Ichigo : FY20/2 Q3 Earnings

[Provisional Translation Only]

This English translation of the original Japanese document is provided solely for information purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

FY20/2 Q3 Earnings

January 10, 2020

Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)

Representative:	Takuma Hasegawa, President
Inquiries:	Go Watanabe, Executive Managing Director
	Telephone: [phone]	www.ichigo.gr.jp/en

Submission of the Financial Report (Shihanki Hokokusho): January 14, 2020 (expected)

Dividend Payment: N/A

Supplemental Materials to Financial and Business Results: Yes

Financial and Business Results Briefing: Yes (for institutional investors and analysts)

1. FY20/2 Q3 Consolidated Financial Results (March 1, 2019 to November 30, 2019)

(1) Consolidated Financial Results				(YOY = year-on-year % change)
		Revenue		Operating Profit	Recurring Profit		Net Income
		(JPY million) YOY		(JPY million) YOY	(JPY million) YOY		(JPY million) YOY
	FY20/2 Q3	78,153	+34.1%		25,032	+21.8%	22,665	+24.1%		15,141	+24.3%
	FY19/2 Q3	58,282	+30.2%		20,553	+24.3%	18,264	+26.3%		12,183	+11.3%
	Note: Comprehensive Income FY20/2 Q3: JPY 16,072 million (+29.7% YOY)
			FY19/2 Q3: JPY 12,393 million (+12.0% YOY)
		Net Income		Net Income
		per Share		per Share
		(Basic, JPY) YOY		(Diluted, JPY) YOY
	FY20/2 Q3	31.09	+26.4%		31.08	+26.5%
	FY19/2 Q3	24.59	+12.2%		24.56	+12.1%
(2) Consolidated Financial Condition
		Total Assets		Net Assets	Shareholder		Net Assets per
		(JPY million)		(JPY million)	Equity Ratio		Share (JPY)
	FY20/2 Q3		340,045			108,690		31.6%			223.24
	FY19/2		319,343			102,859		30.9%			202.14

Note: Shareholders' Equity FY20/2 Q3: JPY 107,500 million FY19/2: JPY 98,748 million

To facilitate comparison to FY20/2, FY19/2 Total Assets have been restated to reflect a minor change in Japanese accounting treatment of tax assets in FY20/2. The restatement is not material: pre-restated FY19/2 Total Assets were JPY 319,599 million.

1

(3) Consolidated Cash Flows

	Cash Flows from	Cash Flows from	Cash Flows from	Cash and Cash
	Equivalents
	Operations	Investments	Financing
	at Period-End
	(JPY million)	(JPY million)	(JPY million)
	(JPY million)
FY20/2 Q3	10,970	-9,015	8,598	40,213
FY19/2 Q3	3,469	-12,142	14,026	39,874

Note: Economic Operating Cash Flow (Cash Flows from Operations excluding net change in Real Estate

	and Power Plants for Sale)
	FY20/2 Q3: JPY 20,979 million	FY19/2 Q3: JPY16,034 million
2. Dividends
			Dividend per Share (JPY)		Total		Dividend on
		First	Second	Third	Fourth	Total	Dividend	Payout Ratio	Equity
		Quarter	Quarter	Quarter	Quarter	(JPY million)		(DOE)
	FY19/2	-	-	-	7	7	3,419	22.5%	3.7%
	FY20/2	-	-	-	7	7		23.0%
	(Forecast)

3. FY20/2 Full-Year Consolidated Earnings Forecast (March 1, 2019 to February 29, 2020)

						(YOY = year-on-year % change)
	Operating Profit	Recurring Profit	Net Income	Net Income per
	(JPY million) YOY	(JPY million) YOY	(JPY million) YOY	Share (JPY)
FY20/2	26,500	+0.8%	22,800	-1.2%	15,000	-2.4%	30.39	-2.4%

Note: Ichigo provides a full-year earnings forecast, but not a half-year forecast, because Ichigo believes the longer full-year forecast is more consistent with global best practice and the focus of Japan's Corporate Governance Code on growing long-term sustainable corporate value. In addition, Ichigo is focused on earnings growth (not revenue growth), with a particular focus on growing long-term EPS, so does not issue a Revenue forecast.

4. Other
(1) Changes in significant consolidated subsidiaries
(material changes in scope of consolidation):	Yes
New subsidiaries:	None
Subsidiary removed from consolidation:	YK PIT PARTNERS

1. Changes in accounting standards/principles, changes in accounting estimates, and revisions to previous financial statements

(i)	Changes in accounting standards/principles:	None
(ii)	Changes in accounting principles other than the above:	None
(iii) Changes in accounting estimates:	None
(iv) Revisions of previous financial statements:	None

2

1. Number of outstanding common shares

1. Number of outstanding shares including treasury shares at period-end

FY20/2 Q3:	505,191,802
FY19/2:	505,066,430

(ii) Number of treasury shares at period-end

FY20/2 Q3:	23,637,400
FY19/2:	16,556,200

(iii) Average number of outstanding shares during the period

FY20/2 Q3:	487,034,981
FY19/2 Q3:	495,435,833

Segment Information

Asset Management(AM) generates fee income via the management of Ichigo Office (8975), Ichigo Hotel (3463), Ichigo Green (9282), and providing real estate services related to real estate acquisition, operations, and disposition.

Sustainable Real Estate(SRE) preserves and improves real estate. Ichigo receives rental income during the period in which it carries out its value-add, along with earning gains on sales that reflect the real estate's higher value after the value-add is complete.

Note: The Sustainable Real Estate segment was formerly called Value-Add. In keeping with its recently announced Ichigo 2030vision, Ichigo has changed the segment name to Sustainable Real Estate in order to put full focus on Ichigo's commitment to preserving and improving real estate as a sustainable infrastructure company.

Clean Energy(CE) is utility-scale solar and wind power production that supplies clean energy and brings productive use to idle land.

Note on Appropriate Use of Forecasts

Forward-looking statements contained in these materials are based on judgments regarding information that was available to Ichigo as of the announcement date. However, these statements involve risk and uncertainties, and actual earnings may differ significantly from the indicated forecasts.

3

Consolidated Balance Sheet (FY20/2 Q3)

		(JPY million)
	FY19/2	FY20/2 Q3
	(Feb 28, 2019)	(Nov 30, 2019)
Assets
Current Assets
Cash and cash equivalents	50,225	40,453
Trade notes and accounts receivable	1,344	1,924
Operational loan investments	1,324	1,324
Operational securities investments	1,218	8,743
Real estate for sale	161,322	172,001
Other	2,156	3,056
Less: allowance for doubtful accounts	2	5
	-	-
Total Current Assets	217,590	227,499
Fixed Assets
Property, Plant, and Equipment
Buildings and structures	24,577	27,127
Depreciation	4,238	4,798
	-	-
Buildings and structures (net)	20,338	22,329
Solar power plant equipment	21,229	22,199
Depreciation	2,170	2,987
	-	-
Solar power plant equipment (net)	19,058	19,212
Land	49,924	52,871
Buildings under construction	956	1,135
Solar power plants under construction	3,656	5,705
Other	1,441	1,712
Depreciation	399	637
	-	-
Other (net)	1,042	1,075
Total Property, Plant, and Equipment	94,976	102,330
Intangible Assets
Goodwill	1,346	1,450
Leasehold rights	316	435
Other	331	634
Total Intangible Assets	1,993	2,519
Investments and Other Assets
Securities investments	2,455	4,875
Long-term loans receivable	10	510
Deferred tax assets	177	152

4

				(JPY million)
			FY19/2	FY20/2 Q3
			(Feb 28, 2019)	(Nov 30, 2019)
Other	2,231	2,249
Less: allowance for doubtful accounts	91	91
			-	-
Total Investments and Other Assets		4,782	7,695
Total Fixed Assets		101,752	112,545
Total Assets			319,343	340,045

5

				(JPY million)
		FY19/2	FY20/2 Q3
		(Feb 28, 2019)	(Nov 30, 2019)
Liabilities
Current Liabilities
Short-term loans	3,275		4,244
Bonds (due within one year)	112		274
Long-term loans (due within one	7,881		12,317
year)
Long-termnon-recourse loans (due	1,666		1,171
within one year)
Income taxes payable	3,760		3,111
Accrued bonuses	31		504
Other current liabilities		5,178		3,921
Total Current Liabilities		21,905		25,545
Long-Term Liabilities
Bonds	538		6,179
Long-term loans	131,569		148,798
Long-termnon-recourse loans	51,068		39,674
Deferred tax liabilities	2,164		2,035
Long-term security deposits	8,292		8,188
received
Other long-term liabilities		946		932
Total Long-Term Liabilities		194,579		205,809
Total Liabilities		216,484		231,355
Net Assets
Shareholders' Equity
Capital	26,820		26,841
Capital reserve	11,207		11,228
Retained earnings	66,730		78,445
Treasury shares	-5,988		-8,988

Total Shareholders' Equity

Accumulated Other Comprehensive

Income

Valuation gains (losses) on other securities

Deferred gains (losses) on long- term interest rate hedges

Total Accumulated Other

Comprehensive Income

98,769107,526

386412

-408-438

-21-26

Stock Options	827	1,004
Minority Interests	3,283	185
Total Net Assets	102,859	108,690
Total Liabilities and Net Assets		319,343	340,045

6

	Consolidated Income Statement (FY20/2 Q3)
							(JPY million)
					FY19/2 Q3	FY20/2 Q3
					(Mar 1, 2018 to	(Mar 1, 2019 to
					Nov 30, 2018)	Nov 30, 2019)
	Revenue	58,282		78,153
	Cost of Goods Sold	33,332		47,823
	Gross Profit	24,950		30,330
	SG&A	4,396		5,298
	Operating Profit	20,553		25,032
	Non-Operating Income
	Interest income	2		4
	Dividend income	62		74
	Foreign exchange gain	49		-
	Mark-to-market gains on long-term				5		53
	interest rate hedges
	Other	31		29
	Total Non-Operating Income	151		162
	Non-Operating Expenses
	Interest expense	1,742		1,734
	Foreign exchange losses		-	39
	Mark-to-market losses on long-term				220		55
	interest rate hedges
	Debt financing-related fees	295		522
	Other	183		176
	Total Non-Operating Expenses	2,441		2,529
	Recurring Profit	18,264		22,665
	Extraordinary Gains
	Gains on sales of securities		2		11
	investments
	Gains on sales of subsidiary shares		-	169
	Other		-	35
	Total Extraordinary Gains	2		215
	Extraordinary Losses
	Losses on disposal of fixed assets		-	27
	Total Extraordinary Losses		-	27
	Pre-Tax Net Income	18,266		22,853
	Income Taxes	5,700		6,775
	Pre-Minority Interest Net Income	12,566		16,077
	Net Income Attributable to Minority		383		936
	Interests
	Net Income	12,183		15,141
				7

	Consolidated Income Statement (FY20/2 Q3 Stand-Alone)
								(JPY million)
					FY19/2 Q3	FY20/2 Q3
					(Sep 1, 2018 to	(Sep 1, 2019 to
					Nov 30, 2018)	Nov 30, 2019)
	Revenue	32,198			31,968
	Cost of Goods Sold	19,702			20,262
	Gross Profit	12,495			11,705
	SG&A	1,524			1,792
	Operating Profit	10,971			9,913
	Non-Operating Income
	Interest income		-		1
	Dividend income	34			35
	Foreign exchange gains	26			15
	Mark-to-market gains on long-term				-			236
	interest rate hedges
	Other	3			11
	Total Non-Operating Income	64			300
	Non-Operating Expenses
	Interest expense	602			585
	Mark-to-market losses on long-term				241			-
	interest rate hedges
	Debt financing-related fees	52			91
	Other	168			61
	Total Non-Operating Expenses	1,066			738
	Recurring Profit	9,970			9,475
	Extraordinary Losses
	Losses on disposal of fixed assets		-		-
	Total Extraordinary Losses		-		-
	Pre-Tax Net Income	9,970			9,475
	Income Taxes	3,059			2,943
	Pre-Minority Interest Net Income	6,911			6,531
	Net Income Attributable to Minority		336			2
	Interests
	Net Income		6,574			6,528

8

Consolidated Statement of Comprehensive Income (FY20/2 Q3)

				(JPY million)
		FY19/2 Q3	FY20/2 Q3
		(Mar 1, 2018 to	(Mar 1, 2019 to
		Nov 30, 2018)	Nov 30, 2019)
Pre-Minority Interest Net Income	12,566		16,077
Other Comprehensive Income
Valuation gains (losses) on other	-191		25
securities
Deferred gains (losses) on long-term	17		-30
interest rate hedges
Total Other Comprehensive Income		-173		-4
Comprehensive Income	12,393		16,072
Comprehensive income attributable to		12,010		15,136
common shareholders
Comprehensive income attributable to	383		936
minority interests

9

Consolidated Statement of Comprehensive Income (FY20/2 Q3 Stand-Alone)

				(JPY million)
		FY19/2 Q3	FY20/2 Q3
		(Sep 1, 2018 to	(Sep 1, 2019 to
		Nov 30, 2018)	Nov 30, 2019)
Pre-Minority Interest Net Income	6,911		6,531
Other Comprehensive Income
Valuation gains (losses) on other
84		97
securities
-10
Deferred gains (losses) on long-term		1
interest rate hedges
Total Other Comprehensive Income		73		96
	-
Comprehensive Income	6,837		6,627
-
Comprehensive income attributable to		6,501		6,625
common shareholders
Comprehensive income attributable to	336		2
minority interests

10

Consolidated Cash Flow Statement (FY20/2 Q3)
	(JPY million)
FY19/2 Q3	FY20/2 Q3
(Mar 1, 2018 to	(Mar 1, 2019 to
Nov 30, 2018)	Nov 30, 2019)

Cash Flows from Operations:

Pre-tax net income

Depreciation

Share-based compensation expenses

Amortization of goodwill

Increase (decrease) in accrued bonuses Increase (decrease) in allowance for doubtful accounts

Interest and dividend income

Interest expense

Losses (gains) on sales of subsidiary shares

Losses (gains) on sales of securities investments

Decrease (increase) in trading notes and receivables

Decrease (increase) in operational securities investments

Decrease (increase) in real estate for sale

Decrease (increase) in advances paid Decrease (increase) in prepaid expenses

Decrease (increase) in accounts receivable

Decrease (increase) in consumption taxes receivable

Increase (decrease) in accounts payable

Increase (decrease) in accrued expenses

Increase (decrease) in deposits received

Increase (decrease) in security deposits received

Other

Sub-Total

Interest and dividend income received

Interest expense paid

Income taxes paid

Income taxes refunded

Net Cash from (Used for)

Operations

	18,266		22,853
		1,217			1,888
		155			187
		140			130
		461			473
		-25
				2
		65
				79
		-			-
		1,742			1,734
					-169
		-
		-2			-11
		-343			-519
		-437			3,842
	11,997		10,046
	-	50		-	136
		-
		-304			-259
		-228
				9
		1,024			-432
	-1,265			-675
		56			83
		178			434
		518			99
		-442
				481
				-
		8,444		19,965
		65			79
		1,545			1,524
	-3,530		-7,548
	-	35		-	-
		3,469		10,970

11

	(JPY million)
FY19/2 Q3	FY20/2 Q3
(Mar 1, 2018 to	(Mar 1, 2019 to
Nov 30, 2018)	Nov 30, 2019)

Cash Flows from Investments:

Payments into time deposits Proceeds from withdrawal from time deposits

Proceeds from cancellation of time deposits

Payments for securities investments Proceeds from sales of securities investments

Acquisitions of property, plant, and equipment

Acquisitions of intangible assets

Payments of SPC capital contributions Redemptions of SPC capital contributions

Payments of security deposits

Redemptions of security deposits

Acquisition of consolidated subsidiary

Payments of loans receivable

Other

Net Cash from (Used for)

Investments

		63			111
	1,010		2,063
		-		-
		-		2,970
		466		2,332
	-	32		-	111
	12,130		10,306
	-	374		-	464
	-	-	-	2
					--
		32
		15			34
		- -		- -
		-		187
		-	-737
		168		-	17
	12,142		9,015
	-
	-			-

12

			(JPY million)
	FY19/2 Q3	FY20/2 Q3
	(Mar 1, 2018 to	(Mar 1, 2019 to
	Nov 30, 2018)	Nov 30, 2019)
Cash Flows from Financing:
Net increase (decrease) in short-term	5,053		969
loans

Proceeds from bond issuance Repayment of maturing bond principal to bondholders

Proceeds from long-term loans

Repayment of long-term loans Proceeds from long-termnon-recourse loans

Repayment of long-termnon-recourse loans

Proceeds from employee exercise of stock options

69		5,828
-56		-96
40,153		44,898
-13,606		-23,445
3,500		5,300
-15,478		-17,188
122		31

Share buyback

Proceeds from minority interests

Payments to minority interests

Dividends paid

Dividends paid to minority interests

Net Cash from (Used for) Financing Effect of Exchange Rate Change on Cash and Cash Equivalents Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents Resulting from Exclusion from Consolidation Cash and Cash Equivalents at End of Period

-2,849		-2,999
90		-
				-1,276
		-
-2,971		-3,415
				-5
		-
14,026		8,598
		-		-
	5,352		10,553
39,365		45,029
	-4,843		-15,369
39,874		40,213

13

Consolidated Cash Flow Statement (FY20/2 Q3 Stand-Alone)

	(JPY million)
FY19/2 Q3	FY20/2 Q3
(Sep 1, 2018 to	(Sep 1, 2019 to
Nov 30, 2018)	Nov 30, 2019)

Cash Flows from Operations:

Pre-tax net income

Depreciation

Share-based compensation expenses

Amortization of goodwill

Increase (decrease) in accrued bonuses Increase (decrease) in allowance for doubtful accounts

Interest and dividend income

Interest expense

Decrease (increase) in trading notes and receivables

Decrease (increase) in operational securities investments

Decrease (increase) in real estate for sale

Decrease (increase) in advances paid

Decrease (increase) in prepaid expenses

Decrease (increase) in accounts receivable

Decrease (increase) in consumption taxes receivable

Increase (decrease) in accounts payable

Increase (decrease) in accrued expenses

Increase (decrease) in deposits received

Increase (decrease) in security deposits received

Other

9,970	9,475
422	647
47	63
46	42
212	225
-		1
34	-36
602	585
-
109	-341
12		205
4,135-
9,262
19	241
-206	-24
-171
	-87
75	412
-672
	89
28	28
209		-198
-177
-63
420	229

Sub-Total	14,961	20,758
Interest and dividend income received	34	36

Interest expenses paid Income taxes paid

Income taxes refunded

Net Cash from (Used for) Operations

	504	-495
	-722	-2,159
	- 33		-
	13,803		18,139

14

	(JPY million)
FY19/2 Q3	FY20/2 Q3
(Sep 1, 2018 to	(Sep 1, 2019 to
Nov 30, 2018)	Nov 30, 2019)

Cash Flows from Investments:

Payments into time deposits Proceeds from withdrawal from time deposits

Proceeds from cancellation of time deposits

Payments for securities investments Acquisitions of property, plant, and equipment

Acquisitions of intangible assets

Payments of SPC capital contributions

Payments of security deposits

Redemptions of security deposits

Payments of loans receivable

Other

Net Cash from (Used for)

Investments

		5	-2
		-
			-
	1,000
		-	2,970
-	440	-500
9,089	-2,355
-	15	-148
	-	-		-
		-	-13
		-		-
		-	-645
		7	4
-8,542		-691

15

		(JPY million)
	FY19/2 Q3	FY20/2 Q3
	(Sep 1, 2018 to	(Sep 1, 2019 to
	Nov 30, 2018)	Nov 30, 2019)
Cash Flows from Financing:
Net increase (decrease) in short-term	-889	-871
loans

Proceeds from bond issuance Repayment of maturing bond principal to bondholders

Proceeds from long-term loans

Repayment of long-term loans Repayment of long-termnon-recourse loans

Proceeds from employee exercise of stock options

Share buyback

Proceeds from minority interests

Dividends paid

Dividends paid to minority interests

Net Cash from (Used for) Financing Effect of Exchange Rate Change on Cash and Cash Equivalents Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents Resulting from Exclusion from Consolidation Cash and Cash Equivalents at End of Period

		69	2,969
		-	-40
15,297	4,650
		8,941	-5,582
	-4,628
	-8,919
	-
		1	28
-2,849	-2,232
		90		-
		-		-
		-	-4
-	1,850	-10,004
-		-
		3,410		7,443
40,487	37,208
	-4,023
	-4,438
39,874	40,213

16

Revenue, P&L, and Assets by Segment (Current FY20/2 Q3)

(Mar 1, 2019 to Nov 30, 2019)

							(JPY million)
		Segment						Amount
	Asset	Sustainable	Clean		Adjustment	2		Recorded in
	Management	Real Estate	Energy	Total			Financial
	(AM)	(SRE)	(CE)					Statements
Revenue
Revenue from	2,109	72,995	3,048	78,153	-		78,153
External
Customers
Inter-Segment	755	1	-	756	-756		-
Activities or
Reclassifications
Total	2,865	72,996	3,048	78,910	-756		78,153
Segment P&L1	1,696	22,232	1,131	25,060	-28		25,032
Segment P&L
Details1
Stock Earnings
(Rental Income,	1,241	7,525	1,131	9,898	-		-
Base AM Fees,
FIT Solar Power
Earnings, etc.)
Flow Earnings
(Profits on
Sustainable Real
Estate Sales,	454	14,707	-	15,161	-		-
Profits on Solar
Power Plant
Sales, Spot AM
Fees, etc.)
Segment Assets	2,114	282,146	31,353	315,614	24,430		340,045
Other
Depreciation	-	1,047	818	1,865	22		1,888
Increase in
Property, Plant,	-	7,039	3,379	10,419	170		10,589
and Equipment
and Intangible
Assets

• Segment P&L is on an Operating Profit basis. For FY20/2 Q3, company-wide business expansion and new business entry costs have increased year-on-year and thus their allocation to the Segments has reduced Stock and Flow Earnings in each Segment.

• The Adjustment to Segment P&L (-JPY 28 million) reflects transaction eliminations and corporate expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 24,430 million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to the segments. The Adjustment to Depreciation (JPY 22 million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 170 million) reflects corporate assets that were not allocated to the segments.

17

Note: To facilitate comparison to FY20/2, FY19/2 Segment Assets have been restated to reflect a minor change in Japanese accounting treatment of tax assets in FY20/2. The restatement is not material.

18

Revenue, P&L, and Assets by Segment (Previous FY19/2 Q3)

(Mar 1, 2018 to Nov 30, 2018)

							(JPY million)
		Segment						Amount
	Asset	Sustainable	Clean		Adjustment	2		Recorded in
	Management	Real Estate	Energy	Total			Financial
	(AM)	(SRE)	(CE)					Statements
Revenue
Revenue from	1,773	53,508	2,999	58,282	-		58,282
External
Customers
Inter-Segment	800	1	-	801	-801		-
Activities or
Reclassifications
Total	2,574	53,509	2,999	59,083	-801		58,282
Segment P&L1	1,571	17,761	1,253	20,586	-32		20,553
Segment P&L
Details1
Stock Earnings
(Rental Income,	1,293	7,477	1,253	10,024	-		-
Base AM Fees,
FIT Solar Power
Earnings, etc.)
Flow Earnings
(Profits on
Sustainable Real
Estate Sales,	277	10,284	-	10,562	-		-
Profits on Solar
Power Plant
Sales, Spot AM
Fees, etc.)
Segment Assets	1,923	267,906	27,733	297,563	26,608		324,172
Other
Depreciation	-	413	787	1,200	16		1,217
Increase in
Property, Plant,	-	10,081	2,441	12,523	-175		12,347
and Equipment
and Intangible
Assets

• Segment P&L is on an Operating Profit basis.

• The Adjustment to Segment P&L (-JPY 32 million) reflects transaction eliminations and corporate expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY26,608 million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to the segments. The Adjustment to Depreciation (JPY 16 million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (-JPY 175 million) reflects corporate assets that were not allocated to the segments.

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Revenue, P&L, and Assets by Segment (Current FY20/2 Q3 Stand-Alone)

(Sep 1, 2019 to Nov 30, 2019)

							(JPY million)
		Segment						Amount
	Asset	Sustainable	Clean		Adjustment	2		Recorded in
	Management	Real Estate	Energy	Total			Financial
	(AM)	(SRE)	(CE)					Statements
Revenue
Revenue from	945	30,076	945	31,968	-		31,968
External
Customers
Inter-Segment	238	-	-	238	-238		-
Activities or
Reclassifications
Total	1,184	30,077	945	32,207	-238		31,968
Segment P&L1	788	8,859	297	9,945	-32		9,913
Segment P&L
Details1
Stock Earnings
(Rental Income,	451	2,457	297	3,207	-		-
Base AM Fees,
FIT Solar Power
Earnings, etc.)
Flow Earnings
(Profits on
Sustainable Real
Estate Sales,	336	6,401	-	6,738	-		-
Profits on Solar
Power Plant
Sales, Spot AM
Fees, etc.)
Segment Assets	2,114	282,146	31,353	315,614	24,430		340,045
Other
Depreciation	-	359	278	638	9		647
Increase in
Property, Plant,	-	1,294	1,157	2,451	56		2,508
and Equipment
and Intangible
Assets

• Segment P&L is on an Operating Profit basis. For FY20/2 Q3, company-wide business expansion and new business entry costs have increased year-on-year and thus their allocation to the Segments has reduced Stock and Flow Earnings in each Segment.

• The Adjustment to Segment P&L (-JPY 32 million) reflects transaction eliminations and corporate expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 24,430 million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to the segments. The Adjustment to Depreciation (JPY 9 million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 56 million) reflects corporate assets that were not allocated to the segments.

20

Note: To facilitate comparison to FY20/2, FY19/2 Segment Assets have been restated to reflect a minor change in Japanese accounting treatment of tax assets in FY20/2. The restatement is not material.

21

Revenue, P&L, and Assets by Segment (Previous Q3 Stand-Alone)

(Sep 1, 2018 to Nov 30, 2018)

							(JPY million)
		Segment						Amount
	Asset	Sustainable	Clean		Adjustment	2		Recorded in
	Management	Real Estate	Energy	Total			Financial
	(AM)	(SRE)	(CE)					Statements
Revenue
Revenue from	570	30,755	872	32,198	-		32,198
External
Customers
Inter-Segment	331	-	-	331	-331		-
Activities or
Reclassifications
Total	901	30,756	872	32,529	-331		32,198
Segment P&L1	558	10,141	284	10,983	-12		10,971
Segment P&L
Details1
Stock Earnings
(Rental Income,	432	2,924	284	3,640	-		-
Base AM Fees,
FIT Solar Power
Earnings, etc.)
Flow Earnings
(Profits on
Sustainable Real
Estate Sales,	126	7,217	-	7,343	-		-
Profits on Solar
Power Plant
Sales, Spot AM
Fees, etc.)
Segment Assets	1,923	267,906	27,733	297,563	26,608		324,172
Other
Depreciation	-	153	262	415	6		422
Increase in
Property, Plant,	-	8,022	1,461	9,483	-220		9,262
and Equipment
and Intangible
Assets

• Segment P&L is on an Operating Profit basis.

• The Adjustment to Segment P&L (-JPY 12 million) reflects transaction eliminations and corporate expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 26,608 million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to the segments. The Adjustment to Depreciation (JPY 6 million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (-JPY 220 million) reflects corporate assets that were not allocated to the segments.

22