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.

FY18/2 Earnings
April 18, 2018
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/en
Annual Shareholders Meeting: May 27, 2018 (expected)
Submission of the Financial Report (Yuka Shoken Hokokusho): May 28, 2018 (expected)
Dividend Payment: May 28, 2018
Supplemental Materials to Financial and Business Results: Yes
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. FY18/2 Consolidated Financial Results (March 1, 2017 to February 28, 2018)(1) Consolidated Financial Results (Full Year)
Revenue
Operating Profit(JPY million) YOY (JPY million) YOY
FY18/2
57,846 -47.1%
20,858-4.2%
FY17/2

109,253 +119.8%

Note: Comprehensive Income

21,781

FY18/2Net Income
per Share(Diluted, JPY)
28.10

FY17/2

29.66

29.59

(2) Consolidated Financial Condition
Total Assets(JPY million)
FY18/2
296,512273,459

Note: Shareholders’ Equity

19,755 +42.2%

14,894 +15.2%

FY18/2: JPY 14,548 million (+0.6% YOY)
FY17/2: JPY 14,463 million (+19.0% YOY)

Net Income
per Share(Basic, JPY)
28.12

FY17/2+41.3%(YOY = year-on-year % change)
Recurring Profit
Net Income(JPY million) YOY (JPY million) YOY
19,185-2.9%
14,018-5.9%

16.5

Operating Profit
Margin
(%)
6.7
36.1

20.2

7.5

Return on
Equity (%)

Return on
Assets (%)

19.9

Net Assets(JPY million)
92,725Equity Ratio
(%)
30.1

Net Assets per
Share (JPY)180.2083,44329.4

159.60FY18/2: JPY 89,336 million FY17/2: JPY 80,339 million

(3) Consolidated Cash Flow
Cash Flow fromOperations(JPY million)

Cash Flow from
Investments(JPY million)

Cash Flow from
Financing(JPY million)

Cash and Cash
Equivalents(JPY million)

FY18/2

10,603-5,645-6,12439,365

FY17/2

21,547-11,933

6,377

41,369Note: Cash Flow from Operations excluding impact of growth in Real Estate for Sale
FY18/2: JPY 23,587 million FY17/2: JPY 28,708 million
2. Dividends
Dividend per Share (JPY)FY17/2
FY18/2
FY19/2(Forecast)

Dividend on
Total
Payout Ratio
Equity Ratio
Dividend (Consolidated)
First Second Third Fourth Total(Consolidated)
Quarter Quarter Quarter Quarter(JPY million)
(%)
(%)
–
–
–
5
5
2,516
16.9
3.4
–

–

–

6

6

–

–

–

7

7

2,974

21.3

3.5

23.3

3. FY19/2 Full-Year Consolidated Earnings Forecast (March 1, 2018 to February 28, 2019)(YOY = year-on-year % change)
Operating Profit
Recurring Profit
Net Income
Net Income per(JPY million) YOY (JPY million) YOY (JPY million) YOY
Share (JPY)25,000 +19.9%
22,000 +14.7%
15,000
+7.0%
30.10
+7.0%
FY19/2
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 thefocus of Japan’s Corporate Governance Code on growing long-term sustainable corporate
value. In addition, Ichigo is focused on growing shareholder earnings (not revenue), with aparticular focus on EPS, so from this year Ichigo will not be issuing a Revenue forecast.
4. Other(1) Changes in significant consolidated subsidiaries(material changes in scope of consolidation):Yes

New subsidiaries (3):SA3 GK Tokumei Kumiai,
Carpe Diem GK Tokumei Kumiai
Kinjo GK Tokumei Kumiai
Tiger Gate TMK

Subsidiaries removed from consolidation:(2) Changes in accounting standards/principles, changes in accounting estimates, and revisions toprevious financial statements(i) Changes in accounting standards/principles:None(ii) Changes in accounting principles other than the above:None(iii) Changes in accounting estimates:None(iv) Revisions of previous financial statements:None2

(3) Number of outstanding common shares(i) Number of outstanding shares including treasury shares
FY18/2:504,484,200
FY17/2:503,712,300(ii) Number of treasury shares
FY18/2:8,706,500
FY17/2:
329,600(iii) Average number of outstanding shares
FY18/2:
FY17/2:

498,475,625
502,257,080

Note on Appropriate Use of Forecasts
Forward-looking statements contained in these materials are based on judgments regarding informationthat was available to Ichigo as of the announcement date. However, these statements involve risk anduncertainties, and actual earnings may differ significantly from the indicated forecasts.
5. Segment Information
Asset Management generates fee income via the management of Ichigo Office (8975), Ichigo Hotel(3463), Ichigo Green (9282), and providing real estate services related to real estate acquisition,
operations, and disposition.
Value-Add preserves and improves real estate. Ichigo receives rental income during the period it iscarrying out its value-add, along with earning 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Consolidated Balance Sheet (FY18/2)(JPY million)
FY17/2(Feb 28, 2017)
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures
Depreciation
Buildings and structures (net)
Solar power plant equipment
Depreciation
Solar power plant equipment (net)Land
Buildings under construction
Solar power plants under construction
Other
Depreciation
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

4

FY18/2(Feb 28, 2018)

47,678
913
1,324
1,433
167,805
516
3,125
-453
222,344

45,510
1,097
1,324
2
180,789
342
2,643
-28
231,681

10,173-2,797
7,375
7,822
-575
7,246
18,627912,308416-331
85
45,654

14,273-3,673
10,60020,895-1,122
19,773
26,993
97
969
483
-359
124
58,558

1,864
62
29
1,956

1,600
135
233
1,968

1,426
10
339
1,820
-92
3,504
51,115
273,459

2,184
10
68
2,132
-91
4,303
64,831
296,512(JPY million)
FY18/2(Feb 28, 2018)

FY17/2(Feb 28, 2017)
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
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

110
805
611
112
5,209

–
1,042
–
112
4,449

6,825

3,921

1,655
62
36
4,119
19,548

1,609
494
34
4,652
16,316632
100
91,60468,319
1,147
8,038
624
170,467
190,015520–
112,366
63,588
1,744
8,492
758
187,470
203,787

26,65011,05642,840-15
80,532

26,723
11,11354,324-2,99589,165

117

543

-365

-372

55

–

-192

171

491
2,612
83,443
273,459

666
2,722
92,725296,512

Consolidated Income Statement (FY18/2)(JPY million)

Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of shares in affiliates
Gain on sale of securities investments
Other
Total Extraordinary Gains
Extraordinary Losses
Office move expenses
Loss on disposal of fixed assets
Impairment loss
Earthquake-related damages
Other
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
Net Income

6

FY17/2(Mar 1, 2016
to Feb 28, 2017)109,253
82,44626,806
5,025
21,781

FY18/2(Mar 1, 2017
to Feb 28, 2018)57,84631,92025,925
5,067
20,858

–
85
32
118

3
57
100
161

1,303

1,266

38

244

585
216
2,144
19,755

159
165
1,835
19,185

–
2,466
–
2,466

1,221
–
41
1,263

31
–
1,090
244
224
1,590
20,630
4,863
573
5,436
15,194

–
11
327
–
–
339
20,109
5,665
258
5,923
14,185299

167

14,89414,018

Consolidated Statement of Comprehensive Income (FY18/2)(JPY million)

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

7

FY17/2(Mar 1, 2016
to Feb 28, 2017)15,194

FY18/2(Mar 1, 2017
to Feb 28, 2018)
14,185

-644

415

-113

-7

27
-730
14,463-45362
14,548

14,16914,392294

155

Consolidated Statement of Changes in Shareholders’ Equity(FY18/2 – Current Period)(JPY million)
Shareholders’ Equity
CapitalReserve

Retained
Earnings

Treasury
Shares26,65011,05642,840

-15

72

72

CapitalBalance as of March 1, 2017
Changes in the Current Fiscal
Year
Share Issuance
Dividend Payment
Net Income
Change in Consolidated
Subsidiaries
Share Buyback
Sale of Treasury Shares1
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as of February 28,
2018

Balance as ofMarch 1, 2017
Changes in the
Current Fiscal Year
Share Issuance
Dividend Payment
Net Income
Change inConsolidated
Subsidiaries
Share Buyback
Sale of Treasury
Shares1
Changes in Items
other thanShareholders’EquityTotal Changes
Balance as ofFebruary 28, 2018

Total
Shareholders’Equity80,532-2,516
14,018145-2,516
14,018

-17

-17

-15

-2,99919-2,9994

72

57

11,483-2,9808,633

26,723

11,11354,324-2,99589,165

Other Comprehensive Income
Deferred
Valuation Gain (Loss) Foreign Total Other Stock Minority Total Net
Gain (Loss) on Long- Currency
Compre- Options Interests Assets
on Other
TermTranslation hensive
Securities Interest Rate Adjustment Income
Hedges
117

-365

55

-192

491

2,612

83,443145-2,516
14,018-17-2,999
4

426

-7

-55

363

175

110

649

426

-7

-55

363

175

110

9,282

543

-372

–

171

666

2,722

92,7258

(FY17/2 – Previous Period)(JPY million)
Shareholders’ Equity
CapitalReserve

Retained
Earnings

Treasury
Shares

26,575

10,96829,454

-41

74

74

CapitalBalance as of March 1, 2016
Changes in the Current Fiscal
Year
Share Issuance
Dividend Payment
Net Income
Change in Consolidated
Subsidiaries
Share Buyback
Sale of Treasury Shares1
Changes in Items other thanShareholders’ Equity
Total Changes
Balance as of February 28,
2017

Balance as ofMarch 1, 2016
Changes in the
Current Fiscal Year
Share Issuance
Dividend Payment
Net Income
Change inConsolidated
Subsidiaries
Share Buyback
Sale of Treasury
Shares1
Changes in Items
other thanShareholders’EquityTotal Changes
Balance as ofFebruary 28, 2017
1

Total
Shareholders’Equity66,956-1,504
14,894149-1,504
14,894

-3

-3

13

26

39

74

88

13,38626

13,57526,65011,05642,840-15

80,532Other Comprehensive Income
Deferred
Valuation Gain (Loss) Foreign Total Other Stock Minority Total Net
Gain (Loss) on Long- Currency
Compre- Options Interests Assets
on Other
TermTranslation hensive
Securities Interest Rate Adjustment Income
Hedges
761

-251

23

533

319

4,357

72,166149-1,504
14,894
-3
39

-643

-113

32

-725

172

-1,745-2,298

-643

-113

32

-725

172

-1,745

11,277

117

-365

55

-192

491

2,612

83,443

Treasury Shares sold to Ichigo employees at the exercise price of employee stock options.

9Consolidated Cash Flow Statement (FY18/2)
FY17/2(Mar 1, 2016
to Feb 28, 2017)
Cash Flow from Operations:Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expense
Loss (gain) on sale of shares in affiliates
Loss (gain) on sale of securities investments
Impairment loss
Decrease (increase) in trading notes andreceivables
Decrease (increase) in operational securities
investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants 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 advances received
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) Operations

10(JPY million)
FY18/2(Mar 1, 2017
to Feb 28, 2018)

20,630
778
223
141
23

20,109
1,015
215
111
32

-3

-355

-85
1,303
–
-2,466
1,090

-61
1,266
-1,221
–
327

-367

-468

2,727

1,663

-6,303
7,251
-190
138
-193
204
92
-49
-667
1,183
25,46085-1,146-4,005
1,153
21,547-8,112
996
871
-13
-10
573
-285
30
125
722
17,532
61-1,135-5,86814
10,603

(JPY million)

Cash Flow from Investments:
Payments into time deposits
Redemptions of time deposits
Acquisition of securities investments
Proceeds from sale of securities investments
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Payments of security deposits
Redemptions of security deposits
Acquisition of subsidiary shares resulting inchange of consolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Other
Net Cash from (Used for) Investments
Cash Flow from Financing:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term
non-recourse loans
Proceeds from bond issuance
Repayment of maturing bond principal tobondholders
Repayment of maturing non-recourse bondprincipal to bondholders
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
Share buyback
Payments to minority interests
Dividends paid
Dividends paid to minority interests
Net Cash from (Used for) Financing
Effect of Exchange Rate Changes
on Cash and Cash Equivalents
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents Resulting from
Exclusion from Consolidation
Cash and Cash Equivalents at End of Period

11

FY17/2(Mar 1, 2016
to Feb 28, 2017)

FY18/2(Mar 1, 2017
to Feb 28, 2018)-6,100
201
-300
6,136
-11,719
-1
-63
-5
10

-6
–
-140
–
-4,796
-83
-28
-36
–

-93

-2,619–2,096

1-11,933-32-5,645-1,383

-306

532

-611

785

–

-56

-112

–

-100

55,674-61,22130,850-15,400
137–-2,000-1,501-39
6,377

32,660-13,402
3,518-22,366
110-2,999–-2,513–-6,124-2-3

15,98828,368-1,16941,369-2,988-834

41,36939,365

Revenue, P&L, and Assets by Segment (Current FY18/2)(Mar 1, 2017 to Feb 28, 2018)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L1

Clean
EnergyOther(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements

Total

2,433

51,864

3,426

122

57,846–

57,846

1,006

1

–

–

1,008

-1,008

–

3,440
2,043

51,865
17,993

3,426
847

122
-50

58,855
20,833-1,00825

57,846
20,858Stock Earnings(Rental Income,Ongoing AM
Fees, FIT Solar
Power Sale
Earnings, etc.)

1,662

7,900

555

–

–

–

–

Flow Earnings(Profits on
Value-Add Real
Estate Sales,
Profits on Solar
Power Plant
Sales, AM
PerformanceFees, etc.)

380

10,092

292

–

–

–

–

1,664

239,935

25,854

2,112

269,567

26,945296,512

–
–

380
327

609
–

–
–

990
327

25
–

1,015
327

–

7,525

3,384

–

10,909218

11,127

Segment P&L
Details1

Segment Assets
Other
Depreciation
Impairment loss
Increase in
Property, Plant,
and Equipment
and Intangible
Assets12

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 25 million) reflects transaction eliminations and corporate
expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 26,945
million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to thesegments. The Adjustment to Depreciation (JPY 25 million) reflects depreciation of corporate assetsthat were not allocated to the segments. The Adjustment to Increase in Property, Plant, and Equipment
and Intangible Assets (JPY 218 million) reflects corporate assets that were not allocated to thesegments.

12

Revenue, P&L, and Assets by Segment (Previous FY17/2)(Mar 1, 2016 to Feb 28, 2017)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L1

Clean
EnergyOther(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements

Total

4,747

92,13812,352

14

109,253–

109,253

1,422

4

–

–

1,427

-1,427

–

6,170
2,326

92,143
16,213

12,352
3,301

14
-165

110,680
21,676-1,427104

109,253
21,781

Stock Earnings(Rental Income,Ongoing AM
Fees, FIT Solar
Power Sale
Earnings, etc.)

1,612

7,657

843

–

–

–

–

Flow Earnings(Profits on
Value-Add Real
Estate Sales,
Profits on Solar
Power Plant
Sales, AM
PerformanceFees, etc.)

714

8,555

2,457

–

–

–

–

2,821

213,245

22,2081,906

240,182

33,277

273,459

6
–

241
1,090

505
–

–
–

753
1,090

24
–

778
1,090

3

58

11,499–11,561

41

11,603

Segment P&L
Details1

Segment Assets
Other
Depreciation
Impairment loss
Increase in
Property, Plant,
and Equipment
and Intangible
Assets12

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 104 million) reflects transaction eliminations and corporate
expenses that were not allocated to the segments. The Adjustment to Segment Assets (JPY 33,277
million) reflects corporate assets, such as cash and cash equivalents, that were not allocated to thesegments. The Adjustment to Depreciation (JPY 24 million) reflects depreciation of corporate assetsthat were not allocated to the segments. The Adjustment to Increase in Property, Plant, andEquipment and Intangible Assets (JPY 41 million) reflects corporate assets that were not allocated tothe segments.

13

Goodwill and Amortization by Segment (Current FY18/2)(Mar 1, 2017 to Feb 28, 2018)
Goodwill(JPY million)
Segment
Asset
Management Value-Add
Amortization
during the fiscal
year
Outstandingbalance as of theend of the period

Clean
Energy

Other

Total

AmountRecorded in
Adjustment Consolidated
Financial
Statements

70

25

15

–

111

–

111

912

454

234

–

1,600

–

1,600

Negative Goodwill
N/A
Goodwill and Amortization by Segment (Previous Period FY17/2)(Mar 1, 2016 to Feb 28, 2017)
Goodwill(JPY million)
Segment
Asset
Management Value-Add
Amortization
during the fiscal
year
Outstandingbalance as of theend of the period

Clean
Energy

Other

Total

AmountRecorded in
Adjustment Consolidated
Financial
Statements

111

15

14

–

141

–

141

1,519

94

249

–

1,864

–

1,864

Negative Goodwill
N/A

14

Per Share Information(JPY)

FY17/2(March 1, 2016 to February 28, 2017)
Net Assets per ShareNet Income per Share
Diluted Net Income per Share

FY18/2(March 1, 2017 to February 28, 2018)159.6029.66
29.59

Net Assets per ShareNet Income per Share
Diluted Net Income per Share180.2028.12
28.10

Calculation of net income per share and diluted net income per share is as follows:
FY17/2(March 1, 2016 to
February 28, 2017)
Net Income per ShareNet Income Attributable to
Shareholders (JPY million)
Amount Not Attributable to
Common Shareholders
Net Income Attributable to
Shareholders in Regards toCommon Shares (JPY million)
Average Number of Shares
Outstanding
Number of Potentially Dilutive
Shares Outstanding(of which are employee stock
options)

Details of Potentially Dilutive Shares
Outstanding

FY18/2(March 1, 2017 to
February 28, 2018)

14,89414,018––14,89414,018502,257,080

498,475,625

1,185,685

316,463(1,185,685)(316,463)

Jan 13, 2016 Employee
Stock Option Issuance:
1,460,000 shares

Jan 13, 2015 Employee
Stock Option Issuance:
1,676,500 shares

Jan 13, 2017 Employee
Stock Option Issuance:
2,000,000 shares

Jan 13, 2016 Employee
Stock Option Issuance:
1,373,200 shares
Jan 13, 2017 Employee
Stock Option Issuance:
1,904,500 shares
Jan 12, 2018 Employee
Stock Option Issuance:
1,800,000 shares

15