Summary Report of Consolidated Financial Results
For the Six Months Ended December 31, 2018

(All financial information has been prepared in accordance with accounting principles generally accepted in Japan.)
Pan Pacific International Holdings Corporation
Securities Code No.: 7532
Shares Listed:Tokyo Stock Exchange
Address:
2-19-10 Aobadai, Meguro-ku, Tokyo
Representative:
Kohji Ohara, President and CEO
Contact:
Mitsuo Takahashi, Senior Managing Director (Phone: +81-3-5725-7588)
URL:
http://www.donki-hd.co.jp(Amounts in million yen are rounded off to the nearest million)
1. Overview of Business Results and Financial Position for the second quarter of fiscal 2019 (From July 1, 2018 toDecember, 31, 2018)(1) Results of Business Operations(Millions of yen, except per-share data)
Operating
Ordinary
Net Sales
Change (%)
Change (%)
Change (%)
IncomeIncomeSix Months Ended
513,41610.9
30,017
2.6
35,33013.8
December 31, 2018
Six Months Ended
462,830
10.8
29,24711.0
31,05815.3
December 31, 2017
(Note) Comprehensive income: 27,090 million yen [29.9%] (FY 2019.6 2Q), 20,851 million yen [10.2%] (FY 2018.6 2Q)
ProfitAttributable to
Owners of Parent
Six Months Ended
December 31, 2018
Six Months Ended
December 31, 2017

Change (%)

Net IncomePer Share(Yen)Net Income Per
Share-fully
diluted (Yen)23,61626.4

149.27148.8918,67813.5

118.08117.93(2) Financial Position(Millions of yen, except per-share data)
Total Assets

Net assets

Ratio of Shareholders’Equityto Total Assets (%)

As of December 31,
1,039,902
326,798
29.5
2018
June 30, 2018806,778
312,495
36.0(Reference) Equity: 306,948 million yen (as of December 31, 2018), 290,363 million yen (as of June 30, 2018)(Note) Starting with the beginning of the first quarter of fiscal 2019, we are applying “Partial Amendments to AccountingStandard for Tax Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No.28, February 16,2018).
Prior-year figures have been adjusted retroactively to conform with this accounting standard.
2. Dividends
Three Months Ended
September 30
Year Ended June 30,
2018Year Ending June 30,
2019Year Ending June 30,
2019 (Forecast)

Six Months Ended
December 31－5.00－10.00

YenNine Months
Ended March 31

Year Ended June30Total－27.00

32.00－28.0038.00(Note) Revision to the dividend forecast in the second quarter of fiscal 2019: Yes
The Breakdown of dividends for the Six Months Ended December 31, 2018: Ordinary dividend 5.00 Yen,
Commemorative dividend 5.00 Yen

13. Consolidated Business Forecast：For the year ending June 30, 2019 (From July 1, 2018 to June 30, 2019)(Millions of yen, except per-share data)
ProfitNet

ChangeOperating

ChangeSales(%)

Income(%)

Ordinary
IncomeChangeAttributable toChange(%)

Owners of(%)

ParentYear Ending
June 30, 2019(Note)

1,370,000

45.5

63,00022.2

65,00013.6

48,00031.9

Net Incomeper Share(Yen)
303.31

Revision to the business forecast in the second quarter of fiscal 2019: Yes

4. Others(1) Significant changes in the scope of consolidation: Yes
Newly consolidated: one company (PAN PACIFIC STRATEGY INSTITUTE PTE. LTD.) Excluded:－(2) Simplified accounting methods and special accounting methods for preparation of the quarterly consolidated
financial statements: None
(3) Changes in accounting policies concerning preparation of quarterly consolidated financial statements① Changes in line with revision to accounting standards: None
② Other changes: None
③ Changes in accounting estimates: None
④ Restatement: None
(4) Number of outstanding shares (Common stock)① Number of outstanding shares (Treasury stock included)
December 31, 2018
158,259,560 shares
June 30, 2018
158,193,160 shares② Number of treasury stock
December 31, 2018
4,633 shares
June 30, 2018
4,633 shares③ Average number of outstanding shares during the period
December 31, 2018
158,203,004 shares
December 31, 2017
158,183,447 shares※This financial summary is not subject to quarterly reviews.
※Explanation regarding the appropriate use of forecasts of business results
The financial forecasts of business results are based on judgments and estimates that have been made using
currently available information. By nature, such financial forecasts are subject to uncertainties and risks. Therefore,
actual results might be significantly different from the aforementioned forecasts for a variety of reasons, includingchanges in economic environments related to our business, market trends and exchange rates.
※The Company plans to hold financial results briefing for securities analysts and institutional investors on February 5,
2019. Presentation materials will be available on the Company’s website.

2

Consolidated Quarterly Balance Sheets(Millions of yen)
As of June 30,

As of December 31,

2018

2018

AmountAmountAssetsCurrent assets
Cash and deposits¥71,973¥258,494

Notes and Accounts receivable-trade

12,84816,056Merchandise

135,781

153,150

Other

16,01525,278(4)(22)

236,613452,956

Buildings and structures, net

133,415

148,432

Tools, furniture and fixtures, net

19,71820,578Land

188,866

194,2005,914

2,465

347,913

365,675

Goodwill

17,60018,065

Other

10,647

11,115

Total intangible assets

28,247

29,180Investment securities

31,606

37,111Long-term loans receivable

95,81586,902

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Other, net
Total property, plant and equipment
Intangible assets

Investments and other assets

Deferred tax assets

15,38914,570

Lease and guarantee deposits

46,494

48,220

Other

6,379

6,985

Allowance for doubtful accounts(1,678)(1,697)

Total investments and other assets

194,005

192,091

570,165586,946¥806,778¥1,039,902

Total non-current assets

Total assets3

(Millions of yen)
As of June 30,

As of December 31,2018

2018

AmountAmountLiabilities
Current liabilities
Accounts payable-trade¥93,030¥119,600

Current portion of long-term loans payable

17,78828,102Current portion of bonds

3,616

3,416

Payables under fluidity lease receivables

7,262

7,249

Income taxes payable

8,821

8,714

Provision for point card certificates

1,892

2,017

Other

39,47733,470Total current liabilities

171,886

202,568

Bonds payable

91,274

229,566

Long-term loans payable

200,668

252,506

Long-term payables under fluidity lease receivables

12,104

8,369

Asset retirement obligations

6,538

6,927

267

223

11,546

12,945

Non-current liabilities

Negative goodwill
Other
Total non-current liabilities

322,397

510,536494,283

713,104

Capital stock

22,436

22,560Capital surplus

19,975

14,563Retained earnings

248,940

268,273

(14)

(14)

291,337

305,382244

105(1,218)

1,461

(974)

1,566

Total liabilities

Net assets
Shareholders' equity

Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares

345

344

Non-controlling interests

21,787

19,506

Total net assets

312,495

326,798¥806,778¥1,039,902

Total liabilities and net assets

4Consolidated Quarterly Statements of Income

Net sales

Six months ended
December 31, 2017

(Millions of yen)Six months ended
December 31, 2018AmountAmount¥462,830¥513,416

342,654377,805

120,176

135,61190,929105,594

29,24730,017

Interest and dividend income

607

994

Amortization of negative goodwill

43

43

Equity in earnings of affiliates

1,698

5,728

Other

1,528

1,893

Total non-operating income

3,876

8,658

Interest expenses

1,417

1,760

Bond issuance cost－

1,126

Cost of claim's liquidation

204

151

Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income

Non-operating expenses

Other
Total non-operating expensesOrdinary income

444

308

2,065

3,345

31,05835,330Extraordinary income
Gain on sales of non-current assets

88465

Other

220

Total extraordinary income

110

465

Impairment loss－417

Loss on retirement of non-current assets

9436

Loss on closing of stores

Extraordinary losses

116

75

Loss on disaster

2307

Other

129

Total extraordinary losses

224

844

Profit before income taxes

30,94434,951

Income taxes - Current

10,906

9,500

Income taxes - Deferred

123

901

11,02910,401

Profit19,91524,550

Profit attributable to non-controlling interests

1,237934¥18,678¥23,616

Total income taxes

Profit attributable to owners of parent

5Consolidated Quarterly Statements of Comprehensive Income(Millions of yen)

ProfitSix months ended

Six months ended

December 31, 2017

December 31, 2018

AmountAmount¥19,915¥24,550

Valuation difference on available-for-sale securities

212

(133)

Foreign currency translation adjustment

722

2,679

2(6)

936

2,540

Comprehensive income¥20,851¥27,090

Comprehensive income attributable toComprehensive income attributable to owners of parent¥19,614¥26,156

1,237

934

Other comprehensive income

Share of other comprehensive income of affiliates
accounted for using equity method
Total other comprehensive income

Comprehensive income attributable
to non-controlling interests

6Consolidated Quarterly Statements of Cash FlowsSix months ended
December 31, 2017
Amount(Millions of yen)Six months ended
December 31, 2018
AmountCash flows from operating activities:
Profit before income taxes
Depreciation
Amortization of negative goodwill
Increase in provision¥30,944¥34,951

7,801

9,226

(43)

(43)

31

193

Interest and dividend income

(607)

(994)

Interest expenses1,417

1,760

Equity in earnings of affiliates(1,698)(5,728)Gain on sales of property, plant and equipment

(78)

(465)

Increase in notes and accounts receivable - trade(4,206)(3,180)

Increase in inventories(18,248)(16,982)

Increase in notes and accounts payable - trade28,10826,242

Increase in prepaid expenses

(823)

(955)

Other, net

1,039

(16)

Subtotal

43,63744,009Interest and dividend income received

343

856

Interest expenses paid

(942)

(1,595)

Income taxes paid

(11,310)(11,331)

Income taxes refund301,515

Payments for loss on disaster

－

(216)

31,75833,238(18,426)(24,805)

Proceeds from sales of property, plant and equipment

315

1,126

Purchase of intangible assets

(338)

(754)

(1,616)(3,404)

Net cash provided by operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment

Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits

54

247

(346)

(731)

(16,283)－

Purchase of shares of subsidiaries and affiliates(19,976)－

Payments of loans receivable(77,650)－

Payment for store opening in progress
Purchase of shares of subsidiaries resulting in change
in scope of consolidation

13,836333

4(133,932)(24,481)Net increase in short-term loans payable

8,000

－

Proceeds from long-term loans payable

105,000

65,000

Repayment of long-term loans payable(3,137)(3,672)－

138,784

Redemption of bonds(17,408)(1,908)

Repayments of payables under fluidity lease receivables(3,757)(3,890)

Collection of loans receivable

Other, net
Net cash used in investing activities
Cash flows from financing activities:

Proceeds from issuance of bonds

7

Proceeds from issuance of common shares

23247(3,322)(4,271)

(788)

(808)

－(4,322)

(31)

(93)

84,580185,067535

864

Net increase (decrease) in cash and cash equivalents(17,059)

194,688

Cash and cash equivalents at beginning of period

78,09475,883－4¥61,035¥270,575

Cash dividends paid
Cash dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation

Other, net
Net cash provided by financing activities
Effect of exchange rate change on cash and cash equivalents

Increase in cash and cash equivalentsfrom newly consolidated subsidiary
Cash and cash equivalents at end of period

Segment Information
For the second quarter ended December 31, 2018
1. Information concerning sales and income by reporting segment(Millions of yen)
Reporting segment
Retailbusiness

Rentbusiness

Sub TotalOthers(Note 1)

Total

Adjustment Consolidated(Note 2)
(Note 3)¥498,150¥11,357¥509,507¥3,909¥513,416¥－¥513,416

340

11,66012,0004,584

16,584(16,584)－Total498,490

23,017

521,507

8,493

530,000(16,584)

513,416

Segment income¥16,959¥9,166¥26,125¥3,715¥29,840¥177¥30,017

Sales, Segment income
Sales
Sales to third parties
Intersegment sales

Notes
1. The other businesses segment includes the services of real estate business and marketing business that are notincluded in other reporting segments.
2. The ¥ 177 million adjustment to segment income is an intersegment elimination.
3. Segment income is adjusted to the quarterly consolidated operating income.
2. Information concerning impairment loss of fixed assets or goodwill by reporting segment(Significant impairment losses on non-current assets)
Impairment losses on store facilities were recorded in the Retail business segment and Rent business segment. Impairment losses of¥276 million in the Retail business segment and ¥141 million in the Rent business segment were recorded for the second quarter
ended December 31, 2018.

(Significant changes in goodwill)
Not applicable(Significant gain on negative goodwill)
Not applicable

8For the second quarter ended December 31, 2017
1. Information concerning sales and income by reporting segment(Millions of yen)
Reporting segment
Retailbusiness

Rent
business

Sub Total

Others(Note 1)

Total

Adjustment Consolidated(Note 2)
(Note 3)¥448,791¥10,686¥459,477¥3,353¥462,830¥－¥462,830

427

10,637

11,064

4,522

15,586(15,586)－Total449,218

21,323

470,541

7,875

478,416(15,586)

462,830

Segment income¥17,495¥8,834¥26,329¥2,858¥29,187¥60¥29,247

Sales, Segment income
Sales
Sales to third parties
Intersegment sales

Notes
1. The other businesses segment includes the services of real estate business and marketing business that are notincluded in other reporting segments.
2. The ¥ 60 million adjustment to segment income is an intersegment elimination.
3. Segment income is adjusted to the quarterly consolidated operating income.
2. Information concerning impairment loss of fixed assets or goodwill by reporting segment(Significant impairment losses on non-current assets)
Not applicable(Significant changes in goodwill)
As a result of acquisition of all the shares of QSI, Inc., goodwill in the Retail business segment has increased by ¥13,794 million for thefirst quarter ended September 30, 2017.

(Significant gain on negative goodwill)
Not applicable9