Summary of Business Results for the Second Quarter Ended September 30, 2018
[Japan GAAP] (Consolidated)
November 7, 2018
Company
Listed on the TSE 1
JP-HOLDINGS, INC.
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 quarterly securities report: November 13, 2018
Expected starting date of dividend payment: ―Preparation of quarterly supplementary financial document: Yes
Quarterly results briefing: Yes (for media members, institutional investors and analysts)（Rounded down to million yen）

１. Consolidated business results for the six months ended September 2018
(April 1, 2018 through September 30, 2018)(1) Consolidated results of operations(% change from the previous corresponding period)
Net sales

Operating income

Million yen% Million yen
14,27812.0
168
Six months ended Sept. 2018
12,74816.2449
Six months ended Sept. 2017
(Note) Comprehensive income
Six months ended September 2018: 171 million yen (-46.8%)
Six months ended September 2017: 322 million yen (32.2%)
Net income
per share
Yen
2.75
4.09

Six months ended Sept. 2018
Six months ended Sept. 2017%
-62.6
50.3

Net income attributable toowners of parent

Ordinary income
Million yen
399
593%
-32.7
54.1

Million yen
235
347

%
-32.1
41.5

Diluted net income pershare
Yen――(2) Consolidated financial position
Total assets

Net assets

Million yen
24,045
As of Sept. 30, 201825,758
As of Mar. 31, 2018
(Reference) Shareholders’ equity:
As of September 30, 2018: 7,738 million yen
As of March 31, 2018: 7,752 million yen

Million yen
7,738
7,756

Shareholders’ equity
ratio
%
32.2
30.1

2. Dividends
End of 1Q

End of 2Q
Yen

Year ended Mar. 31, 2018Year ending Mar. 31, 2019Year ending Mar. 31, 2019 (forecast)

―
―

0.00
0.00

Annual dividend
End of 3Q
Yen
Yen
―
―

Year-end

Total
Yen

Yen

3.50

3.50

3.50

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. 31,30,001 12.0
1,847
41.8
2019(Notes) Revisions to business forecast for the current quarter: NoneOrdinary income

Net income attributable toowners of parent

Net income pershare

Million yen%

Million yen%

Yen

2,196

38.8

980

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: None: None: None: None

(4) Shares outstanding (common stock)①Number of shares outstanding at the end of period (treasury stock included)
As of September 30, 201887,849,400 shares
As of March 31, 201887,849,400 shares②Treasury stock at the end of period
As of September 30, 2018
1,870,607 shares
As of March 31, 2018
2,315,806 shares③Average number of stock during period (quarterly cumulative period)
Six months ended September 201885,749,294 shares
Six months ended September 201784,915,637 shares(Note) The number of treasury stock deducted for the calculation of the number of treasury stock at the end of period and the average
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.
*Explanation regarding appropriate use of business forecasts and other special instructions∙ 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 thebusiness 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 November 8, 2018
(Thursday). After the results briefing, the Company will promptly post presentation materials distributed at the results briefing on
the Company website. Please confirm the results briefing schedule and other information on the Company website.

○Table of Contents of the Appendix
1. Qualitative Information on Quarterly Financial Results ................................................................................................... 2(1) Results of Operations .................................................................................................................................................... 2(2) Financial Position ......................................................................................................................................................... 3(3) Consolidated Earnings Forecasts .................................................................................................................................. 3
2. Quarterly Consolidated Financial Statements ................................................................................................................... 4(1) Quarterly Consolidated Balance Sheets ........................................................................................................................ 4(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income .... 6(3) Notes on Quarterly Consolidated Financial Statements ................................................................................................ 8(Notes on going concern assumption)........................................................................................................................... 8(Notes if there is a significant change in the amount of shareholders' equity) .............................................................. 8(Additional information) ............................................................................................................................................... 8(Significant subsequent events) .................................................................................................................................... 8－ 1 －1. Qualitative Information on Quarterly Financial Results(1) Results of Operations
In the second quarter of the current fiscal year, the Japanese economy remained on a moderate recovery trend as the environment
for both employment and personal income is improving. However, the global economy continued to remain unclear, partly becauseof the impact of trade problems started with the United States on the global economy and uncertainty about political trends in Europe
and the United States.
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 promoted a policy to provide daycare for 320,000 children by the end of March 2020 and to further
improve the levels of compensation of nursery school teachers. The government also aims to fully implement the program ofproviding free early childhood education from October 2019. It is expected that the size of the market will continue to expand inresponse to these government policies, and social role of our child-raising service is expected to become more important.
Against this backdrop, following the Ordinary General Meeting of Shareholders held on June 28, 2018, the Group transitioned to a
new management structure and implemented organizational and business structure reforms to improve management efficiency. In
order to respond to the rising levels of demand for nursery services, the Group is actively opening licensed nursery schools, etc. In
addition, in response to diversifying needs for nursery schools, the Group launched the Group's first company-led childcare business(nursery school) in September 2018.
In the second quarter of the current fiscal year, the Group has opened the following new facilities, including 17 nursery schools and4 school 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 second quarter ofthe current fiscal year.
For the second quarter of the current fiscal year, the Group’s consolidated net sales were 14,278 million yen (up 12.0% year onyear), operating income was 168 million yen (down 62.6%), ordinary income was 399 million yen (down 32.7%), and net income
attributable to owners of parent was 235 million yen (down 32.1%).

－ 2 －The major factors are as follows:
Net sales increased year on year because of the establishment of new facilities as well as sales growth of existing facilities due
to subsidies increase for improving treatment of nursery staff etc.

Operating income decreased year on year. This is because personnel expenses incurred prior to the recording of revenue at existing
facilities, as the allocation of nursery school teachers to facilities was ahead of entrance of children, and the operating rate did
not reach appropriate level to the number of teachers, in addition to an increase in recruitment expenses due to the strengtheningof hiring nursery school teachers for sustainable growth. However, since June 2018, the number of entrance of children has been
gradually increasing in proportion to the number of teachers in the facilities, and the profitability of existing facilities has been
gradually improving. As a result, operating income increased year on year in the second quarter of the current fiscal year.

In addition, both ordinary income and net income attributable to owners of parent decreased year on year, as a decrease inoperating income had large impact, although non-operating revenues grew thanks to an increase in subsidies associated with anincrease in users of the corporate dormitory.

(2) Financial Position
As for the financial position at the end of the second quarter of the current fiscal year, the total assets amounted to 24,045 million
yen (down 1,713 million yen from the end of the previous fiscal year).
Current assets totaled 7,151 million yen (down 733 million yen from the end of the previous fiscal year), mainly because cash anddeposits decreased by 434 million yen, others decreased by 155 million yen, and inventories decreased by 130 million yen.
Fixed assets totaled 16,894 million yen (down 979 million yen from the end of the previous fiscal year), mainly because buildings
and structures increased by 331 million yen, deferred tax assets increased by 73 million yen, tools, furniture and fixtures increasedby 42 million yen, while construction in progress decreased by 1,349 million yen, and investment securities decreased by 84 millionyen.
Total liabilities amounted to 16,306 million yen (down 1,695 million yen from the end of the previous fiscal year).
Current liabilities totaled 7,958 million yen (down 250 million yen from the end of the previous fiscal year), mainly because reserve
for bonuses increased by 144 million yen, income taxes payable decreased by 161 million yen, while current portion of long-termloans payable decreased by 105 million yen, accounts payable-trade decreased by 89 million yen, short-term loans payable
decreased by 39 million yen.
Fixed liabilities totaled 8,348 million yen (down 1,444 million yen from the end of the previous fiscal year), mainly because asset
retirement obligation increased by 76 million yen, net defined benefit liability increased by 31 million yen, while long-term loans
payable decreased by 1,471 million yen, and others decreased by 78 million yen.
Total net assets as of the end of the second quarter of the current fiscal year totaled 7,738 million yen (down 17 million yen fromthe end of the previous fiscal year), mainly because treasury stock decreased by 122 million yen, valuation difference on availablefor-sale securities decreased by 74 million yen, and retained earnings decreased by 71 million yen.

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

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Inventories
Accounts receivable - other
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation and impairment loss
Buildings and structures, net
Machinery, equipment and vehiclesAccumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net
LandConstruction in progress
Total tangible fixed assets
Intangible fixed assets
Goodwill
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets－ 4 －Current Second Quarter(September 30, 2018)

4,455,750
81,250149,105
2,169,850
1,030,385-730
7,885,613

4,021,474
75,436
19,0482,161,291
875,218-726
7,151,743

11,278,553-4,015,971
7,262,582
5,868-2,3983,470
711,365-470,331
241,033
980,894
1,613,898
10,101,879

11,906,684-4,312,280
7,594,403
5,637-2,741
2,895
800,738-517,563
283,175
980,894
263,919
9,125,287

258,280
215,489473,769

243,087
212,340
455,428

629,505
3,297,662
1,823,521
750,305
812,703-16,063
7,297,635
17,873,284
25,758,898

544,991
3,304,922
1,831,629
823,977
823,884-16,113
7,313,291
16,894,007
24,045,751

(Thousand yen)

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Accounts payable – other
Income taxes payable
Accrued consumption taxes
Reserve for bonuses
Other
Total current liabilities
Fixed liabilities
Long-term loans payable
Net defined benefit liability
Long-term accounts payable - other
Asset retirement obligation
Other
Total fixed liabilitiesTotal liabilities
Net assets
Shareholders’ equity
CapitalCapital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－ 5 －Previous Fiscal Year
(March 31, 2018)

Current Second Quarter(September 30, 2018)

228,9171,500,000
2,485,320
1,584,376344,278
78,373390,055
1,597,673
8,208,995

139,888
1,461,000
2,379,796
1,549,487
182,520
74,928534,810
1,635,740
7,958,173

8,934,213
538,8853,700
238,624
78,2809,793,703
18,002,699

7,462,723
570,511
315,525
8,348,760
16,306,933

1,603,955
1,449,544
5,421,026-636,635
7,837,890

1,603,955
1,449,544
5,349,335-514,205
7,888,629-46,654545
3,899-43,350-85,560
3,869
7,756,199
25,758,898-120,770
4,778-249-33,570-149,811
7,738,817
24,045,751

(2)[Quarterly Consolidated Statement of Income and Quarterly Statement of Comprehensive Income][Quarterly Consolidated Statement of Income][Second Quarter of FY3/19](Thousand yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating revenues
Interest income
Subsidy income
Guarantee commission received
Other
Total non-operating revenues
Non-operating expenses
Interest expenses
Equity in losses of affiliates
Demobilization costs
Other
Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary loss
Income before income taxes and others
Corporate, inhabitant and enterprise taxes
Income taxes-deferred
Total income taxes
Net income
Net loss attributable to non-controlling interests
Net income attributable to owners of parent－ 6 －Previous Second Quarter(April 1, 2017–
September 30, 2017)

Current Second Quarter(April 1, 2018–
September 30, 2018)

12,748,825
10,979,215
1,769,609
1,320,144
449,465

14,278,070
12,720,275
1,557,7941,389,535
168,259

55,07986,00732,804
7,789
181,681

53,767
198,978
32,804
10,995296,545

25,5597,426
5,095
38,082593,064

26,50934,7584,254
65,522399,283

741
1,404
2,146
590,917272,837-28,939
243,898
347,019-26
347,04677
270
347
398,935
211,116-47,892
163,224
235,711-64
235,775

[Quarterly Consolidated Statement of Comprehensive Income][Second Quarter of FY3/19](Thousand yen)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to shareholdersof the parent company
Comprehensive income attributable to non-controllinginterests－ 7 －Previous Second Quarter(April 1, 2017–
September 30, 2017)

Current Second Quarter(April 1, 2018–
September 30, 2018)

347,019

235,711-31,764-502
7,360-24,907322,112-74,116
4,232-4,1489,780-64,250
171,460

322,139

171,524-26-64

(3) Notes on Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Second quarter of FY3/19 (April 1, 2018 – September 30, 2018)
None(Notes if there is a significant change in the amount of shareholders' equity)
Second quarter of FY3/19 (April 1, 2018 – September 30, 2018)
None(Additional information)(Application of Partial Revision, etc. of Accounting Standard for Tax Effect Accounting)Current Second Quarter (from April 1, 2018 to September 30, 2018)"Partial Amendment of Accounting Standard for Tax Effect Accounting" (ASBJ Statement No. 28, February
16, 2018) and other regulations have been applied from the first quarter of the current fiscal year. Deferred tax
assets are presented in the category of investments and other assets, while deferred tax liabilities are presented
in the category of long-term liabilities.

(Significant subsequent events)
The Company received notification of the filing of a lawsuit against the Company, on the ground that theCompany treated the exercise of the voting rights of Mother Care Japan Co., Ltd. to be unrecognized at theextraordinary shareholders meeting held on March 23, 2018, requesting the payment of damages of 264
million yen and interest thereon at the rate of 5% per annum for the period from March 23, 2018, until thepayment was completed. The said lawsuit was pending at the Tokyo District Court, and the out-of-court
settlement was concluded on October 9, 2018, the contents of which do not cause any financial burden, or any
other burden of any kind, arising as a result of the settlement being concluded.

－ 8 －