(Containership Business)

Q1. With regard to Containership Business throughout 3rd Quarter and 4th Quarter,
       would you please advise route-wise breakdown between Asia-North America
       and Asia-Europe trades indicating improvement from 3rd Quarter to 4th Quarter.
       How do you see freight rate levels and possibility of further rate restoration?

A1. Major part of the improvement is for Asia-Europe trades, but also in Asia-North America trades,
      which is due to the effect of reduction in service routes through Alliances.
      Freight rate increase planned as of 1st January was U.S.$400 per FEU for Asia -North America
      trades and $200 per TEU for Asia-Europe trades, which has been implemented to almost same extent
      and has had almost same level of effect on our profit.
       Loss made in the service is bigger in Asia-Europe trades.


    Talking about freight rate level for 4th Quarter, rates during November and December in Asia-Europe
    trades have been down more than our estimations. So we took rate restoration action from January 1st.
    Furthermore, in our present forecasts, as we never felt bearish, we set freight rate assumptions
    on the basis that restored freight rates would decline slightly after the middle of February.
    In reality, every shipping company now apears to be committed to maintain freight rates and so we have
    not seen signs of them declining yet. Considering such circumstances, I suppose, we have still some
    room for improvement.

Q2. Would you please advise actual booking situation after the Lunar New Yyear holidays?

A2.  Partly because we have stopped some of our services until March with our Alliance partners,
      present load factor is more than 95% for both Asia-North America and Asia-Europe trades.

Q3.  Rate restorations as of 1st January seems to expand smoothly so what do you think about
       their continuity throughout the next year? 
       Please tell us your view about whether further rate increase is possible,
       or there are possibilities of rate down still remaining.

A3. In terms of trend in the future, such rapid recovery seen in 2010 after the global financial recession
      could be difficult. At that time cargo demand fell by 15% and then in the next year it gained by +16-17%
      for year-on-year basis.
      This time, however, especially in Asia-Europe trades, if we are asked whether we can expect such
      drastic demand growth, our anticipation for trade growth is not as strong as at that time,
      considering recent economic situation in Europe and sluggish recovery in U.S. economy
      On the other hand, however, present rate levels are such that this business can no longer continue to
      be profitable, and therefor we see announcements of unusually high level of rate restoration.
      So, considering all these conditions, we can expect rate restoration will succeed to some extent.
      However, if trade growth weakens, which is the base for maintaining freight rates, we cannot help but
      think recovery will take some years step-by-step.

Q4.  As there has been news that Maersk and Hapaq-Lloyd have made announcements that
       they will make further rate restoration from March, how about your plan in the future?

A4.  Maybe other major European players will follow them and make announcements upping rates
      before long.  I believe that an increase of as much as US$700 would be an expression that all
      containership operators can no longer maintain their business at present rate level, and we will
      also take corresponding action as early as possible.

(Dry Bulk Business)

Q1. Due to spot market downturn, it is said that securing stable earnings might become more difficult.
       In case present market level stays long, is there a real possibility that ratio of long-term contracts
       in your bulk businesses may decrease?

A1. For Dry Bulk Business, I think it might be as you indicated.  In the case of our Cape-size fleet, at
       the beginning of a year, market exposure is usually about 30%, but for next year, it could increase
       close to 40%.  It is becoming more difficult to secure long-term contracts, and in fact, we would
       not like to make long-term contracts under such miserable market conditions.

Q2. In terms of your Cape-size and Panamax fleet, nowadays over-supply problem has been pointed
       out. For Cape-size, as shipping companies have scrapped vessels over 20-year old or so, are there
       any possibilities you may be scrapping younger vessels in the future?


A2. In case of Cape-size, when present level of market continues at level seen for the time being,
       we can pay neither capital cost, nor debt , even interest, as this level is so low that we can hardly
       even pay operation costs. So, if it continues for a long time, we had better scrap older vessels.

       However, we do not think present market level is sustainable, so obviously some degree of
       rebound will occur.


       Then, as it always depends on balance with the market level, one criteria for large-size vessels
      is age of 20 years old. If we want to use them after they are 20 years old, we have to pay significant
      amount of maintenance fee to obtain acceptance from classification societies. Therefore, most
      shipowners will not retain possession of vessels aged over 20 years even if  present market level
      recovers to some degree.


     In case of small-type vessels, whether we make decision for scrapping them or not, quality of vessels
     has rather smaller effect, whereas demand in China trade, or needs in coastal transportation in India,
     etc. are factors having considerable effect.
     It has been said that scrapping age for vessels in this category is about 30 years, but it could be down
     to around 25 years or such, which is our image.


     Furthermore, every player will set their eyes on fuel-efficient ships for the future. Older vessels have the
     worse fuel efficiency. Apart from vessel's age, actions to dispose of such fuel-inefficient vessels earlier
     could well be accelerated.

(Oil Tanker Business)

Q.  In terms of stable profit and market exposure for oil tankers, are there any possibilities to reduce
      ratio of long-term contracts due to market downturn

A. In our VLCC fleet, we have sold one free vessel out of our 9-vessel fleet.
    The other 8 vessels in operation are now all under long-term contracts.
    In that sense, at least for the next one or two years, our long-term contract ratio will not change
    so much. However, there is a problem in the slightly longer view as to how we will manage when
    such contracts come up for revision.


    All COA's for our AFRAMAX fleet are basically exposed to spot markets, so market exposure ratio
    will remain unchanged. Other than that, I suppose that the point is exactly how we can maintain our
    AFRAMAX fleet size.

(Car Carriers)

Q1. Although it may be difficult to compare with other carriers, is there any difference
      in cost structure between others, for example K-Line having high-cost vessels?

A1. In terms of ship's cost, I do not think we have very many high-cost vessels.
       We have still some new buildings which we ordered before global financial crisis
       and the last one of the newbuildings is delivered this year.
       Cost of those ships are rather high, but that is also the same for other carriers.
       In that sense, we think our ship cost is almost at same level as other carriers.


Q2.  Is there any impact from the floods in Thailand in the 4th Quarter?

A2.  There is some small impact in 4th Quarter, around 30,000-40,000 units and 1.5 billion
       yen in 2nd Half.


Q1. As estimate of FY2011 in Bulk Shipping Business is revised downward,
      would you please advise us breakdown for each division?

A1.  Amount of downward revision in 2nd Half is almost the same in each of the
      3 businesses: Dry Bulkers, Car Carriers and Others.
      No one particular business but rather all divisions are revised downward.

Q2. Considering that Operating cash flow is still at deficit balance, it appears
      financial outflow has not yet stopped, so how about finance situation in next
      half year or in one year?

A2. We have tried to secure sufficient financing in advance.
    With regard to cash and deposits at the end of the term, although there was
     decrease to 65.0 billion yen at the end of 2nd Quarter, it was 88.1 billion yen
     at the end of 3rd Quarter, which is a return to previous cash level.  

Q3.  How much effect do you think there will be in pushing up profit next year by
      counter-measures that have been carried out until now in this year, like booking
      impairment loss?

A3. Impact of structural reform, as we previously said, is around 1.5 - 2.0 billion yen,
      which is the amount of our estimation for next 3 years, although the amount will change
      depending on the market.
      This has continuous effect for 10 years or 15 years and the effect is not put together in
      just a year.
      In addition, another advantage of structural reform is that it will be possible to decrease
      investment cash flow to a large extent in 2012, 2013 and 2014 which is the result of
      secondary effects.