Summary of Financial Results for the 1st Quarter of Fiscal YearEnding January 2015
[Japanese Accounting Standards] (Consolidated)
June 2, 2014
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listings: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Shigeru Yamashita (President and Representative Director)
Contact: Tsutomu Matsunaga (Managing Officer, Corporate Planning & Administration Division)/Tel: +81-3-3661-4188
Scheduled Date to file Quarterly Reports: June 6, 2014
Scheduled Date to Commence Dividend Payment: Not yet scheduled
Supplementary explanatory materials prepared for the quarterly financial results: None
Explanatory meetings for the quarterly financial results: None

1. Consolidated Operating Results for the 1st Quarter of Fiscal Year Ending
January 2015 (February 1 to April 30, 2014)(1) Performance (on a cumulative basis)(¥ million, rounded down, % figures denote year-on-year change from the previous nine months)
Net Sales
Operating Income
Ordinary Income
Net Income
1Q of Fiscal Year ending Jan 2015

18,859

11.6%

2,683

40.3%

16,89517.8%
1,913(Note) Comprehensive income: 1Q of Fiscal Year ending January 2015
1Q of Fiscal Year ended January 2014

1Q of Fiscal Year ended Jan 2014

Net Income per
Share (¥)
44.35

1Q of Fiscal Year ending Jan 2015

2,659

21.6%

1,772

33.5%

35.9%
2,187
36.1%
¥871 million ((68.0%));¥2,727 million (54.0%)

1,328

26.4%

Diluted Net
Income Per Share
(¥)
－

33.18
－
(Note) The Group carried out a 2-for-1 stock split with respect to its common stock, effective as of August 1, 2013.
The figures for quarterly net income per share are calculated on the assumption that this stock split had been conducted at the
beginning of the previous fiscal year.

1Q of Fiscal Year ended Jan 2014

(2) Consolidated Financial Position
Total Assets
1Q of Fiscal Year ending Jan 2015

Net Assets

61,832

1Q of Fiscal Year ended Jan 2014
57,955(Reference) Shareholders’ Equity: 1Q of Fiscal Year ending January 2015
1Q of Fiscal Year ending January 2014

Equity Ratio (%)

38,122

60.3

39,981¥37,282 million¥ 39,124 million

67.5

2. Dividend Payment
Annual Dividend (¥)
1Q

2Q

Year-end
55.00

－

90.00

66.00

－

Full-year

Fiscal Year ending Jan 2015－
Fiscal Year ending Jan 2015
45.00
45.00
－
(Forecast)(Note) Changes in dividend forecasts to the most recent announcement: None.
The Group carried out a 2-for-1 stock split with respect to its common stock, effective as of August 1, 2013.

Fiscal Year ended Jan 2014－

3Q

3. Forecast for the Consolidated Operating Results(February 1, 2014 to January 31, 2015)
Net Sales(% figures denote year-on-year change from the previous nine months)
Operating
Ordinary
Net Income per
Net Income
IncomeIncomeShare (¥)

Full year
84,5009.1% 11,600 11.9% 11,800(Note) Changes in dividend forecasts to the most recent announcement: None

7.3%

7,300

4.5%

182.38* Notes(1) Changes in significant subsidiaries during the period under review (Changes in specific subsidiaries accompanying
changes in scope of consolidation): None.
(2) Adoption of special accounting methods to preparation of quarterly consolidated financial statements: None.
(3) Changes in accounting policies, changes in accounting estimates, and restatements
1) Changes in accounting policies pursuant to revision of accounting standards: No
2) Changes in accounting policies other than the above 1): Yes
3) Changes in accounting estimates: No4) Restatements: No(Note)
From the first quarter of the consolidated current term, the depreciation method has been changed and this change
is applicable to “a case when it is difficult to distinguish between a change in an accounting policy and a change
in an accounting estimate”. For further information, please refer to 2. Summary Information (Notes) and related
items: (3) Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements on page 6.
(4) Number of outstanding shares (common stock)1) Number of outstanding shares issued at the term-end (including treasury stock)
1Q of Fiscal Year ending January 2015: 40,551,162
1Q of Fiscal Year ended January 2014: 40,551,162
2) Number of treasury stock for the period-end
1Q of Fiscal Year ending January 2015: 629,672
1Q of Fiscal Year ended January 2014: 525,652
3) Average number of shares outstanding during the fiscal year (on a cumulative basis of the quarters)
1Q of Fiscal Year ending January 2015: 39,966,223
1Q of Fiscal Year ended January 2014: 40,026,704* Indication regarding the situation of quarterly review procedures
Financial results for this first quarter is not the subject of a quarterly review procedure based on the Financial
Instruments and Exchange Act, and at the point in time when these financial results were disclosed, review
procedures for quarterly financial statements based on the Financial Instruments and Exchange Act had not been
completed.
* 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 actual
results could differ significantly from forecast figures depending on a variety of factors.
For the information regarding performance forecasts, please refer to “(3) Qualitative Information Regarding
Consolidated Performance Forecasts” on page 4.

Table of Contents of the Appendix
1. Qualitative Information concerning Financial Performance for the Current Quarter ...................... 2(1) Qualitative Information Regarding Consolidated Business Results ........................................... 2(2) Qualitative Information Regarding Consolidated Financial Position ......................................... 3(3) Qualitative Information Regarding Consolidated Performance Forecasts .................................. 4
2. Summary Information (Notes) and Related Issues .......................................................................... 5(1) Significant Changes in Subsidiaries during the Period Under Review ...................................... .5(2) Adoption of Special Accounting Procedures for Quarterly Consolidated Financial Statements.5(3) Changes in Accounting Policies, Changes in Accounting Estimates, Restatements .................. 6
3. Quarterly Consolidated Financial Statements .................................................................................. 7(1) Quarterly Consolidated Balance Sheets ...................................................................................... 7(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statement ofComprehensive ................................................................................................................................. 9
Quarterly Consolidated Statements of Income
1st Quarter ended April 30, 2014.............................................................. ........................ ........9
Quarterly Consolidated Statement of Comprehensive Income
1st Quarter ended April 30, 2014... ......................................................................................... 10(3) Notes Regarding Going Concern Assumptions...…................................................ ..................11(4) Notes Regarding Substantial Changes in Shareholders’ Equity ............................................... 11(5) Segment Information ................................................................................................................. 111

1. Qualitative Information Regarding the Financial Performance for the Current Quarter(1) Qualitative Information Regarding Consolidated Business Results
In the first quarter of this consolidated fiscal year under review, Japan`s economy continued torecover at a moderate pace. Business earnings improved and capital investments rose, supported bygovernment`s economic and financial policies.
Overseas, there is a slowdown in emerging countries and an uncertainty over the future of politicalinstability in Europe. Also there is a persistent risk of downward pressures on Japanese economy,such as a weaker consumer spending after raising the consumption tax rate.
Amid such economic circumstances, our Group has issued its fifth medium-term business plan (forthe period between the fiscal year ending January 2015 and the fiscal year ending January 2017),
and has put up the following slogan, “Pursuing world class business excellence, think globally, plan
agilely, and implement locally”. Thus, our Group have made a fresh start in this first year for theplan to be implemented. Also, as its business policy, our Group aims at expanding its business andimproving management quality by providing the following "Vision 2016".
Vision 2016i) Strengthening brand power (Global Number One manufacturer of baby and child care products)ii) Reinforcing the management system toward a sustainable growth of the Group`s businessiii) Improving management quality by focusing on cash flowiv) Fostering the Group`s global personnel, establishing human resources systems and promoting its
employee`s activitiesv) Further enhancing corporate value
During the consolidated period under review we have been developing the above business policies,
and strategies for each business and function. As a result, net sales for the period amounted to¥18,859 million (up 11.6% YOY), due to factors including healthy business expansion in Overseas
Business centered on operations in China. Regarding earnings, operating income rose to ¥2,683
million (up 40.3% YOY), ordinary income recorded ¥2,659 million (up 21.6% YOY), and net
income was ¥1,772 million (up 33.5% YOY), which means each significantly exceeded theprevious corresponding result. This was due to a reduction of approximately 0.9 percentage points
in the sales cost ratio from the previous same period, as a result of increased sales and efficientutilization of production bases accompanying business expansion.
So far, "Domestic Baby and Mother Care Business", "Child-rearing Support Services", "HealthCare and Nursing Care Business" and "Overseas Business" have been identified as the Group`sreporting segments. However, from this first consolidated quarter of the fiscal year under review,
we separated our China-related operations from the "Overseas Business", which is why there is now
a total of five reporting segments. Each segment is outlined below.
The following comparisons with the prior year quarter have been made with figures for the prioryear quarter reclassified into the segmentation after such change.
Domestic Baby and Mother Care BusinessNet sales in this segment were ¥6,057 million (up 1.8% YOY). Segment profits increased ¥1,050
million (up 33.7% YOY). This resulted from an increase in selling, general and administrative
expenses due to reviewing marketing expenses.
In this segment, we have released products such as a reversible stroller "Mahalo" designed to ensure
the comfort of the baby, an electric breast pump called "SAKU NYUKI DENDO First Class",
which provides a comfortable breastfeeding routine while reducing frustrations of any motherwilling to breastfeed her baby, and also "Pigeon's Skin Care Products" formulated with moisturizing
ingredients close to those found in baby's vernix. Moreover, during the first quarter of the2

consolidated period under review, we have held a number of events planned as a part of our directcommunications program such as our "Ante-Natal Classes" for women expecting to give birth in
the near future and "Women Meeting for Pregnancy Training" for those who are preparing for
pregnancy, organized for three times. A total of approximately 240 women have participated.
We have conducted a renewal of top page, making good progress in providing to our customers amore easily accessible “Pigeon Info”—a word-of-mouth community portal that supports women
during pregnancy, in childbirth, and those raising children.
Child-rearing Support Services
Net sales of the segment amounted to ¥178 million (up 1.8% YOY). Although there has been an
increase in cost for recruitment due to current shortage of nursery teachers, the segment profits roseto ¥35 million (up 51.6% YOY), as gross profit improved. We have launched two in-house nursery
facilities and while improving the service quality, the Group is steadily promoting sales.
Furthermore, since April we have implemented a mathematical experience program in Preschool
Educational Facilities, called "Math Program", with much favorable feedback.
Health Care and Nursing Care BusinessNet sales of the segment amounted to ¥7,327 million (up 8.0% YOY). In addition to an increase ingross profit, efforts have been made toward the effective use of selling, general and administrative
expenses, while segment profits amounted to ¥123 million (up 44.9% YOY).
In February, we launched in this segment "Recoup KARURU", a new baby underwear which
maintains conventional products' properties in absorption of liquids, and still it is more comfortable
and has improved its functionality in urine leakage absorption.
The Group will continue to focus on marketing products through intensive research on priority
categories and to ensure sales activities focusing on facility routes are carried out considerately.
Overseas Business
Sales of the segment amounted to ¥5,143 million (up 15.9% YOY). Segment profits amounted to¥119 million (up 19.2% YOY).
In India, we are continuing to actively expand sales and marketing activities with a view to establish
our brand on the market. In the future we intend to further strengthen the sales/distribution system
and also to tune up the product supply organization.
Full-scale sales of baby bottles have been launched this January in North America, and we aim tocontinue expanding the business, by means of expanding product categories and consolidating ourorganizational structure.
China BusinessNet sales of the segment amounted to ¥489 million (up 32.8% YOY). Although the selling, generaland administrative expenses increased as a result of marketing activities conducted along with anactive expansion of the business, the segment profits amounted to ¥1,328 million (up 39.3% YOY).
This segment recorded an increase in net sales and segment profits from the previous same period,
assisted by the effects of a steady growth in product categories such as baby bottles and baby bottle
nipples, due to continuous reinforcement of marketing and sales promotion activities.
Furthermore, sales of disposable diapers for babies released last July, have gradually increased,
despite initial forecast drop, and we aim to further expand sales in the future.
Others
Net sales in this segment amounted to ¥342 million (up 19.8% YOY), as OEM product orders
increased. The segment profits amounted to ¥51 million (up 52.7% YOY).
(2) Qualitative Information Regarding Consolidated Financial Position3

As of the first consolidated quarter end of the fiscal year under review, the Group has recorded total
assets of ¥61,832 million, up ¥3,877 million from the previous fiscal year end.
Current assets had an increase of ¥3,613 million, and fixed assets rose up to ¥263 million. The
major factor boosting current assets was a ¥2,541 million increase in cash and deposits, and a ¥543
million increase in goods and products.
Fixed assets increased mainly due to an increase of ¥1,134 million in construction in progress,
despite a decrease of ¥235 million in machinery, equipment and vehicles.
As of the first consolidated quarter end of the fiscal year under review, the Group has recorded total
liabilities of ¥23,710 million, up ¥5,736 million from the previous fiscal year end.
Current liabilities had an increase of ¥716 million, and fixed liabilities rose up to ¥5,019 million.
Current liabilities increased mainly due to an increase of ¥413 million in notes and accounts
payable and of ¥428 million in other ones, despite a decrease of ¥288 million in income taxes
payable.
As of the first consolidated quarter end of the fiscal year under review, the Group has recorded total
net assets of ¥38,122 million, up ¥1,858 million from the previous fiscal year end.
(3) Qualitative Information Regarding Consolidated Performance Forecasts
For the "Fifth Medium-Term Business Plan (for the period between the fiscal year ending January
2015 and the fiscal year ending January 2017)", the Group has put up the following slogan,“Pursuing world class business excellence, think globally, plan agilely, and implement locally”.
Also, our Group has made a fresh start in this first year for the plan to be implemented.
We will further develop and enhance our business operating system, while pursuing in the
improvement of management quality and steadily implementing the measures grounded on the
newly formulated strategies for each business segment and the functional strategy that serves as thefoundation thereof.
Especially concerning the overseas business which the Group positions as a growing field, we willcontinue to expand and enrich business in the existing markets concentrated in China and North
America, and in addition, we will pursuit our goal to further expand performance, due to actively
pursuing new markets.
The Group aims to corporate business expansion and improvement of management quality, since it
has established the following “Vision 2016” and “Business and Functional Strategies”. In thisconsolidated fiscal year, the first year of our fifth medium-term business plan, we will strive toensure completion of our plans.
"Vision 2016"i) Strengthening brand power (Global Number One manufacturer of baby and child care products)ii) Reinforcing the management system toward a sustainable growth of the Group`s businessiii) Improving management quality by focusing on cash flowiv) Fostering the Group`s global personnel, establishing human resources systems and promoting its
employee`s activitiesv) Further enhancing corporate value■ Summary of Business and System Strategies
Overseas Business・Key markets: Cultivation and deep penetration of markets in the prioritized countries from theirmarket potential, including a medium-to-long-term perspective・Key categories: Focusing our efforts on the categories that can make the most of Pigeon`s"strengths". (Baby bottles and nipples, breast pump, pacifiers, skin care products, and nursing pads)
・Activities in hospitals: Synergy between horizontal deployment of a model for activities in
hospitals and strengthening brand power
1) Chinese market- Business expansion
・Growth of existing categories and growth in new products such as disposable diapers- Strengthening its operating base4

・Capital investment in line with business expansion
・Cost containment and stable supply benefits of automation in the production lines
・Further strengthening of its organizational system in line with business expansion2) U.S. and European markets- Enhancement of our brand power in breastfeeding corporate support
・Feeding device: Introducing the actual experience of breastfeeding provided by NEXT in themarkets of European and the United States markets
・Strengthening its total support to child care scene in terms of "Expressing breast milk → Storing→ Feeding"・Reinforcement of activities in hospitals- Business expansion in Central and South America and cultivation of new markets
3) Asian and the Near and Middle Eastern markets- Growth centered on five key categories (baby bottles, baby bottle nipples, breast pump, pacifiers,
skin care products, and breast pads)- Further strengthening of Pigeon`s products and accelerating their market penetration- India: Operating plants for local production and bolstering marketing functions
Domestic Business
Baby and Mother Care Business
The Group aims to develop business growth in the existing fields and to improve profitability, by
improving the profitability of current businesses and achieving solid growth for large-scalebusinesses in the segment of Baby and Mother Care, but also by reinforcing the management
system focused on nursing care facility routes, and marketing products with a competitive
advantage in the segment of Health Care and Nursing Care.
1) Domestic Baby and Mother Care Business- Improve profitability of current businesses- Establish a large-scale merchandise business and consider entering in new categories
2) Health Care and Nursing Care Business- Reinforce sales in nursing care facility routes- Achieve growth in both facilities and existing routes by marketing products with competitive
advantage- Further enhancement of nursing care service quality
3) Child-rearing Support Services- Further improve child-rearing quality and achieve a steady business growth- Foster human resources to ensure a high quality child-rearing
Functional strategies
1) Research and Development- Enrich researches on "Baby Theories" and improve our product development capabilities bymeans of a consistent customer orientation.
- Establish and strengthen a structure for global business development by reviewing functions
related to research, planning and development
2) Quality Control- Reinforce quality control functions of each production site
- Establish the PIGEON PRODUCTIVE MANAGEMENT (PPM) system
3) Production, Procurement and Logistics- Reduce costs by implementing an efficient production, procurement and logistics system- Establish a Global Supply Chain Management system.
4) Global Human Resources System- Foster individuals capable of playing an active role in global society and establish such humanresources system, while meeting the further expansion of our business overseas.
5) Global Headquarters- Reinforce the Corporate Center`s functions
・Strengthen planning and promotion functions of Group strategies
5・Strengthen functions toward compliance and fulfillment of our corporate social responsibility
Consolidated performance forecasts for the Group remain unchanged from the forecasts announced
on March 3, 2014.
2. Issues Regarding Summary (Notes) Information(1) Significant Changes in Subsidiaries During the Period Under Review
Not applicable.
(2) Adoption of Special Accounting Procedures for Quarterly Consolidated Financial
Statements
Not applicable.
(3) Changes in Accounting Policies, Changes in Accounting Estimates, Restatements(Changes in accounting policies)
Change in the method for determining depreciation of tangible fixed assets
The Group and its consolidated subsidiaries previously used the declining-balance method for depreciation and amortization ofproperty, plant and equipment (straight-line method had been applied to buildings, excluding facilities attached to buildings, acquired
after April 1, 1998), but effective from this consolidated fiscal year, the straight-line method has been applied to all tangible fixed
assets.
In the Group’s fifth medium-term business plan, effective from this current consolidated fiscal year, taking into consideration theGroup’s further global business development going forward and the substantial growth in corporate earnings expected overseas, thechange in method was made following a review of the investment effect of tangible fixed assets from the perspective of integratingGroup accounting policies and properly adjusting periodic income, as it has been motivated by changes in the Group’s capital
investment circumstances.
Consequently, property, plant and equipment held by the Group and its consolidated subsidiaries generally are subject to steady
operation over their expected lifetime. In addition, as we can expect also from the Group’s product lines to generate stable profits, thechange has been implemented because, firstly, it is reasonable, from a cost distribution point of view, to adopt the straight-line
method as a depreciation method for the tangible fixed assets, and secondly, the economic conditions should be more appropriatelyreflected by doing so.
As a result of this change, operating income, ordinary income, and net income before income taxes all increased by 32,051 thousand
yen compared with the results under the previous method.

6

3. Quarterly Consolidated Financial Statement(1) Quarterly Consolidated Balance Sheets(Thousands of yen)
At January 31, 2014

At April 30, 2014ASSETS
I. Current Assets:
Cash and deposits

13,102,606

15,643,792

Notes and accounts receivable

12,569,111

12,743,097

Goods and products

5,350,773

5,894,568

Goods in process

281,547

317,034

Raw material and inventory goods

2,420,080

2,569,319

Other current assets

1,670,255

1,861,697

Allowance for doubtful accounts(30,988)(52,145)

35,363,386

38,977,364

Buildings and structures-net

6,238,559

6,075,324

Land

6,080,256

6,072,369

Other tangible fixed assets-net

6,704,646

7,192,120

Total Tangible Fixed Assets

19,023,463

19,339,814

441,108

388,834

Other intangible fixed assets

1,000,222

992,593

Total Intangible Fixed Assets

1,441,331

1,381,427

Other2,170,610

2,177,747

Allowance for doubtful accounts(43,424)(43,414)

Total Investments and Other Assets

2,127,185

2,134,333

Total Fixed Assets

22,591,980

22,855,575

Total Assets

57,955,367

61,832,940

Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:

2. Intangible Fixed Assets:
Goodwill

3. Investments and Other Assets:7

(Thousands of yen)
At January 31, 2014

At April 30, 2014

LIABILITIES
I. Current Liabilities:
4,518,251

4,807,153

395,212514,600

Current portion of long-term loans payable

1,004,953

1,000,000

Income taxes payable

1,155,862

742,669

Accrued bonuses to employees

782,653

1,048,049

Returned goods adjustment reserve

57,31890,177

Other current liabilities

4,904,682

5,333,139

Total Current Liabilities

12,818,934

13,535,789

2,011,503

6,992,484

287,276

290,806

Notes and accounts payable
Short-term borrowings

II. Long-Term Liabilities:
Long-term borrowings
Employees’ retirement benefits
Retirement benefits for directors andcorporate auditors
Other long-term liabilities

323,894

335,1142,532,144

2,555,848

Total Long-Term Liabilities

5,154,818

10,174,253

Total Liabilities

17,973,753

23,710,043

Capital stock

5,199,597

5,199,597

Additional paid-in capital

5,180,246

5,180,246

Retained earnings

26,929,960

26,501,111

Treasury stock(455,960)(940,213)

Total Shareholders’ Equity

36,853,843

35,940,742

30,52030,2912,240,472

1,311,501

2,270,992

1,341,793

III. Minority Interests

856,777

840,361

Total Net Assets

39,981,614

38,122,897

Total Liabilities, Minority Interests and Net Assets

57,955,367

61,832,940

NET ASSETS
I. Shareholders’ Equity:

II. Valuation and Translation Adjustments:
Net unrealized gains on securities
Foreign currency translation adjustment
Total Valuation and Translation Adjustments8(2) Quarterly Consolidated Statements of Income

I. Net Sales
II. Cost of Sales
Gross profit
Reversal of reserve for returned products
Transfer to reserve for returned products
Adjusted gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Other Income:Interest income
Equity in earnings of non consolidated subsidiaries
and affiliates
Foreign exchange gains
Other
Total Other Income
V. Other Expenses:
Interest expense
Sales discounts
Equity in losses of non consolidated subsidiaries
and affiliates
Foreign exchange losses
Other
Total Other Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of property
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of property
Loss on disposal of property
Total Extraordinary Loss
Income before Income Taxes
Income Taxes
Adjustment for Corporate Tax
Total Corporate Income Tax
Income before minority interests
Less: Minority Interest in Net Income ofConsolidated Subsidiaries
Net Income

9First Quarter endedApril 30, 201316,895,717
9,532,677
7,363,039
46,03757,5997,351,478
5,438,060
1,913,417(Thousands of yen)First Quarter endedApril 30, 2014
18,859,156
10,446,251
8,412,904
56,671
90,0898,379,486
5,695,747
2,683,738

26,02735,03818,795－

248,794
54,429348,046－
52,85387,892

8,029
57,076

12,98865,967

－

1,451

－
8,592
73,6972,187,766

23,387
7,905
111,700
2,659,930

2,179
2,179

669
669

31
5,219
5,251
2,184,695
681,028
146,339
827,368

259
6,442
6,702
2,653,896
895,339(51,736)
843,603

1,357,326

1,810,292

29,20037,738

1,328,126

1,772,554

Quarterly Consolidated Statement of Comprehensive Income(First Quarter ended April 30, 2014)(Thousands of yen)First Quarter endedApril 30, 2013

Quarterly net income before adjusted minority
interests income
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total other comprehensive income

Quarterly comprehensive income

First Quarter endedApril 30, 2014

1,357,326

1,810,292

39,326(228)

1,331,056
1,370,383
2,727,710(938,432)(938,661)
871,6312,610,641

843,354

117,069

28,277(Break down)

Quarterly comprehensive income on parent
company
Quarterly comprehensive income on minority
interests10

(3) Notes Regarding Going Concern Assumptions
Not applicable.
(4) Notes Regarding Substantial Changes in Shareholders’ Equity
Not applicable.
(5) Segment Information
1Q of Consolidated Previous Term (February 1, 2013 - April 30, 2013)
Information Regarding Net Sales and Profit & Loss in Each Reporting Segment(Thousands of yen)
Reporting Segment
Domestic
Baby andMotherCare
Business

Health Care
Child-rearing
and Nursing
SupportCare
Services
Business

Overseas
Business

China-related
Sub Total
Business

Other(Note) 1

Total

AmountAccounted on
Quarterly
Adjustments
Consolidated(Note) 2
Statements ofIncome(Note) 3

Net sales
Sales to outside
customers
Inter-segment
sales ortransfers
Total
Segment Profits

5,951,750

1,677,647－－

5,951,750

1,677,647

785,913

23,544

16,610,160

285,556

16,895,717－

16,895,717

52,078702,432－

702,432(702,432)－

1,653,422 4,409,068 3,620,704

17,312,593

285,556

17,598,150(702,432)

16,895,717

2,780,375

33,8382,814,214(900,796)

1,913,417

1,653,422 3,758,714 3,568,626－

85,221

650,354931,477954,217(Note)
1. “Others” are business segments not included in reporting segments and mostly are the Group’s production subsidiaries
manufacturing and selling products to companies outside the Group.
2. The amount of (¥900,796) thousand in adjustments in segment profits include (¥27,057) thousand in eliminations ofinter-segment transactions, and (¥873,738) thousand in non-allocable operating expenses. Non-distributable operating expenses
are mainly administrative costs of the Group.
3. Segment profits are adjusted to operating income in the consolidated statement of income.
1Q of Consolidated Current Term (February 1, 2014 - April 30, 2014)
1. Information Regarding Net Sales and Profit & Loss in Each Reporting Segment(Thousands of yen)
Reporting Segment
Domestic
Baby andMotherCare
Business

Health Care
Child-rearing
and Nursing
SupportCare
Services
Business

Overseas
Business

China-related
Sub Total
Business

Other(Note) 1

Total

AmountAccounted on
Quarterly
Adjustments
Consolidated(Note) 2
Statements ofIncome(Note) 3

Net Sales
Sales to outside
customers

6,057,765

1,708,026

－

－

Total

6,057,765

1,708,026

Segment Profits

1,050,463

35,701

Inter-segment
sales ortransfers

18,517,122

342,033

18,859,156－

18,859,156

198,743987,717－

987,717(987,717)－

1,786,123 5,143,753 4,809,170

19,504,839

342,033

19,846,873(987,717)

18,859,156

3,648,445

51,6833,700,129 (1,016,390)

2,683,738

1,786,123 4,354,780 4,610,426－

123,521788,973

1,109,929 1,328,830(Note)
1. “Others” are business segments not included in reporting segments and mostly are the Group’s production subsidiaries
manufacturing and selling products to companies outside the Group.
2. The amount of (¥1,016,390) thousand in adjustments in segment profits include (¥34,062) thousand in eliminations ofinter-segment transactions, and (¥982,327) thousand in non-allocable operating expenses. Non-allocable operating expenses aremainly administrative costs of the Group.
3. Segment profits are adjusted to operating income in the consolidated statement of income.

112. Matters concerning Changes in the Reporting Segments
Since this first quarter of the consolidated current term, the Group made changes in its business classification, reorganizing its
business in five reporting segments, "Domestic Baby and Mother Care Business", "Child-rearing Support Services", "Health Careand Nursing Care Business" and "Overseas Business" and "China-related Business", as the latter, included before in the Overseas
Business segment, increased in importance.
In this regard, the reporting segments for first quarter of the consolidated previous term are prepared and disclosed based on thesegmentation after this change, effective from the first quarter of the consolidated current term.
3. Changes in the Method for Determining Depreciation of Tangible Fixed Assets(3) As stated in the “2. Summary Information (Notes) and related items: Changes in Accounting Policies, Changes in Accounting
Estimates, and Restatements", the Group and its consolidated subsidiaries have switched to the straight-line method from thedepreciation method for a part of its tangible fixed assets, effective the first quarter end of the consolidated current term.
The impact of this change on segment profits rose to ¥17,756 thousand in "Domestic Baby and Mother Care Business", ¥881
thousand in "Child-rearing Support Services", ¥3,422 thousand in "Health Care and Nursing Care Business", ¥3,069 thousand in"Overseas Business", and ¥1,853 thousand in "Other Businesses". Also, the amount of not-allocable operating expenses recorded
an increase of ¥5,068 thousand.

12