Consolidated Financial Results for the First Quarter of 2020(Three Months Ended March 31, 2020)[Japanese GAAP]May 11, 2020

Company name: WORLD HOLDINGS CO., LTD.

Listing: Tokyo Stock Exchange, First Section
2429
URL: http://www.world-hd.co.jp
Eikichi Iida, Chairman and President
Shigeru Nakano, Director, Business Management Division Manager
Tel: +81-92-474-0555
Scheduled date of filing of Quarterly Report:
May 14, 2020
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:
None
Stock code:
Representative:
Contact:(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Three Months of 2020 (January 1 to March 31, 2020)(1) Consolidated results of operations
Net sales

Operating profit

Million yen%

Three months ended Mar. 31, 2020
36,480Three months ended Mar. 31, 2019
30,614
Note: Comprehensive income (millions of yen)

Million yen%

Million yen

%

19.2
1,358
734.5
1,393
1.7
162
(71.5)
159
Three months ended Mar. 31, 2020: 1,678
Three months ended Mar. 31, 2019: (18)773.1
(71.1)
(-%)
(-%)

1,640
11

(92.5)Net income per share
Three months ended Mar. 31, 2020Three months ended Mar. 31, 2019

(Percentages represent year-on-year changes)
Profit attributable toOrdinary profit
owners of parent

Million yen%

Diluted net income per share

Yen

Yen

96.83
0.66

96.17
0.65

(2) Consolidated financial position
Total assets

Net assets

Million yen

Equity ratio

Million yen

Net assets per share%

As of Mar. 31, 2020
80,12525,220
As of Dec. 31, 201987,352
23,944
Reference: Shareholders’ equity (millions of yen)
As of Mar. 31, 2020: 23,826

Yen

29.7
1,390.08
25.9
1,345.71
As of Dec. 31, 2019: 22,662

2. Dividends
Dividends per share
1Q-end2Q-endYen

3Q-endYear-end

Total

Yen

Yen

Yen

Yen

2019
0.00
2020
2020 (forecast)
0.00
Note: Revisions to the most recently announced dividend forecast: None

-

52.70

52.70

-

99.80

99.80

3. Consolidated Forecast for 2020 (January 1 to December 31, 2020)
Net sales
Million yen

Operating profit%

Million yen(Percentages represent year-on-year changes)
Profit attributable to
Net income per shareowners of parent

Ordinary profit%

Million yen%

Yen

First half
73,566 10.1
2,122 (16.1)
2,733
8.0
Full year
159,682 17.1
7,851
66.0
8,338
73.5
Note: Revisions to the most recently announced consolidated forecast: None%

Million yen

1,517
5,601

(9.9)
89.5

90.13
332.60* Notes(1) Changes in significant subsidiaries during the period (change in scope of consolidation): Yes
Newly added: 1 (JW Solution Co., Ltd.) Excluded: 1 (HOEIKENSETSU Co., Ltd.)(2) Application of special accounting methods for presenting quarterly consolidated financial statements: Yes
Note: Please refer to the section “2. Quarterly Consolidated Financial Statements and Notes, (3) Notes to Quarterly
Consolidated Financial Statements, Application of Special Accounting Methods for Presenting Quarterly Consolidated
Financial Statements” on page 9 for further information.

(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of shares issued (common stock)1) Number of shares issued at the end of the period (including treasury shares)
As of Mar. 31, 2020:

17,261,600 shares

As of Dec. 31, 2019:

16,961,600 shares

As of Dec. 31, 2019:

121,000 shares

2) Number of treasury shares at the end of the period
As of Mar. 31, 2020:

121,000 shares

3) Average number of shares during the period
Three months ended Mar. 31, 2020:

16,942,798 shares

Three months ended Mar. 31, 2019: 16,835,656 shares* The current financial report is not subject to quarterly review by certified public accountants or auditing firms.
* Cautionary statement with respect to forward-looking statements, and other special items
Cautionary statement with respect to forecasts
Forecasts of future performance in this document are based on assumption judged to be valid and information currently
available to the Company’s management, but are not promises by the Company regarding future performance. Actual results
may differ materially from the forecasts for a number of reasons. Please refer to “1. Qualitative Information on Quarterly
Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements” onpage 4 for forecast assumptions and notes of caution for usage.
How to view supplementary materials for quarterly financial results
Supplementary materials for the quarterly financial results will be disclosed today (May 11, 2020), using the Timely Disclosure
network (TDnet), and available on the Company’s website.

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

4(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

4

2. Quarterly Consolidated Financial Statements and Notes

5(1) Quarterly Consolidated Balance Sheet

5(2) Quarterly Consolidated Statements of Income and Comprehensive Income

7

Quarterly Consolidated Statement of Income
For the Three-month Period

7

Quarterly Consolidated Statement of Comprehensive Income
For the Three-month Period

8(3) Notes to Quarterly Consolidated Financial Statements

9

Going Concern Assumption

9

Significant Changes in Shareholders’ Equity

9

Changes in Significant Subsidiaries during the Period

9Application of Special Accounting Methods for Presenting
Quarterly Consolidated Financial Statements

9

Segment Information

10

1

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of 2020, when the Japanese economy was expected to decline, there was a rapid economic
downturn because of the COVID-19 outbreak. Slowing economic growth in China, the difficulty of procuringparts and materials, and other problems caused by this crisis impacted the manufacturing sector. Activity inJapan’s non-manufacturing sector was held down by the drop in foreign tourists, people refraining from going out
for safety and other effects of COVID-19.
Although the business climate was difficult, sales and earnings were higher than planned because COVID -19 did
not have a significant negative effect during the first quarter on the major industries that use services of the World
Holdings Group. Net sales increased 19.2% year on year to 36,480 million yen. Operating profit increased
734.5% to 1,358 million yen, ordinary profit increased 773.1% to 1,393 million yen, an d profit attributable toowners of parent was 1,640 million yen, compared with a profit of 11 million yen one year earlier.
Business segment performance was as follows.
HOEIKENSETSU Co., Ltd. is no longer included in the consolidated financial statements due to the sale of thiscompany. The beginning of the first quarter of 2020 is used as the date of sale for accounting purposes. As a result,
this company is no longer included in reportable segments starting with the first quarter of 2020.
Factory Staffing Business
Some client companies had difficulty procuring parts and materials, briefly suspended operations, and had otherproblems due to COVID-19. Although this had a small negative effect on the performance of this business, sales
and earnings were generally as planned because of the strong performance of staffing services involving the 5G
mobile communication and semiconductor sectors, which we have been strategically targeting for growth.
We are using our Job Paper website for most recruiting activities in order to improve the efficiency of these
activities and the quality of the people we hire. In addition, we are using the consortium model for hiring thepeople we require in order to strengthen our recruiting capabilities. We hired 286 new graduates and quickly
determined assignments for these people beginning in April. Our training activities include trainings for
specialized skills, acquiring skills required for team leader and management positions, and for newly hired
graduates. Providing education and training contributes to the stability and growth of team assignments andactivities performed by teams at client companies. Training also helps raise our employee retention rate. In
addition to these activities, we continued to make preparations to op en more offices and other business sites.
To build a base for more growth in the next fiscal year and onward, preparations are under way to establish ahuman resources company specializing in the materials industry to be called TOHOWORLD Corporation. The
company will be owned jointly with Toho Titanium Co., Ltd., a well -known manufacturer of materials.
Establishing this partnership with Toho Titanium, which has a long history in the materials industry, will create aneven more powerful framework for providing human resource solutions to companies in the manufacturing sector.
As a result, sales were 12,114 million yen, up 2.8% year on year and segment profit decreased 7.9% to 466
million yen.
Technology Staffing BusinessTraining activities are one of the highest priorities of this business. Utilizing these activities has been progress asplanned for placing trainees on assignments and increasing rates for our services. As a result, sales and earnings
were higher for business with companies in the automobile, information and telecommunications, constructionengineering, and other industries.
This business strengthened activities for recruiting people with job experience in order to secure highly skilledhuman resources. There were also measures to reinforce training programs in order to enhance skills and enablepeople to do jobs at a higher level to meet the current needs of client companies. This business hired 180 new
graduates. Although the assignments for some of these people were delayed by COVID -19, we are using our
extensive education and training framework to enable these people to contribute to our growth during the2

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

remainder of 2020.
Sales were 4,207 million yen, up 4.2% year on year and segment profit increased 30.6% to 462 million yen.
R&D Staffing BusinessFirst quarter performance was generally as planned in both the research personnel sector and the clinical researchoutsourcing sector. This business responded to the growth of orders for personnel to perform tests and other tasks
associated with the COVID-19 crisis.
This business strengthened training programs and has in place a training system that uses joint researchlaboratories with the University of Tokyo, Kyoto University, Osaka University and other universities. Due to thistraining infrastructure, this business is able to recruit people across a broad range of skills, backgrounds and othercharacteristics and, as a result, people have been hired as planned. This business has hired 84 new graduates andassignments starting in April have been determined for almost all of these people.
Sales were 1,750 million yen, up 3.4% year on year, and segment profit increased 60.8% to 170 million yen.
Sales & Marketing Staffing Business
The volume of work performed and number of orders decreased in some market sectors, including at apparelcompanies and especially in the tourism sector, because of COVID-19. Despite these declines, sales and earnings
were mostly as planned because of higher orders in the food industry and for call center staffing.
JW Solution Co., Ltd., which was established in 2019, began operations by providing mainly guest services
personnel to the hotel industry. This company has increased its equity due to investments by World Holdings and
JTB Corp. JW Solution is currently making preparations for the provision of services for solving a variety ofhuman resource issues in the tourism industry, where significant demand is foreseen. These activities are utilizing
the human resource business knowledge of the World Holdings Group and the po werful brand and businessnetwork of JTB.
Sales were 997 million yen, up 23.1% year on year, and segment profit was 8 million yen, compared with asegment loss of 17 million yen one year earlier.
Real Estate Business
Sales and earnings were much higher than planned in the first quarter because of sales activities that reflectedcurrent market conditions and the completions of sales of land for business use in the real estate development
business of this segment.
We continue to be cautious about purchasing real estate because prices are consistently high. Although this stancehas temporarily reduced growth of the renovation business and other activities, there was progress with building abase for asset management and other businesses involving real estate f inance. Preparations are continuing in orderto adapt to the major shift in the real estate business climate that is expected to occur in Japan.
COVID-19 has not significantly affected the performance of this business. There are delays in deliveries of so meparts and materials at buildings under construction in this industry, but the World Holdings Group has strong
relationships with general contractors based on mutual cooperation.
The performance of each category of this segment was as follows.
The real estate development business sold 11 condominium units, 10 detached houses and 4 sites for business use,
resulting in property sales of 9,822 million yen. Sales from real estate brokerage and other activities totaled 593
million yen.
In the renovation business, 159 residences were sold and sales were 3,292 million yen.
In the prefabricated house business, sales were 531 million yen.
Sales were 14,238 million yen, up 71.7% year on year and segment profit was 861 million yen, compared with asegment loss of 23 million yen one year earlier.

3

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

Information and Telecommunications Business
Structural reforms implemented in prior years have improved the profit structure of this business. As a result,sales per store were higher and earnings increased steadily even as some stores were closed or consolidated withothers under the realignment in the cellular phone sales industry. (First quarter performance of this business is for
operations from October to December 2019, so there was no impact of the COVID-19 outbreak. Currently, thiscrisis is not having a significant negative effect on this business despite limited store operating hours and otherrestrictions.)
Sales were 2,492 million yen, down 26.0% year on year, and segment profit was 91 million yen, compared with asegment loss of 88 million yen one year earlier.
OthersAlthough the first quarter of the year is usually an off-season for the agricultural park management and operation
business, the first quarter of the current fiscal year saw an increase in the number o f park visitors in January andFebruary due to the success of strategic investments since last year and warmer than normal winter weather fromthe beginning of the year. However, as people refrained from going out to curb the spread of COVID -19 pandemic,
the situation continued to be severe, with the number of park visitors falling in March.
Sales were 679 million yen, up 8.2% year on year, and there was a segment loss of 141 million yen , comparedwith a segment loss of 126 million yen one year earlier.
(2) Explanation of Financial Position
AssetsTotal assets decreased 7,226 million yen from the end of 2019 to 80,125 million yen at the end of the first quarterof 2020. This was mainly due to decreases of 1,076 million yen in notes and accounts receivable-trade, 3,827
million yen in real estate for sale and 2,742 million yen in real estate for sale in process.
Liabilities
Total liabilities decreased 8,502 million yen from the end of 2019 to 54,905 million yen. This was mainly due todecreases of 737 million yen in accounts payable-real estate, 879 million yen in accrued expenses and 6,211
million yen in advances received.
Net assets
Net assets increased 1,276 million yen from the end of 2019 to 25,220 million yen mainly due to increases of 197
million yen in share capital, 197 million yen in capital surplus and 787 million yen in retained earnings.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The impact of the COVID-19 pandemic was limited in the first quarter. However, the recent declaration of
emergency has started forcing some businesses to close down and affecting peoples’ movements as residents
avoid nonessential outings. Concerns are also growing about any further spread of the pandemic and its impact on
the economy. If the risk continues to materialize for a long time, it may affect the performance of the Group.
In addition, the consolidated forecast announced on February 10, 2020 does not include the impact of the spreadof the COVID-19 pandemic. We have not changed our consolidated forecasts at this time because the impact on
the first quarter earnings was limited and the outlook going forward is uncertain. An announcement will be madepromptly if a forecast review is needed.

4

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet(Millions of yen)First quarter of 2020
(As of Mar. 31, 2020)2019(As of Dec. 31, 2019)
AssetsCurrent assets
Cash and deposits

16,513

16,806

Notes and accounts receivable-trade

12,093

11,017

Merchandise and finished goods
Real estate for sale
Work in process

813

966

16,373

12,545

84

92

Real estate for sale in process

26,23423,491

Other

4,814

5,252

Allowance for doubtful accounts

(6)

(4)

76,92070,167

5,919

5,254

Goodwill

436

205

Other

254

233

Total intangible assets

690

438

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Investments and other assets
Investment securities

856

750

Deferred tax assets

1,467

2,032

Leasehold and guarantee deposits

943

919

Other

777

787

Allowance for doubtful accounts

(224)

(224)

Total investments and other assets

3,820

4,265

Total non-current assets
Total assets

10,431

9,958

87,35280,125

1,402

1,190

Liabilities
Current liabilities
Notes and accounts payable-trade
Accounts payable-real estate business

1,004

267

Short-term borrowings

27,701

28,864

Accrued expenses

5,786

4,907

Advances received

9,395

3,184

Income taxes payable

1,226

591

Accrued consumption taxes

1,495

1,573

142

674

-

0

Provision for bonuses
Provision for bonuses for directors (and otherofficers)
Other

4,634

3,347

Total current liabilities

52,79044,601

8,592

8,257

182

158

1,573

1,588

Non-current liabilities
Long-term borrowings
Provision for retirement benefits for directors (andother officers)
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities

5

268

299

10,617

10,303

63,40854,905

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

(Millions of yen)First quarter of 2020
(As of Mar. 31, 2020)2019(As of Dec. 31, 2019)
Net assets
Shareholders’ equity
Share capital

787

985

Capital surplus

984

1,182

Retained earnings

20,98821,775

Treasury shares

(127)

(127)

Total shareholders’ equity

22,633

23,816

Valuation difference on available-for-sale securities

0

(16)

Foreign currency translation adjustment

0(3)Remeasurements of defined benefit plans

28

29

Accumulated other comprehensive income

29

10

Share acquisition rights

Total accumulated other comprehensive income

122

19

Non-controlling interests

1,159

1,374

Total net assets

23,94425,22087,35280,125

Total liabilities and net assets

6

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

(2) Quarterly Consolidated Statements of Income and Comprehensive Income(Quarterly Consolidated Statement of Income)(For the Three-month Period)(Millions of yen)First three months of 2020
(Jan. 1 – Mar. 31, 2020)

First three months of 2019
(Jan. 1 – Mar. 31, 2019)
Net sales
Cost of sales

30,61425,342

36,48030,463Gross profit

5,272

6,017

Selling, general and administrative expenses

5,109

4,658

162

1,358

7

8

14

42

42

36

63

87

46
20

44
8

67

52

Ordinary profit

159

1,393

Extraordinary income
Gain on sales of shares of subsidiaries and associates
Insurance claim income
Consumption taxes differential
Other

10
29
0

175
3
-

39

178

4
7

-

Operating profit
Non-operating income
Subsidy income
Income of support to investment in property andequipment
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses

Total extraordinary income
Extraordinary losses
Impairment loss
Loss on disaster
Total extraordinary losses
Profit before income taxes

12

-

187

1,571

Income taxes

210

(127)

Profit (loss)

(23)

1,699

Profit (loss) attributable to non-controlling interests

(34)

58

11

1,640

Profit attributable to owners of parent

7

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

(Quarterly Consolidated Statement of Comprehensive Income)(For the Three-month Period)First three months of 2019
(Jan. 1 – Mar. 31, 2019)(Millions of yen)First three months of 2020
(Jan. 1 – Mar. 31, 2020)

(23)

1,699

(4)

(16)

Foreign currency translation adjustment

4(6)Remeasurements of defined benefit plans, net of tax

4

1

Total other comprehensive income

4

(20)

(18)

1,678

13

1,621

(32)

56

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

8

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
World Holdings received payment for the new shares issued following the exercise of the second shareacquisition rights issued on March 10, 2015. These newly issued shares raised the share capital and capitalsurplus by 197 million yen each.
As a result, share capital was 985 million yen and capital surplus was 1,182 million yen at the end of the firstquarter of 2020.
Changes in Significant Subsidiaries during the Period
JW Solution Co., Ltd., which was a non-consolidated subsidiary in 2019, is included in the consolidated financial
statements starting in the first quarter of 2020 because of the increasing significance of this company. JW
Solution is classified as a significant subsidiary of World Holdings.
HOEIKENSETSU Co., Ltd., which was a significant subsidiary, is no longer included in the consolidated
financial statements from the first quarter of 2020 because World Holdings sold all shares of this company on
March 16, 2020.
The following information is provided even though these three actions were not a change in a significant
subsidiary.
WORLD INTEC AMERICA, INC., which was a non-consolidated subsidiary in 2019, is included in the
consolidated financial statements starting in the first quarter of 2020 because of the increasing significance of thiscompany.
COMPAX Co.,Ltd., which was a non-consolidated subsidiary in 2019, is included in the consolidated financial
statements starting in the first quarter of 2020 because of the increasing significance of this company.
HOEI HOME CO., LTD., which is a subsidiary of HOEIKENSETSU Co., Ltd., is no longer included in the
consolidated financial statements from the first quarter of 2020 because World Holdings sold all shares of
HOEIKENSETSU, which was a consolidated subsidiary in 2019, on March 16, 2020.
Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements
Calculation of tax expense
The tax expenses are calculated by first reasonably estimating the effective tax rate after the application of tax
effect accounting with respect to profit before income taxes for the fiscal year in which the quarter under review
falls, and multiplying that rate by the profit before income taxes for the quarter under review. However, World
Holdings uses legally stipulated effective tax rates to calculate tax expenses for cases in which using estimatedtax rates gives a noticeably irrational result.

9

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

Segment Information
I. First three months of 2019 (Jan. 1 – Mar. 31, 2019)
1. Information related to net sales and profit or loss for each reportable segment(Millions of yen)
Reportable segment
Information
Sales &
Factory Technology R&D
RealandMarketingStaffing
Staffing Staffing
Estate Telecommuni Subtotal
Staffing
Business Business BusinessBusiness-cations
Business
Business

Others(Note 1)

Total

Amounts
shown onAdjustquarterly
ments consolidated(Note 2) statement ofincome(Note 3)

Net sales
Sales toexternal
11,785
4,037 1,692
810
8,291
3,369 29,985
628 30,613
030,614
customers
Inter-segment
sales and
109
28
4
3
145
30
175 (175)transfers
Total
11,785
4,146 1,692
838
8,295
3,372 30,130
658 30,789 (174)
30,614
Segment
506
354
106
(17)
(23)
(88)
836
(126)
709 (546)
162
profit (loss)
Notes: 1. “Others” represent businesses not included in reportable segments and include the operation and management ofagricultural parks, the operation of personal computer schools, the production of websites and other services.
2. The -546 million yen adjustment to segment profit (loss) includes elimination for inter-segment transactions of 4
million yen, and -550 million yen in corporate expenses that cannot be allocated to any of the reportable segments.
Corporate expenses mainly consist of general and administrative expenses that are not attributable to any of thereportable segments.
3. Segment profit (loss) are adjusted to be consistent with operating profit shown on the quarterly consolidated
statement of income.

2. Information related to impairment losses on non-current assets or goodwill, etc. for each reportable segment
Impairment losses related to non-current assets
Not applicable.
Significant change in goodwill
Not applicable.
Significant gain on bargain purchaseNot applicable.

10

WORLD HOLDINGS CO., LTD. (2429) Financial Results for the First Quarter of 2020

II. First three months of 2020 (Jan. 1 – Mar. 31, 2020)
1. Information related to net sales and profit or loss for each reportable segment(Millions of yen)
Reportable segment
Information
Sales &
Others
Factory Technology
R&D
Real
and
MarketingStaffing
Staffing
Staffing
Estate Telecommuni- Subtotal (Note 1)
Staffing
Business Business BusinessBusinesscations
Business
Business

Total

Amounts
shown onAdjustquarterly
ments consolidated(Note 2) statement ofincome(Note 3)

Net sales
Sales toexternal
12,1144,207
1,750
997 14,238
2,492 35,800
679 36,480
36,480
customers
Inter-segment
sales and
123
45
4
2
176
27
204 (204)transfers
Total
12,1144,330
1,750
1,043 14,242
2,495 35,977
707 36,684 (204)36,480
Segment
466
462
170
8
861
91
2,061 (141)1,919 (560)
1,358
profit (loss)
Notes: 1. “Others” represent businesses not included in reportable segments and include the operation and management ofagricultural parks, the operation of personal computer schools, the product ion of websites and other services.
2. The -560 million yen adjustment to segment profit (loss) includes elimination for inter-segment transactions of 11
million yen, and -572 million yen in corporate expenses that cannot be allocated to any of the repor table segments.
Corporate expenses mainly consist of general and administrative expenses that are not attributable to any of thereportable segments.
3. Segment profit (loss) is adjusted to be consistent with operating profit shown on the quarterly consol idated
statement of income.

2. Information related to impairment losses on non-current assets or goodwill, etc. for each reportable segment
Impairment losses related to non-current assets
Not applicable.
Significant change in goodwill
Not applicable.
Significant gain on bargain purchaseNot applicable.

This financial report is solely a translation of “Kessan Tanshin” (in Japanese, including attachments), which has been
prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers
who prefer an English translation.

11