Nine-month Consolidated Financial Report for the
Fiscal Year ending October 31, 2010 [Japan GAAP]
September 3, 2010
Listed Company Name
Kanamoto Company, Ltd.
Company Code Number 9678
Listing Exchanges
Tokyo Stock Exchange, Sapporo Stock Exchange(URL
http://www.kanamoto.co.jp)
Representative
Kanchu Kanamoto President
Inquiries
Nobuhito Utatsu
Director & Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp.
Scheduled date for submission of Quarterly Report
September 13, 2010
Scheduled date for commencement of dividend payments–
Preparation of Quarterly Settlement Supplementary
Explanatory Materials
No
Quarterly Earnings Briefings
No
1. Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2010
(November 1, 2009 – July 31, 2010)(1) Consolidated Operating Results (Cumulative) (Numbers less than one million yen have been rounded down)(Percentages shown are the percent increase or decrease compared to the same period of the prior consolidated fiscal year)

Operating
IncomeRevenues
Millions of yen

Fiscal Year ending October 31,
2010: Third quarter
Fiscal Year ended October 31,
2009: Third quarter

53,191％

12.6

Ordinary
IncomeMillions of yen％

Millions of yen

Net Income％

Millions of yen

2,884

2,457

1,105

47,258

－299

－544

－858

Net Income
per Share

Diluted Net
Income per
Share
Yen

Fiscal Year ending October 31,
2010: Third quarter
Fiscal Year ended October 31,
2009: Third quarter

％

Yen

33.68

―

－26.13―

Total Assets

Net Assets(2) Consolidated Financial Position

Millions of yen

Shareholders’Equity Ratio

Millions of yen

Fiscal Year ending October 31,
104,634
37,22235.0
2010: Third quarter
Fiscal Year ended October 31,
96,43536,541
37.5
2009(Reference) Shareholders’ equity
Fiscal Year Ending October 31, 2010 Third Quarter:¥36,661 million
Fiscal Year Ended October 31, 2009:¥36,203 million

Net Assets
per Share％Yen

1,116.50
1,102.51

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Fiscal year ending October 31, 2010
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2. Dividends
End of 1Q
Yen

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

Yen

Fiscal year ended October 31, 2009
10.00
Fiscal year ending October 31, 2010
10.00
Fiscal Year ending October 31, 2010
(Projected)(Note) Has the Company revised its projected dividends during this quarter?

Yen

Full year
Yen

10.00

20.00

10.00

20.00

No

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

Operating
IncomeRevenues
Millions of yen％

Millions of yen

Ordinary
Income％Millions of yen

Net Income
per Share

Net Income％

Millions of yen％

Yen

Full year
67,3005.4 1,340
875.8
730
330
10.04
(Note) Has the Company revised its projected consolidated operating results during thequarter? No

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4. Other (For details please refer to [Attachments] Page 8 “Other Information”.)(1) Were there changes to material subsidiaries during the period under review: No
Company newly included (Company name:)Company newly excluded (Company name:)Note: Transfer of specified subsidiaries in conjunction with revisions to the scope of
consolidation.
(2) Has the Company applied the simplified accounting method and special accounting
method: Yes
Note: Application of simplified accounting method and special accounting method in the
preparation of quarterly consolidated financial statements.
(3) Changes in accounting principles, procedures or representation methods(a) Are there changes in conjunction with revision to accounting standards?: Yes(b) Changes other than the above: No
Note: Changes in accounting principles, procedures and reporting methods pertaining topreparation of the quarterly consolidated financial statements recorded in the
Changes in Important Matters Used as the Basis for Preparation of theConsolidated Financial Statements.
(4) Number of shares issued (common stock)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal year ending October 31, 2010 Third 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 the period
Fiscal year ending October 31, 2010 Third Quarter:
36,212 sharesFiscal year ended October 31, 2009:
34,385 shares(c) Average number of shares during the period (Consolidated year-to-date)Fiscal year ending October 31, 2010 Third Quarter:
32,837,073 sharesFiscal year ended October 31, 2009:
32,839,224 shares
Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the
Financial Instruments and Exchange Act. At the time of disclosure of this quarterly earnings
report, the Company has not completed the quarterly review procedure for financial statements
based on the Financial Instruments and Exchange Act.
Note: Explanation concerning appropriate use of the projected operating results and other items
to noteThe forward-looking statements, including business results forecasts, contained in thesematerials are based on information currently available to the Company and on certain
assumptions deemed to be reasonable. Actual business results may differ substantially due to anumber of factors. Please refer to the Qualitative Information Concerning Projected Operating
Results on Page 3 of the Attachments for the conditions used as assumptions for the projected
operating results and matters to note before using the projected operating results.

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Attachments Table of Contents
I. Qualitative Information Concerning Quarterly Consolidated Operating Results .......................... 5
1. Qualitative Information Concerning Consolidated Operating Results.................................... 5
2. Qualitative Information Concerning Consolidated Financial Position .................................... 7
3. Qualitative Information Concerning Projected Consolidated Operating Results ...................... 7
II. Other Information .......................................................................................................... 8
1. Summary of Changes to Material Subsidiaries ................................................................ 8
2. Summary of Simplified Accounting Method and Special Accounting Method.......................... 8
3. Summary of Changes in Accounting Principles, Procedures or Methods of Presentation .......... 8III. Quarterly Consolidated Financial Statements ................................................................... 9
1. Quarterly Consolidated Balance Sheets .......................................................................... 9
2. Quarterly Consolidated Statements of Income ............................................................... 12(Third Quarter Consolidated Year-to-Date) .................................................................. 12
3. Quarterly Consolidated Statements of Cash Flows ......................................................... 14
4. Notes Relating to the Going Concern Assumption ........................................................... 17
5. Business Segment Information .................................................................................. 17
6. Notes on Significant Changes to Shareholders’ Equity..................................................... 19

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1. Qualitative Information Concerning Consolidated Operating Results< Management Environment > (From November 1, 2009 to July 31, 2010)
During the Kanamoto Group’s third quarter, Japan’s economy was boosted by a recovery in the businessof major corporations, and even domestic business conditions gradually exhibited a recovery trend. At thesame time, however, multiple concerns emerged over the uncertain outlook for the economies in Europe
and the United States and the slowdown of China’s economy since the start of 2010, even as Japan’s
external demand-led business recovery encountered yellow warning lights because of the rapid
strengthening of the yen. Under such conditions, a further recovery in business in the months ahead is
expected to be difficult as companies grapple with the ongoing slump in private sector capital investment,
deflation in the services, logistics and other sectors shows no signs of halting and the positive boost in
personal consumption from consumption stimulus measures such as the eco-car tax reduction and eco-point
system run their course.
In the construction industry, construction demand related to economic stimulus measures was evident incertain regions, but was countered by noticeable weakness of private sector construction demand in theTokyo metropolitan area and other urban centers.
< Third Quarter Year-to-Date Operating Results > (From November 1, 2009 to July 31, 2010)
The consolidated year-to-date operating results of the Kanamoto Group for the third quarter of the fiscal
year ending October 31, 2010 continued to be affected by the severe operating environment. In general,
however, construction equipment rental demand improved slightly compared with the same period of theprior consolidated fiscal year, and the used construction equipment market enjoyed a comparatively earlyrecovery. As a result, consolidated revenues rose 12.6% compared with the same period one year earlier to¥53,191 million. There was positive news on the earnings front as well, as the Group achieved consolidated
operating income of ¥2,884 million, compared with an operating loss of ¥299 million in the same period one
year ago, and consolidated ordinary income of ¥2,457 million versus an operating loss in the first threequarters of the prior consolidated fiscal year of ¥544 million. Consolidated third quarter year-to-date net
income also improved to ¥1,105 million, up from a net loss of ¥858 million one year earlier.
A summary of operating results for each of the Company’s businesses is provided below.
[ Business related to the Construction Equipment Rental Division ]The domestic construction equipment rental environment was extremely harsh, reflecting a further drop in
construction works during the traditional slow season for public works at the start of the government’s fiscal
year, a House of Councilors election and accelerating price competition among construction equipment
rental firms. The Kanamoto Group worked to improve its regional market share, while differentiating itself
from competitors by strengthening its lineup of new energy-saving equipment and engaging in
proposal-based sales of practical computerization of labor saving works. Moreover, looking just at the third
quarter, despite the fact the quarter was not as robust as the second quarter, a reflection of the traditional
pattern of lower sales in this quarter and the fact one-time emergency economic measure-related
construction works also reached an end, rental revenues in this business sector for the third quarter
consolidated accounting period rose 9.7% compared with the same period of the prior consolidated fiscal
year.
By region, the Company achieved a 29.3% year-on-year revenue increase and maintained double-digit
growth in the Hokkaido Region, even as a shadow fell across the region as emergency economic
measure-related works were interrupted. The Company also was successful in the Tohoku Region, where it

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Fiscal year ending October 31, 2010P.5

achieved a 3.6% increase, and also expanded its market share in the Kanto, Kinki & Chubu and Kyushu &Okinawa regions, even as private sector demand weakened and sales slipped by 9.4%, 1.4% and 7.2%,
respectively, and reduced the size of the earnings decline that continued until the second quarter. In
rain-drenched regions such as Kyushu, Chugoku and Kinki in particular, where restoration works following
storm disasters were needed, disaster recovery projects are underway and positive conditions are expected
to continue into the fourth quarter.
In the same business segment, revenues from equipment sales jumped sharply and increased 107.2%
compared with the same period one year earlier. Because the international market for used construction
equipment has recovered rapidly, Kanamoto’s sales strategy was not overly affected despite lower saleprices on some models because of the yen’s rapid appreciation since March.
Among the Company’s construction equipment rental subsidiaries in other countries, the Shanghai
Jinheyuan Group (Shanghai Jinheyuan Equipment Rental Co., Ltd. and Shanghai Jinheyuan Engineering
Construction Co., Ltd.) has been developing construction equipment rentals in major metropolitan areas
such as Tianjin and Chongqing in China since the overall halt of construction works in Shanghai during theperiod of the Shanghai Expo, and is achieving steady growth in operating results.
As a result of these factors, third quarter year-to-date results for Kanamoto’s construction-related
businesses substantially exceeded plan, as revenues increased 15.4% from the same period of the priorconsolidated fiscal year to ¥49,233 million, and operating income was ¥2,896 million, compared with anoperating loss of ¥299 million in the same period one year earlier.
[ Business related to the Steel Sales Division ]Because of the marked decline in steel materials demand and a drop in both public and private sector
construction investment, the Steel Sales Division focused on broadening its product lineup by adding items
such as building materials, and strove to identify new sources of steel demand in Hokkaido in addition toexisting general contractors and fabricators. As a result, in many districts the Company was able tomaintain revenues at the same level as in the prior fiscal year, but because of the large influence from thedrop in sales in the Sapporo area, revenues for the consolidated third quarter year-to-date period fell
19.6% from the same period of the prior consolidated fiscal year to ¥3,432 million and operating income
dipped 0.8% year-on-year to ¥17 million.
[ Information Products Division-related businesses and other business ]In the Company’s information and telecommunications-related division, development-related actual
demand was off because of weak domestic corporate operating performance, and there was no change in
the negative trend in personal computer rentals. Sales of both new models and used devices also failed togain traction. The engineer temporary staffing business, on the other hand, successfully marketed its
services to corporate research and development divisions and steadily expanded its operating results. As aresult of these factors, for the third quarter year-to-date period of the consolidated fiscal year under review,
revenues increased 54.1% from the same period of the prior consolidated fiscal year to ¥525 million, andoperating income fell 52.8% year-on-year to ¥12.0 million.
[ Business development issues deserving special mention and status of branch office changes ](1) On June 1, 2010, Kanamoto absorbed and merged with Narasaki Lease Co., Ltd. (Head office: Chuo-ku,
Sapporo, Hokkaido) and Aomori Narasaki Rental Co., Ltd. (Head office: Aomori City, Aomori Prefecture),
two of its subsidiaries.

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(2) The Company did not open or close any branches during the third quarter year-to-date consolidated
accounting period. In conjunction with the absorption-type merger with the former Narasaki Lease Co., Ltd.
and Aomori Narasaki Rental Co., Ltd. described above, the Company succeeded to seven of thesesubsidiaries’ 13 branches (six in Hokkaido and one in Aomori Prefecture) as bases of Kanamoto.

2. Qualitative Information Concerning Consolidated Financial Position(1) Assets, liabilities and net assets
Total assets at the end of the third quarter under review increased by ¥8,199 million compared with theend of the prior consolidated accounting fiscal year to ¥104,634 million. This change was mainly an increaseof ¥5,116 million from newly including four consolidated subsidiary companies in the scope of consolidationfrom the first quarter consolidated accounting period, and an increase in cash and deposits.
Total liabilities were ¥67,412 million, an increase of ¥7,519 million compared with the end of the priorconsolidated accounting fiscal year. This mainly reflected an increase of ¥4,822 million because of theincrease in the number of consolidated subsidiaries, the same reason for the increase in total assets, anincrease of ¥7,592 million in short-term bank loans and a decrease of ¥6,032 million in long-term bankloans and an increase in corporate taxes payable of ¥1,221 million.
Total Net Assets were ¥37,222 million, ¥680 million higher than at the end of the prior consolidated
accounting fiscal year. This mainly reflected income before taxes and adjustments of ¥2,531 million, and adecrease in earned surplus as the result of dividend payments.
(2) Consolidated cash flows
Cash flow from operating activities was ¥7,526 million. This mainly reflected quarterly income before
income taxes and minority interests of ¥2,531 million, and depreciation and amortization expense of ¥5,687
million.
Cash flow from investing activities was ¥227 million. This mainly reflected funds provided from sale ofinvestment securities of ¥775 million and funds used for the purchase of investment securities of ¥537
million.
Cash flow used in financing activities was ¥2,334 million. This mainly reflected an increase in short-termbank loans of ¥7,957 million and proceeds from long-term loans payable of ¥2,317 million, and funds used
to repay long-term bank loans of ¥8,286 million and funds used for repayment of installment obligations of¥3,182 million.

3. Qualitative Information Concerning Projected Consolidated Operating Results
There are no revisions to the projected operating results for the business period ending October 2010 that
Kanamoto announced on May 28. Given the recent management environment during the third quarter, andconsidering the substantial lingering risk of an economic downturn in Kanamoto’s fourth quarter depending
on how the government responds in the short term through monetary and fiscal policy, the businessenvironment for construction equipment rental demand that is the main business of the Kanamoto Group
must unequivocally be deemed extremely opaque. In light of these circumstances, as well as the Kanamoto
Group’s operating results through the third quarter, the Company has not revised its full year operating
results projection.
Moreover, in light of the present conditions, the Company has no plans to change the year-end dividendof ¥10 per share (¥20 including the interim dividend) announced in its initial plan.

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These projected consolidated operating results materials 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
the Company’s actual consolidated operating results will differ from the projected amounts shown above asa result of various future factors, including but not limited to economic conditions surrounding the Company,
market trends, and competitive conditions.

Other Information
1. Summary of Changes to Material Subsidiaries
The Company had no material items to report.
2. Summary of Simplified Accounting Method and Special Accounting Method
1. Appraisal methods for inventory assets
The appraisal value of inventories at the end of the third quarter under review has been calculatedusing a rational method based on physical inventories at the end of the interim consolidated accounting
period, rather than physical inventories at the end of the quarter under review.
2. Method of calculating fixed asset depreciation expense
For depreciation and amortization expense for fixed assets for which it has adopted the decliningbalance method, the Company calculates the amount of depreciation and amortization pertaining to theconsolidated fiscal year on a pro-rata basis for each period.
3. Summary of Changes in Accounting Principles, Procedures or Methods of Presentation
Change in reporting standard for completed contract revenues and cost of completed contracts
The Company traditionally reported revenues and costs of construction contracts by applying thecompleted-contract method. Beginning from the first quarter consolidated accounting period, theCompany will apply the Accounting Standard for Construction Contracts (Accounting Standards Board ofJapan Statement No. 15, December 27, 2007) and the Guidance on Accounting Standard forConstruction 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, 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 thethird quarter consolidated accounting period under review (with the estimate of the percentage ofcompletion based on the cost incurred as a percentage of estimated total cost), and will apply thecompleted-contract method for all other works.
The effect of this change on the Company’s earnings and information by segment is not material.

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III. Quarterly Consolidated Financial Statements
1. Quarterly Consolidated Balance Sheets(Unit: Thousands of yen)Classification

Current Consolidated Fiscal Year
Third Quarter(As of July 31, 2010)

Prior Fiscal Year Summary
Consolidated Balance Sheet(As of October 31, 2009)

AmountAmount(Assets)
Current assets
Cash and deposits

18,600,500

12,345,028

Notes and accounts receivable, trade

13,042,910

14,388,250

Negotiable securities

1,250,000

1,800,000

Work in progress

39,20738,326Merchandise and finished goods

753,157

643,091

Raw materials and supplies

160,869

140,857

Construction equipment

988,411

1,011,437

Income taxes receivable－

355,911

Consumption taxes receivable－

71,661

Deferred tax assets

244,465

261,523

Other

632,548783,704-406,000-475,964

35,306,069

31,363,829

61,351,173

54,406,793

Accumulated depreciation-36,393,474-35,145,234

Net rental Equipment assets

24,957,698

19,261,559

20,835,660

20,904,695

Accumulated depreciation-12,782,872-12,296,819

Net buildings and structures

8,052,787

8,607,875

Machinery, equipment, vehicles anddelivery equipment

5,190,398

5,206,308-4,405,812-4,316,731

784,585

889,577

29,540,992

29,448,053

10,235－

1,348,768

1,344,459-1,077,689-1,033,713

271,078

310,746

63,617,378

58,517,812

Goodwill

396,224542,304

Other

310,218

323,684

Allowance for doubtful accounts
Total Current Assets
Fixed assets
Tangible fixed assets
Rental equipment assets

Buildings and structures

Accumulated depreciation
Net machinery, equipment, vehicles
and delivery equipment
Land
Construction in progress
Other
Accumulated depreciation
Net other
Total Tangible Fixed Assets
Intangible fixed assets

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Total Intangible Fixed Assets

706,443865,989

Investment securities

2,623,685

3,218,486

Deferred tax receivable

1,164,370

1,286,857

Other2,180,997

2,399,931

Allowance for doubtful accounts-913,923-929,977

Allowance for investment loss

-50,025-287,897

Total Investments and Other Assets

5,005,104

5,687,400

Total Fixed Assets

69,328,926

65,071,202

Total Assets

104,634,996

96,435,031

Investments and other assets

Classification

Current Consolidated Fiscal Year
Third Quarter(As of July 31, 2010)

Prior Fiscal Year Summary
Consolidated Balance Sheet(As of October 31, 2009)

AmountAmount(Liabilities)
Current liabilities
Notes and accounts payable, trade

12,294,660

13,150,825

Short-term bank loans

10,068,981

1,258,931

Long-term bank loans due within one year

9,982,677

10,537,364

Current portion of bonds

22,00042,000

Corporate taxes payable

1,237,993

14,722

333,778

464,636

Accounts payable, other

4,844,130

4,293,687

Other

2,198,738

856,71140,982,960

30,618,878

22,00044,000Long-term bank loans

15,562,188

20,987,266

Accrued employees retirement benefits

1,343,648

1,320,173

Retirement allowances to directors andauditors

237,693

226,356

Long-term accrued expenses

7,364,303

6,327,718

Other

1,899,689

368,783

Total Long-term Liabilities

26,429,524

29,274,298

Total Liabilities

67,412,485

59,893,177

Capital stock

9,696,717

9,696,717

Capital surplus

10,960,869

10,960,869

Retained earnings

15,852,044

15,334,652

Accrued bonuses to employees

Total Current Liabilities
Long-term liabilities
Bonds(Net Assets)
Shareholder’s equity

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Treasury stock-24,656-23,917

36,484,975

35,968,321

Valuation difference on other investment
securities

207,716

235,603

Translation adjustments account-31,182－

Total Valuation and Translation
Adjustments

176,533

235,603561,001

337,929

Total Net Assets

37,222,511

36,541,854

Total Liabilities and Net Assets

104,634,996

96,435,031

Total Shareholders’ Equity
Valuation and translation adjustments

Minority Interests

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2. Consolidated Quarterly Statements of Income(Unit: Thousands of yen)Classification

Prior Consolidated Fiscal Year
Third Quarter

Current Consolidated Fiscal Year
Third Quarter

From November 1, 2008
to July 31, 2009

From November 1, 2009
to July 31, 2010

AmountAmountRevenues

47,258,092

53,191,412

Cost of revenues

34,976,723

37,096,852

Gross profit

12,281,368

16,094,559

Selling, general and administrative expenses

12,580,792

13,209,732–299,423

2,884,827

Interest income

33,87810,802

Dividend income

40,02941,673

Insurance benefits

29,87872,011

Rents received

35,61428,563

Cash bonus received

4,450

1,627

Amortization of negative goodwill

52,37452,374Other

92,808106,627

289,034

313,680

Interest expense

327,650

552,842

Loss on sale of notes receivable

45,23636,091

Other

160,874

152,163

Total non-operating expenses

533,761

741,097

Ordinary income (loss)–544,150

2,457,410－

153,765

Reversal of allowance for doubtful
accounts

22,05742,979

Reversal of accrued employees retirement
benefits

17,332－－89,441

Other

11,875

10,373

Total extraordinary income

51,265296,560

47,94060,855

312－288,378

15,199－35,507

Operating income (loss)
Non-operating income

Total non-operating income
Non-operating expenses

Extraordinary income
Gain on sale of investment securities

Subsidies

Extraordinary losses
Loss on sale or retirement of fixed assets
Impairment loss
Valuation loss on investment securities
Transfer to allowance for doubtful
accounts

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Transfer to allowance for loss on affiliatedcompany liquidation－

81,511

41,277

29,325

Total extraordinary losses

377,907

222,399

Income (loss) before taxes and adjustments–870,793

2,531,570

Corporate, local and business taxes

197,765

1,37,693

Adjustment for corporate and other taxes–282,656

86,155

Total corporate and other taxes–84,891

1,403,849

Minority interest in income

72,121

21,902–858,023

1,105,819

Other

Net income (loss)

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3. Consolidated Quarterly Statements of Cash Flows(Unit: Thousands of yen)
Prior Consolidated Fiscal Year
Third Quarter

Current Consolidated Fiscal Year
Third Quarter

From November 1, 2008
to July 31, 2009

From November 1, 2009
to July 31, 2010

Classification
Cash flow from operating activities
Income (loss) before taxes andadjustments–870,793

2,531,570

Depreciation and amortization expense

3,574,528

5,687,100

312－

Amortization of goodwill

135,326

151,978

Loss on sale or retirement of fixed assets

47,94054,554

Installment purchases of assets forsmall-value rentals

24,714

17,062

Reclassification of cost of sales
associated with disposal of construction
equipment

16,436646

Reclassification of cost of sales
associated with disposal of rental assets

590,695

725,626–2,839,317–2,554,082

288,378

15,199(Gain) loss on sales of investment
securities

2,086–153,309

Increase (decrease) in allowance for
doubtful accounts

72,073–101,651

Increase (decrease) in accrued bonuses
to employees–354,212–139,934

Increase (decrease) in accrued
employees retirement benefits

102,906

23,474

Increase (decrease) in retirement
allowances to directors and auditors–1,651

11,337

Interest revenue and dividend income–73,908–52,476

Interest expense on installment
purchases of rental assets

120,900

136,094

Interest expense

327,650

552,8422,641,234

1,698,339

101,946–90,412

Increase (decrease) in accounts payable,
trade–2,112,666–1,262,613

Increase (decrease) in accounts payable,
other165,693

189,179

Other–128,851

636,169

Subtotal

1,831,422

8,076,694

76,13652,099–474,846–716,237

Impairment loss

Expenditures for acquisition of rental
assetsValuation loss on investment securities

Decrease in accounts receivable, trade(Increase) decrease in inventory

Interest and dividends received
Interest expense

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Payment of corporate and other taxes–630,607

114,021

Cash flow from operating activities

802,105

7,526,578

Prior Consolidated Fiscal Year
Third Quarter

Current Consolidated Fiscal Year
Third Quarter

From November 1, 2008
to July 31, 2009

From November 1, 2009
to July 31, 2010

Classification
Cash flow from investing activities
Disbursements for investments in term
deposits–9,228–50,000

Revenue from redemption of term
deposits

127,136500

Funds used for the purchase of tangible
fixed assets–2,234,261–46,434

Funds provided from the sale of tangible
fixed assets

37,00012,299Funds used for the purchase of intangible
fixed assets–141,864–36,676

Funds used for the purchase ofinvestment securities–538,916–537,007

52,849775,390

Funds used for the purchase of
subsidiary stock in conjunction withchange in scope of consolidation–199,304－

Funds used for the purchase of
subsidiary stock–46,000–12,250

Funds used for establishment ofsubsidiary company–52,339－

Payments of loans receivable－–163,675

Funds provided from collection ofshort-term loans receivable－

193,709–6,146

91,694–3,011,075

227,552

152,734

7,957,651

Funds provided by long-term bank loans

12,300,000

2,317,733

Funds used to repay long-term bankloans

–8,230,583–8,286,450–62,000–42,000

Funds used for repayment of installment
obligations–2,388,641–3,182,845

Funds used for the purchase of treasurystock–1,041–738–625,327–631,575－–466,228

1,145,140–2,334,455

Funds provided from sale of investment
securities

Other
Cash flow from investing activities
Cash flow from financing activities
Increase in short-term bank loans

Funds used to redeem corporate bonds

Payment of dividends
Other
Cash flow from financing activities

Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.15

Effect of exchange rate changes on cash
and cash equivalents－

385

Increase (decrease) in cash and equivalents–1,063,829

5,420,060

Balance of cash and equivalents at
beginning of period

17,566,695

14,086,028

Increase in cash and cash equivalents due
to newly consolidated subsidiaries－

185,114

Increase in cash and cash equivalents
resulting from merger with unconsolidated
subsidiaries

24,62950,797

Balance of cash and equivalents at end of
the period

16,527,496

19,742,000

Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.16

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 consolidated fiscal year third quarter (From May 1, 2009 to July 31, 2009)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

12,625,577

1,928,622

113,579

14,667,779－

14,667,779

－

－

－

－

－

－

Total

12,625,577

1,928,622

113,579

14,667,779－

14,667,779

Operating income (loss)–1,236,173

20,809

9,955–1,205,409–15,554–1,220,963

Eliminations
or entire
Consolidated
company

Total

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

Current consolidated fiscal year third quarter (From May 1, 2010 to July 31, 2010)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

14,579,550

1,302,668

166,673

16,048,892－

16,048,892

－

－

－

－

－

－

14,579,550

1,302,668

166,673

16,048,892－

16,048,892–335,717

19,733

8,532–307,451–16,333–323,785

Eliminations
or entire
Consolidated
company

Total

Revenues(1) Revenues from customers(2) Intersegment revenue
Total
Operating income (loss)

Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.17

Prior consolidated fiscal year third quarter year-to-date period (From November 1, 2008
to July 31, 2009)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

42,650,581

4,266,700

340,81047,258,092－

47,258,092

－

－

－

－

－

－

42,650,581

4,266,700

340,81047,258,092－

47,258,092–299,402

17,55626,276–255,570–43,852–299,423

Eliminations
or entire
Consolidated
company

Total

Revenues(1) Revenues from customers(2) Intersegment revenue
Total
Operating income (loss)

Current consolidated fiscal year third quarter year-to-date period (From November 1,
2009 to July 31, 2010)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

49,233,892

3,432,204

525,315

53,191,412－

53,191,412

－

－

－

－

－

－

Total

49,233,892

3,432,204

525,315

53,191,412－

53,191,412

Operating income (loss)

2,896,642

17,413

12,4072,926,463–41,635

2,884,827

Eliminations
or entire
Consolidated
company

Total

Revenues(1) Revenues from customers(2) Intersegment revenue(Notes) 1. Method of business classification
Businesses are classified based on consideration of similarities such as the type of laborand products, the nature of the business and the business markets.
2. Principal products, by businessBusiness

Principal products

Construction equipment rentals

Construction equipment such as hydraulic shovels, generators,
temporary construction materials, construction safety equipment,
temporary modular housing units

Steel sales

Steel bar, sheet steel, steel products such as round bar, steel scrap

Information products and otherbusinesses

Computers and peripheral devices, telecommunications-related
equipment

3. Changes in accounting method
Current consolidated fiscal year third quarter year-to-date period(a) Changes in appraisal methods for principal assets
Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.18

Traditionally, the Company and its domestic consolidated subsidiaries valued
construction equipment using the amount after deduction of depreciation
expense calculated according to the declining-balance method from the original
prices, by separate fiscal year of purchase. Beginning from the first quarter ofthe current consolidated accounting fiscal year, the Company will calculate theamount after deduction of depreciation expense according to the straight-line
method from the original prices, by separate fiscal year of purchase.
In conjunction with this change, the operating loss of the Company’s
construction-related business for the consolidated accounting fiscal year third
quarter year-to-date period under review decreased by ¥53,233 thousandcompared with what it otherwise would have been had the accounting standard
used in past periods been applied.
(b) Change in depreciation method for depreciable assets
Beginning from the first quarter of the current consolidated accounting fiscal
year, the Company and its domestic consolidated subsidiaries have changed themethod for depreciation of rental equipment from the declining balance method
to the straight-line depreciation method.
In conjunction with this change, the operating loss of the Company’s
construction-related business for the consolidated accounting fiscal year third
quarter year-to-date period under review decreased by ¥1,906,532 thousandcompared with what it otherwise would have been had the accounting standard
used in past periods been applied.
(c) Beginning from the first quarter of the current consolidated accounting
fiscal year, the Company and its domestic consolidated subsidiary havechanged the useful lives used for owned machinery and equipment (including
machinery and equipment reported as rental equipment) based on revision of
the Corporation Tax Law.
In conjunction with this change, the operating loss of the Company’s
construction-related business for the consolidated accounting fiscal year third
quarter year-to-date period under review decreased by ¥47,156 thousandcompared with what it otherwise would have been had the accounting standard
used in past periods been applied.
Consolidated accounting fiscal year third quarter year-to-date period underreview
Change of accounting method for completed contract revenues and cost ofcompleted contracts
As described in item (3) Summary of Changes in Accounting Principles,
Procedures or Methods of Presentation under “2. Other Information”, beginningfrom the first quarter consolidated accounting period the Company has revised
its reporting method for completed contract revenues and cost of completed
contracts.
The effect of this change on the Company’s Steel Sales Division-related
businesses is not material when compared with the accounting method theCompany traditionally applied.
6. Note on Significant Changes to Shareholders’ Equity

The Company had no material items to report.

Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.19

Nine-month Consolidated Financial Report for the
Fiscal year ending October 31, 2010
P.20