Three-month Consolidated Financial Reportfor the Fiscal Year ending October 31, 2010
March 5, 2010
Company name: Kanamoto Company, Ltd.
Code number:9678

Stock Change Listing: Tokyo, Sapporo

URL http://www.kanamoto.co.jp
Representative
Kanchu Kanamoto President
Inquiries

Nobuhito Utatsu
Director & Corporate Officer, Division Manager, Accounting Division
TEL +81-11-209-1631

1. Operating Results for the Three-month of the Fiscal Year Ending October 31, 2010
(November 1, 2009 - January 31, 2010)(1) Consolidated Operating Results(Numbers less than one million yen have been rounded down)

Revenues

Operating income

Millions of yen％

Fiscal Year Ending October 31,
2010: First Quarter

18,699( 7.2 )

Fiscal Year Ended October 31,
2009: First Quarter

17,441(Millions of yen

1,666

- )

％

Millions of yen(149.0)

669

(

％

1,595

(162.6)

607

( - )

- )

Net Income
per Share

Net income
Millions of yen

Ordinary income

Diluted Net Income
per Share

％

Yen

Yen

Fiscal Year Ending October 31,
2009: First Quarter

853

(

- )

25.98

-

Fiscal Year Ended October 31,
2008: First Quarter

-105

(

- )

-3.20

-

(2) Consolidated Financial Position(Numbers less than one million yen have been rounded down)

Total Assets

Fiscal Year Ending October
31, 2010: First Quarter
Fiscal Year Ended October
31, 2009(Reference) Shareholder’s equity

Net Assets

CapitalAdequacy Ratio

Net Assets
per Share

Millions of yen

Millions of yen％

Yen

104,834

37,42035.1

1,121.32

96,43536,54137.5

1,102.51

Fiscal Year Ending October 31, 2009 First Quarter: 37,418 million yen
Fiscal Year Ended October 31, 2008: 37,947 million yen

2. Dividends(Record date)

End of 1Q
Yen

Dividend per share
End of 2Q
End of 3Q
Year-end
Yen

Fiscal Year ended October 31,2009
10.00――
Fiscal Year ending October 31,2010
Fiscal Year ending October 31,2009――
10.00(Projected)(Note) Revision of dividend project for the current quarter: No

YenFull year

Yen

Yen

――

10.00
――

20.00
――

-

10.00

20.00

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.1

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2010
(November 1, 2009 - October 31, 2010)(Percentages show the change from the prior year)

Revenues

Operating
IncomeOrdinary
IncomeMillions of yen% Millions of yen% Millions of yen

Net Income
per Share

Net Income% Millions of yen%

Yen

Interim period

35,200

8.0

1,730

87.7

1,510

90.2

700

-

21.32

Full year

67,100

5.1

1,150

737.5

710

-

110

-

3.35

(Note) Revision of Projected Consolidated Operating Results for the current quarter: No
4. Other(1) Changes to material subsidiaries during the period (transfer of specified subsidiaries in conjunction
with revision to scope of consolidation)? : No
(2) Has the Company adopted simplified methods for accounting treatment? : Yes(Note) For details, see “4. Other matters” on Page 5 (Qualitative information and financial statements).
(3) Changes in accounting principles, procedures, or representation methods relating to preparation of theconsolidated quarterly financial statements (Matters stated in the Change to the Basis for presentationof the Consolidated Quarterly Financial Statements)(a) Changes in accordance with revisions to accounting standards: Yes(b) Changes other than the above: Yes(Note) For details, see “4. Other matters” on Page 5 (Qualitative information and financial statements).
(4) Number of shares issued (Common stock)(a)Number of shares outstanding at the end of period (including treasury stock):
Fiscal Year Ending October 31, 2010 First Quarter: 32,872,241 sharesFiscal Year Ended October 31, 2009: 32,872,241 shares(b)Number of shares of treasury stock at the end of period
Fiscal Year Ending October 31, 2010 First Quarter: 34,585 sharesFiscal Year Ended October 31, 2009: 34,385 shares(c)Average number of shares during the period (Consolidated cumulative period)
Fiscal Year Ending October 31, 2010 First Quarter: 32,837,656 sharesFiscal Year Ended October 31, 2009: 32,838970 shares
Note: Explanation concerning appropriate use of the projected operating results and other items to note
The projections above represent an outlook for the future and assumptions about uncertain factorsthat might affect future results, based on information available as of the date of the announcement of
this document. Actual results may differ from the projections as a result of factors arising in the
future.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.2

Qualitative Information and Financial Statements
1. Qualitative information concerning consolidated operating results< Management Environment > (From November 1, 2009 to January 31, 2010)
During the Kanamoto Group’s first quarter, Japan’s economy was boosted by an improvement in theoperating results of export-oriented manufacturers that was driven by China and Southeast Asia, which has
been the first of the world’s leading countries and regions to emerge from the global economic slowdown,
and enjoyed a limited recovery in personal consumption as a result of successful domestic consumption
stimulation measures such as the eco-point system and tax reductions for environmentally-friendly
automobiles. Nevertheless, a full-scale recovery in private sector capital investment was still not evident,
and with no particular progress in this area politically, the quarter was defined by a heightened sense ofstagnation caused by deflation.
For services industries in particular, the sector where Kanamoto also is active, the earnings environment
deteriorated further because of intensified competition that resulted in price cutting, reflecting the drop in
demand.
< First Quarter Operating Results > (From November 1, 2009 to January 31, 2010)
As told by the 17.4% year-on-year drop in the value of orders received for construction work during 2009 to¥41,703 billion (Ministry of Land, Infrastructure and Transport survey), the construction industry isconfronting an extremely severe operating climate. For the construction equipment rental industry as well,which is incidental to the construction industry, competition throughout Japan has intensified in conjunction
with the sharp fall in construction works, a development that has significantly affected the earnings of theKanamoto Group. To isolate itself from such price competition and differentiate its rental equipment
inventory, Kanamoto broadened its lineup in the past with equipment such as hybrid trucks, and in theautumn of 2009 added LED battery floodlights for the first time, which have been well received. The appealof such equipment helped boost other construction equipment rentals, enabling Kanamoto Group to expand
its regional market share in Hokkaido and the Tohoku Region and achieve commensurate success in otherregions as well, where the group was able to maintain its market share.
During the first quarter under review, Kanamoto greatly improved its operating results in the Hokkaido
Region, which offset revenue decreases in other regions. Furthermore, during the quarter Kanamoto madefour entities – the Shanghai Jinheyuan Group (Shanghai Jinheyuan Equipment Rental Co., Ltd. and Shanghai
Jinheyuan Engineering Construction Co., Ltd.; Head office: Shanghai, China) and SJ Rental, Inc. (Headoffice: Territory of Guam, United States), which are developing their business in other countries, andKanamoto Engineering Co., Ltd. (Head office: Minato Ward, Tokyo, Japan) – into new consolidated
companies. Moreover, although worldwide market conditions for used construction equipment sales haverecovered since last autumn, Kanamoto continued its prior period policy of limiting overseas used equipment
sales with the goal of strengthening domestic rental revenues and earnings and ascertaining its future
capital equipment investment requirements, and revenues from this segment declined. As a result of thesefactors, consolidated revenues for the first quarter of the Business Period ending in October 2010 were¥18,699 million, up 7.2% compared with the same period of the previous consolidated fiscal year.
From an earnings perspective, on the other hand, consolidated operating income jumped 149.0% from thesame period of the previous consolidated fiscal year to ¥1,666 million and consolidated ordinary income
increased 162.6% year-on-year to ¥1,595 million. First quarter consolidated net income was ¥853 million,
compared with a consolidated net loss of ¥105 million in the same quarter one year ago.
A summary of operating results for each of the Company’s businesses is provided below.
[ Business related to the Construction Equipment Rental Division ]Compared with the same period of the previous consolidated fiscal year, construction equipment rental
revenues by region in the first quarter were up smartly by 32.4% year-on-year in the Hokkaido Region,
reflecting the effects of the previous administration’s economic measures and Kanamoto’s success in
mitigating the impact of lower rental unit prices through additional steps to strengthen businessdevelopment, including proposal-based marketing. The Company worked tirelessly in the Tohoku Region as
well, holding the year-on-year decrease in revenue to just 0.1%. In the major metropolitan areas in the
Kanto and Kinki & Chubu regions, the influence of the sharp decrease in private sector capital investment
remained significant, with revenues falling 10.4% from the same period of the prior fiscal year in the Kanto
Region, despite a boost from large-scale projects such as expansion of the Tokyo International Airport(Haneda), and similarly slipping 6.8% in the Kinki & Chubu Region. In the Kyushu & Okinawa Region, thesupplementary budgets for the northern and southern areas of Kyushu were pulled forward, which added
some demand, but the effect was limited and revenues for the region decreased 15.5% year-on-year.
Among the overseas subsidiary companies that Kanamoto newly added to its consolidated companies during
the quarter, the Shanghai Jinheyuan Group achieved remarkable growth in its operating performance as aresult of China’s vigorous infrastructure investment.
In this business sector, rental revenues for the first quarter consolidated accounting period rose 9.6%
compared with the same period of the previous consolidated fiscal year. Revenues from sales in thisbusiness sector also were higher for the quarter. Although there were several factors that reduced revenues
from sales, including the slump in domestic construction equipment demand and limits on the overseas sales

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010P.3

of used construction equipment, revenues from sales increased 1.4% year-on-year because of robust sales
in the Hokkaido Region.
As a result of these factors, first quarter revenues for Kanamoto’s construction-related businesses increased
8.0% from the same period of the previous consolidated fiscal year to ¥17,583 million, and operating income
grew 153.0% year-on-year to ¥1,698 million.
[ Business related to the Steel Sales Division ]As with construction equipment rentals, the operating performance of the steel products sales business
Kanamoto is developing in Hokkaido continued to be affected negatively by weak private sector demand,
despite higher public demand related to economic stimulus measures. Revenues for the first quarter
consolidated accounting period fell 8.3% from the same period one year earlier to ¥965 million. The
operating loss was ¥12 million, compared with operating income of ¥3 million in the same period of theprevious consolidated fiscal year.
[ Information Products Division-related businesses and other business ]In the Company’s information and telecommunications-related division, rental revenues per rental period
declined as the average personal computer rental period lengthened. Although used equipment sales rose
marginally, this was insufficient to offset the drop in rental revenues. For the first quarter consolidated
accounting period under review, revenues were up 33.1% year-on-year to ¥151 million, and the operating
loss was ¥9 million, compared with operating income of ¥7 million in the first quarter of the previous
consolidated fiscal year.
[ Business development issues deserving special mention and status of branch office changes ](1) The Company did not open or close any branches during the first quarter consolidated accounting period.
(2) As described above, during the first quarter under review Kanamoto converted four companies (theShanghai Jinheyuan Group (Shanghai Jinheyuan Equipment Rental Co., Ltd. and Shanghai Jinheyuan
Engineering Construction Co., Ltd.; Head office: Shanghai, China), SJ Rental, Inc. (Head office: Territory ofGuam, United States) and Kanamoto Engineering Co., Ltd. (Head office: Minato Ward, Tokyo, Japan)) tocompanies subject to consolidation.

2. Qualitative information on consolidated financial conditions(1) Assets, liabilities and net assets
Compared with the end of the prior consolidated accounting fiscal year, total assets at the end of the firstquarter under review increased by ¥8,399 million to ¥104,834 million. This was mainly an increase of ¥4,708
million from including four newly consolidated subsidiary companies within the scope of consolidation
beginning from the first quarter consolidated accounting period.
Total liabilities were ¥67,413 million, an increase of ¥7,520 million compared with the end of the priorconsolidated accounting fiscal year. This was mainly an increase of ¥4,392 million resulting from the same
factor that produced the increase in total assets.
Total Net Assets were ¥37,420 million, ¥878 million higher than at the end of the previous consolidated
accounting fiscal year. This was mainly an increase in earned surplus from income before income taxes andminority interests for the quarter.
(2) Cash flows
Cash flow from operating activities was ¥1,956 million. This was mainly income before income taxes andminority interests for the quarter, depreciation and amortization expense of ¥1,795 million reflecting theincrease in rental equipment, and expenditures for acquisition of rental assets of ¥1,602 million.
Cash flow used in investing activities was ¥94 million. This was mainly funds used for loans to an
unconsolidated subsidiary of ¥62 million and funds used for purchases of tangible fixed assets totaling ¥52
million.
Cash flow from financing activities was ¥25 million. This primarily reflected an increase in funds provided byshort-term bank loans of ¥3,212 million and an increase in funds provided by long-term loans of ¥1,149
million, and funds used for repayment of ¥2,814 million of long-term bank loans and for repayment of¥1,053 million of installment obligations.

3. Qualitative information concerning projected consolidated operating results

Because the business activities and business areas of Narasaki Lease Co., Ltd. (Head office: Chuo-ku,
Sapporo) and Aomori Narasaki Rental Co., Ltd. (Head office: Aomori City, Aomori Prefecture) overlap withthose of Kanamoto, the Company will execute an absorption-type merger with the two companies on June
1, 2010 to improve the management efficiency of its activities, as announced on February 5, 2010.
Kanamoto projects the merger will not have any material effect on the Company’s consolidated andnon-consolidated operating results.
There is no change to the projected interim period and full year consolidated operating results and projected
dividends for the fiscal year ending October 31, 2010 described in the “Financial Statements Bulletin for theThree-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.4

Fiscal Year Ended October 31, 2009” released on December 4, 2009.
These projected consolidated operating results were prepared using projections based on information
available to the Company as of the date this material was released and forecasts of the future economic,
environment, and include various risks and uncertainty factors. Accordingly, there is a possibility theCompany's actual consolidated operating results will differ from the projected amounts shown above as aresult of various future factors, including but not limited to economic conditions surrounding the Company,
market trends, and competitive conditions.

4. Other(1) Changes in material subsidiaries during the period under review (changes in specific subsidiaries in
conjunction with a change in the scope of consolidation)
The Company had no material items to report.
(2) Application of simplified accounting method and special accounting method in the preparation ofquarterly consolidated financial statements
Appraisal methods for inventory assets
The appraisal value of inventories at the end of the first quarter under review has been calculated using arational method based on physical inventories at the end of the previous consolidated accounting fiscal year,
rather than physical inventories at the end of the quarter under review.
(3) Changes in accounting principles, procedures and reporting methods pertaining to preparation of thequarterly consolidated financial statements
Change in accounting method for revenues and cost of revenues
The Company traditionally reported revenues and costs of construction contracts by applying thecompleted-contract method. Beginning from the first quarter consolidated accounting period, the Company
will apply the Accounting Standard for Construction Contracts (Accounting Standards Board of Japan
Statement No. 15, December 27, 2007) and the Guidance on Accounting Standard for Construction
Contracts (Accounting Standards Board of Japan Implementation Guidance No. 18, December 27, 2007).
Beginning from works contracts for which construction activity was begun during the first quarter
consolidated accounting period under review, the Company will apply the percentage of completion method
for works for which the outcome of the construction activity is deemed certain by the end of the first quarter
consolidated accounting period (with the estimate of the percentage of completion based on the cost
incurred as a percentage of estimated total cost), and will apply the completed-contract method for all otherworks.
The affect of this change on the Company’s earnings and information by segment is not material.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.5

5. Consolidated Financial Statements(1)Consolidated Quarterly Balance Sheets(Unit: Thousands of yen)
As of January 31, 2010

As of October 31,2009

Cash and deposits

14,716,912

12,345,028

Notes and accounts receivable-trade

15,562,933

14,388,250

Short-term investment securities

1,500,000

1,800,000

26,97338,326537,300

643,091

AssetsCurrent assets

Costs on uncompleted construction
contracts
Merchandise and finished goods
Raw materials and supplies

188,187

140,857

construction machine parts

1,038,277

1,011,437

Income taxes receivable342,256

355,911

Consumption taxes receivable

22,627

71,661

Deferred tax assets

190,210

261,523

Other

850,043

783,704

Allowance for doubtful accounts-508,641-475,964

34,467,080

31,363,829

Total current assets
Noncurrent assets
Property, plant and equipment
rental equipment

58,720,643

54,406,793

accumulated depreciation-36,373,281-35,145,234

rental equipment, net

22,347,362

19,261,559

20,919,814

20,904,695

Buildings and structures
Accumulated depreciation-12,481,387-12,296,819

Buildings and structures, net

8,438,427

8,607,875

Machinery, equipment and vehicles

5,231,857

5,206,308

Accumulated depreciation-4,367,990-4,316,731

Machinery, equipment and vehicles, net

863,866

889,577

Land

29,544,943

29,448,053

Lease asset

2,966,563--237,774-

2,728,789

-

7,214

-

1,353,905

1,344,459-1,050,554-1,033,713

303,351

310,746

64,233,955

58,517,812

Goodwill

491,841

542,304

Other

318,776

323,684

Total intangible assets

810,618

865,989

Investment securities

2,868,247

3,218,486

Deferred tax assets

1,181,536

1,286,857

Other

2,266,394

2,399,931

Allowance for doubtful accounts-932,058-929,977

Accumulated depreciation
Lease asset, net
Construction in Process
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.6

Allowance for investment loss
Total investments and other assets
Total noncurrent assets
Total assets-61,525-287,897

5,322,595

5,687,400

70,367,169

65,071,202

104,834,250

96,435,031(Unit: Thousands of yen)

As of January 31, 2010

As of October 31,2009

Notes and accounts payable-trade

13,511,982

13,150,825

Short-term loans payable

5,376,636

1,258,931

628,286-

10,580,334

10,537,364

Current portion of bonds

22,00042,000

Income taxes payable

776,088

14,722

Liabilities
Current liabilities

Lease obligations
Current portion of long-term loans
payableProvision for bonuses

253,602464,636

Accounts payable-other

4,461,650

4,293,687

Other

1,472,342

856,711

Total current liabilities

37,082,925

30,618,878

33,00044,000Long-term loans payable

19,283,497

20,987,266

Provision for retirement benefits

1,360,844

1,320,173

232,577

226,356

Long-term accounts payable-other7,240,612

6,327,718

Lease obligations

1,843,670-

Noncurrent liabilities
Bonds payable

Provision for directors' retirement
benefits

Other

336,760

368,783

30,330,962

29,274,298

67,413,887

59,893,177

Capital stock

9,696,717

9,696,717

Capital surplus

10,960,869

10,960,869

Retained earnings

15,927,691

15,334,652-23,992-23,917

36,561,286

35,968,321

275,003

235,603-14,861-

260,142

235,603

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

Treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on
available-for-sale securities
Foreign currency translation adjustment
Total valuation and translation
adjustments
Minority interests
Total net assets
Total liabilities and net assets

598,933

337,929

37,420,362

36,541,854

104,834,250

96,435,031

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.7

(2)Consolidated Quarterly Statement of Income
3 months FY2009(Unit: Thousands of yen)
3 months FY2010(November 1, 2008

(November 1, 2009

-January 31, 2009)-January 31, 2010)

Net sales

17,441,366

18,699,932

Cost of sales

12,417,428

12,563,002

Gross profit

5,023,938

6,136,930

Selling, general and administrative expenses

4,354,480

4,470,079

669,457

1,666,850

9,482

3,384

Dividends income

7,794

11,509Insurance income

13,10657,507

Rent income

11,532

12,833

233

380

Amortization of negative goodwill

17,45817,458Other

27,55437,484

Total non-operating income

87,164

140,558

Interest expenses

93,183

174,660

Loss on sales of notes payable

19,664

13,997

Other

35,97022,925

Operating income
Non-operating income
Interest income

A receipt bonus

Non-operating expenses

Total non-operating expenses

148,818

211,583

607,8031,595,825

Reversal of allowance for doubtful accounts

3,117

33,233

Reversal of provision for retirement benefits

16,816--

13,362

Ordinary income
Extraordinary income

Subsidy income
Other

2,363

3,496

Total extraordinary income

22,29750,092

2,936

9,310

Extraordinary loss
Loss on sales and retirement of noncurrent
assetsImpairment loss
Loss on valuation of investment securities
Provision of allowance for doubtful accounts
for subsidiaries and affiliates

312-

484,378

-

-

2,792

Other

36,029286

Total extraordinary losses

523,655

12,389106,445

1,633,528

Income taxes-current

212,174

650,821

Income taxes-deferred-55,756

79,481

Total income taxes

156,417730,303

Income before income taxes and minority
interests

Minority interests in income
Net income

55,18750,122-105,160

853,102

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010P.8

(3) Consolidated quarterly statements of cash flows
3 months FY2009(November 1, 2008
-January 31, 2009)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Loss (gain) on sales and retirement of
noncurrent assets
The amount of assets buy on the installment
plan purchase for small rentals
The amount of cost price transfer with theconstruction machine parts sale
The amount of cost price transfer with asset
sell-off for rentals
Expenditure by the assets acquisition for rentals
Loss (gain) on valuation of investment securities
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in provision for directors'
retirement benefits
Interest and dividends income
Assets buy on the installment plan purchase
payment interest for rentals
Interest expenses
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in accounts payable-other
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating
activities
Net cash provided by (used in) investment activities
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Purchase of investments in subsidiaries
Payments of loans receivableCollection of short-term loans receivable
Other, net
Net cash provided by (used in) investment
activities(Unit: Thousands of yen)
3 months FY2010(November 1, 2009
-January 31, 2010)

106,445
1,077,108
312
42,657

1,633,528
1,795,314
50,462

2,936

8,985

17,637

-

4,499

92

45,182

70,278-1,631,391
484,378-1,602,354-

124,426

17,941-311,153-220,331

39,101

40,671

13,4046,220-17,277-14,894

33,87745,492

87,688

174,660

719,571-802,790

76,606

107,394444,599

316,648405,360
1,078,428

78,019587,260

2,844,401

2,292,601

16,69015,444-141,732-21,778-224,489-127,418

2,697,580

1,956,138

122,129-1,268,239

500-52,105

10,076

5,922-8,988-197,114-18,000
760-13,697-2,107-62,100
18,940
10,157-1,359,374-94,490Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.9

(Unit: Thousands of yen)
3 months FY2009
3 months FY2010(November 1, 2008
(November 1, 2009
-January 31, 2009)-January 31, 2010)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Repayments of installment payables
Repayments of lease obligations
Purchase of treasury stock
Cash dividends paid
Other
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting frommerger with unconsolidated subsidiaries
Increase in cash and cash equivalents from newly
consolidated subsidiary
Cash and cash equivalents at end of period

117,407

3,212,084

6,000,000-2,629,733-31,000-990,183-746-328,413-

1,149,510-2,814,043-31,000-1,053,012-105,959-74-300,131-32,023

2,137,330

25,350-270

3,475,536

1,887,269

17,566,695

14,086,028

24,629--185,11421,066,861

16,158,412

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010P.10

(4) Notes relating to the going concern assumption
The Company had no material items to report.
(5) Business Segment Information[Segment information by type of business]
Prior FY2009 quarter (From November 1, 2008 to January 31, 2009)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

16,274,824

1,052,950

113,591--

16,274,824

671,150

Eliminations
or entirecompany

Consolidated

17,441,366-

17,441,366

-

-

-

-

1,052,950

113,591

17,441,366-

17,441,366

3,647

7,639

682,437-12,980

669,457

Total

Revenues(1)Revenues from
customers(2)Intersegment revenue

Total

Operating income

Current FY2010 quarter (From November 1, 2009 to January 31, 2010)

Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

17,583,405

965,225

151,302

-

-

Total

17,583,405

Operating income

1,698,294(Unit: Thousands of yen)

Eliminations
or entirecompany

Consolidated

18,699,932-

18,699,932

-

-

-

-

965,225

151,302

18,699,932-

18,699,932-12,334-9,452

1,676,507-9,656

1,666,850

Total

Revenues(1)Revenues from
customers(2)Intersegment revenue

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.11

[Segment information by location]
FY2009 first quarter consolidated year-to-date (from November 1, 2008 to January 31, 2009)
The Company had no material items to report because the Company did not have any consolidated
subsidiaries or important offices located in countries or regions outside of Japan.
FY2010 First quarter consolidated year-to-date (from November 1, 2009 to January 31, 2010)
The Company had no material items to report because the Company did not have any consolidated
subsidiaries or important offices located in countries or regions outside of Japan.
[Foreign sales]
FY2009 First quarter consolidated year-to-date (from November 1, 2008 to January 31, 2009)
The Company has omitted a description of foreign sales because foreign sales are less than 10% ofconsolidated revenues.
FY2010 First quarter consolidated year-to-date (from November 1, 2009 to January 31, 2010)
The Company has omitted a description of foreign sales because foreign sales are less than 10% ofconsolidated revenues.
(6) Note on significant changes to shareholders’ equity
The Company had no material items to report.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.12