Financial Highlights

In the domestic construction market, contracts funded by the supplementary budget produced an increase in public-sector projects. However, there was a sharp decline in private-sector activity caused primarily by sluggish housing and real estate markets and declining capital expenditures by manufacturers. The result was a large drop in construction orders in the second half of the year. Furthermore, construction companies faced rising costs of construction materials and even fiercer competition in securing orders during the same period.

Despite these challenges, for the year ended March 31,2009, consolidated net sales for the Shimizu Group increased 12.0% from the last fiscal year to ¥1,887.5 billion (US$19.2billion). Operating income was down 57.3% to ¥22.3 billion (US$227.5million). The main reasons were a decrease in gross profit on completed construction contracts resulting from lower profit margins and a decline in gross profit from the real estate development segment. Net income decreased 76.7% to ¥6.2 billion (US$64million) due to special losses that include valuation loss on investment securities resulting from the drop in share prices.