Summary of Consolidated Financial Results of Taiheiyo Cement Corporation
for the First Half of Fiscal 2007 Ended September 30, 2006
November 14, 2006
Company:
Stock code:
URL:

Taiheiyo Cement Corporation5233
http://www.taiheiyo-cement.co.jp/

Fiscal 2006 1H: April 1, 2005-September 30,2005
Fiscal 2006:
April 1, 2005-March 31, 2006
Fiscal 2007 1H: April 1, 2006-September 30, 2006
Fiscal 2007:
April 1, 2006-March 31, 2007

The accompanying consolidated financial results are not intended to present the financial results in accordancewith accounting principles and practices generally accepted in countries and jurisdictions other than Japan.

1. FY3/07 consolidated interim results (April 1, 2006 – September 30, 2006)
All yen figures are rounded down to the nearest one million yen.
(1) Consolidated results of operations
1H FY3/07
1H FY3/06
FY3/06Net Sales
Millions of Yen%
454,916
6.4
427,652
3.5
906,657
3.9

Operating income
Millions of Yen%
30,456 23.9
24,578 47.0
62,011 28.7

Ordinary income
Millions of Yen%
25,404
44.5
17,581
56.4
49,79230.1

1H FY3/07
1H FY3/06
FY3/06

Net income
Millions of Yen
%
7,917
–
–12,883–
9,101 –36.9

EPS
Yen
8.46
–13.77
9.63

Diluted EPS
Yen
8.17
–
9.29

(2) Consolidated financial position
1H FY3/07
1H FY3/06
FY3/06

Total assets
Millions of Yen
1,256,095
1,233,163
1,278,245

Shareholders’ equity
Millions of Yen
306,616
233,383
269,480

Equity ratio

Cash flows frominvesting activities
Millions of Yen–15,819–23,277–22,627

Cash flows fromfinancing activities
Millions of Yen–21,579–8,499–14,649

%
21.5
18.9
21.1

Equity per shareYen
288.32249.16288.01(3) Consolidated cash flows

1H FY3/07
1H FY3/06
FY3/06

Cash flows fromoperating activities
Millions of Yen
17,12030,857
61,460Cash and cash
equivalents at term-end
Millions of Yen
73,69367,261
93,4892. FY3/07 consolidated earnings forecast (April 1, 2006 – March 31, 2007)
Sales
Millions of Yen
FY3/07930,000
Reference: FY3/07 EPS forecast: ¥ 29.92

Ordinary income
Millions of Yen
63,000Net income
Millions of Yen
28,000This forecast is based on the information available at the date of publication of this material and assumptions at the same datewith respect to the various factors which might have impact on the future financial results. Actual results may differ
materially from this forecast due to various factors.

Page 1 of 9

Consolidated Balance Sheets
Item
AssetsCurrent assets
Cash and time deposits
Notes and accounts receivable
Inventories
Deferred income taxes
Short-term loans
Other current assets
Allowance for doubtful accounts
Current assets
Fixed assets
A. Tangible fixed assets
Buildings and structures
Machinery, equipment
Land
Construction in progress
Other tangible fixed assets
Tangible fixed assets
B. Intangible fixed assets
Trade rights
Consolidation adjustments
Goodwill
Other intangible fixed assets
Intangible fixed assets
C. Investments and other assets
Investment securities
Long-term loans
Deferred income taxes
Other investments and assets
Allowance for doubtful accounts
Investments and other assets
Fixed assets
Total assets(Unit: Millions of Yen)
1H FY3/06
Change(As of 9/30/05)

1H FY3/07(As of 9/30/06)

FY3/06(As of 3/31/06)

78,569206,264
79,794
4,483
14,066
14,633–3,830393,981

98,891
197,455
73,995
4,245
16,353
14,827–3,546402,222–20,322
8,809
5,799
238
–2,287–194–284–8,24072,743
182,953
78,5403,670
15,77019,164–2,921
369,920

190,670
169,795
175,904
18,001
25,000579,372

194,305
171,228
179,662
13,662
24,529583,388–3,635–1,433–3,757
4,338
471–4,016

195,955
166,376
180,627
12,83024,145579,935––
19,066
26,96946,036

14,262
5,843–
27,48747,592–14,262–5,84319,066–518–1,556

13,504
6,411–
27,40947,325

173,182
6,075
16,074
59,187–17,814
236,705
862,113
1,256,095

180,110
6,205
15,71458,488–15,478
245,041
876,022
1,278,245–6,928–129359
698–2,336–8,335–13,908–22,149

167,1097,260
16,487
60,119–14,994
235,982
863,242
1,233,163

Page 2 of 9

Item
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Commercial Paper
Bonds (due within one year)
Income taxes payable
Deferred income taxes
Bonus reserve
Other reserves
Other current liabilities
Current liabilities
Fixed liabilities
Bonds
Convertible bonds
Long-term borrowings
Deferred income taxes
Deferred income taxes from revaluation
excess
Accrued for retirement benefits
Accrued for retirement benefits todirectors and corporate auditors
Special repair reserve
Other fixed liabilities
Fixed liabilities
Total liabilities
Minority interests
Shareholders’ equity
Capital stock
Additional paid in capital
Retained earnings
Revaluation excess
Unrealized gain on other securities
Foreign currency translation adjustments
Treasury stock
Total shareholders’ equity
Total liabilities, minority interests andtotal shareholders’ equity
Net asset
Shareholders’ equity
Capital stock
Additional paid in capital
Retained earnings
Treasury stock
Shareholders’ equity
Valuation and translation adjustment
Unrealized gain on other securities
Loss on deferred hedge
Revaluation excess
Foreign currency translation adjustments
Valuation and translation adjustment
Minority interests
Total net asset
Total liabilities and total shareholders’ equity(Unit: Millions of Yen)
1H FY3/06
Change(As of 9/30/05)

1H FY3/07(As of 9/30/06)

FY3/06(As of 3/31/06)

113,196
289,055
2,000
37,099
6,469
15
6,171
663
75,750530,422

119,987
328,742–
61,754
12,952
5
6,362
629
63,495593,929–6,790–39,686
2,000–24,655–6,48310–190
34
12,254–63,506

105,761
353,152–
35,654
6,754
47
5,958
892
71,727579,950

63,011
34,211
214,560
18,46953,05434,000181,904
21,0099,957
211
32,655–2,54068,281
34,000172,427
17,922

6,329

5,904

424

5,893

33,43433,314

119

32,332

2,042

2,313

–270

2,080

123
46,873419,056
949,478–

133
47,352378,988972,91735,847–10–479
40,067–23,438–

142
54,287387,366
967,317

–
–
–
–
–
–
–
–

69,49959,515
105,973
4,785
28,1993,260–1,752
269,480

–
–
–
–
–
–
–
–

69,49958,892
86,137
4,788
23,583–7,963–1,554
233,383–

1,278,245–

1,233,163

69,49959,602
111,479–1,754
238,827

–
–
–
–
–

–
–
–
–
–

–
–
–
–
–

24,469
6
4,557
1,935
30,96936,820

–
–
–
–
–
–

–
–
–
–
–
–

–
–
–
–
–
–

306,616–––

1,256,095–––

32,462

Page 3 of 9

Consolidated Statements of Income
1H FY3/07
1H FY3/06(4/1/06–9/30/06) (4/1/05–9/30/05)
454,916
427,652

Sales

355,922336,802

19,119708,258

Selling, general and administrative expenses

68,53866,271

2,266

136,386

Income from operation

30,456

24,5785,878

62,011

Interest and dividends received

1,286

2,024

–737

4,306

Other non-operating income

2,114

2,306

–191

4,259

3,401

4,331

–929

8,565

5,488

5,648

–159

11,228

1,468

3,950

–2,481

5,545

1,495

1,729

–233

4,010

IncomeCost of sales

ExpensesNon-operating income andexpenses

Operatingincome/loss

Item

Total
Interest expenses
Equity in losses of unconsolidated
subsidiaries and affiliates
Other non-operating expenses
Total

Ordinary income

Gains

Gain on disposal of fixed assets

8,453

11,328–2,87520,78425,404

17,581

7,823

49,792

1,254

443

811

4,435

59

1,287

–1,227

13,899

–

20

–20

1,496

Gain on sale of investment securities
Gain on dilution of ownership in
affiliated companies
Other extraordinary gains

618

130

487

1,961

Total

1,932

1,881

50

21,792

3,685

4,440

–755

8,389

1,794

580

1,214

3,896

–

83

–83

129

218

79

138

306

64

512

–447

1,121

2,807

31,789–28,981

33,435

18

104

–86

263

–

–

–

949

202

–

202

–

Loss on disposal of fixed assets
Provision for allowance for doubtful
accounts
Liquidation of unconsolidated
subsidiaries and affiliates
Loss on sale of investment securities
Stock valuation loss
LossesExtraordinary gains and losses(Unit: Millions of Yen)
YoY
FY3/06(4/1/05–3/31/06)
change27,264
906,657

Loss on Impairment of fixed assets
Special allowance to employees retired
under early retirement scheme
One-time amortization of consolidation
adjustments
Loss on change in equity in affiliatedcompanies
Other extraordinary losses

1,188

649

539

3,621

Total

9,980

38,240–28,260

52,113

Net income before income taxes

17,357–18,777

36,134

19,471

Income taxes

8,763

7,613

1,150

23,226

Income tax adjustments–690–13,376

12,685–14,108

Minority interest income

1,366

–131

1,497

1,251

Net income

7,917–12,883

20,801

9,101

Page 4 of 9

Consolidated Statements of Retained Earnings(Unit: Millions of Yen)
Item
Additional paid in capital
Additional paid in capital at beginning ofI
term
II Increase in additional paid in capitalGain on disposal of treasury stock
IV Additional paid in capital at end of term
Retained earnings
I Retained earnings at beginning of term
II Increase in retained earnings
Net income
Reversal of land revaluation difference
III Decrease in retained earnings
Dividends
Bonuses to directors and corporate auditors
Decrease resulting from merger ofconsolidated subsidiaries
Decrease due to increase in consolidated
subsidiaries
Decrease due to decrease in companies
subject to equity method
Interim net loss
Loss on cancellation of combined sharesthrough merger
VI Retains earnings at end of term

1H FY3/06

FY3/0658,60558,605

287
287

910
910

58,89259,515

101,337
67

101,337
9,171

–
67

9,101
70
15,267

4,536

2,330
48

2,330
48

3

–

–

129

–

1,843

12,883––

182
86,137

105,973

Page 5 of 9

Consolidated Statements of Changes in Shareholders’ Equity for 1H FY3/07
1H FY3/07 (April 1, 2006 – September 30, 2006)(¥ million)
Shareholders’ equity

Balance at March 31, 2006
Changes during the period
Dividends
Bonuses to directors and corporate auditors
Net income
Increase due to increase in consolidated
subsidiaries
Decrease due to increase in consolidated
subsidiaries
Reversal of land revaluation excess
Reversal of accrued retirement benefits todirectors and corporate auditors
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other than shareholders’equity (net)Total changes during the period
Balance at September 30, 2006

Additional
Capitalpaid-instock
capital69,49959,515Retainedearnings

Treasurystock

105,973–1,752–2,339–65
7,917–2,339
–65
7,917

87

87

–72

–72

3

3

–24

–24

87

69,49987
59,602

Total
shareholders’equity233,235

5,506
111,479

–151
149

–151
236

–1
–1,754

5,591
238,827

Valuation and translation adjustments

Balance at March 31, 2006
Changes during the period
Dividends
Bonuses to directors andcorporate auditors
Net income
Increase due to increase inconsolidated subsidiaries
Decrease due to increase inconsolidated subsidiaries
Reversal of land revaluation
excess
Reversal of accrued retirement
benefits to directors andcorporate auditors
Acquisition of treasury stock
Disposal of treasury stock
Changes in items other thanshareholders’ equity (net)Total changes during the period
Balance at September 30, 2006

Unrealized
gain onothersecurities

Gain/loss
on deferred
hedge

Land
revaluation
excessForeigncurrencytranslation
adjustments

Totalvaluationandtranslation
adjustments

28,199

–

4,785

3,260

36,245

Minority
interests

Total net
assets35,847305,327–2,339
–65
7,917
87
–72
3
–24
–151
236

–3,7306–227–1,324–5,276973–4,302–3,73024,469

6
6

–227
4,557

–1,324
1,935–5,27630,969973
36,8201,289
306,616

Page 6 of 9

Consolidated Statements of Cash Flows
Term
Item
I
Cash flows from operating activities
Net income before income taxes
Depreciation and amortization
Amortization of difference between equity in net assets ofconsolidated subsidiaries and affiliates
Amortization of goodwill
Equity in losses of unconsolidated subsidiaries andaffiliates
Stock valuation loss
One-time amortization of consolidation adjustments
Decrease in accrued retirement benefits
Increase/decrease in accrued retirement benefits todirectors and corporate auditors
Increase/decrease in bonus reserve
Increase/decrease in allowance for doubtful accounts
Increase/decrease in other reserves
Interest and dividends received
Interest expenses
Gain on sale of investment securities
Loss on sale of investment securities
Gain on dilution of ownership in affiliated companies
Loss on dilution of ownership in affiliated companies
Liquidation of unconsolidated subsidiaries and affiliates
Gain on disposal of fixed assets
Loss on disposal of fixed assets
Loss on impairment of fixed assets
Increase/decrease in notes and accounts receivable
Increase in inventories
Increase/decrease in notes and accounts payable
Payment of bonuses to directors and corporate auditors
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

1H FY3/07
4/1/06 –9/30/06(Unit: Millions of Yen)
FY3/06YoY
4/1/05 –change3/31/06

1H FY3/06
4/1/05 –9/30/05

17,357
18,868–18,777
18,73336,134135

19,471
38,610

–

575

–575

69

852

–

852

–

1,468

3,950

–2,4815,545

64––2,186512–1,654

–447
–
–532

1,121
949
–2,613

–255

–223

–31

9

–143
2,615
23
–1,286
5,488
–59
218
–
202
–
–1,254
3,685
2,807–9,690–5,767–7,223–79
10,88536,593
1,795–6,458–14,809138–1,224273–2,024
5,648–1,287
79
–20
–
83
–443
4,440
31,7893,105–7,849–10,265–58
11,32336,827
2,277–5,241–3,005

–282
3,839
–249
737
–159
1,227
138
20
202
–83
–811
–755
–28,981–12,795
2,082
3,041
–20
–438
–234
–481
–1,216–11,804371–90–6–4,306
11,228–13,899306–1,496–129–4,4358,389
33,435–6,335–1,2573,309–58–8,16880,280
4,557–10,808–12,569

17,12030,857–13,737

61,460–Page 7 of 9Term

1H FY3/07
4/1/06 –9/30/06

1H FY3/06
4/1/05 –9/30/05

YoY
change502–20,614
4,943
–386
–
–2,714
1,227

473–20,635
1,752–1,1100–5,931
1,572

29
21
3,191
724
–0
3,216
–345

694
–41,898
16,334–871
1–14,003
14,660

–12

–

–12

–

–918
1,765
387

–5,607
3,547
2,661

4,688
–1,781–2,273–4,6405,460
1,636–15,819–23,277

7,458–22,627–17,688
2,000
58,724–47,555
10,990–25,527
137
261
–137
–2,339–445–21,579–3,519–9,807–35,100
30,200–10,645
392
3,121
–106
–2,330–319–8,499–14,169
2,000
48,917–12,455–19,210–14,882–255–2,859–31–8–126–13,080–23,702–54,870–79,029
51,350–20,922
2,544
3,210
–256
–2,330–383–14,649

IV Effect of exchange rate changes on cash and cash equivalents
V Increase/decrease in cash and cash equivalents
VI Cash and cash equivalents at beginning of term
VII Cash and cash equivalents at beginning of term resulting fromchange in scope of consolidation
VIII Increase in cash and cash equivalents at beginning of term
resulting from merger of consolidated subsidiaries–200–20,479
93,489694–225
67,473–894–20,254
26,016

1,758
25,941
67,473

682

–

682

–203

–

13

–13

279

IX Cash and cash equivalents at end of term

73,69367,261

6,431

93,489Item
II Cash flows from investing activities
Increase/decrease in time deposits
Purchase of property, plant and equipment
Proceeds from sale of fixed assets
Payments for purchase of other depreciable assets
Proceeds from sale of other depreciable assets
Payments for purchase of investment securities
Proceeds from sale of investment securities
Payments for sale of stock in subsidiaries due to change
in the scope of consolidation
Long-term loans madeCollections of long-term loans receivable
Other
Net cash used in investing activities
III Cash flows from financing activities
Net decrease in short-term borrowings
Net increase in commercial paper
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of bonds
Redemption of bonds
Issue of shares
Disposal of treasury stock
Repayment of treasury stocks
Cash dividend payments by parent company
Cash dividend payments to minority shareholders
Net cash used in financing activities

FY3/06
4/1/05 –3/31/06

Page 8 of 9

Segment Information
Segment information(Unit: Millions of Yen)
MineralCementEnvironmental
Resources
Business
Business
Business
Sales and operating
incomeSales(1) Sales to276,907
outsidecustomers(2) Intersegment
6,583
sales andtransfers
Total
283,490
Operating259,284
expenses
Operating
24,206
income1H FY3/07 (4/1/06 – 9/30/06)
Construction Ceramics &Materials Electronics Other
Business
Business

Total

Eliminations
Consolidated
or corporate
total
assets37,92930,28741,31034,232

34,249454,916(– )454,916

10,259

2,729

3,871

1

16,86140,305(40,305)–

48,18833,01645,181

34,233

51,110495,222(40,305)

454,916

46,132

31,57145,331

33,69348,471

464,484(40,024)

424,460

2,056

1,445

–150

540

2,639

30,737(281)

30,456

Overseas sales

I
Overseas sales
II Consolidated sales
III Ratio of overseas sales to consolidated sales

North America
64,574–
14.2%(Unit: Millions of Yen)
1H FY3/07 (4/1/06 – 9/30/06)
Asia
Other
Total
41,142
8,568
114,285––454,916
9.0%
1.9%
25.1%

Page 9 of 9