Summary of Financial Results
for the First Quarter of Fiscal Year Ending December 2019
[Japanese Standards] (Consolidated)
June 10, 2019
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listing: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Norimasa Kitazawa (President and COO)
Contact person: Tsutomu Matsunaga (Managing Officer, Business Strategy Division)/Tel: +81-3-3661-4188
Scheduled Filing Date of Quarterly Report: June 14, 2019
Scheduled Commencement Date of Dividend Payments: —Preparation of Any Additional Explanatory Materials for Quarterly Financial Results: None
Holding of Any Briefing Session for Quarterly Financial Results: None

1. Consolidated Business Performance for the First Quarter of Fiscal YearEnding December 31, 2019 (February 1 to April 30, 2019)(1) Consolidated Operating Results (cumulative)

1Q ended April 30, 2019

(Millions of yen, rounded down, % figures denote year-on-year change)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owners of Parent
25,458(1.3)%
4,501(17.3)
4,459(17.1)
3,140(18.5)

1Q ended April 30, 2018
25,798
7.6%(Note) Comprehensive income: 1Q ended April 30, 2019
1Q ended April 30, 2018

5,446
10.2%
5,380
¥4,015 million (32.9%)¥3,020 million (8.9% negative)

Net Income per Share (¥)

10.7%

3,852

10.9%

Diluted Net Income per
Share (¥)

1Q ended April 30, 2019

26.22

－

1Q ended April 30, 2018

32.17

－

(2) Consolidated Financial Position
Total Assets
1Q ended April 30, 2019

Net Assets

87,234

FY ended January 31, 201985,618(Reference) Shareholders’ Equity: 1Q ended April 30, 2019
FY ended January 31, 2019

Equity Ratio (%)

66,43973.4

66,582¥64,067 million¥64,242 million

75.0

2. Cash Dividends
Annual Dividend (¥)
1Q-end2Q-end34.00
FY ended January 31, 2019－
FY ending December 31, 2019－
FY ending December 31, 2019
35.00
(Forecast)(Note) Changes in dividend forecasts to the most recent announcement: None

3Q-endYear-end

Total

－

34.00

68.00

－

35.00

70.00

3. Consolidated Business Performance Forecasts for the Fiscal YearEnding December 31, 2019 (February 1, 2019 to December 31, 2019)
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% Millions of Yen%

Yen

Full year
106,200
20,00020,00014,300119.40－－－－(Notes) 1. Revision of forecasts from the most recent announcement: None
2. Pursuant to the approval of the “partial revision of the Articles of Incorporation” at the 62nd Ordinary General Meetingof Shareholders (fiscal year ended January 31, 2019) on April 25, 2019, the fiscal period has changed from the year
ending January 31 to the year ending December 31, beginning with the 2019 fiscal year. As such, in the fiscal year
ending December 31, 2019 now in progress, the consolidation period in 2019 for the subsidiaries that currently settle
their accounts on January 31 shall be the 11-month period from February 1 to December 31, 2019. Subsequentconsolidation periods shall be from January 1 to December 31 of each year.
For subsidiaries that currently settle their accounts on December 31, or that are doing so temporarily, the consolidation
period shall continue to be the 12-month period from January 1 to December 31.

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)
1Q ended April 30, 2019: 121,653,486
FY ended January 31, 2019: 121,653,486
2) Amount of treasury stock at the period-end
1Q ended April 30, 2019: 1,892,722
FY ended January 31, 2019: 1,892,704
3) Number of average shares outstanding during the period (quarter accumulation)
1Q ended April 30, 2019: 119,760,773
1Q ended April 30, 2018: 119,761,117* 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 First Quarter of Fiscal Year Ending December 2019

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 .................................................................................. 5(1) Quarterly Consolidated Balance Sheets ...................................................................................... 5(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income .............................................................................................................. 7
Quarterly Consolidated Statement of Income(Scope of Consolidation of First Quarter)................................................................................. 7
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of First Quarter) ................................................................................. 8(3) Notes on Consolidated Financial Statements .............................................................................. 9(Notes Regarding Going Concern Assumptions) ........................................................................ 9(Notes Regarding Substantial Changes in Shareholders’ Equity) ............................................... 9(Changes in Accounting Policies) ............................................................................................... 9(Additional Information) ............................................................................................................. 9(Segment Information) .............................................................................................................. 101

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

1. Qualitative Information Regarding the Financial Results for the Current Quarter(1) Explanation of Business Performance
During the consolidated first quarter under review, a cautiously optimistic tone in the Japanese
economy was counterbalanced by cause for concern on the world business stage. The Japanese
economy maintained an overall gradual pace of recovery, as the employment and personal-income
environments continued to improve despite lingering weakness in exports and production. The global
economy, on the other hand, was significantly impacted by factors such as trade friction between
China and the United States and other commercial issues. On this front, the outlook remained asdifficult to read as ever.
Amid such economic circumstances, the Group developed the Sixth Medium-Term Business Plan(for the period between the fiscal year ended January 2018 and the fiscal year ending December2019), under the slogan of “Building our dreams into the future – by creating a bridge towards the
Global Number One manufacturer of baby products –,” and has made efforts toward our further
growth in the final year of this plan. In addition, we have set the following three basic strategies thatwould help us to expand the Group's business and improve its management quality.
1) Based on the Pigeon Way, create and implement all kinds of measures to achieve the goal of
becoming ‘an indispensable company’ for the society and make our Vision “to be the baby
product manufacturer most trusted by the world’s babies and families, i.e. ‘Global NumberOne’” come true.
2) A further increase in corporate value will be pursued through improvement in profitability andefficiency of the business, and maximization of cash flows. The organizational structure,
management system and governance system will also be put in place and reinforced to ensuresustainable growth from a medium to long-term perspective.
3) During the three years of the Sixth Medium-Term Business Plan, invest management
resources giving priority to the key products and carry out strategic investments, laying solid
foundations for the double-digit growth of Pigeon Group in the future.
During the consolidated first three-month period under review, the Company implemented a wide
range of measures on the basis of the above business policies as well as our business-related andfunctional strategies. As a result, net sales amounted to ¥25,458 million (down 1.3% YOY).
Earnings were curtailed in the period under review, as an approximately 0.2 percentage-point
improvement in the sales cost ratio from the previous term was outweighed by a decline in sales anda rise in selling, general and administrative expense ratio. Operating income contracted to ¥4,501
million (down 17.3% YOY). Ordinary income fell to ¥4,459 million (down 17.1% YOY), while net
income attributable to owners of parent shrank to ¥3,140 million (down 18.5% YOY).
The main exchange rates used in the preparation of this first quarter’s financial statements for theCompany’s overseas consolidated subsidiaries (revenues and expenses) are as follows:
・1US$: 110.21 yen (108.22 yen)
・1 CNY: 16.32 yen (17.04 yen)
Note: Figures in parentheses represent the exchange rate in the same period of the previous fiscal
year.
This report consists of information from six Group reporting segments: the Domestic Baby &Mother Care Business, Child Care Service Business, Health & Elder Care Business, China Business,
Singapore Business and Lansinoh Business.
Each segment is outlined below.

2Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

Domestic Baby & Mother Care Business
Against a trend of weak inbound demand, segment net sales amounted to ¥9,093 million (down 3.2%
YOY). Segment profit dropped compared with the corresponding period of last year to ¥1,560 million(down 16.8% YOY), as declining net sales pared gross profit even as selling, general andadministrative expenses mounted. In February this segment enhanced its Peach Leaves Skincare
lineup with the launch of Pigeon UV Baby Lotion (Peach Leaves), a roll-on sunblock product, andPigeon Medicated Perspiration Sheets (Peach Leaves), a sheet product that wipes away perspirationand dirt while moisturizing the skin. Also during the period under review, the segment launched
Runfee RA9, a stroller that adopts ball-bearing casters for easy pushing and a more comfortable ride,
enjoying steadily expanding sales. Moreover, during the period under review, we have held anumber of events planned as a part of our direct communications program such as our “Premama
Class” for women expecting to give birth in the near future and a seminar about breastfeeding whileparenting for health care professionals, organized five times. A total of approximately 522 people
have participated. On "Pigeon Info," a website that supports women during pregnancy, in childbirth,and in raising children, we are continuing to improve the content so that users can use the site in amore convenient manner.
Child Care Service BusinessNet sales of the segment amounted to ¥992 million (down 40.4% YOY). Segment profit decreased
compared with the corresponding period of last year to ¥20 million (down 53.5% YOY). The main
factor in this change in business results was the closure of Japan’s National Hospital Organization(NHO)’s childcare facility management business as of March 2018. During the period under review,
we have concluded a new contract for one in-company child-care facility. We currently provide
services to a total of seventy-three facilities, and shall continue to develop this business further fromnow on striving to improve the quality of the content we offer.
Health & Elder Care BusinessNet sales of the segment amounted to ¥1,752 million (up 4.7% YOY). Segment profit increased to¥118 million (up 46.0% YOY). In February this segment launched the ProFitCare series, a productline focused on maintaining good seated posture in nursing-care facility users. The segment also
introduced the Sanitary Care Inspired by Nursing Series, a skincare product that enables people who
are unable to take a bath to maintain their bodily hygiene.
The segment continues to roll out products of superior competitive power and other initiatives toimprove the quality of nursing-care services.
China BusinessNet sales in this segment amounted to ¥7,751 million (down 0.7% YOY), and segment profit also
decreased to ¥2,870 million (down 3.1% YOY). Amid brisk sales of nursing bottles, sales results
firmed for Medicated Skincare Series (Peach Leaves), Bonyu Jikkan® Nursing Bottle my Precious
and breast pumps. For each of these products, sales results improved YoY in local-currency terms.
The segment will continue to implement an array of measures geared to ramping up customer
contact and expanding operations, including reinforcing efforts centered on e-commerce, wherecontinued expansion is anticipated; active use of direct communication with consumers throughsocial networks; and continued strengthening of offline activities such as in-store sales promotions
and activities in maternity and other hospitals.
Singapore BusinessNet sales of the segment amounted to ¥3,177 million (up 8.5% YOY), and segment profit also
increased to ¥755 million (up 3.3% YOY). In ASEAN, the Middle East, India and other countries inthis segment’s sales region, the Singapore Business segment is moving forward with thedevelopment and introduction of products aimed at middle-class consumers and is continuing
vigorous sales and marketing activities to propagate the Pigeon brand in these markets.
3

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

Lansinoh BusinessNet sales of the segment amounted to ¥3,279 million (up 11.2% YOY), and segment profit
increased to ¥470 million (up 1.5% YOY). In North America, sales of breast pumps through the
DME Channel are expanding steadily. To build out operations still further in China (throughLansinoh Laboratories Shanghai) and Europe, the segment is working to bolster sales throughe-commerce and raise the brand’s profile.
Other Businesses
Net sales of the segment amounted to ¥350 million (up 11.2% YOY), while segment profit stood at¥26 million (down 0.7% YOY).
(2) Explanation of Financial Position(Assets)
As of April 30, 2019, our Group recorded total assets of ¥87,234 million, up ¥1,615 million fromthe previous consolidated fiscal year ended January 31, 2019. Both current and fixed assets
increased by ¥616 million and ¥998 million, respectively.
Current assets increased mainly due to increases in notes and accounts receivable - trade of ¥3,492
million and in merchandise and finished goods of ¥549 million, despite a decrease in cash anddeposits of ¥3,487 million.
Fixed assets increased mainly due to an increase in buildings and structures of ¥782 million.
(Liabilities)
As of April 30, 2019, our Group recorded total liabilities of ¥20,795 million, up ¥1,758 million
from the previous consolidated fiscal year ended January 31, 2019. Both current and fixed liabilities
increased by ¥1,159 million and ¥599 million, respectively.
Current liabilities increased mainly due to increases in notes and accounts payable - trade and inelectronically recorded obligations - operating of ¥932 million and ¥378 million, respectively,
despite a decrease in income taxes payable of ¥711 million.
Fixed liabilities increased, mainly because other fixed liabilities increased by ¥1,186 million,
despite a decrease in provision for directors and corporate auditors’ retirement benefits of ¥599
million.
(Net Assets)
As of April 30, 2019, our Group recorded total net assets of ¥66,439 million, down ¥142 million
from the previous consolidated fiscal year ended January 31, 2019.
Net assets decreased mainly due to a decrease in retained earnings of ¥931 million, despite anincrease in foreign currency translation adjustment of ¥753 million.
(3) Explanation of Consolidated Performance Forecast and Other Future Predictions
For the Sixth Medium-Term Business Plan (for the period between the fiscal year ended January
2018 and the fiscal year ending December 2019), the Group has adopted the slogan, “Building our
dreams into the future – by creating a bridge towards the Global Number One manufacturer of baby
products –.” 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.
In this consolidated fiscal year, the final year of our Sixth Medium-Term Business Plan, we will
strive to ensure completion of our plans.
As approved at the 62nd Ordinary General Meeting of Shareholders (fiscal year ended January 31,2019) on April 25, 2019, the fiscal period has changed from the year ending January 31 to the year
ending December 31, beginning with the 2019 fiscal year.

4Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Millions of yen)
At January 31, 2019ASSETS
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 sales returns
Provision for loss on litigation
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Net defined benefit liability
Provision for directors and corporate
auditors’ retirement benefits
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities

5

At April 30, 201930,94915,004
7,360
405
2,839
1,840
(197)
58,201

27,462
18,496
7,910
493
2,985
1,670
(199)
58,818

6,689
5,577
8,859
21,127

7,472
5,588
9,136
22,197

1,000
3,223
4,223

970
3,222
4,192

2,071
(5)
2,066
27,41785,618

2,031
(5)
2,026
28,41687,234

4,567
1,960
1,951
972
32
－
6,138
15,623

5,500
2,338
1,239
1,218
40
8
6,437
16,783

309

321

599

－

2,503
3,412
19,036

3,690
4,011
20,795

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

(Millions of yen)
At January 31, 2019

At April 30, 2019

NET ASSETS
I. Shareholders’ Equity:
Capital stock

5,199

5,199

Capital surplus

5,179

5,179

Retained earnings

55,70454,772

Treasury stock

(951)

(951)

Total Shareholders’ Equity

65,13164,19921

24

Foreign currency translation adjustment

(910)

(157)

Total Accumulated Other Comprehensive Income

(888)

(132)

III. Non-controlling Interests

2,339

2,372

Total Net Assets

66,582

66,439Total Liabilities and Net Assets

85,61887,234

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

6Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement ofComprehensive Income
Quarterly Consolidated Statement of Income(Scope of Consolidation of First Quarter)(Millions of yen)

I. Net Sales
II. Cost of Sales
Gross profit
Reversal of provision for sales returns
Provision for sales returns
Adjusted gross profit
III. Selling, General and Administrative Expenses
Operating Income
IV. Non-operating Income:Interest income
Other non-operating income
Total Non-operating Income
V. Non-operating Expenses:
Interest expenses
Sales discounts
Foreign exchange losses
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
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

7

Three months endedApril 30, 2018
25,798
12,77813,02034
68
12,9867,540
5,446

Three months endedApril 30, 201925,45812,594
12,86330
40
12,854
8,352
4,501

73
39
113

47
64
111

3
116
47
12
179
5,380

1
116
6
28
153
4,459

1
108
109

1
113
115

0
3
3
5,485
1,874
(345)
1,529
3,955

1
9
10
4,563
1,232
122
1,355
3,208

102
3,852

68
3,140

Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

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

Net Income
Other Comprehensive Income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Other Comprehensive Income

Quarterly Comprehensive Income

Three months endedApril 30, 2018
3,955

Three months endedApril 30, 2019
3,208

(2)

2

(933)
(935)
3,020

803
806
4,015

2,977

3,896

43

118

(Break down)

Quarterly comprehensive income on parent
company
Quarterly comprehensive income on
non-controlling interests

8Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019(3) Notes on Consolidated Financial Statements(Notes Regarding Going Concern Assumptions)Not applicable.
(Notes Regarding Substantial Changes in Shareholders’ Equity)
Not applicable.
(Changes in Accounting Policies)(Application of IFRS 16, “Leases”)
From the beginning of the consolidated first quarter under review, the Pigeon Group applies IFRS
16, “Leases,” the new lease accounting standard published by the International AccountingStandards Board (IASB). This accounting change does not apply to Pigeon Corporation and its
subsidiaries in Japan, which apply Japanese accounting standards, or to Pigeon subsidiaries in the
United States, which apply US accounting standards. With this accounting change, in principle
lessees recognize assets and liabilities with respect to all leases.
Effects of this accounting change on the financial condition and business results of the Group are
negligible.
(Additional Information)(Application of the Partial Revision of Accounting Standards Regarding Tax-effect Accounting,etc.)
From the beginning of the consolidated first quarter under review, the Pigeon Group applies thePartial Revision of Accounting Standards Regarding Tax-effect Accounting, etc. (Corporate
Accounting Standard No. 28, February 16, 2018). Under this partial revision, Deferred Tax Assets
are appropriated under Investments and Other Assets and Deferred Tax Liabilities are appropriatedunder Fixed Liabilities.

9Pigeon Corporation (7956) Summary of Financial Results for the First Quarter of Fiscal Year Ending December 2019

(Segment Information)
Three months ended April 30, 2018
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Domestic
Baby &
MotherCare
Business
Net sales
Net sales toexternalcustomers
Internal sales
or exchange
betweensegments
Total
Segment profit

Child Care Health &Service Elder Care
Business
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note 1)

Total

AmountAccounted
on Quarterly
Adjustments
Consolidated(Note 2)
Statement of
Income(Note 3)

9,393

1,664

1,673

7,779

2,023

2,948

25,483314

25,798－25,798

－

－

－

27

904

－

931

－

931

(931)

－

9,393

1,664

1,673

7,806

2,928

2,948

26,415314

26,729(931)

25,798

1,875

44

80

2,961

731

463

6,156

26

6,183

(737)

5,446

(Notes)1. The “Other Businesses” classification refers to businesses not included in the reporting segments, and consists of ourGroup’s manufacturing subsidiaries, but also of those manufacturing and selling products to companies outside our Group.
2. The negative amount of ¥737 million from adjustments in segment profit includes ¥31 million in elimination ofintersegment transactions, and negative ¥768 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

Three months ended April 30, 2019
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Millions of yen)
Reporting Segment
Domestic
Baby &
MotherCare
Business
Net sales
Net sales toexternalcustomers
Internal sales
or exchange
betweensegments
Total
Segment profit

Child Care Health &Service Elder Care
Business
Business

China
Business

Singapore
Business

LansinohBusiness

Subtotal

Other
Businesses(Note 1)

Total

AmountAccounted
on Quarterly
Adjustments
Consolidated(Note 2)
Statement of
Income(Note 3)

9,093

992

1,752

7,717

2,272

3,279

25,108350

25,458－25,458

－

－

－

33

904

－

938

－

938

(938)

－

9,093

992

1,752

7,751

3,177

3,279

26,046350

26,396(938)

25,458

1,560

20

118

2,870

755

470

5,795

26

5,821

(1,320)4,501(Notes)1. The “Other Businesses” classification refers to businesses not included in the reporting segments, and consists of ourGroup’s manufacturing subsidiaries, but also of those manufacturing and selling products to companies outside our Group.
2. The negative amount of ¥1,320 million from adjustments in segment profit includes ¥17 million in elimination ofintersegment transactions, and negative ¥1,338 million in non-allocable operating expenses. Non-allocable operating
expenses are administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statement of income.

10