Consolidated Financial Results for the Third Quarter of
the Fiscal Year Ending March 31, 2016
(Based on Japanese GAAP)(Translation of Japanese Financial Summary, Released on February 4, 2016)
Company name: Sun Frontier Fudousan Co., Ltd.
Stock listing: Tokyo Stock Exchange 1st Section
Code number: 8934
URL: http://www.sunfrt.co.jp
Address: 14F, Toho Hibiya Building, 2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006
Representative: Tomoaki Horiguchi, President, Representative Director
Inquiries: Yasushi Yamada, Director and Chief Administractive Officer(Phone: +81-3-5521-1301)*Amounts under one million yen have been rounded down.

1. Consolidated Performance in the Third Quarter of the Fiscal Year Ending March 31, 2016
(1) Operating results*Percentage figures shown under net sales, operating income, ordinary income, and net income columns indicate year-on-year changes for
those items.
(Millions of yen, except for per share figures)

Net Sales

Operating Income

Ordinary Income

3rd Quarter of FY ending March 31, 2016

¥17,356 (△13.5%)¥4,521 (△1.4%)¥4,221 (△3.8%)

3rd Quarter of FY ended March 31, 2015

¥20,062 (△91.2%)¥4,587 (67.5%)¥4,390 (66.1%)(Note) Comprehensive Income: 3rd quarter of FY ending March 2016: ¥4,274 million (7.6%) 3rd quarter of FY ended March 2015:¥3,971 million (57.3%)

Net Income per Share(Yen)

Net Income

Fully Diluted
Net Income per Share(Yen)

3rd Quarter of FY ending March 31, 2016

¥4,283 (10.4%)¥100.17¥ －3rd Quarter of FY ended March 31, 2015

¥3,878 (53.8%)¥90.71¥ －(2) Financial Position (at end of the term)(Millions of yen, except for per share figures)

Total Assets

Equity Ratio(%)

Net Assets

3rd Quarter of FY ending March 31, 2016

¥50,711¥26,278

51.8%

FY ended March 31, 2015

¥40,424¥22,701

56.2%(Reference) Shareholders’ Equity at term-end: 3rd Quarter of FY ending March 31, 2016 (as of December 31, 2015): ¥26,272 million
FY ended March 31, 2015 (as of March 31, 2015): ¥22,701 million

2. Cash Dividends
Cash Dividends per Share
1st Quarter

2nd Quarter

FY Ended March 31, 2015

-

¥0.00

FY Ending March 31, 2016

-

¥0.00

FY Ending March, 2016 (Projections)(Note) Changes from the latest released dividend forecasts: Yes

1

3rd Quarter(Yen)

Year-end

Annual
total

-

16.50

16.50

-

25.00

25.00

3. Forecast for Consolidated Financial Results for the Fiscal Year Ending March 31, 2016
(From April 1, 2015 to March 31, 2016) *Percentage figures are indicated year-on year changes for those items.

Net Sales

FY Ending March, 2016

¥33,000 (19.0%)

Operating Income¥7,300 (24.8%)(Millions of yen, except for per share figures)
Net Income per
Ordinary Income
Net Income
Share¥7,000 (25.1%)¥7,200 (42.5%)¥168.39(Note) Changes from the latest released performance: Yes

4. Others(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
New companies: —Excluded companies: —(2) Adoption of special accounting practices in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, procedures and presentation methods
1) Changes caused by revision of accounting standards: Yes
2) Changes of accompanying revisions other than 1) above: None
3) Changes in accounting estimates: None
4) Restatement of corrections: None
(4) Number of outstanding shares (common stocks)
1) Number of outstanding shares at the end of the period (including treasury stock):
3rd Quarter of FY ending March 31, 2016: 42,755,500 shares
FY ended March 31, 2015: 42,755,500 shares
2) Number of treasury stock at the end of the period:
3rd Quarter of FY ending March 31, 2016: 143 shares
FY ended March 31, 2015: 143 shares
3) Average number of shares for the period:
3rd Quarter of FY ending March 31, 2016: 42,755,357 shares
3rd Quarter of FY ended March 31, 2015: 42,755,380 shares※Implementation status of quarterly review processes
This Summary of Consolidated Financial Results is not subject to quarterly review processes under the
Financial Products and Exchange Law. At the time of this document’s release, review of the quarterly
financial statements under the Financial Products and Exchange Law had not been completed.
※Appropriate use of business forecasts; other special items
Business forecasts contained in this report are based on information available to the Company on the date of this report’s
announcement and on assumptions pertaining to uncertain factors that may affect the Company’s future results. Therefore,
the company has no intention to promise the accomplishment of the forecasts. Due to unforeseen circumstances, however,actual results may differ significantly from such forecasts.

2

Table of Contents of Appendix
1. Qualitative Information Concerning Consolidated Business Performance for the Quarter Under Review ............... 4(1) Qualitative information on consolidated operating results ..................................................................................... 4(2) Qualitative information on consolidated financial position .................................................................................... 5
2. Consolidated Financial Statements............................................................................................................................. 6(1) Quarterly consolidated balance sheets .................................................................................................................... 6(2) Quarterly consolidated statements of income and quarterly consolidated statements ofcomprehensive income ......................................................................................................................................... 8(3) Notes to quarterly financial statements ................................................................................................................. 10(Notes regarding the conditions of going business) ............................................................................................. 10(Notes in the case of major changes in shareholders’ equity)............................................................................... 10(Segment information, etc.) .................................................................................................................................. 103

1. Qualitative Information Concerning Consolidated Business Performance for the Quarter Under Review(1) Qualitative information on consolidated operating results
The Japanese economy continued to stage a slow recovery during the third quarter of consolidated fiscal year. Corporate
earnings and employment situation recovered with benefits of government economic stimulus measures and monetary easing
by the Bank of Japan. There have been positive effects of moderate economic recovery thanks to significant increase offoreign visitors to Japan in the meantime. On the other hand, as the economic downside risk of China including the emerging
countries has increased, the economic outlook is continuing uncertain.
In the real estate industry where Sun Frontier Fudousan Group operates, there has been a long-termed improvement in thevacancy rate in the office market in city-center, and the average rent level is also showing moderate improvement in thesame period. In addition, there is very strong interest in purchasing real estate among J-REIT, Japanese and overseas
investors backed by the favorable financing environment and weak yen etc. for procuring funds. Thus the expected returnon properties is declining as a result. The volume of real estate transactions remain still at high level.
Under these circumstances, Sun Frontier Fudousan Group focused on the utilization and distribution of small to mediumsized office building in the urban center of Tokyo, and has helped building owners solve various dissatisfaction andinconveniences regarding real estate from owner’s viewpoint. We contributed to the real estate revitalization and utilizationin consideration for better environment with feeling of thankfulness through providing each customer with one-stop services
in our philosophy-based business model, such as brokerage, sale, management, maintenance, renewal and renovation ofbuildings, consultation regarding inheritance or tax that cooperated with the expert, guarantee services of unpaid rent etc.
The most common tasks of property business are included 1) leasing management for keeping full occupancy, 2) property
management for driving down of vacant or non-payment, 3) construction management for maintaining legal compliance. But we
expand them to 4) optimize the value of properties by generating high value, and 5) solve building owners’ problems of all theirassets. In addition, in the process of using the knowledge and know-how gained by letting these various services and linking up
some of their various functions, we have been proactively trying to chain the real estate revitalization business that generate
substantial added value. We have accumulated the know-how and experience in revitalization of office buildings in five wards
in the center of Tokyo (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya), for example, optimal change for vitalizing the local
community, setting of the roof green terrace for the tenant comfort, setting up the built-interior offices and etc.
As for procurement of real estate business, we tried to obtain information on best real estate from leading real-estate companies,
trust banks, and also an increasing number of pieces of information from “Kyoeikai (Co-prosperity Association)” as our original
network of affiliates. In addition, we have worked to establish another procurement route through activities, such as, solving
building owners’ difficulties, worries, etc. which could contribute to the direct business of real estate.
As other measures, we established a hotel planning/operation company “Sun Frontier Hotel Management Co., Ltd.”, and wehave agreed to make a business alliance with Shanghai Spring Investment Management Co., Ltd. in October 2015 for developing
the hotel business in Japan. For inbound hotel demand to surge, we started proactively expanding the business.
As a result, our consolidated results for the third quarter ending March 2016 were as follows :Sales ¥17,356 million (down by 13.5% year on year), operating income ¥4,521 million (down by 1.4% year on year), ordinary
income ¥4,221 million (down by 3.8% year on year), and net income increased by 10.4% to ¥4,283 million

The performance of each segment is as follows.

Real Estate Revitalization
From the procurement stage, we started with a “production” process through which we aim to put the property to the bestuse possible. By careful research of real estate leasing market on a daily basis to collect knowledge and injecting andcombining each section’s experiences of technologies, knowledge of planning, building management, construction and soon, we gestated feasible plans. In addition, we emphasized the fact that the more satisfied the tenants, the more satisfied theowner through frequent interactions with tenants, we looked for all possible ways to make the property more comfortable
and convenient for them to use.
We renovated the real estate in low occupancy rate or renewal need subject to the characteristics of the locations and themarket trends. Through revitalization of the real estate in such way, we maximized the value and sold them.
After the sale of the revitalized properties, we provided quick services such as building management with a softwareside and the hard aspect, proactive response to the complaint, consultation of the owner’s annoyances and so on.
As for the real estate revitalization business, with placing emphasis on not only stability enhancement
but specific conditions of location and historical facts of the area, we provided renovation optimized for thearea, improved earthquake resistance, and corrective actions for floor-area ratio. We attached much value
on customer's worth, so that we sold 16 properties (20 properties on previous period), and as a result of
readjusting sales amounts, sales decreased, and profits increased.
As for the rental building business, we purchased and possessed the high valued properties from the customer’s perspective,
and by capitalizing on the real estate management skills that we developed working in rental brokerage, property
management, construction solutions and delinquent rent guarantee services, we maintained a high operation rate and secured
stable rental income with them.
In the real estate securitization business, although there was a profit sharing from the property investment fund which we
financed, both sales and profits decreased compared to the same period a year ago.
As a result of the above activities, sales were ¥14,559 million (down by 17.8% year on year) and segment income was¥4,825 million (down by 1.6% year on year).
4Real Estate Brokerage
As for the sales brokerage business, we mostly focused on the relationship with the property management department or
the agents to obtain the effective information and introduction, put more time, made effort into them and added the value on.
In such a way we could take some chances as repeated business from customer to another customer.
In addition, as a business volume has been spread backed by the recovery of the real estate investment market, both sales and profits grew considerably in comparison to the same period of the previous year.
As for the rental brokerage business, while occupancy rates were improving in the market, we engaged in not only finding
tenants, but also consulting with building owners about various problems of the building management. Furthermore, this businesshas been contributing to the corporate group’s profit as a whole through sales and procurement of revitalizing properties andfinding tenant related to commercialization of the revitalized properties.

As a result of the above activities, sales were ¥1,233 million (up by 40.4% year on year) and segment income was ¥1,080
million (up by 45.9% year on year).

Property Management
In the property management business, we practiced the profit improvement by the contract changes to appropriate rent
level providing meticulous and careful leasing management services backed by good sense of locality, which contributed tothe income recovery and maintain of the stable occupancy rate in the building management. Backed by these activities, we
could receive repeated orders for property management from the same customer. At the end of the third quarter of this fiscal
year we were newly managing 60 buildings (23.5% increase YOY), as can be seen in the table below.
In addition, by trying to grasp clients’ asset background and by offering appropriate solutions for them, we created thebusiness opportunities for brokerage and construction order entrusted by the client who had purchased the revitalized
property.
Such combined real estate services with keeping the viewpoint of customers are creating much added-value by making
creativity and improvement.
As a result of the above activities, both sales and profits increased.
End of Dec. 2013

End of Dec. 2014

End of Dec 2015

No. of entrusted buildings

214

255

315

Operation rate

96.4%

97.2%

96.3%

As for the building maintenance business, we have been striving to take an immediate action against leaks of water alongwith high altitude cleaning of outer walls and repair work in cooperation with other business such as property management.
As a result, sales and profits increased from the previous year.
As a result of the above activities, sales were ¥1,097 million (up by 14.9% year on year) and segment income(up by 19.7% year on year).

was ¥499 million

Other Businesses
As for the construction solution business, sales and profits increased compared to the previous year, due
to the increase of the contract amount per construction.
As for the rent guarantee business, we strengthened the relationship with in-house departments including real estate broker
and partner companies, so that both sales and profits increased.
As for the space rental business, “ Vision Center Tokyo “ started in this fiscal year as a new businessdevelopment of the real estate utilization, the income covered the whole expenditure during the third
quarter of consolidated fiscal year by the improvement of the recognition by active marketing.
As for the hotel business started from this third quarter, we have agreed to make a business alliance for the
hotel business in Japan with Spring Group, which runs tour services and airline in China and Japan. We
get a move into proactive approach toward the needs of foreign tourists.
As a result of the above activities, sales were ¥466 million (down by 9.4% year on year) and segment
income was ¥248 million (down by 2.7% year on year).

(2) Qualitative
Qualitative information on consolidated financial position
As of the end of the third quarter of this consolidated fiscal year, total assets were 50,711 million yen (up by 25.4% fromthe end of the previous consolidated fiscal year) and liabilities were 24,433 million yen (up by 37.9%). The main reason for
the increase in total assets was that inventory assets increased 10,375 million yen. The main reason for increase in liabilities
was that long-term loans payable increased 4,070 million yen and corporate bonds increased 1,149 million yen.
Net assets were 26,278 million yen (up by 15.8%). The main reason for the increase in net assets was posting 4,283 million
yen in quarterly net income, despite 705 million yen being paid out for year-end dividends.

5

2. Consolidated Financial Statements(1) Consolidated Quarterly Balance Sheets
FY ended March 31, 2015
(As of March 31,2015)(Thousands of yen)
End of 3Q of FY ending
March 31, 2016(as of December 31, 2015)

ASSETS
Current assets
Cash and deposits

12,686,800

11,853,800

Accounts receivable-trade
Real estate for sale

233,535
1,599,420

300,956
8,034,959

Real estate for sale in process
Supplies

21,880,382
730

25,819,837
1,574

Deferred tax assets
Other774,725
297,082

764,424
659,601

Allowance for doubtful accounts△19,882△22,800

37,452,794

47,412,353

Total current assets
Noncurrent assets
Property, plant and equipment
Buildings, net

1,226,136

1,203,547

Land
Other, net

1,232,143
25,1691,238,530
39,696

Total property, plant and equipment

2,483,449

2,481,775

1,875

-

Other

74,388249,815

Total intangible assets

76,263249,815

Intangible assets
Goodwill

Investments and other assets
Deferred tax assets

2,083

-

Other
Allowance for doubtful accounts

414,572

571,994△4,587△4,390Total investments and other assets

412,069

567,604

Total noncurrent assets
Total assets

6

2,971,783

3,299,194

40,424,577

50,711,548

(Thousands of yen)
End of 3Q of FY ending
March 31, 2016(as of December 31, 2015)

FY ended March 31, 2015
(As of March 31,2015)
LIABILITIESCurrent liabilities
Accounts payable-trade
Short-term loans payable

606,061-476,318
297,000

Current portion of bonds
Current portion of long-term loans payable

40,000964,484

101,200
1,597,084

Income taxes payable
Provision for bonuses

221,154
109,208

1,041,036
69,759Provision for directors' bonuses
Construction warranty reserve

30,00022,10022,5009,200

Provision for loss on guarantees for rent
Other

22,361
1,535,214

21,6391,942,144

Total current liabilities

3,550,585

5,577,882

340,000

1,428,600

Long-term loans payable
Provision for loss on litigation

12,648,786
31,00016,086,248-

Deferred tax liabilities
Other

1,152,905

924
1,339,662

Total noncurrent liabilities

14,172,691

18,855,435

17,723,276

24,433,317

Shareholders' equity
Capital stock

8,387,211

8,387,211

Capital surplus
Retained earnings

2,871,767
11,434,300

2,871,767
15,011,893

△174

△174

22,693,105

26,270,698

Noncurrent liabilities
Bonds payable

Total liabilities
NET ASSETSTreasury stock
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

2,253

2,150

Foreign currency translation adjustment

5,941

△558

Total accumulated other comprehensive income

8,195

1,592

-

5,940

22,701,300

26,278,230

40,424,577

50,711,548

Minority interests
Total net assets
Total liabilities and net assets

7

(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of comprehensive income
Consolidated Statements of Income

Net sales
Cost of sales

FY ended March 31, 2015
(April 1,2014- December 31,
2014)
20,062,447
13,209,428(Thousands of yen)
FY ended March 31, 2016
(April 1,2015- December 31,
2015)
17,356,159
10,307,850

Gross profit

6,853,018

7,048,308

Selling, general and administrative expenses

2,265,246

2,526,468

Operating income

4,587,772

4,521,839

Non-operating income
Interest income

5,609

8,021

Dividends income
Interest on refund

385
508

275
-

Subsidy income
Other

5,080
3,082

4,470
577

Total non-operating income

14,665

13,344

180,654

171,033

Bond issuance expenses
Other31,29086,36456,014

Total non-operating expenses

211,944

313,4124,390,493

4,221,771

Gain on sales of noncurrent assets

14,017

1,257,517

Total extraordinary income

14,017

1,257,517

637

827

Non-operating expenses
Interest expenses

Ordinary income
Extraordinary income

Extraordinary loss
Loss on retirement of noncurrent assets
Loss on litigation
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income (loss)
Net income

8-

10,850637

11,677

4,403,872

5,467,612

326,525
110,799

1,173,253
13,362437,325

1,186,616

3,966,547

4,280,996

88,132△2,0593,878,414

4,283,056

Consolidated Quarterly Statements of comprehensive income
3Q of FY ended
March 31, 2015
(April 1-December 31, 2014)
3,966,547(Thousands of yen)
3Q of FY ending
March 31, 2016
(April 1-December 31, 2015)
4,280,996

502

△103

Foreign currency translation adjustment

4,753△6,500Total other comprehensive income

5,255△6,603Comprehensive income

3,971,802

4,274,393

Comprehensive income attributable toComprehensive income attributable to owners of the parent

3,883,670

4,276,453

Comprehensive income attributable to minority interests

88,132△2,059

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities9(3) Notes to quarterly financial statements(Notes regarding the conditions of going business)
Not applicable.
(Notes in the case of major changes in shareholders’ equity)
Not applicable.
(Segment information, etc.)
I Third Quarter of Fiscal Year Ended March 31, 2015 (April 1, 2014 – December 31, 2014)
1. Information concerning sales and income or loss amount by reporting segment(Thousands of yen)
Quarterly
consolidated
Adjustment
Other
income/loss
Totalamountsbusiness
Real Estate Real Estate Property
statement
Total(Note 1)
(Note 2)
Revitalization Brokerage Management
amount(Note 3)
― 20,062,447
17,714,323 878,205
955,684 19,548,212 514,234 20,062,447
Reporting segment

Sales
Segment
4,901,436 740,860
417,539 6,059,836 255,719 6,315,555 △1,727,782 4,587,772
income(loss)
Notes: 1. The classification “other business” refers to business segments that are not included in reporting segments, andincludes construction solution business and delinquent rent guarantee business, etc.
2. The segment income adjustments amount, △1,727,782 thousand yen, includes △1,908,437 thousand yen incompany-wide expenses that are not allocated to reporting segments and 180,654 thousand yen in adjustment
amounts for interest expense. The company-wide expenses are mainly selling, general and administrative expenses
that are not allocated to reporting segments.
3. Segment income (loss) is adjusted with operating incomes calculated in consolidated quarterly statements ofincome.
2. Information on impairment of non-current assets and goodwill etc. for each reporting segment
Not applicable.
II Third Quarter of Fiscal Year Ending March 31, 2016 (April 1, 2015 – December 31, 2015)
1. Information concerning sales and income or loss amount by reporting segment(Thousands of yen)
Quarterly
consolidated
Other
Adjustment
income/loss
businessTotalamounts
Real Estate Real Estate Property
statement
Total(Note 1)
(Note 2)
Revitalization Brokerage Management
amount(Note 3)
14,559,052 1,233,311 1,097,722 16,890,086 466,072 17,356,159
17,356,159―
Reporting segment

Sales
Segment
4,825,013 1,080,780
499,781 6,405,575 248,759 6,654,335 △2,132,496
4,521,839
income(loss)
Notes: 1. The classification “other business” refers to business segments that are not included in reporting segments, andincludes construction solution business and delinquent rent guarantee business and space rental business and hotel
operation business, etc.
2. The segment income adjustments amount, △2,132,496 thousand yen, includes △2,303,529 thousand yen incompany-wide expenses that are not allocated to reporting segments and 171,033 thousand yen in adjustment
amounts for interest expense. The company-wide expenses are mainly selling, general and administrative expenses
that are not allocated to reporting segments.
3. Segment income (loss) is adjusted with operating incomes calculated in consolidated quarterly statements of income.
2. Information on impairment of non-current assets and goodwill etc. for each reporting segment
Not applicable.

10