MODEC, INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETSMarch 31, 2005ASSETS

Thousands of Japanese yen
March 31,
December 31,2005
2004
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Other current assets
Less-Allowance for bad debts
Total current assets¥10,466,700
12,084,807
1,113,501
8,960,975
3,930,541(4,892)36,551,634¥14,061,926
14,059,343
165,115
9,783,707
4,636,065(5,392)42,700,765

5,626,783
1,075,979
6,702,762

5,606,362
102,199
5,708,562

3,869,490
1,334,009
5,203,499

3,768,430
1,001,357
4,769,788

5,003,780
6,158,669
3,240,882(6,923)
14,396,409

3,882,261
6,273,427
3,192,633(6,400)13,341,922

Total non-current assets

26,302,671

23,820,272

Total assets¥62,854,306¥66,521,038

NON-CURRENT ASSETS:PROPERTY AND EQUIPMENT:
Machinery and equipment
Other, net

INTANGIBLE ASSETS
Consolidated differences
Other intangible assets

OTHER ASSETS:
Investment securities
Long-term lease receivable
Other, net
Less-Allowance for bad debts

LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of Japanese yen
March 31,December 31,2005
2004
CURRENT LIABILITIES:
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accrued employees’ bonuses
Provision for product warranty
Other current liabilities
Total current liabilities¥7,318,865
16,126,279
1,918,774
47,493265,929
5,081,178
30,758,520¥10,255,786
12,663,618
6,652,649
45,870322,184
4,969,552
34,909,660

5,639,129

6,345,467

107,916
120,430
1,407,191
7,274,667

103,109104,980
1,378,991
7,932,547

Total liabilities

38,033,187

42,842,208

MINORITY INTERESTS IN
CONSOLIDATED SUBSIDIARIES

1,611,304

1,393,821

7,159,000
7,675,150
8,079,472
614,139(317,562)(384)
23,209,814

7,159,000
7,675,150
7,531,744
575,833(656,489)(230)
22,285,008¥62,854,306¥66,521,038

LONG-TERM LIABILITIES:Long-term loans payable
Severance and retirement benefits
For employees
For directors and corporate auditors
Deferred tax liabilities
Total long-term liabilitiesSHAREHOLDERS’ EQUITY:
Common stock;
Authorized - 102,868,000 shares
Issued - 34,008,000 shares

Capital surplus
Retained earnings
Net unrealized holding gains on securities
Foreign currency translation adjustments
Less-Treasury stock at cost
Total shareholders’ equity
Total liabilities and shareholders’equity

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME
For 3 months ended March 31, 2005
Thousands of Japanese yen
January 1, 2005 thru

January 1, 2004 thru

March 31, 2005

December 31, 2004

¥9,394,592
7,500,791
1,893,800¥51,891,763
44,553,251
7,338,512

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
Operating profit

988,186
905,6143,559,152
3,779,359

OTHER INCOME (EXPENSES):Interest income
Dividend income
Interest expense
Foreign exchange gain
Foreign exchange loss
Equity in earnings of affiliates
Depreciation of idle assets
Gain from sale of property and equipment
Loss on sale of property and equipment
Loss on bad debt
Other, net
Total other income (expenses)

205,085(203,963)
227,658
61,483
69,681359,945836,395
5,775(685,373)(420,480)
128,326(229,125)
41,874(86,486)(242,807)
286,799(365,102)

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS

1,265,559

3,414,257

INCOME TAXESCurrent
Adjustment to prior years
Deferred

139,761
205,304

2,290,351(489,907)(1,174,044)

INCOME BEFORE MINORITY INTERESTS

920,494

2,787,857

MINORITY INTERESTS

232,236557,363

NET INCOME¥688,257¥2,230,493

SALES
COST OF SALES
Gross profit

Net income per share

Japanese yen¥20.23¥72.77