Ichigo Preserves and Improves Real Estate[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

FY17/2 Q3 Earnings Summary
January 13, 2017
Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)
Representative: Takuma Hasegawa, President
Inquiries:
Go Watanabe, Executive Managing Director
Telephone: +81-3-3502-4818
www.ichigo.gr.jp/english
Submission of the Quarterly Report (Shihanki Hokokusho): January 16, 2017 (expected)
Dividend Payment: N/A
Supplemental Materials to Financial and Business Results: Yes
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. FY17/2 Q3 Consolidated Financial Results (March 1, 2016 to November 30, 2016)(YOY = year-on-year % change)(1) Consolidated Financial Results
Revenue
Operating Profit
Recurring Profit
Net Income(million yen) YOY (million yen) YOY(million yen) YOY (million yen) YOY
FY17/2 Q393,835 +110.9% 17,042+25.3%
15,375 +23.5%
12,837+10.7%
FY16/2 Q344,500+201.7%

Note: Comprehensive income

13,602+201.8%12,450 +220.2%

FY17/2 Q3Net Income
per Share(diluted, yen)
25.50

FY16/2 Q3

23.22

23.08

(2) Consolidated Financial Condition
Net Assets
Total Assets(million yen)(million yen)
FY17/2 Q3
258,853
81,170251,757+225.4%

FY17/2 Q3: JPY 12,282 million (+9.2% YOY)
FY16/2 Q3: JPY 11,244 million (+146.2% YOY)

Net Income
per Share(basic, yen)
25.57

FY16/2

11,59872,166

Note: Shareholders’ equity FY17/2 Q3: JPY 78,125 million

Equity Ratio
(%)
30.2

Net Assets per
Share (yen)155.3226.8

134.54

FY16/2: JPY 67,489 million

2. Dividends
First
Quarter

Dividend per Share (yen)SecondThird
FourthQuarter Quarter Quarter

FiscalYear

FY16/2

–

–

–

3

3

FY17/2(Forecast)

–

–

–

5

5

Changes since the previously announced forecast: None

3. FY17/2 Full-Year Consolidated Forecast (March 1, 2016 to February 28, 2017)(YOY = year-on-year % change)
Revenue(million yen) YOY
FY17/2

125,600+152.7%Net Income(million yen) YOY
FY17/2

13,300Operating Profit(million yen) YOY
18,500+20.0%

Recurring Profit(million yen) YOY
16,400+18.1%Net Income per Share
(yen)

+2.9%

26.43

Changes since the previously announced forecast: None
Note: Ichigo provides a full-year earnings forecast, but not a half-year forecast, because Ichigo believes
the longer full-year forecast is more consistent with global best practice and the focus of Japan’s
Corporate Governance Code on growing long-term sustainable corporate value.

4. Other(1) Changes in significant consolidated subsidiaries (material changes in scope of consolidation): Yes
New subsidiary:
GK Daiba Jisho Tokumei Kumiai
Subsidiaries removed from consolidation: GK Motoazabu Holdings Tokumei Kumiai
GK Ikenohata Holdings Tokumei Kumiai(2) Application of special accounting methods: None
(3) Changes in accounting standards/principles, changes in accounting estimates, and revisions toprevious financial statements(i) Changes in accounting standards/principles:Yes (no earnings impact)(ii) Changes in accounting principles other than the above: None(iii) Changes in accounting estimates:None(iv) Revisions of previous financial statements:
None(4) Number of outstanding common shares(i) Number of outstanding shares including treasury shares
FY17/2 Q3:
FY16/2:

503,358,400
502,523,100(ii) Number of treasury shares
FY17/2 Q3:
FY16/2:369,600
884,200(iii) Average number of outstanding shares
FY17/2 Q3:
FY16/2 Q3:

501,969,014
499,417,927

2

Note on Appropriate Use of Forecasts
Forward-looking statements contained in these materials are based on judgments regarding
information that was available to Ichigo as of the announcement date. However, these statements
involve risk and uncertainties, and actual earnings may differ significantly from the indicatedforecasts.
5. Segment Information
Asset Management generates fee income via the management of Ichigo Office REIT (8975), Ichigo
Hotel REIT (3463), Ichigo Green Infrastructure Investment Corporation (“Ichigo Green,” 9282), andprivate funds and providing real estate services related to real estate acquisition, operation (property
management/building maintenance), and disposition.
Value-Add preserves and improves real estate. Ichigo receives rental income during the period it iscarrying out its value-add, along with profits on sale that reflect the real estate’s higher value after thevalue-add is complete.
Clean Energy is utility-scale solar power production that supplies clean energy and brings productive
use to idle land.
Other is primarily legacy securities investments that are not related to the above three segments.

3Consolidated Balance Sheet (FY17/2 Q3)(Million Yen)
FY16/2(Feb 29, 2016)

FY17/2 Q3(Nov 30, 2016)

AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational investments in loans
Operational investments in securities
Real estate for sale
Power plants for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Solar power plants under construction
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Investments in securities
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

4

28,779
691
1,324
1,784
172,833
－
1,766
3,966
‐458
210,687

38,750
1,382
1,324
982
168,869
7,259
435
2,866
‐447
221,424

3,830
12,267
12,192
3,173
82
31,5463,687
6,771
12,1109,293
75
31,937

1,942
392
38
2,373

1,900
62
32
1,994

5,486
12
39
1,736
‐124
7,149
41,069251,757

1,565
10
39
1,974
‐92
3,496
37,429258,853(Million Yen)
FY16/2(Feb 29, 2016)

FY17/2 Q3(Nov 30, 2016)

Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within
one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities

80
2,188
79
－
8,161

111
600
611
112
4,645

2,975

1,370

631
53
13
3,979
18,161

727
54
247
5,534
14,014－100
94,40956,193
1,543
8,707
475
161,430
179,591

688
100
87,33765,365
1,408
7,979
788
163,668
177,682

26,575
10,96829,454‐41
66,956

26,625
11,03040,786‐17
78,425

761

175

‐251

-471

23

‐2

533

‐299

319
4,357
72,166
251,757449
2,594
81,170258,853

Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive
IncomeValuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Accumulated Other Comprehensive
IncomeStock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets

5Consolidated Income Statement (FY17/2 Q3 – Cumulative 9 Months)(Million Yen)
FY16/2 Q3

FY17/2 Q3(Mar 1, 2015
to Nov 30, 2015)(Mar 1, 2016
to Nov 30, 2016)

Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sales of investment securities
Total Extraordinary Gains
Extraordinary Losses
Office move expenses
Earthquake-related damages
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes – Current
Income Taxes – Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests

44,50027,45817,041
3,439
13,602

93,83573,045
20,7903,748
17,042

1
74
67
34
177

－
80
－
35
115

950
86
292
1,329
12,450

1,034
580
167
1,782
15,375

223
223

2,427
2,427

9
－
9
12,664
1,185
‐223
962
11,702－269
269
17,533
3,147
1,250
4,398
13,135104297

Net Income

11,598

12,837

6

Consolidated Income Statement (FY17/2 Q3 – 3 Months)(Million Yen)
FY16/2 Q3

FY17/2 Q3(Sep 1, 2015
to Nov 30, 2015)(Sep 1, 2016
to Nov 30, 2016)

Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Losses
Office move expenses
Earthquake-related damages
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes – Current
Income Taxes – Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests

29,89320,015
9,878
1,189
8,688

7,844
4,522
3,321
1,263
2,058

－
60
22
9
92

－
68
－
20
89

372
79
230
682
8,099

312
234
59
606
1,541

－
－
－
8,099
676
‐3
672
7,426

－
26
27
1,513
612
-26
585
928

50

26

Net Income

7,376

902

7

Consolidated Statement of Comprehensive Income (FY17/2 Q3 – Cumulative 9 Months)(Million Yen)

Net Income
Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income
Comprehensive income attributable toshareholders
Comprehensive income attributable to minority
interests

8

FY16/2 Q3

FY17/2 Q3(Mar 1, 2015
to Nov 30, 2015)(Mar 1, 2016
to Nov 30, 2016)

11,702

13,135

‐337

‐588

-116

‐220

‐2
‐457
11,244-44-853
12,282

11,361

12,005-116276

Consolidated Statement of Comprehensive Income (FY17/2 Q3 – 3 Months)(Million Yen)

Net Income
Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income
Comprehensive income attributable toshareholders
Comprehensive income attributable to minority
interests

9

FY16/2 Q3

FY17/2 Q3(Sep 1, 2015
to Nov 30, 2015)(Sep 1, 2016
to Nov 30, 2016)

7,426

928

90
‐117

－
62

-4
‐31
7,394

‐18
45
973

7,353

952

40

21

Consolidated Cash Flow Statement (FY17/2 Q3 – Cumulative 9 Months)(Million Yen)

Cash Flows from Operating Activities:
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expense
Loss (gain) on sales of investment securities
Decrease (increase) in trading notes and receivables
Decrease (increase) in operating loan receivables
Decrease (increase) in operational investments
in securities
Decrease (increase) in real estate for sale
Decrease (increase) in advances paid
Decrease (increase) in prepaid expenses
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expense paid
Income taxes paid
Income taxes refunded
Net Cash from (Used for) Operating Activities

10

FY16/2 Q3

FY17/2 Q3(Mar 1, 2015
to Nov 30, 2015)(Mar 1, 2016
to Nov 30, 2016)

12,664
576
126
104
‐67
336

17,533
615
167
106
－
234

6

－

‐75
950
‐223
‐928
1,006

‐80
1,034
‐2,427
‐691
－

587

2,616

‐42,505
－
‐327
‐860
-309
130
1,901
243
‐26,664
75
-910
-301
804

3,956
-190
147
‐217
‐638
40
‐726
‐1,573
19,906
80
‐909
‐840
1,153

-26,996

19,390(Million Yen)

Cash Flows from Investing Activities:
Payments into time deposits
Redemptions of time deposits
Acquisition of investment securities
Proceeds from sales of investment securities
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments for investments
Proceeds from redemptions of investments
Payments of security deposits
Redemptions of security deposits
Acquisitions of subsidiary shares resulting in change ofconsolidation scope
Other

FY16/2 Q3

FY17/2 Q3(Mar 1, 2015
to Nov 30, 2015)(Mar 1, 2016
to Nov 30, 2016)

－
－
‐671
296
-4,135
-10
-9
－
-37
9

-6,100
201
-300
6,021
-5,604
-1
-401
－
-5
10

－

-93

－

8

-4,557-6,263

Cash Flows from Financing Activities:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from bond issuance
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Payments received from minority interests
Payments to minority interests
Dividends paid
Dividends paid to minority interests

‐161
474
－
46,423‐18,264
18,150-2,573
73
2,000
－
-645
-17

-1,588532
785
49,177-59,556
22,350-15,23299－-2,000-1,500-39

Net Cash from (Used for) Financing Activities

45,456-6,972－-12

Increase (Decrease) in Cash and Cash Equivalents

13,903

6,141

Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents Resulting from Exclusionfrom Consolidation

18,97228,368‐2,208-2,068Cash and Cash Equivalents at End of Quarter

30,66732,441Net Cash from (Used for) Investing Activities

Effect of Exchange Rate Changes
on Cash and Cash Equivalents

11Consolidated Cash Flow Statement (FY17/2 Q3 – 3 Months)(Million Yen)

Cash Flows from Operating Activities:
Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expense
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational investments
in securities
Decrease (increase) in real estate for sale
Decrease (increase) in advances paid
Decrease (increase) in prepaid expenses
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in security deposits received
Other
Sub-totalInterest and dividend income received
Interest expense paid
Income taxes paid
Refund of income taxes
Net Cash from (Used for) Operating Activities

12

FY16/2 Q3

FY17/2 Q3(Sep 1, 2015
to Nov 30, 2015)(Sep 1, 2016
to Nov 30, 2016)

8,099
201
42
34
‐22
151

1,513
154
52
35
－
123

6

32

‐60
372
‐333

‐68
312
‐360

1,111

45

13,838
－
123
-762
‐7
69
‐322
‐163
22,378
60
‐351
-92
－

‐33,685
‐200
‐252
100
‐57
23
1,740
‐1,371‐31,861
68
‐274
‐291
－

21,994‐32,358(Million Yen)

Cash Flows from Investing Activities:
Payments into time deposits
Acquisition of investment securities
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments for investments
Proceeds from redemptions of investments
Payments of security deposits
Redemptions of security deposits
Other

FY16/2 Q3

FY17/2 Q3(Sep 1, 2015
to Nov 30, 2015)(Sep 1, 2016
to Nov 30, 2016)－-371-2,263
-10
-1
－
-13
－
－

-3,100－‐1,062
－
‐399
－
‐5
5
7

‐2,658-4,544

Cash Flows from Financing Activities:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term non-recourse loans
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Dividends paid
Dividends paid to minority interests

515
79
4,751
‐13,2541,650-2,067
52
－
-17

-810
532
16,900‐8,23318,000‐238
69－－

Net Cash from (Used for) Financing Activities‐8,292

26,220-1-1

Increase (Decrease) in Cash and Cash Equivalents

11,042-10,694

Cash and Cash Equivalents at Beginning of Quarter
Cash and Cash Equivalents Resulting from Exclusionfrom Consolidation

21,50343,264-1,878‐128

Cash and Cash Equivalents at End of Quarter

30,66732,441Net Cash from (Used for) Investing Activities

Effect of Exchange Rate Changes
on Cash and Cash Equivalents

13

Revenue, P&L, and Assets by Segment (Current FY17/2 Q3 – Cumulative 9 Months)(March 1, 2016 to November 30, 2016)(Million Yen)

Segment

Revenue
Revenue from External
Customers
Inter-Segment Activities
or Reclassifications

Adjustment1

AmountRecorded in
Consolidated
Financial
Statements2

93,835－93,835－

1,181‐1,181－

Asset
Management

Value-Add

3,556

88,481

1,783

14

1,177

3

－

Clean
Energy

Other

Total

Total

4,734

88,4851,783

1495,017-1,181

93,835

Segment Profits or Losses

1,859

14,637537‐142

16,892150

17,042

Segment Assets

3,049

203,635

26,386

1,982

235,052

23,800258,853

4

180

412

－

597

17

615

－

43

7,882

－

7,925

2

7,927

Other
Depreciation
Increase in Property, Plant,
and Equipment andIntangible Assets
1

The Adjustment to Segment Profits or Losses (JPY 150 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 23,800 million) reflects corporate
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (JPY 17
million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in
Property, Plant, and Equipment and Intangible Assets (JPY 2 million) reflects corporate assets that were not allocated tothe segments.
2
Segment Profits or Losses are calculated for each segment from consolidated operating profit.

14

Revenue, P&L, and Assets by Segment (Previous FY16/2 Q3 – Cumulative 9 Months)(March 1, 2015 to November 30, 2015)(Million Yen)

Segment

Asset
Management

Value-Add

4,178

38,955

1,315

51

Clean
EnergyOther

Adjustment1

AmountRecorded in
Consolidated
Financial
Statements2

44,500－44,500Total

Revenue
Revenue from External
Customers
Inter-Segment Activities
or Reclassifications
Total

1,002

3

－

－

1,005

‐1,005－

5,180

38,9581,315

51

45,506-1,00544,500

Segment Profits or Losses

2,527

11,011362‐16

13,884-282

13,602

Segment Assets

3,235

185,165

15,9806,473

210,854

21,340232,195

6

181

364

－

552

24

576

3

34

3,966

－

4,003

33

4,037

Other
Depreciation
Increase in Property, Plant,
and Equipment andIntangible Assets
1

The Adjustment to Segment Profits or Losses (JPY -282 million) reflects transaction eliminations and corporate
expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 21,340 million) reflects
corporate assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation(JPY 24 million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment toIncrease in Property, Plant, and Equipment and Intangible Assets (JPY 33 million) reflects corporate assets that were
not allocated to the segments.
2
Segment Profits or Losses are calculated for each segment from consolidated operating profit.

15

Revenue, P&L, Assets by Segment (Current FY17/2 Q3 – 3 Months)(September 1, 2016 to November 30, 2016) (Million Yen)
Segment

Revenue
Revenue from External
Customers
Inter-Segment Activities
or Reclassifications
Total
Segment Profits or Losses
Segment Assets
Other
Depreciation
Increase in Property, Plant,
and Equipment andIntangible Assets

Adjustment1

AmountRecorded in
Consolidated
Financial
Statements2

7,844

－

7,844

－

267

‐267

－

3

8,112

‐267

7,844

Asset
Management

Value-Add

1,095

6,176

568

3

266

1

－

1,362

6,177

568

Clean
Energy

Other

Total

386

1,544

186

‐6

2,110

‐51

2,058

3,049

203,635

26,386

1,982

235,052

23,800258,853

1

60

86

－

148

5

154

－

16

2,447

－

2,464

－

2,464

1

The Adjustment to Segment Profits or Losses (JPY -51 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 23,800 million) reflects corporate
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (JPY 5
million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in
Property, Plant, and Equipment and Intangible Assets (JPY 0 million) reflects corporate assets that were not allocated tothe segments.
2
Segment Profits or Losses are calculated for each segment from consolidated operating profit.

16

Revenue, P&L, Assets by Segment (Previous FY16/2 Q3 – 3 Months)(September 1, 2015 to November 30, 2015)(Million Yen)

Segment

Adjustment1

AmountRecorded in
Consolidated
Financial
Statements2

29,893－29,893

－

354

‐354

－

445

38

30,247‐354

29,893

71

15

8,627

60

8,688

185,165

15,9806,473

210,854

21,340232,195

2

60

129

－

192

9

201

－

15

2,569

－

2,584

14

2,599

Asset
Management

Value-Add

1,213

28,196

445

38

352

1

－

Total

1,566

28,198Segment Profits or Losses

672

7,868

3,235

Revenue
Revenue from External
Customers
Inter-Segment Activities
or Reclassifications

Segment Assets
Other
Depreciation
Increase in Property, Plant,
and Equipment andIntangible Assets

Clean
Energy

Other

1

Total

The Adjustment to Segment Profits or Losses (JPY 60 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 21,340 million) reflects corporate
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (JPY 9
million) reflects depreciation of corporate assets that were not allocated to the segments. The Adjustment to Increase in
Property, Plant, and Equipment and Intangible Assets (JPY 14 million) reflects corporate assets that were not allocatedto the segments.
2
Segment Profits or Losses are calculated for each segment from consolidated operating profit.

17