Summary of Business Results for the Third Quarter Ended December 31, 2018
[Japan GAAP] (Consolidated)
February 7, 2019
Company
JP-HOLDINGS, INC.
Listed on the TSE 1
Stock Code2749
URL: https://www.jp-holdings.co.jp
Representative
Koichiro Furukawa, President and Representative Director
Contact
Akihiko Fukuoka, Director
T E L: +81-52-933-5419
Expected date of filing of annual securities report: February 13, 2019
Expected starting date of dividend payment: Preparation of supplementary financial document: YesResults briefing: Yes (for media members, institutional investors, analysts, and individual investors)（Rounded down to million yen）

1. Consolidated business results for the nine months ended December 2018
(April 1, 2018 through December 31, 2018)(1) Consolidated results of operations(% change from the previous corresponding period)

Net sales

Operating income

Net income attributable toowners of parent

Ordinary income

Million yen% Million yen%
21,5899.26684.9
Nine months ended Dec. 2018
19,771
18.2
637
-4.9
Nine months ended Dec. 2017
(Note) Comprehensive income
Nine months ended December 2018: 494 million yen (0.9%)
Nine months ended December 2017: 490 million yen (-2.7%)
Net income
Diluted net income perper shareshareYen
Yen
6.76
Nine months ended Dec. 2018
5.70
Nine months ended Dec. 2017

Million yen
967
855

%
13.1
5.7

Million yen
580
484

%
19.9
3.9(2) Consolidated financial position
Total assets
Million yen
27,00425,758

As of Dec. 31, 2018
As of Mar. 31, 2018

Shareholders’ equity
ratio

Net assets
Million yen
8,131
7,756

%
30.1
30.1

(Reference) Shareholders’ equity
As of December 31, 2018: 8,131 million yen
As of March 31 2018: 7,752 million yen

2. Dividends
End of 1Q

End of 2Q
Yen

Year ended Mar. 2018Year ending Mar. 2019Year ending Mar. 2019 (forecast)

-0.00
0.00

Annual dividend
End of 3Q
Yen
Yen
-

Year-end

Total
Yen

Yen

3.50

3.50

3.00

3.50

(Notes) Revisions to dividend forecast for the current quarter: None

3．Forecast of consolidated business results for the fiscal year ending March 2019
(April 1, 2018 through March 31, 2019)
Net sales(% change from the previous corresponding period)
Operating income

Million yen% Million yen%
Year ending Mar. 201930,001 12.0
1,847 41.8(Notes) Revisions to business forecast for the current quarter: NoneOrdinary income
Million yen
2,196%
38.8

Net income attributable toowners of parent

Million yen
980%

Net income
per share
Yen

7.7

11.52

*Notes(1) Changes in significant subsidiaries during the period: None
(2) Application of accounting procedures specific to preparation of the consolidated quarterly financial statements:None(3) Changes in accounting policies, accounting estimates and restatement①Changes in accounting policies associated with revision of accounting standards:②Changes in accounting policies other than ①③Changes in accounting estimates④Restatement(4) Shares outstanding (common stock): None: None: None: None①Number of shares outstanding at the end of period (treasury stock included)
As of December 31, 201887,849,400 shares
As of March 31, 201887,849,400 shares②Treasury stock at the end of period
As of December 31, 2018
1,619,907 shares
As of March 31, 2018
2,315,806 shares③Average number of stock during period (quarterly cumulative period)
Nine months ended December 201885,862,853 shares
Nine months ended December 201785,013,554 shares(Note) The number of treasury stock deducted for the calculation of the number of treasury stock at the end of period and theaverage number of stock during period includes the company's shares held by Trust & Custody Services Bank, Ltd. as
trust property of "Stock Benefit Trust (Employee Stock Ownership Plan)".

*Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants
or auditing firms.
*Appropriate use of financial forecasts and other important matters∙ Forecasts regarding future performance in this material are based on information currently available to the Company and certain
assumptions that the company deems to be reasonable at the time this report was prepared. Actual results may differ significantly
from the forecasts due to various factors. For information regarding the assumptions that form the basis for the business results
forecasts and notes about using business forecasts, please refer to “1. Qualitative Information on Quarterly Financial Results (3)Consolidated Earnings Forecasts” (Page 3).
∙ The company plans to hold results briefing for media members, institutional investors and analysts on February 8, 2019 (Friday) andfor individual investors on February 25, 2019 (Monday). After the results briefings, the Company will promptly post presentationmaterials distributed at the results briefings on the Company website. Please confirm the results briefing schedule and otherinformation on the Company website.

○ Table of Contents of the Appendix

1. Qualitative Information on Results for the Current Quarter ............................................................................ 2(1) Results of Operations..................................................................................................................................... 2(2) Financial Position .......................................................................................................................................... 3(3) Consolidated Earnings Forecasts ................................................................................................................... 32. Quarterly Consolidated Financial Statements ................................................................................................. 4(1) Quarterly Consolidated Balance Sheets ......................................................................................................... 4(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income........................... 6(3) Notes on Quarterly Consolidated Financial Statements ................................................................................. 8(Notes on going concern assumptions) ........................................................................................................ 8(Notes if there is a significant change in the amount of shareholders' equity) ............................................. 8(Additional information) ............................................................................................................................. 811. Qualitative Information on Quarterly Financial Results(1) Results of Operations
In the third quarter of the current fiscal year, the Japanese economy has continued to improve and has been on a gradual recovery
trend as the environment or both employment and personal income is improving. However, the outlook remains unclear due toconcerns over trade issues, uncertainties in overseas economies, and changes in the financial and capital markets.
As for the environment surrounding the child-raising service, demand for childcare is increasing in response to women'sadvancement and active participation in society, and as the issue of the number of children waiting for admission continues to beserious. The government has formulated various measures to improve child care facilities and secure nursery teachers in order toprovide daycare for 320,000 children by the end of March 2021. The Government has also announced a policy toward realizing asystem of free child education to be implemented in October 2019. In response to this policy, the market is expected to continue toexpand, and social role of our child-raising service is expected to become more important.
Against this backdrop, the Group worked to strengthen its ability to recruit and retain nursery school teachers in response to risingdemand for nursery schools, and actively promoted the opening of licensed nursery schools and other facilities.
In the third quarter of the current fiscal year, the Group has opened the following new facilities, including 17 nursery schools and 4school clubs, totaling 21 facilities.
(Nursery school)
Koto-ku Minamisuna No. 4 Nursery School(Apr. 1, 2018)

Asc Toneri Nursery School(Apr. 1, 2018)

Asc Higashi Kasai Nursery School(Apr. 1, 2018)

Asc Minami Kugahara Nursery School(Apr. 1, 2018)

Asc Yakuoji Nursery School(Apr. 1, 2018)

Asc Kaname-cho Nursery School(Apr. 1, 2018)

Asc Fuchu Honmachi Nursery School(Apr. 1, 2018)

Asc Minowa Nursery School(Apr. 1, 2018)

Asc Kugenuma Kita Nursery School(Apr. 1, 2018)

Asc Ohtaka-no-mori Nursery School(Apr. 1, 2018)

Asc Wani Nursery School(Apr. 1, 2018)

Asc Sone Minami Nursery School(Apr. 1, 2018)

Asc Toyotama 1-chome Nursery School A(Apr. 1, 2018)

Asc Toyotama 1-chome Nursery School B(Apr. 1, 2018)

GENKIDS Shinkoyasu Nursery School(Apr. 1, 2018)

Asc Akebono Kaiho Nursery School(Sep. 1, 2018)

Asc Noborikawa Nursery School(Sep. 1, 2018)(School club)
Kojimachi Kids’ Club

(Apr. 1, 2018)

Taisho Elementary School After School Kids’ Club

(Apr. 1, 2018)

Chofu City Chowa Elementary School Club

(Apr. 1, 2018)

Wakuwaku Takinogawa Momiji Hiroba(Apr. 1, 2018)

As a result, the Group came to have 200 nursery schools, 72 school clubs, 11 children's houses, 5 private school clubs, and 1
kindergarten (overseas facility), making a total of 289 facilities for supporting child-raising at the end of the third quarter of thecurrent fiscal year.
For the third quarter of the current fiscal year, the Group’s consolidated net sales were 21,589 million yen (up 9.2% year on year),
operating income was 668 million yen (up 4.9%), ordinary income was 967 million yen (up 13.1%), and net income attributable toowners of parent was 580 million yen (up 19.9%).
The major factors are as follows:

Net sales increased year on year, mainly due to the opening of new facilities, an increase in the number of children accepted atexisting facilities, and an increase in rent subsidies at some existing facilities.
Operating income increased year on year thanks to the increased sales of existing facilities stated above and the decreased expenses
related to the General Meeting of Shareholders, although operating income were pushed down by these factors; the increase inrecruitment expenses due to the strengthening of hiring nursery school teachers and expenses related to corporate dormitories
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associated with an increase in its users, and the placement of nursery teachers at various facilities ahead of the timing of theacceptance of children.

Since June 2018, the Company has been gradually increasing the number of entrance of children. At the end of the third quarter ofthe current fiscal year, the Company has accepted the number of children that is generally commensurate with the number ofteachers recruited in advance.

In addition, both ordinary income and net income attributable to owners of parent increased year on year thanks to an increase in
non-operating revenues owing to increased subsidies associated with an increase in users of the corporate dormitory, as well as anincrease in operating income.

(2) Financial Position
As for the financial position at the end of the third quarter of the current fiscal year, the total assets amounted to 27,004 million yen(up 1,245 million yen from the end of the previous fiscal year).
Current assets totaled 9,974 million yen (up 2,088 million yen), mainly reflecting an increase of 2,244 million yen in cash anddeposits and a decrease of 129 million yen in inventories.
Fixed assets totaled 17,029 million yen (down 843 million yen). This was mainly due to increases of 182 million yen in buildings
and structures and 143 million yen in long-term loans receivable, while there were decreases of 941 million yen in construction inprogress, 102 million yen in deferred tax assets, and 99 million yen in investment securities.
Total liabilities amounted to 18,872 (up 870 million yen).
Current liabilities totaled 8,408 million yen (up 199 million yen), mainly due to increases of 922 million yen in short-term loans
payable and 460 million yen in others, while there were decreases of 322 million yen in current portion of long-term loans payable,
302 million yen in income taxes payable, 270 million yen in provision for bonuses, 205 million yen in accounts payable-other, and80 million yen in notes and accounts payable-trade.
Fixed liabilities totaled 10,464 million yen (up 670 million yen). This was mainly due to increases of 618 million yen in long-termloans payable, 77 million yen in asset retirement obligation, and 51 million yen in net defined benefit liability, while there was adecrease of 73 million yen in other liabilities.
Total net assets as of the end of the third quarter of the current fiscal year totaled 8,131 million yen (up 374 million yen), mainly
due to an increase of 273 million yen in retained earnings, while there were decreases of 191 million yen in treasury stock, and 91
million yen in valuation difference on available-for-sale securities.

(3) Consolidated Earnings Forecasts
The full-year consolidated earnings forecasts have not been revised from the announcement on August 8, 2018, but actual results
may be different from the forecast according to the changes in business situations, etc.
If there are any changes, the Company will disclose them properly.

32. [Quarterly Consolidated Financial Statements](1) [Quarterly Consolidated Balance Sheets](Thousand yen)Previous Fiscal Year
(March 31, 2018)
AssetsCurrent assets
Cash and deposits

Current Third Quarter(December 31, 2018)

4,455,750

6,700,249

Notes and accounts receivable
Inventories

81,250149,105

64,657
19,982

Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets

2,169,850
1,030,385-730
7,885,6132,121,455
1,068,867-931
9,974,281

11,278,553

11,891,287-4,015,971
7,262,582-4,445,802
7,445,484

5,868-2,3983,470

5,637-2,975
2,661

711,365-470,331

808,938-542,035

241,033

266,903Land
Construction in progress
Total tangible fixed assets

980,894
1,613,898
10,101,879

980,894
672,817
9,368,761

Intangible fixed assets
Goodwill
Other
Total intangible fixed assets

258,280
215,489473,769

235,491
148,162
383,653

Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture, and fixtures
Accumulated depreciation and impairment loss
Tools, furniture, and fixtures, net

Investments and other assets
Investment securities

629,505

530,244

Long-term loans receivable
Guarantee deposits

3,297,662
1,823,521

3,441,490
1,841,319

Deferred tax assets
Other
Allowance for doubtful accounts
Total investment and other assets

750,305
812,703-16,063
7,297,635

647,657
833,185-16,584
7,277,313

17,873,284
25,758,898

17,029,728
27,004,009

Total fixed assets
Total assets4

(Thousand yen)Previous Fiscal Year
(March 31, 2018)

Current Third Quarter(December 31, 2018)

Liabilities
Current liabilities
228,917

148,600

Short-term loans payable

1,500,000

2,422,000

Current portion of long-term loans payable

2,485,320

2,163,037

Accounts payable-other

1,584,376

1,378,554

Income taxes payable344,278

42,271

Consumption tax payable

78,37376,750

Other

390,055
1,597,673

119,294
2,058,052

Total current liabilities

8,208,995

8,408,560

Long-term loans payable

8,934,213

9,552,412

Net defined benefit liability

538,885

590,608

Notes and accounts payable-trade

Provision for bonuses

Long-term liabilities

Long-term accounts payable-other
Asset retirement obligations
Other

3,700

-

238,624
78,280316,397
4,850

9,793,703

10,464,268

18,002,699

18,872,828

Capital stock

1,603,955

1,603,955

Capital surplus

1,449,544

1,449,544

Retained earnings

5,421,026-636,635
7,837,890

5,694,403-445,263
8,302,639-46,654-138,445

545-3,366

Foreign currency translation adjustments

3,899

-966

Remeasurements of defined benefit plans-43,350-28,679

Total accumulated other comprehensive income-85,560-171,458

Total fixed liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury stock
Total shareholders' equity
Total accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges

Non-controlling interests
Total net assets
Total liabilities and net assets

53,869-7,756,199

8,131,180

25,758,898

27,004,009

(2) [Quarterly Consolidated Statements of Income and Statements of Comprehensive Income][Quarterly Consolidated Statement of Income][Third Quarter of FY3/19]
Previous Third Quarter(April 1, 2017–
December 31, 2017)
19,771,184(Thousand yen)
Current Third Quarter(April 1, 2018–
December 31, 2018)
21,589,993

Cost of sales

17,018,161

18,867,368

Gross profit

2,753,023

2,722,624

Selling, general and administrative expenses

2,116,003

2,054,579

637,019

668,044

Net sales

Operating incomeNon-operating revenues
Interest income

83,29780,140Subsidy income

126,662

273,781

Guarantee commission received
Other

49,206
17,23549,206
31,057

Total non-operating revenues

276,401

434,186

Interest expenses

38,77340,017

Equity in losses of affiliates

13,192--

34,886

Commission paid

1,500

54,252

Other

4,420

5,340

Non-operating expenses

Demobilization costs

57,886

134,496855,533

967,734-

77

Loss on valuation of investment securities

823
1,404

1,764
-

Total extraordinary loss

2,228

1,841

Income before income taxes and others

853,305

965,892

Corporate, inhabitant and enterprise taxes

258,219

247,865

Income taxes-deferred

110,694

137,247

Total income taxes

368,914385,112Net income

484,390

580,779-63-64484,454580,843

Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets

Net loss attributable to non-controlling interests
Net income attributable to owners of parent

6

[Quarterly Consolidated Statement of Comprehensive Income][Third Quarter of FY3/19]

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

Previous Third Quarter(April 1, 2017
December 31, 2017)484,390(Thousand yen)
Current Third Quarter(April 1, 2018
December 31, 2018)580,779-3,272-91,791-810-3,911

Foreign currency translation adjustments-1,111-4,865Remeasurements of defined benefit plans

11,04014,671

Total other comprehensive income

5,846-85,898490,237

494,881490,300

494,945-63-64

Comprehensive income(Breakdown)Comprehensive income attributable toowners of parentComprehensive income attributable to noncontrolling interests7(3) Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumptions)Third quarter of FY3/19 (April 1, 2018 – December 31, 2018)
None(Notes on significant changes in shareholders' equity)
Third quarter of FY3/19 (April 1, 2018 – December 31, 2018)
None(Additional information)(Application of Partial Revision, etc. of Accounting Standard for Tax Effect Accounting)Third quarter of FY3/19 (April 1, 2018 – December 31, 2018)"Partial Amendment of Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February16, 2018) and otherregulations have been applied from the first quarter of the current fiscal year. Deferred tax assets are presented in the category ofinvestments and other assets, while deferred tax liabilities are presented in the category of fixed liabilities.

8