Appetite for capital investment among customers worldwide stayed high in fiscal 2008. We were able to increase earnings largely as planned in plant-related operations despite the emergence of supply-side constraints for plant machinery. In our business where we sell machinery and equipment in large volumes, sales of industrial machinery in the U.S. market held up strongly despite an economic slowdown caused by the subprime crisis. In Japan, however, earnings fell short of plans mainly because of depressed agricultural equipment sales following a shift in government agricultural policy, and a negative impact on construction machinery rental revenues due to tax system changes.

During INNOVATION 2009, with the aim of creating new business, we plan to work with our core industry partners to reinforce sales and technical capabilities to realize joint growth. Based on the twin drivers of trading and enterprise investments, we will work with other MC business groups to expand the value chain across a number of sectors and industries. This approach will accelerate our global growth. For example, in April 2008 we underwrote a third-party increase in capital for Chiyoda Corporation to raise our stake to 33.4%. Besides seeking to boost the value of MC's investment by targeting growth within the plant engineering industry, this move also promises to generate synergies in our Energy Business and Chemicals groups.