〔Delayed〕The original disclosure in Japanese was released on February 14, 2020 at 15:00 (GMT+9)

February 14, 2020

Tsukada Global Holdings Inc.
Consolidated Earnings Report for the Fiscal Year ended December 31, 2019
(Japanese GAAP)

Stock listing: Tokyo Stock Exchange (First Section)
Securities code: 2418
URL: http://www.tsukada-global.holdings/en/
Representative: Masayuki Tsukada, President and CEO
Information contact: Masahiro Yamazaki, Manager, Finance &Tel: +81-3-5464-0081
Accounting Department
Scheduled dates:
Annual general meeting of shareholders:March 26, 2020
Filing of statutory year-end financial report:
March 26, 2020
Dividend payout:
March 27, 2020
Supplementary materials to year-end financial results available: Yes
Year-end earnings presentation held: Yes (targeted at institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Performance for the Fiscal Year ended December 31, 2019
(January 1, 2019 – December 31, 2019)(1) Consolidated Operating Results(Percentages indicate year-on-year changes)

Net sales
million yen

Year ended
December 31, 2019Year ended
December 31, 2018
Note: Comprehensive income:Operating income%%

million yen%

owners of the parent
million yen%

61,121

1.5

6,383

21.6

6,222

18.4

2,565

5.8

60,197

5.1

5,249

23.0

5,257

19.5

2,424

10.0

Year ended December 31, 2019:Year ended December 31, 2018:
Diluted profit
Profitper shareper shareyen
yenYear ended
53.78
December 31, 2019Year ended
50.82
December 31, 2018
Reference: Equity in (earnings) losses of affiliates:(2) Consolidated Financial Position

December 31, 2019

million yen

Profit attributable toOrdinary income

Total assets
million yen
99,3432,302 million yen (33.5%)
1,724 million yen (-15.7%)
Ordinary income
Return on equity
to total assets%%

Operating income
to net sales
%

-

7.0

6.5

10.4

50.40

7.0

6.0

8.7

Year ended December 31, 2019:- 47 million yen
Year ended December 31, 2018: - million yen
Net assets
million yen

Equity ratio%
37,404

37.7

Net assets per shareyen
784.1590,84137,081
39.1
December 31, 2018
Reference: Total equity: December 31, 2019: 37,404 million yen
December 31, 2018: 35,548 million yen
Total equity = Shareholders’ equity plus total accumulated other comprehensive income
Note: “Partial Amendments to Accounting Standard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ)
Statement No. 28, February 16, 2018) have been applied, effective from the first three months of the fiscal year ended

745.24

December 31, 2019. Figures in the financial position as of December 31, 2018 were retroactively restated in accordance withsaid ASBJ amendments.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
Year ended
December 31, 2019Year ended
December 31, 2018

million yen

million yen

million yen

7,297(12,838)

9,686

28,259

6,050

(375)

3,704

24,117

2. Dividends

Year ended
December 31, 2018Year ended
December 31, 2019Year ending
December 31, 2020
(Forecast)

Cash and cash
equivalents at end of
periodmillion yen

Cash flows fromfinancing activities

Cash flows frominvesting activities

Dividend per share

Rate of total
Dividend
dividend to
payout ratio
net assets(consolidated)(consolidated)
%
%

Total
dividends

End-Q1yen

End-Q2yen

End-Q3yen

Year-endyen

Annual total
yen

-

5.00

-

5.00

10.00

477

19.7

1.4

-

5.00

-

5.00

10.00

477

18.6

1.3

-

5.00

-

5.00

10.00

million yen

12.6

3. Earnings Forecast for the Fiscal Year ending December 31, 2020
(January 1, 2020 – December 31, 2020)(Percentages indicate year-on-year changes)
Net sales
Six months ending
June 30, 2020
Year ending
December 31, 2020

million yen%

Profit attributable toProfit%owners of the parent
million yen%

per shareyen

Operating income

Ordinary income

million yen

million yen%

29,5001.5

900(60.2)

900(55.3)

100(92.2)

2.10

64,000

4.7

6,700

5.0

6,500

4.5

3,800

48.1

79.66

*Notes(1) Changes in significant subsidiaries during the period: Yes(Changes in specific subsidiaries accompanying a change in scope of consolidation)
Newly Consolidated: BEST LIFE STYLE Inc.
Newly Deconsolidated: BT KALAKAUA, LLC
Note: For details, please refer to “(5) Notes on Consolidated Financial Statements (Changes inSignificant Subsidiaries for Fiscal 2019)” in the section “3. Consolidated Financial Statements andMain Notes” on page 14 in the accompanying materials.
(2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: None

3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Shares issued (common stock)1) Number of shares issued at end of period(including treasury stock)2) Number of shares held in treasury at end of period

3) Average number of shares outstanding during the period

December 31, 2019

December 31, 2018

48,960,000

48,960,000

1,259,834

1,259,834

Year ended

Year ended

December 31, 2019

December 31, 2018

47,700,166

47,700,166* This Earnings Report is exempt from auditing conducted by certified public accountants or byauditing firms.

*Appropriate Use of Earnings Forecast and Other Important Information(Cautionary Statement with Respect to Forward-Looking Statements)
Any forecasts and forward-looking statements given herein are based on information available as of thisreport’s publication and on certain assumptions that are deemed reasonable. These forecasts are notguarantees of future performance, and actual results may differ from forecasts due to changes in thebusiness environment. For the assumptions underlying the forecasts herein and other notice on the use of
earnings forecasts, please refer to “(4) Earnings Forecast for the Fiscal Year Ending December 31, 2020”in the section “1. Review of Consolidated Financial Results” on page 5.
2 in the accompanying materials.

(Presentation handout materials)
The Company has scheduled an earnings presentation targeted at institutional investors and analysts on
February 17, 2020.
The presentation handout materials will be posted on the Company's website immediately after the event.

Accompanying Material – Contents
1. Review of Consolidated Financial Results(1) Operating Results for Fiscal 2019(2) Analysis of Financial Condition(3) Overview of Cash Flows(4) Earnings Forecast for the Fiscal Year Ending December 31, 2020
2. Basic Views on Adoption of Accounting Standards
3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income(3) Consolidated Statements of Changes in Net Assets(4) Consolidated Statements of Cash Flows(5) Notes on Consolidated Financial Statements(Note on the Going-concern Assumption)(Changes in Significant Subsidiaries for Fiscal 2019)(Changes in Method of Presentation)(Additional Information)(Segment Information)(Per Share Information)(Significant Subsequent Events)
4. Other Information(1) Changes in Officers(2) Weddings Held and Orders Received

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2
2
3
4
5
5
6
6
8
8
8
9
12
14
14
14
14
14
15
18
18
19
19
19

1. Review of Consolidated Financial Results(1) Operating Results
In the fiscal year ended December 31, 2019, the Japanese economy followed a recovery path thanks toexpanded corporate earnings, a recovery in personal spending and improved employment conditions on
the back of the government’s various economic policies. However, the future outlook remains clouded by
the impact that tensions in the Middle East may have on the global economy and the uncertainties in
economic conditions abroad.
In the bridal market, the core business of the Tsukada Global Holdings Group (“the Group”), thenumber of weddings in Japan in fiscal 2019 was estimated at 583,000, compared with 586,000, down
0.6% from fiscal 2018 (source: Outline of Vital Statistics in Japan, Ministry of Health, Labour andWelfare). Although the rate of decline slowed from 3.4% in the previous fiscal year, the declining birthrate
is gradually having a discernible impact. However, Japan’s wedding market environment remains
generally stable, due partly to a steady rise in expenditures per wedding due to late-life marriages.
Moreover, the number of foreign visitors to Japan, even though the growth rate slowed from 8.7% in
2018, is estimated to have reached 31.88 million in 2019 (up 2.2% year-on-year from 31.19 million in2018 according to the Japan National Tourism Organization). Thus, the hotel market is continuing to
expand steadily owing to the recovery in the Japanese economy and continued increase in the numberof foreign visitors. The relaxation-related market, though witnessing a slowdown in growth on the whole,enjoyed stable growth thanks to the burgeoning interest in health and beauty in addition to the market’s
existing underlying strength.
In this environment, the Group endeavored to increase sales and profitability by accurately
responding to increasingly individualized and diversifying customer needs in the bridal, hotel, andwellness and relaxation (W&R) markets, while also continuing its efforts to create new value and develop
high-quality, appealing outlets capable of providing high value-added services.
Based on this policy, the Group continued efforts to create new value and further improve the qualityof its hospitality services in the hotel business in anticipation of the Tokyo Olympic and Paralympic
Games by, for example, beginning preparations for the opening of the Kimpton Hotel Shinjuku, Tokyo(provisional name), major renovations of The Strings by InterContinental Tokyo in Shinagawa, Tokyo,
and refurbishment and rebranding of The Strings Hotel Yagoto Nagoya in Showa Ward, Nagoya.
In the wedding business, the Group increased internal production of mainstay wedding-related
products such as floral decorations, photographs, videos, and audio content, and promoted externalsales of these products. The Group also focused on expanding the earnings and business areas of theWellness & Relaxation (W&R) business, which opened comprehensive fitness club Best Style Fitness
Kyoto Karasuma (Nakagyo-ku, Kyoto) in September 2019.
As a result of these efforts, in the fiscal year ended December 31, 2019, the Group posted increased
sales and profits. Consolidated net sales were ¥61,121 million (up 1.5% year on year). Operating income
totaled ¥6,383 million (up 21.6%) and ordinary income totaled ¥6,222 million (up 18.4%). However, given
signs of potential impairment of some assets due to declines in profitability, the Group posted an
impairment loss of ¥1,015 million as an extraordinary loss, taking into account future business plans andrecoverability in accordance with the Accounting Standard for Impairment of Fixed Assets, and as aresult profit attributable to owners of the parent came to ¥2,565 million (up 5.8%).
The results for each business segment were as follows.

21) Wedding businessIn fiscal 2019, sales grew in the wedding business bolstered primarily by an increase in the number of
weddings held in the mainstay Japanese market, a solid increase in spend per wedding, and progresswith external sales. Segment income significantly increased mainly due to increased internal productionof wedding-related products and content such as photographs, audio, videos, and floral decorations.
As a result, net sales in the wedding business were ¥39,414 million (up 3.4% year on year), andsegment income was ¥7,797 million (up 23.1%).
2) Hotel business
Segment sales declined in fiscal 2019 despite solid growth of overnight occupancy rates and averagecharge per night, because the number of weddings held at our hotels decreased, and the number ofguest rooms available for sale decreased due to major renovation work at The Strings Hotel Tokyo
Intercontinental and The Strings Hotel Yagoto Nagoya. Segment income halved due to lower segment
sales and expenses related to the preparations for opening Kimpton Hotel Shinjuku, Tokyo (provisionalname).
As a result, net sales in the hotel business came to ¥17,768 million (down 2.6% year on year), andsegment income totaled ¥477 million (down 51.3%).
3) W&R business (Wellness & Relaxation business)
This segment achieved sales growth in fiscal 2019 due to full-year operation of the comprehensive
fitness club Best Style Fitness Kaihin Makuhari, which opened in December 2018, and the opening ofBest Style Fitness Kyoto Karasuma in September. However, the segment posted an operating loss
owing to the startup costs of the new fitness clubs and some delay in attracting members at some fitness
clubs.
As a result, the W&R business posted net sales of ¥3,939 million (up 2.6% year on year), and asegment loss of ¥229 million (compared with a loss of ¥426 million a year earlier).
(2) Analysis of Financial Condition
Assets, Liabilities, and Net Assets
Total assets at the end of fiscal 2019 (December 31, 2019) amounted to ¥99,343 million, an increase of¥8,502 million from the end of the previous fiscal year (December 31, 2018). The increase mainly reflects
a ¥7,864 million increase in construction in progress related to the construction of Kimpton Hotel
Shinjuku, Tokyo (provisional name), a ¥4,164 million increase in investment securities as a result ofinvestment of surplus funds, and a ¥4,141 million increase in cash and deposits due to fundprocurement. These were partially offset by a ¥3,162 million decline in buildings and structures and a¥5,979 million decrease in land, as a result of the exclusion of former consolidated subsidiary BT
KALAKAUA, LLC from the scope of consolidation due to a reduced equity stake following partial
divestment.
Total liabilities at the end of fiscal 2019 came to ¥61,939 million, an increase of ¥8,179 million fromthe end of the previous fiscal year. The increase is chiefly attributable to an increase of ¥3,039 million in
long-term debt (including the current portion) owing to fund procurement for capital investment and¥2,110 million from the issuance of bonds (including the current portion).
Net assets at the end of fiscal 2019 totaled ¥37,404 million, an increase of ¥322 million from the end

3

of the previous fiscal year. The change is primarily due to a ¥2,088 million increase in retained earnings
reflecting the posting of profit attributable to owners of the parent, which was partially offset by a ¥1,533
million decrease in non-controlling interests due to the exclusion of a subsidiary from the scope of
consolidation.
(3) Overview of Cash Flows
Cash and cash equivalents (“cash”) at the end of fiscal 2019 increased by ¥4,141 million from the end of
the previous fiscal year to ¥28,259 million. Cash flows and factors behind changes in the cash flows are
explained below.
(Operating cash flow)
Cash provided by operating activities during fiscal 2019 totaled ¥7,297 million, an increase of 20.6% fromthe previous fiscal year. The change is mainly attributable to ¥3,140 million in depreciation andamortization and ¥5,122 million in profit before income taxes, which were partially offset by ¥2,449 million
in income taxes paid.
(Investing cash flow)
Cash used in investing activities totaled ¥12,838 million, compared with ¥375 million used in the previous
fiscal year. The change is mainly the result of ¥10,969 million used for purchase of tangible assets.
(Financing cash flow)
Cash provided by financing activities in fiscal 2019 totaled ¥9,686 million, an increase of 161.5% from theprevious fiscal year. The change is mainly attributable to proceeds of ¥11,990 million from long-term debt
and ¥2,689 million from the issuance of bonds, which were partially offset by repayments of long-term
debt of ¥3,400 million and payments for redemption of bonds of ¥590 million.
Changes in the Group’s cash flow-related indicators are as follows.
Return on equity (%)
Return on equity based on market value(%)
Cash flow to interest-bearing debt (years)
Interest coverage ratio (times)

FY2015FY2016FY2017FY2018FY2019

39.6

38.5

40.5

39.1

37.7

47.7

39.3

37.5

31.3

29.3

6.2

5.8

5.0

6.6

6.1

24.8

27.2

33.9

26.3

17.3

Notes:
Return on equity: Total equity/Total assets
Return on equity based on market value: Market valuation/Total assets
Cash flow to interest-bearing debt: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest expenses
1. All indicators are calculated based on consolidated figures.
2. Cash flows from operating activities in the Consolidated Statements of Cash Flows are used for operating
cash flow. Interest-bearing debt includes all liabilities recorded on the Consolidated Balance Sheets on
which interest is paid. Interest paid in the Consolidated Statements of Cash Flows is used for interest
expenses.

4

(4) Earnings Forecast for the Fiscal Year Ending December 31, 2020
Regarding the economic environment in which the Group operates, the economy continues on arecovery track, reflecting expanded corporate earnings, an upturn in consumer spending and improved
employment conditions thanks partly to the effects of various economic policies. However, the economic
outlook is likely to remain unclear primarily due to the tensions in the Middle East, developments
regarding trade disputes between the U.S. and China, and concerns about the impact of the COVID-19
coronavirus disease on Japan’s tourism market.
In addition to taking appropriate steps to counteract the above risks, the Group intends to constantly
strive to create new value and proactively develop products that accurately meet ever-changing
customer needs. It will also aim to improve its cost-competitiveness and further enhance profitability
through efficient outlet operations and the proactive development of human resources.
The wedding order backlog at the end of the fiscal year under review (December 31, 2019) was
7,549 (down 9.0% year on year). For the fiscal year ending December 31, 2020, the Group forecasts
consolidated net sales of ¥64,000 million (up 4.7%), operating income of ¥6,700 million (up 5.0%),
ordinary income of ¥6,500 million (up 4.5%), and profit attributable to owners of the parent of ¥3,800
million (up 48.1%). The forecast for sales and profit growth in the fiscal year ending December 31, 2020is due in part to the opening of the new Kimpton Hotel Shinjuku, Tokyo (provisional name) and theimpact of hosting the Tokyo Olympic and Paralympic Games.
2. Basic Views on Adoption of Accounting Standards
The Group’s financial statements are prepared in accordance with the accounting principles generally
accepted in Japan (Japanese GAAP), in order to ensure comparability with other companies in the peergroup. As to the possible future adoption of the International Financial Reporting Standards (IFRS), theGroup shall continue its study going forward, taking into account the future developments of the Group’sbusiness and of the global and Japanese business environments.

5

3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheets
December 31, 2018
AmountAssetsCurrent assets
Cash and deposits
Accounts receivable - tradeMarketable securities
Merchandise
Raw materials and supplies
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Tangible assets
Buildings and structures
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total tangible assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets

6(millions of yen)
December 31, 2019
Amount24,206
1,281
289
127
490
1,136
(24)
27,50628,347
1,259
2,455
116
530
1,389
(22)
34,076

48,680(23,318)
25,361
15,553
1,972
8,500(6,777)
1,723
44,61047,544(25,345)
22,199
9,574
9,837
9,141
(7,231)
1,909
43,520

1,738
184
1,922

1,475
195
1,670

2,557
8,152
4,177
1,961
(206)
16,641
63,174

6,721
8,451
3,973
990
(213)
19,925
65,115160
160
90,841

151
151
99,343

December 31, 2018
AmountLiabilities
Current liabilities
Accounts payable - trade
Current portion of long-term debt
Current portion of bonds
Income taxes payable
Advances received
Other
Total current liabilities
Fixed liabilities
Bonds
Long-term debt
Net defined benefit liability
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total fixed liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain (loss) on available-for-salesecurities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

7(millions of yen)
December 31, 2019
Amount

2,437
3,172
590
1,313
1,884
4,381
13,778

2,298
4,617
668
1,275
2,442
6,557
17,8593,125
32,614
302
784
2,391
762
39,98153,7595,157
34,209
303
831
2,412
1,167
44,08061,939472
634
35,849(892)
36,063472
634
37,937(892)
38,151

(142)

(72)

(249)

(504)

(118)
(4)
(514)
1,533
37,081
90,841

(163)
(5)
(747)
37,404
99,343

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(millions of yen)
Year ended
Year ended
December 31, 2018 December 31, 2019
AmountAmount60,197
61,121
Net sales
Cost of sales
40,59840,014
19,59921,107Gross profit
14,34914,724
Selling, general and administrative expenses
5,249
6,383
Operating income
Non-operating income
Interest income
29108
Dividend income
85Gain on investments in silent partnership
150
153
Real estate rental income
213
191
Compensation income
70
Other
93
137
Total non-operating income
495
667
Non-operating expenses
Interest expenses
233
422
Real estate rental expenses
96
164
Foreign exchange loss
81
137
Other
77
104
Total non-operating expenses
488
828
5,257
6,222
Ordinary income
Extraordinary income
Gain on sales of fixed assets
492
23
Gain on sale of shares in subsidiaries
207
Other
2
Total extraordinary income
494
230
Extraordinary loss
Loss on disposal of fixed assets
49
223
Impairment loss
1,183
1,015
Other
128
91
Total extraordinary loss
1,361
1,330
4,389
5,122
Profit before income taxes
2,218
2,385
Income taxes - current
(275)
202
Income taxes - deferred
1,942
2,587
Total income taxes
2,446
2,535
Profit22(30)
Profit (loss) attributable to non-controlling interests
2,424
2,565
Profit attributable to owners of the parent

8

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Net unrealized gain (loss) on available-for-salesecurities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Remeasurements of defined benefit plan
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income (loss) attributable to noncontrolling interests

9

Year ended
December 31, 2018
Amount2,446(millions of yen)
Year ended
December 31, 2019
Amount
2,535

(75)

69

(249)

(255)

(397)
0

(39)
(1)

-

(5)

(722)
1,724

(232)
2,302

1,731

2,332

(6)

(30)

(3) Consolidated Statements of Changes in Net Assets
Year ended December 31, 2018 (January 1 to December 31, 2018)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Changes during term
Cash dividends
Profit attributable to owners of
the parent
Change in scope of
consolidation
Net changes in items otherthan shareholders’ equity

Retainedearnings
33,816

Treasury stock
(892)

Total
shareholders’equity34,030

(477)

(477)

2,424

2,424

85

85

Total changes during term

-

-

2,032

-

2,032

Balance at end of term

472

634

35,849(892)

36,063Net unrealized
gain (loss) on
available-forsale securities
Balance at beginningof term(66)

Accumulated other comprehensive income
Deferred gain
Total
Foreign(loss) on
Remeasurements accumulated
currency
derivatives
otherof definedtranslation
under hedge
comprehensive
benefit plansadjustments
accounting
income
-

250

(5)

178

Noncontrollinginterests

1,572

Total net assets

35,781

Changes during term
(477)

Cash dividends
Profit attributable toowners of theparentChange in scope of
consolidation
Net changes in
items other thanshareholders’equityTotal changes during
term
Balance at end of
term

2,424
85

(75)

(249)

(368)

0

(692)

(38)

(731)

(75)

(249)

(368)

0

(692)

(38)

1,300

(142)

(249)

(118)

(4)

(514)

1,533

37,08110

Year ended December 31, 2019 (January 1 to December 31, 2019)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Changes during term
Cash dividends
Profit attributable to owners of
the parent
Net changes in items otherthan shareholders’ equity

Retainedearnings
35,849Treasury stock
(892)

Total
shareholders’equity36,063

(477)

(477)

2,565

2,565

Total changes during term

-

-

2,088

-

2,088

Balance at end of term

472

634

37,937(892)

38,151

Net unrealized
gain (loss) on
available-forsale securities
Balance at beginningof term(142)

Accumulated other comprehensive income
Deferred gain
Total
Foreign(loss) on
Remeasurements accumulated
currency
derivatives
otherof definedtranslation
under hedge
comprehensive
benefit plansadjustments
accounting
income
(249)

(118)

(4)

(514)

Noncontrollinginterests

Total net assets

1,533

37,081

Changes during term
(477)

Cash dividends
Profit attributable toowners of theparentNet changes in
items other thanshareholders’equityTotal changes during
term
Balance at end of
term

2,565

69

(255)

(45)

(1)

(232)

(1,533)(1,766)

69

(255)

(45)

(1)

(232)

(1,533)

322

(72)

(504)

(163)

(5)

(747)

-

37,40411

(4) Consolidated Statements of Cash Flows(millions of yen)
Year ended
Year ended
December 31, 2018 December 31, 2019
AmountCash flows from operating activities
Profit before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Amortization of bond issuance costs
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses(Gain) loss on sales of shares in subsidiaries(Gain) loss on redemption of investment securities
Compensation income
Loss on disposal of fixed assets(Gain) loss on sales of fixed assets
Shop closing expenses(Gain) loss on valuation of derivatives(Gain) loss on investments in silent partnership
Foreign exchange (gain) loss
(Increase) decrease in notes and accounts receivable –trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Increase (decrease) in accrued consumption taxes(Increase) decrease in other assets
Increase (decrease) in other liabilities
Other
Sub totalInterest and dividends received
Interest paid
Income taxes paid
Compensation income
Net cash provided by (used in) operating activities

12

Amount

4,389
3,275
1,183
266
20

5,122
3,140
1,015
267
20

45

47

11
(49)
(38)
233
49
(491)
90
(7)
(150)
11

4
(1)
(114)
422
(207)
12
(70)
223
(23)
72
(13)
(153)
36

(173)

20

57
(22)

(28)
(138)

262

555

176
(2)
(324)
(236)
8,578
18
(230)
(2,316)
6,050

(185)
136
(169)
92
10,08415(422)(2,449)70
7,297

Year ended
Year ended
December 31, 2018 December 31, 2019
AmountCash flows from investing activities
Purchase of tangible assets
Proceeds from sales of tangible assets
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Repayment of contributions from the silent partnership
Loans receivable
Lease and guarantee deposits
Collection of lease and guarantee deposits
Proceeds from sales of shares of subsidiaries resulting inchange in scope of consolidation
Other- net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of bonds
Payments for redemption of bonds
Payments for redemption of convertible bonds
Dividends paid to non-controlling interests
Dividends paid to shareholders
Repayment to non-controlling interests
Net cash provided by (used in) financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Decrease in cash and cash equivalents resulting fromexclusion of subsidiaries from consolidation
Cash and cash equivalents, end of period

13

Amount(7,255)
6,800
(38)
67
82
(26)
(143)
200

(10,969)50(88)(2,521)
395
78
(22)
(590)
128

-

770

(63)
(375)

(68)
(12,838)(8,100)17,520(4,164)
201
(744)
(500)
(31)
(477)
3,704

11,990(3,400)
2,689
(590)
(476)
(525)
9,686

(3)

(4)

9,375
14,896

4,141
24,117(154)-

24,11728,259(5) Notes on Consolidated Financial Statements(Note on the Going-concern Assumption)
Not applicable(Changes in Significant Subsidiaries for Fiscal 2019)BEST LIFE STYLE Inc. has been added to the scope of consolidation, due to its establishment during
the second quarter of fiscal 2019.
Additionally, due to the Company having sold a portion of its shareholding, BT KALAKAUA, LLC has
been excluded from the scope of consolidation and was consequently been made an equity method
affiliate from the end of the second quarter of fiscal 2019.
(Changes in Method of Presentation)(Consolidated Statements of Income)“Loss on disposal of fixed assets,” which was included under “Other” of the “Extraordinary loss” in theprevious fiscal year, has exceeded 10% of the total amount of extraordinary losses. It has therefore been
reclassified under a separate and independent heading. The financial statements for the previous fiscal
year have therefore been restated in order to reflect this change in the method of presentation.
Accordingly, 178 million yen shown under “Other” of “Extraordinary loss” in the consolidated statements
of income for the previous fiscal year has been reclassified as 49 million yen in “Loss on disposal of fixed
assets” and 128 million yen in “Other.”(Additional Information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”)“Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28 of
February 16, 2018) have been applied, effective from the first quarter of the fiscal 2019. Accordingly,
deferred tax assets are shown under investments and other assets, while deferred tax liabilities areshown under fixed liabilities.

14

(Segment Information)
1. Overview of reportable segment
The Group’s reportable segments are components of the Group for which separate financial information isavailable. These segments are subject to periodic examinations to enable the Company’s board of
directors to decide how to allocate resources and assess performance.
The Group’s operations are classified into three reportable segments: the “Wedding business” thatprovides services such as planning and operation related to wedding ceremonies and banquets in Japanand overseas, the “Hotel business” that offers the management of hotel weddings and banquets, andprovision of hotel accommodation services, and the “W&R business” segment that provides reflexology
services and management of a spa complex and a comprehensive fitness club.
“Wedding business” comprises outlet management in Japan and sales to customers, provision of foodand drinks at wedding banquets, dress rental and beauty care services, as well as management of venues
and operations for weddings and banquet in Hawaii and Bali, mainly for customers who book through theGroup’s sales salons in Japan.
“Hotel business” offers the management of hotel weddings and banquets, and provision of hotel
accommodation services at “Hotel InterContinental Tokyo Bay,” “The Strings by InterContinental Tokyo,”“The Strings Hotel Yagoto Nagoya,” and at “The Strings Hotel Nagoya.”“W&R business” operates a British-style reflexology salon, “Queensway” with a high level of skills andsophisticated know-how of attending to customers, as well as managing a spa complex, “Beauty &Relax
SPA-HERBS,” and “BEST STYLE FITNESS” comprehensive fitness clubs.
2. Calculation of net sales, income/loss, assets, liabilities, and other items by reportable segment
Accounting methods applied in the reportable business segments are in accordance with theaccounting policies that are adopted for the preparation of consolidated financial statements.
Reportable segment income is based on operating income.
Intersegment sales or transfers are based on market price.

15

3. Net sales, income/loss, assets, liabilities, and other items by reportable segment
Year ended December 31, 2018 (January 1 to December 31, 2018)(millions of yen)

Reportable segment
Amountrecorded on

WeddingbusinessHotelbusiness

W&R
business

Total

Adjustments(note 1)

consolidated
financialstatements(note 2)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers

38,113

18,244

3,839

60,197-60,197

1,447

344

1

1,793

(1,793)-

Total

39,56018,5883,841

61,990(1,793)60,197

Segment income (loss)

6,333

981

(426)

6,888

(1,638)5,249

Segment assets

27,731

24,9195,233

57,88532,97790,862

1,733
-

1,106
128

361
138

3,200
266

74
-

3,275
266

1,612

861

4,429

3,251

7,680

Other items
Depreciation/amortization
Amortization of goodwill
Increase in tangible andintangible assets

1,955

Notes: 1. Details of adjustments are as follows:(1) The minus 1,638 million yen adjustment for segment income or loss includes 114 million yen elimination of intersegment sales and minus 1,753 million yen of unallocated corporate expenses. The main component of these
unallocated corporate expenses is general and administrative expenses that are not attributable to reportablesegments.
(2) The 32,977 million yen adjustment for segment assets comprises unallocated corporate assets. Unallocatedcorporate assets consist mainly of cash and deposits held by the Company which are not attributable to reportablesegments.
(3) The 74 million yen adjustment for depreciation/amortization comprises depreciation/amortization for unallocatedcorporate assets.
(4) The 3,251 million yen adjustment for increase in tangible and intangible assets comprises investments in unallocatedcorporate assets.
2. Segment income or segment loss is adjusted to correspond with operating income reported on the consolidated
statements of income.

16

Year ended December 31, 2019 (January 1 to December 31, 2019)(millions of yen)

Reportable segment
Amountrecorded on

WeddingbusinessHotelbusiness

W&R
business

Total

Adjustments(note 1)

consolidated
financialstatements(note 2)

Net sales
Sales to outside
customers
Inter-segment sales
and transfers

39,414

17,768

3,939

61,121-

61,121

1,630

348

17

1,997

(1,997)-

Total

41,045

18,117

3,956

63,119(1,997)

61,121

Segment income (loss)

7,797

477

(229)

8,045

(1,661)

6,383

Segment assets

34,33432,2804,804

71,42027,92399,343

1,623
0

1,089
128

286
138

2,998
267

141
-

3,140
267

9,436

237

11,58063

11,643

Other items
Depreciation/amortization
Amortization of goodwill
Increase in tangible andintangible assets

1,906

Notes: 1. Details of adjustments are as follows:(1) The minus 1,661 million yen adjustment for segment income or loss includes 128 million yen elimination of intersegment sales and minus 1,790 million yen of unallocated corporate expenses. The main component of these
unallocated corporate expenses is general and administrative expenses that are not attributable to reportablesegments.
(2) The 27,923 million yen adjustment for segment assets comprises unallocated corporate assets. Unallocatedcorporate assets consist mainly of cash and deposits held by the Company which are not attributable to reportablesegments.
(3) The 141 million yen adjustment for depreciation/amortization comprises depreciation/amortization for unallocatedcorporate assets.
(4) The 63 million yen adjustment for increase in tangible and intangible assets comprises investments in unallocatedcorporate assets.
2. Segment income or segment loss is adjusted to correspond with operating income reported on the consolidated
statements of income.

17(Per Share Information)

Net assets per share
Profit per share
Diluted profit per share
Note:

Year ended December 31, 2018745.24 yen
50.82 yen
50.40 yen

Year ended December 31, 2019784.15 yen
53.78 yen
- yen

The calculation base for profit per share and diluted profit per share is as follows:Year ended
December 31, 2018Year ended
December 31, 2019

2,424

2,565

-

-

2,424

2,565

47,700,166

47,700,166

Profit per share
Profit attributable to owners of the parent(millions of yen)Amount not attributable to common
stockholders (millions of yen)
Profit attributable to common stock ofowners of the parent (millions of yen)
Average number of common stock
outstanding during the term (shares)

Diluted profit per share
Adjustment to profit attributable to owners of
the parent (millions of yen)
Increase in the number of common stock
398,739(shares)[Of which convertible bonds with stock[398,739]
acquisition rights (shares)]
Residual securities that are not dilutive and notincluded in the calculation for diluted profit per
share
Note: Diluted profit per share for fiscal 2019 is not disclosed, as there are no dilutive shares.
(Significant Subsequent Events)
Not applicable

18

[-]
-

4. Other Information(1) Changes in Officers
Not applicable(2) Weddings Held and Orders Received
1) Number of weddings held
Year ended December 31, 2018Year ended December 31, 2019

Number of weddings held (cases)
12,806

Number of weddings held (cases)
12,385

Hotel business

1,712

1,611

Total

14,51813,996

Year ended December 31, 2018Year ended December 31, 2019

Segment
Wedding business2) Wedding orders received
Segment

Orders received

Order backlog

Orders received

Order backlog

Wedding business(cases)12,976(cases)7,119(cases)11,784(cases)6,518

Hotel business

1,775

1,179

1,463

1,031

Total

14,751

8,298

13,2477,549

19