BOARD OF DIRECTORSAND STATUTORYAUDITORSCORPORATE DATA

Chairman and
Representative Director

Head Office

Consolidated Subsidiaries

2-12, Showa-machi 3-chome,
Takaoka,Toyama Prefecture 933-8566, Japan
Phone: (0766) 21-1073
Fax: (0766) 21-3640

Road haulage
Kanto Tonami Transportation Co., Ltd.

Tokyo Headquarters

Ibaraki Tonami Transportation Co., Ltd.
Fukui Tonami Transportation Co., Ltd.

Yoshihiro Minami

President andRepresentative Director
Katsusuke Watanuki

Senior Managing Director
Akiyoshi Kunisada

Managing Director
Kohichi Kishida

Director and Adviser
Yohsuke Konishi

3-8, Higashinihonbashi 3-chome,
Chuo-ku,
Tokyo 103-0004, Japan
Phone: (03) 3664-5401
Fax: (03) 3664-5405

Date of Establishment
June 1943

Common Stock

Shonan Tonami Transportation Co., Ltd.

Ishikawa Tonami Transportation Co., Ltd.
Kanagawa Tonami Transportation Co., Ltd.
Kansai Tonami Transportation Co., Ltd.

Issued and Outstanding
SharesNiigata Tonami Transportation Co., Ltd.

97,610,118 shares

Warehousing
Keishin Warehousing Co., Ltd.

Shareholders

Ocean-freight forwarderTonami Global Logistics Co., Ltd.

Employees
5,423

Trading Company
Tonami Trading Co., Ltd.

Makoto Nagai
Nariyuki Aoki

Terminals

Sale of tires
Toyo Gomu Hokuriku Hanbai Co., Ltd.
Travel inns
Shogawa Kanko Co., Ltd.

Statutory Auditors

Warehouses

Shinichiro Inushima
Toshio Yaeda
Yohji Ishiguro

48

5,600

Sale of liquor
Toyama Jizake Hanbai Co., Ltd.
Automobile technology R&D
Tonami Automobile Technology ResearchInstitute Co., Ltd.

(As of September 30, 2005)(As of September 30, 2005)

Development and sale of software
Keishin System Research Co., Ltd.

Motor Vehicles

For the six-month period ended September 30, 2005

Customs clearance service
Tonami Air Service Co., Ltd.

Standing Statutory Auditors

84

Semiannual Report

Kawai Transportation Co., Ltd.
Chukyo Tonami Transportation Co., Ltd.
Saitama Tonami Transportation Co., Ltd.
ATS Co., Ltd.

8,044

2006

Zento Transportation Co., Ltd.
Takefu Transportation Co., Ltd.

¥14,183 million

Directors
Noriaki Murata
Kiyomi Asamizu
Yasuo Terabayashi
Yoshinobu Watanabe
Toshiyuki Koroku
Shigeyuki Okada

Gosei Tonami Transportation Co., Ltd.
Osaka Tonami Transportation Co., Ltd.

Sale of tires
Toyo Tire Toyama Shop Co., Ltd.
Sale of bed-clothes
Toyo Shinso Co., Ltd.
Financial service
Tonami Business Service Co., Ltd.

TONAMI TRANSPORTATION CO., LTD.
TONAMI TRANSPORTATION CO., LTD.

URL:http://www.tonami.co.jp/

A

M E S S A G E

F R O MT H E

P R E S I D E N T

Performanceplan launched in April 2005 with the aim ofachieving corporate innovation. On the sales
side, we enhanced sales functions of system
logistics operations that provide comprehensive
distribution services integrating transport,
storage, distribution processing, inventory
control, delivery and information processing,
and worked to build up the distribution
solutions business by strengthening proposal
functions and sales capabilities.

During the first six-month period ended
September 30, 2005, the Japanese economy wason a modest recovery track as capital investment
increased in line with the improvement incorporate earnings and personal consumption
continued to be relatively buoyant. However,
the outlook for the Japanese economy remained
unclear due to concerns such as the sharp risein oil prices.

We endeavored to offset the decline inoperating revenues resulting from the loweringof the unit freight charge in the road haulage
operations, which is our mainstay business, bypromoting the system logistics operations. As aresult, operating revenues were ¥63,131 million,
down 1.0% compared with the same period of
the previous year.

In the distribution industry, while domestic
freight volumes continued to decline, there has
been strong pressure from customers seeking
enhanced distribution efficiency and lower
costs. In addition, the cost burden increased due
to higher fuel prices and implementation ofenvironmental measures. As a result, thebusiness environment remained tough.

Looking at the composition of operational
revenues, total revenues from logistics-related
businesses were 1.9% lower than for the same

In these circumstances, the Tonami Group is
implementing the 17th medium-term business

UNAUDITED CONSOLIDATED FINANCIAL HIGHLIGHTSTONAMI TRANSPORTATION CO., LTD. AND CONSOLIDATED SUBSIDIARIESSix months ended September 30, 2005 and 2004

Millions of yen
2005
2004

Thousands of
U.S. dollars
2005

For the period:
Operating revenues ................................................................... ¥ 63,131
Operating income ......................................................................
794
Net income (loss) ......................................................................
(5,780)¥ 63,764
1,360
1,102

$ 557,744
7,015(51,065)

Per share (yen and U.S. dollars):
Net income (loss) ...................................................................... ¥ (63.52)¥ 12.09$ (0.5612)

At period-end:
Total assets ................................................................................ ¥121,021
Total shareholders’ equity .........................................................
46,033¥126,548
51,246$1,069,185
406,688

Notes: 1. U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥113.19 = U.S.$1, prevailing on
September 30, 2005, has been used for the translation into U.S. dollar amounts.
2. The computation of net income (loss) per share of common stock is based on the weighted average number of shares
outstanding (which represents the number of issued shares less treasury stock.) during each period.

1period of the previous year. In logistics-related
businesses, while revenues from the road
haulage operations and the freight forwarding
operations both declined 3.0% compared withthe same period of the previous year andrevenues from the harbor transport operations
declined 5.7%, revenues from the warehousing
operations rose 3.6%. Revenues from otherbusinesses that include automobile repair andmerchandising increased 10.3%.

higher quality and more efficient logistics
systems to customers.
In this context, we are strengthening ourcommitment to achievement of the goals of the
17th medium-term business plan in order tosecure operating revenues and enhance
profitability. At the same time, we will make agroup-wide effort to enrich activities designed tofulfill our corporate social responsibility (CSR).
For the year ending March 31, 2006, we plan to
pay total annual dividends of ¥6.00 per share,
which include an interim dividend of ¥3.00 per
share.

Although the Tonami Group made a concerted
effort to enhance operational efficiency throughproductivity improvement and to reduce costs
by improving fuel efficiency, operating income
fell 41.6% compared with the same period of theprevious year, to ¥794 million. The net loss forthe period amounted to ¥5,780 million as aresult of the reporting of an extraordinary loss of¥7,678 million due to the application of theaccounting standards concerning impairment of
fixed assets.

We will strive to improve our performance so as
to meet the expectations of our shareholders. In
these endeavors, we request your continued
support.

December 2005

Capital expenditures during the period wereused for the Nishi-yodogawa Distribution Center
in Osaka, which started operation in July, andthe setting up of an office in Shanghai, China,
which opened in August. We intend tovigorously expand and upgrade ourtransportation network and facilities.

Katsusuke Watanuki
President and Representative Director

OutlookThe business environment is expected to remain
tough throughout the year ending March 31,
2006, as there are numerous issues to be
tackled. In view of the declining domestic
freight volumes, the cost burden is increasing
due to strengthened official regulations
concerning the environment and safety and fuelprices hovering at high levels, whereas, on theother hand, there is an urgent need to propose

2

UNAUDITED CONSOLIDATED BALANCE SHEETSTONAMI TRANSPORTATION CO., LTD. AND CONSOLIDATED SUBSIDIARIESAs of September 30, 2005 and 2004

Thousands of
U.S. dollars(Note 1)Millions of yen
2005

2004

2005

Cash and time deposits .....................................................................

¥ 13,672¥ 15,341$ 120,788

Marketable securities (Note 2) ..........................................................

1,000

1,096

8,835

21,51021,728190,035ASSETS
Current assets:

Trade receivables:
Notes and accounts ......................................................................
Less: allowance for doubtful accounts .......................................

(39)

(82)

(345)

Inventories .........................................................................................

796

814

7,032

Deferred tax assets ............................................................................

709

689

6,264

Other current assets ..........................................................................

2,568

2,214

22,688

Total current assets .............................................................

40,21641,800355,297

Land ...................................................................................................

38,26041,254

338,016

Buildings and structures ...................................................................

22,631

24,704

199,938

Machinery and vehicles......................................................................

3,026

3,252

26,734

Property and equipment (Notes 3 and 4):

Other ..................................................................................................

973

2,251

8,596

Total property and equipment ...........................................

64,89071,461

573,284

Investments and other assets:
Investments in securities (Notes 2 and 3) ........................................

8,943

6,755

79,009Deferred tax assets ............................................................................

2,301

1,510

20,328Other ..................................................................................................

4,671

5,022

41,267

Total investments and other assets ....................................

15,915

13,287

140,604

Total assets ..........................................................................

¥121,021¥126,548$1,069,185

The accompanying Notes are an integral part of these statements.

3

Thousands of
U.S. dollars(Note 1)Millions of yen
2005

2004

2005

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:
Short-term bank loans (Note 3) ........................................................
Current portion of long-term debt (Note 3) ....................................
Trade notes and accounts payable ...................................................
Income taxes payable .......................................................................
Other current liabilities .....................................................................
Total current liabilities ........................................................

¥ 15,827
417
10,788437
7,426
34,895¥ 15,900
900
10,375720
7,233
35,128$ 139,827
3,684
95,3093,861
65,606308,287

Long-term liabilities:
Long-term debt, less current portion (Note 3) .................................
Deferred tax liabilities from revaluation reserve for land (Note 8) ..
Employees’ severance and retirement benefits ...............................
Consolidation difference ...................................................................
Other long-term liabilities .................................................................
Total long-term liabilities ....................................................
Total liabilities .....................................................................

11,2005,801
19,137327
2,981
39,44674,341

11,297
4,595
19,771565
3,224
39,45274,58098,94951,250169,070
2,889
26,336348,494
656,781

Minority interests ................................................................................

647

722

5,716

14,183
14,687
10,936
6,245
1,939

14,183
14,687
16,681
6,768
862

125,303
129,755
96,61655,173
17,131(1,957)46,033¥121,021(1,935)51,246¥126,548(17,290)406,688$1,069,185

Contingent liabilities
Shareholders’ equity:
Common stock:
Authorised: 299,200,000 shares in 2004
299,200,000 shares in 2005
Issued:97,610,118 shares in 2004
97,610,118 shares in 2005 .......................................
Capital surplus ...................................................................................
Retained earnings ..............................................................................
Revaluation reserve for land (Note 8) ..............................................
Unrealized gain on securities ...........................................................
Treasury stock, at cost: 6,568,899 shares in 2004 and
6,631,468 shares in 2005 ............................
Total shareholders’ equity ..................................................
Total liabilities, minority interests, and shareholders’ equity ...

4

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONSTONAMI TRANSPORTATION CO., LTD. AND CONSOLIDATED SUBSIDIARIESFor the six months ended September 30, 2005 and 2004

Thousands of
U.S. dollars(Note 1)Millions of yen
2005

2004

2005

¥63,131¥63,764$557,744

63,131

63,764

557,744

Operating cost ...................................................................................

59,24859,228523,438

Selling, general and administrative expenses ..................................

3,089

3,176

27,291

62,33762,404

550,729

794

1,360

7,015

Interest and dividend income ...........................................................

142

122

1,255

Equity in earnings of unconsolidated subsidiaries and affiliates ....

98

106

866

Loss on sells of property and equipment, net .................................

(51)

(78)

(451)

Interest expenses ...............................................................................

(159)

(153)

(1,405)

Impairment losses (Note 4) ..............................................................

(7,678)—(67,833)

Other, net ...........................................................................................

214

413

1,891

(7,434)410(65,677)(6,640)1,770(58,662)

Current ...............................................................................................

350

646

3,092

Deferred .............................................................................................

(1,176)(8)(10,389)

(826)

638

(7,297)

Minority interests ................................................................................

(34)

30

(300)

Net income (loss) ................................................................................

¥ (5,780)¥ 1,102$ (51,065)

Operating revenues:
Operating revenues ...........................................................................

Operating costs and selling, general and administrative expenses:

Operating income ...............................................................................

Other income and expenses:

Income (loss) before income taxes and minority interests .......
Income taxes:

The accompanying Notes are an integral part of these statements.

5

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWSTONAMI TRANSPORTATION CO., LTD. AND CONSOLIDATED SUBSIDIARIESFor the six months ended September 30, 2005 and 2004

Thousands of
U.S. dollars(Note 1)Millions of yen
2005

2004

2005

Cash flows from operating activities:
Income (loss) before income taxes and minority interests .............
Depreciation and amortization .........................................................
Impairment losses .............................................................................
Gain on disposal of property and equipment .................................
Gain on sales of investments in securities .......................................
Loss on devaluation of investments in securities ............................
Loss on devaluation of golf club memberships ...............................
Bond issue expenses .........................................................................
Amortization of consolidation difference .........................................
Equity in earnings of unconsolidated subsidiaries and affiliates ....
Decrease in allowance for doubtful accounts .................................
Decrease in employees’ severance and retirement benefits ...........
Increase in accrued bonuses to employees .....................................
Interest and dividend income ...........................................................
Interest expenses ...............................................................................
Decrease in trade receivables ...........................................................
Increase in inventories ......................................................................
Decrease in accounts payable ..........................................................
Decrease in accrued consumption taxes .........................................
Other, net ...........................................................................................
Subtotal .........................................................................................
Interest and dividends received .......................................................
Interest paid .......................................................................................
Income taxes paid .............................................................................
Net cash provided by operating activities ..............................

¥ (6,640)
1,178
7,678
23
35
0
8
—
(75)
(98)
(50)
(240)
74
(142)
159
1,224
(250)
(525)
(48)
(823)
1,488
142
(158)
(601)
871

¥ 1,770
1,293
—
86
(16)
0
4
31
(83)
(106)
(120)
(339)
56
(121)
153
2,492
(238)
(2,140)
(23)
(276)
2,423
121
(153)
(886)
1,505

$ (58,662)
10,407
67,833
203
309
0
71
—
(663)
(866)
(442)
(2,120)654(1,255)
1,405
10,814(2,209)(4,638)(424)(7,271)
13,146
1,255(1,396)(5,310)7,695

Cash flows from investing activities:
Purchase of time deposits .................................................................
Proceeds from redemption of time deposits ...................................
Purchase of marketable securities ....................................................
Proceeds from sales of marketable securities ..................................
Purchase of property and equipment ..............................................
Proceeds from sales of property and equipment ............................
Purchase of investments in securities ..............................................
Proceeds from sales of investments in securities ............................
Investments in loans receivable .......................................................
Proceeds from collection of loans receivable ..................................
Other, net ...........................................................................................
Net cash used in investing activities .......................................

(78)
130
(0)
65
(2,105)
92
(36)
70
(1)
16
15
(1,832)

(61)
103
—
15
(2,571)
1
(10)
20
(45)
68
(98)
(2,578)

(689)
1,149
(0)
574
(18,597)
813
(318)
618
(9)
141
133
(16,185)

Cash flows from financing activities:
Net decrease in short-term loans ......................................................
Proceeds from long-term debt ..........................................................
Repayment of long-term debt ...........................................................
Proceeds from issuance of bonds ....................................................
Purchase of treasury stock ................................................................
Dividends paid ..................................................................................
Dividends paid to minority interests ................................................
Net cash (used in) provided by financing activities ..............

(136)
280
(449)
—
(8)
(273)
(8)
(594)

(163)
82
(487)
2,469
(196)
(275)
(10)
1,420

(1,201)
2,474(3,967)—(71)(2,412)(71)(5,248)Net (decrease) increase in cash and cash equivalents ..................
Cash and cash equivalents at beginning of year ...........................
Cash and cash equivalents at end of year ......................................

(1,555)
16,040¥14,485347
15,800¥16,147(13,738)
141,709$127,971

The accompanying Notes are an integral part of these statements.

6

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
TONAMI TRANSPORTATION CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1.

Basis of presenting financial statements

The accompanying unaudited consolidated financial
statements of Tonami Transportation Co., Ltd. (the“Company”) and consolidated subsidiaries are prepared on
the basis of accounting principles generally accepted inJapan, which are different in certain respects as to theapplication and disclosure requirements of International
Financial Reporting Standards, and are compiled from theconsolidated financial statements prepared by the Company
as required by the Securities and Exchange Law of Japan.

2.

U.S. dollar amounts presented in the unaudited
financial statements are included solely for convenience andshould not be construed as representations that Japanese yenamounts have been or could in the future be converted into
U.S. dollars. The rate of ¥113.19 = U.S.$1, prevailing on
September 30, 2005, has been used for the translation into
U.S. dollar amounts in the unaudited financial statements.

Fair Value of Securities

No trading securities or held-to-maturity securities were heldat September 30, 2005 or 2004. Securities classified as othersecurities are included in “marketable securities” and“investments in securities” in the accompanying unaudited
consolidated balance sheets.

The components of unrealized gain or loss onmarketable securities classified as other securities at
September 30, 2005 and 2004 are summarized as follows:—

Unrealized gain:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Unrealized loss:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Total ..........................................................................................................................

Unrealized gain:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Unrealized loss:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Total ..........................................................................................................................

Unrealized gain:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Unrealized loss:
Stocks ....................................................................................................................
Bonds
Corporate bonds ................................................................................................
Other ...................................................................................................................
Other .....................................................................................................................
Total ..........................................................................................................................

Acquisition
costs

Millions of yen
2005
Carrying
value

Unrealizedgain(loss)¥2,555¥5,821¥3,266

20
—
—

20
—
—

0
—
—

8

7

(1)

—
—
100
¥2,683——99¥5,947——(1)¥3,264

Acquisition
costs

Millions of yen
2004
Carrying
value

Unrealizedgain(loss)¥2,277¥3,745¥1,468

90
—
—

91
—
—

1
—
—

151

134

(17)

25
—
60
¥2,60325—
59¥4,054(0)—(1)¥1,451

Acquisition
costs

Thousands of U.S. dollars
2005
Carrying
value

Unrealizedgain(loss)$22,573$51,427$28,854

177
—
—

177
—
—

0
—
—

71

62

(9)

—
—
883
$23,704——
874$52,540——(9)$28,836

Millions of yen
2005
2004
¥ 3,635¥ 3,751
12,193
12,149Thousands of
U.S. dollars
2005$ 32,114
107,722

3. Short-term bank loans and long-term debt(a) Short-term bank loans

Short-term bank loans as at September 30, 2005 and 2004 were as follows:—

Secured ....................................................................................................................
Unsecured ................................................................................................................

Interest rates range from 0.6% to 4.0%.

7

(b) Long-term debt

Long-term debt as at September 30, 2005 and 2004 was as follows:—
Millions of yen
2005
2004
¥ 6,400¥ 6,400
600
600

0.89% ¥6.4 billion unsecured straight bonds due 2008 ........................................
0.52% ¥0.6 billion unsecured straight bonds due 2008 ........................................
0.00% ¥2.5 billion unsecured convertible bond type–bonds
with stock acquisition rights due 2009 ................................................................
0.6%–3.6% loans from financial institutions due 2005 to 2009 and thereafter
Secured ..............................................................................................................
Unsecured .........................................................................................................
Total .............................................................................................................
Less: amount due within one year .........................................................................

The maturity date of the ¥6.4 billion 0.89% unsecured
straight bonds, issued in June 2003, is June 30, 2008.
The maturity date of the ¥0.6 billion 0.52% unsecured
straight bonds, issued in June 2003, is June 30, 2008.

Thousands of
U.S. dollars
2005$56,542
5,301

2,500

2,500

22,087

1,369
748
11,617417¥11,200

1,737
960
12,197900¥11,297

12,095
6,608
102,633
3,684$98,949

The maturity of the ¥2.5 billion 0.00% unsecured
convertible bond type-bonds with stock acquisition rights,
issued in July 2004, is September 30, 2009.

(c) Pledged assets

Property and equipment having a net value of ¥22,326 million ($197,244 thousand) was pledged as collateral for short-term bankloans and long-term debt.

4. Impairment Losses(a) Accounting standards for impairment of fixed assets
Since the six-month period ended September 30, 2005, theGroup has adopted “Accounting Standards for Impairment of
Fixed Assets” (“Opinion concerning Establishment of
Accounting Standards for Impairment of Fixed Assets” issued
by the Business Accounting Council on August 9, 2002) andthe “Implementation Guidance for Accounting Standards for
Impairment of Fixed Assets” (“Financial Accounting Standard
Implementation Guidance No. 6” issued by the AccountingStandards Board of Japan on October 31, 2003).

Consequently, income (loss) before income taxes andminority interests decreased by ¥7,678 million (US$67,833
thousand).
Accumulated impairment losses have been directlydeducted from the value of each relevant asset in accordancewith the revised regulations concerning consolidated financial
statements for interim periods.

(b) Impairment losses

During the six-month period ended September 30, 2005, the Group recorded impairment losses concerning the following asset
groupings.

Tonami Transportation Co., Ltd. ............................................................................
Tonami Transportation Co., Ltd. ............................................................................
Kawai Transportation Co., Ltd. and 3 other companies .......................................
Total .........................................................................................................................

Tonami Transportation Co., Ltd. ............................................................................
Tonami Transportation Co., Ltd. ............................................................................
Kawai Transportation Co., Ltd. and 3 other companies .......................................
Total .........................................................................................................................

Millions of yen
2005
Usage
LocationType
Haulage andKoto Ward,
warehouse Tokyo and 37
Land andfacilities
other sites
buildings
Warehouse
Noda, Chiba
Leasedfacilities
prefecture
facilities
Facilities for Moriyama, Shigalease and idle prefecture,and 3
Land and
asset
other sites
buildings

Impairment losses¥6,864756
58¥7,678

Thousands of U.S. dollars
2005
Usage
LocationType
Impairment losses
Haulage andKoto Ward,
warehouse Tokyo and 37
Land andfacilities
other sites
buildings$60,641
Warehouse
Noda, Chiba
Leasedfacilities
prefecture
facilities
6,679
Facilities for Moriyama, Shigalease and idle prefecture,and 3
Land and
asset
other sites
buildings
513$67,833

locations are bases for providing the Company’scomprehensive distribution solution services to customers. In
many cases, organizations of operations are located at thesebusiness facilities and deal with their customers.

The Company is a comprehensive logistics enterprise and has
six operations including the road haulage operation.
Organizations belonging to operations implement
management accounting. Business facilities in various

8The breakdown of the impairment losses is as follows:¥3,922 million (US$34,650 thousand) concerning land, ¥3,000
million (US$26,504 thousand) concerning buildings and ¥756
million (US$6,679 thousand) concerning leased facilities.
In regard to asset groupings, recoverable value of landand buildings is measured based on the net sales value. Net
sales value is assessed based mainly on appraisal value
provided by real-estate appraisers. Immaterial assets areassessed based on carrying value. Recoverable value ofleased facilities is measured based on the use value and thepresent value is calculated based on a 3.6% discount of future
cash flows.

Organizations of operations have complementary
relationships. Business facilities constitute the unit for
generating cash flows. The aggregate assets of organizations
located at each business facility constitute an asset grouping.
At consolidated subsidiaries, decision-making on
investment is done by each business unit. Accordingly, theaggregate assets of organizations belonging to a business unit
constitute an asset grouping.
Regarding the asset groupings for which impairment
losses were recorded, future cash flow losses were projected
partly due to a large decline in land prices. Thus, the carrying
values of the asset groupings were reduced by theunrecoverable values and an impairment loss amounting to¥7,678 million (US$67,833 thousand) was recorded as an
extraordinary loss.

5.

Cash flow statements

Reconciliation of cash and time deposits shown in the unaudited consolidated balance sheets and cash and cash equivalents
shown in the unaudited consolidated statements of cash flows as at September 30, 2005 and 2004 is as follows:—

Cash and time deposits ...........................................................................................
Time deposits with maturities exceeding three months .......................................
Cash equivalents included in marketable securities .............................................
Bonds with maturities exceeding three months ....................................................
Cash and cash equivalents .....................................................................................

6.

Amounts per share

Net income (loss) per share has been computed using theweighted-average number of shares of common stock
outstanding during each period.
Although dilutive securities were outstanding, diluted
net income per share for the six months ended September 30,
2005 was not disclosed because of the net loss in this period.

Millions of yen
2005
2004
¥13,672¥15,340
(187)
(193)
1,000
1,096
—
(96)
¥14,485¥16,147

Thousands of
U.S. dollars
2005$120,788(1,652)
8,835—$127,971

Net assets per share has been computed using thenumber of shares of common stock outstanding at eachbalance sheet date.
Amounts per share of common stock for the six months
ended September 30, 2005 and 2004 were as follows:—
Yen

U.S. dollars
2005

2005

2004

Net income (loss) per share:
Basic ......................................................................................................................
Diluted ...................................................................................................................

(¥ 63.52)—¥ 12.09
11.26($

Net assets per share ................................................................................................

¥505.97¥562.88$4.4701

0.56)—

Basis for the calculation of net income (loss) per share and diluted net income per share for the six months ended September 30,
2005 and 2004 was as follows:—
2004

Thousands of
U.S. dollars
2005(¥5,780)—(—)(¥5,780)
90,991,074¥1,102—(—)¥1,102
91,132,931($51,065)—(—)($51,065)—¥¥

Millions of yen
2005
Net income (loss) available to shareholders of common stock:
Net income (loss) .................................................................................................
Net income (loss) not available to shareholders of common stock: ...............
of which appropriation of bonuses to directors and statutory auditors ........
Net income (loss) available to shareholders of common stock .........................
Weighted-average number of shares of common stock outstanding ................
Diluted net income available to shareholders of common stock:
Adjustments to net income:...................................................................................
of which commission for bonds ......................................................................
Incremental number of shares of common stock: ...............................................
of which stock acquisition rights .....................................................................
Common stock equivalents not included computation of diluted net income
per share due to their anti-dilutive effect .........................................................

9

—
(—)
—
(—)

(a) Stock acquisition rights(The ¥2.5 billion convertible
bond type-bonds with stockacquisition rights to mature on
September 30, 2009)(b) Stock options (The grant of
1,340 options was approved at
the Company’s Annual General
Meeting of Shareholders heldon June 29, 2005.)

0(0)
6,738,544(6,738,544)
—

$

—
(—)

7.

Subsequent event

At a meeting held on November 14, 2005, the board of directors of the Company resolved the following interim cash dividends:—
Dividends (¥3.00 per share) .....................................................................................

8.

Thousands of
U.S. dollars$2,412Millions of yen¥273

Additional Information

Deferred taxes concerning land revaluation
Previously, regarding handling of deferred taxes concerning
land revaluation, revaluation gains were offset by revaluation
losses and deferred tax liabilities for net revaluation gains
were recorded. On February 17, 2004, “Auditing Treatment ofApplication of Tax Effect Accounting to Differences in
Valuation of Other Securities” (The Japanese Institute ofCertified Public Accountants Auditing Committee Report No.
70) was revised and renamed as “Auditing Treatment ofApplication of Tax Effect Accounting to Differences in
Valuation of Other Securities and Losses on Impairment of

9.

Fixed Assets,” which has clarified the necessity of individually
determining the recoverability of deferred tax assets
concerning land revaluation losses. As a result of thenecessary treatment, the amount of land revaluationdifferences at September 30, 2005, is ¥929 million (US$8,207
thousand) lower than the amount based on the previous
method, and the amount of deferred tax liabilities concerning
revaluation is increased by the same amount. This has no
impact on net loss.

Segment Information

The Company’s business segments consist of logistics related services classified as Logistics and non-logistics services classified as
Others.
A summary of segment information by industry segment for the six months ended September 30, 2005 and 2004 is asfollows:—
Logistics
Net Sales:
Outside customers .............................................................
Inter segment sales ............................................................
Total ..............................................................................
Costs and expenses ..................................................................
Operating income ....................................................................

¥57,794
146
57,94057,499¥ 441

Logistics
Net Sales:
Outside customers .............................................................
Inter segment sales ............................................................
Total ..............................................................................
Costs and expenses ..................................................................
Operating income ....................................................................

¥58,925
10
58,93557,807¥ 1,128

Logistics
Net Sales:
Outside customers .............................................................
Inter segment sales ............................................................
Total ..............................................................................
Costs and expenses ..................................................................
Operating income ....................................................................

$510,593
1,290
511,883
507,987$ 3,896

For the six months ended September 30, 2005
Millions of yen
OthersTotal
Eliminations(Note)¥ 5,337
3,675
9,012
8,592
¥ 420

¥ 63,131
3,821
66,952
66,091¥861¥—(3,821)(3,821)(3,754)¥ (67)For the six months ended September 30, 2004
Millions of yen
OthersTotal
Eliminations(Note)¥ 4,839
3,188
8,027
7,726
¥ 301

¥ 63,764
3,198
66,96265,533¥ 1,429¥—(3,198)(3,198)(3,129)¥(69)

For the six months ended September 30, 2005
Thousands of U.S. dollars
OthersTotal
Eliminations(Note)$ 47,151
32,467
79,61875,907$ 3,711$ 557,744
33,757
591,501
583,894
$
7,607

$

—
(33,757)(33,757)(33,165)$ (592)

Consolidated¥ 63,131—
63,131
62,337¥794

Consolidated¥ 63,764—
63,76462,404¥ 1,360

Consolidated$ 557,744—
557,744
550,729$
7,015

Note: Operating cost and expenses included in the column “Eliminations” mainly consist of those charged by the general affairs
and finance divisions of the Company, amounting to ¥95 million ($839 thousand) and ¥97 million ($857 thousand) for thesix months ended September 30, 2005 and 2004, respectively.
The two business segments mainly consist of the following services:
Logistics ...... Road haulage, freight forwarding, warehousing, and harbor transport and customs services
Others ......... Vehicle maintenance, casualty insurance, leasing, merchandising and commissioned sales and purchases,
travel services, mail order services, travel inn, and other businesses
Neither geographical segment information nor overseas sales have been presented because none of the Company’s
consolidated subsidiaries are domiciled outside Japan, and the Company and its consolidated subsidiaries had no overseas
sales for the six months ended September 30, 2005 and 2004.

10

BOARD OF DIRECTORSAND STATUTORYAUDITORSCORPORATE DATA

Chairman and
Representative Director

Head Office

Consolidated Subsidiaries

2-12, Showa-machi 3-chome,
Takaoka,Toyama Prefecture 933-8566, Japan
Phone: (0766) 21-1073
Fax: (0766) 21-3640

Road haulage
Kanto Tonami Transportation Co., Ltd.

Tokyo Headquarters

Ibaraki Tonami Transportation Co., Ltd.
Fukui Tonami Transportation Co., Ltd.

Yoshihiro Minami

President andRepresentative Director
Katsusuke Watanuki

Senior Managing Director
Akiyoshi Kunisada

Managing Director
Kohichi Kishida

Director and Adviser
Yohsuke Konishi

3-8, Higashinihonbashi 3-chome,
Chuo-ku,
Tokyo 103-0004, Japan
Phone: (03) 3664-5401
Fax: (03) 3664-5405

Date of Establishment
June 1943

Common Stock

Shonan Tonami Transportation Co., Ltd.

Ishikawa Tonami Transportation Co., Ltd.
Kanagawa Tonami Transportation Co., Ltd.
Kansai Tonami Transportation Co., Ltd.

Issued and Outstanding
SharesNiigata Tonami Transportation Co., Ltd.

97,610,118 shares

Warehousing
Keishin Warehousing Co., Ltd.

Shareholders

Ocean-freight forwarderTonami Global Logistics Co., Ltd.

Employees
5,423

Trading Company
Tonami Trading Co., Ltd.

Makoto Nagai
Nariyuki Aoki

Terminals

Sale of tires
Toyo Gomu Hokuriku Hanbai Co., Ltd.
Travel inns
Shogawa Kanko Co., Ltd.

Statutory Auditors

Warehouses

Shinichiro Inushima
Toshio Yaeda
Yohji Ishiguro

48

5,600

Sale of liquor
Toyama Jizake Hanbai Co., Ltd.
Automobile technology R&D
Tonami Automobile Technology ResearchInstitute Co., Ltd.

(As of September 30, 2005)(As of September 30, 2005)

Development and sale of software
Keishin System Research Co., Ltd.

Motor Vehicles

For the six-month period ended September 30, 2005

Customs clearance service
Tonami Air Service Co., Ltd.

Standing Statutory Auditors

84

Semiannual Report

Kawai Transportation Co., Ltd.
Chukyo Tonami Transportation Co., Ltd.
Saitama Tonami Transportation Co., Ltd.
ATS Co., Ltd.

8,044

2006

Zento Transportation Co., Ltd.
Takefu Transportation Co., Ltd.

¥14,183 million

Directors
Noriaki Murata
Kiyomi Asamizu
Yasuo Terabayashi
Yoshinobu Watanabe
Toshiyuki Koroku
Shigeyuki Okada

Gosei Tonami Transportation Co., Ltd.
Osaka Tonami Transportation Co., Ltd.

Sale of tires
Toyo Tire Toyama Shop Co., Ltd.
Sale of bed-clothes
Toyo Shinso Co., Ltd.
Financial service
Tonami Business Service Co., Ltd.

TONAMI TRANSPORTATION CO., LTD.
TONAMI TRANSPORTATION CO., LTD.

URL:http://www.tonami.co.jp/