February 21, 2005

Summary of Business Results for the First Three
Quarters of Fiscal 2004 (on a consolidated basis)

1. Matters relating to preparation of quarterly report
1) Adoption of simplified methods for accounting:

(Details)
Accounting standard for calculation of income taxes:

Calculation of tax amounts based on estimated income
taxes for the term using the statutory effective tax rate

2) Changes in accounting standards from those used for the
latest account settlement: none

3) Changes in the scope of consolidation or accounting for
equity method: 22 newly consolidated firms, 3 companies
excluded as equity-method affiliates
2. Outline of business operations for the first three quarters
(April 1 to December 31, 2004)

(1) Operating results
(Amounts less than ¥1 million are
omitted.)

Net sales
Operating profit Recurring profit Net income

(¥ million)
(¥ million)
(¥ million)
(¥ million)
First 3 quarters
of fiscal 2004
200,496
15,202 15,017 8,177
First 3 quarters
of fiscal 2003
Nippon Sanso
Taiyo Toyo Sanso
166,164
91,761
10,313
2,611
9,410
2,935
5,627
1,672
Earnings per share
(Yen)
First 3 quarters of fiscal 2004
Taiyo Nippon Sanso*
24.78
First 3 quarters of fiscal 2003
Nippon Sanso
Taiyo Toyo Sanso

19.21
11.46

*Note: The pre-merger business results of the two companies
for fiscal 2003 are provided above, no direct comparison is
possible with the business results of Taiyo Nippon Sanso for
fiscal 2004.

Supplemental disclosure on business performance
Taiyo Nippon Sanso Corp. was created through the merger of
Nippon Sanso Corp. (the surviving entity) and
Taiyo Toyo
Sanso Co. on
October 1, 2004. Accordingly, Nippon Sanso’s
consolidated results for the nine-month period include the
six-month term ended September 30, 2004 as Nippon Sanso, and
the three-month period ended December 31, 2004 as Taiyo Nippon
Sanso. As a result of the merger, 22 new subsidiaries have
been accounted for in the consolidated financial statements
beginning with the third quarter. Accordingly, on a
consolidated basis, net sales for the nine-month term ended

December 31, 2004 came to ¥200,496 million, operating profit
to ¥15,202 million, recurring profit to ¥15,017 million, and
net income to ¥8,177 million. These figures were generally in
line with initial projections, reflecting steady performance
in the mainstay industrial gas operations.

(2) Financial position (¥ million)
(Amounts less than ¥1 million are omitted.)
Total
assets
(¥ million)
Shareholders’
equity
(¥ million)
Shareholders’
equity ratio
(%)
Shareholders’
equity per share
(¥)
As of Dec. 31, 2004
Taiyo Nippon Sanso
411,558 151,945 36.9
375.37
As of Dec. 31, 2003
Nippon Sanso
Taiyo Toyo Sanso

263,369
127,982

95,263
47,374

36.2
37.0

325.43
340.34
[Cash flows]
(¥ million; Amounts less than ¥1 million are omitted.)

Cash flows
from
operating
activities
Cash flows
from
investing
activities
Cash flows
from
financing
activities
Cash and cash
equivalents at
end of first 3
quarters
First 3 quarters
of fiscal 2004
15,567 (22,446)
1,779 19,517
First 3 quarters
of fiscal 2003
Nippon Sanso
Taiyo Toyo Sanso
11,867
--
(6,914)
--
(5,839)
--
10,144
--

Note: The cash flow figures for Taiyo Toyo Sanso for the
previous three-quarter period have not been disclosed.

Supplemental disclosure on financial position
Total assets and shareholders’ equity showed substantial
increases as a result of the merger. Total assets increased to
¥411,558 million. Shareholders’ equity also rose to ¥151,945
million, and the equity ratio increased to 36.9% from 36.2% at
the end of December 2003.

Cash flows from operating activities resulted in a net
cash inflow of ¥15,567 million. Cash flows from investing
activities resulted in a net cash outflow of ¥22,446 million,
mainly due to acquisition of operations by a U.S. subsidiary,
and cash flows from financing activities resulted in a net
cash inflow of ¥1,779 million. As a result of the merger and a
consequent increase in consolidated subsidiaries, cash and
cash equivalents grew by ¥11,258 million year-on-year, to
¥19,517 million.

3. Forecast on a consolidated basis for the full term (April
1, 2004 to March 31, 2005)

Net
sales
(¥ million)
Recurring profit
(¥ million)
Net income
(¥ million)
Full term
300,000
22,000
12,000
(For reference: Earnings per share (full-term forecast) is ¥29.64.

Disclaimer: The forecasts above are prepared on the basis of
information available to the Company’s management as of the
date of writing, and are subject to various factors beyond the
Company’s control, notably exchange rate fluctuations and
unforeseeable economic conditions. Actual results may thus
differ substantially from the above forecasts.

Supplementary disclosure on performance forecasts
The Company’s forecasts remain unchanged from those made
simultaneously with the disclosure of the interim account
settlement (forecasts as of Nov. 17, 2004). We are looking
into ways to fully utilize the assets accompanying the merger,
and are making decisions on sales of land holdings that have
poor prospects for utilization. The sell-off of land holdings
will generate losses, which will be posted under extraordinary
losses along with other losses resulting from the merger.
These losses, however, will be offset by the posting of
extraordinary gains of nearly the same amount resulting from
the sale of tangible fixed assets.