Half Year Financial Results for FYE 3/2007 (Consolidated)

October 30, 2006

Name of listed company: TERUMO CORPORATION
Exchange where listed: TSE( URL http://www.terumo.com/ )Location of headquarters (prefecture):Company code number: 4543
Tokyo
Representative:
Akira Takahashi, President
Please address all communications to:
Kunio Kimishima, General Manager, Corporate Communication Dept.
Phone: +81 / 3-3374 - 8111
Date of Board of Directors’ meeting for approval of financial results: October 30, 2006
Adoption of U.S. accounting standards [Yes/No]: No

1. Consolidated Financial Highlights for the interim period ended September 2006
(From April 1, 2006 to September 30, 2006)(1) Consolidated financial results(Note: The amounts shown below ignore values of less than a million yen)

Net sales

Operating income

Ordinary income(Millions of yen)%

(Millions of yen)%

(Millions of yen)%

132,669
119,825
247,048

10.7
6.8

28,63625,01048,251

14.5
12.5

29,05725,30048,93414.8
12.2

September 2006
September 2005
March 2006

Net income

Net income per share(Millions of yen)%

18,43016,30532,45713.0
22.8

September 2006
September 2005
March 2006

Net income per share,
fully diluted

(Yen)

90.78
81.57
160.45(Yen)-(Notes) 1. Investment income for equity method:
September 2006: 85 million yen, September 2005: 97 million yen, March 2006: 177 million yen
2. Average number of shares during period (consolidated):
September 2006: 203,025,089 shares, September 2005: 199,890,537 shares, March 2006: 201,459,940 shares
3. Changes in accounting policies: Yes
4. The Percentages shown next to net sales, operating profit, ordinary profit and net income represent year-on-year changes.

(2) Consolidated financial position(Note: The amounts shown below ignore values of less than a million yen)

Total assets
September 2006
September 2005
March 2006

Net assets(Millions of yen)

(Millions of yen)

368,385
344,281354,648

289,466
253,590
273,309%(Yen)

1,425.78
1,249.02
1,345.52

March 2006: 203,027,519 shares(Note: The amounts shown below ignore values of less than a million yen)

Cash flows fromoperating activities
September 2006
September 2005
March 2006

Net assets per share

78.6
73.7
77.1

(Notes) 1.Number of shares outstanding at the end of the period (consolidated):
September 2006: 203,022,715 shares, September 2005: 203,031,679 shares(3) Consolidated statements of cash flows

Capital asset ratio

Cash flows from investing Cash flows from financing Cash and cash equivalents at
the end of the period
activities
activities(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

20,86521,05243,380(9,326)(21,147)(54,391)(4,976)9,829
370

54,70867,59447,963(4) Scope of consolidation and in application of the equity method
Nonconsolidated subsidiaries accounted for under equity method: 2
Consolidated subsidiaries: 40
Affiliated companies accounted for under equity method: 1(5) Changes in scope of consolidation and in application of the equity method
Consolidation (new): 2(elimination): None(elimination): None
Equity method (new): None

2. Consolidated forecasts for the year ending March 2007 (From April 1, 2006 to March 31, 2007)
Net sales(Millions of yen)

Year ended March, 2007

273,000

Operating income(Millions of yen)

57,500Ordinary income(Millions of yen)

57,500Net income(Millions of yen)

37,000(N.B.) Estimated earnings per share (full year): 182.25 yen

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results,
performance or achievements to differ materially from that anticipated in these statements.

3. Semiannual Financial Statements(1) Semiannual Consolidated Balance Sheet(Millions of yen)Interim year ended

Interim year ended

September 2005

September 2006

March 2006

(As of September 30, 200 5)(As of September 30, 200 6)(As of March 31, 200 6)

AmountAmount(Assets)
I

II

Year ended

Amount%175,278

Cash on hand and in banks

67,59455,40747,963

Trade notes/accounts receivable

59,52066,96963,940Inventories

38,274

43,69740,941

Deferred income taxes - current

6,643

8,508

8,604

Other current assets

4,022

3,945

4,952

Allowance for doubtful accounts

(776)

(905)

1. Tangible fixed assets

177,622

48.2%%

Current Assets

Fixed Assets

50.9%

%
165,486(915)

169,00249.1%

190,76251.8%

189,16153.3%

107,420

31.2%

112,637

30.6%

109,837

31.0%

Buildings and structures

42,05343,19042,591

Machinery and transportation equipment

28,081

30,56928,401

Land

20,51920,334

20,384

Construction in progress

9,589

11,294

10,697

Other tangible fixed assets

7,176

7,248

2. Intangible fixed assets

22,566

Goodwill

5,124

Consolidation adjustments

12,811Other intangible fixed assets

4,630

3. Investments and other fixed assets

39,015

6.6%

7,762

41,37011.2%

35,598-12,411
5,790

36,75410.0%

37,35130,26731,61832,162

Deferred income taxes - noncurrent

6,354

2,640

2,830

Other assets

2,392

2,495

344,281100.0%

11.8%

23,770

5,771
11.3%

41,972

Investments in securities

Total Assets

46.7%

10.5%

2,358

368,385

100.0%

354,648100.0%(Millions of yen)Interim year ended

Interim year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

AmountAmount(Liabilities)
I

II

Year ended

Amount%69,113

Trade notes/accounts payable

22,25022,713

Short-term bank loans

6,159

1,886

Current installments of long-term debt

5,000

Accrued Income taxes

9,398

10,656

11,398Reserve for employees bonuses

4,729

4,402

4,324

Notes and accounts payable on equipment

5,447

5,192

4,819

Other current liabilities

16,12819,14818,500Long-term Liabilities

21,530Reserve for retirement allowance

Other long-term liabilities
Total Liabilities

17.4%

66,876

6.2%

19,470-3,975

14,918-4.0%

14,412

107

90

11,677

12,171

728

2,011
26.3%

46

0.0%

4.0%

-

2,404

90,64418.9%

23,858-48

Reserve for retirement benefits for directors and corporate auditors

64,000%Current Liabilities

Deferred income taxes - noncurrent

20.1%

%

2,150

78,91921.4%

81,288

22.9%

-

-

49

0.0%

10.9%

(Minority interests)
Minority interests(Stockholders' equity)
I

Capital stock

38,716

11.3%

-

-

38,716II

Capital surplus

59,030

17.2%

-

-

59,030

16.6%

III

Retained earnings

169,271

49.2%

-

-

183,391

51.7%

IV Evaluation difference of investment securities

4,989

1.4%

-

-

7,367

2.1%

V

(4,983)

-1.5%

-

-

(1,747)-0.4%

Foreign currency translation adjustments

VI Treasury stock(13,434)

-3.9%

-

-

(13,449)-3.8%

Total Stockholders' Equity

253,590

73.7%

-

-

273,309

77.1%

Total Liabilities, minority interests and stockholders' equity

344,281100.0%--

354,648100.0%(Net assets)
I

II

Shareholders' equity-

Capital stock-

Capital surplus-

59,030-Retained earnings-

198,848-

Treasury stock-

Evaluation difference and foreign currency exchange adjustments-

Evaluation difference of investment securities--

283,12776.9%

38,716

6,287

-

-

(13,468)
-

-

1.7%

-

7,058

-

-

Gain/Loss on deferred hedge-(0)

Foreign currency translation adjustments

-

(770)

Minority interests

-

-

51

0.0%

-

-

Total net assets--

289,466

78.6%

-

-

Total liabilities,net assets--

368,385

100.0%

-

-

III

-

(2) Consolidated Statement of Income(Millions of yen)Interim year ended

Interim year ended

Year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

AmountAmountAmount%100.0%

132,669%I

Net sales

II

Cost of sales

54,53045.5%

59,41844.8%

111,377

45.1%

Gross Profit on Sales

65,29554.5%

73,25055.2%

135,670

54.9%

Selling, General and Administrative Expenses

40,285

33.6%

44,61333.6%

87,41935.4%

Operating Profit

25,01020.9%

28,63621.6%

48,251

19.5%

2,365

1.0%

III

119,825%100.0%

247,048100.0%IV Non-operating Income
Interest income

145

284

368

Dividend income

93

163

170

Royalties
Foreign exchange profit

V

8

46

79

553

365

836

Equity in earnings of unconsolidated companies

97

Other non-operating income

310

85
1,209

1.0%

301

177
1,246

0.9%

731

Non-operating Expenses
Interest expenses

143

87

286

Sales discount

191

180

393

Loss on retirement benefit in the overseas subsidiary

160

-

163

Loss on disposal of inventories

101

128

198

Other non-operating expenses

321

Ordinary Profit

918

0.8%

25,300

21.1%

429

826

0.6%

29,057

21.9%

640

1,682

0.7%

48,934

19.8%

5,219

2.1%

VI Extraordinary Profit
Gain on sales of fixed assets
Gain on contribution of securities to retirement benefit trust

65

42

71

-

-

4,966

Reversal of allowance for doubtful accounts

66

Gain on sales of recevables written off

156

22
288

0.2%

-

25
65

0.0%

156

VII Extraordinary Losses
Loss on disposal of fixed assets
Loss on sales of golf membership deposits
Loss on liquidation of the subsidiary
Loss on restructuring in the subsidiary
Directors' retirement fee

521

57

-

-

661
6

190

-

196

-

-

575

59

12

59

-

728

-

-

Provision of allowance for retirement benefits for directors andcorporate auditors
Expense relating to acquisition of newly consolidated subsidiary
Impairment loss

592

Income Before Taxes
Corporate, Inhabitant and Enterprise Taxes

9,047

Deferred Taxes (reduction)(1,139)Minority Interest Income (loss) of consolidated companies
Net Income for the Period

1,363

1.1%

24,224

20.2%

7,907

6.6%

11
16,305

-

473
798

0.6%

28,324

21.3%

9,890

7.4%

19,117

7.8%

0.0%

2

0.0%

13

0.0%

13.6%

18,43013.9%

32,457

13.1%

9,385
504

592

2,566

1.0%

51,58820.9%

20,197(1,079)(3) Consolidated Appropriation of Retained Earnings(Millions of yen)Interim year ended

Year ended

September 2005

March 2006

(As of September 30, 2005)(As of March 31 2006)(Capital Surplus)
I

Consolidated capital surplus, beginning of period

52,103

52,103

II

Increases in Capital surplus

6,926

6,926

Gain on sales of treasury stocks

6,926

6,926

59,03059,030

III Capital surplus, end of period(Retained Earnings)
I

Consolidated retained earnings, beginning of period

155,501

155,501

II

Increases in consolidated retained earnings

16,30532,457

Net income for the period

16,30532,457

III Deductions from retained earnings

2,536

4,567

Dividends - total

2,379

4,410

Directors' bonuses

140

140

Statutory auditors' bonuses

17

17

169,271

183,391

IV Retained earnings, end of period(4) Statement of changes in net assets(Millions of yen)
Shareholders' equity
Capital stock
Beginning of period

Capital surplus

Retained earnings

59,030183,391

38,716

Treasury stock

Shareholders' equity total(13,449)

267,689

Changes during this interium accounting period
Delivery of dividends(2,842)

Directors' bonuses

(132)

(132)

Interim net income

18,43018,430Acquisition of treasury stock(2,842)

(19)

(19)

Changes of items other than capital stock (net)Total changes during this interium accounting periodEnding of period--

15,456(19)

15,43738,71659,030198,848(13,468)

283,127

Evaluation difference and foreign currency exchange adjustments
Evaluation difference ofGain/Loss on

Foreign currency

Evaluation difference andMinority

Net assets

investment securities

deferred hedgetranslation adjustments

foreign currency exchangeinterests

total

adjustments total
Beginning of period

7,367

-

(1,747)5,619

49273,359

Changes during this interium accounting period
Delivery of dividends(2,842)

Directors' bonuses(132)Interim net income

18,430Acquisition of treasury stock
Changes of items other than capital stock (net)

(19)
(308)

(0)

977

668

1

669

Total changes during this interium accounting period

(308)

(0)

977

668

1

16,106

Ending of period

7,058

(0)

(770)

6,287

51

289,466(5) Consolidated Statements of Cash Flows(Millions of yen)Interim year ended

I

September 2005

September 2006

March 2006

(As of September 30, 2006)(As of March 31, 2006)

Income before taxes and other adjustments

24,22428,324

51,588Depreciation and amortization

6,968

6,952

14,381

Impairment loss

592

-

592

Amortization of consolidated adjustments

399

-

799

-

590

-

(97)

(85)

(177)
(7,214)

Cash flows from operating activities

Equity in loss(earnings) of unconsolidated companies
Increase(decrease) in retirement allowance

84

(494)

Increase(decrease) in allowance for doubtful accounts

(211)

(27)

(90)

Interest and dividend income

(239)

(447)

(539)

Interest expenses

143

87

286

Foreign exchange losses (gains)

124

140

664

Loss on disposal of tangible fixed assets

521

57

661

Gain on sales of tangible fixed assets

(65)

(42)

(71)

Loss on revaluation of golf membership deposits

-

-

6

Expense relating to acquisition of newly consolidated subsidiary

-

-

473

Gain on contribution of securities to retirement benefit trust--(4,966)

Transfer of securities to retirement benefit trust

-

-

7,110

Decrease(increase) in accounts receivable

1,561(2,351)(1,752)

Decrease(increase) in inventories(3,121)(2,274)(4,923)

Increase(decrease) in accounts payable686(1,605)

1,461

Directors' bonuses

(157)

(132)

(157)

Others

(555)

1,926

3,323

Subtotal

61,45530,86030,618Interest and dividend received

436

546

787

Interest paid

(143)

(87)

(293)

Income taxes paid

(10,100)(10,213)(18,569)

Cash flows from operating activities

21,052

20,86543,380Cash flows from investing activities
Payments into time deposits
Payments for acquisition of tangible assets

-

(698)

-

(6,149)(8,641)(14,248)

Proceeds from sales of tangible assets

763

141

987

Payments for acquisition of intangible assets

(764)

(126)

(1,278)

Payments for acquisition security investments(14,999)(1)(15,000)

Proceeds from sales of security investments

1

-

1

Payments for assignment of goodwill

-

-

(918)
(23,460)

Acquisition of shares in consolidated subsidiary--

Payments for acquisition of newly consolidated subsidiary

-

-

(473)

(21,147)(9,326)(54,391)(4,848)Cash flows from investing activities
III

Year ended(As of September 30, 2005)

Amortization of goodwill

II

Interim year ended

Cash flows from financing activities
Increase(decrease) in short-term debt

(2,446)(2,114)

Repayment of long-term debt

(328)

-

(5,339)Proceeds from treasury stock

14,998-14,998

Buyback of treasury stock

(14)

(19)

(29)

Dividends paid

(2,379)(2,842)(4,410)Cash flows from financing activities

9,829(4,976)370

IV Effect of Exchange Rate Changes on Cash andCash Equivalents
V

Change in Cash and Cash Equivalents

302

182

1,046

10,036

6,744(9,594)

VI Cash and Cash Equivalents, Beginning of period

57,55747,96357,557

VII Cash and Cash Equivalents, End of period

67,59454,70847,963

Notes:Relating to balance sheet(Millions of yen)Interim year ended

I Accumulated depreciation of tangible assets

Interim year ended

Year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

178,784

191,436

186,091

II Matured bills as of September 30 2006
The last day of this interim accounting period was a holiday of banking institutions,and the bills reaching maturity on Sep 30 2006,mentioned below,
are included in the ending balance of this interim accounting period.
Trade notes receivable

694 millions of yen

Relating to statement of income
I Main items among selling, general and administrative expenses(Millions of yen)Interim year ended

Interim year ended

Year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

Promotion and Advertisement fee

4,001

4,428

Transportation and Packaging cost

3,570

3,845

7,431

Salaries

9,177

11,10019,254

Provision for bonuses

2,099

2,006

3,896

859

742

1,835

Depreciation

1,270

1,438

2,828

II R&D expenditure

7,342

7,771

18,024

Pension

9,077

III Itemized statement of Gain on sales and Loss on disposal of assets
Gains on sales of fixed assets(Millions of yen)Interim year ended

Interim year ended

Year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

Land

60

33

60

Machinery and transportation equipment

4

8

10

Other tangible fixed assets

0

-

0

Total Gains on sales of fixed assets

65

42

71

Land

313

-

323

Buildings and structures

93

12

114

Loss on disposal of fixed assets(Millions of yen)

Machinery and transportation equipment

76

18

170

Other tangible fixed assets

37

25

53

Total Loss on disposal of fixed assets

521

57

661

IV Impairment loss
(Millions of yen)
Location

Ashigara kami county ,Kanagawa prefecture-

Ashigara kami county ,Kanagawa prefecture

Application

Unused immovable property-

Unused immovable property

Assortment

Land

-

Land

Amount

592

-

592

Relating to statement of cash flows
Reconciliation of cash and cash equivalents on the semiannual consolidated balance sheet.

(Millions of yen)Interim year ended

Interim year ended

Year ended

September 2005

September 2006

March 2006

(As of September 30, 2005)(As of September 30, 2006)(As of March 31, 2006)

Cash on hand and in banks
Time deposits, bonds and other with original maturity exceedinga three-month period

67,59455,40747,963

-

(698)

-

Cash and cash equivalents

67,59454,70847,963

Relating to Statement of changes in net assets
I Category and total number of issued stock and treasury stock(Thousand)

Beginning balance

Increase during
this interim period

Decrease during
this interim periodEnding balanceIssued stock : Common stock

210,876--

210,876

Treasury stock : Common stock

7,848

4

-

7,853

*Note : The increase of treasury stock is from taking up odd stock.
II Items on dividend(1) Delivery of dividends(Resolution)

Category of stock

Annual meeting of stockholders held on June 29, 2006

Common stock

Dividend Dividend per(millions yen) share (yen)

2,842

14

Dividend record date

Effective date

March 31,2006

June 29,2006(2) Dividend recorded in this interim period but effective after the period end(Resolution)
Board of directors held on Oct 30, 2006

Category of stock

Dividend
Source of(millions yen) dividend

Dividend
per share(yen)

Dividend record date

Effective dateCommon stock

Retained
2,436 earnings

12

September 30,2006

December 8,2006

4. Segment Information(1) Segment
Interim year ended
September 2005
(As of September 30, 2005)
General hospital products
Sales
Operating income
Operating income ratio
Catheter and Cardiovascular system
Sales
Operating income
Operating income ratio
Home health care products
Sales
Operating income
Operating income ratio(2) Sales results by product segment

Disposable medical equipment
Pharmaceuticals
Blood transfusion system
General hospital products
Catheter system
Cardiovascular system
Vascular grafts
Catheter and Cardiovascular system
CAPD system
Diabetes care products
Other productsHome health care products
Total(Millions of yen)Interim year ended
September 2006
Changes(As of September 30, 2006)

63,351
12,06619.0%

65,82912,351
18.8%

2,478
284
－

42,641
14,15333.2%

52,771
17,77733.7%

10,1303,624－

13,833
4,039
29.2%

14,068
3,834
27.3%

234
(205)
－

(Millions of yen)Interim year ended
Interim year ended
Changes
September 2005
September 2006
(As of September 30, 2005) (As of September 30, 2006)
Amount%Amount%%37,71631.5%

38,23328.8%

17,57014.7%

18,363

13.8%

1.4%
4.5%

8,064

6.7%

9,232

7.0%

14.5%

63,35152.9%

65,829

49.6%

3.9%

24,06920.1%

30,277

22.8%

25.8%

15,23012.7%

17,625

13.3%

15.7%

3,341

2.8%

4,868

3.7%

45.7%

42,641

35.6%

52,771

39.8%

23.8%

3,953

3.3%

3,637

2.7%

-8.0%

4,803

4.0%

5,925

4.5%

23.4%

5,076

4.2%

4,505

3.4%

-11.2%

13,833
119,82511.5%
100.0%

14,068132,669

10.6%
100.0%

1.7%
10.7%

Note ) Main Products belonging to each product segment
Product segment

Main Products

Disposable medical equipment

Syringe, Needle, Solution Administration set, I.V.catheter,
Blood collection tube, Electronic medical devices, etc.
I.V.solutions, Prefilled syringe, Nutritional products, etc.

Pharmaceuticals
Blood transfusion system
Catheter system
Cardiovascular system
Artificial vascular grafts
CAPD system
Diabetes care products
Other products(3) Sales results by region

Japan
EuropeAmerica
Others
Total

Blood bags, Blood transfusion administration set, medical
electronic devices for blood collection, etc.
PTCA dilation catheters, Coronary stent, Guide wire,
Angiographic catheters, etc.
Roller pump, Hollow fiber oxygenators, Blood circuit, etc.
Artificial vascular grafts
Dialysis solution, etc.
Blood glucose monitor, etc.
Home oxygen system, Digital Thermometers, Electronic
sphygmomanometers, etc.

(Millions of yen)Interim year ended
Interim year ended
Changes
September 2005
September 2006
(As of September 30, 2005) (As of September 30, 2006)
Amount%Amount% Amount
73,283

61.1%

73,82855.6%

544

18,55515.5%

22,750

17.2%

4,195

18,44815.4%

24,699

18.6%

6,251

9,539
119,8258.0%
100.0%

11,390132,6698.6%
100.0%

1,851
12,843