REG-Mitsui & Co Ltd Highlights of Consolidated Financial Results for the Three-Month Period Ended June 30, 2008

Highlights of Consolidated Financial Results for the Three-Month Period Ended June 30, 2008

LONDON--(Business Wire)--

I. Highlights of Consolidated Financial Results for the Three-Month Period Ended
June 30, 2008

This announcement is for our U.S.$5,000,000,000 Euro Medium Term Note Program
authorized by UKLA on 24th October 2007.

Consolidated financial statements for the three month period ended June 30, 2008
and the corresponding three month period of the previous year are not audited by
auditors.

1. Summary of Financial Results for the Three-Month Period Ended June 30, 2008

(1) Operating Results

Mitsui & Co., Ltd. ("Mitsui") and its subsidiaries (collectively "the Group")
posted consolidated net income of ¥103.1billion, a decrease of ¥77.9 billion, or
down 43.0 %, from ¥181.0 billion for the corresponding three month period of the
previous year. Major developments during the periods were:

-- Substantial one-off gains on sale of securities and divestitures in the
three month period of the previous year amounting to approximately ¥84
billion (after tax) including sales of the Group's stakes in mineral
resources and energy businesses, such as Sesa Goa Limited in India,
Sakhalin II in Russia and EBM(*1) in Brazil as well as gains on sale of
aircraft held by Tombo Aviation (United States).

-- Increases in gross profit, equity in earnings of associated companies
and dividend income of mineral resources and energy producing businesses
all reflecting the continued run-up in prices of related commodities(*2)
in the current year. On the other hand, the Consumer Service & IT
Segment recorded a downturn chiefly from write downs of inventories in
residential home business in Japan. In addition, the Chemical Segment
also recognized impairment loss on domestic listed securities.

(*1) Empreendimentos Brasileiros de Mineração S.A.

(*2) Due to the difference in accounting periods as well as time-lag issues, the
impact of various run-ups in prices of internationally traded commodities such
as iron ore, coal and oil has not been fully reflected in the three month period
ended June 30, 2008. Such impact will be reflected in the next three months
period.

(2) Financial Condition

Total assets as of June 30, 2008 were ¥10.3 trillion, an increase of ¥0.7
trillion from ¥9.6 trillion as of March 31, 2008. Investments and plant,
property and equipment ("PPE") increased by ¥0.3 trillion mainly due to higher
stock prices on Japanese stock exchanges as well as net improvement in foreign
currency translation adjustments due to the weaker Japanese Yen against
Australian Dollar, U.S. Dollar and Brazilian Real. In addition, various capital
expenditures for the expansions made by the Mineral & Metal Resources and the
Energy segments also contributed to the increase. Higher commodity prices
resulted in an increase of ¥0.4 trillion in the current assets. Shareholders
equity as of June 30, 2008 was ¥2.4 trillion, an increase of ¥0.2 trillion from
2.2 trillion as of March 31, 2008, as a result of increased retained earnings,
higher stock prices and Japanese yen depreciation, and Net Debt-to-Equity Ratio
("Net DER") as of June, 2008 was 1.21 times, 0.06 points lower than that of
March 31, 2008.

(3) Cash Flow Statement

Reflecting net increase of ¥97.5 billion of operating assets and liabilities
including increased inventories at Westport Petroleum, Inc. net cash provided by
operating activities for the three month period ended June 30, 2008 was ¥30.7
billion despite the steady growth of operating income. Net cash used in
investing activities for the three month period ended June 30, 2008 was
¥80.8billion due mainly to expansion expenditures of natural resources in the
Mineral & Metal Resources and the Energy Segments. As a result, free cash flow
(*1) for the three-month period ended June 30, 2008 was a net outflow of ¥50.1
billion.

(1*) Sum of net cash flow for operating activities and cash flow for investing
activities

2． Results of Operations

(1) Analysis on consolidated income statements

Gross Profit

Gross profit for the three month period ended June 30, 2008 was ¥275.0 billion,
an increase of ¥38.6 billion, or 16.3%, from ¥236.4 billion for the
corresponding three month period of the previous year as a result of the
following:

-- The Energy Segment reported an increase of ¥25.2 billion in gross
profit. This increase is attributable to solid performance by the oil &
gas producing businesses and Mitsui Coal Holdings Pty. Ltd. (Australia),
reflecting continued run-up in mineral resource prices and additional
energy equity production.

-- The Mineral & Metal Resources Segment also reported an increase of ¥20.0
billion in gross profit. Reflecting higher iron ore prices Mitsui Iron
Ore Development Pty. Ltd. (Australia) reported an increase of ¥16.5
billion.

-- Automotive and other machinery businesses; and basic materials such as
steel products and chemical products continued to show good performance
carrying over last year's positive trend into this fiscal year.

-- The Consumer Service & IT Segment reported a decrease in gross profit
due to write downs of inventories in the domestic residential home
business as well as a slowdown in other business areas.

.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three month period ended
June 30, 2008 were ¥150.7 billion, an increase of ¥3.7 billion, from ¥147.0
billion for the corresponding three month period of the previous year. The table
below provides selling, general and administrative expenses by operating
segment.

The table below provides a breakdown of selling, general and administrative
expenses used for our internal review.

Provision for Doubtful Receivables

Provision for doubtful receivables for the three month period ended June 30,
2008 was ¥1.0 billion, a decrease of ¥0.5 billion, from ¥1.5 billion for the
corresponding three month period of the previous year. Provisions for both
periods consisted of individually small ones.

Interest Expense, Net of Interest Income

Interest expense, net of interest income for the three month period ended June
30, 2008 was ¥9.0 billion, a decrease of ¥1.1 billion from ¥10.1 billion for the
corresponding three month period of the previous year. Mitsui recorded a ¥1.1
billion increase reflecting higher Japanese Yen interest rates.

On the other hand, overseas subsidiaries reported a decrease in total due to
lower U.S. Dollar interest rates.

The following table sets forth the periodic average of 3 month Libor of Japanese
Yen and U.S. Dollar for the three month periods ended June 30, 2008 and 2007.

-0-
*T
Periodic average of 3 month Libor (%p.a.)
-----------------------------------------------------
3 month Period Ended
June 30,
------------------------------- --------------------
2008 2007
------------------------------- --------- ---------
Japanese Yen 0.92 0.71
U.S. Dollar 2.77 5.36
*T

Dividend Income

Dividend income for the three month period ended June 30, 2008 was ¥24.6
billion, an increase of ¥6.6 billion from ¥18.0 billion for the corresponding
three month period of the previous year.

Dividends from LNG projects in Abu Dhabi, Qatar and Oman were ¥11.9 billion, an
increase of ¥6.0 billion over for the corresponding three month period of the
previous year. Also, we received a dividend of ¥1.1billion from an LNG project
in Equatorial Guinea.

Gain on Sales of Securities

Gain on sales of securities for the three month period ended June 30, 2008 was
¥6.4 billion, a substantial decrease of ¥37.6 billion from ¥44.0 billion for the
corresponding three month period of the previous year. While there were no major
divestitures for the three month period ended June 30, 2008, the Group posted
substantial gains for the corresponding three month period of the previous year
as a result of several large scale divestitures such as the sale of a part of
its stake in the Sakhalin II project and its whole stake in EBM in Brazil.

Loss on Write-Down of Securities

Loss on write-downs of securities for the three month periods ended June 30,
2008 was ¥10.6 billion, an increase of ¥9.8 billion from ¥0.8 billion for the
corresponding three month period of the previous year. Major loss for the three
month period ended June 30, 2008 was impairment loss on listed shares in Mitsui
Chemicals, Inc. (Japan) while the loss for the corresponding three month period
of the previous year consisted of miscellaneous small losses.

Gain on Disposal or Sales of Property and Equipment--Net

Gain on disposal or sales of property and equipment--net for the three month
period ended June 30, 2008 was ¥2.2 billion, an increase of ¥2.1 billion from
¥0.1 billion for the corresponding three month period of the previous year.
Major gain for the three month period ended June 30, 2008 was related to the
sale of an office building previously held by Mitsui & Co. France S.A.

Impairment Loss of Long-Lived Assets

Impairment loss of long-lived assets for the three month period ended June 30,
2008 was ¥0.5 billion, an increase of ¥0.5 billion from ¥ 0 billion for the
corresponding three month period of the previous year.

Other Expense--Net

Other expense--net for the three month period ended June 30, 2008 was ¥11.2
billion, an increase of ¥10.3 billion, from ¥0.9 billion for the corresponding
three month period of the previous year. The major expenses for the three month
period ended June 30, 2008 were foreign exchange losses and exploration expenses
in the oil & gas business. Other expenses for the corresponding three month
period of the previous year consisted of miscellaneous small items.

Minority Interests in Earnings of Subsidiaries

Minority interests in earnings of subsidiaries for the three month period ended
June 30, 2008 was ¥13.6 billion, an increase of ¥3.6 billion from ¥10.0 billion
for the corresponding three month period of the previous year. Major factors of
the increase are related to the increase in minority interest at Novus
International, Inc. (United States) and Japan Collahuasi Resources B.V.
(Netherlands), an investment vehicle of Compania Minera Dona Ines de Collahuasi
SCM (Chile), a copper mining company.

Equity in Earnings of Associated Companies--Net

Equity in earnings of associated companies--net (after income tax effect) for
the three month period ended June 30, 2008 was ¥44.6 billion, an increase of
¥8.1 billion from ¥36.5 billion for the corresponding three month period of the
previous year as a result of followings:

-- Increase in earnings at Robe River Mining Company (Australia) reflecting
an increase in iron ore prices.

-- Increase in earnings at Compania Minera Dona Ines de Collahuasi SCM
(Chile), reflecting an increase in copper prices and additional
production.

-- Reversal effect of IPM Eagle LLP (United Kingdom) which recorded a
mark-to-market evaluation loss on long-term swap agreement at their
overseas power generating operation for the corresponding three month
period of the previous year.

-- Valepar S.A. (Brazil) posted a decrease, reflecting a reduction in
earnings at Companhia Vale do Rio Doce ("Vale") mainly due to a drop in
nickel price as well as appreciation of Brazilian Real against U.S.
Dollar. Impact of the settlement of iron ore contract price negotiation
for the current fiscal year is not substantially reflected in the three
month period ended June 30, 2008 due to a three-month time lag in
consolidating its earnings into our operating results.

Income from Discontinued Operations--Net

Income from discontinued operations--net (after income tax effect) for the three
month period ended June 30, 2008 was nil, a decrease from ¥59.9 billion for the
corresponding three month period of the previous year. Major discontinued
operations for the corresponding three month period of the previous year were
Sesa Goa Limited (India) of the Mineral & Metal Resources Segment and Tombo
Aviation, Inc. of Machinery & Infrastructure Projects Segment.

(2) Operating Results by Operating Segment

Based on the reorganization effective April 1, 2008, the following subsidiaries
previously included in the Machinery & Infrastructure Projects and the Chemical
Segments were transferred to the Americas Segment. The operating segment
information for the three month period ended June 30, 2007 has been restated to
conform to the current year presentation.

From the Machinery & Infrastructure Projects Segment:

Mitsui Automotoriz S.A. (Peru), Road Machinery LLC (United States), Ellison
Technologies Inc.(United States)

From the Chemical Segment:

Novus International, Inc. (*1), Fertilizantes Mitsui S.A. Industria e Comercio
(Brazil)

(*1) Novus International, Inc. was transferred in the 4th quarter of the fiscal
year ended March 31, 2008.

Iron & Steel Products Segment

Gross profit for the three month period ended June 30, 2008 was ¥17.7 billion,
an increase of ¥2.0 billion from ¥15.7 billion for the corresponding three month
period of the previous year. Supported by continued favorable demand, foreign
trading transactions, including those of Regency Steel Asia Pte Ltd. (Singapore)
to Asian markets, of various products such as steel sheets and plates for
automobiles and shipbuilding, steel tubular products and line pipes for oil and
gas development recorded solid performance. Furthermore, domestic sales of steel
products were robust under tight market condition and contributed to the
increase in earnings as well.

Operating income for the three month period ended June 30, 2008 was ¥ 9.0
billion, an increase of ¥1.9 billion from ¥7.1 billion for the corresponding
three month period of the previous year reflecting the increase in gross profit.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥0.9 billion, a decrease of ¥0.3 billion from ¥1.2 billion for the
corresponding three month period of the previous year. Net income for the three
month period ended June 30, 2008 was ¥5.8 billion, a ¥0.1 billion decrease from
¥5.9 billion for the corresponding three month period of the previous year.

Mineral & Metal Resources Segment

Gross profit for the three month period ended June 30, 2008 was ¥41.0 billion,
an increase of ¥21.0 billion from ¥21.0 billion for the corresponding three
month period of the previous year.

The main factor contributing to the increase was the price increase at iron ore
mining operations. Reflecting tight supply and demand balance in Asia,
especially in China and India, iron ore prices for the year ending March 31,
2009 increased substantially from the year ended March 31, 2008. Following the
settlement of Brazilian iron ore fines with increases by 65~71% in February
2008, Australian iron ore lump and fines prices were settled with an increase by
96.5% and 79.9% respectively between June and July 2008. FOB prices of Brazilian
iron ore and Australian iron ore had been the same level as a customary practice
in this industry up to the year ended March 31, 2008. However, Australian iron
ore producers insisted that different price be applied, reflecting ocean freight
difference between Australia and Brazil to major steel making countries, China
and Japan. Consequently increase in gross profit recorded by Mitsui Iron Ore
Development (Australia) was ¥16.5 billion. Part of the price increase achieved
is not reflected into the operating results for the three month period ended
June 30, 2008, because the final settlement of the price negotiation was delayed
until July.

Furthermore, increases in prices of other mineral and metal resources such as
iron and steel scrap, ferrous alloy reflecting tight market conditions also
contributed to increase in gross profit.

Operating income for the three month period ended June 30, 2008 was ¥ 37.7
billion, an increase of ¥21.0 billion from ¥16.7 billion for the corresponding
three month period of the previous year, reflecting increase in gross profit.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥20.3 billion, an increase of ¥6.3 billion from ¥14.0 billion for
the corresponding three month period of the previous year. Major factors were as
follows:

-- Earnings at Robe River Mining Company (Australia) were ¥6.5 billion, an
increase by ¥4.2 billion from ¥2.3 billion for the corresponding three
month period of the previous year reflecting increase in the iron ore
prices.

-- Compania Minera Dona Ines de Collahuasi SCM (Chile) recorded earnings of
¥6.6 billion, an increase by ¥3.9 billion from the corresponding three
month period of the previous year supported by firm copper price and
increased production.

-- Valepar S.A. (Brazil) posted a decrease of ¥2.0 billion, reflecting a
reduction in earnings at Vale mainly due to a drop in nickel prices as
well as the appreciation of Brazilian Real against U.S. Dollar. Most of
the upwardly revised iron ore contract prices have not been reflected
into the earnings for the three month period ended June 30, 2008 due to
a lag in consolidating its earnings into our operating results.

Net income for the three month period ended June 30, 2008 was ¥36.4 billion, a
large decrease of ¥48.4 billion from ¥84.8 billion for the corresponding three
month period of the previous year. Increase in operating income and equity in
earnings were offset by a significant rebound effect from gains from
divestitures for the three month period ended June 30, 2007 of a ¥93.9 billion
on the sale of its whole stake in Sesa Goa Limited (*1) and a ¥12.4 billion gain
on the sale of shares in EBM, a Brazilian iron ore company.

(*1) In this "Operating Results by Operating Segment", operating results of Sesa
Goa have been included in and presented as continuing operation. In the
consolidated statement of income, net income of Sesa Goa for the corresponding
three month period of the previous year is presented as income from discontinued
operations (after income tax effect).

Machinery & Infrastructure Projects Segment

Gross profit for the three month period ended June 30, 2008 was ¥28.2 billion,
an increase of ¥0.8 billion from ¥27.4 billion for the corresponding three month
period of the previous year.

-- Overseas automotive-related and construction machinery subsidiaries
continued to show steady performance, particularly a motorcycle retail
finance company P.T. Bussan Auto Finance (Indonesia) as well as
subsidiaries in Russia and other regions all reporting higher gross
profit.

-- Reflecting strong demand, ocean vessels and marine project businesses
showed overall strong performance through marketing commercial vessels,
trading in used vessels, operating and chartering vessels, and owning or
leasing special energy-related vessels.

-- In infrastructure projects business fields, plant business recorded a
downturn in gross profit. Operations of rolling stock leasing
subsidiaries in Europe and Americas also reported declines in gross
profit.

Operating income for the three month period ended June 30, 2008 was ¥ 6.0
billion, a decrease of ¥1.0 billion from ¥7.0 billion for the corresponding
three month period of the previous year. The decrease is primarily attributable
to the decrease in gross profit and an increase in selling, general and
administrative expenses in infrastructure projects business field. Operating
income of automotive and marine business related subsidiaries increased in
general, partially offset by an increase in selling, general and administrative
expenses.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥9.7 billion, an increase of ¥4.5 billion from ¥5.2 billion for the
corresponding three month period of the previous year. Overseas power producing
businesses such as IPM Eagle LLP and P.T. Paiton Energy (Indonesia) reported
equity in earnings of ¥4.2 billion in total, an increase of ¥3.4 billion from
¥0.8 billion earnings for the corresponding three month period of the previous
year. The major factor of this increase is reversal effect (rebound effect) of
IPM Eagle LLP which recorded a mark-to-market evaluation loss on long-term swap
agreement at their Australian power generating operations for the corresponding
three month period of the previous year.

Net income for the three month period ended June 30, 2008 was ¥15.9 billion, an
increase of ¥2.3 billion from ¥13.6 billion for the corresponding three month
period of the previous year. In addition to the above-mentioned factors, this
segment recorded a gain of ¥5.5 billion (*1) on the sale of leased aircraft for
the corresponding three month period of the previous year.

(*1) In this "Operating Results by Operating Segment", the gain on the sale of
aircraft has been included in and presented as continuing operation. In the
consolidated statement of income, the gain on the sale for the corresponding
three month period of the previous year is presented as income from discontinued
operations (after income tax effect).

Chemical Segment

Gross profit was ¥27.5 billion, an increase of ¥0.5 billion from ¥27.0 billion
for the corresponding three month period of the previous year. The principal
developments in this segment were as follows:

-- Basic petrochemicals fields ranging from basic materials to mid-stream
intermediate products recorded a slight decline in total. While P.T.
Kaltim Pasifik Amoniak (Indonesia), a joint venture manufacturing and
marketing company of ammonia recorded an increase in gross profit due to
higher price and an increase in sales volume, business of aromatics such
as xylene recorded a decrease in gross profit due to a sharp decrease in
margins following a rapid cost increase of raw material naphtha.

-- Supported by a globally strong demand for agriculture products,
businesses of crop protection chemicals and fertilizer as well as
sulphur and sulfuric acid, raw materials of fertilizer, remained robust.

Operating income for the three month period ended June 30, 2008 was ¥13.5
billion, an increase of ¥1.0 billion from ¥12.5 billion for the corresponding
three month period of the previous year, reflecting increase in gross profit.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥2.3 billion, an increase of ¥0.4billion from ¥1.9 billion for the
corresponding three month period of the previous year, mainly due to the
contribution of International Methanol Company (Saudi Arabia), a joint venture
methanol manufacturing company.

Net income for the three month period ended June 30, 2008 was ¥1.5 billion, a
decrease of ¥5.6 billion from ¥7.1 billion for the corresponding three month
period of the previous year, despite a small improvement as above. This segment
recorded a ¥8.1 billion impairment loss on shares of Mitsui Chemicals, Inc.

Energy Segment

Japan Crude Cocktail (JCC) continued to rise since April 2007, reflecting strong
demand and an influx of speculative money into the future markets and reached
US$121.83 (preliminary figure) per barrel in June 2008.

The JCC price, which has been reflected in revenues of the Mitsui's oil and gas
producing subsidiaries and associated companies, was US$94 per barrel in average
for the three month period ended June 30, 2008 compared to US$60 per barrel for
the corresponding three month period of the previous year.

Gross profit for the three month period ended June 30, 2008 was ¥75.0 billion,
an increase of ¥25.2 billion from ¥49.8 billion for the corresponding three
month period of the previous year primarily due to the following:

-- There were contributions of ¥9.1 billion by Mitsui E&P Australia Pty Ltd
(Australia) due to the start-up of oil production at Tui oil field in
New Zealand in July 2007 as well as higher oil prices. Likewise, due to
increased productions as well as higher oil prices Mitsui Oil
Exploration Co., Ltd.(Japan) and MitEnergy Upstream LLC (United States)
reported increases of ¥4.8 billion and ¥2.9 billion respectively. On the
other hand, Mittwell Energy Resources Pty., Ltd. posted a decrease of
¥4.3 billion in gross profit due to lack of shipment during the three
month period ended June 30, 2008.

-- The price for representative Australian premium hard coking coal for the
year ending March 31, 2009 is quoted as US$300 per ton FOB, which is
approximately tripled compared to the price for the year ended March 31,
2008. At the same time thermal coal prices are around doubled.

For the three month period ended June 30, 2008, gross profit at Mitsui Coal
Holdings Pty. Ltd. (Australia) increased by ¥13.4 billion, reflecting higher
coal price. Its coal production for the three month period ended June 30, 2008
increased slightly over the corresponding three month period of the previous
year.

Operating income for the three month period ended June 30, 2008 was ¥ 63.6
billion, an increase of ¥24.8 billion from ¥38.8 billion for the corresponding
three month period of the previous year.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥10.0 billion, a slight decrease of ¥0.3 billion from ¥10.3 billion
for the corresponding three month period of the previous year.

Net income for the three month period ended June 30, 2008 was ¥30.6 billion, a
decrease of ¥15.1 billion from ¥45.7 billion for the corresponding three month
period of the previous year. Besides the above-mentioned developments, there
were following factors:

-- In April 2007, this segment sold 50% of its stake in Sakhalin Energy
Investment Company Ltd. (Bermuda) and recorded the relevant gains on
sale of the shares.

-- Dividends from LNG projects in Abu Dhabi, Qatar, Oman and Equatorial
Guinea were ¥13.0billion, an increase of ¥7.1 billion over the
corresponding three month period of the previous year.

-- Other expense increased by ¥7.9 billion due mainly to additional
exploration.

-- Increased dividends from the segment's overseas subsidiaries resulted in
increase in Japanese income tax expense. In addition, Petroleum Resource
Rent tax in Australia increased at Mitsui E&P Australia Pty Limited.

Foods & Retail Segment

Gross profit for the three month period ended June 30, 2008 was ¥19.7 billion, a
decrease of ¥0.8 billion from ¥20.5 billion for the corresponding three month
period of the previous year. Under business circumstances where inflation of raw
material costs, food raw material business transactions showed firm performance,
however, this segment continues to face severe conditions in terms of
profitability, particularly for food raw material manufacturing subsidiaries. In
addition, the segment has been taking various cost reduction initiatives in the
domestic food distribution and retail operations.

Operating income for the three month period ended June 30, 2008 was ¥4.0
billion, no variance from ¥4.0 billion for the corresponding three month period
of the previous year. MITSUI FOODS CO., LTD. (Japan) and Mitsui Norin Co., Ltd.
(Japan) succeeded in decreasing general, selling and administrative expenses. As
a result, their operating income showed small improvement and remained at the
same level respectively.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥0.7 billion, a ¥0.4 billion increase from ¥0.3 billion for the
corresponding three month period of the previous year.

Reflecting these developments, net income for the three month period ended June
30, 2008 was ¥3.2 billion, which is the same as that of the corresponding three
month period of the previous year.

Consumer Service & IT Segment

Gross profit for the three month period ended June 30, 2008 was ¥19.8 billion, a
decrease of ¥8.2 billion from ¥28.0 billion for the corresponding three month
period of the previous year. Consumer Service recorded a decrease of ¥5.7
billion due to loss on write down of inventories and reduced sales in the
domestic residential home business. In addition, Media related businesses
recorded a ¥1.2 billion decreases due to divestiture of cable television
business.

For the three month period ended June 30, 2008, this segment recorded a ¥5.2
billion operating loss, a decrease of ¥9.1 billion from operating income of ¥3.9
billion for the corresponding three month period of the previous year.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥0.8 billion, a decrease of ¥1.2 billion from ¥2.0 billion for the
corresponding three month period of the previous year.

Net loss for the three month period ended June 30, 2008 was ¥2.1 billion, a
decrease of ¥9.8 billion from ¥7.7 billion for the corresponding three month
period of the previous year. Other than the above-mentioned factors Gain on
sales of securities decreased as follows:

-- For the corresponding three month period of the previous year, in
conjunction with the merger of Mitsui Knowledge Industry Co., Ltd.
(Japan) and NextCom K.K., this segment recorded a gain from the exchange
of shares of these subsidiaries, and recorded gain on sales of shares
including those in Jupiter Telecommunications Co., Ltd. For the
three-month period ended June 30, 2008, gains on sales of shares
decreased as a reversal effect.

Logistics & Financial Markets Segment

Gross profit was ¥14.3 billion, an increase of ¥2.2 billion from ¥12.1 billion
for the corresponding three month period of the previous year. Commodity trading
activities remained robust under as the commodity market continued to be
volatile.

Reflecting the increase in gross profit, operating income for the three month
period ended June 30, 2008 was ¥5.9 billion, an increase of ¥ 1.5 billion from
¥4.4 billion for the corresponding three month period of the previous year.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was a loss of ¥1.6 billion, a ¥1.8 billion decrease from ¥0.2 billion
for the corresponding three month period of the previous year. This segment
recorded equity in loss from investment in a partnership, NPF-Harmony (Japan),
reflecting other than temporary decline in its fair value.

Accordingly, net income for the three month period ended June 30, 2008 was ¥2.9
billion, a decrease of ¥0.6 billion from ¥3.5 billion for the corresponding
three month period of the previous year. Other factors included a gain from the
exchange of shares in Mitsui Leasing & Development, Ltd. for JA Mitsui Leasing,
Ltd.

Americas Segment

Gross profit for the three month period ended June 30, 2008 was ¥19.2 billion, a
decrease of ¥3.2 billion from ¥22.4 billion for the corresponding three month
period of the previous year. Oil products trading subsidiary Westport Petroleum,
Inc. (United States) recorded a significant decrease of ¥12.9 billion due to
evaluation losses on derivative contracts(*1). On the other hand, Novus
International Inc. recorded an increase of ¥7.6 billion in gross profit for the
three month period ended June 30, 2008 reflecting higher product prices as well
as increase in sales volume supported by a strong demand of animal feed
additives. Also, Steel Technologies, Inc. (United States), which was acquired in
June 2007, contributed to the increase in gross profit by ¥2.6 billion.

Operating income for the three month period ended June 30, 2008 was ¥1.2
billion, a decrease of ¥3.8 billion from ¥5.0 billion for the corresponding
three month period of the previous year. Selling, general and administrative
expenses at Mitsui & Co. (U.S.A.), Inc. and its subsidiaries increased.

Equity in earnings of associated companies for the three month period ended June
30, 2008 was ¥1.2 billion, a ¥0.1 billion decrease from ¥1.3 billion for the
corresponding three month period of the previous year.

Net income for the three month period ended June 30, 2008 was ¥2.1 billion, a
decrease of ¥0.6 billion from ¥2.7 billion for the corresponding three month
period of the previous year. In addition to above factors, interest expenses,
net of interest income, decreased by ¥1.2 billion at Mitsui & Co. (U.S.A.), Inc.
and its subsidiaries resulting from a decline in U.S. Dollar interest rates.

(*1) Besides mark-to-market evaluation losses on derivative contracts, Westport
Petroleum, Inc. maintained inventories which involved unrealized holding gains.

Europe, the Middle East and Africa Segment

Gross profit for the three month period ended June 30, 2008 was ¥4.0 billion, a
decrease of ¥1.7 billion from ¥5.7 billion for the corresponding three month
period of the previous year, reflecting a decrease in gross profit of energy
business.

This segment recorded a ¥2.4 billion operating loss for the three month period
ended June 30, 2008, a ¥2.2 billion decline from ¥0.2 billion loss for the
corresponding three month period of the previous year, reflecting an increase
mainly in personnel expenses.

Net income for the three month period ended June 30, 2008 was ¥0.4 billion, a
decrease of ¥0.4 billion from ¥0.8 billion for the corresponding three month
period of the previous year. The above mentioned decrease in operating profit
was partly offset by a gain of ¥1.8 billion from sale of office building
previously held by Mitsui & Co. France S.A.S.

Asia Pacific Segment

Gross profit for the three month period ended June 30, 2008 was ¥7.7 billion, a
slight decrease of ¥0.2 billion from ¥7.9 billion for the corresponding three
month period of the previous year.

Operating income for the three month period ended June 30, 2008 was ¥1.5
billion, a decrease of ¥0.5 billion from ¥2.0 billion for the corresponding
three month period of the previous year, reflecting increases mainly in
personnel expenses.

Net income for the three month period ended June 30, 2008 was ¥11.8 billion, an
increase of ¥6.6 billion from ¥5.2 billion for the corresponding three month
period of the previous year. The main factor of the increase in net income is
attributable to the segment's minority interest in Mitsui Iron Ore Development
Pty. Ltd. (Australia) and Mitsui Coal Holdings Pty. Ltd. (Australia).

3． Financial Condition and Cash Flows

(1)Assets, Liabilities and Shareholders' Equity

Total assets as of June 30, 2008 were ¥10,293.4 billion, an increase of ¥687.0
billion from ¥9,606.4 billion, as of March 31, 2008.

Current assets as of June 30, 2008 were ¥5,529.5 billion, an increase of ¥ 402.9
billion from ¥5,126.6 billion as of March 31, 2008, mainly attributable to
increases in trade receivable, inventories and derivative assets at the Energy
Segment and the Financial Markets Segment reflecting higher commodity prices.

Total current liabilities as of June 30, 2008 were ¥3,868.7 billion, an increase
of ¥358.6 billion from ¥3,510.1 billion as of March 31, 2008, primarily due to
increases in trade payables and derivative liabilities corresponding to
increases in the current assets as well as an increase in short time debt in the
Americas Segment.

As a result, working capital, or current assets minus current liabilities, as of
June 30, 2008 was ¥1,660.8 billion, an increase of ¥44.3 billion from ¥1,616.5
billion as of March 31, 2008.

The sum of "total investments and non-current receivables," "property and
equipment--at cost," "intangible asset, less accumulated amortization" "deferred
tax assets-non-current" and "other assets" as of June 30, 2008 totaled ¥4,763.9
billion, a ¥284.1 billion increase from ¥4,479.8 billion as of March 31, 2008,
mainly due to the following factors:

-- Total investments and non-current receivables as of June 30, 2008 was
¥3,476.1 billion, a ¥238.8 billion increase from ¥3,237.3 billion as of
March 31, 2008. Within this category, investments in and advances to
associated companies as of June 30, 2008 was ¥1,465.5 billion, a ¥132.5
billion increase from ¥1,330.0 billion as of March 31, 2008.

-- Major expenditure was an acquisition of shares in MED3000 Group Inc., a
US based company of healthcare management and technology services for
healthcare providers for ¥6.5billion.

-- There were increases which do not involve cash outflow such as increases
in equity in earnings (before tax effect) of ¥30.2 billion (net of ¥33.7
billion dividends received from associated companies) and a net ¥ 74.1
billion increase caused from foreign exchange translation adjustment.
Other investment as of June30, 2008 was ¥1,384.1billion ,a ¥102.6
billion increase from ¥1,281.5 billion as of March31,2008, mainly due
to:

-- acquisition of shares in Sakhalin Energy Investment for ¥13.3 billion
and in Mitsubishi Aircraft Corp. for ¥3.5 billion;

-- a ¥60.7 billion net improvement of unrealized holding gains and losses
on available-for-sales securities, such as those of INPEX Holdings Inc.
and Seven & i Holdings Co., Ltd; and

-- ¥8.1billion loss on write down of shares in Mitsui Chemicals, Inc.

-- Property and equipment--at cost as of June 30, 2008 was ¥1,058.5
billion, an increase of ¥42.2 billion from ¥1,016.3 billion as of March
31, 2008. Major components were:

-- iron ore mining expansion projects in Australia for ¥21.7 billion
(including effect from foreign exchange translation of ¥10.7 billion);

-- coal mining expansion projects in Australia for ¥18.0 billion (including
effect from foreign exchange translation of ¥15.9billion ); and

-- energy related projects such as Enfield and Vincent oil field in
Australia, Tui oil field in New Zealand, oil and gas projects in Oman,
and oil and gas projects of offshore Gulf of Mexico, in total for ¥14.5
billion(including effect from foreign exchange translation of
¥11.8billion ).

Long-term debt, less current maturities as of June 30, 2008 was ¥2,962.0
billion, an increase of ¥17.6 billion from ¥2,944.4 billion as of March 31, 2008
mainly due to an increase in borrowings for rolling stock leasing subsidiaries
abroad.

Deferred tax liabilities-non-current as of June 30, 2008 was ¥446.5 billion, an
increase of ¥59.2 billion from ¥387.3 billion as of March 31, 2008, reflecting
the increases "investments in and advances to associated companies" and "other
investments" as discussed above.

Shareholders' equity as of June 30, 2008 was ¥2,392.9 billion, an increase of
¥209.2 billion from ¥2,183.7 billion as of March 31, 2008, primarily due to the
increase in retained earnings by ¥61.3 billion, net improvement in foreign
currency translation adjustments by ¥104.5 billion due to stronger U.S. Dollar,
Australian Dollar and Brazilian Real against Japanese Yen, and net improvement
in unrealized holding gains on available-for-sale securities by ¥36.7 billion.

As a result, shareholders' equity to total assets ratio as of June 30, 2008 was
23.2 %, a 0.5 percentage point improvement from 22.7 % as of March 31, 2008. Net
interest bearing debt, or interest bearing debt minus cash and cash equivalents
and time deposits as of June 30, 2008 was ¥2,885.9 billion, a increase of ¥111.9
billion from ¥2,774.0 billion as of March 31, 2008. Net debt-to-equity ratio as
of June 30, 2008 was 1.21 times, 0.06 point lower from 1.27 times as of March
31, 2008.

(*)Net Debt-to-Equity Ratio

We refer to Net Debt-to-Equity Ratio ("Net DER'') in this flash report. Net DER
is comprised of "net interest bearing debt'' divided by shareholders' equity.

"Net interest bearing debt'' is defined as interest bearing debt less cash and
cash equivalents and time deposits. Our interest bearing debt primarily consists
of long term debt, less current maturities, which are not readily repayable. In
order to flexibly meet capital requirements and to prepare for future
debt-service requirements in case of unforeseen deteriorations in financial
markets, currently we hold a relatively high level of cash and cash equivalents
reflecting the current financial market conditions and future capital
requirements.

Under this policy, Net DER is a useful internal measure for our management to
review the balance between:

-- our capacity to meet debt repayments; and

-- leverage to improve return on equity in our capital structure.

This measure does not recognize the fact that cash and cash equivalents and time
deposits may not be available completely for debt repayments, but cash and cash
equivalents and time deposits may be required for operational needs including
certain contractual obligations or capital expenditure.

(2) Cash Flows during the three-month period Ended June 30, 2008

Cash Flows from Operating Activities

Net cash provided by operating activities for the three month period ended June
30, 2008 was ¥30.7 billion. The Group recorded operating income of ¥123.3
billion and net income of ¥103.1 billion for the three month period ended June
30, 2008 led by the robust performance of the Mineral& Metal Resources Segment
and Energy Segment, while there were increases in cash outflows of ¥97.5 billion
reflecting an increase and decrease of operating assets and liabilities,
respectively, including increased inventories at Westport Petroleum, Inc.

Cash Flows from Investing Activities

Net cash used in investing activities for the three month period ended June 30,
2008 was ¥80.8billion.

-- The net outflows of cash that corresponded to investments in and
advances to associated companies (net of sales of investments in and
collection of advances to associated companies) were ¥11.0 billion,
which included an acquisition of shares in MED3000 Group Inc. for
¥6.5billion.

-- The net outflows of cash that corresponded to other investments (net of
sales of other investments) were ¥11.8 billion. Major expenditures
included additional investment in Sakhalin Energy Investment for ¥13.3
billion, acquisition of shares in Mitsubishi Aircraft Corp. for ¥3.5
billion. Proceeds from sales of those investments consisted of
miscellaneous small ones.

-- The net outflow of cash that corresponded to purchases of property
leased to others and property and equipment (net of sales of those
assets) was ¥55.6 billion. Major expenditures of equipment included:

-- coal mining projects in Australia for ¥13.0 billion;

-- iron ore mining projects in Australia for ¥4.1 billion;

-- Enfield and Vincent oil field in Australia, Tui oil field in New
Zealand, oil and gas projects in Oman, and oil and gas projects of
offshore Gulf of Mexico as well as oil and gas projects by Mitsui Oil
Exploration Co., Ltd. in total for ¥16.3 billion; and

-- leased rolling stock for ¥9.5 billion.

Free cash flow, or sum of net cash provided by operating activities and net cash
used in investing activities, for the three-month period ended June 30, 2008 was
a net outflow of ¥50.1 billion.

Cash Flows from Financing Activities

During the three-month period ended June 30, 2008, net cash inflow from
borrowing of short-term debt and long-term debt was ¥85.3 billion. Thus, net
cash provided by financing activities was ¥42.8 billion after the payments of
cash dividends of ¥41.8 billion and for the acquisition of treasury stock.

As a result, cash and cash equivalents as of June 30, 2008 were ¥910.3 billion,
a ¥11.0 billion increase from ¥899.3 billion as of March 31, 2008.

For diagrams omitted, please see our home page.

http://www.mitsui.co.jp/en/ir/data/meeting/2009/index.html

Mitsui & Co Ltd

Copyright Business Wire 2008