YoY(¥ million)

ChangeFY2012(full term)

493,000

1.9%

YoY

Ordinary income(¥ million)

Change35,000(1.3)%

YoY

Net income(¥ million)

Change32,000(6.3)%

YoY

Earnings
per share(Yen)

Change17,700

39.0%

44.59

Note: No revisions have been made to recently announced forecasts.
3. General information relating to the first two quarter results
Overall business performance (consolidated basis)
In the first two quarters of the fiscal year under review (April 1-September 30, 2011),
fears emerged that the world economy was headed for a slowdown, with growth in
the US continuing to sputter, Europe struggling with worsening sovereign debt
problems and growth in China and the emerging markets tailing off somewhat.
Meanwhile, economic prospects for Japan became a murkier as worrying trends suchas electricity shortages, blunted exports due to the soaring Japanese yen and an
accelerating shift abroad by Japanese manufacturing companies countered the boost
from rebuilding and recovery works in the areas hit by the Great East Japan
Earthquake in March.
Against this backdrop, first-half sales on a consolidated basis fell 1.1% yearon-year to ¥234,799 million, operating income slipped 12.5% to ¥15,774 million,ordinary income fell 10.3% to ¥16,005 million and net income was down 17.7% at¥8,414 million.
Please note that full details of the three-year business plan (“Gear Up 10”—
Challenges in Becoming a Global Company III) launched during the period underreview were disclosed on November 10, 2011, including key priorities and numericaltargets in light of the Great East Japan Earthquake.
A breakdown of business performance by operational segment is as follows.
(1) Industrial Gases Business
Demand in key customer industries such as steelmaking and chemicals is gradually
recovering after a sharp drop at the beginning of the period due to the earthquake
disaster, but sales of oxygen, nitrogen and argon were all slightly down year-on-year.
Sales of machinery and equipment too were significantly down due to shrinking
demand from major capital investment projects such as air separation plants, thoughin Japan sales of welding and cutting equipment and materials were up. In overseas

2markets, sales rose on a year-on-year basis due partly to the contribution of earnings
from newly acquired companies in North America from merger activity in theprevious fiscal period.
As a result of the foregoing, sales of industrial gases increased 1.1% year-onyear to ¥144,608 million, while operating income edged up 0.9% to ¥11,155 million.
(2) Electronics Business
Shipments of gases for electronic device production were down year-on-year as
capacity utilization sank at major manufacturers of semiconductors, LCD panels andother products following the earthquake disaster and the persistently high Japaneseyen. However, thanks to demand from Korea, Taiwan and China, sales of electronicmaterials gases increased slightly year-on-year. Meanwhile, sales of electronicsrelated equipment and installations fell steeply year-on-year due to reduced capital
investment demand, and sales of semiconductor manufacturing equipment also took a
hit as major users in Japan revised or postponed their capital expenditure plans,
despite strong orders from Korea and Taiwan.
As a result of the above, sales in Electronics Business fell 9.0% year-on-yearto ¥56,179 million, while operating income fell 39.7% to ¥3,146 million.
(3) Energy BusinessAlthough shipments of LP gas were down year-on-year in volume terms, sales rosedue to persistently high import prices.
As a result, sales in energy-related businesses increased 6.3% year-on-year to¥17,748 million, while operating income jumped 40.2% to ¥660 million.
(4) Other Businesses
In the Medical Business, we took Groupwide measures to ensure a stable supply of
medical-use gases to areas affected by the Great East Japan Earthquake. Sales of
medical equipment devices were up also year-on-year on buoyant demand in thehome healthcare market. In the Thermos Business, sales were down year-on-year.
As a result of the foregoing, sales in Other Businesses increased 2.3% yearon-year to ¥16,263 million, while operating income fell 27.9% to ¥1,505 million.

34. Segment information
Results by operating segment
First Two Quarters, FY2011 (April 1, 2010 to September 30, 2010)(¥ million)
Reportable segment
Electronics
EnergyOther Businesses
BusinessBusiness(Note 1)

Industrial
Gases BusinessSales(1) Sales to external
Customers(2) Sales frominter-segment
transactions andtransfers
Total
Operating income

Consolidated

Total

Adjustments(Note 2)

142,964

61,751

16,69815,890237,306-

237,306

905

38

970

1,439

3,354

(3,354)-

143,870
11,05461,7895,217

17,669471

17,3302,088

240,660
18,831(3,354)(794)

237,306
18,037Notes
1. Other Businesses include the Medical Business, Thermos Business and real estate
operations.
2. The ¥794 million negative adjustment for segment earnings comprises ¥186 millionof inter-segment eliminations and companywide expenses of ¥607 million that werenot allocated to any particular reportable segment. These companywide expenses
relate principally to basic researches that were not particularly allocated to reportablesegments.
Results by operating segment
First Two Quarters, FY2012 (April 1, 2011 to September 30, 2011)(¥ million)
IndustrialGases
BusinessSales(1) Sales toexternal
Customers(2) Sales frominter-segment
transactions andtransfers
Total
Operating income

Reportable segment
Electronics
EnergyOtherBusinessBusinessBusinesses(Note 1)

Consolidated

Total

Adjustments(Note 2)

144,608

56,17917,74816,263

234,799-

234,799

1,216

41

1,437

1,348

4,042

(4,042)-

145,824
11,15556,2203,146

19,185660

17,612
1,505

238,842
16,467(4,042)(693)

234,799
15,774Notes
1. Other Businesses include the Medical Business, Thermos Business and real estate
operations.
2. The ¥693 million negative adjustment for segment earnings comprises ¥127 millionof inter-segment eliminations and companywide expenses of ¥565 million that werenot allocated to any particular reportable segment. These companywide expenses
relate principally to basic researches that were not particularly allocated to reportablesegments.
3. (Major assets subject to depreciation and amortization and method of depreciation)

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The Company has been using the declining-balance method for calculating
depreciation of property, plant and equipment other than machinery and plant forlease and structures (not including ancillary facilities) acquired since April 1, 1998.
However, from the first quarter of the current fiscal year, we have switched to thestraight-line method.
In the new Medium-Term Business Plan, TNSC will continue to focus
management resources on growth markets such as electronics and emerging markets.
With regard to mid-sized and small gas supply facilities, our principal items ofproperty, plant and equipment, we expect stable long-term utilization, with capital
investments focusing on replacement works in anticipation of stable demand fromestablished customers while we reduce investment targeting facilities for newcustomers. Accordingly, we decided it would be more logical to adopt the straightline method for earnings statements in light of the distribution of expenses at aconstant pace for long-term period.
As a result of this change, segment earnings in the first two quarters(consolidated basis) has increased by ¥502 million (Industrial Gases), ¥371 million(Electronics), ¥15 million (Energy) and ¥54 million (Other). Adjustments increased¥47 million.
5. Subsequent Event(1) Transfer of SDS and VAC businesses
1) Purpose and reason
Through its wholly owned subsidiary Matheson Tri-Gas, Inc. (“MTG”), the Company
had a license with Advanced Technology Materials Inc. (“ATMI”), under which theGroup had global marketing rights for Safe Delivery Source (“SDS”) and Vacuum
Actuated Cylinder (“VAC”) gases for ion implantation processes. Recently, it hasreached an agreement to transfer the businesses concerned to ATMI, for all world
markets except Japan.
In tandem with this transfer, the Group will continue to focus on electronics-related
businesses, including development of semiconductor and solar cell materials gases.
2) Recipient companyAdvanced Technology Materials, Inc.
3) Businesses to be transferred
Safe Delivery Source (SDS) and Vacuum Actuated Cylinder (VAC) gas businesses,outside Japan
In future, these businesses will be handled as detailed below.

5Marketing in JapanThe Company and ATMI shall sign a new contract covering Japan, and marketing
will continue to be handled by the Company, as before.
Marketing outside Japan
After a transitional period, ATMI shall take over marketing. MTG and Group
companies shall continue to offer customer services to enable a smooth transition.
Manufacturing
ATMI and MTG shall continue manufacturing operations. There will be no change
to production networks in Japan, either.
4) Timing of the transfer
October 31, 20115) Price
The transfer price shall be $95 million. The Company plans to recognize gains on thistransfer of business, though exact amount is currently under review.
(2) Tender offer for Leeden shares
At a meeting of the Board of Directors held on November 7, 2011, the Company
decided to make a tender offer (the “Tender Offer”), through its wholly-owned
subsidiary Taiyo Nippon Sanso Singapore Pte Ltd (the “Tender Offeror”), for allshares of Leeden Limited, a company listed on the Singapore Exchange, on condition
that Leeden delists. Through its wholly owned subsidiary in Singapore, National
Oxygen Pte Ltd. (“NOX”), the Company already owns 9,055,000 or 5% of the issued
shares of Leeden.
1) Purpose of the Tender Offer
Through the Tender Offer, the Company aims to expand its industrial gas and related
businesses in the Southeast Asian area, which is expected to show steady economic
growth in future years.
The Company has mainly been involved in the industrial gas business inSoutheast Asia, but overlap exists with Leeden in terms of customer base for welding
and related equipment and safety tools. By making Leeden a subsidiary, marketing
networks of both companies would benefit from synergies, with each tapping and6

supplementing the other’s networks. This would contribute significantly to the growthof both companies.
With a history going back more than 50 years, Leeden has expanded its
business through integration of its welding and other equipment businesses withdownstream industrial gas businesses (manufacture and marketing of package gases)
through joint ventures with NOX. In partnership with the Company, both companies
would team up and share economic resources in the key markets of Singapore andMalaysia, as well as Thailand, Vietnam and the Philippines, leading, we hope, to an
expansion of Group business.
2) Leeden Limited
Name: Leeden Limited
Address: 1 Shipyard Road, Singapore 628128
Title and name of representative: Mr. Steven Tham Weng Cheong, Chairman & Chief
Executive Officer
Nature of business: Manufacture, procurement and marketing of welding and safety
equipment and high-pressure gas
Capital: 54.6 million Singapore dollars
Date of establishment: May 18, 1964
3) Outline of Tender Offer
Number of shares the Company seeks to purchase170,510,346 common shares
1. The Tender Offer is conditional upon the receipt of valid acceptances resulting
in the Tender Offeror holding more than 50% of the total number of shares,
including potential shares related to stock options (“Stock Options”) held byemployees of Leeden. There is no maximum limit for shares to be purchased.
2.

Before conclusion of the Tender Offer, if Leeden issues any new commonshares through exercise of Stock Options, it is planned that these commonshares shall also be subject to the Tender Offer. Please note that with regard toStock Options that are not exercised, the Tender Offeror at the time of theTender Offer shall offer to pay the difference between the offer price andexercise price, on condition that the holders of the Stock Options agree not toexercise them.

7Pricing of the offer
0.57 Singapore dollars per common share of stock
Period of the Tender Offer
The Tender Offer shall commence on granting of approval from the Singapore
Exchange
Funding needed for the Tender Offer (provisionally)
Up to 85.3 million Singapore dollars
DelistingIt is a condition of this Tender Offer that shareholders of Leeden convene anextraordinary general meeting and agree to delist the shares of their company.
Matters for agreement between the Tender Offeror and Leeden
In the Tender Offer, it is agreed that 44,645,000 shares (24.9% of all issued sharesin Leeden) held by Mr. Steven Tham Weng Cheong, Chairman and Chief
Executive Officer of Leeden, and 25,082,000 shares (14.0% of issued shares
including indirect shareholdings) held by Mr. Lee Chee Fatt, Leeden’s Managing
Director and Chief Operating Officer, shall be subject to the tender offer. However,
it is agreed that payment for half of the shares held by both men shall be in cash,
and that the other half shall be through exchange of shares, at a price equivalent tothe Tender Offer price. After the Tender Offer, it is planned that Mr. Tham and Mr.
Lee shall remain in their management roles at Leeden. In addition, it is agreed thatthe 9,055,000 Leeden shares held by NOX shall be exchanged for shares of theTender Offeror between this day and the launch of the Tender Offer, at a priceequivalent to the Tender Offer price.
Compulsory purchase
Regarding the Tender Offer, the Tender Offeror intends to exercise rights ofcompulsory purchase under Singaporean law to acquire all shares of Leeden,
provided that relevant conditions are satisfied regarding such compulsory purchaseunder Singaporean law.
Changes in share ownership following purchaseTotal shareholding before purchase: 0
Total acquired by transfer from NOX: 9,055,000 shares
Total shareholding after purchase (planned): 179,565,346 (100% of issued shares inLeeden).

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