Consolidated Financial Results
for the Six Months Ended December 31, 2017
[Japanese GAAP]
February 14, 2018
Company name: Nippon Koei Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 1954
URL: https://www.n-koei.co.jp/english
Representative: Ryuichi Arimoto, Representative Director and President
Contact: Tetsumi Aoki, General Manager, Accounting Department
Phone: +81-3-3238-8040
Scheduled date of filing quarterly securities report: February 14, 2018
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: Yes (for investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended December 31, 2017 (July 1, 2017 to December 31, 2017)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
Six months ended
Million yen%
Million yen% Million yen% Million yen%
December 31, 201731,23318.7(2,597)(2,344)(1,312)
December 31, 2016
26,30429.3(2,747)(2,286)(1,800)(Note) Comprehensive income: Six months ended December 31, 2017: ¥(47) million [ - %]Six months ended December 31, 2016: ¥(3,975) million [ - %]Diluted net income
per share
Six months ended
Yen
Yen
December 31, 2017(84.86)
December 31, 2016
(116.96)(Note) The Company conducted a share consolidation at a rate of one share for every five shares on January 1, 2017. The
figures for “Net income per share” are amounts on the assumption that the Company conducts the share consolidationon the beginning of previous fiscal year.
Net income per share(2) Consolidated Financial Position
Total assets
Net assets
As ofMillion yen
Million yen
December 31, 2017
120,264
53,804
June 30, 2017
113,865
54,874(Reference) Equity: As of December 31, 2017 : ¥53,443 million
As of June 30, 2017
: ¥54,508 million

Equity ratio
%
44.4
47.9

2. Dividends
1stquarter-end
Yen
-

2nd
quarter-end
Yen-

Annual dividends
3rdquarter-end
Yen-

Year-end

Yen
Fiscal year ended June 30, 2017
75.00
Fiscal year ending June 30, 2018
Fiscal year ending June 30, 2018
75.00
(Forecast)(Note)(1) Revision to the forecast for dividends announced most recently: None
(2) The Company conducted a share consolidation at a rate of one share for every five shares on January 1, 2017.

―1―

Total
Yen
75.00
75.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2018 (July 1, 2017 to June 30, 2018)(% indicates changes from the previous corresponding period.)
Profit attributable to
Net income
Net sales
Operating income
Ordinary income
owners of parent
per share
Million yen% Million yen% Million yen% Million yen%
Yen
Full year

114,000

12.5

7,700

40.9

7,800

30.9

4,900

49.0

316.84(Note) Revision to the financial results forecast announced most recently: None
* Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting inchanges in scope of consolidation): None
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: Yes
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Total number of issued shares (common stock)1) Total number of issued shares at the end of the period (including treasury stock):
As of December 31, 2017
: 15,905,049 shares
As of June 30, 2017
: 17,331,302 shares2) Total number of treasury stock at the end of the period:
As of December 31, 2017:
410,682 shares
As of June 30, 2017
: 1,891,831 shares
3) Average number of shares during the period:
Six months ended December 31, 2017
: 15,465,396 shares
Six months ended December 31, 2016
: 15,395,122 shares(Note) The Company conducted a share consolidation at a rate of one share for every five shares on January 1, 2017. The
figures for “Total number of issued shares at the end of the period”, “Total number of treasury stock at the end of
the period” and “Average number of shares during the period” are amounts on the assumption that the Company
conducts the share consolidation on the beginning of previous fiscal year.
* These Consolidated Financial Results are not subject to quarterly review procedures.
* Explanation of the proper use of financial results forecast and other notes
The earnings forecasts and other forward-looking statements disclosed herein are based on information available to
the Company as of the date of publication of this document and certain assumptions deemed reasonable. Actual results,
etc. may differ significantly due to a wide range of factors.
The Company is scheduled to hold a financial results briefing session for investors and analysts on February 22, 2018.
The financial briefing materials to be distributed at this briefing session will be subsequently posted on the Company’s
website.

―2―

Table of Contents of Attached Documents
1. Qualitative Information on Quarterly Financial Results ........................................................................................... 2(1) Explanation of Operating Results ....................................................................................................................... 2(2) Explanation of Financial Position ....................................................................................................................... 4(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements ..................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes ............................................................................ 5(1) Quarterly Consolidated Balance Sheets ............................................................................................................... 5(2) Quarterly Consolidated Statements of Operating and Comprehensive Income ................................................... 7(3) Quarterly Consolidated Statements of Cash Flows ............................................................................................. 8(4) Notes to Quarterly Consolidated Financial Statements ....................................................................................... 9(Notes on Going Concern Assumption) ............................................................................................................... 9(Notes on Significant Changes in Shareholders’ Equity) ..................................................................................... 9(Accounting Policies Adopted Specially for the Preparation of Quarterly Consolidated Financial Statements) . 9(Changes in Accounting Policies) ........................................................................................................................ 9(Segment Information) ....................................................................................................................................... 10(Significant Subsequent Events) ........................................................................................................................ 11
3. Other Information ................................................................................................................................................... 12(1) Status of Orders and Sales ................................................................................................................................. 12―1―

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the six months ended December 31, 2017 (from July 1, 2017 to December 31, 2017), Japan’s economy
continued on a moderate recovery path with signs of private consumption picking up against the background ofsteady improvements in employment and income. On the other hand, overseas economies saw a modest
recovery though consideration must be given to the policies of the United States and Europe and the economic
future in Asia.
The business environment of Nippon Koei Co., Ltd. (the “Company”) and its subsidiaries (together, the“Group”) continued to be stable, and each business segment saw steady demand. The Group undertook
measures for disaster prevention and mitigation, and measures to prevent deterioration of infrastructure forpublic works projects in the Domestic Consulting Operations, promoted strategic exporting of infrastructure
systems in the International Consulting Operations, renewed power distribution equipment in the PowerEngineering Operations and newly built and renovated architectural installation in the UK in the Urban &Spatial Development Operations.
Under these circumstances, based on the Medium-Term Management Plan “NK-AIM” (from July 2015 to June2018), with the fundamental principles of “Sustainable growth of three core businesses,” “Generation andexpansion of new businesses,” and “Autonomy and collaboration,” the Group tackled the three focus themes of“Further advance of global expansion,” “Further expansion of business fields and improvement of profitability
by intensifying existing core businesses,” and “Demonstrating the true merits of aggregated technologies forestablishment of new business domains.” Moreover, as companywide measures to realize these goals, the Group
actively advanced “Development of next-generation core technologies and further improvement of technicalstrengths and productivity,” “Strengthening of human resource recruitment and training,” and “Promotion ofcollaboration and enhancement of corporate governance.”
In terms of Group performance, as a result of the above, orders received decreased 18.2% year on year to¥47,832 million for the six months ended December 31, 2017. This was due to the acceptance of orders relating
to multiple large projects mainly in the transportation business area for the previous fiscal year. Net sales wereup 18.7% year on year to ¥31,233 million, operating loss decreased 5.4% year on year to ¥2,597 million,
ordinary loss increased 2.5% year on year to ¥2,344 million, and loss attributable to owners of parent decreased
27.1% year on year to ¥1,312 million due to the recording of a gain on sales of non-current assets in the first
three months ended September 30, 2017.
Net sales for the six months ended December 31, 2017 were ¥31,233 million, an achievement rate of 27.4%
against the net sales forecast of ¥114,000 million for the fiscal year ending June 30, 2018 (six months ended
December 31, 2016: 26.0%). This is attributable to seasonal fluctuations in the Group’s net sales where asignificant percentage of its business commonly tends to increase its percentage of achievement in the second
half of the fiscal year. In addition, because expenses such as selling, general and administrative expenses weregenerated fairly evenly throughout the year, the Group recorded an operating loss, an ordinary loss and a loss
attributable to owners of parent for the six months ended December 31, 2017.
The Group’s accounting method for net sales has been changed from the completed-contract method to thepercentage-of-completion method from the first three months ended September 30, 2017. For each quarter of theprevious fiscal year and the previous consolidated fiscal year, the previous completed-contract method has been
applied to the quarterly consolidated financial statements and the consolidated financial statements. Details are
as stated in Changes in Accounting Policies.
Business results for each segment are as follows:[Domestic Consulting Operations]
The Domestic Consulting Operations worked to increase its business areas and market shares by specifying
significant businesses, improving quality of service and profitability by restructuring work procedures, and―2―

effectively entering into alliances.
As a result, orders received decreased 9.5% year on year to ¥21,675 million due to orders for large projects
received in the previous year (including approximately ¥2 billion of consulting services relating to the Greater
Cairo Metro Line No.4 - Phase 1 project in Egypt), and yet steadily increased 11.2% year from two years ago.
Net sales increased 49.5% year on year to ¥6,335 million, operating loss decreased 8.9% year on year to ¥3,172
million and ordinary loss decreased 5.2% year on year to ¥3,293 million.
[International Consulting Operations]International Consulting Operations worked to improve operation strategy functions focusing on regional
officers, strengthen the production system, develop a management foundation to respond to risks, and strengthen
the capabilities of and cooperation with Group companies.
As a result, orders received decreased 36.1% year on year to ¥14,197 million due to orders for large projects
received in the previous year (including approximately ¥8 billion of consulting services relating to the Greater
Cairo Metro Line No.4 - Phase 1 project in Egypt), and yet steadily increased 28.4% year from two years ago.
Net sales increased 59.9% year on year to ¥12,731 million, operating income increased 594.8% year on year to¥1,397 million and ordinary income increased 377.9% year on year to ¥1,324 million.
[Power Engineering Operations]
In the Power Engineering Operations, we worked to increase cost competitiveness through strict cost
reductions, strengthen sales and marketing capabilities through proposing cost reduction plans, enhance fusionand cooperation among the business areas of consulting, products, and construction, promote the developmentof products and technology, and reinforce and expand the mechanical and electromechanical consulting division.
The level of outstanding orders as of the end of the previous fiscal year, however, was lower compared withprevious years, thus affecting the net sales.
As a result, orders received for the six months ended December 31, 2017, decreased 1.4% year on year to¥6,598 million. Net sales decreased 27.5% year on year to ¥5,608 million, operating income decreased 83.3%
year on year to ¥240 million and ordinary income decreased 73.3% year on year to ¥376 million.
[Urban & Spatial Development Operations]
The Urban & Spatial Development Operations strove to expand the scope of business in the urban
development and architectural design area by growing businesses within the UK through BDP and collaborating
as a group in the Asian region.
As a result, orders received for the six months ended December 31, 2017, decreased 3.6% year on year to¥5,356 million. Net sales increased 3.6% year on year to ¥6,209 million, operating loss was ¥10 million (anoperating income of ¥76 million for the six months ended December 31, 2016) and ordinary loss was ¥22
million (an ordinary income of ¥50 million for the six months ended December 31, 2016).
[Real Estate Leasing Operations]
In the Real Estate Leasing Operations, net sales for the six months ended December 31, 2017, decreased 7.8%
year on year to ¥222 million. Both operating income and ordinary income increased 0.2% year on year to ¥204
million.

―3―

(2) Explanation of Financial Position
Total assets as of the end of the current second quarter amounted to ¥120,264 million, up ¥6,398 million fromthe end of the previous fiscal year.
In the Assets section, current assets were ¥60,871 million, an increase of ¥6,072 million from the end of theprevious fiscal year. This is mainly due to a ¥6,909 million decrease in cash and deposits, and a ¥10,296 million
increase in work in process.
Non-current assets were ¥59,393 million, an increase of ¥325 million from the end of the previous fiscal year.
This is mainly due to a ¥1,050 million decrease in land, and a ¥681 million increase in investment securities anda ¥872 million increase in long-term loans receivable included in other items of investments and other assets.
In the Liabilities section, current liabilities were ¥38,490 million, an increase of ¥8,148 million from the end of
the previous fiscal year. This is mainly due to a ¥9,000 million increase in short-term loans payable.
Non-current liabilities were ¥27,969 million, an decrease of ¥681 million from the end of the previous fiscal
year. This is mainly due to a ¥660 million increase in long-term deferred tax liabilities included in other items of
non-current liabilities, and a ¥1,343 million decrease in long-term loans payable.
Net assets were ¥53,804 million, a decrease of ¥1,069 million from the end of the previous fiscal year. The
primary factors behind this were ¥1,312 million in loss of attributable to owners of parent, ¥1,192 million in
cash dividends paid, a ¥569 million increase in valuation difference on available-for-sale securities and a ¥719
million increase in foreign currency translation adjustments.
As a result, the shareholders’ equity ratio decreased 3.5 percentage points from the end of the previous fiscal
year to 44.4%.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements
The consolidated financial results forecast for the fiscal year ending June 30, 2018 have not changed from theforecast announced in the Consolidated Financial Results for the Fiscal Year Ended June 30, 2017 dated August
14, 2017.

―4―2. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of June 30, 2017
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets―5―

As of December 31, 2017

19,59318,09011,7275,392(6)54,798

12,68419,06922,0247,097(5)60,871

5,591
17,648
1,295
24,535

5,419
16,598
1,219
23,238

8,685
5,214
13,9008,846
5,159
14,006

20,799(168)
20,63059,067
113,865

22,324(175)
22,14859,393
120,264

(Millions of yen)
As of June 30, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Advances received
Provision for bonuses
Provision for directors' bonuses
Provision for loss on construction contracts
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for directors' retirement benefits
Provision for environmental measures
Liability for retirement benefits
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets―6―

As of December 31, 2017

4,012
1,760
1,049
10,7971,365
88
54
11,211
30,341

3,714
9,000
2,065
377
13,349
1,351
246
8,384
38,49021,413
45
34
3,963
3,193
28,65058,991

20,069
32
34
3,985
3,846
27,96966,4597,393
7,240
43,450(3,607)54,477

7,415
6,427
39,622(1,320)52,144

1,016(1,813)828
30
36554,874
113,865

1,586(1,094)
806
1,298
361
53,804120,264(2) Quarterly Consolidated Statements of Operating and Comprehensive Income
For the Six months ended December 31, 2017 and 2016

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Gain on sales of investment securities
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of investment securities
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of property, plant and equipment
Total extraordinary income
Extraordinary losses
Head office transfer cost
Total extraordinary losses
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)
Profit (loss) attributable toProfit (loss) attributable to owners of parent
Profit (loss) attributable to non-controlling interests
Other comprehensive income (loss)
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss) attributable toComprehensive income (loss) attributable to owners of parent
Comprehensive income (loss) attributable to non-controlling interests―7―

For the six months
ended December 31, 2016
(From July 1, 2016
to December 31, 2016)
26,304
17,936
8,368
11,116(2,747)(Millions of yen)
For the six months
ended December 31, 2017
(From July 1, 2017
to December 31, 2017)31,23321,7099,523
12,121(2,597)

72
116
411
600

81
155
158
197
593

88
52
140
(2,286)

99
145
95
339
(2,344)

-

1,276
1,276

105
105
(2,392)417(1,002)(585)(1,807)488
488(1,556)
514
(755)
(240)
(1,315)(1,800)(6)(1,312)(3)769(2,932)(5)(2,168)(3,975)

568
721
(21)
1,267
(47)

(3,981)
5

(44)
(3)

(3) Quarterly Consolidated Statements of Cash Flows

For the six months
ended December 31, 2016
(From July 1, 2016
to December 31, 2016)
Cash flows from operating activities
Profit (loss) before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of property, plant and equipment

Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on
construction contracts
Interest and dividend income
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Decrease (increase) in consumption taxes refund receivable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities

Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Other, net
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
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period―8―(Millions of yen)
For the six months
ended December 31, 2017
(From July 1, 2017
to December 31, 2017)(2,392)
767
232
(3)
8
610

(1,556)
768
236
(158)
145
(1,280)
4
(29)

82

191

(189)

(237)

3,506

(797)

(13,114)
278
(121)
6,652
(1,137)(1,835)(6,655)
75
(58)
(698)
(7,337)(10,258)
(315)
(39)
2,548
(2,043)(1,466)(14,287)
173(98)(1,106)(15,319)

(755)
(599)
4
(221)
(730)
319
(96)
(2,078)

1,137
(283)
2,336
(300)
172
(530)
129
(157)
2,504

(9,700)22,121
(939)
102
(27)
(771)
(27)
10,758
(408)
933
9,400
10,3349,000(1,079)152(24)(1,187)
(27)
6,833
132
(5,848)17,083
11,234

(4) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no relevant information.
(Notes on Significant Changes in Shareholders’ Equity)
Based on the resolution made at the Board of Directors’ meeting held on August 14, 2017, the Company
cancelled 1,436,731 shares of treasury stock on August 31, 2017. This resulted in decreases of ¥835 million incapital surplus, ¥1,323 million in retained earnings and ¥2,158 million in treasury stock during the six months
ended December 31, 2017.
In addition, based on the resolution made at the Board of Directors’ meeting held on October 12, 2017, theCompany issued new shares as compensation with restricted stocks for directors on November 10, 2017,
resulting in increases of ¥21 million in capital stock and ¥21 million in capital reserve during the six months
ended December 31, 2017.
As a result, capital stock, capital surplus, retained earnings and treasury stock were ¥7,415 million, ¥6,427
million, ¥39,622 million and ¥1,320 million, respectively, as of the end of the first six months of the fiscal year
ending June 30, 2018.
(Accounting Policies Adopted Specially for the Preparation of Quarterly Consolidated Financial Statements)(Deferral of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be almost completely
eliminated by the end of the cost accounting period, which is, therefore, deferred as other current liabilities.
（Changes in Accounting Policies）
The Company and domestic subsidiaries previously had been applying the completed-contract method(including partial completed-contract method) in principle when recording net sales of business contracts
relating to Domestic Consulting Operations, International Consulting Operations, and Power Engineering
Operations. From business contracts effective from the current first quarter, the method has been changed to thepercentage-of-completion method (estimate of the degree of completion is mainly based on the cost to cost
method). The previous revenue recognition standard was reviewed again. We considered the increasing
opportunities to receive large project orders under the government-led strategic exporting of infrastructure
systems and the expansion of the Company’s international operations including the acquisition of anarchitectural firm in the UK. As a result, the Company judged that the percentage-of-completion method would
be more appropriate to present its operating results and financial conditions. Relating systems were developed,
and taking this as an opportunity, the Company has decided to make such change.
As this change was made possible with the introduction of a new accounting system, using the percentage-ofcompletion method to calculate retroactively is practically impossible.
Furthermore, since the cumulative impact at the beginning of the current first quarter cannot be calculated in
the case where the system is applied retrospectively, the outstanding balance at the end of the previous fiscal
year is treated as the outstanding balance at the beginning of the current first quarter. As for business contracts
relating to work in process included at the end of the previous fiscal year, the completed-contract method will
be applied in principle, and net sales will be recorded in the financial quarter in which the completion date ofeach business falls.
As a result, compared with the previous accounting method, net sales were ¥5,525 million, and gross profit,
operating income, ordinary income, and profit before income taxes all increased by ¥1,499 million for the six
months ended December 31, 2017.
Impacts on segment information and others are stated in the relevant section.

―9―

(Segment Information)
For the six months ended December 31, 2016 (from July 1, 2016 to December 31, 2016)1)

Net sales and segment profit or loss by reportable segment(Millions of yen)
Reportable Segments
Urban &
Domestic International
Power
Real Estate
SpatialConsulting Consulting Engineering
Leasing
Development
Operations Operations Operations
Operations
Operations

Subtotal

Others(Note)Total

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers

4,237

7,959

7,738

5,993

241

26,170134

26,304

194

6

105

2

65

373

1

374

Total

4,431

7,965

7,843

5,996

306

26,543

135

26,679Segment profit (loss)(3,474)

277

1,411

50

203

(1,531)(760)(2,292)(Note) “Others” refers to a group of operations from which no profits are gained or that produce only incidental gains.

2)

Differences between the total amount of profit or loss of reportable segments and the amounts in quarterly
consolidated statement of operating and comprehensive income, and major breakdown of such differences(reconciliation)(Millions of yen)
IncomeAmount(1,531)

Reportable segment total
Profit (loss) of “others” category(760)

Elimination of inter-segment transactions

5

Ordinary Income (loss) in the quarterly consolidated
statement of operating and comprehensive income(2,286)―10―

For the six months ended December 31, 2017 (from July 1, 2017 to December 31, 2017)1)

Net sales and segment profit or loss by reportable segment(Millions of yen)
Reportable Segments
Urban &
Domestic International
Power
Real Estate
SpatialConsulting Consulting Engineering
Leasing
Development
Operations Operations Operations
Operations
Operations

Subtotal

Others(Note)Total

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers

6,335

12,731

5,608

6,209

222

31,107

126

31,233

265

11

109

14

78

480

1

481

Total

6,600

12,742

5,718

6,224

301

31,587

127

31,714

Segment profit (loss)(3,293)

1,324

376

(22)

204

(1,411)(952)(2,363)(Note) “Others” refers to a group of operations from which no profits are gained or that produce only incidental gains.

2)

Differences between the total amount of profit or loss of reportable segments and the amounts in quarterly
consolidated statement of operating and comprehensive income, and major breakdown of such differences(reconciliation)(Millions of yen)
IncomeAmountReportable segment total(1,411)

Profit (loss) of “others” category(952)

Elimination of inter-segment transactions

19

Ordinary Income (loss) in the quarterly consolidated
statement of operating and comprehensive income

3)(2,344)

Information concerning changes to reporting segments, etc.
As stated in Changes in Accounting Policies, the accounting policy for business contracts effective fromthe current first quarter was changed to the percentage-of-completion method (estimate of degree ofcompletion is mainly based on the cost to cost method). As a result of this change, compared with theprevious accounting method, net sales and segment profit increased by ¥1,700 million and ¥393 million for
Domestic Consulting Operations, ¥3,421 million and ¥1,013 million for International Consulting Operations,¥324 million and ¥80 million for Power Engineering Operations, and ¥78 million and ¥11 million for Others,
respectively, for the six months ended December 31, 2017.

(Significant Subsequent Events)
There is no relevant information.

―11―

3. Other Information(1) Status of Orders and Sales
By period
Category/Operations

Net sales 2

Net sales 1

Orders received

Domestic Consulting
International Consulting

22,22938.0

14,197

29.7(Note 1) 41,573

35.4

Power Engineering

6,690

11.5

6,598

13.8

14,087

12.0

Urban & Spatial Development

5,555

9.5

5,356

11.2

13,460

11.5

Real Estate Leasing-

Others

24

0.0

4

0.0

55

0.0

Total

58,451

100.0

47,832

100.0

117,442

100.0

Domestic Consulting

4,332

16.5

6,553

21.0

45,47044.9International Consulting

8,747

33.2

13,55643.4

26,38426.0

Power Engineering

6,941

26.4

4,696

15.0

14,583

14.4

Urban & Spatial Development

5,993

22.8

6,204

19.9

14,344

14.1

241

0.9

222

0.7

473

0.5

Real Estate Leasing

-

48

0.2

0

0.0

81

0.1

Total

26,304100.0

31,233100.0

101,338

100.0

Domestic Consulting

4,237

16.1

6,335

20.3

43,516

42.9

International Consulting

7,959

30.3

12,731

40.7

24,491

24.2

Power Engineering

7,738

29.4

5,608

18.0

17,577

17.3

Urban & Spatial Development

5,993

22.8

6,209

19.9

14,347

14.2

241

0.9

222

0.7

473

0.5

Real Estate Leasing
Others

134

0.5

126

0.4

931

0.9

Total

26,304100.0

31,233100.0

101,338

100.0

Category/Operations

Impact of foreignexchange fluctuations-

OthersBy period

Outstanding Orders

For the six months ended
For the six months ended
For the fiscal year ended
December 31, 2016
December 31, 2017
June 30, 2017
AmountAmountAmountRatio (%)
Ratio (%)
Ratio (%)
(Millions of yen)
(Millions of yen)
(Millions of yen)
23,951
41.0
21,67545.3
48,265
41.1

Domestic Consulting
International Consulting
Power Engineering

As of December 31, 2016
As of December 31, 2017
As of June 30, 2017
AmountAmountAmountRatio (%)
Ratio (%)
Ratio (%)
(Millions of yen)
(Millions of yen)
(Millions of yen)
3,074

301

2,177

-

(0)

-

(3,039)615(1,678)

Real Estate Leasing

-

-

-

Others

-

-

-

Total

35

917

498

Urban & Spatial Development

Domestic Consulting

48,15734.1

46,45532.3

31,33324.8

International Consulting

70,55949.972,31050.2

71,368

56.6

Power Engineering

9,951

7.0

11,609

8.1

9,707

7.7

Urban & Spatial Development

12,7749.0

13,456

9.4

13,688

10.9

0.0

29

0.0

24

Real Estate Leasing-

Others

25

-

0.0

Total
141,468
100.0
143,861
100.0
126,122100.0(Notes) 1. System Science Consultants Inc. became a consolidated subsidiary during the previous fiscal year, and orders
received at the time of its consolidation are included. System Science Consultants Inc. merged with Koei ResearchInstitute International Corp. (consolidated subsidiary) as of July 1, 2017, and the company name changed to Koei
Research & Consulting Inc.

2. The above amounts are exclusive of consumption taxes.
3. The above amounts are for external customers.
4. Net sales 1 is by segment which received orders. Net sales 2 is by segment which provided services.

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