Consolidated Financial Results for the Third Quarterof the Fiscal Year Ending March 31, 2023
February 10, 2023 released

Company name:
Stock listing:Code number:
URL:
Representative:
Inquiries:

Sun Frontier Fudousan Co., Ltd.
Tokyo Stock Exchange Prime Section
8934
https://www.sunfrt.co.jp/en/
Seiichi Saito, President
Takeshi Hirahara, Executive Officer, General Manager of Corporate Planning Department(Phone: +81-3-5521-1301)
Scheduled date of quarterly securities report submission: February 13, 2023
Supplemental materials for the financial results: Yes
Presentation to explain for the financial results: Yes (For institutional investors and analysts)*Amounts are rounded down to millions of yen.

1.Consolidated Performance in the Third Quarter of the Fiscal Year Ending March 31, 2023
(1) Consolidated Operating Results (April 1, 2022 to December 31, 2022)(“¥” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating Profit

Ordinary Profit

Net Income

FY2023/3 3Q¥75,32822.3%¥14,69620.9%¥14,401

20.2%¥10,35437.7%

FY2022/3 3Q¥61,61832.7%¥12,15172.8%¥11,983

82.6%¥7,51985.3%(Note) Comprehensive income: 3rd Quarter of FY ending March 31, 2023: 11,187 millions of yen (43.7%)‘3rd Quarter of FY ended March 31, 2022 : 7,786 millions of yen (100.2 %)Fully Diluted
Net Income per Share
Net income per Share
(yen)
(yen)
FY2023/3 3Q

213.05212.85

FY2022/3 3Q

154.40154.26(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio (%)

FY2023/3 3Q¥145,954¥83,287

54.8%

FY2022/3¥136,512¥74,452

52.2%(Reference) Total Equity: 3rd Quarter of FY ending March 31, 2023 : ‘79,971 millions of yen
FY ended March 31, 2022
: ‘71,282 millions of yen
2.Cash Dividends
Cash Dividends per Share (yen)stnd
1 quarter end 2 quarter end
3rd quarter end
Year end
FY2022/3
21.00
23.00
FY2023/3-

23.00

Annual Total
44.00

-

FY2023/3 (Forecast)(Note) Changes from the latest released dividend forecast: Yes

-

25.00

48.00

3.Forecast for Consolidated Financial Results for FY2023 (April 1, 2022 to March 31, 2023)(“¥” indicates millions of yen, percentage figures indicate year-on-year changes.)

Net Sales

Operating income

Ordinary income

Full¥82,000
15.1%¥14,800
22.0%¥14,500
year(Note) Changes from the latest released performance: Yes
-1

18.7%

Profit Attributable to
Owners of Parent¥10,400

40.3%

EPS (yen)213.99※ Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changing
scope of consolidation): None
New companies: Excluded companies: (2) Adaption of special accounting practices in the preparation of quarterly consolidated financial statements
None(3) Changes in accounting policies, estimates and retrospective restatement
1) Changes in accounting policies due to changes in accounting standard:
2) Changes in accounting policies other than 1) above:3) Changes in accounting estimates:
4) Retrospective restatement:

Yes
None
None
None

(4) Number of outstanding shares (common stock)1) Number of outstanding shares at the endof the period (including treasury stock):

FY2023/3 3Q

48,755,500
shares

FY2022/3

48,755,500
shares2) Number of shares of treasury stock at theend of the period:

FY2023/3 3Q

165,320
shares

FY2022/3

56,644
shares3) Average number of shares for the period(April 1, 2022 to December 31, 2022):

FY2023/3 3Q

48,601,210
shares

FY2022/3 3Q

48,698,856
shares(Note) The number of treasury shares at the end of the third quarter of the fiscal year ending March 31, 2023
includes the 143,800 treasury shares acquired based on the resolution of the Board of Directors held on May 13,
2022, after deducting the 35,124 treasury shares disposed of as renumeration of restricted stock.
※This Summary of Consolidated Financial Results is not subject to review processes under the Financial
Instruments and Exchange Act.
※Explanation for appropriate use of forecast and other special matters
Earnings per share in the Forecast for Consolidated Financial Results for FY2023 is calculated based on
the average number of shares for the period 48,601,210 shares and excluded the effect regarding acquiring
treasury stock due to “Notice of Additional Contribution to Employee Stock Ownership Plan (J-ESOP)”
released today.
Forward-looking statements, such as forecast of consolidated financial performance, stated in thisdocument are based on information currently possessed by the Company as well as certain assumptions
deemed rational. It does not mean that the Company assurances that the contents mentioned in these forwardlooking statements will ever materialize. Actual financial performance may be significantly different fromsuch expectations due to various factors. For further information on assumptions used in forecasts, please
see Page 4, 1. (3) Forward Looking Statements such as Consolidated Earnings Forecasts.

-2

Accompanying Materials
Contents
1. Qualitative information regarding consolidated performance for the first nine months.............................4(1) Business Performance...........................................................................................................................4(2) Financial Position .................................................................................................................................7(3) Forward-Looking Statements such as Forecast for Consolidated Financial Results for FY2023 ........7
2．Quarterly Consolidated Financial Statements and Key Notes .....................................................................9(1) Consolidated Balance Sheet .................................................................................................................9(2) Consolidated Statements of Income and Comprehensive Income...................................................... 11(3) Notes to Consolidated Financial Statements ......................................................................................13(Notes to Assumption of Going Concern) ................................................................................................13(Notes to Significant Changes in Shareholders' Equity) ..........................................................................13(Change of Accounting Policies)..............................................................................................................14(Additional Information) ..........................................................................................................................14(Segment Information) .............................................................................................................................15(Revenue Recognition).............................................................................................................................16(Significant Subsequent Events) ..............................................................................................................16-3

1. Qualitative information regarding consolidated performance for the first nine months(1) Business Performance
Matters concerning the future in this document are judged by Sun Frontier Group as of the end of thethird quarter of the fiscal year ending March 31, 2023.
During the nine months ended December 31, 2022, the Japanese economy continued to recover,particularly in personal consumption and capital investment, as easing of restrictions on economic and social
activities further advanced amid the transition to coexist with COVID-19. There are concerns that the global
economy will slow down due to prospect for the prolonged Ukraine issue and inflation and interest rate
hikes in other countries.
In the real estate market, the average rent in the Tokyo Business District (5 districts of the Central Tokyo:
Chiyoda, Chuo, Minato, Shinjuku, and Shibuya) in December was 20,059 yen per tsubo, down for the 29th
consecutive month (total down 2,955 yen/ 12.8%). And the average vacancy rate for the month was almost
flat at 6.47% (according to a survey by a private research institution). Overall office market conditions
remain weak. On the other hand, in the real estate investment market, although institutional investors’
willingness to invest is generally strong, the outlook remains unpredictable due to the global monetary
tightening phase.
During the nine months ended December 31, 2022, Real Estate Revitalization Business, which is the corebusiness of the Group, saw an increase in the number of units sold despite net sales remained flat. And
profits were at the same level as the same period of the previous year due to the contribution of transactions
with high profit margin. Real Estate Service Business continued to show stable performance. In Hotel
Development Business, sales and profit increased significantly year on year due to the completion of thesale of two hotels. Hotel Operation Business, which has been greatly affected by the COVID-19 pandemic,
saw a rapid recovery in sales. In addition to the continued increase in demand associated with easing ofrestrictions on economic and social activities, the Nationwide Travel Subsidy Program, a campaign topromote domestic tourism started in October, and the lifting of the ban on personal travel from abroad also
contributed to the recovery.
As a result, net sales amounted to 75,328 million yen (up 22.3% YoY), operating profit amounted to
14,696 million yen (up 20.9% YoY), ordinary profit amounted to 14,401 million yen (up 20.2% YoY) andprofit attributable to owners of parent amounted to 10,354 million yen (up 37.7% YoY).
The results of each segment are as follows.
(Real Estate Revitalization Business)
In Real Estate Revitalization Business, we are engaged in (i) Replanning Business and (ii) Rental
Building Business.
(i) In Replanning Business, we provide a one stop service that provides an integrated real estate service
from building purchasing to planning for renovation and utilization, construction work, leasing,management, sales, and building management. Sales in this quarter are progressing smoothly due to thestrong investment appetite from investors. At the same time, we are actively promoting property purchasewhile monitoring the real estate market in macroeconomic fluctuations and the impact of monetary policies,and carefully selecting properties. In commercialization, while anticipating changes in town, office andworking style, we are aiming to create an office that meets the needs of hybrid work styles and is the choiceof office in the new normal. Through coordination with the leasing brokerage division, the Company
advanced attraction of tenants during the COVID-19 pandemic as well and finished real estate products withhigh utilization and high added value, thereby selling products that meet the expectations of a wide rangeof clients in Japan and overseas. For example, in December, we worked in close coordination with our-4leasing brokerage division and sold five office buildings in Tokyo to an investor with almost full occupancy.
In January 2023, these five properties, which we continue to manage entrusted after being sold, acquired
BELS certification, the Building-Housing Energy-efficiency Labeling System. The Group will promote
initiatives toward further conversion to energy conservation and decarbonization. In Real Estate
Revitalization Business in New York City, U.S.A., the Company sold two properties in commercializationin order to meet the diversification needs of a client's asset portfolio. In addition, as small-lot products inspecified joint real estate ventures, the Company sold medical and educational malls (new construction,
third and fourth composition) and a licensed nursery school (new construction, first composition). Althoughsales of relatively large-scale properties decreased compared to the same period of the previous fiscal year,
the number of properties sold in the first nine months in Replanning Business increased by 4 compared tothe same period of the previous fiscal year to 22, while expanding the customer base including properties
sold in New York City. Accordingly, although net sales decreased compared to the same period of theprevious year, profits increased due to the contribution of transactions with high profit margin.
(ii) In Rental Building Business, with the aim of building a stable revenue base as a stock business, theGroup is working to increase rent income over the medium to long term while expanding the number ofrental building properties in Replanning Business and utilizing the operational capabilities accumulated inreal estate service division. Compared to the same period of the previous year, in the first nine months' net
sales and profits decreased due to a decrease in rent income from properties held as inventories.
As a result, net sales in Real Estate Revitalization Business amounted to 47,550 million yen (down 4.3%
YoY) and segment profit amounted to 14,638 million yen (down 0.6% YoY).
(Real Estate Service Business)
In Real Estate Service Business, we are engaged in (i) Property Management Business, (ii) Building
Maintenance Business, (iii) Sales Brokerage Business, (iv) Leasing Brokerage Business, (v) Conference
Room Rental Business, and (vi) Rent Guarantee Business. Each of these operating divisions is developing
its businesses in medium-sized office buildings in central Tokyo by gathering their expertise and working
together. This is also the foundation for generating high profitability in the Replanning Business by creating
added value through a chain reaction of expertise cultivated through originality and ingenuity in the field.
(i) In Property Management Business, the Company supports owners to achieve high-occupancy andhigh-profitability building management by raising the satisfaction of tenants through attentive property
management and by working to attract tenants in cooperation with the leasing brokerage division andrevising conditions for reasonable rents. Despite weak market conditions, in the first nine months
maintained a 90% occupancy rate while the number of managing buildings grew by approximately 10%
from the same period of the previous year. Accordingly, both net sales and profits increased from the same
period of the previous year.

Number ofManaging Buildings
Occupancy Rate

End ofDecember 2020

End ofDecember 2021

End ofDecember 2022

404 buildings

413 buildings

457 buildings

95.7%

90.8%

90.8%

(ii) In Building Maintenance Business, under the slogan “Make Tokyo the Most Beautiful City in theWorld,” we provide comprehensive building maintenance services, including inspections to maintain andmanage buildings, cleaning to maintain beauty and comfortable spaces, and renovation work. The Group is
promoting collaboration with the property management division with its strength in high-rise cleaning of
exterior windows and walls using swings, waterproofing work and exterior wall renovation work. In the-5first nine months, both net sales and profits increased compared to the same period of the previous year due
to synergistic effects resulting from M&A and an increase in the number of managing buildings.
(iii) In Sales Brokerage Business, as part of our real estate consulting services, we are working to respondquickly to consultation requests from clients in other divisions, such as Property Management Business andLeasing Brokerage Business. Office building business division has expanded its customer base by working
together to support building owners manage their buildings, and succeeded in concluding sales brokeragecontracts based on the trust it has built up. Both net sales and profits increased compared to the same periodof the previous fiscal year due to favorable brokerage to domestic and overseas investors.
(iv) In Leasing Brokerage Business, we have developed a service network of 10 sites, mainly in central
Tokyo, which functions as an information center for consultation close to the local building owners. In
addition, the needs and changes of tenants quickly acquired at leasing sites are utilized in research andproposals for optimal use of office space, leading to the creation of a new sense of value from our clients’perspective in Replanning Business product planning. Accordingly, both net sales and profits increased
compared to the same period of the previous year due to an increase in the number of contracts concluded.
(v) In Conference Room Rental Business, we have been able to capture continuous use and the demandsof new customer segments by providing services that respond to the changing times, attracting customers
based on data, and making flexible proposal sales to meet clients’ needs through close ties with local
communities. Demand for corporate training, seminars, certification tests, etc. continued to recover amid
further progress in easing of restrictions on economic and social activities. In addition, net sales increased
compared to the same period of the previous year due to orders for large-scale projects for two newly opened
conference rooms. Profits also increased despite a temporary increase in expenses associated with the
opening of new conference rooms.
(vi) In Rent Guarantee Business, we not only guarantee tenants’ rents in arrears, but also support until thelease is surrendered, and provide services tailored to building owners easing the sense of burden in building
management. Consultations from building owners increased due to the increase of vacant rooms and tenantcredit concerns, caused by the pandemic of COVID-19. Accordingly, the number of new contracts ofguarantee increased, and both net sales and profits in the first nine months increased compared to the same
period of the previous year.
As a result of above, net sales in Real Estate Service Business amounted to 6,505 million yen (up 18.8%
YoY) and segment profit amounted to 3,646 million yen (up 22.2% YoY).
(Hotel and Tourism Business)
In Hotel and Tourism Business, we are engaged in (i) Hotel Development Business and (ii) Hotel
Operation Business.
(i) In Hotel Development Business, net sales and profits both increased compared to the same period of
the previous year due to the handover of two hotels at the end of October, out of the three hotels announced
for sale at the end of August 2022. One hotel that was announced to be sold at the same time as these two
hotels’ handover is scheduled in April 2023. The net sales and profits from this transaction are scheduled tobe recorded in the first quarter of the fiscal year ending March 31, 2024. The return from the sale of thehotel will be reinvested in hotel development, including M&A, centering on the “Tabino Hotel” brand andcondominium hotels, to expand the business.
(ii) In Hotel Operation Business, we opened “Sora Niwa Terrace Kyoto” and “Bettei Kamogawa” in June
2022. As of February 10, we operated a total of 22 hotels (2,612 rooms). While demand for domestic tourism
further recovered in line with the easing of restrictions on economic and social activities, against the
backdrop of the effects of the Nationwide Travel Subsidy Program and the lifting of the ban on private travelfrom abroad, the occupancy rate and average daily rate continue rising based on the Group's high added
value strategies. Accordingly, compared to the same period of the previous year, net sales in the nine months-6

increased and turned a profit in the third quarter (October-December period).
As a result of the above, net sales in Hotel and Tourism Business amounted to 20,680 million yen (up266.9% YoY) and segment profit was 1,459 million yen (it was 1,227 million yen in deficit in the same
period of the previous fiscal year).
(Other Business)
In Other Business, we are engaged in (i) Overseas Development Business and (ii) Construction Businessand so on.
(i) In Overseas Development Business, we are advancing into Southeast Asian countries where growth isexpected, developing real estate centered on condominiums and houses using Japanese advanced
construction technology, and focusing on providing Asian people with a firsthand experience of Japanesequalities. In the current period, revenue from the management of condominiums in Vietnam which we arepromoting as a stock business increased, although net sales decreased compared to the same period of theprevious year due to a decrease in revenue from the sale of properties. Accordingly, profits in the first ninemonths increased due to an increase in profits from the sale of properties in Vietnam, despite a write-downof inventories in the Indonesian market. In November, we sold out all our properties in the Indonesianmarket. The net sales will be included in the fourth quarter (January-March period).
(ii) In Construction Business, the Group is engaged in renewal planning, repair and reform, interior
finishing work and telecommunications work for commercial buildings. Both net sales and profits in thefirst nine months increased compared to the same period of the previous year due to sales from large-scaleconstruction projects at group subsidiaries.
As a result of the above, net sales in Other Business amounted to 1,228 million yen (up 2.6% YoY) andthe segment profit amounted to 179 million yen (up 69.0% YoY).
(2) Financial Position
Total assets as of December 31, 2022 amounted to 145,954 million yen (up 6.9% YoY), liabilities
amounted to 62,666 million yen (down 1.0% YoY) and net assets amounted to 83,287 million yen (up 11.9%
YoY).
The increase in total assets was mainly due to an increase of 14,860 million yen in cash and deposits,
3,861 million yen in real estate for sale, and 1,352 million yen in building from property plant and equipment,
which offset a decrease of 7,752 million yen in real estate for sale in process, 2,008 million yen in longterm guarantee deposit.
The increase in liabilities was mainly due to a decrease of 3,339 million yen in long-term borrowings due
within one year, and a decrease of 2,006 million yen in income taxes payable, despite an increase of 515
million yen in account payable, 544 million yen in income taxes payable for consumption tax, and 3,638
million yen in long-term borrowings.
The increase in net assets was mainly due to the recording of 10,354 million yen in profit attributable toowners of parent despite the payment of year-end dividend of 2,240 million yen.
Equity ratio increased 2.6 percentage points to 54.8%.
(3) Forward-Looking Statements such as Consolidated Earnings Forecasts
As for the results for the fiscal year ending March 31, 2023, we revised the forecast figures announced on
May 13, 2022. For details of the revision, please refer to “Notice of Upward Revision to Financial Results
Forecast for FY2023 and Revision to Dividend Forecast (Increase)” announced today.

-72．Quarterly Consolidated Financial Statements and Key Notes(1) Consolidated Balance Sheet(Unit: million yen)
As of March 31, 2022

As of December 31, 2022

AssetsCurrent assets
Cash and time deposits

30,053

44,913945

1,569

Real estate for sale

14,222

18,084

Real estate for sale in process
Costs of uncompleted construction
contracts
Supplies

62,93455,181

100

175

83

103

Other

2,603

1,077

Allowance for doubtful accounts

(21)

(14)

110,920

121,090

Buildings (net amount)

7,876

9,229

Land

10,046

10,083872

917

18,796

20,229Goodwill

408

359

Other

164

355

Total intangible assets

572

715

Guarantee deposits

4,726

2,717

Deferred tax assets

1,036

887

Other

460

312

Allowance for doubtful accounts

(0)

(0)

Total investments and other assets

6,222

3,917

25,591

24,863

136,512145,954

Notes, accounts receivable, and contract assets

Total current assets
Non-current assets
Property, plant and equipment

Other (net amount)
Total property, plant and equipment
Intangible assets

Investments and other assets

Total non-current assets
Total assets-8

(Unit: million yen)
As of March 31, 2022

As of December 31, 2022

Liabilities
Current liabilities
Accounts payable - trade

1,345

1,861

Short-term borrowings

30

Current portion of long-term borrowings

6,874

208
3,534

Income taxes payable

3,528

1,521

191

119

73

51

39

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Provision for fulfillment of guarantees
Other

4,126

38
5,691

Total current liabilities

16,21013,02744,16947,807Retirement benefit liability

6

5Provision for share-based remuneration

68

80

Other

1,605

1,745

Total non-current liabilities

45,84949,63962,06062,666

Share capital

11,965

11,965

Capital surplus

6,445

6,445

Retained earnings

52,91761,031

Treasury shares

(67)

(180)

71,26079,261

Non-current liabilities
Long-term borrowings

Total liabilities
Net Assets
Shareholders' equity

Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

3

2

19

707

Total accumulated other comprehensive income

22

709

Share acquisition rights

30

30

Non-controlling interests

3,139

3,286

Total net assets

74,452

83,287

136,512145,954

Total liabilities and net assets-9(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
For the nine months
ended December 31,
2021
61,618(Unit: million yen)
For the nine months
ended December 31,
2022
75,328

Cost of sales

44,09854,844Gross profit

17,51920,483

Selling, general and administrative expenses

5,368

5,787

Operating profit

12,151

14,696

Interest and dividend income

25

37

Foreign exchange gains

23

75

Subsidy income

148

51

Other

56

32

Total non-operating income

253

196

Interest expenses

329

354

Loss on investments based on equity method

55

101

Other

36

34

Total non-operating expenses

421

490

11,983

14,401

-

101

115

-

0

-

116

101

Impairment loss-

Settlement money

254

27
-

Other

14

-

Total extraordinary losses

268

27

Profit before income taxes

11,831

14,475

Income taxes - current

4,280

3,686

Income taxes - deferred

36

326

Total income taxes

4,317

4,013

Profit7,514

10,462

(5)

107

7,519

10,354

Net sales

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income
Gain on sale of shares of subsidiaries andassociates
Gain on bargain purchase
Other
Total extraordinary income
Extraordinary loss

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent-10

Consolidated Statement of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income

For the nine months
ended December 31,
2021
7,514

(Unit: million yen)
For the nine months
ended December 31,
2022
10,462

(0)

(0)

272

725

272

725

7,786

11,187

7,778

11,0418

145

Comprehensive income attributable to
Owners of parent
Non-controlling interests-11(3) Notes to Consolidated Financial Statements(Notes to Assumption of Going Concern)
Not applicable.
(Notes to Significant Changes in the Amount of Shareholders’ Equity)
For FY2022/3 3Q (April 1, 2021 to December 31, 2021)
1. Dividend paid
Total
Dividends per
dividends
share (yen)(million yen)

Resolution

Type of shares

Annual General Meetingof Shareholders,June 22,2021

Commonshares

2,047

42.00

Board of Directors,
November 9, 2021

Commonshares

1,023

21.00

Record date

Effective
date

Source ofdividends

March 31,2021

June 23,2021

Retainedearnings

September 30, December 7,
2021
2021

Retainedearnings

Note: 1. The total amount of dividends decided at the Annual General Meeting of Shareholders on June 22, 2021 includes
dividends of 2 million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan
(J-ESOP).
2. The total amount of dividends decided at the Board of Directors held on November 9, 2021, includes dividends of 1
million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

2. Dividends for which the record date is during FY2022/3 3Q and the effective date is after the last day of
FY2022/3 3Q.
Not applicable.
For FY2023/3 3Q (April 1, 2022 to December 31, 2022)
1. Dividend paid
Total
dividends Dividends per
share (yen)(million yen)

Record date Effective date

Source ofdividends

March 31,2022

June 22, 2022

Retainedearnings

23.00 September 30, December 6,
2022
2022

Retainedearnings

Resolution

Type of shares

Annual General Meetingof Shareholders, June 21,
2022

Commonshares

1,121

23.00

Board of Directors,
November 10, 2022

Commonshares1,118

Note: 1. The total amount of dividends decided at the Annual General Meeting of Shareholders held on June 21, 2022, includes
dividends of 1 million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan
(J-ESOP).
2. The total amount of dividends decided at the Board of Directors held on November 10, 2022, includes dividends of 1
million yen for the Company's shares held by the trust account of the Employee Stock Ownership Plan (J-ESOP).

2. Dividends for which the record date is during FY2023/3 3Q and the effective date is after the last day of
FY2023/3 3Q
Not applicable.
3. Significant changes in shareholders' equity
Based on the resolution of Board of Directors meeting held on May 13, 2022, the Company purchased
143,800 treasury shares. The Company also disposed of 35,464 treasury shares with a due date of July 21,
2022 as a remuneration of restricted shares. As a result, treasury shares increased by 112 million yen during
the first nine months ended December 31, 2022, and stands at 180 million yen as of the end of the period.

-12(Change of Accounting Policies)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31, June 17, 2021, hereinafter referred to as “Fair Value Measurement Implementation Guidance”) has been
applied from the beginning of the first quarter of the fiscal year. In accordance with the transitional treatment
set forth in Paragraph 27-2 of the Fair Value Measurement Implementation Guidance, the new accounting
policies stipulated in the Fair Value Measurement Implementation Guidance will be applied into the future.
The application of this accounting standard has no impact on the consolidated financial statements for theperiod under review.
(Additional Information)
1. Accounting Estimates for the Impact of the Spread of COVID-19 Infections
There have been no material changes to assumptions regarding the impact of the spread of COVID-19
infections described in the “Significant Accounting Estimates” in the Annual Securities Report for theprevious fiscal year.
2. Transactions of Delivering the Company’s Own Shares to Employees etc. through Trusts
The Company conducts transactions to deliver its own shares through trust for the purpose of employee
welfare.
(i) Overview of transaction
The plan provides the Company's shares to employees of the Company who meet certain requirements
based on the share benefit regulations established by the Company in advance.
The Company will grant points to employees who satisfy certain conditions at the end of the fiscal year,
and when they acquire the right to receive benefits, the Company shares corresponding to the granted
points will be delivered. The shares to be granted to employees are acquired in the future with the money
set in trust in advance and managed separately as trust assets.
The total amount method is applied to the Employee Stock Ownership Plan (J-ESOP) in accordancewith the “Practical Solution on Transactions of Delivering the Company’s Own Shares to Employees etc.
through Trusts” (ASBJ PITF No. 30, March 26, 2015).
(ii) Own shares remaining in the trust
The book value of the Company's shares remaining in the trust (excluding the amount of incidental
expenses) is included in net assets. The book value and number of shares of the treasury shares as ofDecember 31, 2022 were 67 million yen and 56,500 shares.
3. Accounting Treatment and Disclosure with the Application of the Group Tax Sharing System
The Company and certain consolidated domestic subsidiaries shifted from the consolidated taxation
system to the group tax sharing system effective from the first quarter of the fiscal year ending March 31,
2023. Accordingly, the accounting treatment and disclosure of corporate tax, local corporate tax and tax
effect accounting are based on the “Treatment of the Accounting and Disclosure under the Group Tax
Sharing System” (ASBJ PITF No. 42, August 12, 2021, hereinafter “PITF No. 42”). Based on Paragraph
32 (1) of PITF No. 42, there is deemed to be no effect on the consolidated financial statements for theperiod under review due to the change in accounting policies resulting from the application of PITF No.
42.

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(Segment Information, etc.)
Segment Information
I For FY 2022/3 3Q (April 1, 2021 to December 31, 2021)
1. Information on net sales and profit and disaggregation of revenue for each reportable segment(Unit: million yen)
Reportable segment
Real Estate Real Estate
Revitalization Service
Business
Business

Hotel andTourism
Business

Subtotal

Other(Note 1)Total

Net sales
Revenue from contracts
with customers

46,165

4,726

5,552

56,445

1,192

57,637

Other revenue(Note 2)

3,502

394

84

3,980

-

3,980

Net sales to externalcustomers

49,667

5,120

5,637

60,425

1,192

61,618

9

356

-

366

4

371

49,677

5,477

5,637

60,792

1,197

61,98914,725

2,982(1,227)

16,480106

16,586

Internal sales or transfers
between segments
Subtotal
Segment profit (loss)

Notes:1. The “Other” segment is a business segment that is not included in the reportable segment and includes the Overseas
Development Business, Construction Business, etc.
2. Other income is rental income, etc., based on ASBJ No. 13 “Accounting Standard for Lease Transactions”.

2. The difference between the total amount of the report segment's profit or loss and the amount recorded in
the Consolidated Statement of Income and the main content of the difference (matters related to thedifference adjustment)(Unit: million yen)
ProfitAmountReportable segment total

16,480

Profit in the “Other” category

106

Elimination of intersegment transactions(0)

Corporate expenses (Note)(4,602)

Ordinary profit in the consolidated statement of income

11,983

Note: Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment.

3. Information on impairment loss or goodwill of fixed assets for each reportable segment
Not applicable.

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II For FY2023/3 3Q (April 1, 2022 to December 31, 2022)
1. Information on net sales and profit and disaggregation of revenue for each reportable segment(Unit: million yen)
Other
Reportable segment
Total(Note 1)
Real Estate Real Estate Hotel and
Revitalization Service
Tourism
SubtotalBusiness
Business
Business
Net sales
Revenue from contracts
with customers

44,364

4,943

20,55969,867

1,216

71,084

Other revenue(Note 2)

3,173

974

97

4,244

-

4,244

Net sales to externalcustomers

47,537

5,917

20,656

74,112

1,216

75,328

13

587

23

624

11

636

47,550

6,505

20,68074,736

1,228

75,965

14,638

3,646

1,459

19,743179

19,923

Internal sales or transfers
between segments
Total
Segment profit

Notes: 1. The “Other” segment is a business segment that is not included in the reportable segment and includes the Overseas
Development Business, Construction Business, etc.
2. Other income is rental income, etc., based on ASBJ No. 13 “Accounting Standard for Lease Transactions”.

2. The difference between the total amount of the report segment's profit or loss and the amount recorded in
the Consolidated Statement of Income and the main content of the difference (matters related to thedifference adjustment)(Unit: million yen)
ProfitAmountReportable segment total

19,743

Profit in the “Other” category

179

Elimination of intersegment transactions

24

Corporate expenses (Note)(5,546)

Ordinary profit in the consolidated statement of income

14,401

Note: Corporate expenses are mainly general and administrative expenses not attributable to the reportable segment.

3. Information on impairment loss or goodwill of fixed assets for each reportable segment
Not applicable.
(Revenue Recognition)
Breakdown of revenue from contracts with customers is as stated in the “Notes to Consolidated Financial
Statements (Segment Information, etc.)”.
(Significant Subsequent Events)
Not applicable.

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