Nine-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2016 [Japan GAAP]
September 9, 2016
Listed Company Name
Company Code Number

Kanamoto Co., Ltd.
9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

URL
Representative

http://www.kanamoto.co.jp
Kanchu Kanamoto
President and CEO

Inquiries

Nobuhito Utatsu

Director & Senior Executive Corporate Officer, Division
Manager, Accounting Division

TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for submission of Quarterly Report

September 13, 2016

Scheduled date for commencement of dividend payments–

Preparation of Quarterly Settlement Supplementary Explanatory Materials

No

Quarterly Earnings Briefings

No(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2016
(November 1, 2015 – July 31, 2016)(1) Consolidated Operating Results (Cumulative)(Percentages show the change from the prior year)
Profit Attributable to
Net Sales
Operating Income
Ordinary Income
Owners of Parent
Millions of yen%

Fiscal Year ending October 31,
103,422
4.5
2016: Third quarter
Fiscal Year ended October 31,
98,9566.8
2015: Third quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2016, Third Quarter
Fiscal Year Ended October 31, 2015, Third Quarter
Net Income per
Share
Fiscal Year ending October 31,
2016: Third quarter
Fiscal Year ended October 31,
2015: Third quarter

Millions of yen%

Millions of yen%

Millions of yen%

10,576−15.4

10,049

−19.9

5,889

−21.5

12,498−2.5

12,546

0.9

7,499

4.2

5,935 (−27.3%)
8,162(2.1%)Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

166.65－208.08－(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Millions of yen

Fiscal Year ending October 31,
218,270
78,548
2016: Third quarter
Fiscal Year ended October 31,
202,919
71,9982015(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2016 Third Quarter 73,985
Fiscal Year Ended October 31, 2015
69,588－1 －Equity Ratio
%

33.9
34.3

2. Dividends
Annual Dividends per Share
End of second End of third
Year-endquarterquarter

End of firstquarter
Fiscal year ended October 31, 2015
Fiscal year ending October 31, 2016
Fiscal Year ending October 31, 2016
(Projected)

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

15.00
15.00

－
－

20.00

35.00

30.00

45.00

(Note) 1. Has the Company revised its most recently released dividend projection:

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2016
(November 1, 2015 – October 31, 2016)(Percentages show the change from the prior year)

Net Sales
Full year

Operating Income

Millions of yen%

143,200

7.4

Millions of yen

Ordinary Income
Millions of yen%

14,630 −10.1%

14,100 −12.8

Profit Attributable to
Owners of Parent
Millions of yen

Net Income per
Share

%

Yen

8,550 −10.5

241.94(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter:
No

－

2 －

4. Notes(1) Changes in material subsidiaries during the period under review (Changes in specific subsidiaries in conjunction witha change in the scope of consolidation): No
Company newly included (Company name)─
Company newly excluded (Company name)─(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:

No(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements(a) Changes in accounting policy in conjunction with revision of accounting standards:
Yes(b) Changes other than the above:No(c) Changes in accounting estimates:(d) Retrospective restatements:

NoNo(4) Number of shares issued (common shares)(a) Number of shares outstanding at the end of the period (including treasury shares)
Fiscal year ending October 31, 2016 Third Quarter
36,092,241 sharesFiscal year ended October 31, 2015
36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2016 Third Quarter
753,079 sharesFiscal year ended October 31, 2015
752,941 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2016 Third Quarter
35,339,234 sharesFiscal year ended October 31, 2015 Third Quarter
36,039,308 shares

Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the Financial Instruments
and Exchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed thequarterly review procedure for quarterly financial statements.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future. Please refer to“1. Qualitative Information Concerning Quarterly Consolidated Operating Results (3) Explanation Concerning Future
Forecasts Including Projected Consolidated Operating Results” on Page 7 of the Attachments for the conditions
used as assumptions for the projected operating results and matters to note before using the projected operating
results.

－

3 －〇Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results ……………………………………

5(1) Qualitative Information Concerning Consolidated Operating Results ……………………………………………

5(2) Qualitative Information Concerning Consolidated Financial Position ……………………………………………

6(3) Qualitative Information Concerning Projected Consolidated Operating Results ……………………………….

7

2. Matters Concerning Summary Information (Notes) ……………………………………………………………………

7(1) Changes to Material Subsidiaries during the Consolidated Period under Review ……………………………..
(2) Application of Special Accounting Method in the Preparation of the Quarterly Consolidated Financial
Statements ………………………………………………………………………………………………………………
(3) Change in Accounting Policy, Change in Accounting Estimates, and Retrospective Restatements …………

77(4) Supplemental Information …………………………………………………………………………………………….

7

3. Quarterly Consolidated Financial Statements ………………………………………………………………………….

9(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………….
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income …………………………………………………………………………………………………………………..
Quarterly Consolidated Statements of Income

911

Consolidated Nine-month Period ended July 31, 2016 ……………………………………………………..

11

7

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month Period ended July 31, 2016 ……………………………………………………..

12(3) Notes Concerning Quarterly Consolidated Financial Statements ………………………………………………..

13(Notes Relating to the Going Concern Assumption) ………………………………………………………………

13(Note on Significant Changes to Shareholders’ Equity) ………………………………………………………….

13(Business Segment Information) ……………………………………………………………………………………

13

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
Management environment (From November 1, 2015 to July 31, 2016
During the third quarter of Kanamoto’s current consolidated fiscal year, the business environment maintained amodest recovery trend, supported by continuation of the government’s current economic and monetary policy
measures. Conditions continued to demand vigilance, however, including developments such as the drop in
stock prices and appreciation of the yen that have accompanied the decelerating economic growth in newly
developing countries and concerns of a slowdown of the global economy triggered by the effects of GreatBritain’s vote to withdraw from the EU.
< Third Quarter Operating Results > (From November 1, 2015 to July 31, 2016)
In the construction industry related to the Kanamoto Group, private sector construction investment remained
brisk along with construction and equipment investment. Yet even as construction demand for disaster
restoration and projects such as the Tokyo Olympics remains vigorous, construction demand in other regions isbeing affected overall by delays in construction starts, including infrastructure maintenance works, and continues
to languish. While a recovery trend can be expected to appear gradually in the future, for now the management
environment on the whole continues to be challenging.
Given such circumstances, the Kanamoto Group continued to push ahead with key initiatives based on thevarious measures in its Medium-term Management Plan (fiscal 2014 - fiscal 2016). Together with expanding its
base in the Tokyo metropolitan area and other locations where public and private sector demand is concentrated,
the Company took steps to broaden and strengthen its domestic base of operations. These including launching a
new Specialized Equipment Engineering Division, comprised of a Tunnel Machinery Section and Water
Treatment Machinery Section, as part of the Company’s growth strategy.
As a result, net sales for the consolidated nine-month period ended July 31, 2015 rose by 4.5% from the same
period of the prior consolidated fiscal year to ¥103,422 million. From an earnings perspective, income reflected
the impact of the increased burden for depreciation and amortization resulting from investments in rental andother assets to strengthen Kanamoto’s equipment portfolio. As a result, operating income decreased 15.4% fromthe same period of the prior consolidated fiscal year to ¥10,576 million, ordinary income decreased 19.9% yearon-year to ¥10,049 million, and profit attributable to owners of parent fell 21.5% from the same period one year
earlier to ¥5,889 million.
Results for each of the Company’s business segments were as follows.
< Business related to the Construction Equipment Rental Division >In the construction-related business that is Kanamoto’s core business, construction demand was brisk,
primarily for recovery and restoration in the Tohoku Region and infrastructure refurbishment ahead of the Tokyo
Olympics. At the same time, net sales have been boosted substantially with the addition of Nishiken Co., Ltd. to
the Group’s consolidated operations in the Kyushu Region, an area where branch development previously was
limited. To support disaster recovery activities following the earthquake that struck Kumamoto City and thesurrounding area in Kumamoto Prefecture on April 16, 2016, the Kanamoto Group is responding to restoration in
the region with its full capabilities, including strengthening cooperation with Group firms and effective allocation of
the Group’s management resources.
Used construction equipment sales eased down 4.0% from the corresponding period of the prior consolidated
fiscal year, as Kanamoto restricted sales in line with its initial period plan in order to maintain the propercomposition of rental assets in the Company’s portfolio.
As a result of these actions, net sales for Kanamoto’s construction-related businesses for the first nine monthsof the fiscal year increased 3.3% from the same period of the previous consolidated fiscal year to ¥94,830 million,
and operating income declined 17.7% year-on-year to ¥9,872 million.
< Other businesses >In the Company’s other businesses, both steel products-related sales and sales in the information andtelecommunications-related division were steady, and the welfare-related business of Nishiken Co., Ltd. has
been newly included. Net sales were up 20.3% from the same period of the prior consolidated fiscal year to¥8,591 million, and operating income increased 72.4% year-on-year to ¥392 million.
－

5 －< Change in number of branches >During the third quarter of the current consolidated fiscal year, Kanamoto opened five new branches: theChusan Branch (Zentsuji City, Kagawa Prefecture), the Shinjo Branch (Shinjo City, Yamagata Prefecture), theYamanashi Minami Branch (Minamikoma-gun, Yamanashi Prefecture), the Kashiwazaki Branch (Kashiwazaki
City, Niigata Prefecture), and the Ishikari Branch (Ishikari City, Hokkaido). The Company did not close any
branches.
(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Compared with the end of the prior consolidated fiscal year, total assets at the end of the third quarter underreview increased by ¥15,350 million to ¥218,270 million. This change was tempered for the inclusion of Nishiken
Co., Ltd. within the scope of consolidation, and mainly reflected increases of ¥8,425 million in rental equipment,¥2,554 million in buildings and structures, and ¥2,794 million in land, respectively.
Total liabilities were ¥139,721 million, an increase of ¥8,800 million compared with the end of the priorconsolidated fiscal year. Like the increase in total assets this was tempered for the new consolidation, with theprincipal items being increases of ¥4,100 billion in long-term loans payable, ¥4,032 million in short-term loans
payable and ¥2,313 million in accounts payable-other, respectively, and a decrease of ¥3,200 million in income
taxes payable.
Total net assets were ¥78,548 million, ¥6,550 million higher than at the end of the prior consolidated fiscal year.
This was mainly because of a third quarter profit of ¥5,889 million and an increase of ¥2,153 million in noncontrolling interests, and a decrease of ¥1,236 million as a result of dividends from surplus.

－

6 －(3) Qualitative Information Concerning Projected Consolidated Operating Results
At this time the Company has not made any changes to the press release “Notification Concerning Revision of
Projected Full-Year Operating Results for the Business Period Ending October 2016” released on June 10, 2016.

2. Matters Concerning Summary Information (Notes)(1) Changes to Material Subsidiaries during the Consolidated Period under Review
The Company had no material items to report.
(2) Application of Special Accounting Method in the Preparation of Quarterly Consolidated Financial Statements
The Company had no material items to report.
(3) Change in Accounting Policy, Change in Accounting Estimates, and Retrospective Restatements
Change in Accounting Policy(Application of the Accounting Standard for Business Combinations and related standards)
Beginning from the first quarter of the current consolidated fiscal year, the Company will apply the AccountingStandard for Business Combinations (Accounting Standards Board of Japan Statement No. 21 dated September
13, 2013; “the Business Combinations Accounting Standard”), the Accounting Standard for Consolidated
Financial Statements (Accounting Standards Board of Japan Statement No. 22 dated September 13, 2013; “theConsolidation Accounting Standard”), and the Accounting Standard for Business Divestitures (AccountingStandards Board of Japan Statement No. 7 dated September 13, 2013; “the Business Divestitures AccountingStandard”), and related standards, and together with reporting as capital surplus the difference that results fromthe change of Kanamoto’s equity interest in subsidiaries over which it will continue to exercise control, theCompany will change to the method of reporting costs related to business combinations as an expense in the
consolidated fiscal year in which they are incurred. Furthermore, for business combinations executed on or after
the beginning of the first quarter of the current consolidated fiscal year, the Company has changed its reporting
method to reflect adjustments to the allocated amounts of business combination costs resulting from the final
determination of the provisional accounting treatment in the quarterly consolidated financial statements of thequarter in which the date of the business combination falls. In addition, the Company has revised its presentationof profit etc., and revised its presentation from minority interests to non-controlling interests. To reflect thesechanges in presentation, the quarterly consolidated financial statements for the third quarter of the fiscal year
ended October 31, 2015 and the consolidated financial statements for the prior consolidated fiscal year havebeen restated to reflect a consistent presentation format.
Application of the accounting standards is subject to the transitional treatment set forth in Clause 58-2(4) of theBusiness Combinations Accounting Standard, Clause 44-5(4) of the Consolidation Accounting Standard, andClause 57-4(4) of the Business Divestitures Accounting Standard, and the Company will apply these accounting
standards in the future from the beginning of the first quarter of the current consolidated fiscal year.
The effect of this change on the quarterly consolidated financial statements for the nine-month period of thecurrent consolidated fiscal year is not material.
(Application of Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
In conjunction with amendment of the Corporation Tax Law, certain consolidated subsidiaries have applied thePractical Solution on a Change in Depreciation Method Due to Tax Reform 2016 (Accounting Standards Board ofJapan Practical Issue Task Force Report No. 32, June 17, 2016) in the third quarter of the current consolidated
fiscal year, and have changed their method of depreciation related to buildings and accompanying facilities andstructures that were acquired on or after April 1, 2016 from the declining balance method to the straight-line
depreciation.
The effect of this change on the quarterly consolidated financial statements for the nine-month period of thecurrent consolidated fiscal year is not material.
(4) Supplemental Information(Effect of the change in the corporation tax rate etc.)
Under the Act for Partial Revision of the Income Tax Act Etc. (Act No. 15 of 2016) and the Act for Partial
Revision of the Local Tax Act (Act No. 13 of 2016), which were promulgated on March 31, 2016, Japan’s
corporate tax rate and business tax rate will be reduced in the consolidated fiscal year beginning on or after April
1, 2016. In conjunction with this change, the statutory effective tax rate used to calculate deferred tax assets and－7 －deferred tax liabilities will be revised from 32.0% applied in the past to 30.6% for temporary differences expected
to be eliminated in the consolidated fiscal years that begin on November 1, 2016 and November 1, 2017, andfrom 32.0% to 30.4% for temporary differences expected to be eliminated in the consolidated fiscal year thatbegins on November 1, 2018.
As a result of applying this statutory effective tax rate, the amount for deferred tax assets, (amount after
deducting deferred tax liabilities) will decrease by ¥10 million, and the amount for income taxes-deferred and theamount for valuation difference on available-for-sale securities will increase by ¥48 million and ¥37 million,
respectively.

－

8 －3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2015)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2016)

35,90037,251
350
672
272
8,214
610
623
−701
83,19534,29738,023
200
813
351
9,800
428
851
−702
84,064

164,914−97,573
67,341
25,840−16,275
9,564
5,714−4,965749
32,354
2,539−1,112
1,426
111,436

187,602−111,834
75,76730,752−18,633
12,118
6,954−5,8991,055
35,148
1,939−1,311
628
124,718

－
316
316

675
396
1,072

6,317
285
2,008
−528
−110
7,972
119,724
202,919

6,473
350
2,336
−526
−219
8,414
134,205
218,270

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Raw materials and supplies
Construction machine parts
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment,net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets－

9 －(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2015)

Current Consolidated
Fiscal Year Third Quarter(As of July 31, 2016)

27,775727－
12,550
1,585
3,711
856
19,233
3,093
69,53427,0984,760
80
13,747
1,418
511
790
21,546
2,605
72,557－
19,614
1,831
39,254－－317
368
61,387130,92110
23,7142,790
39,791
90
253
381
130
67,163
139,721

13,652
14,916
41,156−2,12867,597

13,652
14,91645,808−2,12972,249

1,948
−0
43
1,991
2,409
71,998202,919

1,598
−0
137
1,735
4,563
78,548218,270

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of bonds
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Accounts payable - other
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Lease obligations
Long-term accounts payable - other
Provision for directors' retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net Assets

－

10 －

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Nine-month Period ended July 31, 2016)(Unit: Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
A receipt bonus
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes payable
Foreign exchange losses
Provision of allowance for investment loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Compensation income for damage
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Impairment loss
Loss on valuation of investment securities
Loss on valuation of shares of subsidiaries andassociates
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent－

Prior Consolidated Fiscal
Current Consolidated
Year Third Quarter
Fiscal Year Third Quarter(From November 1, 2014 (From November 1, 2015
to July 31, 2015)
to July 31, 2016)
98,956
103,422
68,116
72,70630,84030,716
18,341
20,13912,498
10,576

11 －

5
109
29
50
24
190
3
145
558

5
135
20
52
10
－
30
147
400

383
14
－
－
113
510
12,546

208
9
453
109
145
927
10,049

8
12
118
－
138

17
6
－
14
39

123
42
27

65
－
－

－

49

193
12,491
4,473
305
4,779
7,712
213
7,499

115
9,973
3,468
301
3,769
6,204
314
5,889

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Nine-month Period ended July 31, 2016)(Unit: Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests－

Prior Consolidated Fiscal
Current Consolidated
Year Third Quarter
Fiscal Year Third Quarter(From November 1, 2014 (From November 1, 2015
to July 31, 2015)
to July 31, 2016)
7,712
6,204

12 －

436
－
12
449
8,162

−362
−0
93
−268
5,935

7,952

5,625

210

310

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Note on Significant Changes to Shareholders’ Equity)
The Company had no material items to report.
(Business Segment Information)[ Segment information ]I Third quarter of the prior consolidated fiscal year (From November 1, 2014 to July 31, 2015)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

91,813

7,143

98,956－－－

91,813

7,143

98,956

11,992

227

12,220Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment profit

Total(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and business related to the
Information Products Division and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

11,992
227
278

Operating income reported on the Consolidated
Quarterly Statements of Income

12,498

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
In the “Business related to the Construction Equipment Rental Division” segment, the Company
recorded an impairment loss on goodwill of ¥42million

－

13 －

II Third quarter of the current consolidated fiscal year (From November 1, 2015 to July 31, 2016)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

94,8308,591

103,422－－－

94,8308,591

103,422

9,872

392

10,264

Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment profit

Total(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, business related to the
Information Products Division, welfare-related business and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

9,872
392
312

Operating income reported on the Consolidated
Quarterly Statements of Income

10,576

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
In the second quarter consolidated period under review, Nishiken Co., Ltd. was included in the scope of
consolidation.
The amount of the increases in goodwill for the third quarter of the current consolidated fiscal year as aresult of this event are ¥380 million for business related to the Construction Equipment Rental Division,and ¥331 million for other businesses.
4. Information concerning changes in reporting segments etc.
(Application of the Accounting Standard for Business Combinations and related standards)
As described in Change in Accounting Policy, beginning from the first quarter of the current consolidated
accounting year the Company will apply the Accounting Standard for Business Combinations and related
standards, and together with reporting as capital surplus the difference that results from the change of
Kanamoto’s equity interest in subsidiaries over which it will continue to exercise control, the Company haschanged to the method of reporting costs related to business combinations as an expense in the
consolidated fiscal year in which they are incurred. In addition, for business combinations executed on orafter the beginning of the first quarter of the current consolidated fiscal year, the Company has changed its
reporting method to reflect adjustments to the allocated amounts of business combination costs resulting
from the final determination of the provisional accounting treatment in the quarterly consolidated financial
statements of the quarter in which the date of the business combination falls.
The effect of this change in accounting policy on the Company’s income by segment for the third quarterof the current consolidated fiscal year is not material.

－

14 －