Consolidated Statements of Income Millions of yen Thousands of U.S. dollars (Note 3) Years ended December 31, 2010 2009 2010 Net sales........................................................................................................................................................................................ \153,779 \140,033 $1,887,098 Cost of sales................................................................................................................................................................................ 103,491 100,764 1,269,989 Gross profit.................................................................................................................................................................................. 50,288 39,268 617,108 Selling, general and administrative expenses (Notes 12 and 15)............................................................... 29,016 28,110 356,077 Operating income................................................................................................................................................................... 21,271 11,158 261,030 Other income (expenses): Interest and dividend income.................................................................................................................................. 429 422 5,274 Interest expense................................................................................................................................................................ (246) (279) (3,025) Equity in earnings of affiliates................................................................................................................................... 342 361 4,200 Impairment loss on property, plant and equipment (Note 6).............................................................. (2,419) (2,486) (29,688) Loss on disposal of property, plant and equipment................................................................................... (538) (1,063) (6,606) Provision for doubtful receivables......................................................................................................................... (236) (287) (2,896) Foreign currency exchange loss............................................................................................................................. (251) (77) (3,082) Environment readiness fee........................................................................................................................................ (398) (142) (4,890) Laboratory transfer expenses................................................................................................................................... (189) . (2,330) Gain on revision of retirement benefit plan..................................................................................................... 240 . 2,946 Loss on discontinued operations (Note 7)........................................................................................................ . (490) . Other, net.............................................................................................................................................................................. (86) 90 (1,063) Income before income taxes and minority interests......................................................................................... 17,917 7,205 219,868 Income taxes (Note 13): Current.................................................................................................................................................................................... 6,583 3,392 80,789 Deferred................................................................................................................................................................................. (2,575) (547) (31,601) 4,008 2,844 49,188 Minority interests..................................................................................................................................................................... 775 819 9,515 Net income (Note 21)........................................................................................................................................................... \ 13,133 \ 3,541 $ 161,164 See accompanying notes to consolidated financial statements. Toagosei Co., Ltd. and Consolidated Subsidiaries 28 Annual Report 2010