Consolidated Statements of Income

¥ million

	2007/03	2008/03	2009/03	2010/03
I Net sales	969,712	1,202,965	1,076,164	840,427
II Cost of sales	343,794	390,554	319,038	298,167
Gross profit	625,918	812,410	757,126	542,259
III Exploration expenses (After deducting Exploration subsidies)	17,688	34,095	25,982	15,710
IV Selling, general and administrative expenses	49,152	64,104	67,877	64,880
Operating income	559,077	714,211	663,266	461,667
V Other income
1. Interest income	12,843	10,984	9,535	4,353
2. Dividend income	2,291	5,439	12,338	9,476
3. Equity in earnings of affiliates	1,349	1,764	946	—
4. Gain on transfer of mining rights	33,533	—	—	—
5. Net gain on redetermination of unitized field	—	4,005	—	—
6. Net gain on taking effect of exploration and production agreement	—	3,481	—	—
7. Foreign exchange gain	5,738	2,747	—	—
8. Other	4,322	4,666	9,214	7,643
Total other income	60,079	33,089	32,034	21,473
VI Other expenses
1. Interest expense	12,389	10,887	3,934	1,274
2. Equity in losses of affiliates	—	—	—	1,919
3. Provision for allowance for recoverable accounts under produciton sharing	6,176	20,586	16,642	6,028
4. Provision for exploration projects	2,973	3,104	3,386	8,594
5. Provision for investments in exploration	—	—	—	5,408
6. Loss on valuation of investment securities	—	21,349	31,798	—
7. Foreign exchange loss	—	—	14,570	13,263
8. Other	11,355	5,572	8,801	4,624
Total other expenses	32,893	61,501	79,134	41,113
Ordinary income	586,262	685,799	616,166	442,027
Income before income taxes and minority interests	586,262	685,799	616,166	442,027
Income taxes–current	432,894	496,852	488,262	322,993
Income taxes–deferred	-19,655	-5,502	-17,883	2,132
Minority interests	7,932	21,204	725	9,691
Net income	165,091	173,245	145,062	107,210

Consolidated net sales decreased 22% to ¥235.7 billion in the fiscal year ended March 31, 2010. Increased sales volume contributed ¥29.8 billion. But negative factors outweighed. They included a decrease in the average unit sales price, which subtracted ¥182.0 billion. Meanwhile, the strong yen shaved of ¥83.0 billion, while net sales excluding crude oil and natural gas edged down by ¥0.4 billion.
Cost of sales fell 7%. The drop came largely as lower sales led to a fall in royalties at the ADMA Block in the United Arab Emirates. Exploration expenses fell 40%. Operating income was down 30%.
Ordinary income decreased 28% to ¥442.0 billion due in part to a fall in losses on valuation of investment securities. As a result, net income was down 26% at ¥107.2 billion.

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