The Sumitomo Warehouse Co., Ltd.
Consolidated Balance Sheets (Unaudited)
30 September 2007 and 2008

Millions of yen
ASSETS
Current assets:
Cash and cash equivalents (Note 4)･･･・･････････・･･･
Short-term investments (Note 5)･･･・･････････・･･････
Receivables
Trade notes and accounts･･･・･････････・･････････
Other･･･・･････････・･････････・･･･････････････・･
Allowance for doubtful receivables･･･・･････････・

2007
\

(

Real estate inventories (Note 3)･･････・･････････・･･･
Deferred tax assets･･････・･････････・･･･････････････
Other･･･・･････････・･････････・･････････････････・･･
Total current assets･･･・･････････・･････････・･･･････
Investments and other non-current assets:
Investment securities (Notes 4)･･･・･････････・･･･････
Long-term loans receivable･･･・･････････・･････････・
Deferred tax assets･･････・･････････・･･･････････････
Other (Notes 4)･･･・･････････・･････････・･････････・･
Allowance for doubtful receivables･･･・･････････・･･･(

Property and equipment:
Land･･････・･････････・･････････・･････････・･･・････
Buildings and structures･･･・･････････・･････････・･･･
Machinery and equipment･･･・･････････・･････････・･
Construction in progress･･･・･････････・･････････・･･･
Other･･･・･････････・･････････・･････････････････・･･
Less accumulated depreciation･･･・･････････・･･･････(

Intangibles:
Goodwill･･･・･････・･････････・･････････････・･･・･･･
Leasehold･･･・･････････・･･･････・･････・･････････・･･
Software･･･・･･･････・･････････・･････････・･････････
Other･･･・･････････・･･･・･････････・･････････・･･････\

See accompanying notes.

12,288993
18,9052,607
106 )
21,406
321
1,012
1,794
37,814

103,895
347
155
6,795
269 )
110,923

45,963
154,619
24,845
3,888－
229,315
110,165 )
119,150

2,910
3,514
352
1,861
8,637
276,524

2008
\

(

(

(

\

13,4801,383
18,3742,526
98 )
20,802
320
1,075
1,484
38,54462,972
826
215
6,601
248 )
70,366

46,335
163,866
26,3501,067
7
237,625
114,889 )
122,736

2,586
3,592
815
2,111
9,104
240,750

Thousands of
U.S. dollars (Note 1)
2008$

130,154
13,353
177,407
24,389946 ）
200,850
3,090
10,37914,328372,154

(

(

(

$

608,014
7,975
2,076
63,7352,395 ）
679,405447,379
1,582,176
254,417
10,30268
2,294,342
1,109,288 )
1,185,054

24,96934,682
7,869
20,38287,902
2,324,515

The Sumitomo Warehouse Co., Ltd.
Consolidated Balance Sheets (Unaudited)
30 September 2007 and 2008

LIABILITIES AND NET ASSETS
Current liabilities:
Bank loans (Note 5)･･･・･････････・･････････・･･･････････ \Long-term debt due within one year (Note 5)･･･・･････････
Payables :Trade notes and accounts ･･･・･････････・･････････・･･･
Other･････・･････････・･････････・･････････・････････・･

Thousands of
U.S. dollars (Note 1)
2008

Millions of yen
2007
2008
28,338
3,009

\

9,243
2,937

$

89,24428,358

10,744
3,702

10,533
3,617

101,699
34,924

14,44614,150136,623

Income taxes payable･･･・･････････・････････････・･･･････
Accrued employees' bonuses･･･・･････････・･････････・･･･
Other･･･・･････････・･････････・･･･・･････････・･････････・
Total current liabilities･･･・･････････・･････････・･･････

2,022
1,581
1,991
51,387

1,818
1,592
2,036
31,776

17,553
15,371
19,658306,807

Long-term debt due after one year (Note 5)･･･・･････････・

25,04553,852519,958

Deferred tax liabilities･･･・･････････・･････････・･････････・

33,855

16,710161,340

Employees' retirement benefits･･･・･････････・･････････・･･

3,373

3,210

30,994

Directors' and corporate auditors' retirement benefits･･･・

69

72

695

Deposits on contracts･･･・･････････・･････････・･････････・･

14,20913,572131,042

Other non-current liabilities･･･・･････････・･････････・･････

920

874

8,438

21,823
19,18060,594

21,823
19,17863,526

210,708
185,169
613,363

Contingent liabilities (Note 7)
Net assets:
Shareholders' equity:
Common stock
Authorized － 395,872,000 shares
Issued－ 195,936,231 shares at 30 September 2007
－ 195,936,231 shares at 30 September 2008 ･Capital surplus･･･・････････････・･････････・･････････・･･･
Retained earnings･･･・････････････・･････････・･････････・
Treasury stock, at cost
－ 1,484,245 shares at 30 September 2007
－ 10,471,697 shares at 30 September 2008 ･･･ (Total shareholders' equity･･･・･････････・･････････・････
Valuation and translation adjustments:
Unrealized gains on investment securities･･･・･････････・･･
Deferred gains and losses on hedges･･･・･････････・･･･････
Foreign currency translation adjustments ･･･・･････････・･･
Total valuation and translation adjustments･･･・････････
Subscription rights to shares･･･・･････････・･････････・････
Minority interests in consolidated subsidiaries･･･・･･･････
Total net assets･･･・･････････・･････････・･････････・･･･\

See accompanying notes.

1,304 )
100,293
42,50820
651
43,17932
4,162
147,666
276,524(\

6,118 )
98,40917,91519
16
17,95064
4,261
120,684
240,750($

59,071 )
950,169
172,975183
155
173,313
618
41,141
1,165,241
2,324,515

The Sumitomo Warehouse Co., Ltd.
Consolidated Statements of Income (Unaudited)
Six months ended 30 September 2007 and 2008

Thousands ofMillions of yen
2007
2008
Net sales･････・･････････・･････････・･････････・････････・････････ \Cost of sales･････・･････････・･････････・･････････・････････・･････
Selling, general and administrative expenses･････・･････････・･･･

68,05060,361
3,566

Operating income･････・･････････・･････････・･････････・････････

4,123

Other income (expenses):
Interest and dividend income･････・･････････・･････････・･･･････
Interest expense･････・･････････・･････････・･････････・････････・ (Equity in earnings of affiliates･････・･････････・･････････・･･････
Gain on sale of investment securities･･・･････････・･････････・･･･
Loss on write-down of investment securities･･・･････････・･･････ (Provision of allowance for doubtful receivables ･････・･････････・ (Loss on disposal of property and equipment･････・･････････・････ (Impairment losses on fixed assets･･・･････････・･････････・･･････ (Cost of compensation for damage･･・･････････・･････････・･･････ (Loss on dissolution of the welfare pension fund of consolidated
subsidiaries･･・･････････・･････････・････････・･････････・･････ (Other, net･････・･････････・･････････・･････････・････････・･････
Income before income taxes and minority interests･････・･･･････
Income taxes
Current･････・･････････・･････････・･････････・････････・･･･････
Deferred･････・･････････・･････････・･････････・････････・･･････

718
351 )
90
856
44 )
45 )
39 )
－)
410 )
206 )
85

\

U.S. dollars (Note 1)

2008

69,542
61,921
3,757
3,864

(

(
(
(
(
(
(

4,777

783
452 )
93
－
216 )
－)
30 )
67 )
－)
－)
57

Minority interests･････・･････････・･････････・･････････・････････
Net income･････・･････････・･････････・･････････・････････・･･････ \

\

1,715
123 )
1,592
148
2,292

Basic net income per share･････・･････････・･････････・･････････・ \Dilutive net income per share･････・･････････・･････････・･･･････ \

13.74
13.67

Yen
\
\

12.23
12.17

(

671,449
597,866
36,27537,308

(

(
(
(
(
(
(

4,032

1,805
76
1,881
225
2,671

See accompanying notes.

$

7,560
4,364 )
898－
2,086 )
－)
290 )
647 )
－)
－)
551
38,930($16,5591,188 )
15,371
1,429
22,130U.S. dollars (Note 1)

$
$

0.12
0.12

The Sumitomo Warehouse Co., Ltd.
Consolidated Statements of Changes in Net Assets (Unaudited)
Six months ended 30 September 2007 and 2008
Millions of yen
Shareholders' equity

Commonstock
Balance at 31 March 2007\

Conversion of convertiblebonds
Net income
Employee welfare fund21,270Capitalsurplus\553

Retainedearnings

18,711\

58,862

(
(

2,671
1)

\

47,009\147\

47,162(4,501 )

14

504

(

3,983 )

2,916(

4,501 )

14

504

(

3,983 )

100,293\

42,508651\

43,179(553\

21,823

19,180

Subscription
rights tosharesMinority
interests inconsolidated
subsidiaries

\

\

32

960 )

3,801

1,732
\

60,594Total
net
assets\148,372
1,106(

Increase resulting from a
newly consolidated subsidiary

2,671
1)
22

Cash dividends at \5.0 per
share

(

Net increase in treasury stock

960 )
78

\

32

\

(
162

469
\

97,377

6

\

361

(

3,622 )

361

(

706 )

4,162

\

147,666

2,671
1)
22

84 )

Conversion of convertiblebonds
Net income
Employee welfare fund

See accompanying notes.

\

22

Net increase in treasury stock

Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2007

1,466 )

Total
valuation andtranslation
adjustments

1,106
(

Cash dividends at \5.0 per
share

Balance at 31 March 2007\(

Valuation and translation adjustments
DeferredForeign
gains orcurrency
losses ontranslation
hedgesadjustments

553

Increase resulting from a
newly consolidated subsidiary

Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2007

Treasury
stock

Total
shareholders'equityUnrealized
gains oninvestment
securities

78

162
\(

1,304 )

960 )

\

\

20

\

The Sumitomo Warehouse Co., Ltd.
Consolidated Statements of Changes in Net Assets (Unaudited)
Six months ended 30 September 2007 and 2008
Millions of yen
Shareholders' equity

Commonstock
Balance at 31 March 2008
Net income
Increase resulting fromapplication of PITF No.18(Note 2)
Cash dividends at \5.0 per
share
Net increase in treasurystock
Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2008

Balance at 31 March 2008
Net income
Increase resulting fromapplication of PITF No.18(Note 2)
Cash dividends at \5.0 per
share
Net increase in treasurystock
Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2008
See accompanying notes.

\

21,823

Capitalsurplus\Retainedearnings

19,179\((\21,823(

1)\

19,178

Minority
interests inconsolidated
subsidiaries

\

\

4,218

956 )

\

352

\

20,376

3,003 )(

2,084 )

(

6)

(

336 )

(

2,426 )

(

6)

(

336 )

(

2,426 )

16\

17,950

(

956 )

(

3,004 )(

3,003 )(

1,658 )(

2,084 )

63,526\(

6,118 )\

98,409\17,915

124,713

(

956 )

(

3,004 )

1243(

2,371 )

1243(

4,029 )

4,261\

120,684\

19,999

1,346

10

64

\

100,067

10

Total
net
assets
\

\

10

(

\

3,115 )

Total
valuation andtranslation
adjustments

2,292

2,292

\

\(

Valuation and translation adjustments
DeferredForeign
gains orcurrency
losses ontranslation
hedgesadjustments

2,292

1)

Subscription
rights toshares52

62,180Treasury
stock

Total
shareholders'equityUnrealized
gains oninvestment
securities

\

25

19

\

\

The Sumitomo Warehouse Co., Ltd.
Consolidated Statements of Changes in Net Assets (Unaudited)
Six months ended 30 September 2007 and 2008
Thousands of U.S. dollars (Note 1)
Shareholders' equity

Commonstock
Balance at 31 March 2008$

210,708

Capitalsurplus$185,179

Retainedearnings$

Net income

600,366

Balance at 31 March 2008

(
(

(
$

210,708$

Subscription
rights tosharesMinority
interests inconsolidated
subsidiaries

$

$

502

40,726$

Cash dividends at \5 .0(U.S.$0.05) per share
Net increase in treasurystock
Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2008
See accompanying notes.

9,230 )

(

58 )

(

58 )

29,005 )16,008 )(20,122 )613,363$(

59,071 )$

950,169$

172,975(

9,230 )(

29,005 )415(

22,893 )

116

415

(

38,901 )41,141

20,122 )

(

(

116

$

(

9,230 )

28,995 )97

618

28,995 )((22,130$193,097

12,997$ 1,204,142

Increase resulting fromapplication of PITF No.18(Note 2)$966,177

97

Total
net
assets

Net income

$

97

(

10 )

30,076 )22,13010 )

185,169$(

Total
shareholders'equity22,130

Increase resulting fromapplication of PITF No.18(Note 2)
Cash dividends at \5 .0(U.S.$0.05) per share
Net increase in treasurystock
Net changes in items otherthan shareholders' equity
Total changes in items
during the period
Balance at 30 September
2008

Treasurystock$ 1,165,241

Valuation and translation adjustments
DeferredForeign
gains orcurrency
losses ontranslation
hedgesadjustments

Unrealized
gains oninvestment
securities

$

$

241

183

$

$

Total
valuation andtranslation
adjustments

3,399

$

196,737(

3,244 )(

23,424 )(3,244 )(

23,424 )155$

173,313

The Sumitomo Warehouse Co., Ltd.
Consolidated Statements of Cash Flows (Unaudited)
Six months ended 30 September 2007 and 2008

2007
Cash flows from operating activities:
Income before income taxes and minority interests･･･・･････････・･･･ \Adjustments to reconcile income before income taxes andminority interests to net cash provided by operating activities:
Depreciation and amortization･･･・･････････・･･･・･････････・･･
Impairment loss on fixed assets・・・・・・・・・・・・・・・・・・・・・・・・・・
Amortization of goodwill･･････・･････････・･･･････････・･･････
Increase（decrease） in allowance for doubtful receivables･･･・･･
Decrease in employees’ retirement benefits･･･・･････････・･･･・
Decrease in directors’ and corporate auditors’retirement
benefits･･･・･････････・･･･・･････････・･････････・･････････・･
Increase in accrued employees’bonuses･･･・･････････・･･･・････
Interest and dividend income･･･・･････････・･･･・･････････・･･･
Interest expense･･･・･････････・･･･・･････････・･････････・･････
Equity in earnings of affiliates･･･・･････････・･･･・･････････・･･
Loss on disposal of property and equipment･･･・･････････・･･･・
Gain on sale of investment securities･･･・･････････・･･･・･･････
Loss on write-down of investment securities･･･・･････････・･･･・
Increase in notes and accounts receivable･･･・･････････・･･･・･･
Increase（decrease） in notes and accounts payable･･･・･････････
Other, net･･･・･････････・･･･・･････････・･････････・･････････・
Subtotal･･･・･････････・･･･・･････････・･････････・･････････・･･
Interest and dividends received･･･・･････････・･･･・･････････・･
Interest paid･･･・･････････・･･･・･････････・･････････・････････
Income taxes paid･･･・･････････・･･･・･････････・･････････・･･･
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of time deposits maturing after three months･･･・･･･････
Proceeds from time deposits maturing after three months･･･・･･･････
Acquisition of property and equipment･･･・･････････・･･･・･････････
Proceeds from sale of property and equipment･･･・･････････・･･･・･･･
Acquisition of intangible fixed assets･・･････････・･･･・･････････・･･･
Acquisition of securities･･･・･････････・･･･・･････････・･････････・･･
Proceeds from sale and redemption of securities･･･・･････････・･･･・･
Advances on loans receivable･･･・･････････・･･･・･････････・････････
Collection of loans receivable･･･・･････････・･･･・･････････・･･･････
Other, net･･･・･････････・･･･・･････････・･････････・･････････・･････
Net cash used in investing activities･･･・･････････・･･･・･････････・････
Cash flows from financing activities:
Proceeds from short-term debt･･･・･････････・･･･・･････････・･･･････
Repayments of short-term debt･･･・･････････・･･･・･････････・･･････
Proceeds from long-term debt･･･・･････････・･･･・･････････・･･･････
Repayments of long-term debt･･･・･････････・･･･・･････････・･･･････
Purchase of treasury stock･･･・･････････・･･･・･････････・･････････・･
Dividends paid･･･・･････････・･･･・･････････・･････････・･････････・･
Other, net･･･・･････････・･･･・･････････・･････････・･････････・･････
Net cash provided by financing activities･･･・･････････・･･･・･････････
Effect of exchange rate changes on cash and cash equivalents･･･・･････
Net increase (decrease) in cash and cash equivalents･･･・･････････・･･･
Cash and cash equivalents at beginning of period･･･・･････････・･･･・･･
Cash and cash equivalents of a newly consolidated subsidiary・・・・・・・・
Cash and cash equivalents at end of period･･･・･････････・･･･・････････ \See accompanying notes.

Thousands of
U.S.dollars(Note 1)
2008

Millions of yen
2008

4,777

\

4,032

$

38,930

2,771
－
162
34
(315)

3,121
67
162
(65)
(96)

30,134
647
1,564
(628)
(927)

(129)
52
(718)
351
(90)
15
(856)
44
(462)
(199)
(40)
5,397
724
(338)
(2,173)
3,610

(14)
68
(783)
452
(93)
30
－
216
(457)
340
(48)
6,932
778
(413)
(2,264)
5,033

(135)
657
(7,560)
4,364
(898)
290
－
2,086
(4,412)
3,283(464)
66,931
7,512(3,988)(21,860)
48,595(124)
40(5,682)
49
(460)
(678)
766
(33)
32
(540)
(6,630)(437)
351(5,020)
19
(671)
(83)
－
(316)
29
(65)
(6,193)(4,219)3,389(48,470)
183(6,479)
(801)

2,077
(2,073)3,600(1,701)
(16)
(960)
(59)
868
297
(1,855)
13,977166
12,288

5,057(4,226)
7,400(1,133)(3,007)
(957)
(52)
3,082
(160)
1,762
11,718－13,48048,827(40,803)71,449(10,939)(29,034)(9,240)(502)
29,758(1,545)17,013
113,141－
130,154\－(3,051)
280(627)(59,795)$

The Sumitomo Warehouse Co., Ltd.
Notes to Consolidated Interim Financial Statements (Unaudited)
30 September 2007 and 2008
1. Basis of Presenting Consolidated Interim Financial Statements(a)

The accompanying consolidated interim financial statements of the Sumitomo Warehouse Co., Ltd. (the “Company”) and its
consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments andExchange Law and its related accounting regulations and in conformity with accounting principles generally accepted in Japan(“Japanese GAAP”), which are different in certain respects from the application and disclosure requirements of International
Financial Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted
accounting principles prevailing in the respective countries of domicile. The accompanying consolidated interim financial statements
have been restructured and translated into English, with some expanded descriptions and the inclusion of consolidated statements ofchanges in net assets from the consolidated interim financial statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange
Law. Some supplementary information included in the statutory Japanese language consolidated interim financial statements, but notrequired for fair presentation, is not presented in the accompanying consolidated interim financial statements.
In preparing the accompanying consolidated interim financial statements, certain reclassifications have been made in the previous
consolidated interim financial statements to conform to the presentation for the current six month period.

(b)

The translation of the Japanese yen amounts into U.S. dollars amounts is included solely for the convenience of readers outside Japan,
using the prevailing exchange rate at 30 September 2008, which was ¥103.57 to U.S. $1.00. The translations should not be construed
as representations that the Japanese yen amounts have been, could have been or could in the future be converted into U.S. dollars at
this or any other rate of exchange.

2. Significant Accounting Policies(a)Consolidation
The consolidated financial statements include the accounts of the Company and 37 and 35 significant subsidiaries for the six
months ended 30 September 2007 and 2008, respectively. All significant intercompany transactions and accounts have been
eliminated. The fiscal six-month end of all the consolidated foreign subsidiaries and one consolidated domestic subsidiary is 30 Juneand 31 August, respectively. Significant transactions arising from the use of different fiscal six-month ends are reflected in the
consolidated financial statements.
In the elimination of investments in subsidiaries, the assets and liabilities of each subsidiary, including the portion
attributable to minority shareholders, are evaluated using the fair value at the time the Company acquired control of therespective subsidiary.
The equity method is applied to 5 affiliates for the six months ended 30 September 2007 and 2008, respectively. Other
unconsolidated subsidiaries and affiliates are not accounted for by the equity method because they are immaterial.
Effective from the consolidated interim financial statement for six months ended 30 September 2008, the “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (Practical
Issues Task Force (PITF) No. 18, 17 May 2006) is applied and necessary revisions have been made in terms of consolidated
closing.

－1－

(b)

Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the rate at the end ofeach six-month period, and the resulting gains and losses are recognized in the statements of income.
The financial statements of consolidated foreign subsidiaries and affiliates are translated into Japanese yen at the rate at theend of each six-month period, except that shareholders’ equity accounts are translated at historical rates.

(c)

Allowance for doubtful receivables
The Company and its consolidated subsidiaries (the “Companies”) provide for doubtful accounts principally at an amountcomputed based on the actual ratio of bad debts in the past plus estimated uncollectible amounts of certain individual
receivables.

(d)Securities
The Companies classify securities as 1) securities held for trading purposes (hereafter, “trading securities”), 2) debt
securities intended to be held to maturity (hereafter, “held-to-maturity debt securities”), 3) equity securities issued bysubsidiaries and affiliates or 4) all other securities that are not classified in any of the above categories (hereafter,“available-for-sale securities”). The Companies have no trading securities. Held-to-maturity debt securities are stated atamortized cost. Equity securities issued by subsidiaries and affiliates which are not consolidated or accounted for using theequity method are stated at moving average cost. Available-for-sale securities with available fair market values are stated atfair market value. Unrealized gains and losses on these securities are reported, net of applicable income taxes, as a separate
component of net assets. Realized gain or loss on the sale of such securities is computed using moving average cost. Other
securities with no available fair market value are stated at moving average cost.
If the market value of held-to-maturity debt securities and available-for-sale securities declines significantly, the securities are stated atfair market value and the difference between the fair market value and the carrying amount is recognized as loss in the period of thedecline. If the fair market value of equity securities issued by unconsolidated subsidiaries and affiliated companies not on the equity
method is not readily available, the securities should be written down to net asset value with a corresponding charge in the income
statement in the event net asset value declines significantly.

(e) Derivative financial instruments and hedging
1)

Derivatives
Derivatives are revaluated by the market value method.

2)

Hedge accounting
The Companies use the deferred hedge accounting method. However, when foreign exchange forward contracts meet certain
conditions, accounts receivable and accounts payable covered by these contracts are translated by using the contract rates. In
addition, when an interest rate swap contract meets certain conditions, the net amount to be paid or received under the contract is
added to or deducted from the interest on the hedged items.

3)

4)

Hedging instruments and hedged items
Hedging instruments

Hedged items

Foreign exchange forward contracts

Accounts receivable and accounts payable in foreign
currencies

Interest rate swap contracts

Bank loans

Crude oil average swap
Hedging policy

Fuel prices

The Companies utilize financial instruments to hedge risk of fluctuations in currency exchange rates, interest rates and fuelprices in accordance with internal policies and procedures.

－2－

5)

Method for assessing hedge effectiveness
The Companies evaluate the effectiveness of their hedging activities by comparing the cumulative changes in fair value or the
cumulative changes in cash flows on hedging instruments and the related hedged items. However, when a foreign exchange
forward contract and an interest rate swap contact meet certain criteria for applying exceptional methods, an assessment ofhedge effectiveness is not performed.

(f)Inventories
Real estate for sale, real estate for sale in process and work in process are stated at specific cost. Supplies are stated at moving averagecost.

(g) Property and equipment
Property and equipment are carried at cost. The Company and its consolidated domestic subsidiaries provide fordepreciation of property and equipment mainly by the declining balance method over the estimated useful life of the asset.
However, depreciation for buildings, except building fixtures, acquired after 31 March 1998 is computed by the straight-line
method.
Consolidated foreign subsidiaries compute depreciation on the straight-line method over the estimated useful life of theasset.
(h) Finance leases
With regard to finance leases without ownership transfer, the Company and certain consolidated subsidiaries have formerly
applied accounting treatment consistent with that for rental transactions. However, with the “Accounting Standard for Lease
Transactions” (ASBJ Statement No. 13, First Committee of the Business Accounting Council, 17 June 1993; amended 30
March 2007) and the “Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No. 16, 18 January 1994
(Accounting System Committee, Japanese Institute of Certified Public Accountants); amended 30 March 2007) becoming
available for application to consolidated interim financial statements for fiscal years beginning on or after 1 April 2008, theCompany and certain consolidated subsidiaries apply these accounting standards to lease contracts that begin on or after 1
April 2008, using accounting treatment consistent with regular purchase transactions.
With regard to depreciation charges applicable to lease assets under finance leases without ownership transfer, the Company
and certain consolidated subsidiaries use the straight-line method with the contract term as the useful life of the lease asset andwith a residual value of zero.
For finance leases without ownership transfer whose start-date predates the first applicable fiscal year, the Company andcertain consolidated subsidiaries continue to use accounting treatment consistent with ordinary rental transactions.
(i)

Software costs
The Companies depreciate software using the straight-line method over the estimated useful life of 5 years.

(j)

Income taxes
The Companies recognize tax effects of temporary differences between the carrying amounts of assets and liabilities for tax andfinancial reporting. 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 of assets and liabilities for financial reporting purposes and theamounts used for income tax purposes.

(k) Bonuses
The Company and its consolidated domestic subsidiaries follow the general Japanese practice of paying bonuses to
employees mainly in June and December. Accrued bonus liabilities at the balance sheet date are calculated based upon
managements’ estimates of annual amounts thereof.
－3－

(l)

Retirement benefits
1)

Employees
The Company and certain consolidated subsidiaries provide two types of defined benefit plans, unfunded lump-sum payment
plans and funded non-contributory pension plans, under which all eligible employees are entitled to benefits based on the level ofwages and salaries at the time of retirement or termination, length of service and certain other factors. Certain consolidated
subsidiaries provide defined contribution plans.
The liabilities and expenses for retirement benefits are determined based on the amounts actuarially calculated using certain
assumptions. The Company and its consolidated domestic subsidiaries provide for the liability for employees’ retirement benefits
at the balance sheet date based on the estimated amount of projected benefit obligation and the fair value of plan assets at that
date. Actuarial gains and losses are recognized in expenses using the straight-line method within the average of the estimatedremaining service years commencing with the following period.

2)

Directors and corporate auditors
Certain subsidiaries accrue the liability for directors’ and corporate auditors’ retirement benefits equal to the amountthat would be required if they retired their positions at the balance sheet date.

(m) Net income per share
The computation of basic net income per share of common stock shown in the consolidated statements of income is basedon the weighted average number of shares outstanding during the period and net income available to common shareholders.
The computation of dilutive net income per share of common stock is based on the weighted average number of shares ofcommon stock outstanding increased by the number of shares which would have been outstanding assuming the conversion of
all outstanding dilutive bonds at the beginning of the period. The related interest expense, net of income taxes, has been
eliminated for the purposes of this calculation.
(n) Cash and cash equivalents
Cash and cash equivalents include cash on hand, readily available deposits and short-term investments which have original
maturities of three months or less, and which are easily convertible into cash and present insignificant risk of change in value.

3. Inventories
Inventories at 30 September 2007 and 2008 consisted of the following:

Real estate for sale･･････････････････････････････････････････････････
Real estate for sale in process･･････････････････････････････････････････
Work in process････････････････････････････････････････････････････
Total･････････････････････････････････････････････････････････････

Millions of yen
2007
2008
¥ 321
¥ 222
－
3
－
95
¥ 321
¥ 320

Thousands of
U. S. dollars
2008$ 2,14429
917$ 3,090

4. Securities
The following tables summarize the acquisition costs, book values and fair value of securities with available fair values as of 30 September 2007:
Held-to-maturity debt securities:
Book value･･･････････････････････････････････････････････････
Fair value････････････････････････････････････････････････････
Difference･･･････････････････････････････････････････････
These debt securities are pledged as deposits on contracts for the lease of land.
－4－

Millions of yen
¥
791
781
¥
( 10)

Available-for-sale securities:
Millions of yen
Book value¥ 101,728
2¥ 101,730

Acquisition cost
Equity securities･･････････････････････････････････････¥ 29,750
Other･･･････････････････････････････････････････････
2¥ 29,752
Total･･･････････････････････････････････････････

Difference¥ 71,978－¥ 71,978The following table summarizes the book values of securities with no available fair values as of 30 September 2007:
Millions of yen
Available-for-sale securities:
Non-listed equity securities･･･････････････････････････････････････¥
993
Other･････････････････････････････････････････････････････････
60
Equity securities issued by subsidiaries and affiliates････････････････････････
1,171
Total････････････････････････････････････････････････････････¥
2,224
The following tables summarize the acquisition costs, book values and fair value of securities with available fair values as of 30
September 2008:
Held-to-maturity debt securities:

Book value･･････････････････････････････････････････････････
Fair value････････････････････････････････････････････････････
Difference･･･････････････････････････････････････････････

Millions of yen
¥
775
774
¥
( 1)

Thousands of U.S.
dollars
$
7,483
7,473
$
( 10)

These debt securities are pledged as deposits on contracts for the lease of land.
Available-for-sale securities:
Millions of yen
Book value¥
60,501
2¥
60,503Difference¥
30,338( 1)¥
30,337

Thousands of U. S. dollars
Book value$ 584,156
19$ 584,175

Difference$ 292,923( 10)$ 292,913

Acquisition cost
Equity securities･････････････････････････････････････¥ 30,163
Other･･････････････････････････････････････････････
3
Total･･････････････････････････････････････････¥ 30,166

Equity securities･････････････････････････････････････
Other･････････････････････････････････････････････
Total･･････････････････････････････････････････

Acquisition cost
$ 291,233
29$ 291,262

The following table summarizes the book values of securities with no available fair values as of 30 September 2008:
Millions of yen
Available-for-sale securities:
Non-listed equity securities･･･････････････････････････････････････
Other････････････････････････････････････････････････････････
Equity securities issued by subsidiaries and affiliates････････････････････････
Total････････････････････････････････････････････････････････

－5－

¥

¥

994
60
1,474
2,528

Thousands of U.S.
dollars
$

$

9,597
579
14,232
24,408

5. Bank Loans and Long-term Debt
Short-term bank loans at 30 September 2007 and 2008 bore interest ranging from 0.86% to 3.06% and from 1.05% to 4.60%, respectively.
Long-term debt at 30 September 2007 and 2008 consisted of the following:
Millions of yen
2007
2008
¥ 5,520¥ 6,252

Thousands of
U. S. dollars
2008$60,365450
22,08428,054(3,009)¥ 25,045

450
50,08856,790(2,938)¥ 53,852

4,345
483,615548,325(28,367)＄519,958

30 September
Millions of yen
2009･･･････････････････････････････････････････････････････････････････････¥ 2,938
2010･･･････････････････････････････････････････････････････････････････････
1,759
2011･･･････････････････････････････････････････････････････････････････････
1,130
2012･･･････････････････････････････････････････････････････････････････････
615
2013･･･････････････････････････････････････････････････････････････････････
32,5672014 and thereafter･･･････････････････････････････････････････････････････････
17,781¥ 56,790

Thousands of
U. S. dollars$ 28,367
16,984
10,911
5,938
314,444
171,681＄ 548,325

SecuredLoans principally from banks at 0.68% - 4.20%, maturing through 2019･･･････････
Unsecured
Zero coupon convertible bonds, due 2009, convertible into shares of theCompany’s common stock at a price of ¥466 (US$3.95) per share･･････････････
Loans principally from banks at 0.53% - 3.48% , maturing through 2017･･････････
Less amounts due within one year･･･････････････････････････････････････････

The aggregate annual maturities of long-term debt at 30 September 2008 were as follows:

The Company has concluded commitment line agreements with two financial institutions in order to ensure the availability of funds for
operations in a stable and efficient manner. The commitment lines of credit at 30 September 2007 and 2008 were as follows:
Thousands ofMillions of yen
U. S. dollars
2007
2008
2008
＄
57,932¥ 6,000
Total commitment lines of credit･･････････････････････････････････････････ ¥ 25,000
Outstanding borrowings････････････････････････････････････････････････
28,96622,0003,000＄28,966
Net outstanding credit･･････････････････････････････････････････････････ ¥ 3,000¥ 3,000

6. Net assets
Under the Company Law of Japan, the entire amount of the issue price of shares is required to be accounted for as capital, although a
company may, by resolution of its Board of Directors, account for an amount not exceeding one-half of the issue price of the new sharesas additional paid-in capital, which is included in capital surplus.
The Company Law of Japan provides that an amount equal to 10% of cash dividends and other cash appropriations shall beappropriated and set aside as a legal reserve until the total amount of legal reserve and additional paid-in capital equals 25% of common
stock. The legal reserve and additional paid-in capital may be used to eliminate or reduce a deficit by resolution of the shareholders’meeting or may be capitalized by resolution of the Board of Directors. On the condition that the total amount of legal reserve andadditional paid-in capital remains equal to or exceeding 25% of common stock, they are available for distribution by the resolution of theshareholders’ meeting. Legal reserve is included in retained earnings in the accompanying financial statements.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of
the Company in accordance with the Company Law of Japan.

－6－7. Contingent Liabilities
At 30 September 2007 and 2008, the Companies were contingently liable for the following:

Guarantees of indebtedness･･････････････････････････････････････････････

Thousands of
U. S. dollars
2008$ 29,622

Millions of yen
2007
2008
¥ 3,353¥ 3,068

8. Segment Information(a) Information by operational segment

Segment
Logistics

Real estate

Main operations
Warehousing (stock operations, bonded cargo handling)
Harbor transportation, Customs clearance
International multimodal transportation, Air cargo agent
Land transportation
Office space and land leasing

Six months ended 30 September 2007

Logistics

Millions of yen
Corporate
Real estate& Elimination

Sales to outside customers････････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales･････････････････････････････････････
Operating cost･････････････････････････････････････
Operating income･･････････････････････････････････

¥

¥

¥

63,086
1
63,08759,897
3,190

¥

4,964
194
5,158
2,314
2,844

－
( 195)( 195)1,716¥ (1,911)¥

Six months ended 30 September 2008

Logistics

Millions of yen
Corporate
Real estate& Elimination

Sales to outside customers････････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales･････････････････････････････････････
Operating cost･････････････････････････････････････
Operating income･･････････････････････････････････

¥

¥

¥

Six months ended 30 September 2008
Sales to outside customers････････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales････････････････････････････････････
Operating cost･････････････････････････････････････
Operating income･･････････････････････････････････

64,454
5
64,45961,503
2,956

Logistics$$

622,32348
622,371593,830
28,541

¥

5,088
94
5,182
2,110
3,072

¥

¥

－
( 99)
( 99)
2,065
(2,164)

Thousands of U. S. dollars
Corporate
Real estate& Elimination$$

49,126908
50,034
20,373
29,661$$－( 956)( 956)
19,938(20,894)

Consolidated¥¥

68,050－68,05063,927
4,123

Consolidated¥¥

69,542－
69,542
65,6783,864

Consolidated$$

671,449－
671,449
634,141
37,308

Corporate costs and expenses of ¥1,911 million and ¥2,164 million (US$20,894 thousand) for the six months ended 30 September 2007
and 2008, respectively, consisted mainly of expenses of administrative departments of the Company and some of its consolidated
subsidiaries.

－7－

(b) Information by geographic segment

Millions of yen
Corporate

Six months ended 30 September 2007
Sales to outside customers････････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales･････････････････････････････････････
Operating cost･････････････････････････････････････
Operating income･･････････････････････････････････

Japan

¥

61,284
390
61,67456,064
5,610¥

Others¥¥& Elimination

6,766
2,409
9,175
8,751
424

－
(2,799)(2,799)( 888)(1,911)¥¥

Consolidated¥¥

68,050－68,05063,927
4,123

Millions of yen
Corporate

Six months ended 30 September 2008
Sales to outside customers････････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales･････････････････････････････････････
Operating cost･････････････････････････････････････
Operating income･･････････････････････････････････

Japan

¥

62,904477
63,381
57,778
5,603¥

Others¥¥& Elimination

6,638
2,597
9,235
8,810
425

¥

¥

－
(3,074)(3,074)( 910)(2,164)

Consolidated¥¥

69,542－
69,542
65,6783,864

Thousands of U. S. dollars
Corporate

Six months ended 30 September 2008
Sales to outside customers･･･････････････････････････
Inter-segment transfers･･････････････････････････････
Total sales････････････････････････････････････
Operating cost････････････････････････････････････
Operating income･･････････････････････････････････

Japan

$

$

607,357
4,606
611,963
557,864
54,099Others$$& Elimination

64,09225,074
89,16685,063
4,103

$

$

－
(29,680)(29,680)( 8,786)(20,894)

Consolidated$$

671,449－
671,449
634,141
37,308“Others” consists of Asia, Europe and North America.
Corporate costs and expenses of ¥1,911 million and ¥2,164 million (US$20,894 thousand) for the six months ended 30 September 2007
and 2008, respectively, consisted mainly of expenses of administrative departments of the Company and some of its consolidated
subsidiaries.
(c) Overseas sales
The Companies’ overseas sales, which represent sales to customers outside Japan, were immaterial. Accordingly, overseas sales were
not disclosed.

9. Subsequent Events(a)Appropriation
At the Board of Directors’ meeting of the Company held on 7 November 2008, the appropriation of retained earnings at 30 September
2008 was duly approved as follows:

Cash dividends of ¥5.0 (U S $0.05) per share････････････････････････････････････－8－Millions of yen¥ 927

Thousands of
U. S. dollars$ 8,950

(b) Purchases of treasury stock
The Board of Directors of the Company, at its meeting held on 7 November 2008, resolved matters concerning purchases of its treasury
stock in accordance with Article 156 of the Company Law of Japan, as applied pursuant to Article 165, Paragraph 3 of the Law.
1)

Reason for the purchase of treasury stock
To facilitate the execution of flexible capital policies to cope with changes in the business environment.

2)

Details of the purchases
Type of shares to be acquired
Total number of shares to be acquired

Common stock of the Company
8,400,000 shares(Ratio to the total number of shares issued (treasury stock excluded): 4.53%)

Total value of shares to be acquired

3,000,000,000 yen (maximum)

Acquisition period

14 November 2008 to 24 March 2009－9－