August 12, 2009

Business Performance for the First Quarter of Fiscal 2010
(on a consolidated basis)
1. Outline of business operations for the first quarter (April 1 to June 30, 2009)(1) Operating results(Amounts less than ¥1 million are omitted.)
Net sales(YoYchange)(¥ million)

First quarter offiscal 2010
First quarter offiscal 2009

Operating income

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

Net income(YoYchange)(¥ million)

96,637(22.6%)

5,042(44.9%)

4,733(49.8%)

2,622(49.2%)

124,843-

9,152-

9,428-

5,163-Earnings pershare (Yen)First quarter of fiscal 2010
First quarter of fiscal 2009

6.56
12.83

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

Net assets(¥ million)

Net assets
per share (¥)

Equity ratio (%)

618,078

204,85031.0

479.29534,350

194,25033.9

452.67

Notes:
EquityFirst quarter of fiscal 2009: ¥191,653 million
FY2008 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(¥ million)

First half of fiscal
2010
FY2010 full term

Recurringincome

Operating income(YoYchange)(¥ million)(YoYchange)(¥ million)

Net income(YoYchange)(¥ million)(YoYchange)

Earnings pershare(Yen)

205,000(19.9%)

11,000(39.4%)

10,300(43.7%)

5,500(44.6%)

13.75

450,000(9.2%)

27,400(6.0%)

24,600(12.0%)

13,300(19.6%)

33.26

13. Business Performance and Financial Results (consolidated basis)
Business performance for the first quarter of fiscal 2010
During the first-quarter period (April 1 to June 30, 2009) of fiscal 2010 signs of a bottomingout of the economy were seen in certain sectors thanks to the government’s stimulus packages,
but against the background of a continued recession in the global economy, conditions in Japanremained severe, with sharp inventory adjustments, major production cutbacks, and drastic
curbs on capital investment. In addition, consumer spending remained stagnant amid aworsening employment situation.
In the Company’s main user industries – the steel, non-ferrous metals, automotive, andsemiconductor industries – a number of plants were closed and production lines stopped inresponse to the need for sharp inventory adjustments and production cuts. As a result, overall
demand for the products of the TNSC Group remained weak despite certain encouraging signs
such as an upturn in demand for gases for use by makers of ethylene and LCD panels in China
and other East Asian countries.
Amid these circumstances, the Group posted business results on a consolidated basis
for the reporting first quarter as follows: sales of ¥96,637 million (down 22.6% year-on-year),
operating income of ¥5,042 million (down 44.9%), recurring income of ¥4,733 million (down49.8%), and net income of ¥2,622 million (down 49.2%).
Breakdown of business performance by operational segment
Gas BusinessIn the Gas Business, we experienced a resurgence in demand in the Japanese market fromchemicals companies and certain electronics parts manufacturers such as LCD panel makers.
We also saw some encouraging signs from our automaker customers, where inventoryadjustments have just about run their course. Even so, a fullscale recovery has yet to occur,with sales volumes of the mainline products oxygen, nitrogen, and argon as well as specialty
gases staying below the levels of the corresponding quarter of FY2009. Overseas, meanwhile,
we experienced sharp drops in demand for gases in America and East Asia, and the effects of
the yen’s appreciation compounded this factor, pushing sales down sharply on a year-on-yearcomparison.

2

As a result, sales of the Gas Business declined by 22.7% year-on-year, to ¥67,365
million, while operating income fell 34.9% to ¥4,704 million.
Machinery & Equipment Business
Orders for installation work came in at a fairly normal pace, but rethinking and postponementof capital investment plans in our main customer industries pushed down demand for gasrelated equipment (including installation), equipment for the electronic industry (includinginstallation), and welding and cutting equipment. Consequently, sales were down sharply fromthe previous first-quarter period.
Sales of the Machinery & Equipment Business posted a year-on-year drop of 25.6% to¥23,962 million, while operating income was down by 62.3% at ¥831 million.
Housewares Business and Others
In the Housewares Business, sales of our mainline sports bottles held firm, but all otherbusinesses suffered from a decline in demand, causing overall sales to fall by 4.0% from thelevel of the previous first quarter, to ¥5,310 million, while operating income came to ¥1,273
million, up 16.0% year-on-year.
Breakdown of business performance by geographical segment
JapanIn the Gas Business, the start of a recovery in demand was seen from the chemicals andautomotive industries and from some sectors of the electronics industry, but no recovery wasevident in the steel, non-ferrous metals, shipbuilding, machinery, and construction industries.
As a result, total segment sales fell below the previous year’s level. In the Housewares
Business, shipments of sports bottles continued to be brisk.
Sales in Japan were down 21.0% year-on-year, at ¥76,911 million, while operating
income was down 48.7% at ¥3,796 million.
North America3

The economic downturn caused sales of oxygen, nitrogen, and argon to post year-on-year
declines in North America, and a sharp fall in sales of specialty gases to the semiconductor
industry was also recorded. Sales on a local currency basis posted declines while on a yen basis
the rate of decline was larger due to the Japanese currency’s appreciation. Sales were down
25.2% year-on-year, at ¥15,581 million, while operating income fell sharply by 44.2% to¥1,112 million.
Other Regions
Customer companies in Southeast Asia have also been heavily impacted by the global
downturn, and sales in the Gas Business posted a year-on-year decline for the quarter. Ourmajor users in Taiwan, the semiconductor manufacturers, are holding back on capital
investment, and as a result we recorded a decline in sales on a local currency basis. Once again,
the Japanese currency’s appreciation accelerated the margin of decrease in sales on a Japanesecurrency basis.
Total sales for Other Regions amounted to ¥4,145 million for a year-on-year decreaseof 38.0%. Operating income was down 28.4% at ¥328 million.

44. Results by operating segment
Fiscal 2010 (April 1 to June 30, 2009)(Millions of yen)
MachineryandEquipment
BusinessHousewares
Business andOthers

67,36523,962

5,310

96,637-

96,637

3

1,959

8

1,972

(1,972)-

67,3684,704

25,922
831

5,319
1,273

98,6106,809(1,972)(1,766)

96,637
5,042

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

Total

Eliminations or
Corporate

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
Stainless steel vacuum bottles(household, laboratory), vacuum thermalHousewares Business insulation cooking pots, assembly, processing and inspection ofand Others
electronic components, maintenance of facilities, other outsourced
business
3. Changes in accounting standards
Previous term: Changes applicable with effect from the first quarter of fiscal 2008
Accounting standards for valuation of inventory assets

5For the previous first quarter, the Company applied the “Accounting Standards for
Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement No. 9on July 5, 2006). The changes in the accounting standards have no material effect on theincome statement.
Unification of accounting policies applied to foreign subsidiaries
For the previous first quarter, the Company applied the “Practical Solution on Unification ofAccounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”(ASBJ Practical Issues Task Force No. 18 on May 17, 2006). As a result, operating income for
the Gas Business for the previous first quarter decreased by ¥358 million.
Application of accounting standards for lease transactions
For the previous first quarter, the Company applied the Accounting Standard for Lease
Transactions (ASBJ Statement No. 13 (June 17, 1993 (Business Accounting Council, FirstSubcommittee) revised March 30, 2007) and the Implementation Guidance on the AccountingStandard for Lease Transactions (ASBJ Guidance No. 16 (January 18, 1994 (JapaneseInstitute of Certified Public Accountants, Accounting System Committee) revised March 30,2007). The changes in the accounting standards have no material effect on the incomestatement.
Reporting term: Changes applicable with effect from the first quarter of fiscal 2009
Changes 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, wepreviously recognized the total lump-sum amount of the completed contract values atcompletion, excepting for contracts with a contract amount of ¥1,000 million or larger and awork period of longer than one year to which the percentage-of-completion method wasapplied. However, with effect from the reporting first quarter, the Accounting Standards forConstruction Contracts (ASBJ Statement No. 15, issued on December 27, 2007) and theGuidance on Application of Accounting Standards for Construction Contracts (ASBJ6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 reporting period (except for short-periodwork); and the percentage of construction already completed by the end of the reporting
period 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, the completed-contract
method has been applied.
This change has no effect on sales or operating income.
4. Additional information
Previous first quarter (first quarter of fiscal 2009)
Changes in useful life of machinery and equipment
Effective from the previous first quarter, the Company and its consolidated subsidiaries inJapan have changed their accounting policy for the depreciation of machinery and equipment inline 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 previous first quarter decreased by ¥533 million
for the Gas Business, ¥11 million for the Machinery and Equipment Business, and ¥2 million
for the Housewares Business and Others.

75. Results by geographical segment
Fiscal 2010 (April 1 to June 30, 2009)(Millions of yen)North
America

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

Other countries

Total

Eliminations orCorporate

Consolidated

76,911

15,581

4,145

96,637-96,637768

567

1,0802,416(2,416)-

77,6793,796

16,149
1,112

5,225
328

99,054
5,237(2,416)(194)

96,637
5,042

Notes
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 2008
Accounting standards for valuation of inventory assets
For the previous first quarter, the Company applied the “Accounting Standards for
Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement No. 9on July 5, 2006). The changes in the accounting standards have no material effect on theincome statement.
Unification of accounting policies applied to foreign subsidiaries
For the previous first quarter, the Company applied the “Practical Solution on Unification ofAccounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”(ASBJ Practical Issues Task Force No. 18 on May 17, 2006). As a result, operating incomeon business operations in North America for the previous first quarter decreased by ¥358million.
Application of accounting standards for lease transactions
For the previous first quarter, the Company applied the Accounting Standard for Lease
Transactions (ASBJ Statement No. 13 (June 17, 1993 (Business Accounting Council, First8Subcommittee) revised March 30, 2007) and the Implementation Guidance on the AccountingStandard for Lease Transactions (ASBJ Guidance No. 16 (January 18, 1994 (JapaneseInstitute of Certified Public Accountants, Accounting System Committee) revised March 30,2007). The changes in the accounting standards have no material effect on the income
statement.
Reporting term: Changes applicable with effect from the first quarter of fiscal 2009
Changes 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 ¥1,000 million or larger and awork period of longer than one year to which the percentage-of-completion method wasapplied. However, with effect from the reporting first quarter, 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 reporting period (except for short-periodwork); and the percentage of construction already completed by the end of the reporting
period 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, the completed-contract
method has been applied.
This change has no effect on sales or operating income.
3. Additional information
Previous first quarter (first quarter of fiscal 2009)
Changes in useful life of machinery and equipment

9Effective from the previous first quarter, the Company and its consolidated subsidiaries inJapan have changed their accounting policy for the depreciation of machinery and equipment inline 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 previous first quarter on business operations inJapan decreased by ¥546 million.

10