November 13, 2009

Business Performance for the First Two Quarters of Fiscal 2010
(on a consolidated basis)
1. Outline of business operations for the first two quarters of fiscal 2010 (April 1 toSeptember 30, 2009)(1) Operating results(Amounts less than ¥1 million are omitted.)
Net sales(¥ million)

First twoquarters of fiscal
2010
First twoquarters of fiscal
2009(YoYchange)

Operating income

Recurring income(YoYchange)(YoYchange)(¥ million)(¥ million)

Net income(YoYchange)(¥ million)

204,157(20.2%)

12,761(29.7%)

12,358(32.5%)

6,828(31.3%)

255,990-

18,143-18,308

-

9,936

-

Earnings pershare (Yen)First two quarters of fiscal 2010
First two quarters of fiscal 2009

17.08
24.69

(2) Financial position(As of end of terms; amounts less than ¥1 million are omitted.)
Total assets(¥ million)
First two quarters of fiscal
2010 (Sept. 30, 2009)
Reference: FY2009 full term(March 31, 2009)

Net assets(¥ million)

Net assets
per share (¥)

Equity ratio (%)

612,763

206,51331.5

483.17534,350

194,25033.9

452.67

Notes:
EquityFirst two quarters of fiscal 2010: ¥193,188 million
FY2009 full term: ¥181,037 million

2. Forecasts for business operations for the fiscal 2010 full term (April 1, 2009 – March 31, 2010)(Amounts less than ¥1 million are omitted.)
Net sales(YoYchange)
450,000(9.2%)(¥ million)

FY2010 full term

RecurringincomeOperating income(YoYchange)
27,400(6.0%)(¥ million)

1(YoYchange)
24,600 (12.0%)(¥ million)

Net income(YoYchange)
13,300 (19.6%)(¥ million)

Earnings pershare(Yen)

33.26

3. Business Performance and Financial Results (consolidated basis)
Business performance for the first two quarters of fiscal 2010
During the first two quarters (April 1 to September 30, 2009) of fiscal 2010, the Japanese
economy showed signs of a bottoming-out, primarily due to increased consumer spending, andthanks to the implementation of economic stimulus packages in the world’s leading economies,
including Japan’s, and a recovery in demand which pushed up capacity utilization rates inleading industries, owing largely to growth in exports to China and other markets. However,the future direction of the economy remained unclear, as manufacturers continued to curb
capital investment and concerns over high unemployment persisted.
In the Company’s main user industries – the steel, non-ferrous metals, automotive, andsemiconductor industries – inventory adjustments ran their course and production recoveredagainst the backdrop of an increase in exports, mainly of LCDs and steel products to China
and other East Asian countries. The increase in demand, as a whole, however, was stillinsufficient to realize a full-scale recovery.
Amid these circumstances, the Group made concerted efforts to further reduce costs
and recover profitability. These efforts were insufficient to offset the adverse effects of weak
demand. Consequently, the Group posted the following business results on a consolidated basis
for the reporting first two quarters: sales of ¥204,157 million (down 20.2% year-on-year),
operating income of ¥12,761 million (down 29.7%), recurring income of ¥12,358 million(down 32.5%), and net income of ¥6,828 million (down 31.3%). Both revenues and earnings
declined year-on-year.

Breakdown of business performance by operational segment
Gas BusinessIn the Gas Business, we experienced a resurgence in demand from Japanese companies
exporting LCD panels and steel products to the Chinese and other East Asian markets. We
also saw some encouraging signs of a recovery in demand from our users, primarily chemicalcompanies, automakers, and steelmakers. Even so, a full-scale recovery has yet to occur, withsales volumes of our mainline products of oxygen, nitrogen, and argon as well as specialty
gases staying below the levels of the corresponding six-month period of the previous fiscal

2year. Overseas, meanwhile, demand for gases in America remained weak, and the effects of theyen’s appreciation against the dollar compounded this factor, pushing sales down sharply on ayear-on-year comparison.
As a result, sales of the Gas Business declined by 18.5% year-on-year, to ¥142,603
million, while operating income fell 31.5% to ¥9,608 million.
Machinery & Equipment Business
Demand remained weak overall in response to reductions in or postponements of capital
investment in our main customer industries, which led to a decline in demand for electronicsrelated equipment, (including installation), and air separation plants. Consequently, sales
revenues were down sharply from the previous first two-quarter period.
Sales of the Machinery & Equipment Business posted a year-on-year drop of 27.1% to¥51,395 million, while operating income was down by 40.4% at ¥2,999 million.
Housewares Business and Others
In the Housewares Business, sales of our popular portable mug and other mainline products
held firm, but other businesses generally suffered from a decline in demand, causing overallsales to fall by 2.7% from the level of the previous first-half period, to ¥10,159 million, while
operating income came to ¥2,182 million, up 30.7% year-on-year.
Breakdown of business performance by geographical segment
JapanIn the Gas Business, the start of a recovery in demand was seen from our user industries ofchemicals, electronics, and steel, but demand remained sluggish in the shipbuilding, metalprocessing, and construction industries. In the Machinery & Equipment Business, total
segment sales fell below the previous year’s level due to a decline in demand for large-scale
projects. In the Housewares Business, shipments of portable mugs and similar products
continued to be brisk.
Sales in Japan were down 20.9% year-on-year, at ¥158,350 million, while operating
income was down 22.4% at ¥10,773 million.

3North America
The ongoing economic downturn caused demand to remain weak in both the Gas andMachinery & Equipment Businesses, causing sales of oxygen, nitrogen, and argon to post
year-on-year declines in North America. A sharp fall in sales of specialty gases to theelectronics industry was also recorded. Sales posted on a yen basis also resulted in a large
year-on-year decline, due partly to the yen’s appreciation against the dollar. Consequently,
sales decreased 13.9% year-on-year to ¥35,920 million, while operating income fell sharply by
61.7% to ¥1,817 million.
Other Regions
In Southeast Asia, sales in our mainstay Gas Business posted a year-on-year decline for thesix-month period. Growth in demand as a result of the beginnings of an economic recovery
was insufficient to fully offset a substantial decline in sales to our major users in Taiwan ‒semiconductor and LCD manufacturers. Sales on a Japanese-currency basis declined year-onyear, which is attributable in part to the yen’s appreciation.
Total sales for Other Regions amounted to ¥9,887 million for a year-on-year decreaseof 29.3%, while operating income was down 23.0% at ¥886 million.

44. Results by operating segment
First two quarters of fiscal 2010 (April 1 to September 30, 2009)(Millions of yen)
MachineryandEquipment
Business

Housewares
Business andOthers

142,603

51,395

10,159204,157-204,157

3

5,028

17

5,049

(5,049)-142,607
9,608

56,423
2,999

10,1762,182

209,207
14,790(5,049)(2,028)204,157
12,761Gas
Business
Sales(1) Sales to externalcustomers(2) Sales from intersegment transactions andtransfers
Total
Operating income

Total

Eliminations orCorporate

Consolidated

First two quarters of fiscal 2009 (April 1 to September 30, 2008)(Millions of yen)
MachineryandEquipment
BusinessHousewares
Business andOthers

175,019

70,535

10,436

255,990-

255,990

11

9,910

41

9,963

(9,963)-

175,031
14,02880,445
5,034

10,477
1,670

265,954
20,733(9,963)(2,589)255,990
18,143

GasBusinessSales(1) Sales to externalcustomers(2) Sales from intersegment transactions andtransfers
Total
Operating income

Total

Eliminations orCorporate

Consolidated

Notes
1. Segmentation method
Products (whether developed and/or made in-house or by other companies [i.e. bought-inmerchandise]) are allocated to one of the three segments of the Gas Business, the Machineryand Equipment Business, and the Housewares Business and Others.
2. The principal products and services included in the three segments are shown in the tablebelow.
Business segment
Main products
Oxygen, nitrogen, argon, carbon dioxide, helium, rare gases such as
xenon and neon, hydrogen, medical gases(oxygen, dinitrogen
Gas Businessmonoxide), specialty gases (semiconductor materials gases, standard
reference gas), dissolved acetylene, liquid petroleum gas (LPG), othergases, stable isotopes, equipment lease
Cutting and welding equipment, welding materials, cylinders,
semiconductor related engineering/equipment, semiconductor
manufacturing equipment, medical equipment, air separation plants(oxygen, nitrogen, argon, rare gases), cryogenic air separation plants,
Machinery andultra-low-temperature equipment, high-vacuum equipment, pressure
Equipment Businessswing adsorption (PSA) gas generators, hydrogen generators, gas
compressors, gas expanders, liquefied gas storage/pumps, vacuum
brazing, atomic power/space development equipment and other related
equipment
5

Stainless steel vacuum bottles (household, laboratory), vacuum
Housewares Business thermal insulation cooking pots, assembly, processing and inspectionof electronic components, maintenance of facilities, other outsourced
and Others
business
3. Changes in accounting standards
Previous term: Changes applicable with effect from the first quarter of fiscal 2009
Accounting standards for valuation of inventory assets
From the first quarter of the previous term, the Company applied the “Accounting Standards
for Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement
No. 9 on July 5, 2006). The changes in the accounting standards have no material effect on theincome statement.
Unification of accounting policies applied to foreign subsidiaries
From the first quarter of the previous term, the Company applied the “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated FinancialStatements” (ASBJ Practical Issues Task Force No. 18 on May 17, 2006). As a result,operating income for the Gas Business for the first two quarters of the previous term decreasedby ¥715 million.
Application of accounting standards for lease transactions
From the first quarter of the previous term, the Company applied the Accounting Standard forLease Transactions (ASBJ Statement No. 13 (June 17, 1993 (Business Accounting Council,
First Subcommittee) revised March 30, 2007) and the Implementation Guidance on theAccounting Standard for Lease Transactions (ASBJ Guidance No. 16 (January 18, 1994(Japanese Institute of Certified Public Accountants, Accounting System Committee) revised
March 30, 2007). The changes in the accounting standards have no material effect on theincome statement.
Reporting term: Changes applicable with effect from the first quarter of fiscal 2010
Changes in accounting standards for recognition of construction revenues and cost ofcompleted work

6

With regard to accounting standards employed for the recognition of revenues resulting fromconstruction work undertaken for customers using the completed-contract method, we
previously recognized the total lump-sum amount of the completed contract values atcompletion, excepting for contracts with a contract amount of ¥1billion or larger and a work
period of longer than one year to which the percentage-of-completion method was applied.
However, with effect from the first quarter of the current term, the Accounting Standards forConstruction Contracts (ASBJ Statement No. 15, issued on December 27, 2007) and theGuidance on Application of Accounting Standards for Construction Contracts (ASBJ
Guidance No. 18, issued on December 27, 2007) have been applied to construction contracts.
The percentage-of-completion method is applied to construction contracts meeting thefollowing criteria: construction had started within the first quarter of the current term (exceptfor short-period work); and the percentage of construction already completed by the end of thereporting second quarter can be estimated fairly reliably. (The estimation is based on the
proportion of direct costs incurred for each work phase as compared with the estimated total
cost for the entire contract.) Other than the above-mentioned construction contracts, thecompleted-contract method has been applied. This change has no effect on sales revenues oroperating income.
4. Additional information
Previous term (first two quarters of fiscal 2009)
Changes in useful life of machinery and equipment
Effective from the first quarter of the previous term, the Company and its consolidated
subsidiaries in Japan have changed their accounting policy for the depreciation of machineryand equipment in line with amendments to the Income Tax Law effective from fiscal 2009.
Accordingly, the useful life of machinery and equipment has been changed to more
effectively reflect the actual useful lives.
As a result, operating income for the first two quarters of the previous term decreasedby ¥1,102 million for the Gas Business, ¥25 million for the Machinery and Equipment
Business, and ¥7 million for the Housewares Business and Others compared with the amounts
calculated under the previous standards.

75. Results by geographical segment
First two quarters of fiscal 2010 (April 1 to September 30, 2009)(Millions of yen)JapanSales(1) Sales to externalcustomers(2) Sales from intersegment transactions
Total
Operating income

North
America

Other countries

Total

Eliminations orCorporate

Consolidated

158,350

35,9209,887

204,157-

204,157

1,348

1,616

2,000

4,964

(4,964)-159,698
10,77337,536
1,817

11,887886

209,122
13,477(4,964)(715)

204,157
12,761First two quarters of fiscal 2009 (April 1 to September 30, 2008)(Millions of yen)JapanSales(1) Sales to externalcustomers(2) Sales from intersegment transactions
Total
Operating income

North
America

Other countries

Total

Eliminations or
Corporate

Consolidated

200,280

41,715

13,994

255,990-

255,990

3,949

5,749

1,870

11,569(11,569)-

204,229
13,88447,465
4,746

15,864
1,151

267,559
19,781(11,569)(1,637)

255,990
18,143Notes
1. Principal countries in the North America and Other Countries segments are as follows:(1) North America: The United States of America(2) Other countries: Singapore, Malaysia, Philippines, China, Taiwan etc.
2. Changes in Accounting Standards
Previous term: Changes applicable with effect from the first quarter of fiscal 2009
Accounting standards for valuation of inventory assets
From the first quarter of the previous term, the Company applied the “Accounting Standards
for Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement
No. 9 on July 5, 2006). The changes in the accounting standards have no material effect on theincome statement.
Unification of accounting policies applied to foreign subsidiaries
From the first quarter of the previous term, the Company applied the “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated FinancialStatements” (ASBJ Practical Issues Task Force No. 18 on May 17, 2006). As a result,operating income from business operations in North America for the first two quarters of the8

previous term decreased by ¥715 million compared with the amounts calculated under theprevious standards.
Application of accounting standards for lease transactions
From the first quarter of the previous term, the Company applied the Accounting Standard forLease Transactions (ASBJ Statement No. 13 (June 17, 1993 (Business Accounting Council,First Subcommittee) revised March 30, 2007) and the Implementation Guidance on theAccounting Standard for Lease Transactions (ASBJ Guidance No. 16 (January 18, 1994
(Japanese Institute of Certified Public Accountants, Accounting System Committee) revised
March 30, 2007). The changes in the accounting standards have no material effect on theincome statement.
Reporting term: Changes applicable with effect from the first quarter of fiscal 2010Changes in accounting standards for recognition of construction revenues and cost ofcompleted work
With regard to accounting standards employed for the recognition of revenues resulting fromconstruction work undertaken for customers using the completed-contract method, we
previously recognized the total lump-sum amount of the completed contract values atcompletion, excepting for contracts with a contract amount of ¥1 billion or larger and a work
period of longer than one year to which the percentage-of-completion method was applied.
However, with effect from the first quarter of the current term, the Accounting Standards forConstruction Contracts (ASBJ Statement No. 15, issued on December 27, 2007) and theGuidance on Application of Accounting Standards for Construction Contracts (ASBJ
Guidance No. 18, issued on December 27, 2007) have been applied to construction contracts.
The percentage-of-completion method is applied to construction contracts meeting thefollowing criteria: construction had started within the first quarter of the current term (exceptfor short-period work); and the percentage of construction already completed by the end of thereporting second quarter can be estimated fairly reliably. (The estimation is based on theproportion of direct costs incurred for each work phase as compared with the estimated total
cost for the entire contract.) Other than the above-mentioned construction contracts, thecompleted-contract method has been applied. This change has no effect on sales revenues oroperating income.

93. Additional information
Previous term (first two quarters of fiscal 2009)
Changes in useful life of machinery and equipment
Effective from the first quarter of the previous term, the Company and its consolidated
subsidiaries in Japan have changed their accounting policy for the depreciation of machineryand equipment in line with amendments to the Income Tax Law effective from fiscal 2009.
Accordingly, the useful life of machinery and equipment has been changed to more
effectively reflect the actual useful lives.
As a result, operating income from business operations in Japan for the first twoquarters of the previous term decreased by ¥1,135 million compared with the amounts
calculated under the previous standards.

10