Consolidated Financial Results for the Third Quarter of the
Fiscal Year Ending March 31, 2020 [Japanese GAAP]
January 30, 2020
Company name: TOKAI Holdings Corporation
Stock listing:Tokyo Stock Exchange
Stock code:
3167
URL:
https://tokaiholdings.co.jp
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:
February 13, 2020
Scheduled date of dividend payment:
Supplementary materials on quarterly financial results:
Yes
Quarterly financial results briefing:No(Figures are rounded to the nearest million yen)

1. Consolidated Financial Results for the Nine-months Ended December 31, 2019
(April 1, 2019 to December 31, 2019)(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%

Nine-months Ended
141,557
9,278
9,478
30.8
5,103
2.6
31.8
December 31, 2019
Nine months Ended
137,943
7,038
7,247
8.8
3,966
3.5
7.0
December 31, 2018
(Note) Comprehensive income: 5,579 million yen in the Nine-months Ended December 31, 2019 (199.3%)
1,864 million yen in the Nine months Ended December 31, 2018 (-55.1%)
Quarterly Net Income
per Share
Nine-months Ended
December 31, 2019
Nine months Ended
December 31, 2018

28.6
15.5

Quarterly Net Income
per Share (Diluted)

Yen

Yen

38.97

-

30.29

-

(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Millions of yen

Equity Ratio%

Nine-months Ended
168,697
65,724
December 31, 2019Year ended
167,606
63,894
March 31, 2019
(Reference) Equity: 64,386 million yen for the Nine-months Ended December 31, 2019
62,627 million yen for the year ended March 31, 2019

38.2
37.4

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, 2018

―

14.00

―

14.00

28.00

Year ending March 31, 2018

―

14.00
―

14.00

28.00

Year ending March 31, 2018
(Forecast)(Note) Revisions to most recently announced dividend forecasts: No

3. Consolidated Earnings Forecasts for the Year Ending March 31, 2020 (April 1, 2019 to March 31, 2020)(% 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

5.9

8,230

5.9

62.85

%

Year ending March
200,800
4.8
14,1708.5
14,04031, 2020(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): No3) 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):

Q3 FY3/2020

139,679,977 shares FY3/2019

139,679,977 shares

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

Q3 FY3/2020

8,722,266 shares FY3/2019

8,731,411 shares

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

Q3 FY3/2020

130,953,891 shares Q3 FY3/2019

130,946,547 shares(Note) Board benefit trust shares(BBT) is included in the number of year-end treasury stock.(400,700 stocks at Q3 FY3/2020, 410,800
stocks at FY3/2019) 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 (405,144 shares for the Nine-months Ended December 31,
2020; 413,352 shares for the Nine months Ended December 31, 2019).

* 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 Nine months Ended December 31, 2019

[Attachment]
Contents
1. Quarterly Consolidated Financial Statements and Notes(1)

Explanation Regarding Consolidated Operating Results ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 2(2)

Explanation of Consolidated Financial Position ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 4(3)

Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 4

2. Quarterly Consolidated Financial Statements and Notes(1)

Quarterly Consolidated Balance Sheets ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 6(2)

Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income 8(3)

Quarterly Consolidated Statements of Cash Flowsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 10(4)

Notes to Quarterly Consolidated Financial Statementsꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 12(Notes to Premise of Going Concern)ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 12(Notes to Significant Changes in Shareholders’ Equity)ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 12(Additional Information) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 12(Segment Information, etc.) ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 13

1

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

1. Quarterly Consolidated Financial Statements and Notes(1) Explanation Regarding Consolidated Operating Results
In the first nine months of the fiscal year ending March 31, 2020, the Japanese economy was on a gradual recovery path,with a rally in personal consumption and continued improvement in the employment situation. However, the economic
outlook continued to remain clouded by uncertainties in overseas economies, including US–China trade friction and theUnited Kingdom’s decision to leave the European Union.
The current fiscal year is the third year of the TOKAI Group’s four-year medium-term management plan, Innovation Plan
2020 “JUMP.” The Group continued to implement strategies aimed at expanding its earnings base, including developing
existing businesses, making acquisitions, and entering new businesses. The key themes underlying these strategies wererealizing the Group’s vision of becoming a Total Life Concierge (TLC)*1, and ABCIR+S*2 initiatives.
In the nine months ended December 31, 2019, with the success of measures to acquire new customers and increase orders,the Group booked sales of 141,557 million yen (+2.6% year on year) and posted significant growth in each profit line, with
operating profit of 9,278 million yen (+31.8% year on year), recurring profit of 9,478 million yen (+30.8% year on year), andnet income attributable to owners of the parent of 5,103 million yen (+28.6% year on year). The results for sales and all profit
categories were at record highs.
As of December 31, 2019, the number of continuing customers rose by 31 thousand from March 31, 2019 to 2,933 thousand,and members of the TLC Membership Service increased by 70 thousand to 875 thousand.
Major topics in the nine months ended December 31, 2019 included the following: In July 2019, we purchased shares insoftware development company AM’s Brain Inc. (Kita-ku, Okayama, Okayama Prefecture) and later acquired all shares ingeneral construction company Nissan Tri Star Construction, Inc. (Gero, Gifu Prefecture) in September of the same year,
converting both of these companies into consolidated subsidiaries. We acquired shares in Isesaki Gas Co., Ltd. (Isesaki,
Gunma Prefecture) in April, converting it into an equity-method affiliate, and formed a business alliance with Isesaki Gas inAugust. Additionally, in October, we purchased the cable television business covering the eastern section of Shizuoka
Prefecture from Shioya Limited (Mishima, Shizuoka Prefecture).
Furthermore, we established Nikaho Gas Corporation (Nikaho, Akita Prefecture) in August and are making preparations for it
to take over the city gas business operated by the city of Nikaho. In October, we jointly established T&T Energy Co., Ltd. withTEPCO Energy Partner, Inc. and have begun preparations for the launch of a city gas retail business in the Chukyo
metropolitan area surrounding Nagoya, Aichi Prefecture.
*1 Vision of becoming a TLC: The Group seeks to support the comfortable living of its customers in a comprehensive
and detail-oriented way and enhance customer satisfaction through its wide range of services.
*2 ABCIR+S: An acronym formed by the first letters of AI, big data, cloud, IoT, robotics, and smartphones. It refers to
the Group’s strategies targeting technological innovation.
Performance by segment was as follows.
(Gas and Petroleum)
In the LP gas business, we focused on customer growth through measures such as strengthening efforts to acquire newcustomers and preventing contract cancellations in existing service areas, as well as expanding into new areas. As a result,in the nine months ended December 31, 2019, the number of customers rose by 19 thousand from March 31, 2019 to 647
thousand, leading to a substantial increase in profit. On the other hand, sales fell to 45,618 million yen (-0.4% year on year)
due in part to fluctuations in procurement price of LP gas for industrial use and wholesale.
In the city gas business, the number of customers largely remained unchanged from that of March 31, 2019 at 56 thousand.
Still, sales rose to 9,573 million yen (+7.7% year on year), supported by a higher unit sales price on the back of fuel cost2

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019adjustment regulations and increased equipment sales.
As a result, segment sales amounted to 55,191 million yen (+0.9% year on year) and operating profit to 2,156 million yen(+77.5% year on year).

(Building and Real Estate)
In the Building and Real Estate business, segment sales were 14,919 million yen (+7.7% year on year), and operating profit
was 709 million yen (+62.9% year on year), thanks primarily to increases in construction and equipment sales.

(CATV)In the CATV business, amid intensifying competition from telecommunications companies, we worked to increase
competitiveness and boost customer count, and took steps to prevent contract cancellations. We offered discounts forbroadcasting and communications bundles and packaged services with smartphones in partnership with major mobile
phone carriers. We also stepped up efforts to create community channel programs with a local focus. As a result,broadcasting services had 801 thousand customers, up by 13 thousand from March 31, 2019, and communications services
had 287 thousand customers, up by 13 thousand.
Consequently, segment sales amounted to 23,433 million yen (+2.6% year on year) and operating profit to 3,432 million yen(+7.5% year on year).

(Information and Communications)
In the Information and Communications business for individual consumers, amid intensifying competition from major mobile
phone carriers, the Group worked to attract customers by expanding service offerings. In addition to the TOKAI-brand MVNO
service LIBMO on its own, it offered Hikari Collaboration bundled with LIBMO. The LIBMO service added five thousand
customers since March 31, 2019 to bring customer count to 45 thousand, but the number of ISP customers declined by 26
thousand to 720 thousand (324 thousand Hikari Collaboration and 396 thousand conventional ISP customers). As a result of
these factors, sales came to 21,661 million yen (-6.7% year on year).
In the Information and Communications business for corporate clients, the IT service market was in full swing, and the Groupwas certified by a global platform provider and steadily increased the size of its corporate client base, primarily in terms ofcloud services. These circumstances led to expansion in the Group’s recurring revenue businesses. Due in part to a steadyclimb in the number of contracted system development projects, sales rose to 17,173 million yen (+16.5% year on year).
Due to these factors, segment sales were 38,834 million yen (+2.3% year on year), and operating profit was 2,429 million
yen (+43.5% year on year).

(Aqua)In the Aqua business, we actively worked to acquire customers mainly for “The gift of delicious water: Ulunom” brand,
targeting large commercial and other facilities. The number of customers increased by four thousand from March 31, 2019 to
160 thousand. We also worked to reduce manufacturing and logistics costs.
As a result, segment sales came to 5,603 million yen (+6.1% year on year) and operating profit to 389 million yen (+10.7%
year on year).

3

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

(Others)
Turning to other businesses, sales in the nursing care business totaled 905 million yen (+12.3% year on year), supported bya higher number of care recipients. In the shipbuilding business, sales amounted to 1,053 million yen (+12.4% year on year),reflecting an increase in work volume for ship repairs. In the bridal events business, sales came to 1,032 million yen (-4.5%
year on year) due to a decline in the number of wedding ceremonies.
As a result of these factors, segment sales were 3,575 million yen (+6.6% year on year), and operating profit was 186 million
yen (+80.7% year on year).

(2) Explanation of Consolidated Financial Position
1) Assets, Liabilities, and Net Assets
As of December 31, 2019, total assets amounted to 168,697 million yen, up 1,090 million yen from March 31, 2019. This
mainly reflected a 1,168 million yen decrease in notes and accounts receivable–trade that was offset by an increase of 1,814
million yen in cash and deposits due primarily to the consolidation of new subsidiaries through acquisition.
Total liabilities stood at 102,972 million yen, down 739 million yen from March 31, 2019. This was primarily due to a decreaseof 2,900 million yen in income taxes payable resulting from income tax payments.
Net assets totaled 65,724 million yen, up 1,829 million yen from March 31, 2019. This was mainly attributable to the bookingof 5,103 million yen in net income attributable to owners of the parent, offsetting the payment of 3,678 million yen in
dividends of surplus.

2) Cash Flows
As of December 31, 2019, cash and cash equivalents stood at 5,032 million yen, up 1,013 million yen from March 31, 2019.
Cash flows from each activity during the period under review and the factors behind them are as follows:(Cash flows from operating activities)
Net cash provided by operating activities was 15,476 million yen, up 5,663 million yen from the same period of the previous
fiscal year. Income tax payments and a decline in trade payables led to cash outflows, but higher net income before income
taxes and lower trade receivables, as well as depreciation and amortization expenses (non-cash items) increased cash
inflows.
(Cash flows from investing activities)
Net cash used in investing activities was 9,683 million yen, down 67 million yen from the same period of the previous fiscal
year, as a result of the purchase of property, plant and equipment and intangible assets.
(Cash flows from financing activities)
Net cash used in financing activities was 4,779 million yen, down 5,514 million yen from the same period of the previous
fiscal year. This was primarily due to repayments of lease obligations and payments of dividends.
The substantial year-on-year decline in cash flows from financing activities was due primarily to a decrease in short-termloans payable.

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Information

4

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

Earnings results for the nine months ended December 31, 2019 were generally in line with forecasts, and the Group
maintains its consolidated earnings forecasts for the fiscal year ending March 31, 2020, which was announced on May 9,
2019.
The earnings forecasts are based on information currently available to the Company. Actual results may differ from these
forecasts due to a variety of factors.

5

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

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

Nine Months Ended

March 31, 2019

December 31, 2019

AssetsCurrent assets
Cash and deposits

4,164

5,979

Notes and accounts receivable–trade

24,79823,629Merchandise and finished goods

4,173

3,973

Work in process

660

2,132

Raw materials and supplies

865

901

Other

8,264

7,894

Allowance for doubtful accounts

-419

-407

42,50644,102

Buildings and structures, net

33,75633,269Machinery, equipment and vehicles, net

23,592

23,159Land

22,921

23,065

Other, net

16,76017,288

Total property, plant and equipment

97,03096,783

Goodwill

5,044

4,657

Other

6,084

5,984

Total intangible assets

11,128

10,642

Net defined benefit asset

2,365

2,417

Other

14,95815,303

Allowance for doubtful accounts

-386

-553

Total investments and other assets

16,937

17,166125,097

124,5922

1

167,606

168,697

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

Intangible assets

Investments and other assets

Total non-current assets
Deferred assets
Total assets

6

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

(Millions of yen)
Fiscal Year Ended

Nine Months Ended

March 31, 2019

December 31, 2019

Liabilities
Current liabilities
Notes and accounts payable–trade

15,021

15,158

Short-term loans payable

22,26525,540Current portion of bonds

168

133

Income taxes payable

3,491

591

-

1,150

Other provision

Provision for loss on litigation

1,705

192

Other

18,733

18,964

Total current liabilities

61,38561,730230

161

27,94026,781Other provision

149

103

Net defined benefit liability

719

768

Other

13,286

13,427

Total non-current liabilities

42,32541,241

103,711

102,972

14,00014,000Non-current liabilities
Bonds payable
Long-term loans payable

Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus

25,52725,542Retained earnings

21,86323,288Treasury stock-2,222-2,221

Total shareholders’ equity

59,16760,609Valuation difference on available-for-sale securities

1,573

1,589

Deferred gains (losses) on hedges

-319

122

Foreign currency translation adjustment

-10

-13

Remeasurement of defined benefit plans

2,217

2,078

Total accumulated other comprehensive income

3,460

3,777

Non-controlling interests

1,267

1,338

Total net assets

63,89465,724

167,606

168,697

Accumulated other comprehensive income

Total liabilities and net assets

7

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019(2) Quarterly Consolidated Statements of Income, Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Nine Months Ended December 31, 2019)(Millions of yen)
Nine Months Ended
December 31, 2018
(April 1, 2018 to
December 31, 2018)

Nine Months Ended
December 31, 2019
(April 1, 2019 to
December 31, 2019)

Sales

137,943

141,557

Cost of sales

83,616

84,254Gross profit

54,32757,302

Selling, general and administrative expenses

47,28948,024

Operating profit

7,038

9,278

Interest income

68Non-operating profit
Dividend income

180

191

Commission fee

69

26

Other

295

275

Total non-operating profit

552

503

Interest expenses

278

229

Other

63

74

Total non-operating expenses

342

303

7,247

9,478

Gain on sales of non-current assets

014Transmission line facility subsidies

105

96

Subsidy income

5-Gain on reversal of subscription rights to shares

0

263

111

374

0

3

504

558

Non-operating expenses

Recurring profit
Extraordinary income

Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets-

17

Impairment loss

Loss on sales of investment securities

14-

Loss on valuation of investment securities

45

30

-

1,150

Other

37

77

Total extraordinary losses

602

1,839

Quarterly net income before income taxes

6,756

8,013

Income taxes (current)

1,934

2,799

Income taxes (deferred)

746

-48

Total income taxes

2,681

2,751

Quarterly net income

4,075

5,262

Quarterly net income attributable to non-controlling interests

108

159

Quarterly net income attributable to owners of the parent

3,966

5,103

Provision for loss on litigation

8

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

(Consolidated Statements of Comprehensive Income)(Nine Months Ended December 31, 2019)(Millions of yen)
Nine Months Ended
December 31, 2018
(April 1, 2018 to
December 31, 2018)
Quarterly net income

Nine Months Ended
December 31, 2019
(April 1, 2019 to
December 31, 2019)

4,075

5,262

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains (losses) on hedges
Foreign currency translation adjustment
Remeasurement of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted
for using the equity method
Total other comprehensive income
Quarterly comprehensive income-1,082

15

-966

442

2

1

-162

-138

-2

-5

-2,211

316

1,864

5,579

1,755

5,420

109

159

(Breakdown)
Quarterly comprehensive income attributable to owners of
the parent
Quarterly comprehensive income attributable to noncontrolling interests

9

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
Nine Months Ended Nine Months Ended
December 31, 2018 December 31, 2019
(April 1, 2018 to(April 1, 2019 to
December 31, 2018) December 31, 2019)
Cash flows from operating activities
Quarterly net income before income taxes

6,756

8,013

Depreciation

10,36910,681

Amortization of goodwill

859

810

Impairment loss

14-

Increase (decrease) in net defined benefit asset and liability

-225

-133

Interest and dividend income

-187

-200

-0

-245

278

229

-0

-10

Loss (gain) on sales of investment securities
Interest expenses(Gain) loss on sales of non-current assets(Gain) loss on valuation of investment securities

45

30

Loss on retirement of non-current assets

504

558

Decrease (increase) in notes and accounts receivable – trade

610

1,990

Decrease (increase) in inventories

-968

-804

Increase (decrease) in notes and accounts payable – trade-1,379

-331

Other

-3,630153

Subtotal

13,046

20,741

Income taxes paid

-3,233-5,264

Net cash provided by (used in) operating activities

9,813

15,476

Interest and dividend income received

226

238

Purchase of securities

-310

-10

0

576

-9,537-8,947

171

164

-202

-1,408

Payments of loans receivable

-200

-20

Collection of loans receivable

14

53

Other

220

-329

-9,615-9,683-281-232

Net increase (decrease) in short-term loans payable

10,6503,450

Repayments of lease obligations-2,793-2,706

Cash flows from investing activities

Proceeds from sales of securities
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

Net cash provided by (used in) investing activities
Cash flows from financing activities
Interest expenses paid

Proceeds from long-term loans payable

5,800

5,420

Repayment of long-term loans payable-8,815-6,850-134-104

Payments for acquisition of treasury stock-0-1

Proceeds from disposal of treasury shares

00-3,654-3,672

Redemption of bonds

Cash dividends paid

10

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

Other

-7

-82

762

-4,779

-0

-1

960

1,013

Cash and cash equivalents at beginning of period

3,004

4,018

Cash and cash equivalents at end of period

3,964

5,032

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

11

TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019(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)(Litigation)
On January 16, 2020, the Tokyo High Court delivered an appellate ruling in the damage suit filed by consolidated
subsidiary TOKAI Communications Corporation against Hitachi Solutions, Ltd. and the subsequent damage
counterclaim filed by the latter against the former. The ruling stipulates that TOKAI Communications Corporation pay
compensation for damages and late payment charges to Hitachi Solutions, Ltd.
TOKAI Communications Corporation objects to this ruling and plans to file and petition for acceptance of a final appeal
with Japan’s Supreme Court. However, the Company has recorded 1,150 million yen in provision for loss on litigation
as an extraordinary loss in preparation for possibility that the Supreme Court upholds the ruling of the Tokyo High Court.

12TOKAI Holdings Corporation (3167) Financial Results for the Nine months Ended December 31, 2019

(Segment Information, etc.)[Segment Information]
I. Nine Months Ended December 31, 2018 (April 1, 2018 to December 31, 2018)
Sales and Income of Losses by Reportable Segment
Reportable segments
Building
Information
Other1
Gas and
and
and
CATV
Aqua Subtotal
Petroleum Real
CommuniEstatecations
Sales
Sales toexternalcustomers
Intersegment
sales andtransfers

54,675 13,846 22,829

147

772

37,959553

2,293

Subtotal

54,822 14,619 23,382

40,252

Segment income(loss)

1,214

1,693

435

3,194

5,279 134,590

97

3,863

5,377 138,454
351

6,889

Total Adjustments2(Millions of yen)Amount inquarterly
consolidated
statements ofIncome3－

137,943

3,990-3,990－3,478 141,933-3,990137,94345

7,038

3,352 137,943

126

103

6,992

(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. Nine Months Ended December 31, 2019 (April 1, 2019 to December 31, 2019)
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

Total

Amount in quarterly
consolidated
Adjustments2
statements ofIncome3

Sales
Sales toexternalcustomers
Intersegment
sales andtransfers

55,191 14,919 23,433

130

750

507

38,834 5,603 137,982

2,593

127

4,109

Subtotal

55,322 15,669 23,940

41,428 5,730 142,091

Segment income(loss)

2,156

2,429

709

3,432

389

9,117

3,575 141,557-

141,557

4,242-4,242-

3,708 145,799-4,242

141,557

-24

9,278

132

186

9,303

(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.

13