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 Q1 Earnings
July 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/en/
Submission of the Financial Report (Shihanki Hokokusho): July 14, 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. FY18/2 Q1 Consolidated Financial Results (March 1, 2017 to May 31, 2017)(1) Consolidated Financial Results

FY18/2 Q1
FY17/2 Q1(YOY = year-on-year % change)

Revenue
Operating Profit
Recurring Profit
Net Income(JPY million) YOY (JPY million) YOY (JPY million) YOY (JPY million) YOY
12,915-72.2%
2,810-48.1%
2,097-56.4%
2,237-59.9%
46,415+421.3%

5,412+117.2%

4,806+115.2%5,585+135.1%

Note: Comprehensive income FY18/2 Q1: JPY 2,135 million (-60.5% YOY)
FY17/2 Q1: JPY 5,404 million (+131.8% YOY)

FY18/2 Q1Net Income
per Share(basic, JPY)
4.46

Net Income
per Share(diluted, JPY)
4.45

FY17/2 Q1

11.13

11.08

(2) Consolidated Financial Condition
FY18/2 Q1
FY17/2

Total Assets(JPY million)
275,154

Net Assets(JPY million)
81,622Equity Ratio(%)
28.5

Net Assets perShare (JPY)157.34273,45983,443

29.4

159.60Note: Shareholders’ equity FY18/2 Q1: JPY 78,486 million

FY17/2: JPY 80,339 million

2. Dividends
Dividend per Share (JPY)FirstQuarter

SecondQuarter

Third
Quarter

FourthQuarter

Total

FY17/2–––55

FY18/2(Forecast)–––

66Changes since the previously announced forecast: None
3. FY18/2 Full-Year Consolidated Forecast (March 1, 2017 to February 28, 2018)

FY18/2

FY18/2

Revenue(JPY million) YOY
75,500-30.9%(YOY = year-on-year % change)
Operating Profit
Recurring Profit(JPY million) YOY(JPY million) YOY
20,600-5.4%
18,300-7.4%

Net Income(JPY million) YOY

Net Income per Share(JPY)

13,500

-9.4%

26.98

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 bestpractice and the focus of Japan’s Corporate Governance Code on growing long-termsustainable corporate value.
4. Other(1) Changes in significant consolidated subsidiaries(material changes in scope of consolidation):
New subsidiary:
Subsidiaries removed from consolidation:

Yes
SA3 GK Tokumei Kumiai
None(2) Changes in accounting standards/principles, changes in accounting estimates, andrevisions to previous financial statements(i) Changes in accounting standards/principles:None(ii) Changes in accounting principles other than the above: Yes(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 Q1:
FY17/2:503,777,700
503,712,300(ii) Number of treasury shares
FY18/2 Q1:
FY17/2:

4,943,000
329,600(iii) Average number of outstanding shares
FY18/2 Q1:
FY17/2 Q1:

501,810,195
501,679,223

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, thesestatements involve risk and uncertainties, and actual earnings may differ significantly fromthe indicated forecasts.
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 (“IchigoGreen,” 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 is carrying 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 threesegments.

3Consolidated Balance Sheet (FY18/2 Q1)(JPY million)
FY17/2(Feb 28, 2017)

FY18/2 Q1(May 31, 2017)

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

447,678
913
1,324
1,433
167,805
－516
3,125
-453
222,344

45,542
1,250
1,324
1,960
170,799
996
515
3,105
-445
225,049

7,375
7,246
18,627912,30885
45,654

7,296
6,193
18,89914
12,81381
45,299

1,864
62
29
1,956

1,30162
27
1,391

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

1,416
10
343
1,735
-91
3,413
50,105275,154

(JPY million)
FY17/2(Feb 28, 2017)

FY18/2 Q1(May 31, 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

110
805
611
112
5,209

－
1,385
611
112
5,439

6,825

6,271

1,655
62
36
4,119
19,548

731
68
138
3,163
17,922632
100
91,60468,319
1,147
8,038
624
170,467
190,015632100104,962
59,950
1,146
7,986
833
175,610
193,532

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

26,654
11,05742,561-1,51178,762

117

90

-365

-401

55

35-192

-275

491
2,612
83,443
273,459541
2,593
81,622
275,154

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 OptionsMinority Interests
Total Net Assets
Total Liabilities and Net Assets

5Consolidated Income Statement (FY18/2 Q1)(JPY million)
FY17/2 Q1

FY18/2 Q1(Mar 1, 2016
to May 31, 2016)(Mar 1, 2017
to May 31, 2017)

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
Valuation loss on derivatives
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of securities investments
Gain on sale of shares in affiliate
Total Extraordinary Gains
Extraordinary Losses
Earthquake-related damages
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests

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

12,915
8,914
4,001
1,191
2,810－
3
58－
20
17
37

381－
202
30
614
4,806

288
256
156
48
750
2,097

2,427－
2,427－
1,135
1,135

242
242
6,990
1,103
5,886－
－
3,232
1,001
2,231

301-6

Net Income

5,585

2,237

6Consolidated Statement of Comprehensive Income (FY18/2 Q1)(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 Q1

FY18/2 Q1(Mar 1, 2016
to May 31, 2016)(Mar 1, 2017
to May 31, 2017)

5,886

2,231-263-38-211-36-8-482
5,404-21-95
2,135

5,135

2,154

268-18

Consolidated Cash Flow Statement (FY18/2 Q1)(JPY million)
FY17/2 Q1

FY18/2 Q1(Mar 1, 2016
to May 31, 2016)(Mar 1, 2017
to May 31, 2017)

6,990
224
56
35142

3,232
189
5325
138

‐6-4‐3381‐2,427－‐802-20288－-1,135-623

Cash Flows from Operating Activities:
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 securities investments
Loss (gain) on sale of shares in affiliate
Decrease (increase) in trading notes and receivables
Decrease (increase) in operational securities
investments
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
OtherSub-total
Interest and dividend income received
Interest expense paid
Income taxes paid

814

73

13,45110151-393-872
44-1,740-191
15,8653-327-547-2,991200-94
26-777-168-52
216-1,42420-216-1,747

Net Cash from (Used for) Operating Activities

14,994-3,368

8

(JPY million)

Cash Flows from Investing Activities:
Payments into time deposits
Payments for 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
Acquisition of subsidiary shares resulting in change ofconsolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Other

FY17/2 Q1

FY18/2 Q1(Mar 1, 2016
to May 31, 2016)(Mar 1, 2017
to May 31, 2017)

－－
6,021
-1,045
－
-2
－－-29
－
-879
-2
－-10

-89

－

－

1,665

－

-16

Net Cash from (Used for) Investing Activities

4,884727

Cash Flows from Financing Activities:
Net increase (decrease) in short-term 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
Payments to minority interests
Share buyback
Dividends paid
Dividends paid to minority interests-763
25,870‐27,504
4,350‐10,140
22-2,000－-1,425-39

580
18,630-5,093－-9,023
6－-1,499-2,402－Net Cash from (Used for) Financing Activities‐11,630

1,198

-5

-3

Increase (Decrease) in Cash and Cash Equivalents

8,242-1,447

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

28,36841,369-1,838-689

Cash and Cash Equivalents at End of Quarter

34,772

39,232

Effect of Exchange Rate Changes
on Cash and Cash Equivalents

9Revenue, P&L, and Assets by Segment (Current FY18/2 Q1)(March 1, 2017 to May 31, 2017)(JPY million)
Segment

Revenue
Revenue from
External Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in Property,Plant, and Equipment
and Intangible Assets
12

Adjustment2

AmountRecorded in
Consolidated
Financial
Statements1

12,915－

12,915

－

239

‐239－

373
52
22,731

86
‐43
1,836

13,1552,782
243,006‐239
27
32,14812,9152,810275,154

80

102－

183

6189

18836－

854

9863

Asset
Management

Value-Add

Clean
Energy681

11,773

373

86

238

－－

920
504
1,884

11,774
2,269
216,553－－

Other

TotalSegment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 27 million) reflects transaction eliminations and corporate expenses thatwere not allocated to the segments. The Adjustment to Segment Assets (JPY 32,148 million) reflects corporate
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (JPY6 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 9 million) reflects corporate assets thatwere not allocated to the segments.

10Revenue, P&L, and Assets by Segment (Previous FY17/2 Q1)(March 1, 2016 to May 31, 2016)(JPY million)
Segment

Revenue
Revenue from
External Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in Property,Plant, and Equipmentand Intangible Assets12

Adjustment2

AmountRecorded in
Consolidated
Financial
Statements146,415－

46,415－

547

‐547－

556
143
20,050

5
‐14
2,276

46,963
5,334
219,978‐547
77
24,05946,415
5,412
244,037

56

157－

216

8

224

5

1,690－

1,695－

1,695

Asset
Management

Value-Add

Clean
Energy1,185

44,667

556

5

546

1－

1,732
800
3,103

44,668
4,404
194,547

1－

Other

Total

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 77 million) reflects transaction eliminations and corporate expenses thatwere not allocated to the segments. The Adjustment to Segment Assets (JPY 24,059 million) reflects corporate
assets, such as cash and reserves, that were not allocated to the segments. The Adjustment to Depreciation (JPY8 million) reflects depreciation of corporate assets that were not allocated to the segments.

11