Consolidated Financial Results for the First Quarter of the Fiscal Year ending March 31, 2010
(April 1, 2009 through June 30, 2009)
All financial information has been prepared in accordance with accounting principles generally accepted in Japan. This is apartial English translation of the original Japanese-language document. All information pertains to consolidated results unlessotherwise noted. Information on the basis of presentation of consolidated financial statements does not appear in thistranslation.
August 11, 2009
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:

IT Holdings Corporation
The First Section of the Tokyo Stock Exchange3626
http://www.itholdings.co.jp/e/Susumu Okamoto, President
Yukio Urata, Vice President+81 3-6738-7557

Scheduled dates
Submission of quarterly statements:
Commencement of dividend payments:

August 12, 2009-

Figures in millions of yen are rounded down to the nearest million
1. Consolidated Results for the First Quarter of the Fiscal Year ending March 31, 2010
(April 1, 2009 – June 30, 2009)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net sales

FY 2010 First Quarter
FY 2009 First Quarter

Operating income

Recurring profit

Net income

millions of yen%

millions of yen%

millions of yen%

millions of yen%

65,85566,934

(1.6)
-

851
(362)

-

981
(118)

-

1,101
(457)

-

Net income
per share – basic

Net income
per share – diluted

yen

FY 2010 First Quarter
FY 2009 First Quarter

yen

12.94
(5.40)

12.94-(2) Consolidated Financial Position
Total assets

Net assets

millions of yen

Equity ratio

millions of yen

Net assets per share%

End-First Quarter FY 2010
287,819
145,686
45.5
End-FY 2009
295,327
146,216
44.4
For reference:
End-FY 2009: 131,054 million yen.
Shareholders’ equity: End-First Quarter FY 2010: 130,995 million yen

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record dateor period

End-Q1yen

End-Q2yen

End-Q3Year-end

yen

yen

Total
yen

FY 2009
32.00
32.00
FY 2010
FY 2010
12.00
20.00
32.00
(forecast)
Note: Revision of dividend forecast during the first quarter of the fiscal year ending March 31, 2010: No

1

yen

1,538.20
1,541.17

3. Forecast of Consolidated Results for FY 2010 (April 1, 2009 – March 31, 2010)
Net sales

Operating income

Percentages indicate year-over-year changes
Net income per
Recurring profit
Net income
share – basic

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

149,000

(8.8)

5,000

(46.8)

4,800(49.4)

2,500(44.3)

29.38

322,000(4.8)

20,000(15.9)

19,500(17.4)

9,000

(4.3)

105.71First half of FY 2010
(six months ending Sep. 30,
2009)

Full FY 2010
(year ending Mar. 31, 2010)

Note: Revision of consolidated results forecast during the first quarter of the fiscal year ending March 31, 2010: Yes

4. Other(1) Material reclassifications of subsidiaries (scope of consolidation) during the period: No(2) Application of simplified accounting and application of special accounting to preparation of quarterly consolidated
financial statements: Yes
Note: For details, see “4. Other” on page 6 in the “Qualitative Information and Financial Statements” section.
(3) Changes in accounting principles, procedures, presentation methods, etc., used in the preparation of quarterly consolidated
financial statements (information reported in "Changes in Basis of Presentation of Consolidated Financial Statements")
1) Changes associated with changes to accounting standards: Yes
2) Changes other than the above: No
Note: For details, see “4. Other” on page 6 in the “Qualitative Information and Financial Statements” section.
(4) Issued shares of common stock
1) Period-end issued shares (including treasury stock):
End-First Quarter FY 2010 (June 30, 2009): 86,372,339 shares
End-FY 2009 (March 31, 2009):
86,372,339 shares
2) Period-end treasury stock:
End-First Quarter FY 2010 (June 30, 2009):
1,211,263 shares
End-FY 2009 (March 31, 2009):
1,337,013 shares
3) Average number of shares (for the three months):
First Quarter FY 2010 (June 30, 2009):
85,076,683 sharesFirst Quarter FY 2009 (June 30, 2008):
84,762,083 shares

Cautionary Statement on Forward-Looking Statements and Other Important Matters
1. Consolidated first-half and full-year results forecasts for FY2010, previously issued on May 12, 2009, have been revised.
The revised forecasts appear in this document.
2. This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans and expectations.
These forward-looking statements are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors that may cause ITHD’s actual results, performance, achievements or financial position to bematerially different from any future results, performance, achievements or financial position expressed or implied by theseforward-looking statements.
Refer to “Qualitative Information on the Consolidated Results Forecast” in the “Qualitative Information and Financial
Statements” section, beginning on page 3, for assumptions underlying earnings forecasts and cautionary statements on theuse of earnings forecasts.

2

Qualitative Information and Financial Statements
1. Qualitative Information on the Consolidated Results of Operations
Results for the first quarter of fiscal 2010 (three months ended June 30, 2009)
There were some mildly promising signs for the Japanese economy during the three months ended June 30, 2009, as
exports and industrial production started to rally for a number of manufacturing sectors, but the overall businessclimate remained extremely challenging as the ongoing fallout from the global financial crisis and concerns over therisk of a further economic downturn weighed heavily on corporate earnings and capital spending.
These conditions once again made things very difficult for the information services industry, as reflected in figuresfrom the Bank of Japan's June 2008 Short-term Economic Survey of Enterprises in Japan indicating that firms areplanning to significantly reduce their software investment versus the fiscal year ended March 31, 2009.
Our own sales for the three months ended June 30, 2009, were adversely impacted as our clients sought to cut backon their capital outlays, but we were also able to post some solid results by virtue of: (1) the completion of a number ofprojects for which orders had been received prior to the end of March; (2) solid demand for operation andmaintenance services among our major clients; and (3) cost reductions achieved through an increased focus on project
profitability. We thus booked consolidated net sales of ¥65,855 million (down just 1.6% from the three months ended
June 30, 2008), operating profit of ¥851 million (versus an operating loss of ¥362 million a year earlier), recurring
profit of ¥981 million (versus a recurring loss of ¥118 million), and net profit of ¥1,101 million (versus a net loss of¥457 million in the three months ended June 30, 2008).
The breakdown of net sales by segment was as follows.
1) Outsourcing and network segment
Consolidated sales totaled ¥30,870 million, which was up 7.3% from the three months ended June 30, 2008, on theback of solid contributions from ongoing operations and Nexway Co., Ltd., which became a group subsidiary in July
2008.
2) Software development segment
Consolidated sales totaled ¥27,425 million, down 5.1% from a year earlier due to the completion of a number ofrelatively large projects during the previous fiscal year.
3) Solution services segment
Consolidated sales totaled ¥5,798 million, which was down 8.9% from a year earlier as the economic downturn
continued to impact on demand for hardware.
4) Other businesses segment
Consolidated sales totaled ¥1,760 million, down 39.5% from a year earlier as the application of new accounting
standards required sales attributable to sublease transactions to be recorded on a net basis.
In April 2009 we launched a new three-year management plan—IT Evolution 2011—which aims to cement ourgroup's position at the forefront of the IT services industry. The plan outlines key strategies for strengthening andexpanding our existing operations while simultaneously exploring new business opportunities both at home andabroad, and we have recently taken a significant step toward realizing these goals by signing a memorandum of
understanding with British Telecommunications plc—one of the world's leading providers of network IT services—
outlining a strategic collaboration in providing next-generation IT services. The alliance will encompass various
aspects of technology, product development, and marketing, thereby enabling us to offer a global one-stop service forJapanese companies with major international operations.
On April 1, 2009 we established IT Service Force Inc. as a subsidiary that will provide shared back-office services
for each of our group companies with a view to achieving group-wide efficiency gains, cost savings, and operational
quality improvements.
Also in line with our medium- to long-term group strategy, we completed the process of making Systems
Engineering Laboratory Co., Ltd. a wholly owned subsidiary on June 25, 2009, and we then merged this firm withTIS Solution Business Co., Ltd. on July 1 to launch a new firm under the name of Neoaxis Co., Ltd.
We are now planning to merge Intec Holdings, Ltd. with Intec Inc. (effective October 1, 2009) as the second step inour group formation strategy.
3

2. Qualitative Information on Consolidated Financial Position
1) Assets
Assets totaled ¥287,819 million at the end of the fiscal first quarter (June 30, 2009), down ¥7,507 million from the endof last fiscal year (March 31, 2009). This mainly reflects a ¥25,573 million decrease in notes and accounts receivable,
which was only partly offset by a ¥6,670 million increase in work in process, a ¥4,534 million increase in investment
securities, and a ¥4,104 million increase in cash and deposits.
2) Liabilities
Liabilities totaled ¥142,132 million at June 30, 2009, down ¥6,977 million from March 31, 2009, reflecting a ¥5,099
million decline in notes and accounts payable, a ¥2,266 million decline in short-term borrowings, and a ¥1,000 million
decline in corporate bonds (including those that are to be redeemed within one year).
3) Net assets
Net assets were ¥145,686 million at June 30, 2009, down ¥529 million from March 31, 2009. Although we booked¥1,264 million in net unrealized gains on other securities, this was offset by a ¥1,620 million decrease in retained
earnings (reflecting a ¥1,101 million net profit for the quarter and ¥2,721 million in dividend payments from surplus).
3. Qualitative Information on the Consolidated Results Forecast
For the various reasons outlined below, we have revised our consolidated earnings forecasts for the fiscal year ending
March 31, 2010 (previously announced on May 12, 2009). Note that our non-consolidated earnings forecast anddividend forecast remain unchanged.
IT investment in the fiscal first half (six months ending September 30, 2009) remains somewhat sluggish as
unexpectedly strong concerns over the economic outlook are apparently delaying a recovery in corporate earnings andcapital expenditures.
We therefore expect to see our consolidated first-half earnings come in somewhat below our original forecasts as
we battle through a number of headwinds including: (1) scaling-down of some projects and delays to others to an
extent that far exceeds our initial expectations; (2) caution among clients with respect to IT investment, resulting in
longer development lead times and thus causing revenues to lag behind personnel expenses and other upfront costs
incurred in anticipation of going into full development; (3) growing demands to cut prices in relation to softwaredevelopment, although demand for IT operations, maintenance, and other ongoing services remains strong; and (4)additional outlays required to bolster our core operations and develop new businesses with a view to driving mediumto long-term growth.
Our forecasts for the fiscal second half remain unchanged, however. The group remains strong on the order front.
IT Holdings has numerous orders currently in the pipeline along with a number of projects set to move out of theinitial development stage. It also expects to see concrete results from group-wide efforts to secure new orders anddecisively reduce costs.
1) Forecast for the first half of the fiscal year ending March 31, 2010
Net sales

OperatingincomePrevious forecast (A)155,000

9,500

Revised forecast (B)149,000

Change (B – A)
Percent change (%)
Reference:
April 1 –September 30, 2008

Net income

Net income pershare (yen)

9,300

4,500

52.92

5,000

4,800

2,500

29.38

(6,000)(4,500)(4,500)(2,000)—(3.9)%(47.4)%(48.4)%(44.4)%

—

9,400

9,479

4,491

163,426

Recurring profit

4

52.97

2) Forecast for the full fiscal year ending March 31, 2010
Net sales

OperatingincomePrevious forecast (A)328,000

24,500

Revised forecast (B)322,000

Change (B – A)
Percent change (%)
For reference:Previous fiscal
year’s results

Net income

Net income pershare (yen)24,00011,000129.3620,00019,5009,000

105.71(6,000)(4,500)(4,500)(2,000)—(1.8)%(18.4)%(18.8)%(18.2)%—

23,787

23,604

9,406

338,302

Recurring profit

110.74*The above forecasts were prepared by IT Holdings based on information available at the time of preparation. Actual
results may differ materially from forecasts due to various factors.
4. Other(1) Material reclassifications of subsidiaries (scope of consolidation) during the period
Not applicable(2) Application of simplified accounting and accounting procedures specific to preparation of quarterly consolidated financial
statements
1) Simplified accounting(a) Bad debt estimation method for general claims
Certain consolidated subsidiaries estimated the value of uncollectible general claims based on the credit loss rate at
beginning of the first quarter of the fiscal year ending March 31, 2010, unless the credit loss rate at end of the firstquarter was deemed to have changed substantially relative to the rate calculated at the beginning of the first quarter.
(b) Inventory valuation method
Certain consolidated subsidiaries write-down the book value of inventory to estimated net realizable value only whenutility has clearly diminished.
(c) Calculation method for income taxes and deferred-tax assets and liabilities
Certain consolidated subsidiaries calculate income tax payments with a method that limits deductible and taxable
items and tax-credit items to those that are material. To assess deferred assets’ collectability, certain consolidated
subsidiaries used the tax planning and earnings forecasts used at the beginning of the fiscal year ending March 31,
2010, as no substantial changes in the operating environment and status of temporary differences were deemed to havetaken place since beginning of the fiscal year.
2) Accounting procedures specific to preparation of quarterly consolidated financial statements
Not applicable(3) Changes in accounting principles, procedures, presentation methods, etc., used in the preparation of quarterly consolidated
financial statements (information reported in "Changes in Basis of Presentation of Consolidated Financial Statements")
Changes related to accounting standards
The Company previously used the completed-contract method to account for revenues associated with build-to-ordersoftware. Effective the first quarter of the fiscal year ending March 31, 2010, however, due to adoption of the
Accounting Standard for Construction Contracts (ASBJ Statement No. 15, December 27, 2007) and its accompanying
Guidance on Accounting Standard for Construction Contracts (ASBJ Guidance No. 18, December 27, 2007), thepercentage-of-completion method has been applied to build-to-order software that went into development during thefirst quarter ended June 30, 2009, for which certain elements were determinable with certainty at end of the firstquarter. The percentage of completion is estimated with the proportion-of-cost method, under which the percentage ofsoftware development completed during the period is calculated as the ratio of the development cost incurred duringthat period relative to the total development cost. The completed-contract method was applied to other works.
The effects of this change on net sales and income/loss are negligible.

55. Consolidated Financial Results for the First Quarter of the Fiscal Year ending March 31, 2010
(1) Consolidated Balance Sheets
As of Jun. 30, 2009
As of Mar. 31, 2009
Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Prepaid pension cost
Guarantee deposits
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

6

millions of yen

millions of yen

41,62837,288
7,456
700
2,137
18,249254
11,4978,075(228)
127,060

37,52462,862
7,274
1,501
2,799
11,579234
11,0756,203(255)
140,799

53,6395,985
21,925
1,555
7,272
90,37753,278
5,799
21,925
1,235
6,809
89,048

4,549
10,42914,978

4,839
10,162
15,001

31,438
6,013
2,598
11,1786,920(2,745)55,402
160,759
287,819

26,904
6,762
2,818
10,1536,516(2,678)50,477
154,527
295,327

As of Jun. 30, 2009

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Corporate bonds (redeemed within one year)
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other
Total current liabilities
Non-current liabilities
Corporate bonds
Long-tern debt
Lease obligations
Accrued retirement benefits to employees
Accrued retirement benefits to directors
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains on other securities
Revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

7

As of Mar. 31, 2009

millions of yen

millions of yen

13,527
20,653
8,100
389
4,814
264
30,365
78,114

18,626
22,919
5,100
3,390
9,830
71
22,112
82,051

7,500
41,473
2,721
8,312
215
825
993
1,976
64,018142,132

11,50041,013
2,549
8,113
248
682
993
1,958
67,058149,110

10,00086,31838,565(2,133)
132,749

10,00086,32140,186(2,354)
134,153

146(1,841)(58)(1,754)
8
14,683
145,686
287,819(1,118)(1,841)(139)(3,098)815,154
146,216
295,327

(2) Consolidated Statements of Income
First Quarter FY 2009

Items
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividends income
Amortization of negative goodwill
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of non-consolidated subsidiaries andaffiliates
Organization expenses
Other
Total non-operating expenses
Recurring profit (loss)
Extraordinary income
Gain on sale of investment securities
Reversal of allowance for doubtful accounts
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Valuation loss on investment securities
Other
Total extraordinary loss
Income (loss) before income taxes and minority interests
Income taxes: current
Income taxes: deferred
Total income taxes
Minority interests in earnings of consolidated subsidiaries
Net income (loss)

8

First Quarter FY 2010

millions of yen

millions of yen

66,93457,640
9,293
9,656
(362)

65,85554,526
11,32910,478
851

20
367
239
170
798

19
367
22
133
543

281

262

7

57

110
155
554
(118)

92
412
981

7
37
6
51

20
48
0
69

121
28
28
178
(245)
673
(648)
25
186
(457)

29
12
6
48
1,002
260
(422)
(161)
62
1,101

(3) Notes on the Going-Concern Assumption
Not applicable(4) Note on Significant Changes in the Amount of Shareholders’ Equity
Not applicable9(For reference) Supplementary Information for the First Quarter of Fiscal Year ending March 31, 2010

Consolidated Net Sales (IT Holdings Corporation)
1. Net Sales by Business Segment(millions of yen)

FY2010IT Holdings(consolidated)

Three months ended
June 30, 2009

Six months ending
September 30, 2009

(A)

Net sales
Outsourcing network
Software development
Solution services
Other business

Full Year

Progress ratio

(B)

(A/B)

65,855

149,000

322,000

30,87061,000125,000

46.9%

40.9%

38.8%

27,42572,000161,000

41.6%

48.3%

50.0%

5,798

12,50029,000

8.8%

8.4%

9.0%

1,760

3,500

7,000

2.7%

2.4%

2.2%

(Forecast)

20.5%
24.7%
17.0%
20.0%
25.1%

(Forecast)(millions of yen)

FY2009IT Holdings(consolidated)

Three months ended
June 30, 2008

Six months ending
September 30, 2008

(A)

Net sales
Outsourcing network
Software development
Solution services
Other business

Full Year

Progress ratio

(B)

(A/B)

66,934

163,426

338,302

28,76860,794

125,721

43.0%

37.2%

37.2%

28,89582,000175,847

43.2%

50.2%

52.0%

6,361

14,91429,409

9.5%

9.1%

8.7%

2,911

5,717

7,325

4.3%

3.5%

2.1%

19.8%
22.9%
16.4%
21.6%
39.7%

*Forecast sales volume for the six months ending September 30, 2009 and the full year are revised figures released on August 11, 2009.
*Earnings forecasts and other forward-looking statements contained in this document are based on information available to the Company at thetime of preparation and certain assumptions that it believes to be reasonable. Actual results may differ materially from those expressed or implied
by forward-looking statements due to various factors.
*Lease businesses included in the Other segment: Until end of the third quarter of the fiscal year ended March 31, 2009 (December 31, 2008), theCompany used the now-replaced lease accounting standards, under which sublease transactions were recorded on a gross basis. Since the fourth
quarter of the fiscal year ended March 31, 2009, the Company has used the new lease accounting standards, under which sublease transactions arerecorded on a net basis.
*Effective the fiscal year ending March 31, 2010, the Company adopted the percentage-of-completion method.

2. Orders for Software Development(millions of yen)

FY2010Three months ended
June 30, 2009

New order volume
during the term
Order volume
at the end of the term

38,12563,508(millions of yen)

FY2009Three months ended
June 30, 2008

New order volume
during the term
Order volume
at the end of the term

Three months ended
September 30, 2008

Full Year35,15273,894

156,386

78,52764,16352,808*Orders for outsourcing network services are not stated in this report because they are conducted on an ongoing basis.

10