FINANCIAL SECTION

Ten-Year Summary and Business Highlights

2011/3

2012/3

2013/3

2014/3

2015/3

2016/32017/3

RESULTS OF OPERATIONS:
Operating revenues¥1,236,520 ¥1,260,833 ¥1,282,374 ¥1,374,610 ¥1,396,708
995,651

1,014,564

1,028,219

1,099,400

1,101,439

1,111,867

1,151,028

Non-delivery

240,869

246,269

254,155

275,210295,269

304,546

315,824

Operating costs

1,143,006

1,163,777

1,181,834

1,274,471

1,290,715

1,306,200

1,385,492

Selling, general and administrative expenses

29,20030,40534,33737,04337,046

41,673

46,475

Operating profit

64,314

66,651

66,20363,096

68,947

68,54034,885

Profit before income taxes

61,83645,81764,28465,882

69,15868,07933,038

Income taxes

28,491

26,05929,56331,00331,55528,415

14,673

Profit attributable to owners of parent

33,20819,78735,144

34,77637,53339,42518,054

PER SHARE OF COMMON STOCK:
Basic earnings
Diluted earnings
Cash dividends
Net assets per share
Stock price (closing), end of year¥    73.42 ¥    46.00 ¥    81.85 ¥    82.22 ¥    90.41
73.30
44.87
79.84
80.18
88.26
22.00
22.00
23.00
24.00
25.00
1,173.60
1,197.26
1,261.35
1,316.12
1,368.66
1,290
1,279
1,740
2,224
2,772

¥    96.45 ¥    45.37
95.64
—
28.00
27.00
1,349.56
1,367.51
2,247
2,332.5

FINANCIAL POSITION:
Working capital
Total shareholders’ equity
Total assets
Capital expenditures
Depreciation and amortization
Net cash provided by operating activities¥  185,922 ¥  182,111 ¥  186,868 ¥  179,999 ¥  209,172
515,602514,996
534,451
551,379
565,521899,363919,295
950,153 1,032,134 1,082,531
52,472
48,61548,052
79,53152,02239,58338,68237,93642,26646,05887,89971,84373,95080,075
92,620¥  235,884 ¥  214,661
537,821539,179
1,089,437
1,114,672
53,94548,99446,73946,11449,71573,325

KEY RATIOS:
Operating profit margin (%)

5.20

5.29

5.16

4.59

4.94

4.84

2.38

Net margin (%)

2.69

1.57

2.74

2.53

2.69

2.78

1.23

3.74
6.46
170.34
57.33
1.39
73.71
17.6
1.1

2.18
3.84
164.50
56.02
1.39
90.52
27.8
1.1

3.76
6.70
162.3956.25
1.37
108.36
21.3
1.4

3.51
6.41
151.8253.42
1.39
153.41
27.0
1.7

3.55
6.75
158.5952.24
1.32
173.45
30.7
2.0

3.63
7.15
167.7649.37
1.30
125.33
23.3
1.7

1.64
3.35
157.73
48.37
1.33
81.45
51.4
1.7

171,642
83,427
88,215
1,348
609

177,301
84,29393,0081,423
600

177,108
84,422
92,6861,487
591

193,146
87,279105,867
1,665
574

197,056
88,247
108,809
1,622
595

196,582
89,112
107,470
1,731
578

201,784
90,737
111,047
1,867
559

2,312
64

2,187
62

2,112
61

2,084
61

1,901
61

1,536
57

1,542
55

Return on assets (ROA) (%)
Return on equity (ROE) (%)
Current ratio (%)
Shareholders’ equity ratio (%)
Assets turnover (Times)
Interest coverage ratio (Times)
Price earnings ratio (PER) (Times)
Price book-value ratio (PBR) (Times)
NON-FINANCIAL DATA:
Number of employees
Full-timePart-time
TA-Q-BIN delivery amount (Millions of parcels)
Unit price (Yen)
Kuroneko DM-Bin handling volume(Millions of units)
Unit price (Yen)

Foreign currency translation: U.S. dollar amounts have been translated, for convenience only, at the rate of ¥108.83 to U.S.$1.
Note: On March 31, 2015, we ceased accepting items for Kuroneko Mail and from April 1 launched Kuroneko DM-Bin.

64¥1,416,413 ¥1,466,852

Delivery

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION

2018/3

2019/3

Millions of Yen
2020/3Thousands of
U.S. Dollars

Analysis of Operating Revenues

2020/3(¥ billion)

1,625.3

2019/3¥1,538,813 ¥1,625,315 ¥1,630,147$14,978,836

1,201,770

1,297,223

1,310,068

12,037,746

337,043

328,092

320,079

2,941,090

1,452,485

1,513,988

1,526,103

14,022,813

50,642

52,981

59,343545,281

35,68658,34644,701

410,742

33,12352,25844,581

409,641

14,43526,30821,679199,199

18,232

25,682

22,324205,127

Yen

+12.8

Delivery(5.5)

Home Convenience+3.9

e-Business(2.8)

Financial
Autoworks

(1.0)

Other

+1.0

U.S. Dollars

1,630.1

2020/3¥    46.24 ¥    65.14 ¥    56.78
—
—
—
27.00
28.00
41.00
1,395.74
1,435.15
1,441.20
2,668.5
2,859.0
1,697.0
Millions of Yen¥  164,600 ¥  139,835 ¥  134,072
550,308565,841555,173
1,114,870
1,123,660
1,100,740
54,482
79,83955,034
46,42351,34755,08351,728118,094
74,434$      0.52
—
0.38
13.24
—
Thousands of
U.S. Dollars$ 1,231,948
5,101,287
10,114,303
505,686
506,138
683,944(3.5)

BIZ-Logistics

YoY +4.8

Analysis of Operating Profit(¥ billion)

58.3

2019/3+4.8

Revenue
Personnel expenses+27.3

Subcontracting
expenses(27.8)+1.0

Vehicle expenses

2.32

3.59

2.74

1.18

1.58

1.37

1.64
3.35
141.6749.36
1.38
131.94
57.7
1.9

2.29
4.60
134.0750.36
1.45
212.29
43.9
2.0

2.01
3.98
132.8050.44
1.47
106.2529.9
1.2

213,096
93,534
119,562
1,836
597

225,125
97,587
127,538
1,803
664

224,945
98,744
126,201
1,799
676

1,464
56

1,211
60

987
65

+14.9

Other
Consolidation
journal entries

+2.9
44.7

2020/3

YoY (13.6)

Quarterly YoY Growth Rates of TA-Q-BIN Delivery Amountand Unit Price (Excluding Nekopos)
(%)
25
20
15
10
5
0
(5)
(10)

1Q

2Q

3Q

4Q

1Q

2018/3TA-Q-BIN Delivery Amount Growth Rate
TA-Q-BIN Unit Price Growth Rate

2Q

3Q

2019/3

4Q

1Q

2Q

3Q

4Q

2020/3

Delivery Amount:
YoY (2.5)%
Unit Price:
YoY +3.4%

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

65

FINANCIAL SECTION

Consolidated Balance Sheet
March 31, 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen

ASSETS

2020

2019

2020

¥  197,227¥  195,955$ 1,812,246  Trade213,981

220,159

1,966,194   Installment (Note 4)

46,08844,802

423,492   Lease (Note 13)

53,88754,538495,146   Allowance for doubtful accounts(1,440)(1,475)(13,231)

4,216

3,248

38,736CURRENT ASSETS:
Cash and cash equivalents (Notes 2.e and 14)
Notes and accounts receivable (Note 14):

Inventories (Note 5)
Prepaid expenses and other current assets

28,92533,032

265,786    Total current assets

542,884

550,259

4,988,369

PROPERTY, PLANT AND EQUIPMENT—At cost:
Land
Buildings and structures
Vehicles

175,159362,315214,177

175,996352,142
208,031

1,609,472
3,329,183
1,967,998

Machinery and equipment
Leased assets (Note 13)
Construction in progress

132,896
31,261
6,418

133,238
31,5388,391

1,221,132
287,243
58,971Others21,97926,311201,960    Total
Accumulated depreciation     Net property, plant and equipment

INVESTMENTS AND OTHER ASSETS:
Investment securities (Notes 6 and 14) Investments in and advances to unconsolidated subsidiaries and affiliates,
net of valuation allowance of ¥373 million ($3,427 thousand) in 2020 (Note 14)
Long-term loans
SoftwareLease deposits
Deferred tax assets (Note 12)
Other assets (Notes 2.k and 9)     Total investments and other assets
TOTAL
See notes to consolidated financial statements.

66

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

944,205

935,647

8,675,959(520,369)(506,729)(4,781,485)

423,836428,918

3,894,474

29,20536,229268,356

15,2171,240
18,182
18,67145,611

20,5301,294
17,313
18,34344,386

139,817
11,393167,070
171,561
419,104

5,894

6,388

54,159134,020

144,483

1,231,460¥1,100,740¥1,123,660$10,114,303

FINANCIAL SECTION

Thousands of
U.S. Dollars(Note 1)Millions of Yen

LIABILITIES AND EQUITY

2020

2019

2020

¥   70,000¥   20,000$   643,205

19,07943,592

175,305  Trade147,082

158,938

1,351,483  Other

12,641

25,598116,149

Income taxes payable

20,377

23,747

187,238

Accrued expenses

77,97081,530716,438

CURRENT LIABILITIES:
Short-term bank loans (Notes 8 and 14)
Current portion of long-term debt (Notes 8 and 14)
Notes and accounts payable (Note 14):

Deferred profit on installment sales (Notes 4 and 14)

5,028

5,342

46,204

Other current liabilities (Note 10)56,63551,677

520,399

408,812410,424

3,756,421

Long-term debt (Notes 8 and 14)

35,76049,642

328,588

Liability for employees’ retirement benefits (Notes 2.k and 9)

79,231

74,508728,024Deferred tax liabilities (Note 12)

2,064

4,181

18,970

Other long-term liabilities (Note 10)

12,038

11,516110,609

129,093

139,847

1,186,191

Common stock—authorized, 1,787,541,000 shares in 2020 and 2019 ;issued, 411,339,992 shares in 2020 and 2019

127,235

127,235

1,169,115

Capital surplus

36,81336,813

338,263

Retained earnings

441,747

431,498

4,059,054

Treasury stock—at cost, 2
 6,124,409 shares in 2020 and
17,065,526 shares in 2019(54,771)(39,086)(503,266)

8,158

12,97574,959    Total current liabilities
LONG-TERM LIABILITIES:    Total long-term liabilities
COMMITMENTS LIABILITIES (Note 13)
EQUITY (Notes 11 and 18):

Accumulated other comprehensive income:   Unrealized gain on available-for-sale securities   Foreign currency translation adjustments   Remeasurements of defined employees’ retirement benefit plans (Notes 2.k and 9)    Total
Non-controlling interests    Total equity
TOTAL

(317)

(515)

(2,914)(3,692)(3,079)(33,924)555,173565,841

5,101,287

7,662

7,548

70,404562,835

573,389

5,171,691¥1,100,740¥1,123,660$10,114,303

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

67

FINANCIAL SECTION

Consolidated Statement of Income
Year Ended March 31, 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen
2020

2019

2020

¥1,630,147¥1,625,315$14,978,836

1,526,103

1,513,988

14,022,813

59,34352,981

545,281

1,585,446

1,566,969

14,568,094

44,701

58,346

410,742Interest and dividend income

1,096

1,036

10,068Interest expense

(422)

(276)

(3,881)Gain (loss) on sales and disposal of property, plant and equipment—net

7,528

(300)

69,174

Loss on impairment of long-lived assets (Note 7)(991)(2,087)(9,100)Gain on sales of marketable and investment securities (Note 6)

1,300

37

11,942OPERATING REVENUESOPERATING COSTS AND EXPENSES:
Operating costs
Selling, general and administrative expenses   Total operating costs and expenses  Operating profit
OTHER INCOME (EXPENSES):

Loss on valuation of investment securities (Note 6)

(140)

(39)

(1,285)

Loss on valuation of investment in unconsolidated subsidiaries and affiliates(2,207)(1,357)(20,282)

Share of loss of entities accounted for using equity method(4,169)(4,873)(38,304)

Compensation for delay damages

1,776

Loss on liquidation of business(1,207)

Other—net  Other expenses—net
PROFIT BEFORE INCOME TAXES(11,087)

(908)

(5)

(8,346)(120)(6,088)(1,101)

44,581

52,258409,641

23,026

24,651

211,573

INCOME TAXES (Note 12):Current
Deferred(1,347)

1,657(12,374)   Total income taxes

21,67926,308199,199

PROFIT

22,902

25,950210,442

578

268

5,315

PROFIT ATTRIBUTABLE TO NON-CONTROLLING INTERESTSPROFIT ATTRIBUTABLE TO OWNERS OF PARENT¥

22,324¥25,682$

205,127
U.S. Dollars(Note 1)

Yen
2020

2019

Basic earnings¥56.78¥65.14$0.52

Cash dividends applicable to the year

41.00

28.00

0.38

2020

PER SHARE OF COMMON STOCK (Notes 2.q and 16):

See notes to consolidated financial statements.

68

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION

Consolidated Statement of Comprehensive Income
Year Ended March 31, 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen

PROFIT2020

2019¥22,902¥25,950$210,442(45,281)

2020

OTHER COMPREHENSIVE INCOME (Note 15):
Unrealized loss on available-for-sale securities(4,928)(116)

Foreign currency translation adjustments

199(1,661)

1,821

Remeasurements of defined employees’ retirement benefit plans

(613)

2,541

(5,634)

Share of other comprehensive income of entities accounted for using equity method

(274)

274

(2,517)   Total other comprehensive (loss) income
COMPREHENSIVE INCOME(5,616)

1,038(51,611)¥17,286¥26,988$158,831¥17,092¥26,577$157,047

194

411

1,784

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of parent
Non-controlling interests
See notes to consolidated financial statements.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

69

FINANCIAL SECTION

Consolidated Statement of Changes in Equity
Year Ended March 31, 2020

Thousands

Millions of Yen
Accumulated Other Comprehensive Income

BALANCE,APRIL 1, 2018

Outstanding
Number of
Shares ofCommon Stock

Common Stock394,276¥127,235

Capital Surplus Retained Earnings Treasury Stock¥36,813¥416,855¥(39,081)

Remeasurements
Unrealizedof Defined
Foreign Currency
Employees’Gain onAvailable-for-Sale
Translation
Retirement Benefit
Securities
Adjustments
Plans¥12,959¥1,146¥(5,619)

Non-controlling
Interests

Total¥550,308¥7,279Total Equity¥557,587 
Profit attributable toowners of parent

25,682

25,682

25,682 
Cash dividends,¥28 per share(11,039)(11,039)(11,039)

(5)

(5)

 
Purchase oftreasury stock

(2)

(5)

 
Disposal oftreasury stock 
Net change in the year
BALANCE,MARCH 31, 2019394,274

127,235

36,813

431,498

127,235

36,813

430,857 
Cumulative effects ofchanges in accounting
policies (Note 3)

16(1,661)

2,540

895

269

1,164

(39,086)

12,975(515)(3,079)565,841

7,548

573,389(39,086)

12,975(515)(3,079)565,200

7,548

572,748(641)

RESTATED BALANCE

(641)

(641)

 
Profit attributable toowners of parent

22,324

22,324

22,324 
Cash dividends,¥29 per share(11,434)(11,434)(11,434)(15,685)(15,685) 
Purchase oftreasury stock(9,059) 
Disposal oftreasury stock

1(15,685) Net change in the year
BALANCE,MARCH 31, 2020

385,216¥127,235¥36,813¥441,747¥(54,771)(4,817)

198

(613)

(5,232)

114(5,118)¥ 8,158¥  (317)¥(3,692)¥555,173¥7,662¥562,835

Thousands of U.S. Dollars (Note 1)
Accumulated Other Comprehensive Income

Common Stock

BALANCE,MARCH 31, 2019

Capital Surplus Retained Earnings Treasury Stock$1,169,115$338,263$3,964,878

1,169,115

338,2633,958,990 Cumulative effects ofchanges in accounting
policies (Note 3)
RESTATED BALANCE

Non-controlling
Interests

Total$(359,144)$119,225$(4,733)$(28,291) $5,199,313(359,144)

119,225(4,733)(28,291)(5,888)5,193,425

Total Equity$69,354$5,268,667

69,354

5,262,779(5,888)(5,888) Profit attributable toowners of parent

205,127

205,127

205,127 
Cash dividends,$0.27 per share(105,063)(105,063)(105,063)(144,126)(144,126) 
Purchase oftreasury stock(144,126) Disposal oftreasury stock4 Net change in the year
BALANCE,MARCH 31, 2020

$1,169,115

See notes to consolidated financial statements.

70

Remeasurements
Unrealizedof Defined
Foreign Currency
Employees’Gain onAvailable-for-Sale
Translation
Retirement Benefit
Securities
Adjustments
Plans

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

$338,263$4,059,054$(503,266)

4(44,266)

1,819$ 74,959$(2,914)(5,633)

4(48,080)

1,050(47,030)$(33,924) $5,101,287$70,404$5,171,691

FINANCIAL SECTION

Consolidated Statement of Cash Flows
Year Ended March 31, 2020

Thousands of
U.S. Dollars(Note 1)Millions of Yen
2019

2020

2020

OPERATING ACTIVITIES:Profit before income taxes¥ 44,581¥ 52,258$ 409,641  Income taxes—paid(30,034)(13,745)(275,972)   Depreciation and amortization

55,10551,359506,338   (Gain) loss on sales and disposal of property, plant and equipment—net(7,528)300(69,174)

991

2,087

9,100

(1,300)(37)(11,942)

140

39

1,285

   Loss on valuation of investment in unconsolidated subsidiaries and affiliates

2,207

1,357

20,282   Share of loss of entities accounted for using equity method

4,169

4,873

38,304

Adjustments for:   Loss on impairment of long-lived assets   Gain on sales of marketable and investment securities   Loss on valuation of investment securities   Compensation for delay damages received

1,776   Changes in assets and liabilities:    Decrease in notes and accounts receivable

4,478

3,223

   Increase in inventories

(702)

(296)

(6,452)    (Decrease) increase in notes and accounts payable(11,768)

3,773(108,127)    Increase in liability for employees' retirement benefits

1,864

1,936

17,128  Other—net

12,231

9,191

112,382   Total adjustments

29,85365,836274,303    Net cash provided by operating activities

74,434

118,094

683,944

Proceeds from sale of property, plant and equipment

13,161

4,233

120,928

Purchases of property, plant and equipment

41,151INVESTING ACTIVITIES:(54,853)(48,058)(504,022)

Proceeds from sales of marketable and investment securities

1,978

72

18,175Purchases of marketable and investment securities

(585)

(290)

(5,371)(1,663)(1,770)(15,281)

Increase in investments in and advances to unconsolidated subsidiaries and affiliates
Collection of loans

722

1,178

6,639

Payment of loans(661)(1,322)(6,076)

Other     Net cash used in investing activities(8,043)(8,915)(73,908)(49,944)(54,872)(458,916)

FINANCING ACTIVITIES:
Proceeds from (repayments of) short-term debt—net

45,634(16,165)

419,311

Repayments of long-term debt

(40,800)(43,600)(374,897)

Dividends paid

(11,512)(11,178)(105,775)

Purchase of treasury stock—net(15,691)(4)(144,178)(22,369)(70,947)(205,539)   Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS

(109)

(487)

(1,002)NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

2,012(8,212)

18,487

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

194,651

202,863

1,788,575

CASH AND CASH EQUIVALENTS, END OF YEAR (Note 2.e)

¥196,663¥194,651$1,807,062¥¥ 18,131$

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Newly recorded assets related to finance lease transactions
Newly recorded liabilities related to finance lease transactions——

19,768* The amounts of newly recorded assets and liabilities related to finance lease transactions for the fiscal year ended March 31, 2020, are omitted due to immateriality.
See notes to consolidated financial statements.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

71

FINANCIAL SECTION

Notes to Consolidated Financial Statements
Year Ended March 31, 2020

1. BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in theJapanese Financial Instruments and Exchange Act and its related accounting regulations, and in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the applicationand disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to
the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications and rearrangements have been made in the 2019 consolidated
financial statements to conform them to the classifications and presentations used in 2020.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Yamato
Holdings Co., Ltd. (the “Company”) is incorporated and operates. The translations of Japanese yen amounts into U.S.
dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of¥108.83 to $1, the approximate rate of exchange at March 31, 2020. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa. Consolidation—The consolidated financial statements as of March 31, 2020 and 2019, include the accounts of theCompany and its 39 significant subsidiaries (together, the “Group”).
Under the control and influence concepts, those companies in which the Company, directly or indirectly, is able toexercise control over operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influence are accounted for by the equity method.
The unconsolidated subsidiaries, whose combined assets, net sales, profit and retained earnings in the aggregate are
not significant to the consolidated financial statements, have not been consolidated with the Company.
There were 19 (17 in 2019) affiliates accounted for by the equity method.
Effective from the fiscal year ended March 31, 2020, GEDE ADVISORY INDONESIA and one other company areincluded in the scope of the equity method due to GD EXPRESS CARRIER BHD., an affiliate accounted for using
equity method, newly acquiring their shares.
Investments in the unconsolidated subsidiaries and several affiliates not accounted for by equity method are stated atcost, less a valuation allowance representing possible losses on the investments that are deemed to be other than temporary. If the equity method of accounting had been applied to the investments in such companies, the effect on the accompanying consolidated financial statements would not be material.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from transactions within the Group is also eliminated.
b. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements—
Under Accounting Standards Board of Japan (“ASBJ”) Practical Issues Task Force (“PITF”) No. 18, “Practical Solution on
Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Financial Statements,” the accounting policies and procedures applied to a parent company and its subsidiaries for similar transactions and events undersimilar circumstances should in principle be unified for the preparation of the consolidated financial statements. However,financial statements prepared by foreign subsidiaries in accordance with either International Financial Reporting Standards
or generally accepted accounting principles in the United States of America tentatively may be used for the consolidation
process, except for the following items which should be adjusted in the consolidation process so that profit is accounted
for in accordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive income; (c) expensing capitalized development costs of R&D; (d) cancellation of the fair value model accounting for property, plant andequipment and investment properties and incorporation of the cost model accounting; and (e) recording a gain or loss
through profit or loss on the sale of an investment in an equity instrument for the difference between the acquisition costand selling price, and recording impairment loss through profit or loss for other-than-temporary declines in the fair value of
an investment in an equity instrument, where a foreign subsidiary elects to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument.

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c. Unification of Accounting Policies Applied to Foreign Affiliated Companies for the Equity Method—ASBJ
Statement No. 16, “Accounting Standard for Equity Method of Accounting for Investments,” requires adjustments to bemade to conform the affiliate’s accounting policies for similar transactions and events under similar circumstances to thoseof the parent company when the affiliate’s financial statements are used in applying the equity method, unless it is impracticable to determine such adjustments. In addition, financial statements prepared by foreign affiliated companies in accordance with either International Financial Reporting Standards or generally accepted accounting principles in the UnitedStates of America tentatively may be used in applying the equity method if the following items are adjusted so that profit isaccounted for in accordance with Japanese GAAP, unless they are not material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive income; (c)expensing capitalized development costs of R&D; (d) cancellation of the fair value model accounting for property, plant andequipment and investment properties and incorporation of the cost model accounting ; and (e) recording a gain or loss
through profit or loss on the sale of an investment in an equity instrument for the difference between the acquisition costand selling price, and recording impairment loss through profit or loss for other-than-temporary declines in the fair value of
an investment in an equity instrument, where a foreign affiliate elects to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument.
d. Recognition of Operating Revenues—The Group recognizes freight charge income as operating revenue at the time
when freight has been received from the shipping customer for transportation.
Fees from customers based on installment sales contracts are recognized by the equal installment method.
e. Cash Equivalents—Cash equivalents in the consolidated statement of cash flows are short-term investments that arereadily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents in the consolidated statement of cash flows include time deposits, certificates of deposit, and mutual funds investing in bonds that represent short-term investments, all of which mature or become due within three months of the date of acquisition.
The difference between cash and cash equivalents in the accompanying consolidated balance sheet and cash andcash equivalents in the accompanying consolidated statement of cash flows was as follows:
Thousands of
U.S. Dollars

Millions of Yen
2020

Cash and cash equivalents presented in the consolidated balance sheet
Time deposits due beyond three months
Cash and cash equivalents presented in the consolidated statement of cash flows

2019

2020

¥197,227¥195,955(564)(1,304)(5,184)¥196,663¥194,651$1,807,062$1,812,246

f. Inventories—Inventories are stated at the lower of cost determined by the first-in, first-out method or net selling value.
g. Marketable and Investment Securities—Marketable and investment securities are classified and accounted for,depending on management’s intent, as follows: (1) trading securities, which are held for the purpose of earning capitalgains in near term, are reported at fair value, and the related unrealized gains and losses are included in earnings; (2) heldto-maturity debt securities, for which there is a positive intent and ability to hold to maturity, are reported at amortized cost;and (3) available-for-sale securities, which are not classified as either of the aforementioned securities, are reported at fairvalue, with unrealized gains and losses, net of applicable taxes, reported in a separate component of equity. The Group
had no trading securities at March 31, 2020 and 2019.
Non-marketable available-for-sale securities are stated at cost determined by the moving-average method.
For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge toincome.
h. Property, Plant and Equipment—Property, plant and equipment are stated at cost. Depreciation of property, plant andequipment excluding leased assets of the Company and its domestic consolidated subsidiaries is computed substantiallyby the declining-balance method, while the straight-line method is applied to buildings acquired on or after April 1, 1998,
and facilities attached to buildings and structures acquired on or after April 1, 2016. Depreciation of leased assets is computed by the straight-line method over the lease period with no residual value carried.

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Notes to Consolidated Financial Statements

The depreciation of property, plant and equipment of foreign consolidated subsidiaries is computed by the straight-line
method over the estimated useful lives of the assets. The range of useful lives is principally as follows:
Buildings and structures
VehiclesMachinery and equipment

7–60 years
2– 7 years
2–20 years

Maintenance and repairs, including minor renewals and improvements, are charged to income as incurred.
i. Long-Lived Assets—The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized
if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected toresult from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the
discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
j. Other Assets—Amortization of intangible assets is computed by the straight-line method.
Depreciation of leased assets is computed by the straight-line method over the lease period with no residual value
carried.
k. Retirement and Pension Plan—The Company and consolidated subsidiaries mainly have a contributory trusted pension plan and an unfunded retirement benefit plan. In addition, a defined contribution retirement plan was introduced alongwith these defined benefit pension plans.
In calculating the retirement benefit obligations, the straight-line basis is used in determining the amount of the
expected retirement benefit obligations attributed to service performed up to the end of the current fiscal year.
Past service costs are recognized in profit or loss in full in the fiscal year in which it arises. Actuarial gains and losses
are amortized on a straight-line basis over a period within the average remaining service period of the eligible employees(mainly five years) on and after the fiscal year following the fiscal year in which it arises.
Actuarial gains and losses are recognized within equity on the consolidated balance sheet after adjusting for tax effects,
and funded status is recognized as a liability or asset.
l. Asset Retirement Obligations—An asset retirement obligation is recorded for a legal obligation imposed either by law orcontract that results from the acquisition, construction, development, and normal operation of a tangible fixed asset and isassociated with the retirement of such tangible fixed asset.
The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset
retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred,
the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon initialrecognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying
amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to
expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present
value each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash
flows are reflected as reconciliation to the carrying amount of the liability and the capitalized amount of the related asset
retirement cost.
m. Leases—For a lessee, all finance lease transactions are capitalized to recognize lease assets and lease obligations in
the balance sheet.
For a lessor, all finance leases that deem to transfer ownership of the leased property to the lessee are recognized aslease receivables, and all finance leases that deem not to transfer ownership of the leased property to the lessee are recognized as investments in leases.

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n. Income Taxes—The provision for income taxes is computed based on the pretax income included in the consolidated
statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets
and liabilities. Deferred taxes are measured by applying currently enacted income tax rates to the temporary differences.
o. Foreign Currency Transactions—All short and long-term monetary receivables and payables denominated in foreign
currencies are translated into Japanese yen at the exchange rates at the balance sheet date.
p. Foreign Currency Financial Statements—The balance sheet accounts of the consolidated foreign subsidiaries aretranslated into Japanese yen at the current exchange rate as of the balance sheet date except for equity, which is translated at the historical rate. Differences arising from such translation are shown as “Foreign currency translation adjustments” under accumulated other comprehensive income in a separate component of equity.
Revenue and expense accounts of the consolidated foreign subsidiaries are translated into Japanese yen at the current
exchange rates as of the balance sheet date.
q. Per Share Information—Basic earnings per share is computed by dividing profit attributable to common shareholders
by the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits.
Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into
common stock. Diluted earnings per share of common stock assumes full conversion of the outstanding convertible notes
and bonds at the beginning of the year (or at the time of issuance) with an applicable adjustment for related interest
expense, net of tax, and full exercise of outstanding warrants.
For the years ended March 31, 2020 and 2019, diluted earnings per share is not disclosed because the Company had
no dilutive securities.
Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicableto the respective fiscal years, including dividends to be paid after the end of the year.
r. Accounting Changes and Error Corrections—Under ASBJ Statement No. 24, “Accounting Standard for Accounting
Changes and Error Corrections,” and ASBJ Guidance No. 24, “Guidance on Accounting Standard for Accounting Changes
and Error Corrections,” accounting treatments are required as follows:(1) Changes in Accounting Policies—When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional provisions, in which case the entity shall comply with the specific transitional provisions. (2) Changes in Presentation—When thepresentation of financial statements is changed, prior-period financial statements are reclassified in accordance with thenew presentation. (3) Changes in Accounting Estimates—A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only, and is accounted for prospectively if the change affects both theperiod of the change and future periods. (4) Corrections of Prior-Period Errors—When an error in prior-period financial
statements is discovered, those statements are restated.
s. Assumption for Effects of the Novel Coronavirus Disease (“COVID-19”) in Accounting Estimate —In the Group,delivery amount, particularly in individual customers and e-commerce markets, has increased due to voluntarily refraining
from going out and expansion of stay-at-home consumption since the spread of COVID-19. On the other hand, delivery
amount in small-lot corporate clients gradually decreased due to worldwide stagnation of the production activities in manufacturing industry and international trade and voluntarily refraining from business activities.
The spread of COVID-19 affects economy and business activities widely, and predicting when the pandemic might
subside is difficult. Under these circumstances, in assessing impairment loss on fixed assets and recoverability of deferred
tax assets, the Group assumed that COVID-19 affects financial performance of the business involved in corporate logistics
for a certain period of time during the fiscal year ending March 31, 2021, considering the effect on receiving orders.
The Group determined that the impact of COVID-19 on accounting estimates is immaterial for other business consideringcontinuous operation of the business during COVID-19 outbreak. Based on these assumptions, the Company did notrecognize impairment loss on fixed assets and reversal of deferred tax assets as a result of the effect of COVID-19.
In addition, the effect of COVID-19 on business environment is uncertain, and may impact the consolidated financial
statements for the year ending March 31, 2021, if the situation changes.

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Notes to Consolidated Financial Statements

t. New Accounting Pronouncements
Accounting Standards for Revenue Recognition—In March 2018, the ASBJ issued ASBJ Statement No. 29,“Accounting Standard for Revenue Recognition,” and ASBJ Guidance No. 30, “Implementation Guidance on AccountingStandard for Revenue Recognition.” An entity should recognize revenue by applying the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The accounting standard and guidance will be applied from the beginning of the fiscal year that begins on or after
April 1, 2021.
The Company is now in the process of measuring the effect of applying the accounting standard and guidance.

3. ACCOUNTING CHANGES
Certain subsidiaries, which apply International Financial Reporting Standards, adopted IFRS 16 Leases (“IFRS 16”) from thefiscal year ended March 31, 2020. In line with this adoption, lessees, in principle, recognize all leases as assets and liabilities on the balance sheet. In applying IFRS 16, retained earnings have been adjusted for the cumulative effect of changes
in accounting policies at the beginning of the fiscal year ended March 31, 2020, resulting from the transitional treatment.
The effect of this application on the consolidated financial statements and per share information is immaterial.

4. INSTALLMENT RECEIVABLES
Sales recorded on the installment basis were 0.3% of operating revenues in both 2020 and 2019.
Annual maturities of installment receivables at March 31, 2020, and related amortization of deferred profit on installment
sales are as follows:
Millions of Yen
Year Ending March 31

Receivables

Thousands of U.S. Dollars

Deferred Profit on
Installment Sales

Receivables

Deferred Profit on
Installment Sales

2021¥22,467¥1,972$206,441$18,1212022

10,971

1,359

100,805

12,484

2023

6,363

828

58,472

7,612

2024

3,283

431

30,170

3,958

2025

1,625

217

14,935

1,998

2026 and thereafter

1,379

221

12,6692,031¥46,088¥5,028$423,492$46,204Total

5. INVENTORIESInventories at March 31, 2020 and 2019, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

MerchandiseWork in process

76

2020

2019

2020

¥  552¥  643$ 5,074

166

194

1,523

Raw materials and supplies

3,498

2,411

32,139Total¥4,216¥3,248$38,736

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION

6. MARKETABLE AND INVESTMENT SECURITIESMarketable and investment securities as of March 31, 2020 and 2019, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2019

2020

2020

Non-current:
Marketable equity securities
Non-marketable equity securities
Other
Total

¥26,466¥33,742

935

944

8,589

1,804

1,543

16,575¥29,205¥36,229$268,356$243,192

Information regarding each category of the securities classified as available-for-sale at March 31, 2020 and 2019, is as follows:
Millions of Yen
2020
Cost

Unrealized Gains

Unrealized Losses¥12,797¥838

Fair Value

Securities classified as:
Available-for-sale: Equity securities¥14,507¥26,466

Millions of Yen
2019
Cost

Unrealized Gains

Unrealized Losses¥18,765¥25

Fair Value

Securities classified as:
Available-for-sale: Equity securities¥15,002¥33,742

Thousands of U.S. Dollars
2020
Cost

Unrealized Gains

Unrealized Losses$117,592$7,702

Fair Value

Securities classified as:
Available-for-sale: Equity securities$133,302$243,192

Information for available-for-sale securities, which were sold during the years ended March 31, 2020 and 2019, is as follows:
Millions of Yen
March 31, 2020

Available-for-sale: Equity securities

Proceeds¥1,978Realized Gains

Realized Losses¥1,300¥—Millions of Yen
March 31, 2019

Available-for-sale: Equity securities

Proceeds¥72

Realized Gains

Realized Losses

¥37

¥—

Thousands of U.S. Dollars
March 31, 2020

Available-for-sale: Equity securities

Proceeds$18,175

Realized Gains

Realized Losses$11,942$—

Loss on valuation of available-for-sale equity securities for the year ended March 31, 2020 and 2019, were ¥140 million($1,285 thousand) and ¥39 million, respectively.

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Notes to Consolidated Financial Statements

7. LONG-LIVED ASSETSThe Group reviewed its long-lived assets for impairment as of the years ended March 31, 2020 and 2019. As a result, theGroup recognized an impairment loss of ¥991 million ($9,100 thousand) as other expense for the asset groups of the Trade
Logistics Service of Yamato Global Logistics Japan Co., Ltd. and 16 other asset groups for the year ended March 31,
2020, and ¥2,087 million as other expense for the asset groups of the head office and the Kansai Regional Branch of
Yamato Home Convenience Co., Ltd. and 21 other asset groups for the year ended March 31, 2019, due to continuous
operating losses of those units or significant declines in market prices. The carrying amounts of the relevant asset groups
were written down to their recoverable amounts. In the case where the net selling prices were used as recoverable
amounts, the relevant asset groups were evaluated mainly based on Real Estate Appraisal Standards, assessed value of
fixed assets, and posted land prices. In the case where the recoverable amounts were measured at its value in use, thediscount rates used for computation of present value of future cash flows for years ended March 31, 2020 and 2019, were
4.32% and 4.55%, respectively.

8. BANK LOANS AND LONG-TERM DEBT
Short-term bank loans at March 31, 2020 and 2019, consisted of notes to banks and bank overdrafts. The weightedaverage interest rates applicable to the bank loans as of March 31, 2020 and 2019, were approximately 0.092% and0.040%, respectively.
Long-term debt at March 31, 2020 and 2019, consisted of the following:Thousands of
U.S. Dollars

Millions of Yen
2020

0.120% to 0.299% loans from banks due 2020 to 20222019

¥ 19,500

0.030% to 0.299% loans from banks due 2019 to 20222020

$ 179,179¥ 60,300

Lease obligations

25,33922,934

232,828

Unsecured 0.090% bonds due in March 2021

10,00010,00091,886

Total

54,83993,234

503,893

Less current portion(19,079)(43,592)(175,305)

Total¥ 35,760¥ 49,642$ 328,588

Millions of Yen

Thousands of
U.S. Dollars

2021¥19,079$175,305

2022

16,645

152,946

2023

2,103

19,322

2024

1,931

17,745

Annual maturities of long-term debt at March 31, 2020, are as follows:Year Ending March 31

78

2025

1,353

12,4352026 and thereafter

13,728126,140

Total¥54,839$503,893

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FINANCIAL SECTION

9. RETIREMENT AND PENSION PLANS
The Group has defined benefit pension plans and defined contribution retirement plans for employees.
The defined benefit pension plans provide, under most circumstances, that employees terminating their employment
are entitled to retirement benefits determined based on the rate of pay at the time of termination, years of service, andcertain other factors. Such retirement benefits are made in the form of a lump-sum severance payment from the Company
or from the consolidated subsidiaries and annuity payments from a trustee. Employees are entitled to larger payments if thetermination is involuntary, by retirement at the mandatory retirement age, by death, or by voluntary retirement at certain
specific ages exceeding the standard retirement age.
(1) Defined Benefit Pension Plans
The changes in defined benefit obligation for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2019

2020

Balance at beginning of year

2020

¥172,209¥169,653$1,582,369

Service cost

13,146

12,141

120,788

Interest cost

171

169

1,574

Actuarial loss (gain) arising during the year519

(2,658)4,773(8,210)(7,387)(75,437)

Retirement benefits paid
Past service cost arising during the year
Balance at end of year

291
¥177,835¥172,209$1,634,067

The changes in plan assets for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2019

2020

Balance at beginning of year

¥97,863¥94,287

979

943

8,992

(2,379)295(21,855)

Expected return on plan assets
Actuarial (loss) gain arising during the year

2020

$899,227

Contributions from the employer

4,448

4,386

40,872Retirement benefits paid

(2,183)(2,048)(20,057)¥98,728¥97,863$907,179

Balance at end of year

Reconciliation between the liability recorded in the consolidated balance sheet and the balances of defined benefit obligation and plan assets as of March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2019

2020

Defined benefit obligation of funded plan2020

¥ 65,656¥ 65,259$  603,292(98,728)(97,863)(907,179)(33,072)(32,604)(303,887)

Defined benefit obligation of unfunded plan

112,179

106,950

1,030,775

Net liability arising from defined benefit obligation¥ 79,107¥ 74,346$  726,888

Plan assets

Thousands of
U.S. Dollars

Millions of Yen

Liability for employees’ retirement benefits
Asset for employees’ retirement benefits
Net liability arising from defined benefit obligation

2020

2019

¥79,231¥74,5082020$728,024

(124)

(162)

(1,136)¥79,107¥74,346$726,888

The amount of the liability and asset for employees’ retirement benefits that are offset individually by the Company andsubsidiaries are combined.

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Notes to Consolidated Financial Statements

The components of net periodic benefit costs for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Service cost

2020

2019

¥13,146¥12,141

2020$120,788Interest cost

171

169

1,574

Expected return on plan assets

(979)

(943)

(8,992)

Recognized actuarial loss

2,029

712

18,639

Past service cost

291

OthersNet periodic benefit costs

(6)

(47)

(51)

¥14,361¥12,323$131,958

Amounts recognized in other comprehensive income (before income tax effect adjustments) in respect of defined retirement benefit plans for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2019

2020

Actuarial (loss) gain¥(869)¥3,665$(7,989)

Total¥(869)¥3,665$(7,989)2020

Amounts recognized in accumulated other comprehensive income (before income tax effect adjustments) in respect ofdefined retirement benefit plans as of March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2020

2019

2020

Unrecognized actuarial loss¥(5,232)¥(4,363)$(48,075)

Total¥(5,232)¥(4,363)$(48,075)

2020

2019

Plan assets as of March 31, 2020 and 2019, consisted of the following:
General accounts

33%

32%

Debt investments

24

25

Equity investments

18

22

Others

25

21

Total

100%

100%

Assumptions used for the years ended March 31, 2020 and 2019, were set forth as follows:
2020

2019

Discount rate

0.1%

0.1%

Expected rate of return on plan assets

1.0%

1.0%

The expected rate of return on plan assets is determined on the basis of the distribution of plan assets, past performance of respective assets that make up investments of plan assets, and market trends.
(2) Defined Contribution Retirement Plans
The amounts contributed to the defined contribution retirement plans of the Group for the years ended March 31, 2020
and 2019, were ¥2,764 million ($25,394 thousand) and ¥2,432 million, respectively.

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10.		 ASSET RETIREMENT OBLIGATIONS
The changes in asset retirement obligations for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Balance at beginning of year

2020

2019

2020

¥8,686¥5,800$79,812Additional provisions associated with the acquisition of property,
plant and equipment

777

2,263

7,134

Reconciliation associated with passage of time

112

106

1,031

Reconciliation associated with changes in accounting estimates

(89)

629

(817)

Reduction associated with settlement of asset retirement obligations

(559)

(92)

(5,133)(20)(3)¥8,927¥8,686$82,024

OthersBalance at end of year

Changes in accounting estimates were recorded as it became evident that the estimate of the discounted cash flows
required for future asset retirement would change at the beginning of the year. A reconciliation has been prepared for thechange, which resulted in a decrease and increase of the asset retirement obligation for the years ended March 31, 2020
and 2019, by ¥89 million ($817 thousand) and ¥629 million, respectively.

11.		 EQUITY
Japanese companies are subject to the Companies Act of Japan (the “Companies Act”). The significant provisions in the
Companies Act that affect financial and accounting matters are summarized below:
a. Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders’ meeting. For companies that meet certain criteria such as (1) having a Board of
Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors being prescribed as one year rather than the normal two-year term by its articles of incorporation, the Board of
Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash assets) to shareholders subject to acertain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles ofincorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available fordividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity accountcharged upon the payment of such dividends until the aggregate amount of legal reserve and additional paid-in capitalequals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal
reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional
paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts within equity undercertain conditions upon resolution of the shareholders.
c. Treasury Stock
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution
to the shareholders, which is determined by a specific formula. The Companies Act also provides that companies canpurchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented asa separate component of equity.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

81

FINANCIAL SECTION

Notes to Consolidated Financial Statements

12.		 INCOME TAXESThe Company and its domestic subsidiaries are subject to Japanese national and local income taxes, which, in the aggregate, resulted in normal effective statutory tax rates of 30.6% for the years ended March 31, 2020 and 2019.
The tax effects of significant temporary differences and tax loss carryforwards which resulted in deferred tax assets andliabilities at March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2019

2020

2020

Deferred tax assets:  Accrued expenses¥ 10,961¥ 10,956$ 100,720   Legal welfare expense

1,811

1,808

16,639  Enterprise tax

2,100

2,309

19,296

679

623

6,241

   Tax loss carryforwards

10,056

7,433

92,401   Liability for employees’ retirement benefits

24,42522,909224,435   Loss on valuation of land

20,75920,759190,750   Loss on impairment of long-lived assets

4,656

4,732

42,777   Loss on valuation of investment securities

1,145

1,771

10,519  Unrealized profit

3,048

2,763

28,003   Allowance for doubtful accounts   Loss on valuation of telephone subscription rights

403

404

3,705

  Other

7,863

7,719

72,248807,734   Total of tax loss carryforwards and temporary differences

87,906

84,186   Less valuation allowance for tax loss carryforwards(9,541)(7,400)(87,664)   Less valuation allowance for temporary differences(26,947)(27,306)(247,611)   Total valuation allowance
Deferred tax assets(36,488)(34,706)(335,275)¥ 51,418¥ 49,480$ 472,459¥ (3,318)¥ (5,073)$ (30,489)

Deferred tax liabilities:   Unrealized gain on available-for-sale securities  Other(4,553)(4,202)(41,836)

Deferred tax liabilities¥ (7,871)¥ (9,275)$ (72,325)

Deferred tax assets—net¥ 43,547¥ 40,205$ 400,134

The expiration of tax loss carryforwards, the related valuation allowances and the resulting net deferred tax assets as ofMarch 31, 2020, are as follows:
Millions of Yen

Year Ending March 31

Less Valuation
Allowances for
Tax Loss
Carryforwards

2021¥   425¥  (398)

2022

398

(398)

2023

341

(341)

2024

685

(685)

2025
2026 and thereafter
Total

82

Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

Net Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

¥ 27

223

(223)

7,984

(7,496)488¥10,056¥(9,541)¥515

FINANCIAL SECTION

Thousands of U.S. Dollars

Year Ending March 31

Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

Net Deferred Tax
Assets Relating
to Tax Loss
Carryforwards

Less Valuation
Allowances for
Tax Loss
Carryforwards

2021$ 3,905$ (3,654)

2022

3,658

(3,658)

2023

3,128

(3,128)

2024

6,297

(6,297)

2025

2,048

(2,048)2026 and thereafter

73,365(68,879)

4,486

Total

$92,401$(87,664)$4,737$  251

Reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in the accompanying consolidated statement of income for the year ended March 31, 2020, with the corresponding figures for 2019 was
as follows:
2019

2020

Normal effective statutory tax rate

30.6%

30.6%

Per capita levy of local taxes

7.2

6.1

Difference of tax rates for foreign subsidiaries

1.3

3.6

Valuation allowance

5.7

5.4

Share of profit or loss of entities accounted for using equity method

2.9

2.9

Other—net

0.9

1.7

Actual effective tax rate

48.6%

50.3%

13.		 LEASES(1) Lessee
The Group leases certain building, machinery, computer equipment and other assets.
Future rental payments under non-cancelable operating leases at March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen

Due within one year

2020

2019

¥ 4,996¥ 5,1762020$ 45,909

Due after one year

25,672

29,339235,886

Total¥30,668¥34,515$281,795(2) Lessor
The net investments in lease as of March 31, 2020 and 2019, were summarized as follows:
Thousands of
U.S. Dollars

Millions of Yen

Gross lease receivables

2020

2019

¥50,250¥51,4282020$461,724

Unguaranteed residual values

6,544

6,969

60,133

Unearned interest income(3,853)(4,246)(35,402)¥52,941¥54,151$486,455

Investments in leases—current

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

83

FINANCIAL SECTION

Notes to Consolidated Financial Statements

Maturities of lease receivables for finance leases that deem to transfer ownership of the leased property to the lessee as ofMarch 31, 2020, are as follows:Year Ending March 31

Millions of Yen

Thousands of
U.S. Dollars

2021¥  211$1,941

2022

210

1,929

2023

220

2,020

2024

228

2,093

2025

146

1,344

2026 and thereafter
Total

5

45

¥1,020$9,372

Maturities of investments in lease for finance leases that deem not to transfer ownership of the leased property to thelessee as of March 31, 2020, are as follows:
Millions of Yen

Thousands of
U.S. Dollars

2021¥17,688$162,5302022

14,057129,161

Year Ending March 31

2023

9,980

91,705

2024

5,995

55,083

2025

2,237

20,5552026 and thereafter
Total

293

2,690

¥50,250$461,724

The minimum rental commitments under non-cancelable operating leases at March 31, 2020 and 2019, are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Due within one year

2020

2019

2020

¥3,109¥4,024$28,568

Due after one year

3,271

5,621

30,060Total¥6,380¥9,645$58,628

14.		 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES(1) Group Policy for Financial Instruments
The Group uses financial instruments, mainly long-term debt including bank loans and bonds, in order to expand its business based on its investment plan to expand its network. Cash surpluses, if any, are invested in low risk financial assets.
Derivatives are used, not for speculative purposes, but to manage exposure to interest fluctuation risk. Certain consolidated subsidiaries conduct leasing or installment sales operations.
(2)	Nature and Extent of Risks Arising from Financial Instruments and the Risk Management for Financial Instruments
Receivables such as notes and accounts receivable and installment sales receivable are exposed to customer credit risk.
Therefore, the Group minimizes customers’ credit risk by monitoring collections and accrued receivables at due dates.
Marketable and investment securities are mainly equity securities of the companies with which the Group has business
relationships or capital alliances. Such securities are exposed to the risk of market price fluctuations.
Most payment terms of payables such as notes and accounts payable are less than one year.
Short-term bank loans and long-term bank loans are mainly related to a financial business. Bank loans are mainly variable interest rate loans.
Accounts payable and bank loans exposed to liquidity risks are managed by each company of the Group, such as
through fund settlement, bookkeeping, monitoring of the balances outstanding, and managing cash flows.

84

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION(3) Fair Values of Financial Instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted price is not available, otherrational valuation techniques are used instead. The value could vary depending on the technique used.
Fair values of financial instruments at March 31, 2020 and 2019, were as follows:
Millions of Yen
March 31, 2020

Carrying Amount

Fair Value

Difference

Assets:Cash and cash equivalents¥197,227

Trade notes and accounts receivable

213,981   Allowance for doubtful accounts¥197,227(53)
213,928

213,503¥ (425)39,84244,8084,966

Available-for-sale securities

26,466

26,466

Shares of affiliates

8,045

9,229

Trade notes and accounts payable

147,082

147,082

Short-term loans

75,50075,497(3)

Long-term loans

14,00014,0022

Installment sales receivable   Allowance for doubtful accounts   Deferred profit on installment sales

46,088(1,218)(5,028)

1,184

Liabilities:

Millions of Yen
March 31, 2019

Carrying Amount

Fair Value

Difference

Assets:Cash and cash equivalents¥195,955

Trade notes and accounts receivable

220,159   Allowance for doubtful accounts¥195,955(108)
220,051

219,922¥ (129)38,331

43,602

5,271

Available-for-sale securities

33,742

33,742

Shares of affiliates

9,036

9,036

Trade notes and accounts payable

158,938

158,938

Short-term loans

60,80060,789(11)

Long-term loans

19,50019,5077Installment sales receivable   Allowance for doubtful accounts   Deferred profit on installment sales

44,802(1,129)(5,342)

Liabilities:

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

85

FINANCIAL SECTION

Notes to Consolidated Financial Statements

Thousands of U.S. Dollars
March 31, 2020

Carrying Amount

Fair Value

Cash and cash equivalents$1,812,246$1,812,246

Trade notes and accounts receivable

1,966,194

Difference

Assets:   Allowance for doubtful accounts(486)
1,965,708

1,961,806$ (3,902)

366,092

411,72945,637Available-for-sale securities

243,192

243,192

Shares of affiliates

73,92584,803

Installment sales receivable   Allowance for doubtful accounts   Deferred profit on installment sales

423,492(11,196)(46,204)

10,878

Liabilities:
Trade notes and accounts payable

1,351,483

1,351,483

Short-term loans

693,743

693,717(26)

Long-term loans

128,641

128,657

16

Cash and cash equivalents

The carrying values of cash and cash equivalents approximate fair value because of their short maturities.
Trade notes and accounts receivable

The fair values of receivables are measured at the amount to be received at maturity discounted at the Group’s assumed
corporate discount rate. A portion of these receivables is determined by discounting the future cash flows related to thereceivables at the rate of government bonds.
Installment sales receivable

Allowances for doubtful accounts and deferred profit on installment sales are deducted from the fair values of installment
sales receivable, which are determined by discounting the future cash flows related to the installment sales receivable atthe market interest rate.
Marketable and investment securities

The fair values of marketable and investment securities are measured at the quoted market price of the stock exchange forthe equity instruments, and at the quoted price obtained from the financial institution for certain debt instruments. Fairvalue information for marketable and investment securities by classification is included in Note 6.
Trade notes and accounts payable

The fair values of payables, all of which are substantially paid within one year, are measured at the amount to be paid.
Short-term loans and long-term loans

The fair values of short-term bank loans and long-term loans are determined by discounting the future cash flows related tothe debt at the Group’s assumed corporate borrowing rate.
The current portion of long-term bank loans is included in short-term loans in the above table in addition to short-termbank loans on the consolidated balance sheet. Lease payments are not included in long-term loans in the above table.
(4) Financial Instruments Whose Fair Value Cannot Be Reliably Determined
Thousands of
U.S. Dollars

Millions of Yen

86

2020

2019

2020

Shares of affiliates¥2,162¥5,650$19,867

Other

3,637

5,585

33,416

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION(5) Maturity Analysis for Financial Assets and Securities with Contractual Maturities
Millions of Yen
March 31, 2020

Due in One Yearor Less

Due after One Yearthrough Five Years

Due after
Five Years

Cash and cash equivalents¥197,227

Trade notes and accounts receivable

199,214¥14,657

Installment sales receivable

22,46722,242

1,379¥418,908¥36,899¥1,489Due in One Yearor Less

Due after One Yearthrough Five Years

Total¥  110Millions of Yen
March 31, 2019

Due after
Five Years

Cash and cash equivalents¥195,955

Trade notes and accounts receivable

203,228¥16,898

Installment sales receivable

22,667

21,321814¥421,850¥38,219

¥847

Total

¥ 33

Thousands of U.S. Dollars
March 31, 2020

Due in One Yearor Less

Cash and cash equivalents$1,812,246

Trade notes and accounts receivable

1,830,514

Installment sales receivable
Total

Due after One Yearthrough Five Years

Due after
Five Years$134,669$ 1,011

206,441

204,382

12,669$3,849,201$339,051$13,680(6) Maturity Analysis for Long-Term Loans
Millions of Yen

Thousands of
U.S. Dollars

2021¥ 5,500$ 50,538

2022

14,000128,641

Total¥19,500$179,179

Year Ending March 31

Please see Note 8 for annual maturities of long-term loans.

15.		 OTHER COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2020 and 2019, were as follows:
Thousands of
U.S. Dollars

Millions of Yen
2020

2019

2020

Adjustments arising during the year¥(5,579)¥ (132)$(51,265)

Reclassification adjustments to profit or loss

(1,086)(37)(9,977)

Amount before income tax effect(6,665)(169)(61,242)

Unrealized gain on available-for-sale securities:

Income tax effect
Total

1,737

53

15,961¥(4,928)¥ (116)$(45,281)¥  199¥(1,661)$  1,821

Foreign currency translation adjustments:
Adjustments arising during the year
Remeasurements of defined employees' retirement benefit plans:
Adjustments arising during the year¥(2,898)¥ 2,953$(26,628)

Reclassification adjustments to profit or loss

2,029

712

18,639Amount before income tax effect

(869)

3,665

(7,989)

Income tax effect256(1,124)2,355¥  (613)¥ 2,541$ (5,634)

Adjustments arising during the year¥  (274)¥274$ (2,517)

Total other comprehensive (loss) income¥(5,616)¥ 1,038$(51,611)

Total
Share of other comprehensive income of entities accounted for using equity method:

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

87

FINANCIAL SECTION

Notes to Consolidated Financial Statements

16.		 EARNINGS PER SHARE
Basic earnings per share (“EPS”) for the years ended March 31, 2020 and 2019, was as follows:
Millions of Yen
Year Ended March 31, 2020

Basic EPS—Profit attributable to common shareholders

Thousands ofSharesProfit Attributable to Weighted-average
Owners of Parent
SharesYen

U.S. Dollars
EPS¥22,324

393,171¥56.78¥25,682

394,275¥65.14$0.52

Year Ended March 31, 2019

Basic EPS—Profit attributable to common shareholders

17.		 SEGMENT INFORMATION(1) Description of Reportable Segments
The Group identifies operating segments as components of entity for which discrete financial information is available andwhose operating results are regularly reviewed by the Board of Directors in order to make decisions about resources to beallocated to the segments and assess their performance.
The Company, as a pure holding company, forms six reportable segments classified according to business content andmanages them based on these reportable segments. Therefore, the Group has the following six reporting segments:“Delivery,” “BIZ-Logistics,” “Home Convenience,” “e-Business,” “Financial,” and “Autoworks” based on the above policy.
The Group defines the reporting segments as follows:
Delivery:		Small-parcel delivery services such as TA-Q-BIN (door-to-door parcel delivery) and Kuroneko DM-Bin(posting service)
BIZ-Logistics:		
Intercompany logistics services, aimed at the B2B supply-chain management market
Home Convenience:	Lifestyle support services intimately connected with the needs of local markets, such as moving andhousehold effects delivery services
e-Business:		Information services targeted at the business market, including ASP services and the development of
information systems
Financial:		Financial services targeted at business customers and consumers, such as settlement and collection
Autoworks:		Vehicle maintenance services and fuel supply targeted at transport companies(2) Methods of Measurement for the Amounts of Segment Revenues, Segment Profit, Segment Assets, and Other
Items for Each Reportable Segment
The accounting policies of each reportable segment are consistent with those disclosed in Note 2, “Summary of Significant
Accounting Policies.”

88

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

FINANCIAL SECTION(3) Information about Segment Revenues, Segment Profit, Segment Assets, and Other Items
Millions of Yen

2020
Delivery

BIZ-Logistics

Home Convenience

e-Business

Financial

Autoworks

Other

Total

Reconciliation

Consolidated¥1,310,068
56,763¥1,366,831¥143,934
13,837¥157,771¥ 27,806
11,399¥ 39,205¥30,579
43,188¥73,767¥ 77,073
2,815¥ 79,888¥24,923
30,976¥55,899¥15,764
66,018¥81,782¥1,630,147
224,996¥1,855,143¥     —
(224,996)¥(224,996)¥1,630,147¥   27,250
687,610¥  4,976
74,998¥(10,062)
12,649¥10,669
47,452¥  6,323
245,235¥ 4,295
29,567¥36,045
22,458¥   79,496
1,119,969¥ (34,795)(19,229)¥   44,701
1,100,740

41,586

3,301

433

3,231

4,725

678

842

54,796287

55,083

440

1,550

1,990

8,045

10,03541,852

3,184

53,855

1,179

55,034

Segment revenues:Segment revenues
from customers
Intersegment revenues
Total segment revenues
Segment profit (loss)
Segment assets¥1,630,147

Other:
Depreciation and amortization
Investment in entities  accounted for using
equity method
Increase of tangible and   intangible fixed assets

325

1,884

4,334

1,639

637

Millions of Yen

2019Delivery

BIZ-Logistics

Home Convenience

e-Business

Financial

Autoworks

Other

Total

Reconciliation

Consolidated¥1,297,223
64,137¥1,361,360¥147,437
12,282¥159,719¥33,405
12,623¥46,028¥26,593
41,153¥67,746¥ 79,967
2,856¥ 82,823¥25,985
31,416¥57,401¥14,705
46,298¥61,003¥1,625,315
210,765¥1,836,080¥     —
(210,765)¥(210,765)¥1,625,315¥   40,788
718,911¥  3,329
77,463¥ (7,765)
12,281¥ 8,740
44,136¥  6,245
257,207¥ 4,434
29,379¥19,373
22,386¥   75,144
1,161,763¥ (16,798)(38,103)¥   58,346
1,123,660

37,221

2,575

515

3,531

6,000

645

622

51,109238

51,347

426

4,836

5,262

9,252

14,51456,896

5,212

79,707

132

79,839Segment revenues:Segment revenues
from customers
Intersegment revenues
Total segment revenues
Segment profit (loss)
Segment assets¥1,625,315

Other:
Depreciation and amortization
Investment in entities  accounted for using
equity method
Increase of tangible and   intangible fixed assets

764

1,571

7,104

513

7,647

Thousands of U.S. Dollars

2020
Delivery

BIZ-Logistics

Home Convenience

e-Business

Financial

Autoworks

Other

Total

Reconciliation

Consolidated$12,037,746
521,574$12,559,320$1,322,562
127,136$1,449,698$255,497
104,740$360,237$280,980
396,841$677,821$  708,195
25,866$  734,061$229,006
284,631$513,637$144,850
606,620$751,470$14,978,836
2,067,408$17,046,244$       — $14,978,836(2,067,408)$(2,067,408) $14,978,836$   250,390
6,318,205$   45,720
689,134$ (92,456)
116,225$ 98,030
436,016$   58,099
2,253,372$ 39,465
271,683$331,210
206,354$   730,458
10,290,989$  (319,716) $   410,742(176,686) 10,114,303

3,979

29,68643,420

6,228

7,737

503,498

2,640

506,138

18,28373,925

92,208494,853

10,833505,686

Segment revenues:Segment revenues
from customers
Intersegment revenues
Total segment revenues
Segment profit (loss)
Segment assets
Other:
Depreciation and amortization

382,115

30,333

Investment in entities  accounted for using
equity method

4,043

14,240

Increase of tangible and   intangible fixed assets

384,567

29,2582,986

17,311

39,821

15,0595,851

Notes: ”Other” includes JITBOX charter services and shared services.
	Segment revenues and segment profit of “Other” include dividends for the years ended March 31, 2020 and 2019, of ¥37,024 million ($340,200 thousand) and ¥18,594 million, respectively, which the Company received from its subsidiaries as a pure holding company.
Reconciliations are as follows:		 (1) R econciliations of segment profit for the years ended March 31, 2020 and 2019, of ¥34,795 million ($319,716 thousand) and ¥16,798 million, respectively, are intersegment eliminations and others.
		 (2) R econciliations of segment assets at March 31, 2020 and 2019, of ¥19,229 million ($176,686 thousand) and ¥38,103 million, respectively, include intersegment
eliminations of assets and liabilities of ¥151,149 million ($1,388,855 thousand) and ¥184,580 million, and corporate assets which are not allocated to each reporting
segment of ¥131,920 million ($1,212,169 thousand) and ¥146,477 million, respectively.
		 (3) R econciliations of investments in entities accounted for using equity method at March 31, 2020 and 2019, of ¥8,045 million ($73,925 thousand) and ¥9,252 million,
respectively, are investments which are not allocated to each reporting segment.
		 (4) R econciliations of increases of tangible and intangible fixed assets at March 31, 2020 and 2019, of ¥1,179 million ($10,833 thousand) and ¥132 million, respectively,
include the Company’s capital investment.
Segment profit is reconciled with operating profit in the consolidated statement of income.
	As described in Note 3, “Accounting Changes,”certain subsidiaries, which apply International Financial Reporting Standards, adopted IFRS 16 Leases (IFRS 16) from thefiscal year ended March 31, 2020. In line with this adoption, lessees, in principle, recognize all leases as assets and liabilities on the balance sheet. In addition, the effect of
this application on segment information is immaterial.

YAMATO HOLDINGS CO., LTD.
Integrated Report 2020

89

FINANCIAL SECTION

Notes to Consolidated Financial Statements[Related Information about Reporting Segments](1) Information about Products and Services
Operating revenues from customers for the years ended March 31, 2020 and 2019, were as follows:
Millions of Yen
2019

2020
TA-Q-BIN

Kuroneko DM-Bin¥1,164,287

Other¥61,416¥404,444

Total

TA-Q-BIN¥1,630,147¥1,139,438

Kuroneko DM-Bin

Other¥69,678¥416,199

Total¥1,625,315

Thousands of U.S. Dollars
2020
TA-Q-BIN$10,698,219

Kuroneko DM-Bin

Other$564,329

Total$3,716,288 $14,978,836(2) Information about Geographical Areas
Operating revenues for the years ended March 31, 2020 and 2019, were as follows:
Millions of Yen
2019

2020
Japan

North America¥1,599,373

Other¥11,517¥19,257

Total

Japan

¥1,630,147¥1,595,703

North America

Other¥12,212¥17,400

Total¥1,625,315

Thousands of U.S. Dollars
2020
Japan

$14,696,063

North America

Other$105,829

Total$176,944 $14,978,836

Property, plant and equipment at March 31, 2020 and 2019, were as follows:
Millions of Yen
2019

2020
Japan

North America¥421,921

Other

¥403

Total

¥1,512

Japan

North America¥427,384¥423,836

Other

¥385

¥1,149Total¥428,918

Thousands of U.S. Dollars
2020
Japan

North America$3,876,881$3,704

Other

Total

$13,889$3,894,474(3) Information about Loss on Impairment of Long-Lived Assets by Reporting Segments
Loss on impairment of long-lived assets by reporting segments for the years ended March 31, 2020 and 2019, were as
follows:
Millions of Yen
2020

Loss on impairmentof long-lived assets

Delivery

BIZ-Logistics

Home
Convenience

¥267

¥678

¥46

e-Business

Financial

Autoworks

Other

Total

¥991

Eliminations or
Corporate
Consolidated¥991

Millions of Yen
2019

Loss on impairmentof long-lived assets

Delivery

BIZ-Logistics

Home
Convenience

¥546

¥265

¥1,276e-Business

Financial

Autoworks

Other

Total

¥2,087

Eliminations or
Corporate
Consolidated¥2,087

Thousands of U.S. Dollars
2020

Loss on impairmentof long-lived assets

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Delivery

BIZ-Logistics

Home
Convenience$2,450$6,225$425

e-Business

Financial

Autoworks

Other

Total

$9,100Eliminations or
Corporate
Consolidated$9,100FINANCIAL SECTION

18.		 SUBSEQUENT EVENTS
a. Transactions under Common Control
At the meeting held on January 23, 2020, the Board of Directors resolved to reorganize the Company’s management structure from that of a pure holding company to that of an operating company, upon conducting an absorption-type merger andabsorption-type split involving eight consolidated subsidiaries, including Yamato Transport Co., Ltd., on April 1, 2021.
On the other hand, to avoid problems such as delays in various procedures due to the effect of the spread of COVID19, resolutions were made at a meeting of the Board of Directors held on May 15, 2020, to change the details of absorption-type merger and absorption-type split, to remove the Company from the parties of the said reorganization, and to
perform reorganization involving the absorption-type merger and absorption-type split between Yamato Transport Co.,
Ltd., which is a consolidated subsidiary of the Company, and seven consolidated subsidiaries, including Yamato Logistics
Co., Ltd. and Yamato Global Logistics Japan Co., Ltd.
Outline of Business Combination(1) Absorption-type merger in which Yamato Transport Co., Ltd. is the surviving company
Name and business of the companies involved in the business combination
Surviving company
Name:
Yamato Transport Co., Ltd. (“YTC”)
Business: Small parcel delivery services for the general public and corporations (TA-Q-BIN, Kuroneko DM-Bin, etc.)
Dissolving company
Name:
Yamato Global Express Co., Ltd. (“YGX”)
Business: Small parcel delivery services for corporations (domestic air cargo transport business, etc.)
Name:
Yamato Logistics Co., Ltd. (“YLC”)
Business:	Logistics services for corporations (total support services including logistics, medical products distribution services, maintenance support service, and recall support service)
Name:
Yamato Global Logistics Japan Co., Ltd. (“YGL”)
Business:	International air cargo service, handling of marine cargo, import/export customs clearance services, overseas
lifestyle support services including international moving, fine art transport business
Name:
Yamato Packing Service Co., Ltd. (“YPC”)
Business: Packing / cargo transportation services
Name:
Yamato Packing Technology Institute Co., Ltd. (“YPTI”)
Business: R&D and sale of packaging containers and materials
Name:
Yamato Financial Co., Ltd. (“YFC”)
Business:	Settlement services targeting business customers and general consumers (TA-Q-BIN Collect service, Internet
total settlement service, etc.)
Date of the business combination
April 1, 2021 (planned)
Legal form of the business combination
Absorption-type merger with YGX, YLC, YGL, YPC, YPTI and YFC as dissolving companies and YTC as the surviving
company
Name of the company after the business combination
The name will not change.

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FINANCIAL SECTION

Notes to Consolidated Financial Statements(2) Absorption-type split in which Yamato Transport Co., Ltd. is the successor company
Name and content of business involved in the business combination
Name:
Web-based Mail Order Solution Business of Yamato System Development Co., Ltd. (“YSD”)
Content:	Offering a package consisting not only of services related to launch of a mail order business, but also, tofully support the customer’s business, creating a tailor-made IT system and managing it
Name:Content:

Regional Operation Management Department of YSD
Sales department

Date of the business combination
April 1, 2021 (planned)
Legal form of the business combination
Absorption-type split with YSD as the absorbed company and YTC as the successor company
Name of the company after the business combination
The name will not change.
(3) Outline and purpose of business combination
The Company has formulated the Transformation Plan “YAMATO NEXT100.” This plan has been formulated as a granddesign, which is the framework of the next medium-term management plan, based on the results and challenges of thecurrent medium-term management plan “KAIKAKU 2019 for NEXT100” and changes in the external environment.
Based on this plan, in April 2021, the Company will shift its current management structure into a management structure
comprising four business divisions (Retail, Corporate, Global SCM, and EC) and four function divisions, with the objectiveof reforming the current system of partial optimization of functional units to a fully optimized organization structured according to customer segments to further improve the speed of management.
Outline of accounting treatment applied
The transaction will be accounted for as a transaction under common control in accordance with ASBJ Statement No. 21,“Accounting Standard for Business Combinations,” and ASBJ Guidance No. 10, “Guidance on Accounting Standards for
Business Combinations and Business Divestitures.”b. Appropriations of Retained Earnings
The following appropriation of retained earnings at March 31, 2020, was approved at the Company’s Board of Directors
meeting held on May 20, 2020:

Year-end cash dividends, ¥ 26.00 ($0.24) per share*

Millions of Yen

Thousands of
U.S. Dollars¥10,016$92,030* The dividend per share of ¥26.00 ($0.24) includes commemorative dividends of ¥10.00 ($0.09) for the 100th anniversary since the Company’s founding.

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FINANCIAL SECTION

Independent Auditor’s Report

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93

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Independent Auditor’s Report

94

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FINANCIAL SECTION

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