Business Results for the Third Quarter of the Fiscal Year Ending December 31,
2006 (Consolidated)
Date: November 10, 2006CompanySt o c k C o d e
URLRepresentative
C o n t a c t

Funai Zaisan Consultants Co., Ltd.

Registered on the TSE Mothers
Head office location: Tokyo8929
http://www.funai-zc.co.jp/
Yoshihito Hirabayashi
Ti t l e o f E x e c u t i v e Executive Director, Executive Officer and Administration Manager
Name
Hisao Nakatsuka
TEL
03-5321-7020

1. Significant policies in the preparation of the summary of quarterly financial position and results ofoperations:(1) Basis of preparation of quarterly financial statements: The standards for Preparation of Interim FinancialStatements(2) Changes in accounting treatment compared to the most recent fiscal year: None
(3) Changes in the scope of consolidation and application of the equity method: Yes
Number of subsidiaries additionally included in the consolidation: 3
Number of affiliates additionally accounted by the equity method: 1
Number of affiliates excluded: 13(4) Participation of a certified public accountant or audit corporation: Yes
The quarterly financial statements were audited by our auditors in order to obtain their opinion in accordanceWith the Tokyo Stock Exchange’s “Supplementary Rules” to the “Rules on Timely Disclosure of Corporate
Information by Issuer of Listed Securities and the Like”.
2.

Results of operations for the third quarter of the fiscal year ending December 2006 (January 1, 2006 −September 30, 2006)(1) Results of Operations

FY2006 3rd Quarter
FY2005 3rd Quarter
December 2005

Operating revenue¥ Million%
11,386
36.2
8,359
46.5
11,237

Operating income¥ Million%
1,767
92.2
919
52.1
1,283
Net incomeper share

Net income
FY2006 3rd Quarter
FY2005 3rd Quarter
December 2005

¥ Million915
458640%Ordinary income¥ Million%
1,571
101.5
779
56.4
1,115
Diluted net income pershare

¥

99.8
72.9

34,935.7
35,544.22
24,750.98¥
33,038.92――(Note) 1. The percentages shown for operating revenue, operating income, etc. represent changes from the same
period in the previous fiscal year.
2. Earnings per share as if a 2-for-1 stock split as of December 20, 2005 and a 2-for-1 stock split as ofNovember 1, 2006 had taken place at the beginning of the fiscal year are as follows.
(Net income per share)
Third quarter of the fiscal year ending December 2006: ¥17,467.54
Third quarter of the fiscal year ended December 2005: ¥8,886.6
Fiscal year ended December 2005: ¥12,375.49(Diluted net income per share)
Third quarter of the fiscal year ending December 2006: ¥16,519.46− 1 −【Results of operations】
During the third quarter of the fiscal year (Jan. 1, 2006〜Sept. 30, 2006), although escalating prices of various
materials including crude oil remain as sources of concern, Japan’s economy is heading for recovery supported bystrong corporate earnings and increasing trend of private capital investment.
In the 2006 land price report, which is based on official announcement of land prices, released in August by theNational Tax Agency, statistics revealed that land prices on a nationwide basis rose in 14 years and land prices inJapan’s three metropolitan areas also recovered. Due to these factors, land prices mainly in central cities headed
for recovery. Furthermore, in the 2006 land price trends report, which is based on surveys of land price in all
Japanese prefectures, released in September by the Ministry of Land, Infrastructure and Transport, statistics
revealed that although land prices on a nationwide average are still falling, decline in commercial and residential
land prices are slowing and commercial and residential land prices in Japan’s three major metropolitan areas rosein 16 years. Particularly noteworthy was that land prices in every point in central Tokyo rose.
The Funai Zaisan Group, which is made up of Funai Zaisan, 11 consolidated subsidiaries and 7 equity-method
affiliates, continues to perform well in the core individual and property consulting businesses.
Operating highlights for the third quarter is as follows.
・ Business alliance with Benefit One Inc.
Benefit One has expertise in the provision of employee benefit outsourcing services and consulting services
involving personnel and employee benefit systems. This alliance will allow Funai Zaisan and Benefit One tostrengthen their respective business models and work closely together. Funai Zaisan will use this collaboration toaggressively conduct a number of business, including its services to improve corporate finances, assist in the saleof employee benefit facilities and other real estate, and offer proposals for the effective use of effects.
・ Ukai Co., Ltd. (Hachioji-shi, Tokyo; Isamu Okubo, President; JASDAQ-7621) to become an equity-method
subsidiary of the company
Funai Zaisan established the “Centennial Fund Investment Limited Partnership” and became a general partner inorder to increase the corporate value of Ukai. Consequently, Funai Zaisan made the general partner its
consolidated subsidiary and Ukai became an equity-method subsidiary of Funai Zaisan.
・ Apart from the above, Funai Zaisan sold all 120 units at 1,200 million yen each at “ADVANTAGE CLUBChiyoda” using its real estate joint ownership scheme.
As a result of the above and other factors, third quarter consolidated operating revenue increased 36.2%
year-on-year to 11,386 million yen, ordinary income increased 101.5% year-on-year to 1,571 million yen and net
income increased 99.8% year-on-year to 915 million yen.
Operating results by business segment are as follows.
(1) Property consulting
Activities in this segment are divided between property consulting for high-net worth individuals and corporate
consulting for companies.
Operating results for the third quarter are as follows.
In consulting for individuals, activities focused on consulting projects through entrusted inheritance-related− 2 −business. The result was 1,230 million yen, 7.1% less than the previous year.
In consulting for companies, entrusted large projects contributed to its net sales which posted 1,130 million yen, anincrease of 129.6% compared to the previous year.
As a result, property consulting revenue increased 30.0% year-on-year to 2,361 million yen.
(2) Real estate transaction
Funai Zaisan sold 2 real estate properties which are “ADVANTAGE CLUB Tokyo-Yotsuya Kyoto-Gojo” (192
units at 1,920 million yen) and “ADVANTAGE CLUB Chiyoda” (120 units at 1,200 million yen) under its realestate joint ownership scheme. Moreover, sale of real estate properties in other areas of Tokyo produced net salesof 7,992 million yen, 41.4% more than a year earlier.
(3) Sub-leasing
The number of orders received for sub-leasing was 15. These properties produced net sales of 851 million yen,23.3% more than a year earlier.
(4) Others
Net sales in the other segment was 181 million yen, 9.3% less than a year earlier.
(2) Financial Position
Total assets

Net assets¥ Million
17,753
14,76914,535

FY2006 3rd Quarter
FY2005 3rd Quarter
December 2005

Net assets per
share

Equity ratio％¥ Million
4,568
3,570
3,732

25.4
24.2
25.7

¥
172,251.76
272,479.72
142,418.27(Note) Earnings per share as if a 2-for-1 stock split as of December 20, 2005 and a 2-for-1 stock split as ofNovember 1, 2006 had taken place at the beginning of the fiscal year are as follows.
(Net assets per share)
Third quarter of the fiscal year ending December 2006: ¥86,125.88
Third quarter of the fiscal year ended December 2005: ¥68,119.93
Fiscal year ended December 2005: ¥71,209.13【Consolidated Financial Condition】
At the end of the third quarter of the fiscal year, total assets were 17,753 million yen, 3,217 million yen more thanat the end of the previous fiscal year. This was mainly attributable to increase of 2,205 million yen in cash anddeposits, decrease of 3,469 million yen in real estate for sale and 3,680 million yen increase in affiliate company
stock by acquiring shares of Ukai Co., Ltd. through “Centennial Fund Investment Limited Partnership”.
(3) Results of Cash FlowsNet cash flows by
operating activities
FY2006 3rd Quarter
FY2005 3rd Quarter
December 2005

¥ Million
4,311-2,265-3,513

Net cash flows by
investment activities¥ Million-4,058-112-842

Net cash flows by
financial activities¥ Million
1,890
5,178
5,403

Balance of cash and cash
equivalents at the end ofyear¥ Million
6,101
5,710
3,957【Cash Flows Condition】
Cash and cash equivalents (hereafter “funds”) for the third quarter of the fiscal year was 6,101 million yen, an− 3 −increase of 2,143 million yen compared to the previous consolidated fiscal year.
(Operating activities)
Net cash gained through operating activities was 4,311 million yen. This was due mainly to proceeds fromdecrease of real estate for sale which was 3,469 million yen, in addition to 1,607 million yen in income before
income taxes. Apart from these, there were 454 million yen increase in purchase of loans and payment of the 562
million yen for corporate taxes.
(Investing activities)
Net cash used in investing activities was 4,058 million yen. This was due mainly to payments of 3,572 million yen
for acquiring shares of Ukai through Centennial Fund Investment Limited Partnership and purchase of investment
securities and capital which amounted to 400 million yen.
(Financing activities)
Net cash gained by financing activities was 1,890 million yen. This was due mainly to proceeds from investment
deposits of anonymous association which was 2,650 million yen and net increase of 164 million yen in bond.
However, there were net decrease of 906 million yen in debt and payments of the 65 million yen in dividend.
The net results of these cash flows during the third quarter was an increase of 2,143 million yen in cash and cash
equivalents to 6,101million yen.
3．Forecast of Financial Performance in FY December 2006 (January 1, 2006 − December 31, 2006)
Operating revenue

FY ending Dec. 2006

¥ Million
13,500（Note）Forecast net income per share for

Ordinary income¥ Million
1,600

Net income¥900

Millionthe year: 17,171.64 yenNet income per share has been adjusted to reflect the 2-for-1 stock split as of November 1, 2006.
【Consolidated Forecasts】
Funai Zaisan has revised its 2006 forecasts as was announced today in a press release titled “Notice of Revisions
to Business Forecasts”.
Funai Zaisan plans to pay year-end dividend of 1,500 yen per share. In view of the 2-for-1 stock split conducted on
November 1, 2006, Funai Zaisan will increase its year-end dividend by 2.4% from 1,250 yen per share which wasplanned to be paid before the stock split to 3,000 yen in real terms and its annual dividend by 1.7% from the initial2,500 yen per share which was planned to be paid before the stock split to 4,250 yen in real terms.
(Note) The above forecasts are based on judgements made in accordance with information available at the time
this report was prepared. As forecasts embody risks and uncertainties, actual results may differ significantly fromt
these forecasts for a number of factors.

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