Gulliver International Co., Ltd.

Consolidated Results
Third Quarter of the Fiscal Year Ending February 28, 2007
(Nine-month period ended November 30, 2006)

This document has been translated from the original Japanese as a guide for non-Japanese investors. It
contains forward-looking statements based on a number of assumptions made and beliefs held bymanagement in light of information currently available. Actual financial results may differ materiallydepending on a number of factors, including changing economic conditions and the pricing and productinitiatives of new and existing competitors.

SUMMARY OF FINANCIAL STATEMENTS (Consolidated)
Third quarter results for the fiscal year ending February 28, 2007

Gulliver International Co., Ltd.

January 9, 2007

Stock Code: 7599
Listed exchanges: Tokyo (1st Section)
http://www.glv.co.jp/
Inquiries: Senior Managing Director: Ikuo Murata
President: Kenichi Hatori
Telephone: +81 3 5208-5503
1. Notes to preparation of these financial statements
1. Adoption of simplified accounting treatments:
Yes (partial use of the simplified method)
2. Differences in accounting treatments applied compared to previous consolidated fiscal year:
Yes
For further details regarding the differences in accounting treatments applied see page 8: Changes to Material Items
Forming the Basis for the Preparation of the Consolidated Financial Statements
3. Changes to scope of consolidation or equity method accounting: Yes (One newly consolidated company TakeOff Co., Ltd.)
2. Consolidated financial results for the nine month period ended November 30, 2006
1) Consolidated Operating Results

Millions of yen, rounded downNine months ended
November 30, 2006

Nine months ended
November 30, 2005(%
change)(% change)

Sales ...............................................................
Operating income............................................
Ordinary income..............................................
Net income......................................................
Net income per share (¥) ................................
Net income per share (¥)(fully diluted) ............

135,224
7,718
7,657
4,912
¥502.89¥500.20

1.5
30.3
30.1
75.7
---

Fiscal Year ended
February 28, 2006

133,219
5,920
5,882
2,795
¥279.67¥276.55(% change)

19.9(21.2)(21.5)(31.8)---

182,649
9,423
9,382
4,421
¥435.61¥431.10

16.5
(7.8)
(8.1)
(21.7)---

Notes to the preparation of these financial statements:
Percentage figures for sales, operating income, etc. represent changes compared to the comparable period of the previous fiscal year.

2) Financial Position (consolidated)

Millions of yen, rounded down

As of November 30, 2006
Total assets......................................................
Net assets ........................................................
Equity ratio (%) ................................................
Shareholders’ equity per share (¥) ...................

As of November 30, 2005

As of February 28, 2006

38,87017,58344.3
1,764.40

35,833
15,77244.0
1,583.02

38,812
16,01141.3
1,623.01

Nine months ended
November 30, 2006
5,074
(4,567)
(772)
3,110

Nine months ended
November 30, 2005
3,578
(5,655)
2,607
4,826

Fiscal Year ended
February 28, 2006
4,442
(6,385)
1,029
3,374

3) Consolidated cash flows

Cash flow from operating activities...................
Cash flow from investing activities ...................
Cash flow from financing activities ...................
Cash and cash equivalents at end of period ....

3. Forecasts for the fiscal year ending February 28, 2007 (March 1, 2006 to February 28, 2007)
Millions of yen

Sales .......................................................................................
Ordinary income......................................................................
Net Income..............................................................................
Net income per share (¥) ........................................................

FY ending
February 28, 2007
205,400
11,2005,700
584.19Forecasts and forward-looking statements in this document are based on a number of assumptions made and beliefs held bymanagement in light of information currently available. Actual financial results may differ materially depending on a number offactors, including economic conditions, legislative and regulatory developments, delay in new product or service launches, andpricing and product initiatives of competitors.

1

Operating results and financial position
Gulliver operates 283 directly operated stores involved in the purchase and sale of cars (15 morethan in the comparable period of the previous fiscal year and 5 more than at the end of the previous
fiscal year) and has 187 affiliated stores (32 fewer than in the comparable period of the previous fiscal
year and 30 fewer than at the end of the previous fiscal year). In total, Gulliver operates 470 stores(17 fewer than in the comparable period of the previous fiscal year and 25 fewer than at the end of theprevious fiscal year). Our policy of increasing the number of stores by opening new branches andreplacing stores (relocating or launching new stores) remains unchanged.
In the period under review, compared to the first nine months of last fiscal year, we have cut backinvestments in marketing and implemented streamlined marketing activities. Further measures wehave taken to promote efficiency include changes to our sales structure and the strengthening of staff
training in addition to constraining the number of new hires.
Vehicles handled by Gulliver are sold quickly, with an average timeframe of only one week to ten days
required to achieve a sale via channels that include: 1) Auction sites throughout Japan, 2) On-screen
selling system ‘Dolphinnet’, 3). GAO! Auction, the internet based real-time auction aimed at used car
dealers. Despite curbing sales management expenses such as advertising, sales from all channels
are currently performing well.
There are currently 9 subsidiaries of Gulliver International. Among these, the operating income of
G-Trading Co., Ltd., the second-hand truck, bus and construction vehicles purchase, sales and export
company, has declined from the previous comparable period despite a steady increase in revenues
and the number of vehicles sold. Further, G-One Financial Service Co., Ltd., the auto-loan andfinancial business company, has increased the number of its auto-loans and is steadily strengthening
its operating base. As announced on July 11, 2006, and following changes to the accounting method
for auto-loan income, a special income of approximately ¥1,164 million has been recorded.
As a result of the factors noted above, consolidated net sales for the nine month period under review
increased 1.5% (¥2,004 million) to ¥135,224 million compared to the first nine months of the previous
fiscal year and operating income increased 30.3% (¥1,798 million) to ¥7,718 million. Ordinary income
increased 30.1% (¥1,774 million) to ¥7,657 million and net income increased 75.7% (¥2,117 million)to ¥4,912 million.
Financial Position
At the end of the third quarter, compared to the end of the previous fiscal year total assets increased¥57 million and net assets increased ¥1,571 million. (From this fiscal period minority interests havebeen included in net assets. If calculated using the same standards as in the previous fiscal year theincrease in net assets compared to the end of the previous fiscal year would be ¥1,203 million.)
Cash flow
In the nine month period cash flow from operating activities was positive and cash flow from investing
activities and financing activities were negative, resulting in cash and cash equivalents as of the endof the period of ¥3,110 million ¥263 million lower than at the end of the previous fiscal year.

2Cash flow from operating activities
Cash generated from operating activities was ¥5,074 million. This was primarily due to an increase inoperating revenue from the purchase and sale of cars.
Cash flow from investing activities
Net cash used in investing activities was ¥4,567 million. This was primarily due to investment in the
opening of new directly operated stores.
Cash flow from financing activities
Net cash used in financing activities was ¥772 million. This was primarily due to the acquisition oftreasury stock.
Qualitative information regarding forecasts
With regard to the consolidated forecasts, we are making good progress towards achieving theforecasts previously announced.

3

Consolidated Balance Sheets
As of November 30,
2006
ASSETSAs of November 30,
2005% of total

Millions of yen
As of February 28,
2006% of total% of total

Current assets
Cash and deposits .................................

3,110

4,826

3,374

Accounts receivable...............................

9,353

5,661

11,180Marketable securities .............................

--

--

100

Inventory ................................................

4,697

6,257

4,659

Deferred tax assets................................

351

558

468

Others ....................................................

2,871

1,949

1,393

Allowance for doubtful accounts ............

(85)

(69)

(84)

Total current assets............................

20,29952.2

19,184

53.5

21,091

54.4

Fixed assets
Tangible fixed assets
Buildings and structures.........................

7,564

5,910

6,812

Tools, fixtures and equipment................

1,398

1,261

1,689

Land.......................................................

327

327

327

Other......................................................

67

318

415

Total tangible fixed assets

9,357

24.1

7,818

21.8

9,244

23.8

Intangible fixed assets
Software.................................................

2,528

2,987

2,719

Other......................................................

113

98

121

Total intangible fixed assets ...............

2,642

6.8

3,085

8.6

2,841

7.3

Investments and other assets
Investment securities ..............................

99

319

199

Shares of related companies ..................

108

--

103

Deposits and guarantee money ..............

3,464

3,295

3,052

Construction cooperation fund ................

2,470

1,636

1,890

Deferred tax assets.................................

157

96

111

Others .....................................................

659

749

648

Allowance for doubtful accounts .............

(388)

Total investments and other assets ......

6,571

Total fixed assets ...............................
Total Assets.............................................

(351)
16.9

5,745

18,57047.8

38,870

100.0

(371)
16.0

5,633

14.5

16,64946.5

17,72045.6

35,833100.0

38,812100.0

4

Consolidated Balance Sheets
As of November 30,
2006
LIABILITIESCurrent liabilities
Accounts payable ...................................
Short-term borrowing ..............................
Accrued expenses ..................................
Accrued corporate taxes .........................
Deposits received ...................................
Reserve for bonuses...............................
Others.....................................................
Total current liabilities...........................
Long-term liabilities
Long-term debt .....................................
Guarantee deposits received ..................
Total long-term liabilities.......................
Total liabilities.....................................
MINORITY INTERESTS
Minority interests.....................................
CAPITAL
Paid-in capital .........................................
Capital surplus ........................................
Retained earnings .................................
Unrealized gains and losses in othersecurities .................................................
Translation adjustments ..........................
Treasury stock ........................................
Total capital........................................

As of November 30,
2005
%

51.0

2,810
9,500
2,294
677
700
970
1,932
18,885

578
870
1,449
21,286

3.7
54.7

200
628
828
19,714

2.3
55.0

304
594
898
22,448

--

--

346

1.0

352

0.9

----

----

4,157
4,032
14,304

11.6
11.3
39.9

4,157
4,032
15,822

10.7
10.4
40.8

-----

-----

79
0
(6,799)15,7720.2
0.0(19.0)
44.067(0)(8,067)
16,0110.2(0.0)(20.8)
41.3

--

--

35,833100.0

38,812100.0

NET ASSETS
Shareholders’ equity .................................
Paid-in capital .........................................
Capital surplus ........................................
Retained earnings...................................
Treasury shares

4,157
4,032
18,794(9,775)

10.7
10.4
48.4
(25.2)

-----

-----

-

Total shareholders’ equity ..................

17,208

44.3

--

--

--

8

0.0

--

--

(1)

(0.0)

--

--

6

0.0

--

--

--

--

368

1.0

--

--

--

--

Total net assets.......................................

17,583

45.3

--

--

--

--

Total liabilities and net assets ...............

38,870100.0--

Total Liabilities, Minority Interests
and Shareholders’ Equity.......................

2,158
11,880
2,235
1,267
616
348
1,330
19,837%

Millions of yen
As of February 28,
2006
%

52.7

3,501
9,350
4,156
1,867
462
532
1,678
21,549

55.5

2.3
57.8

--

Appraisal and translation differences
Unrealized gains and losses in othersecurities.................................................
Translation adjustments..........................
Total Appraisal and translationdifferences .........................................
Minority interests--

5Consolidated Statements of Income
March 1, 2006 to

March 1, 2005 toNovember 30, 2006

November 30, 2005

Millions of yen
March 1, 2005 to
February 28, 2006

%

%

%

Sales .....................................................

135,224100.0

133,219100.0

182,649

100.0

Cost of sales .........................................

104,391

77.2

101,90976.5

139,371

76.3

Gross profit.....................................

30,83222.8

31,31023.5

43,278

23.7

Sales general and administrative
expenses............................................

23,11317.1

25,39019.1

33,855

18.5

Operating income ...........................

7,718

5.7

5,920

4.4

9,423

5.2

Non-operating income ........................

69

0.1

65

0.1

120

0.1

Non-operating expenses ......................

130

0.1

102

0.1

161

0.1

Ordinary income..................................

7,657

5.7

5,882

4.4

9,382

5.2

Extraordinary profit ...............................

1,164

0.8

49

0.0

56

0.0

Extraordinary losses......................... ...

578

0.4

365

0.3

1,001

0.6

Net income before taxes, etc. .......

8,243

6.1

5,566

4.1

8,437

4.6

Income tax, inhabitants tax andenterprise tax .................................

3,199

2.4

2,780

2.1

3,935

2.2

Corporate tax adjustment ...............

112

0.1

(17)

(0.0)

66

0.0

Minority interests ............................

18

0.0

7

0.0

14

0.0

Net income ................................ ...

4,912

3.6

2,795

2.0

4,421

2.4

6

Millions of yen

Changes in consolidated shareholders’ equity
Shareholders’ equity
CapitalBalance as of February 28, 2006

Capital surplus
4,157

Retained profit

4,032

Total shareholders’

Treasury stock

15,822equity(8,067)

15,944

Change during the period
Surplus dividend
Bonuses to directors through profit
appropriation
Net income(1,608)(1,608)

(73)

(73)

4,912

4,912

Acquisition of treasury stock
Disposal of treasury stock
Changes to items other than

(2,079)(2,079)

(258)

371

112

―

―

―

―

―

―

―

2,971

(1,707)

1,263

4,157

4,032

18,794(9,775)

17,208shareholders’ equity
Total change during the period
Balance as of November 30, 2006

Valuation and differences due to foreign exchange
Valuation differenceson other marketablesecurities
Balance as of February 28, 2006

67

Translation

Total valuation andMinority interests

Total net assets

adjustment account translation differences
(0)

67

352

16,364(5)(1,613)

Change during the period
Surplus dividend
Bonuses to directors through profit(73)

appropriation
Net income

4,912

Acquisition of treasury stock(2,079)

Disposal of treasury stock

112

Changes to items other thanshareholders’ equity during the

(59)

(1)

(60)

21

(38)

Total change during the period

(59)

(1)

(60)

15

1,219

Balance as of November 30, 2006

8

(1)

6

368

17,583

period7

Consolidated Statements of Cash flows
Millions of yen
March 1, 2005 to
February 28, 2006

March 1, 2006 to
November 30, 2006

March 1, 2005 toNovember 30, 2005

I. Cash flow from operating activities
Income before taxes, etc. ...................................................................

8,243

5,566

8,437

Depreciation .......................................................................................

1,691

1,437

2,061

Increase (decrease) in reserve for bonuses .......................................

(173)

440

2

Increase (decrease) in allowance for doubtful accounts ....................

17

21

47

Interest and dividends received..........................................................

(2)

(1)

(1)

Interest paid ........................................................................................

45

22

28

New share issuance expenses ...........................................................

7

5

5

Gain on sale of fixed assets ...............................................................

--

--

(3)

Loss on disposal of fixed assets .........................................................

578

244

879

Gain on sale of investment securities.................................................

--

(45)

(45)

Payment of directors’ bonuses ...........................................................

(73)

(94)

(94)
(660)

Increase (decrease) in accounts receivable .......................................

1,721

5,701

Increase (decrease) in inventory ........................................................

49(1,634)(17)

Increase (decrease) in accounts payable...........................................

(1,308)(2,382)(1,079)

Increase (decrease) in operational loans receivable(1,006)

--

--

(260)

187

328

Increase (decrease) in accrued consumption tax...............................
Other...................................................................................................

(729)

(998)

(549)

Subtotal...............................................................................................

8,799

8,470

9,339

Interest and dividends received..........................................................

2

1

1

Interest paid ........................................................................................

(45)

(21)

(26)

Corporate taxes paid ..........................................................................

(3,681)(4,871)(4,871)

Cash flow from operating activities ..................................................

5,074

3,578

4,442

II. Cash flow from investing activities
Proceeds from sale of investment securities ......................................

100

212

212

Payments for acquisition of tangible fixed assets...............................

(3,136)(2,033)(3,032)

Proceeds from sale of tangible fixed assets .......................................

0

0

7

Payments for acquisition of intangible fixed assets ............................

(475)(1,520)(1,558)

Payments for acquisition of shares of affiliates ..................................

(5)

(19)

--

Amounts lent.......................................................................................

(56)

(291)

(492)

Proceeds from repayment of loans.....................................................

4

68

577

Increase (decrease) in short-term borrowing......................................

--

16

(130)

Deposit and guarantee payments.......................................................

(1,004)(2,080)(2,096)

Proceeds from transfer of operations .................................................

--

--

127

Other...................................................................................................

4

(7)

1

Cash flow from investing activities...................................................

(4,567)(5,655)(6,385)

III. Cash flow from financing activities
Net increase (decrease) in short term borrowings..............................

2,480

5,550

5,687

Repayment of long-term loans ...........................................................

(57)

--

(340)

Proceeds from long-term loans ..........................................................

378

200

200

Payments for acquisition of treasury stock .........................................

(2,079)(1,545)(2,974)

Proceeds from disposal of treasury stock...........................................

112

155

209

Payments for issuance of new shares ................................................

(7)

--

--

Proceeds from issuance of new shares..............................................

--

30

35

Payment of dividends .........................................................................

(1,608)(1,786)(1,786)

Payment of dividends to minority shareholders..................................

(5)

--

--

Payments from minority shareholders ................................................

--

3

3

Other...................................................................................................

14

--

--

Cash flow from financing activities...................................................

(772)

2,607

1,029

IV. Cash and cash equivalents currency translation differences ..

1

(0)

1

V. (Decrease) increase in cash and cash equivalents .....................

(263)

531

(913)

VI. Cash and cash equivalents at beginning of period ....................
VII. Increase in cash and cash equivalents from change in scopeof consolidation ...............................................................................
VIII. Cash and cash equivalents at end of period.............................

3,374

4,130

4,130

--

164

155

3,110

4,826

3,374
8

Changes to Material Items Forming the Basis for the Preparation of the Third
Quarter Consolidated Financial Statements
March 1, 2006 – November 30, 2006

March 1, 2005 –November 30, 2005

March 1, 2005 – February
28, 2006

Accounting standards relating to the impairment of fixed
assetsFrom the period under review, we have applied the ‘AccountingStandards for Impairment of Fixed Assets’ (issued by the
Accounting Standards Board of Japan on August 9, 2002) andthe Financial Accounting Standards Implementation Guidance
No. 6, ‘Implementation Guidance for Accounting Standards for
Impairment of Fixed Assets’ (issued by the AccountingStandards Board of Japan on October 31, 2003). This change
has had no material effect on profit and loss statements.
Accounting treatments relating to income generated
through auto-loans
Previously, in respect of auto-loans at the consolidated
subsidiary G-One Financial Service Co., Ltd. the entire amountof the income was recorded as income over the period of theloan. However, from the current fiscal period, we have begun toemploy a method in which the financing cost for the unexpired
portion is accounted for over the contract period. For theremaining portion, excluding income related to foreseeable
losses arising from early repayment or subrogated performancethe income is recorded in full at the time of contracting for the
auto-loan.
We made this change as most of the costs associated with
auto-loan income occur at the time of contracting and also
because the expertise and internal data we have accumulatedon the auto-loans business allows us to rationally forecast early
repayment or subrogated performance. As a result we believe
the new method better reflects actual operating conditions.
In order to make loan contracts signed in previous fiscal years
conform to this method, the balance of unpaid loans at the endof the fiscal year ended February 28, 2006, excluding income
related to financing rates and foreseeable losses arising fromearly repayment or subrogated performance, has beenrecorded as extraordinary profit.
As a result of this change, net sales, gross profit on sales,
operating income and ordinary income have increased by ¥547
million compared to the previous method, and net income
before adjustment for income taxes has increased ¥1,711
million.
Accounting standards relating to presentation of net
assets on balance sheets
From the period under review, the ‘Statement Regarding the
Presentation of Net Assets on the Balance Sheet’ (BusinessAccounting Council, December 9, 2005, Article No. 5) and‘’Guidelines for the Application of Accounting Policies for the
Presentation of Net Assets on the Balance Sheet’ (Guidelines
for the Application of Business Accounting Polices, Article 8;
Business Accounting Council, December 9, 2005) have been
applied. The equivalent amount previously recorded as ‘Capital’is ¥17,215 million. Following changes to the regulations on
the interim financial statements, net assets on the third quarterbalance sheet have been recorded in accordance with therevised regulations.

9Segment Information
Segment information by business type
Third quarter of the fiscal year ending February 28, 2007 (March 1, 2006 to November 30, 2006)
Trading of
Other
Elimination/
Total
used cars
businesses
All company
Sales(1) Sales to external
128,631
6,592
135,224-customers(2) Inter-segmental sales----or transfers
128,631
6,592
135,224-Total118,242
5,461
123,703
3,801
Operating expenses
10,388
1,131
11,520(3,801)
Operating income

Millions of yen

Consolidated

135,224-135,224
127,505
7,718

Note:
1.

Method of business classification: Businesses have been classified according to the classification used in calculating sales. Further,
due to the increased importance of other business in the ‘Franchise operations’ segment this segment has been renamed ‘Other
businesses’ commencing from the fiscal year ended February 28, 2006.

2.

Names of principal products or services attributable to each business classification:

Business Classification
Used Car Sales
Other businesses

Principal Product Name or Service Name
Purchase and sales of used automobiles through directly operated outlets and the likeRoyalties arising out of franchise agreements and fees for the provision of training etc., intermediation inbuying and selling of used automobiles, and fees from other businesses such as the financing business3.

Amounts and main details for the item Elimination/ All company are as follows:
Third quarter of the fiscal year ended February 28, 2006

Amount included in
Elimination/ All company that

¥3,801Main details
Expense related to Parent Company’s head
office management department.

could not be included
elsewhere10Third quarter of the fiscal year ended February 28, 2006 (March 1, 2005 to November 30, 2005)
Trading ofFranchise
Elimination/
Total
used cars
business
All company
Sales(1) Sales to external
0
126,704
6,514
133,219
customers(2) Inter-segmental sales----or transfers
0126,704
6,514
133,219
Total
118,820
5,128
123,948
3,351
Operating expenses
7,884
1,386
9,270
(3,350)Operating income

Millions of yen

Consolidated

133,219-133,219
127,299
5,920

Note:
1.

Method of business classification: Businesses have been classified according to the classification used in calculating sales.

2.

Names of principal products or services attributable to each business classification:

Business Classification

Principal Product Name or Service Name

Used Car Sales

Purchase and sales of used automobiles through directly operated outlets and the likeFranchising

Royalties arising out of franchise agreements and fees for the provision of training etc., and intermediation inbuying and selling of used automobiles

3.

Amounts and main details for the item Elimination/ All company are as follows:
Third quarter of the fiscal year ended February 28, 2006

Amount included in
Elimination/ All company that

¥3,351Main details
Expense related to Parent Company’s head
office management department.

could not be included
elsewhere11

Fiscal year ended February 28, 2006 (March 1, 2005 to February 28, 2006)
Trading ofUsed cars
Sales(1) Sales to externalcustomers(2) Inter-segmental sales
or transfers
Total
Operating expenses
Operating income

Otherbusinesses

Millions of yen

Elimination/
All company

Total

Consolidated

173,648

9,001

182,649--

182,649

--

--

--

--

--

173,648
162,227
11,420

9,001
7,302
1,698

182,649
169,529
13,119-3,696(3,696)

182,649
173,226
9,423

Note:
1.

Method of business classification: Businesses have been classified according to the classification used in calculating sales.
Further, due to the increased importance of other business in the ‘Franchise operations’ segment this segment has been renamed‘Other businesses’ commencing from the fiscal year ended February 28, 2006.Names of principal products or services attributable toeach business classification:
Business Classification
Used Car Sales
Other businesses

Principal Product Name or Service Name
Purchase and sales of used automobiles through directly operated outlets and the likeRoyalties arising out of franchise agreements and fees for the provision of training etc., intermediation inbuying and selling of used automobiles, and investments from other businesses such as the financing
business3.

Amounts and main details for the item Elimination/ All company are as follows:
Third quarter of the fiscal year ended February 28, 2006

Amount included in
Elimination/ All company that

¥3,696Main details
Expense related to Parent Company’s head
office management department.

could not be included
elsewhere

Segment information by geographical location
For the third quarter of the current and previous consolidated fiscal years and for the previous fiscal year consolidated
subsidiaries were located overseas, but as over 90% of sales for each segment were in Japan segment information bygeographical location has been omitted.
Overseas sales
For the third quarter of the current and previous consolidated fiscal years and for the previous fiscal year, overseas sales
were less than 10% of consolidated sales and have therefore been omitted.

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