CRE : Summary of Consolidated Financial Statements for the Fiscal Year ending July 31, 2020

September 11, 2020

CRE Inc.

Summary of Consolidated Financial Statements (Unaudited)

For the Fiscal Year ending July 31, 2020 (Translated from the Japanese original)

Corporate Information

Code: 3458 Listing: First Section of the Tokyo Stock Exchange (URL https://www.cre-jpn.com/english/)

Representative: Tadahide Kameyama, Representative Director, President

Contact: Hidetoshi Nagahama, Director

E-mail:[e-mail]

Anticipated date of annual general meeting of shareholders: October 28, 2020

Expected date of payment for dividends: October 12, 2020

Anticipated date for filing Yuka Shoken Hokokusho (a Japanese-language business report): October 28, 2020

Preparation of supplementary explanation material for financial results: Yes

Presentation meeting for financial results: Yes (for institutional investors and analysts)

(Rounded down to the nearest million)

1. Consolidated Performance for Fiscal 2020 (August 1, 2019 through July 31, 2020)

(1) Consolidated Operating Results

(Percentages represent changes from corresponding period of previous year)

														Net income attributable to
	Net sales				Operating profit		Recurring profit			owners of the parent
																company
	Millions of yen			%	Millions of yen	%		Millions of yen	%		Millions of yen		%
Fiscal 2020	41,194			72.1	4,228	156.1			4,049	193.0			2,611		274.9
Fiscal 2019	23,941		(28.7)	1,651	(48.2)			1,382	(55.5)			696		(66.9)
(Note) Comprehensive income: 3,141 million yen (224.9 %) (Fiscal 2020), 966 million yen ((55.3) %) (Fiscal 2019)
	Net income per			Fully diluted net		Return (net	Return (recurring		Return (operating
	share			income per share		income) on equity	profit) on assets		profit) on sales
	Yen				Yen			%		%				%
Fiscal 2020	103.72			103.40			13.9				6.5				10.3
Fiscal 2019	27.86			27.68			4.1				2.9				6.9

(Reference) Equity in earnings or losses of affiliates: 112 million yen (Fiscal 2020), (48) million yen (Fiscal 2019)

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio		Net assets per share
	Millions of yen	Millions of yen	%		Yen
Fiscal 2020	70,142	20,004		28.5	792.31
Fiscal 2019	54,712	17,545		31.9	696.15

(Reference) Equity capital: 20,002 million yen (July 31, 2020), 17,473 million yen (July 31, 2019)

(3) Consolidated Cash Flows

	Cash flows from operating	Cash flows from	Cash flows from	Cash and cash equivalents
	activities	investing activities	financing activities	at end of period
	Millions of yen	Millions of yen	Millions of yen	Millions of yen
Fiscal 2020	7,725	(471)	(1,820)	14,466
Fiscal 2019	(13,350)	(1,529)	10,522	9,032

1

2. Payment of Dividends

		Dividends per share				Dividend
							Total dividends		Dividends on net
	First	At end	Third
		For the		payout ratio
	quarter-	of first	quarter-	Year-end		(For the year)		assets (Consolidated)
	year		(Consolidated)
	end	half	end
	yen	yen	yen	yen	yen		Millions of yen	%	%
Fiscal 2019	―	0.00	―	21.00	21.00	527	75.4	3.1
Fiscal 2020	―	0.00	―	22.00	22.00	555	21.2	3.0
Fiscal 2021	―	0.00	―	23.00	23.00			21.7
(Estimated)

3. Anticipated Consolidated Results for Fiscal 2021 (August 1, 2020 through July 31, 2021)

(Percentages represent changes from corresponding period of previous year)

		Net sales			Operating profit			Recurring profit
		Millions of yen			%		Millions of yen		%		Millions of yen		%
Full year	54,700			32.8	5,000		18.2		4,500		11.1
		Net income attributable to owners		Net income per share
		of the parent company
		Millions of yen		%		Yen
Full year		2,900			11.0				105.88

(Note)

Calculation of net income per share (anticipated) for fiscal 2021, ending July 31, 2021, takes into consideration an increase in the number of shares associated with issuance of new shares through a third-party allocation of shares and public offering, for which payment was completed in August 2020, and also associated with disposal of treasury stock, in addition to an increase in the number of shares reflecting third-party allocation related to a secondary offering by way of over-allotment, for which payment was completed in September 2020.

*Notes:

1. Major reclassifications of subsidiaries during the term (changes in specified subsidiaries resulting in change in scope of consolidation): None
2. Changes in accounting policy, changes in accounting estimate and retrospective restatement

1. Changes associated with revision of accounting standards, etc: None
2. Changes other than 1: None
3. Changes in accounting estimates: None
4. Restatements: None

(3) Number of outstanding shares (common stock)

1. Number of outstanding shares, including treasury stock, at end of term: 26,309,200 shares (July 31, 2020)
   26,161,300 shares (July 31, 2019)
2. Number of shares of treasury stock at end of term:

1,063,311 shares (July 31, 2020)

1,060,832 shares (July 31, 2019)

3. Average outstanding number of shares (during the fiscal year): 25,181,574 shares (July 31, 2020)

25,004,324 shares (July 31, 2019)

2

(Reference) Non-consolidated Financial Results for Fiscal 2020 (August 1, 2019 through July 31, 2020)

1. Non-consolidated Performance for Fiscal 2020 (August 1, 2019 through July 31, 2020)

(1) Non-consolidated Operating Results

		Net sales			Operating profit				Recurring profit		Net income
	Millions of yen		%		Millions of yen	%		Millions of yen	%		Millions of yen	%
Fiscal 2020	35,720		74.4			3,905	131.7		3,341	153.6		1,870	214.4
Fiscal 2019	20,477		(24.4)			1,685	(39.6)		1,317	(51.0)		595	(64.1)
		Net income per share		Fully diluted net income
			per share
				Yen					Yen
Fiscal 2020					74.29				74.06
Fiscal 2019					23.80				23.65
(2) Non-consolidated Financial Position
		Total assets				Net assets				Equity ratio	Net assets per share
		Millions of yen				Millions of yen		%			Yen
Fiscal 2020					66,445			18,871			28.4		747.49
Fiscal 2019					50,700			16,768			33.1		668.07

(Reference) Equity capital: 18,871 million yen (July 31, 2020), 16,768 million yen (July 31, 2019)

*Audit Status

These materials are not subject to audit procedure requirements under Japan's Financial Instruments and Exchange Act which require auditing by certified public accountants or an accounting firm.

*Cautionary Note on Forward-Looking Statements and Other Important Matters

This report contains forward-looking statements about plans and expectations pertaining to CRE's business activities, based on information available to management at the time of preparation and on certain assumptions that management believes to be reasonable. These forward-looking statements are not guarantees of future performance, and actual results, performance, achievements and financial position may differ materially from statements expressed or implied herein due to various factors.

Ratios for cash flow analysis are as follows:

	Fiscal 2016	Fiscal 2017	Fiscal 2018	Fiscal 2019	Fiscal 2020
Equity ratio (%)	30.4	42.7	39.9	31.9	28.5
Equity ratio (market value basis) (%)	37.7	52.9	56.4	52.2	51.5
Cash flow to interest-bearing debt	3.4	4.9	4.4	―	3.2
ratio (years)
Interest coverage ratio (times)	33.7	20.0	27.5	―	40.7

Equity ratio: Equity capital / Total assets

Equity ratio (market-value basis): Total market value of stocks / Total assets

Cash flow to interest-bearing debt: Interest-bearing debt / Cash flow

Interest coverage ratio: Cash flow / Interest payments

(Notes) 1. All indicators were calculated using consolidated financial statement data.

1. Total market value of stocks is based on the number of shares issued and outstanding, excluding treasury stock.
2. Cash flow draws on cash flow from operating activities.
3. "Interest-bearingdebt" is all debt on the consolidated balance sheet on which interest in payable.
4. Neither cash flow to interest-bearing debt ratio nor interest coverage ratio for fiscal 2019 are provided because CRE posted negative cash flow from operating activities.

3

Consolidated Financial Statements
(1) Consolidated Balance Sheets
	Fiscal 2019	Fiscal 2020
	As of July 31, 2019	As of July 31, 2020
	Thousands of yen	Thousands of yen
Assets
Current assets
Cash and deposits	9,032,949	14,466,126
Accounts receivable-trade	422,384	485,405
Notes receivable-trade and Accounts receivable from	292,503	143,033
completed construction contracts
Real estate for sale	9,931,410	20,395,781
Real estate for sale in process	14,669,953	8,715,918
Advance payments-trade	55,779	3,374,710
Prepaid expenses	782,650	1,055,477
Others	1,082,975	703,577
Allowance for doubtful accounts	(25,260)	(15,963)
Total current assets	36,245,345	49,324,066
Fixed assets
Tangible fixed assets
Buildings and structures	3,604,049	4,155,207
Accumulated depreciation	(1,829,915)	(1,927,543)
Buildings and structures (net)	1,774,134	2,227,664
Machinery, equipment and vehicles	418,413	417,449
Accumulated depreciation	(197,261)	(246,911)
Machinery, equipment and vehicles (net)	221,151	170,538
Tools, furniture and fixtures	109,299	147,500
Accumulated depreciation	(79,442)	(96,202)
Tools, furniture and fixtures (net)	29,856	51,297
Land	1,558,832	1,877,030
Lease assets	480,631	472,388
Accumulated depreciation	(231,499)	(251,183)
Lease assets (net)	249,131	221,205
Construction in progress	71,478	14,013
Total tangible fixed assets	3,904,584	4,561,749
Intangible fixed assets
Goodwill	1,533,085	1,296,836
Others	130,444	144,898
Total intangible assets	1,663,530	1,441,735
Investments and other fixed assets
Investment securities	6,708,305	7,210,680
Claims provable in bankruptcy, claims provable in	37,476	62,468
rehabilitation and other
Long-term prepaid expenses	345,155	1,245,391
Deferred tax assets	59,593	60,348
Lease and guarantee deposits	5,730,005	6,218,658
Others	59,092	83,564
Allowance for doubtful accounts	(40,726)	(65,718)
Total investments and other fixed assets	12,898,902	14,815,392
Total fixed assets	18,467,017	20,818,877
Total assets	54,712,362	70,142,943

4

	Fiscal 2019	Fiscal 2020
	As of July 31, 2019	As of July 31, 2020
	Thousands of yen	Thousands of yen
Liabilities
Current liabilities
Accounts payable-trade	1,917,810	11,994,136
Accounts payable for construction contracts	399,470	135,032
Short-term loans payable	25,000	1,000,000
Current portion of long-term loans payable	3,601,592	9,752,331
Lease obligations	28,045	28,804
Accrued corporate and other taxes	208,507	1,377,803
Deposits received	450,815	1,484,492
Unearned revenue	1,564,691	1,620,977
Allowance for employees' bonuses	47,242	49,799
Allowance for directors' bonuses	―	250,000
Allowance for sublease losses	42,274	70,275
Asset retirement obligations	119,124	587
Others	425,738	274,689
Total current liabilities	8,770,312	28,038,929
Fixed liabilities
Long-term loans payable	20,913,299	13,703,300
Lease obligations	315,767	286,955
Liability for retirement benefits	236,960	238,808
Allowance for loss on guarantees	32,405	30,661
Asset retirement obligations	218,279	253,361
Allowance for sublease losses	―	21,552
Lease and guarantee deposits received	6,497,059	7,115,073
Others	183,037	450,217
Total fixed liabilities	28,396,809	22,099,930
Total liabilities	37,167,121	50,138,860
Net assets
Shareholders' equity
Common stock	2,195,714	2,240,348
Capital surplus	3,784,614	3,612,271
Retained earnings	12,085,463	14,170,090
Treasury stock	(955,107)	(955,171)
Total shareholders' equity	17,110,684	19,067,539
Accumulated other comprehensive income
Unrealized gain (loss) on available-for-sale securities	407,944	1,070,359
Deferred gains (losses) on hedges	(31,935)	(30,919)
Foreign currency translation adjustment	(12,997)	(104,317)
Total accumulated other comprehensive income	363,011	935,122
Non-controlling interests	71,545	1,420
Total net assets	17,545,241	20,004,083
Total liabilities and net assets	54,712,362	70,142,943

5

1. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income

	Fiscal 2019	Fiscal 2020
	(August 1, 2018 through July	(August 1, 2019 through July
	31, 2019)	31, 2020)
	Thousands of yen	Thousands of yen
Net sales	23,941,977	41,194,446
Cost of sales	18,758,825	32,722,525
Gross profit	5,183,151	8,471,920
Selling, general and administrative expenses	3,531,864	4,243,173
Operating profit	1,651,286	4,228,747
Non-operating income
Interest received	5,063	4,370
Equity in income of affiliates	―	112,917
Foreign exchange gains	6,794	―
Penalty income	―	67,437
Settlement received	4,000	―
Others	17,543	11,830
Total non-operating income	33,401	196,556
Non-operating expenses
Interest paid	161,350	208,499
Commission fee	86,237	90,584
Removal expenses	―	60,000
Equity in loss of affiliates	48,607	―
Others	6,464	17,017
Total non-operating expenses	302,659	376,102
Recurring profit	1,382,028	4,049,201
Extraordinary income
Gain on sales of investment securities	17,825	162,460
Reversal of allowance for doubtful accounts	112,000	―
Gain on reversal of asset retirement obligations	21,202	―
Others	17,941	1
Total extraordinary income	168,968	162,461
Extraordinary expenses
Loss on valuation of investment securities	139,050	93,880
Impairment loss	19,791	75,005
Provision for loss on guarantees	32,405	―
Others	9,506	5,945
Total extraordinary expenses	200,753	174,831
Profit before dividend distribution from silent partnerships
1,350,244	4,036,831
and income taxes
Dividends distribution from silent partnerships	―	915
Income before income taxes	1,350,244	4,035,915
Corporate, inhabitant and business taxes	593,486	1,764,798
Adjustments to corporate and other taxes	103,205	(296,816)
Total income taxes	696,692	1,467,982
Net income	653,552	2,567,933
Net income (loss) attributable to non-controlling interests	(43,036)	(43,803)
Net income attributable to owners of the parent company
696,588	2,611,737

6

Consolidated Statements of Comprehensive Income
	Fiscal 2019	Fiscal 2020
	(August 1, 2018 through July	(August 1, 2019 through July
	31, 2019)	31, 2020)
	Thousands of yen	Thousands of yen
Net income	653,552	2,567,933
Other comprehensive income
Unrealized gain (loss) on available-for-sale securities	319,522	670,558
Foreign currency translation adjustment	936	9,114
Share of other comprehensive income of entities accounted for	(7,098)	(106,144)
using equity method
Total other comprehensive income	313,361	573,529
Comprehensive income	966,913	3,141,463
Comprehensive income attributable to owners of the parent
1,009,946	3,183,848
company
Comprehensive income attributable to non-controlling	(43,033)	(42,385)
interests

7

1. Consolidated statements of changes in shareholders' equity Fiscal 2019 (August 1, 2018 through July 31, 2019)

(Thousands of yen)

								Shareholders' Equity
		Common stock			Capital surplus		Retained earnings		Treasury stock		Total shareholders'
							equity
Balance at beginning	2,145,976			3,734,876			11,886,295	(955,107)	16,812,040
of fiscal year
Changes
Issuance of new
shares-exercise of	49,738			49,738						99,476
subscription rights to
shares
Dividends from									(497,420)			(497,420)
surplus
Net income
attributable to owners									696,588			696,588
of the parent
company
Net changes in items
other than
shareholders' equity
during fiscal year
Total changes	49,738			49,738			199,167		―	298,643
Balance at end of	2,195,714			3,784,614			12,085,463	(955,107)	17,110,684
fiscal year
		Accumulated other comprehensive income
		Unrealized					Foreign		Total
			Deferred gains		accumulated		Non-controlling
		gains (losses)		currency				Total net assets
			(losses) on		other		interests
		on other		translation
				hedges		comprehensive
		securities			adjustment
							income
Balance at
beginning of fiscal		88,860			(30,250)	(8,956)	49,653		114,251		16,975,944
year
Changes
Issuance of new
shares-exercise of														99,476
subscription rights
to shares
Dividends from														(497,420)
surplus
Net income
attributable to														696,588
owners of the parent
company
Net changes in items
other than		319,084			(1,685)	(4,040)	313,358		(42,705)		270,652
shareholders' equity
during fiscal year
Total changes		319,084			(1,685)	(4,040)	313,358		(42,705)		569,296
Balance at end of		407,944			(31,935)	(12,997)	363,011		71,545		17,545,241
fiscal year

8

Fiscal 2020 (August 1, 2019 through July 31, 2020)

(Thousands of yen)

								Shareholders' Equity
	Common stock		Capital surplus		Retained earnings		Treasury stock		Total shareholders'
					equity
Balance at beginning of	2,195,714		3,784,614			12,085,463		(955,107)	17,110,684
fiscal year
Changes
Issuance of new shares-
exercise of subscription	44,634		44,634						89,268
rights to shares
Dividends from surplus									(527,109)			(527,109)
Net income attributable to
owners of the parent									2,611,737			2,611,737
company
Purchase of treasury stock											(63)	(63)
Change in ownership
interest of parent due to					(216,976)						(216,976)
transactions with non-
controlling interests
Net changes in items
other than shareholders'
equity during fiscal year
Total changes	44,634		(172,342)			2,084,627		(63)	1,956,855
Balance at end of fiscal	2,240,348		3,612,271			14,170,090		(955,171)	19,067,539
year
	Accumulated other comprehensive income
	Unrealized					Foreign		Total
		Deferred gains			accumulated	Non-controlling
	gains (losses)			currency			Total net assets
			(losses) on			other	interests
	on other				translation
			hedges		comprehensive
	securities				adjustment
					income
Balance at beginning of	407,944			(31,935)		(12,997)	363,011	71,545		17,545,241
fiscal year
Changes
Issuance of new shares-
exercise of subscription													89,268
rights to shares
Dividends from surplus													(527,109)
Net income attributable
to owners of the parent													2,611,737
company
Purchase of treasury													(63)
stock
Change in ownership
interest of parent due to													(216,976)
transactions with non-
controlling interests
Net changes in items
other than shareholders'	662,414			1,016		(91,320)	572,111	(70,124)		501,986
equity during fiscal year
Total changes	662,414			1,016		(91,320)	572,111	(70,124)		2,458,842
Balance at end of fiscal	1,070,359			(30,919)		(104,317)	935,122	1,420		20,004,083
year

9

(4) Consolidated statements of cash flows
					Fiscal 2019	Fiscal 2020
					(August 1, 2018 through July	(August 1, 2019 through July
					31, 2019)	31, 2020)
					Thousands of yen	Thousands of yen
Cash flows from operating activities
Income before income taxes		1,350,244	4,035,915
Depreciation and amortization		280,756	339,948
Impairment loss				19,791	75,005
Amortization of goodwill		280,671	236,249
Share of	(profit)	loss	of entities accounted	for using equity	48,607	(112,917)
method
Increase (decrease) in allowance for doubtful accounts	(111,637)	15,695
Increase (decrease) in allowance for employees' bonuses	280	2,556
Increase (decrease) in allowance for sublease losses	(54,456)	49,553
Increase (decrease) in allowance for loss on guarantees	32,405	(1,744)
Increase (decrease) in allowance for directors' bonuses	(116,520)	250,000
Increase (decrease) in liability for retirement benefits	1,282	1,847
Interest and dividends received		(5,186)	(4,510)
Interest paid				161,350	208,499
Loss (gain) on sales of investment securities		(17,825)	(162,459)
Loss (gain) on valuation of investment securities	139,050	93,880
Gain on reversal of asset retirement obligations		(21,202)	―
(Increase) decrease in notes and accounts receivable	(169,777)	86,449
(Increase) decrease in inventories		(12,106,262)	(4,568,726)
Increase (decrease) in notes and accounts payable	(2,100,773)	9,871,887
Decrease (increase) in advance payments		549,136	(3,318,930)
(Increase) decrease in guarantee deposits		(67,488)	(484,539)
Increase (decrease) in lease and guarantee deposits received	(621)	600,306
Others					(339,317)	1,341,182
Subtotal					(12,247,491)	8,555,149
Proceeds from interest and dividend income
	1,687	386
Payment of interest			(144,367)	(189,689)
Payment of income taxes		(959,986)	(640,738)
Net cash provided by operating activities
	(13,350,157)	7,725,107
Cash flows from investing activities
Purchase of marketable and investment securities	(449,921)	(433,871)
Proceeds	from	sales	and redemption of	marketable and	360,893	970,037
investment securities
Purchase of shares of subsidiaries resulting from change of scope	(864,092)	―
of consolidation
Purchase of property, plant and equipment		(685,317)	(768,473)
Purchase of intangible fixed assets		(67,272)	(132,578)
Payments for asset retirement obligations		―	(83,924)
Others					176,610	(23,091)
Net cash (used in) investing activities
	(1,529,098)	(471,902)

10

	Fiscal 2019	Fiscal 2020
	(August 1, 2018 through July	(August 1, 2019 through July
	31, 2019)	31, 2020)
	Thousands of yen	Thousands of yen
Cash flows from financing activities
Proceeds from short-term loans	5,050,000	2,600,000
Repayment of short-term loans	(5,568,750)	(1,625,000)
Proceeds from long-term loans	16,162,071	8,296,852
Repayment of long-term loans	(4,627,907)	(10,511,260)
Repayment of lease obligations	(27,270)	(28,060)
Execution of stock option	32,298	18,228
Cash dividends paid	(497,854)	(526,898)
Payments from changes in ownership interests in subsidiaries	―	(244,715)
that do not result in change in scope of consolidation
Others	―	200,780
Net cash provided by (used in) financing activities	10,522,587	(1,820,073)
Effect of exchange rate change on cash and cash equivalents	4,627	45
Net increase (decrease) in cash and cash equivalents
(4,352,040)	5,433,177
Cash and cash equivalents at beginning of fiscal year	13,384,989	9,032,949
Cash and cash equivalents at end of fiscal year	9,092,949	14,466,126

11

Fiscal 2019 (August 1, 2018 through July 31, 2019)

							(Thousands of yen)
		Reporting Segments					Consolidated
	Real estate	Logistics	Asset		Other		Adjustment	statements
		Operations	Total	of income
	management	investment	management	Total	(Note 2)
	(Note 1)		amount
	business	business	business
					(Note 3)
Sales
External	21,537,610	1,599,994	784,217	23,921,822	20,154	23,941,977	－	23,941,977
customers
Inter-segment	23,339	2,079	3,600	29,018	－	29,018	(29,018)	－
Total	21,560,949	1,602,073	787,817	23,950,840	20,154	23,970,995	(29,018)	23,941,977
Segment income	1,764,475	207,103	406,565	2,378,144	4,421	2,382,566	(731,279)	1,651,286
Segment assets	15,860,061	25,226,772	5,221,419	46,308,253	827,912	47,136,165	7,576,196	54,712,362
Other
Depreciation and	266,370	4,155	1,380	271,905	16	271,922	8,834	280,756
amortization
Amortization of	256,539	－	24,132	280,671	－	280,671	－	280,671
goodwill
Impairment loss	19,791	－	－	19,791	－	19,791	－	19,791
Investment in
affiliates
accounted for	－	1,766,764	－	1,766,764	－	1,766,764	－	1,766,764
by equity
method
Increase on
tangible fixed
assets and	709,592	－	1,150	710,742	－	710,742	44,031	754,773
intangible
fixed assets

(Notes) 1. The classification "Other Operations" represents business segments not included under other reporting segments.

2. Adjustments are as follows:

1. The (731,279) thousand yen segment income adjustment includes (2,071) thousand yen in inter-segment elimination and (733,351) thousand yen in corporate expenses not included in any segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.
2. The 7,576,196 thousand yen segment assets adjustment includes (332) thousand yen in inter-segment elimination and 7,576,529 thousand yen in corporate assets not included in any segment. Primary corporate assets are cash and deposits and general corporate assets which are not associated with reporting segments.
3. The 8,834 thousand yen depreciation and amortization adjustment are corporate expenses which are not associated with reporting segments.
4. The 44,031 thousand yen increase on tangible fixed assets and intangible fixed assets adjustment are amount of capital investments related to general corporate.

1. Segment income has been reconciled with operating income on the consolidated statements of income.
2. Increase paralleling the addition of a new consolidated subsidiary is not included in increase in tangible fixed assets and intangible fixed assets.

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Fiscal 2020 (August 1, 2019 through July 31, 2020)

							(Thousands of yen)
		Reporting Segments					Consolidated
	Real estate	Logistics	Asset		Other		Adjustment	statements
		Operations	Total	of income
	management	investment	management	Total	(Note 2)
	(Note 1)		amount
	business	business	business
					(Note 3)
Sales
External	22,563,437	17,645,230	966,712	41,175,380	19,066	41,194,446	－	41,194,446
customers
Inter-segment	496,723	900	4,823	502,447	1,991	504,438	(504,438)	－
Total	23,060,160	17,646,131	971,536	41,677,828	21,057	41,698,885	(504,438)	41,194,446
Segment income	2,163,844	2,521,378	503,775	5,188,997	3,876	5,192,874	(964,126)	4,228,747
Segment assets	16,974,583	33,017,213	5,681,067	55,672,865	528,016	56,200,882	13,942,061	70,142,943
Other
Depreciation and	316,916	3,455	4,922	325,285	14	325,300	14,648	339,948
amortization
Amortization of	212,117	－	24,132	236,249	－	236,249	－	236,249
goodwill
Impairment loss	75,005	－	－	75,005	－	75,005	－	75,005
Investment in
affiliates
accounted for	315,482	1,745,572	－	2,061,054	－	2,061,054	－	2,061,054
by equity
method
Increase on
tangible fixed
assets and	807,267	－	43,245	850,512	－	850,512	75,617	926,130
intangible
fixed assets

(Notes) 1. The classification "Other Operations" represents business segments not included under other reporting segments.

2. Adjustments are as follows:

1. The (964,126) thousand yen segment income adjustment includes (11,123) thousand yen in inter-segment elimination and (953,003) thousand yen in corporate expenses not included in any segment. Primary corporate expenses are general administrative expenses which are not associated with reporting segments.
2. The 13,942,061 thousand yen segment assets adjustment includes (782,046) thousand yen in inter-segment elimination and 14,724,107 thousand yen in corporate assets not included in any segment. Primary corporate assets are cash and deposits and general corporate assets which are not associated with reporting segments.
3. The 14,648 thousand yen depreciation and amortization adjustment are corporate expenses which are not associated with reporting segments.
4. The 75,617 thousand yen increase on tangible fixed assets and intangible fixed assets adjustment are amount of capital investments related to general corporate.
   3. Segment income has been reconciled with operating income on the consolidated statements of income.

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