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 Q1 Earnings Summary
July 14, 2016
Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)
Representative: Takuma Hasegawa, President & Representative Statutory Executive Officer
Inquiries:
Go Watanabe, Executive Managing DirectorTelephone: +81-3-3502-4818
www.ichigo.gr.jp/english
Submission of the Quarterly Report (Shihanki Hokokusho): July 15, 2016 (expected)
Dividend Payment: N/A
Supplemental Materials to Financial and Business Results: YesFinancial and Business Results Briefing: Yes (for institutional investors and analysts)
1. FY17/2 Q1 Consolidated Financial Results (March 1, 2016 to May 31, 2016)(1) Consolidated Financial Results(YOY = year-on-year % change)

Revenues(million yen)

Operating Profit
YOY(million yen)

YOY

Recurring Profit(million yen)

YOYNet Income(million yen)

YOY

FY17/2 Q1

46,415+421.3%

5,412+117.2%

4,806+115.2%

5,585+135.1%

FY16/2 Q1

8,903+36.4%

2,492+11.5%

2,233

+8.6%

2,375

+27.4%

Note: Comprehensive income FY17/2 Q1: 5,404 million yen (+131.8% YOY)
FY16/2 Q1: 2,331 million yen (+12.2% YOY)
Net Income
per Share(basic, yen)

Net Income
per Share(diluted, yen)

FY17/2 Q1

11.13

11.08

FY16/2 Q1

4.76

4.72

(2) Consolidated Financial Condition
Total Assets(million yen)

Net Assets(million yen)

Equity Ratio(%)

Net Assets per Share(yen)FY17/2 Q1

244,03774,10329.2

141.78

FY16/2

251,757

72,16626.8

134.54

Note: Shareholders’ equity

FY17/2 Q1: 71,151 million yen

FY16/2 : 67,489 million yen

2. Dividends
FirstQuarter

Dividend per Share (yen)SecondThird
FourthQuarter Quarter Quarter

FiscalYear

FY16/2

—

0.00

—

3.00

3.00

FY17/2(Forecast)

—

0.00

—

5.00

5.00

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)
Revenues

Operating Profit

Recurring Profit(million yen)

YOY(million yen)

YOY(million yen)YOY

125,600+152.7%18,500+20.0%

16,400+18.1%

FY17/2Net Income (million yen)

Net Income per Share

YOY(yen)

FY17/2

13,300

+2.9%

26.43

Changes since the previously announced forecast: None
Note: The Company provides a full-year earnings forecast, but not a half-year forecast. The Company believes
that 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
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 Q1:
FY16/2:502,688,900
502,523,100(ii) Number of treasury shares
FY17/2 Q1:
FY16/2:845,200
884,200(iii) Average number of outstanding shares
FY17/2 Q1:
FY16/2 Q1:

501,679,223
499,184,6542

Note on Appropriate Use of Forecasts
Forward-looking statements contained in these materials are based on judgments regarding
information that was available to the Company as of the announcement date. However, thesestatements involve risk and uncertainties, and actual earnings may differ significantly from theindicated forecasts.
5. Segment Information
Asset Management generates fee income via the management of Ichigo Office REIT (8975), Ichigo
Hotel REIT (3463), and private 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. The Company receives rental income during the period
it is carrying out its value-add, along with profits on sale that reflect the real estate’s higher value after
the value-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

Revenues, P&L, Assets, and Other Items by Segment (FY17/2 Q1 – Current Period)(March 1, 2016 to May 31, 2016)(Million Yen)

Segment

Adjustment1

AmountRecorded in
Consolidated
FinancialStatements2

46,415—46,415—547(547)

—

556

5

46,963(547)

46,415143

(14)

5,334

77

5,412

194,547

20,0502,276

219,978

24,059244,037

1

56

157

—

216

8224

—

51,690

—

1,695

—

1,695

Asset
Management

Value-Add

1,185

44,667

556

5546

1

—

Total

1,732

44,668Segment Profits or Losses

800

4,404

3,103

Revenues
Revenues from External
Customers
Inter-Segment Revenues
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 (77 million yen) reflects transaction eliminations and company expenses
that were not allocated to the segments. The Adjustment to Segment Assets (24,059 million yen) reflects company
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (8 millionyen) reflects depreciation of company assets that were not allocated to the segments.
2Segment Profits or Losses are calculated for each segment from consolidated operating profit.

4

Revenues, P&L, Assets, and Other Items by Segment (FY16/2 Q1 – Previous Period)(March 1, 2015 to May 31, 2015)(Million Yen)

Segment

Adjustment1Amount
Recorded in
Consolidated
Financial
Statements2

8,903

—

8,903

210

(210)

—

6

9,114

(210)

8,903

(16)

2,527

(34)

2,492

6,077

162,356

14,032

176,388

111

—

174

7

181

626

—

636

—

636

Asset
Management

Value-Add

1,529

6,988

379

6209

0

—

0Total

1,738

6,989

379

Segment Profits or Losses

875

1,572

96

2,971

139,705

13,600260

09Revenues
Revenues from External
Customers
Inter-Segment Activities
or Reclassifications

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

CleanEnergyOther

1

Total

The Adjustment to Segment Profits or Losses (-34 million yen) reflects transaction eliminations and company expenses
that were not allocated to the segments. The Adjustment to Segment Assets (14,032 million yen) reflects company
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (7 millionyen) reflects depreciation of company assets that were not allocated to the segments.
2
Segment Profits or Losses are calculated for each segment from consolidated operating profit.

5

Consolidated Balance Sheet (FY17/2 Q1)
FY16/2(Feb 29, 2016)(Million Yen)
FY17/2 Q1(May 31, 2016)

AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational investments in loans
Operational investments in securities
Real estate for sale
Deferred tax assets
OtherLess: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Equipment (net)Land
Buildings 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
OtherLess: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

628,779
691
1,324
1,784
172,833
1,766
3,966
(458)
210,687

35,183
1,494
1,324
2,617
159,384
1,173
4,669
(447)
205,401

3,830
12,267
12,192
3,173
82
31,546

3,773
13,09912,192
3,872
81
33,020

1,942
392
38
2,373

1,969
392
35
2,398

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

1,734
10
33
1,532
(93)
3,217
38,635244,037

FY16/2(Feb 29, 2016)(Million Yen)
FY17/2 Q1(May 31, 2016)

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

81
1,425
79
10,171

2,975

931

631
53
13
3,979
18,161

250
75
155
3,906
17,077100
94,40956,193
1,543
8,707
475
161,430
179,591100
91,011
52,447
1,590
6,965
742
152,857
169,934

26,575
10,96829,454(41)
66,956

26,58910,98333,534(39)
71,068

761
(251)
23503
(440)
20

533

83

319
4,357
72,166
251,757365
2,586
74,103244,037

Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury sharesTotal Shareholders’ Equity
Accumulated Other Comprehensive
IncomeValuation gain (loss) on other securities
Deferred gain (loss) on hedges
Foreign currency translation adjustment
Total Accumulated Other Comprehensive
IncomeStock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets

7

Consolidated Income Statement (FY17/2 Q1)
FY16/2 Q1(Million Yen)
FY17/2 Q1(Mar 1, 2015
to May 31, 2015)(Mar 1, 2016
to May 31, 2016)

Revenues
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Profit
Interest income
Dividend income
Amortization of negative goodwill
Other
Total Non-Operating Profit
Non-Operating Expenses
Interest expense
Debt financing-related fees, etc.
OtherTotal Non-Operating Expenses
Recurring Profit
Extraordinary Gain
Gain on sales of investment securities
Total Extraordinary Gain
Extraordinary Loss
Earthquake damages
Total Extraordinary Loss
Pre-Tax Net Income
Income Taxes – Current
Income Taxes – Deferred
Total Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests

8,903
5,276
3,627
1,134
2,492

46,41539,803
6,612
1,200
5,412

0422134103－58265727300
2,233

381
202
30
614
4,806

223
223

2,427
2,427－－
2,456
179(124)
55
2,401

242
242
6,990
548
555
1,103
5,886

25301

Net Income

2,375

5,585

8

Consolidated Statement of Comprehensive Income (FY17/2 Q1)Net Income
Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on hedges
Foreign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income
Comprehensive income attributable toshareholders
Comprehensive income attributable to minority
interests

9

FY16/2 Q1(Million Yen)
FY17/2 Q1(Mar 1, 2015
to May 31, 2015)(Mar 1, 2016
to May 31, 2016)

2,401

5,886

(64)
(1)
(3)
(69)
2,331(263)
(211)
(8)
(482)
5,404

2,318

5,135

12268

Consolidated Cash Flow Statement (FY17/2 Q1)(Million Yen)
FY17/2 Q1

FY16/2 Q1Cash 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 expenses paid
Income taxes paid
Net Cash from (Used for) Operating Activities

10(Mar 1, 2015
to May 31, 2015)(Mar 1, 2016
to May 31, 2016)

2,456
181
4234(22)
166

6,990
224
56
35－
142

14(6)

(5)
265
(223)
(643)
1,006

(3)
381
(2,427)
(802)
－

283

814

(2,392)
－
(50)
(130)
(444)
69
72
345
1,027
5(268)(207)

13,451
10
151
(393)
(872)
44
(1,740)(191)
15,8653(327)(547)

556

14,994

Cash Flows from Investing Activities:
Payments into time deposits
Proceeds from sales of investment securities
Acquisition of property and equipment
Payments for investments
Payments of security deposits
Proceeds from redemptions of security deposits
Proceeds from acquisitions of subsidiaries resulting inthe change of consolidation scope
Other

FY16/2 Q1(Million Yen)
FY17/2 Q1(Mar 1, 2015
to May 31, 2015)(Mar 1, 2016
to May 31, 2016)(0)296(1,223)
(6)
(19)
9(0)
6,021
(1,045)
(2)
－－－

(89)

0(0)

(943)

4,884

Cash Flows from Financing Activities:
Increase (decrease) in short-term bank loans, net
Increase (decrease) in short-term non-recourse loans, net
Proceeds from long-term bank loans
Repayment of long-term bank loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from exercise of stock options
Proceeds from minority interests
Cash dividends paid
Cash dividends paid to minority interests

(681)
(48)
7,651
(3,819)
－
(109)
8－
(601)
－

(763)
－
25,870(27,504)
4,350(10,140)
22(2,000)(1,425)(39)

Net Cash from (Used for) Financing Activities

2,400(11,630)0(5)Increase (Decrease) in Cash and Cash Equivalents

2,013

8,242

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

18,97228,368(330)(1,838)Cash and Cash Equivalents at End of Period

20,65534,772Net Cash from (Used for) Investing Activities

Effect of Exchange Rate Changes
on Cash and Cash Equivalents

11