Summary of Consolidated Business Results for the Third Quarter Ended December 2006
January 31, 2007
Company Name
Nagase & Co., Ltd
Listing Code8012(URL http://www.nagase.co.jp/)
Representative
Position
President
Contact Details
Position
Accounting Division, Manager

Stock Exchanges Listed: Tokyo, Osaka
Location of Head Office: Osaka Prefecture
Hiroshi Nagase
Takahide OsadaTelephone (03) 3665-3103

1. Matters concerning the preparation of the Summary of Business Results for the Third Quarter of fiscal 2006
(1) Use of simplified accounting procedures:(Description):
Accounting standard of income and other taxes: The amount of these taxes was calculated using the estimated yearly tax rates
based on the legal effective tax rates.
For some account items with minor effects, a simpler calculation method was used.
(2) Changes in accounting policies compared to recent consolidated fiscal year:(Description):
Change of segment classify(3) Change in the applicable scope of the consolidation and equity method:
Consolidated Subsidiaries: New: 7 Excluded: 0
Equity method: New: 2 Excluded: 0
2. Consolidated Business Results for the Third Quarter Ended December 2006 (April 1, 2006 – December 31, 2006)
1)Consolidated Operating Results(Note: Amounts have been rounded off to the nearest million yen)
Net Sales
Third Quarter Ended December 2006
Third Quarter Ended December 2005
(Reference)
Period Ended March 31, 2006

¥ Millions
525,155
474,068

Operating Income%
10.8
11.3

¥ Millions
16,621
13,979Ordinary income

%
18.9
33.0

648,023

17,596

Net (quarterly) income

EPS (quarterly)¥ Millions
17,897
15,710

%
13.9
29.7

18,798Fully Diluted EPS (quarterly)¥ Millions%¥¥Third Quarter Ended December 2006
10,271
-4.0
80.17
79.91
Third Quarter Ended December 2005
10,702
46.3
83.86
83.70
(Reference)
12,892100.33100.05Period Ended March 31, 2006
Notes:
Figures shown in percentage of sales, operating income and other items show the ratios of sequential changes comparedwith the Third quarter of 2006.
2)Consolidated Financial Position¥ Millions
419,949
390,409¥ Millions
207,161
190,257

%
47.8
48.7

Shareholders Equity PerShare¥
1,565.34
1,487.05

396,773

196,62049.6

1,535.70

Net Cash Used forFinancial Activities¥ Millions-4,303
9,645

Balance of Cash and Cash
Equivalents at Term End¥ Millions
20,76919,092

9,330

22,936

Total Assets
Third Quarter Ended December 2006
Third Quarter Ended December 2005
(Reference)
Period Ended March 31, 2006

Shareholder's Equity Shareholder's Equity Ratio3)Consolidated Cash FlowsNet Cash fromNet Cash Used for
operating activities Investment Activities¥ Millions¥ Millions
Third Quarter Ended December 2006
4,970
-3,942
Third Quarter Ended December 2005
-7,975-1,553(Reference)
Period Ended March 31, 2006
-2,341-3,8093. Consolidated Forecasts for the Year Ended March 31, 2007 (April 1, 2006 - March 31, 2007)No change has been made to the forecasts published on October 30, 2006
Net Sales
Recurring Income
Net Income¥ Millions¥ Millions¥ Millions
Whole Year
694,000
22,70013,600(Reference) Expected EPS (Whole Year) ¥ 106.02*The above forecasts were prepared on the basis of information available on the date of release. Actual results may differ from these
forecasts due to various factors.

Business Performance and Financial Position[Business Performance]

Summary of Overall Performance
Through the first nine months of the fiscal year ending March 31, 2007, the Japanese economy continuedto expand, albeit moderately, led by increased exports and corporate capital investment. However, elementsof uncertainty continued regarding economic trends overseas, in particular the outlook for the U.S.
economy and fluctuations in crude oil prices. Under these conditions, for the nine months ended December
31, 2006, Nagase posted domestic sales of ¥309.54 billion (an increase of 7.5 percent from the same period
in the previous year) and overseas sales of ¥215.60 billion (up 15.9 percent), for total net sales of ¥525.15billion (up 10.8 percent). Due to the increase in net sales and other factors, operating income was ¥16.62billion (up 18.9 percent) and ordinary income was ¥17.89 billion (up 13.9 percent). However, net income
was ¥10.27 billion (down 4.0 percent) due to factors including a substantial decrease in gains on sales ofproperty and equipment and investments in securities.

Segment SummaryStarting from the current fiscal year, business segment classifications have been partially revised. For
details of the revision, refer to “4. Segment Information” on page 6.

[Chemicals] Sales: ¥184.87 billion, 10.7 percent increase year-on-year
The Chemicals segment performed strongly overall. Sales grew in the performance chemicals business,
which handles paint and urethane materials, plastic materials and additives, and other products. Sales also
expanded in the colors and imaging business, which handles pigments, dyestuffs and other products related
to color, and the speciality chemicals business, which handles a wide range of surfactants, industrial oilsolutions, and materials for organic synthesis such as silicones and fluorochemicals.

[Plastics] Sales: ¥183.71 billion, 8.9 percent increase year-on-year
Sales in the Plastics segment increased overall. Strong sales continued in Greater China, which includes
Hong Kong, Taiwan and China, and in the Asia region, which includes Thailand, Singapore and other
ASEAN countries. Sales of engineering plastics for CDs, DVDs and other media applications decreased,
but sales of products for automobile components and precision equipment such as printers and copiers
increased. Sales of products for building materials and housing equipment, primarily in Japan, were firm.

[Electronics] Sales: ¥112.85 billion, 25.4 percent increase year-on-yearSales of the Electronics segment increased substantially. Sales were strong in both the electronic chemicals
business, including formulated epoxy resins and chemicals and chemical supply and control equipment-2-

used in post-processing of LCDs and semiconductors, and the display business, including LCD andelectronic equipment component processing. In addition, sales also increased in the information andfunctional materials business, which includes materials for precision abrasives, encapsulants used insemiconductor post-processing, and surface inspection systems.

[Life Sciences]

Sales: ¥39.35 billion, 6.6 percent decrease year-on-year

Sales of the Life Sciences segment decreased overall. In the fine chemicals business, sales of fermentation
products increased slightly, but sales of pharmaceutical intermediates decreased. Sales in the beauty carebusiness, which sells cosmetics and health foods, decreased slightly. In addition, Nagase implemented adrastic restructuring of the medical care business, including withdrawal from businesses, in the previous
fiscal year.

[Others] Sales: ¥4.35 billion, 29.0 percent decrease year-on-year
Sales of the Others segment decreased due to weak sales of products such as DVD players with LCDscreens and the transfer of the direct sales business, which sold DVD movie software and other products toend-users.

[Financial Position]
Total assets increased ¥23.17 billion compared with the end of the previous fiscal year to ¥419.94 billion.
Investments in securities decreased because of a drop in stock prices, but notes and accounts receivable
increased due to the increase in net sales and because the balance sheet closing date was a business holiday.

Net assets including minority interests increased ¥4.78 billion compared with the end of the previous fiscalyear to ¥207.16 billion, despite a decrease in unrealized holding gain on securities declared as net assets, asa result of the increase in retained earnings and other factors.

As a result, the net worth ratio declined 1.8 percentage points to 47.8 percent from 49.6percent at the end of
the previous fiscal year.

[Summary of Consolidated Cash Flows]
Despite taxes paid and other items, net cash provided by operating activities was ¥4.97 billion due toincome before income taxes and minority interests of ¥17.99 billion.

Net cash used in investing activities was ¥3.94 billion due to factors including payment for purchases ofproperty and equipment and purchases of investments in securities.

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Net cash used in financing activities was ¥4.30 billion due to factors including repayment of commercial
paper and cash dividends paid.

As a result, the balance of cash and cash equivalents at December 31, 2006 was ¥20.76 billion, a decreaseof ¥2.16 billion from the end of the previous fiscal year.

[Performance Forecast for the Fiscal Year]At present, there is no change to the figures in the consolidated and non-consolidated performance forecasts
announced on October 30, 2006.

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