Summary of Financial Results
for the Third Quarter of Fiscal Year Ending December 2022
[Japanese Standards] (Consolidated)
November 8, 2022

Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listing: Prime Market, Tokyo Stock Exchange
Website: www.pigeon.com
Representative: Norimasa Kitazawa (President and CEO)Contact person: Nobuo Takubo (Managing Officer, Business Strategy Division Manager)/Tel: +81-3-3661-4204
Scheduled Filing Date of Quarterly Report: November 9, 2022
Scheduled Commencement Date of Dividend Payments: ―Preparation of Any Additional Explanatory Materials for Quarterly Financial Results: Yes
Holding of Any Briefing Session for Quarterly Financial Results: Yes (For analysts and institutional investors)

1. Consolidated Business Performance for the First Three Quarters of Fiscal
Year Ending December 31, 2022 (January 1 to September 30, 2022)(1) Consolidated Operating Results (cumulative)

3Q ended September 30, 2022

(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owners of Parent
70,7071.8%
9,103(12.8)%
10,774(8.5)%
6,948(3.3)%

3Q ended September 30, 2021
69,426(6.0)%
10,444(17.5)%
11,774(Note) Comprehensive income: 3Q ended September 30, 2022
¥13,232 million (40.6%)
3Q ended September 30, 2021
¥9,411 million (9.7%)
Net Income per Share (¥)(13.2)%

58.07－

3Q ended September 30, 2021

60.06

－

Total Assets

3Q ended September 30, 2022

Net Assets

103,917

FY ended December 31, 2021
98,042(Reference) Shareholders’ Equity: 3Q ended September 30, 2022
FY ended December 31, 2021

2. Cash Dividends(23.3)%

Diluted Net Income per
Share (¥)

3Q ended September 30, 2022

(2) Consolidated Financial Position

7,185

Equity Ratio (%)

81,031

74.7

76,810¥77,650 million¥73,885 million

75.4

Annual Dividend (¥)
1Q-end2Q-end3Q-endFY ended December 31, 2021
37.00－
FY ending December 31, 2022
38.00－
FY ending December 31, 2022
(Forecast)(Note) Changes in dividend forecasts from the most recent announcement: None

Year-end
－
－

Total

37.00

74.00

38.00

76.00

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending
December 31, 2022 (January 1 to December 31, 2022)
Net Sales
Millions of Yen(% figures denote year-on-year change from the previous term)
Net Income
Net Income per
Operating Income
Ordinary Income
Attributable to
Share
Owners of Parent% Millions of Yen% Millions of Yen

Full year
95,0002.1
12,000(10.0)
13,000(Note) Revision of forecasts from the most recent announcement: None

% Millions of Yen(11.3)

8,550

%

(2.7)

Yen

71.46

Notes
(1) Changes in major subsidiaries (or changes in specific subsidiaries that affect the scope of consolidation) during theperiod under review: None
New: － (Company name: － ), Excluded: － (Company name: － )(2) Application of any accounting procedures specific to preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, changes in accounting-based estimates, and restatements
1) Changes in accounting policies associated with revision of accounting standards: Yes
2) Changes in accounting policies other than the above 1): None
3) Changes in accounting-based estimates: None
4) Restatements: None
(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the period-end (including treasury stock)
3Q ended September 30, 2022: 121,653,486
FY ended December 31, 2021: 121,653,486
2) Amount of treasury stock at the period-end
3Q ended September 30, 2022: 1,996,448
FY ended December 31, 2021: 2,018,072
3) Average number of shares outstanding during the period (quarter accumulation)
3Q ended September 30, 2022: 119,649,732
3Q ended September 30, 2021: 119,635,556(Note) Amount of treasury stock at the period-end includes Company shares held by the board incentive plan (BIP) trust forcompensation of directors (102,956 shares as of 3Q ended September 30, 2022; 124,800 shares as of FY ended
December 31, 2021). Company shares held by the BIP trust for compensation of directors are also included in thetreasury stock subtracted in the calculation of the average number of shares outstanding during the period.

* Summaries of quarterly financial results are exempt from quarterly review by certified public accountants andauditing corporations.
* Cautionary Statement regarding Performance Forecasts
The forecasts and future projections stated in this report have been prepared on the basis of the information andassumption that shall be reasonable as of the date of announcement of this summary information, and the forecasts
and future projections stated in this report are in no way intended as a promise of achievement as a company.
In addition, the actual results could differ significantly from forecast figures depending on a variety of factors. See
the section “(3) Explanation of Consolidated Performance Forecast and Other Future Predictions” in “1. Qualitative
Information Regarding the Financial Results for the Current Quarter” on page 4 regarding conditions which arepreconditions for business performance forecasts and cautions for using the business performance forecast.

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

Table of Contents of the Appendix
1. Qualitative Information Regarding the Financial Results for the Current Quarter.......................... 2(1) Explanation of Business Performance ......................................................................................... 2(2) Explanation of Financial Position ............................................................................................... 4(3) Explanation of Consolidated Performance Forecast and Other Future Predictions .................... 4
2. Quarterly Consolidated Financial Statements and Main Notes ....................................................... 6(1) Quarterly Consolidated Balance Sheets ...................................................................................... 6(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income .............................................................................................................. 8
Quarterly Consolidated Statement of Income(Scope of Consolidation of Third Quarter)................................................................................. 8
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of Third Quarter)................................................................................. 9(3) Notes on Consolidated Financial Statements ............................................................................ 10(Notes Regarding Going Concern Assumptions) ...................................................................... 10(Change in Accounting Policy) ................................................................................................. 10(Notes Regarding Substantial Changes in Shareholders’ Equity) ............................................. 10(Segment Information) .............................................................................................................. 111

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

1. Qualitative Information Regarding the Financial Results for the Current Quarter(1) Explanation of Business Performance
During the consolidated first-nine-month period under review, conflicting factors were at work in
the Japanese and global economies. In the Japanese economy, despite rising prices for raw materials
and crude oil and rapid depreciation of the Japanese yen against the US dollar, personal
consumption continued to recover gradually, as restrictions on activity were eased following a newwave of COVID-19 infections. In the global economy, recovery began as the worldwide COVID-19
pandemic shifted into an endemic phase. However, rapid increases in the prices of goods, supply
squeezes and other factors heightened the risk of economic downturn, blunting the pace of recovery.
Amid such circumstances, the Group has established three basic strategies (brand strategy, coreproduct strategy, and regional strategy) in its Seventh Medium-Term Business Plan (for the period
between the fiscal year ended December 2020 and the fiscal year ending December 2022) that wasformulated in February 2020. Now, in the final year of the Plan, guided by these basic strategies, weare implementing various measures for business growth, as well as to realize our purpose which is“we want to make the world more baby-friendly by furthering our commitment to understanding andaddressing babies' unique needs.”
Sales results varied by region during the period under review. Unforgiving conditions persisted for
the China Business, as the COVID-19 pandemic continued its spread from the start of the fiscal
year and the government imposed a zero-COVID policy, including lockdowns in Shanghai andelsewhere in 2Q, in response. On the other hand, sales were brisk in the Singapore Business andLansinoh Business, and depreciation in the Japanese yen gave a boost to revenue figures. Net sales
appreciated slightly to ¥70,707 million (up 1.8% YOY). In earnings, globally high raw-material
prices and shipping expenses caused a deterioration in cost rates while the reopening of economic
activity in various countries prompted concerted use of selling, general and administrative expenses.
Operating income dropped to ¥9,103 million (down 12.8% YOY), ordinary income fell to ¥10,774
million (down 8.5% YOY) and net income attributable to owners of parent slipped to ¥6,948
million (down 3.3% YOY).
The main exchange rates used in the preparation of this nine-month period’s financial statements for
the Company’s overseas consolidated subsidiaries (revenues and expenses) are as follows:
・1 US$: 128.31 yen (108.54 yen)
・1 CNY: 19.38 yen (16.77 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
From the fiscal year ended December 31, 2020, the Group has a total of four reporting segments:
the Japan Business, China Business, Singapore Business, and Lansinoh Business.
An outline of each segment is given below.
Japan BusinessThis segment consists of businesses such as the Baby Care Business, Child Care Service Business,and Health & Elder Care Business. Net sales for the entire segment amounted to ¥26,726 million(down 8.7% YOY). Segment profit decreased compared to the same period of the previous fiscal
year to ¥924 million (down 45.2% YOY), pulled down by factors such as a decrease in gross profit
caused by the decline in net sales and high procurement prices.
In the Baby Care Business (childcare and feminine products), net sales were down year-on-year.
Contributing factors included a seventh wave of COVID-19 infections, which prompted people torestrict their own outings, and a reorientation of consumer sentiment toward lower-priced options as
a result of inflation. On the other hand, sales continued to be strong for nursing bottles and breast
pumps, both mainstay product areas for Pigeon, particularly products overhauled in February.
However, some consumables, such as baby wipes, declined YOY amid intensified pricecompetition. In the skincare category, sales struggled as overseas demand declined but, as a new

2

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

product-value proposition, the Group enhanced its product line with offerings such as attractively
packaged moisturizing lotions adopting eco-friendly paper-cube packs. Additionally, Pigeon
launched sonaetta, its first disaster preparedness series for babies, in August, and POCHItto, a steam
disinfecting and drying solution for nursing bottles that automates all processes from steam
disinfection to drying, in September, at baby-product boutiques across Japan.
The Group was also active in direct communications. We offered live presentations of theBreastfeeding Seminar, a maternity seminar that provides a fun way to learn about breastfeeding.
Over 2,400 expectant mothers and others attended these seminars. For medical professionals, theGroup presented an online seminar that attracted over 1,100 viewers. In order to alleviate theanxiety of mothers and fathers in the era of living with COVID-19, we are continuing to work toenergize mutual communication and support content provided via the internet and social media. We
will also continue to make further improvements according to the needs of our customers in thecontents of “Pigeon Info,” which is a website that supports women during pregnancy, childbirth,and childcare.
In products for health and elder care, net sales decreased YoY, as the Group rejigged this category’s
product lineup to improve gross profit margin from the previous fiscal year. However, an improving
effect on profit margin is gradually emerging. The Group is continuing its thorough implementationof measures such as bolstering sales activities with respect to retail outlets, elder-care facilities andother partners and improving the quality of elder-care services.
Regarding child care service, during the consolidated first nine-month period under review, we
currently provide services at 64 in-company child-care facilities, and shall continue to develop thisbusiness further while striving to improve the quality of service content.
China BusinessNet sales in this segment amounted to ¥26,220 million (down 5.1% YOY), and segment profit also
decreased compared to the same period of the previous fiscal year to ¥8,100 million (down 11.6%
YOY). As China continued to face the spread of the COVID-19 pandemic from the beginning of
this fiscal year, lockdowns were imposed in Shanghai in 2Q and lifted in June. Pigeon
manufacturing and sales activities revived from July onward and logistical disruptions generally
drew to a close. However, a strict “zero COVID” policy remains in effect in China.
In Mainland China, the Group completed product-line revisions on online sales channels for the
Shizen Jikkan nursing bottle series (marketed as Bonyu Jikkan® in Japan), whose overhaul and startof advance sales had been accomplished in September 2021. On offline channels, the switchover isproceeding step by step. In the skin-care product category, the Group drew on research on babies’skin to launch a line of skin-care products for children ages three and up, thereby expanding its
range of categories in the China market.
This fiscal year the Group is launching sales of Pigeon-brand baby products in North America. By
disseminating information, mainly online, and through communication with experts, the Group is
striving to increase recognition and brand value.
Going forward, the Group plans to expand interactive communication activities with consumers
through its e-commerce platform, while continuing to strengthen activities at hospitals, maternity
clinics and the like. In these ways, we are working to multiply contact points with customers andexpand our operations.
Singapore BusinessNet sales of the segment amounted to ¥10,772 million (up 17.5% YOY), and segment profit
increased to ¥1,978 million (up 46.1% YOY).
This segment is responsible for operations in the ASEAN region and India. As these regions
continued to recover from the COVID-19 pandemic, net sales and profits both rose in key countries
such as India, Indonesia, Malaysia and Singapore. In the nursing-bottle category, the Group began arevamp of its mainstay SofTouch nursing bottle series (marketed as Bonyu Jikkan® in Japan),starting with China and Japan and proceeding to other major countries in August, and sequentiallyrolled out nursing bottles made with T-Ester, a new plastic as transparent as glass. In the skin-carecategory, the Group deployed Natural Botanical Baby, a new skin-care series, in more than 15
countries and regions, and is now extending sales at major retailers in each country.
3

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

Moving forward, we will continue to advance the development and launch of products for theupper-middle class, while actively developing sales and marketing activities to achieve market
penetration of Group brands.
Lansinoh BusinessNet sales of the segment amounted to ¥12,384 million (up 29.5% YOY), while segment profit
decreased to ¥476 million (down 33.7% YOY).
North America and Europe, two vital markets for the segment, suffered continued delays in productarrivals and shipments due to disruptions in logistics. In North America, net sales in this region rose
YOY in local-currency terms, as sales were firm for nipple care creams and breast pumps, which
are mainstay products, and sales swelled for prenatal and postnatal care products, launched theprevious year. Meanwhile, in parts of Europe such as Germany and the United Kingdom, the highcost of living dampened consumer activity, causing net sales in this region to fall YOY in
local-currency terms.
Profits were down YoY. Logistical costs such as marine transportation expenses persisted at a highlevel, affecting unit costs, shipping expenses and other factors. Product development and vigorous
marketing activities also contributed to expenses.
Moving forward, to expand its business further, the Group is implementing initiatives such asenhancing our product lineup, strengthening e-commerce, implementing marketing activities
tailored to consumer behavior in each region, and carrying out brand-strengthening activities.
(2) Explanation of Financial Position(Assets)
As of September 30, 2022, our Group recorded total assets of ¥103,917 million, up ¥5,874 million
from the previous consolidated fiscal year ended December 31, 2021. Current assets increased by¥2,564 million, and fixed assets increased by ¥3,310 million.
Current assets increased mainly due to increases in notes and accounts receivable - trade of ¥1,629
million and in merchandise and finished goods of ¥1,862 million, despite a decrease in cash anddeposits of ¥2,200 million.
Fixed assets increased mainly due to increases in buildings and structures of ¥1,285 million and inother tangible fixed assets of ¥1,705 million.
(Liabilities)
As of September 30, 2022, our Group recorded total liabilities of ¥22,885 million, up ¥1,653
million from the previous consolidated fiscal year ended December 31, 2021. Current liabilities
increased by ¥1,607 million, and fixed liabilities increased by ¥46 million.
Current liabilities increased mainly due to an increase in notes and accounts payable - trade of¥1,684 million.
Fixed liabilities increased mainly due to an increase in net defined benefit liability of ¥146 million.
(Net Assets)
As of September 30, 2022, our Group recorded total net assets of ¥81,031 million, up ¥4,221
million from the previous consolidated fiscal year ended December 31, 2021.
Net assets increased mainly due to an increase in foreign currency translation adjustment of ¥5,745
million, despite a decrease in retained earnings of ¥2,033 million.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
The number of new COVID-19 infections is declining worldwide, while vaccination rates are
improving. Against this background, the reopening of economies (restarting of economic activity) is
progressing. However, the outlook for trends in the foreign-exchange market and other matters is
unclear at the time of writing. Consequently, the impact of these factors on the business results of
the Pigeon Group are challenging to calculate. However, in view of the business results for the
consolidated first half of this fiscal year, the forecast of the Group’s business results for the full4

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

fiscal year, announced on February 15, 2022, is revised as follows: As of August 9, 2022, the Group
forecasts net sales of ¥95,000 million (down 3.7% from the previous forecast), operating income of¥12,000 million (down 15.5% from the previous forecast), ordinary income of ¥13,000 million(down 9.1% from the previous forecast) and net income attributable to owners of parent of ¥8,550
million (down 10.0% from the previous forecast).

5

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

2. Quarterly Consolidated Financial Statements and Main Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)

At December 31, 2021
ASSETS
I. Current Assets:
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:
Buildings and structures, net
Land
Other tangible fixed assets, net
Total Tangible Fixed Assets
2. Intangible Fixed Assets:
Goodwill
Other intangible fixed assets
Total Intangible Fixed Assets
3. Investments and Other Assets:
Other
Allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets
LIABILITIES
I. Current Liabilities:
Notes and accounts payable - trade
Electronically recorded obligations - operating
Income taxes payable
Accrued bonuses to employees
Provision for expenses related to voluntary productrecallProvision for loss on litigation
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Net defined benefit liability
Provision for share-based remuneration
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities

6

At September 30,
2022

35,21816,253
8,723
623
3,359
2,270
(194)
66,25433,01817,882
10,585
607
4,566
2,404
(246)
68,818

9,125
7,272
10,69527,093

10,411
7,427
12,401
30,239

534
2,037
2,572

479
2,175
2,654

2,123
(0)
2,122
31,78898,042

2,205
(0)
2,204
35,099103,917

4,087
1,623
1,180
882

5,771
1,628
1,410
1,448

18

－

9
7,268
15,072

8
6,411
16,679

478
313
5,367
6,159
21,232

625
288
5,292
6,206
22,885

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

(Millions of yen)
At December 31, 2021

At September 30,
2022

Capital stock

5,199

5,199

Capital surplus

5,179

5,131

Retained earnings

61,16359,129Treasury stock(1,479)(1,387)

Total Shareholders’ Equity

70,062

68,07216

26

Foreign currency translation adjustment

3,805

9,551

Total Accumulated Other Comprehensive Income

3,822

9,577

III. Non-controlling Interests

2,925

3,381

Total Net Assets

76,81081,031

Total Liabilities and Net Assets

98,042103,917NET ASSETS
I. Shareholders’ Equity:

II. Accumulated Other Comprehensive Income:
Valuation difference on available-for-sale securities

7

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income
Quarterly Consolidated Statement of Income(Scope of Consolidation of Third Quarter)(Millions of yen)

I. Net Sales
II. Cost of Sales
Gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Non-operating Income:Interest income
Dividend income
Subsidy income
Foreign exchange gains
Other non-operating income
Total Non-operating Income
V. Non-operating Expenses:
Interest expenses
Other non-operating expenses
Total Non-operating Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of fixed assets
Gain on sales of investment securities
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of fixed assets
Loss on disposal of fixed assets
Expenses related to voluntary product recall
Total Extraordinary Loss
Income before Income Taxes
Income taxes - current
Income taxes - deferred
Total Corporate Income Tax
Net Income
Net Income Attributable to Non-controlling Interests
Net Income Attributable to Owners of Parent

8

Nine months ended
September, 2021
69,42636,24733,17922,735
10,444

Nine months ended
September 30, 2022
70,70737,51033,19724,093
9,103

125
126
708
274
162
1,397

121
12
761
631
240
1,768

46
21
67
11,77469
27
97
10,774

5
54
59

5
－
5

1
36
866
903
10,930
3,722
(124)
3,597
7,332

1
29
－
31
10,749
3,674
(35)
3,638
7,110

147

162

7,185

6,948

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of Third Quarter)(Millions of yen)

Net Income
Other Comprehensive Income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total Other Comprehensive Income
Quarterly Comprehensive Income(Break down)
Quarterly comprehensive income on parent
company
Quarterly comprehensive income on
non-controlling interests

9

Nine months ended
September, 2021
7,332

Nine months ended
September 30, 2022
7,110

0
2,078
2,078
9,411

10
6,112
6,122
13,232

9,311

12,69699536

Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

(3) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Change in Accounting Policy)(Application of Accounting Standards, etc., Related to Fair Value Measurement)
The Group applies the Accounting Standard for Fair Value Measurement (ASBJ Statement No.
30, July 4, 2019; hereinafter, “the Accounting Standard for Fair Value Measurement”) fromthe beginning of the consolidated first quarter of this fiscal year. In accordance with thetransitional handling stipulated in the Accounting Standard for Fair Value Measurement,
Paragraph 19, as well as the Accounting Standards for Financial Instruments (ASBJ Statement
No. 10, July 4, 2019), Paragraph 44-2, the Group applies the new accounting policy stipulated
in the Accounting Standard for Fair Value Measurement, etc. going forward. This change does
not affect the quarterly consolidated financial statements.
(Notes Regarding Substantial Changes in Shareholders’ Equity)
Not applicable.

10Pigeon Corporation (7956) Summary of Financial Results for the Third Quarter of Fiscal Year Ending December 2022

(Segment Information)
Nine months ended September 30, 2021
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)AmountAccounted on
Quarterly
Consolidated
Statement of
Income(Note 2)

Reporting Segment

Japan Business

China Business Singapore Business Lansinoh Business

Adjustments(Note 1)Total

Net sales
Net sales toexternal customers

26,87827,451

5,553

9,543

69,426－69,426

Internal sales or
exchange between
segments

2,389

188

3,617

19

6,214

(6,214)－

Total

29,26727,640

9,170

9,562

75,641(6,214)69,426

Segment profit

1,686

9,161

1,354

718

12,920(2,476)

10,444(Notes)1. The negative amount of ¥2,476 million from adjustments in segment profit includes negative ¥31 million in eliminationof intersegment transactions and negative ¥2,444 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
2. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

Nine months ended September 30, 2022
1. Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)

Reporting Segment

Japan Business

China Business Singapore Business Lansinoh Business

Adjustments(Note 1)Total

Net sales

AmountAccounted on
Quarterly
Consolidated
Statement of
Income(Note 2)

Net sales toexternal customers

25,27225,821

7,241

12,37270,707－70,707

Internal sales or
exchange between
segments

1,453

398

3,531

12

5,396

(5,396)－

Total

26,726

26,22010,772

12,384

76,104(5,396)70,707

Segment profit

924

8,100

1,978

476

11,480(2,376)

9,103(Notes)1. The negative amount of ¥2,376 million from adjustments in segment profit includes negative ¥23 million in eliminationof intersegment transactions and negative ¥2,353 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
2. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

11