Consolidated Financial Results for the Second Quarter of the
Fiscal Year Ending March 31, 2018 [Japanese GAAP]
October 31, 2017
Company name: TOKAI Holdings Corporation
Stock listing:Tokyo Stock Exchange
http://tokaiholdings.co.jp
Stock code:
3167
URL:
Representative:
Katsukiho Tokita, President & CEO
Contact:
Kuniyoshi Muramatsu, Managing Executive Officer, General Manager of Administrative
Headquarters
Telephone: +81-54-275-0007
Scheduled date of filing quarterly report:
November 13, 2017
Scheduled date of dividend payment:
November 30, 2017
Supplementary materials on quarterly financial results:
Yes
Quarterly financial results briefing:
Yes (For institutional investor)(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the Six-months Ended September 30, 2017
(April 1, 2017 to September 30, 2017)(1) Consolidated Operating Results (cumulative)(% figures represent year-on-year changes)

Sales

Operating Profit

Millions of yen%

Millions of yen

Quarterly Net
IncomeAttributable to
Owners of the
ParentRecurring Profit%

Millions ofyen%Millions of yen

Six months Ended
3,114
3,143 (29.0)
1,246
84,911
3.3(29.3)
September 30, 2017
Six months Ended
(3.0)
4,406
137.4
4,428 148.9
2,384
82,201
September 30, 2016
(Note) Comprehensive income: 1,911 million yen in the Six months Ended September 30, 2017 (-34.2%)
2,906 million yen in the Six months Ended September 30, 2016 (-%)
Quarterly Net Income
per Share
Six months Ended
September 30, 2017
Six months Ended
September 30, 2016%(47.7)
760.2

Quarterly Net Income
per Share (Diluted)

Yen

Yen

9.76

9.50

21.00

18.21

(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Millions of yen

Equity Ratio%

Six months Ended
161,497
58,822September 30, 2017
Year ended
161,11256,446
March 31, 2017
(Reference) Equity: 57,755 million yen for the Six months Ended September 30, 201755,654 million yen for the year ended March 31, 2017

36.0
34.5

2. Dividends
End of Q1

End of Q2

Annual Dividend
End of Q3

Year-end

Total

Yen

Yen

Yen

Yen

Yen

Year ended March 31, 2017



11.00



17.00

28.00

Year ending March 31, 2018



14.00

Year ending March 31, 2018

28.00
14.00
(Forecast)(Note) Revisions to most recently announced dividend forecasts: No(Note) The breakdown of the year-ended March 31, 2017 dividen were ordinary dividend of 11 yen andcommemorative dividend of 6 yen.
Capital surplus is included in dividend resources for fiscal 2016. For details, please refer to "Breakdown of dividends
with capital surplus as dividend fund" below.

3. Consolidated Earnings Forecasts for the Year Ending March 31, 2018 (April 1, 2017 to March 31, 2018)(% figures represent year-on-year changes)

Sales
Millions ofyen%Operating Profit

Recurring Profit

Net Income
Attributable to
Owners of the
ParentMillions ofyenMillions ofyen%Millions of
yen

%

Yen

(11.1)

6,450(12.1)

50.88%

Year ending March
189,400
6.0
11,410 (10.5)
11,36031, 2018(Note) Revisions to most recently announced earnings forecasts: No

Net Income
per Share

業績予想欄については、上場会社各社の実情に応じて、開示対象項目や開示対象期間の追加又は削除、開示形式の変更を行うことが可能です。
*Notes(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries affecting the scope of consolidation): No(2) Application of special accounting procedures in the preparation of quarterly consolidated financial statements: No(3) Changes in accounting policies, estimates, and restatements
1) Changes in accounting policies accompanying revisions in accounting standards, etc.: No
2) Changes in accounting policies other than 1): No
3) Changes in accounting estimates: No4) Restatements: No(4) Number of shares issued (common stock)
1) Shares issued at the end of each period (including treasury stock):

Q2 FY3/2018

139,679,977 shares FY3/2017

139,679,977 shares

2) Number of shares of treasury stock at the end of each period:

Q2 FY3/2018

8,735,660 shares FY3/2017

12,915,785 shares

3) Average number of shares during the period (cumulative):

Q2 FY3/2018

127,761,866 shares Q2 FY3/2017

113,546,363 shares(Note) Board benefit trust shares(BBT) is included in the number of year-end treasury stock.(416,600 stocks at Q2 FY3/2018, 420,000
stocks at FY3/2017) And the company shares held in ESOP trust accounts are included in the treasury stock, which is subtracted
from calculations of the average number of shares during the period (417,714 shares for the Six months Ended September 30,
2017; 2,295 shares for the Six months Ended September 30, 2016).

* Quarterly financial results not covered by quarterly review* Explanation regarding the Appropriate Uses of Earnings Forecasts and Other Notes
All earnings forecasts provided within this document are based on the most accurate information available at the time of the release of thisdocument. Actual results may differ from forecasts due to various factors going forward.

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

Breakdown of dividends with capital surplus as dividend resource
Of the dividends for the fiscal year ending March 31, 2017, the breakdown of dividends for capital surplus asdividend is as follows.
Reference dateYear-Ended

Total

Dividend per share (Yen)

0.79

0.79

Total dividends (Millions of yen)

100

100

(Note) Reduction ratio of net assets 0.003

1TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

[Attachment]
Contents

1. Qualitative Information on Financial Results for the Period Under Review(1)

Explanation of Consolidated Operating Performance··············································································· 2(2)Explanation of Consolidated Financial Condition····················································································· 3(3)Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information ······························ 4

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheets ································································································ 5(2)Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income ··············· 7(3)Quarterly Consolidated Statements of Cash Flows ·················································································· 9(4)Notes on Quarterly Consolidated Financial Statements ·········································································· 10(Notes on Premise of Going Concern) ····································································································· 10(Notes on Significant Changes in Shareholders’ Equity) ·············································································· 10(Additional Information) ························································································································· 10(Segment Information, etc.) ···················································································································· 112

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

1. Qualitative Information on Financial Results for the Period Under Review(1) Explanation of Consolidated Operating Performance

During the first six months of the fiscal year ending March 31, 2018, the Japanese economy was on a gradual recovery
trend, with an upturn in personal consumption and some improvement in employment conditions, but the general economic
outlook remains clouded due to uncertainties in overseas economies, such as the U.S. monetary policy and the risk of
weaker-than-expected performance of emerging economies in Asia.
As set out in the TOKAI Group’s new medium-term management plan Innovation Plan 2020 “JUMP,” the Group seeks toadvance further by pursuing growth strategies such as increasing the number of continuing customers and capturing crossselling opportunities based on the Total Life Concierge (TLC) concept, expanding service areas to broaden sales channels,
M&A activities, and moving into new business areas. In July, Tokyo Bay Network Co., Ltd., which operates a CATV
business in two Tokyo wards, became a consolidated subsidiary.
Under these conditions, in the six months ended September 30, 2017, the Group booked sales of 84,911 million yen (up3.3% year-on-year) mainly due to an increase in continuing customers. However, a rise in costs to acquire customers andprevent contract cancellations among other factors affected profits, and the Group posted operating profit of 3,114 million
yen (down 29.3%), recurring profit of 3,143 million yen (down 29.0%), and quarterly net income attributable to owners of theparent of 1,246 million yen (down 47.7%).
In the six months ended September 30, 2017, the number of continuing customers increased by 263 thousand fromMarch 31, 2017 to 2,827 thousand, primarily due to the addition of Tokyo Bay Network’s 250 thousand customers.
Members of the TLC Membership Service increased by 56 thousand to 642 thousand.
Performance by segment was as follows.

(Gas and Petroleum)
In the liquefied petroleum gas (LP gas) business, in the six months ended September 30, 2017, the Group focused onincreasing the customer count amid intensifying competition, including efforts to attract new customers and prevent existingcustomers from switching suppliers and starting services in Okayama Prefecture. As a result, the number of customers roseby six thousand from March 31, 2017, to 594 thousand and LP gas sales volume was flat year-on-year. Consequently, salesof the LP gas business came to 27,478 million yen (up 0.6% year-on-year).
In the city gas business, the number of customers was 54 thousand, unchanged from the level as of March 31, 2017, but
sales rose 2.4% year-on-year to 5,299 million yen due to a higher unit sales price stemming from the fuel cost adjustment
system and other factors.
As a result, segment sales came to 32,777 million yen (up 0.9% year-on-year), but operating profit was down 77.8% to393 million yen because of an increase in costs to acquire new customers and prevent service cancellations.

(Building and Real Estate)
In the Building and Real Estate business, housing sales, projects such as building new retail stores, and number ofproperties managed under building management support services increased, although solar power equipment sales
declined year-on-year. As a result, segment sales were 8,349 million yen (up 3.8% year-on-year) and operating profit was
57 million yen (up 100.5%).

(CATV)In the CATV business, in addition to preventing existing customers from switching to competitors, we worked on measures
such as sales of set discount offerings for broadcasting and communications and smartphone set discounts throughalliances with major mobile phone carriers. These measures helped to make our prices more competitive to acquire newcustomers. We also stepped up efforts to improve our broadcasting service by offering more local information programs andprogressing the transition to fiber optics compatible with 4K broadcasts. In telecommunications, we launched a new ultrafast
fiber-optic service offering a maximum speed of 10Gbps. We expanded and improved services to increase customer
satisfaction.

3

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

The addition of Tokyo Bay Network’s 250 thousand customers (235 thousand broadcasting and 15 thousand
telecommunications customers) meant a sharp increase from March 31, 2017 of 239 thousand customers for our
broadcasting services to 748 thousand and an increase of 22 thousand customers for our telecommunications services to
247 thousand.
Due to an increase in subscribers, segment sales totaled 13,607 million yen (up 8.3% year-on-year), and operating profit
was 1,517 million yen (up 22.3%).

(Information and Communications Services)
In the broadband business for individual customers, we worked to acquire new customers and also actively encouraged
existing customers to switch to Hikari Collaboration services. As a result, the number of Hikari Collaboration customers
increased by 16 thousand from March 31, 2017, to 315 thousand. However, the total number of FTTH customers fell by 15
thousand to 705 thousand due to increased competition from major mobile phone carriers. This, combined with contract
cancellations by ADSL and other customers, led to a decrease of 20 thousand broadband customers to 774 thousand. The
number of customers of our LIBMO MVNO service launched in February 2017 came to 13 thousand as of September 30,
2017. As a result, segment sales totaled 15,703 million yen (up 0.5% year-on-year).
For corporate customers, growth of businesses with recurring revenue such as cloud services and an increase in orders
for systems development led to a 13.2% year-on-year increase in sales to 9,202 million yen.
Due to these factors, segment sales came to 24,906 million yen (up 4.9% year on year), but operating profit was 906
million yen (down 32.7%) due to an increase in promotional spending on the MVNO business and others.

(Aqua)In the Aqua business, the Company pushed forward with customer acquisition activities for the “The gift of delicious
water: Ulunom” brand, mainly targeting large-scale commercial facilities at metropolitan areas, and succeeded in increasing
the number of customers to 141 thousand, up by six thousand from March 31, 2017.
As a result, segment sales came to 3,055 million yen (up 4.3% year-on-year), but operating profit fell 86.6% to 12 million
yen due to an increase in customer acquisition costs.

(Others)
In the nursing care business, an increase in the number of users led to sales of 506 million yen (up 18.3% year-on-year).
In the ships business, sales were down 10.6% year-on-year to 686 million yen on a decrease in the number of ships
repaired. In the bridal events business, sales were down 23.3% year-on-year to 672 million yen due to the closure of
wedding venue Vrai Cloche Bouquet Tokai Mishima at the end of March 2017.
Due to these factors, segment sales came to 2,214 million yen (down 8.6% year-on-year), but operating profit was 18
million yen (compared with an operating loss of 59 million yen in the same period of the preceding fiscal year) as a result of
improved profitability.

(2) Explanation of Consolidated Financial Condition
1) Assets, Liabilities, and Net Assets
Total assets amounted to 160,497 million yen as of September 30, 2017, down by 614 million yen from March 31, 2017.
This is primarily due to an increase in tangible fixed assets of 1,948 million yen from making Tokyo Bay Network a
consolidated subsidiary and a 3,323 million yen decrease in notes and accounts receivable – trade due to seasonal andother factors.
Total liabilities were 101,674 million yen, down 2,991 million yen from March 31, 2017. This is mainly due to an 882 million
increase in interest-bearing liabilities because of a rise in short-term loans and other factors, and decrease of 2,080 million
yen in income taxes payable (as a result of submitting returns for, and payment of fiscal 2016 income tax) and 1,606 million
yen in notes and accounts payable – trade because of seasonal and other factors.
As of September 30, 2017, net assets totaled 58,822 million yen, up 2,376 million yen from March 31, 2017. Although theGroup paid 2,162 million yen in dividends from surplus, it booked 1,246 million yen in net income attributable to owners of

4

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

the parent and a 2,400 million yen increase in asset from the conversion of convertible bonds with stock acquisition rights
and other factors.

2) Cash Flows
Cash and cash equivalents (hereinafter referred to as “funds”) at September 30, 2017 totaled 2,639 million yen, down 472
million yen from March 31, 2017.
Cash flows from each activity during the six months under review and the factors behind them are as follows.

(Cash flows from operating activities)
Net cash provided by operating activities was 7,888 million yen (down 4,150 million yen year-on-year).
Funds increased chiefly due to quarterly net income before income taxes and the effect of depreciation and amortization
expenses (non-cash items).

(Cash flows from investing activities)
Net cash used in investing activities was 6,931 million yen (down 2,262 million yen year-on-year). This is mainly due toacquisition of shares in a subsidiary resulting in the acquisition of tangible and intangible fixed assets and change to thescope of consolidation.

(Cash flows from financing activities)
Net cash used in financing activities was 1,427 million yen (up 7,405 million yen year-on-year). Cash was mainly used forthe payment of dividends.
Additionally, cash flows from financing activities increased substantially year-on-year. This was mainly due to an increasein short-term borrowings.

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information
Earnings results for the six months ended September 30, 2017 were generally in line with forecasts, and the Company
maintains its consolidated earnings forecasts for the fiscal year ending March 31, 2018, announced on May 9, 2017.
Forecasts are judgments based on currently available information. Actual performance may differ from forecasts due to avariety of factors going forward.

5

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017(4) Notes on Quarterly Consolidated Financial Statements(Notes on Premise of Going Concern)
No items to report(Notes on Significant Changes in Shareholders’ Equity)
No items to report(Additional Information)(Board Benefit Trust (BBT))(1) Overview of Transactions
At a Board of Directors Meeting held on May 10th, 2016, the Company approved the introduction of a board
benefit trust (BBT) plan as a new stock-based compensation system (hereinafter referred to as “the System”) for
the Company’s Directors, Executive Officers, Administrative Officers, and the Directors and Administrative
Officers of some of the Company’s subsidiaries (excluding Outside Directors; hereinafter referred to as“Executives”). This Executive compensation was approved at the 5th Annual General Meeting of Shareholders
held on June 24, 2016.
The System is a stock-based compensation system in which the Company will acquire the shares of theCompany using funds the Company first contributes. The Company’s shares and the amount of cash equivalent
to the market price of the Company’s shares as of the date of the Executive’s retirement (hereinafter referred toas the “Company’s Shares, etc.”) will be provided through the trust to the Executives in accordance withexecutive stock-based compensation rules stipulated by the Company and subsidiaries of the Company coveredby the System. In principle, Executives shall receive the Company’s Shares, etc. upon their retirement.
The Company has applied the gross method for this transaction in accordance to “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts” (ASBJ PITF No. 30,
March 26, 2015).
(2) Company stock remaining in the trust
The Company is recording Company stock which remains in the trust as treasury stocks under net assets atbook value (excluding attached expenses). The book value of the treasury stock was 261 million yen at the endof the preceding fiscal year and 259 million yen as of September 30, 2017. Treasury stock totaled 420,000
shares at the end of the preceding fiscal year and 416,000 shares as of September 30, 2017.

6

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

(Segment Information, etc.)[Segment Information]
I. Six Months Ended September 30, 2016 (April 1, 2016 to September 30, 2016)
Sales and Income or Losses by Reportable Segment(Millions of yen)
Reportable segments
Gas andPetroleum

Building
and Real
Estate12
Information andOthers Total Adjustments
CATV
CommuniAqua Subtotal
cations

Amount inconsolidated
statements of3
incomeSales
Sales to externalcustomers

32,496

Intersegment
sales and transfer

100

Subtotal
Segment income(loss)

8,040 12,560
903

2,423 82,201－

82,201

2,973

94 3,067(3,067)－25,250 3,002 82,752

2,517 85,269(3,067)

82,201

1,347(59) 4,419

(13)

4,406

23,750 2,929 79,778

396

32,597

8,944 12,957

1,768

28 1,240

1,499

73

92

4,478

(Note) 1. The “Others” category is a business segment not included in the reportable segments. This category includes
businesses such as weddings, ship repair, insurance and nursing care.
2. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements ofincome.

II. Six Months Ended September 30, 2017 (April 1, 2017 to September 30, 2017)
Sales and Income or Losses by Reportable Segment(Millions of yen)
Reportable segments
Gas andPetroleum

Building
and Real
Estate12
Information andOthers Total Adjustments
CommuniCATV
Aqua Subtotal
cations

Amount inconsolidated
statements of3
incomeSales
Sales to externalcustomers

32,777

Intersegment
sales and transfer

101

Subtotal
Segment income(loss)

8,349 13,607
625

2,214 84,911－

84,911

2,684

88 2,772(2,772)－

26,396 3,131 85,381

2,303 87,684(2,772)

84,911

18 2,905

208

3,114

24,906 3,055 82,697

390

32,8798,975 13,998

393

57 1,517

1,489

906

75

12

2,887

(Note) 1. The “Others” category is a business segment not included in the reportable segments. This category includes
businesses such as weddings, ship repair, insurance and nursing care.
2. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements ofincome.

7

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
Fiscal Year Ended

Six Months Ended

March 31, 2017

September 30, 2017

AssetsCurrent assets
Cash and deposits

3,239

2,773

Notes and accounts receivable–trade

22,83819,514Merchandise and finished goods

3,676

3,683

Work in process

645

864

Raw materials and supplies

737

694

Other

7,789

8,532

Allowance for doubtful accounts

(332)

(309)

Total current assets

38,59435,754

Buildings and structures, net

33,71834,430Machinery, equipment and vehicles, net

21,84821,944Land

22,634

22,669Other, net

15,446

16,551

Total property, plant and equipment

93,647

95,595

Goodwill

5,861

5,778

Other

5,127

5,630

Total intangible assets

10,988

11,408Net defined benefit asset

2,397

2,434

Other

15,895

15,884

Allowance for doubtful accounts

(432)

(596)

Total investments and other assets

17,86017,722

122,496

124,727

21

16

161,112160,497

Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets

Total non-current assets
Deferred assets
Total assets

8

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

(Millions of yen)
Fiscal Year Ended

Six Months Ended

March 31, 2017

September 30, 2017

Liabilities
Current liabilities
Notes and accounts payable–trade

14,77913,172

Short-term loans payable

22,912

25,232Current portion of bonds

578

368

Income taxes payable

3,484

1,404

Accruals

1,695

1,755

Other

17,854

16,719Total current liabilities

61,30458,653406

492

Convertible bonds with stock acquisition rights

2,800

400

Long-term loans payable

27,44028,526

Accruals

101

124

Net defined benefit liability

364

489

Other

12,24912,988

Total non-current liabilities

43,361

43,021

104,665

101,674

Capital stock

14,00014,000Capital surplus

24,28625,524Retained earnings

15,048

14,233

Treasury stock(3,285)(2,222)

Total shareholders’ equity

50,04851,534

2,126

2,705

Deferred gains (losses) on hedges

720

847

Foreign currency translation adjustment

(9)

(7)

Remeasurement of defined benefit plans

2,768

2,674

Total accumulated other comprehensive income

5,605

6,221

791

1,066

56,44658,822

161,112160,497

Non-current liabilities
Bonds payable

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Non-controlling interests
Total net assets
Total liabilities and net assets

9

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017(2) Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Six Months Ended September 30, 2017)(Millions of yen)
Six Months Ended
September 30, 2016
(April 1, 2016 to
September 30, 2016)

Six Months Ended
September 30, 2017
(April 1, 2017 to
September 30, 2017)

Sales

82,201

84,911

Cost of sales

48,57750,436Gross profit

33,62434,474

Selling, general and administrative expenses

29,21831,360Operating profit

4,406

3,114

Interest income

55Dividend income

103

113

Commission fee

41

43

Other

234

148

Total non-operating profit

385

310

Interest expenses

283

227

Other

79

53

Total non-operating expenses

362

281

4,428

3,143

Gain on sales of non-current assets

5

1Transmission line facility subsidies

15

24

Subsidy income

2-

Gain on reversal of subscription rights to shares

98-

Total extraordinary income

121

25

0

0

329

442

Impairment loss (★減損損失)-

15

Loss on valuation of investment securities-

15

Loss on step acquisitions-

105

Total extraordinary losses

329

578

Quarterly net income before income taxes

4,220

2,590

Income taxes (current)

1,731

1,131

Income taxes (deferred)

64

162

Total income taxes

1,795

1,294

Quarterly net income

2,425

1,295

Quarterly net income attributable to non-controlling interests

41

49

Quarterly net income attributable to owners of the parent

2,384

1,246

Non-operating profit

Non-operating expenses

Recurring profit
Extraordinary income

Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets

10TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

(Consolidated Statements of Comprehensive Income)(Six Months Ended September 30, 2017)(Millions of yen)
Six Months Ended
September 30, 2016
(April 1, 2016 to
September 30, 2016)
Quarterly net income

Six Months Ended
September 30, 2017
(April 1, 2017 to
September 30, 2017)

2,425

1,295

Other comprehensive income
716

427

Deferred gains (losses) on hedges

(116)

126

Foreign currency translation adjustment

(22)

(1)

Remeasurement of defined benefit plans, net of tax

(76)

(93)

(20)

23

480

615

2,906

1,911

2,865

1,861

41

49

Valuation difference on available-for-sale securities

Share of other comprehensive income of entities accounted
for using the equity method
Total other comprehensive income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income attributable to owners of
the parent
Quarterly comprehensive income attributable to noncontrolling interests

11

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
Six Months Ended

Six Months Ended

September 30, 2016 September 30, 2017
(April 1, 2016 to(April 1, 2017 to

September 30,

September 30,

2016)

2017)

Cash flows from operating activities
Quarterly net income before income taxes

4,220

2,590

Depreciation

7,205

7,155

605

594

-

15

Increase (decrease) in net defined benefit asset and liability

(122)

(153)

Interest and dividend income (★利息及び配当金の受取額)

(109)

(118)

Interest expenses

283

227

(Gain) loss on sales of non-current assets

(5)

(0)

-

15

329

442

-

105

3,184

3,953

(7)

(204)

(1,794)(1,719)

Other

(193)

(1,193)

Subtotal

13,597

11,610

Income taxes paid

(1,558)(3,721)

Net cash provided by (used in) operating activities

12,0397,888Interest and dividend income received

138

153

Purchase of securities

(7)

(6)

(4,887)(5,998)

89

109

-

(1,175)

34

22

(35)

(35)

(4,668)(6,931)

(291)

(235)

Net increase (decrease) in short-term loans payable(3,300)

2,775

Repayments of lease obligations(2,025)(1,552)

Proceeds from long-term loans payable

4,950

6,001

Repayment of long-term loans payable(6,919)(5,867)

(379)

(404)

－

20

Payments for acquisition of treasury stock

(261)

(0)

Proceeds from disposal of treasury shares

384

0

Amortization of goodwill
Impairment loss

(Gain) loss on valuation of investment securities
Loss on retirement of non-current assets(Gain) loss on step acquisitions
Decrease (increase) in notes and accounts receivable – trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable – trade

Cash flows from investing activities

Purchase of tangible and intangible assets
Proceeds from sales of tangible and intangible assets
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Collection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Interest expenses paid

Redemption of bonds
Proceeds from share issuance to non-controlling shareholders

12

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

Cash dividends paid

(904)

(2,158)

Other

(84)

(5)

(8,833)(1,427)(1)(2)(1,464)(472)

Cash and cash equivalents at beginning of period

4,044

3,111

Cash and cash equivalents at end of period

2,580

2,639

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

13

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017(4) Notes on Quarterly Consolidated Financial Statements(Notes on Going Concern Assumptions)Not applicable.

(Notes on Significant Changes in Shareholders’ Equity)
Not applicable.

(Additional Information)(Board Benefit Trust (BBT))(1)

Overview of Transactions
At a Board of Directors Meeting held on May 10th, 2016, the Company approved the introduction of a board

benefit trust (BBT) plan as a new stock-based compensation system (hereinafter referred to as “the System”) for theCompany’s Directors, Executive Officers, Administrative Officers, and the Directors and Administrative Officers ofsome of the Company’s subsidiaries (excluding Outside Directors; hereinafter referred to as “Executives”). This
Executive compensation was approved at the 5th Annual General Meeting of Shareholders held on June 24, 2016.
The System is a stock-based compensation system in which the Company will acquire the shares of theCompany using funds the Company first contributes. The Company’s shares and the amount of cash equivalent to
the market price of the Company’s shares as of the date of the Executive’s retirement (hereinafter referred to as the“Company’s Shares, etc.”) will be provided through the trust to the Executives in accordance with executive stockbased compensation rules stipulated by the Company and subsidiaries of the Company covered by the System. In
principle, Executives shall receive the Company’s Shares, etc. upon their retirement.
The Company has applied the gross method for this transaction in accordance to “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees etc. through Trusts” (ASBJ PITF No. 30, March
26, 2015).
(2)

Company stock remaining in the trust
The Company is recording Company stock which remains in the trust as treasury stocks under net assets at bookvalue (excluding attached expenses). The book value of such Company stocks was 261 million yen as of March 31,
2017, 258 million yen as of September 30, 2017. The number of stock was 420 thousand shares as of March 31, 2017,
416 thousand shares as of September 30, 2017.

14

TOKAI Holdings Corporation (3167) Financial Results for the Six months Ended September 30, 2017

(Segment Information, etc.)[Segment Information]
I. Six Months Ended September 30, 2016 (April 1, 2016 to September 30, 2016)
Sales and Income of Losses by Reportable Segment(Millions of yen)
Reportable segments
Building
Information
Other1
Gas and
and
and
CATV
Aqua Subtotal
Petroleum Real
CommuniEstatecations
Sales
Sales toexternalcustomers
Intersegment
sales andtransfers
Subtotal
Segment income(loss)

32,496

8,040

12,56023,750

100

903

396

1,499

32,597

8,944

12,95725,250

1,768

28

1,240

1,347

2,929 79,778

73

2,973

3,002 82,752
92

4,478

Amount in quarterly
consolidated
Total Adjustments
statements ofIncome322,423 82,201-

82,201

3,067(3,067)-2,517 85,269(3,067)

82,201

(13)

4,406

94

(59)

4,419

(Notes) 1. The “Other” category is a business segment not included in the reportable segments. This category includes businesses such as weddings,
ship repair, insurance, and nursing care.
2. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements of income.

II. Six Months Ended September 30, 2017 (April 1, 2017 to September 30, 2017)
Sales and Income of Losses by Reportable Segment(Millions of yen)
Reportable segments
Information
Building
Other1
Gas andandand Real CATV
Aqua Subtotal
Petroleum
CommuniEstatecations

Amount in quarterly
consolidated
Total Adjustments
statements ofIncome3
2

Sales
Sales toexternalcustomers
Intersegment
sales andtransfers
Subtotal
Segment income(loss)

32,777101
32,879393

8,349 13,607

625

390

8,975 13,998
57

1,517

24,906 3,055

82,697

1,489

75

2,684

26,396 3,131

85,381

906

12

2,887

2,214 84,911-

84,911

2,772(2,772)-2,303 87,684(2,772)

84,911

208

3,114

88

18

2,905

(Notes) 1. The “Other” category is a business segment not included in the reportable segments. This category includes businesses such as weddings,
ship repair, insurance, and nursing care.
2. Adjustments to segment income (loss) are mainly eliminations due to intersegment transactions.
3. Segment income (loss) is adjusted to match operating profit in the quarterly consolidated statements of income.

15