MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEET
June 30, 2010ASSETS

Millions ofJapanese yen
CURRENT ASSETS:
Cash and time deposits
AAccounts
receivablei bl - tradedInventories
Short-term loans receivable
Other current assets
Less-Allowance for bad debts
Total current assets
PROPERTY AND EQUIPMENTEQUIPMENT:
Vessels and equipment
Other

INTANGIBLE ASSETSOTHER ASSETS:
Investment securities
Long-term loans receivable
Other investments
Less-Allowance for bad debts

Total assets* The figures are rounded down to the nearest million yen.

¥21,888
69
69,900900
745
27,3178,900(78)
128,673

768
537
1,305
6,733

15,07818,1902,855(4)36,119¥172 832¥172,832

LIABILITIES AND SHAREHOLDERS’ EQUITY

Millions ofJapanese yen
CURRENT LIABILITIES:
Accounts payable - trade
Short-term
hlloans payable
blCurrent portion of long-term loans payable
Accrued expenses
Income taxes payable
Advances Received
Provision for construction warranties
Other current liabilities
T t l currentt liTotal
liabilities
biliti¥69,200
10,945
12,141
2,974
1,924
1,692
2,508642
102
102,030030

LONG-TERM LIABILITIES:Long-term loans payable
Severance and retirement benefits
For employees
Long-term accounts payable
Other long-termlong term liabilities
Total long-term liabilities

155
328
4 694
4,694
13,969NET ASSETSSHAREHOLDERS' EQUITY:
Common stock;authorized - 102,868,000 shares
outstanding - 46
46,408,000
408 000 shares
Capital surplus
Retained earnings
Less-Treasury stock at cost
Total shareholders' equity

20,185
20185
20,915
20,576(1)
61,675

ACCUMULATED GAINS (LOSSES) FROM VALUATIONAND TRANSLATION ADJUSTMENTS
Net unrealized holding gains (losses) on securities
Unrealized losses on hedging derivative, net of tax
Foreign currency translation adjustments
Total accumulated gains (losses) from valuationand translation adjustments
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES:
Total net assets
Total liabilities, net assets* The figures are rounded down to the nearest million yen.

8,790

(10)
(543)
(6,547)(7,101)
2,258
56,832¥172,832

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENT OF INCOME
For year ended June 30, 2010SALESCOST OF SALES
Gross profit

Millions ofJapanese yen¥89,199
83,7585,440

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
O
Operatingi profit
fi (l(loss))

3,396
22,043043

OTHER INCOME (EXPENSES):Interest income and dividend income
Interest expense
Equity in earnings of affiliates
Gain on valuation of derivatives
F i exchange
Foreignhgaini (loss),(l ) nett
Gain on disposal of fixed asset
Other, net
Total other income (expenses)

657(292)944
139(441)
14185
1,233

INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS

3,277

INCOME TAXES:
Current
PriorDeferred

1,611
159(777)

INCOME BEFORE MINORITY INTERESTS

2,284

MINORITY INTERESTSNET INCOME525¥1,758* The figures are rounded down to the nearest million yen.

Net income per share¥42.18

MODEC, INC. and Consolidated Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWFor year ended June 30, 2010

Millions ofJapanese yen
CASH FLOW FROM OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minorityinterests to net cash provided by operating activities:
Depreciation and amortization
AAmortizationi i off goodwill
d ill
Provision for (reversal of) allowance for bad debts
Provision for severance and retirement benefits for employees
Provision for directors' bonuses
Provision for product warranty
Provision for loss on construction contracts
Interest income and dividend income
I tInterestt expense
Foreign exchange (gain) loss
Equity in earnings of affiliates and unconsolidated subsidiaries
Gain on valuation of derivatives
Gain on disposal of fixed asset
Changes in assets and liabilities:
Decrease (Increase) in– Accounts receivable - trade– Inventories
Increase (Decrease) in– Long term accrued expense– Accounts payable - trade– Accrued consumption taxes
Other, net

Interest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥3,277

574
114
(20)
9(9)
248
2(657)
292
279(944)
(139)
(141)

(13,938)(13938)57(83)
15,697
120
830
5 568
5,568
716(281)(1,344)¥4,659

Millions ofJapanese yen
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment and intangible assets
Proceeds from sale of property and equipment and intangible assets
Purchases of investments in affiliates
Decrease in short-term loans receivableCollection of long-term loans receivable
Net cash used in investing activities¥(271)
846
0(13,560)
167(12,817)

CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
P hPurchase
off treasury stockk
Cash dividends paid
Cash dividends paid to minority interests
Proceeds from stock issue
Net cash used in financing activities(4,747)0(723)
0(373)
015,587
9,744

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
DECREASE IN CASH AND CASH EQUIVALENTS DUE TO THE
CHANGE OF CONSOLIDATION SCOPE
CASH AND CASH EQUIVALENTS AT ENDING OF YEAR
* The figures are rounded down to the nearest million yen.

(1,255)(1255)
330
31,505(9,948)¥21,888