Consolidated Financial Results
for the Six Months Ended December 31, 2018
[Japanese GAAP]
February 13, 2019
Company name: Nippon Koei Co., Ltd.
Stock exchange listing: Tokyo Stock Exchange
Code number: 1954
URL: https://www.n-koei.co.jp/english/
Representative: Ryuichi Arimoto, Representative Director and President
Contact: Tetsumi Aoki, General Manager, Accounting Department
Phone: +81-3-3238-8040
Scheduled date of filing quarterly securities report: February 13, 2019
Scheduled date of commencing dividend payments: Availability of supplementary briefing material on quarterly financial results: Yes
Schedule of quarterly financial results briefing session: Yes (for investors and analysts)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended December 31, 2018 (July 1, 2018 to December 31, 2018)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net income attributable
Net sales
Operating income
Ordinary income
to owners of parent
Six months ended
Million yen%
Million yen% Million yen% Million yen%
December 31, 2018
39,14625.3(2,817)(2,901)(2,331)
December 31, 201731,23318.7(2,597)(2,344)(1,312)(Note) Comprehensive income: Six months ended December 31, 2018 : ¥(3,472) million [ - %]Six months ended December 31, 2017 : ¥(47) million [ - %]Net income per share
Six months ended
December 31, 2018
December 31, 2017

Yen
(149.66)(84.86)

Diluted net income
per shareYen-(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio
As ofMillion yen
Million yen%
December 31, 2018
122,072
55,022
44.2
June 30, 2018
113,890
59,44951.2(Reference) Equity: As of December 31, 2018 : ¥53,960 million
As of June 30, 2018
: ¥58,363 million(Note) From the beginning of the first quarter of the fiscal year ending June 30, 2019, the Company has adopted “Partial
Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No.28, February 16, 2018), etc. The
accounting standard is retrospectively applied to the amount as of June 30, 2018.
2. Dividends
Annual dividends
1st
2nd
3rd
quarter-end
quarter-end
quarter-end
Yen
Yen
Yen
Fiscal year ended June 30, 2018
Fiscal year ending June 30, 2019
Fiscal year ending June 30, 2019 (Forecast)(Note) Revision to the forecast for dividends announced most recently: None1Year-end

Total

Yen
75.00

Yen
75.00

75.00

75.00

3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2019 (July 1, 2018 to June 30, 2019)(% indicates changes from the previous corresponding period.)
Net income attributable
Net income
Net sales
Operating income
Ordinary income
to owners of parent
per share
Million yen% Million yen% Million yen%
Million yen%
Yen
Full year
115,000
8.5
6,200
(5.5)
6,100
(9.2)
4,100
(10.0)
263.14(Note) Revision to the financial results forecast announced most recently: None
* Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: None
2) Changes in accounting policies other than 1) above: Yes
3) Changes in accounting estimates: Yes
4) Retrospective restatement: None
(4) Total number of issued shares (common stock)1) Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 2018
: 15,919,544 shares
As of June 30, 2018
: 15,905,049 shares2) Total number of treasury stock at the end of the period
As of December 31, 2018:296,210 shares
As of June 30, 2018:364,422 shares
3) Average number of shares during the period
Six months ended December 31, 2018
: 15,581,280 shares
Six months ended December 31, 2017
: 15,465,396 shares* These consolidated financial results are not subject to quarterly audit procedures by certified public accountants or audit firms.
* Explanation of the proper use of financial results forecast and other notes(Caution regarding forward-looking statements)
The earnings forecasts and other forward-looking statements disclosed herein are based on information available to theCompany as of the date of publication of this document and certain assumptions deemed reasonable. Actual results, etc. may
differ significantly due to a wide range of factors.
The Company is scheduled to hold a financial results briefing session for investors and analysts on February 26, 2019. The
financial briefing materials to be distributed at this briefing session will be subsequently posted on the Company’s website.

2

Table of Contents of Attachment
1. Qualitative Information on Quarterly Financial Results ............................................................................................. 2(1) Explanation of Operating Results .......................................................................................................................... 2(2) Explanation of Financial Position .......................................................................................................................... 4(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements ....................... 4
2. Quarterly Consolidated Financial Statements and Primary Notes .............................................................................. 5(1) Quarterly Consolidated Balance Sheets ................................................................................................................. 5(2) Quarterly Consolidated Statement of Income and Comprehensive Income .......................................................... 7(3) Quarterly Consolidated Statement of Cash Flows ................................................................................................. 8(4) Notes to Quarterly Consolidated Financial Statements ......................................................................................... 9(Notes on Going Concern Assumption) ................................................................................................................ 9(Notes on Significant Changes in Shareholders’ Equity) ...................................................................................... 9(Accounting Policies Adopted Specially for the Preparation of Quarterly Consolidated Financial Statements) .. 9
(Changes in Accounting Policies that are difficult to distinguish from Changes in Accounting Estimates, andChanges in Accounting Estimates) ........................................................................................................................ 9(Segment Information) ........................................................................................................................................ 10(Significant Subsequent Events).......................................................................................................................... 12
3. Other Information ...................................................................................................................................................... 13(1) Status of Orders and Sales ................................................................................................................................... 131

1.

Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the six months ended December 31, 2018 (from July 1, 2018 to December 31, 2018), Japan’s economy
continued on a moderate recovery path with signs of private consumption picking up against the background ofsteady improvements in employment conditions and income. While overseas economies are seeing a moderate
recovery, negotiations on trade issues, the outlook for emerging economies, changeable foreign policies,
fluctuations in financial and capital markets, and other factors continued to be uncertain.
The business environment of Nippon Koei Co., Ltd. (the “Company”) and its subsidiaries (together, the “Group”)
experienced firm demand in each business segment. In the Domestic Consulting Operations, the Group undertook
measures to prevent and mitigate disaster, and also to prevent deterioration of infrastructure for public works
projects. In the International Consulting Operations, we promoted the Japanese government's infrastructure andsystems export strategy, while the Power Engineering Operations saw demand in a replacement of power
distribution equipment. In the Urban & Spatial Development Operations, BDP Holdings Limited and its subsidiaries(hereinafter referred to under the general label “BDP”) were involved in the construction and renovation of public
facilities in the United Kingdom, its main market, and the Energy Business Operations experienced rising demand
for renewable energy as a result of the shift towards low-carbon societies and distributed power sources.
Under these circumstances, based on the Medium-Term Management Plan “NK-Innovation 2021” (from July
2018 to June 2021), with the fundamental principles of “Continue evolution into global consulting and engineering
firm,” the Group tackled the five business strategies of “Enhancement of operating system for Railways Business,”“Overseas expansion of Urban & Spatial Development Business,” “Establishment of Energy Business,” “Creationof businesses and overseas expansion of Consulting Business,” and “Product development and overseas expansionof Power Engineering Business.” Moreover, as group-wide measures to realize these goals, the Group actively
advanced “Establishment of one-stop marketing system,” “Investment in technologies and human resources,” and“Enhancement of group governance.”
In terms of Group Performance, as a result of the above, orders received were ¥47,707 million, unchanged year
on year. Net sales increased 25.3% year on year to ¥39,146 million due to an application of the percentage-ofcompletion method to contracts started during the previous fiscal year. Operating loss increased 8.5% year on yearto ¥2,817 million, and ordinary loss increased 23.8% year on year to ¥2,901 million due partly to a loss on valuationof investment securities. Loss attributable to owners of parent was ¥2,331 million from the previous year in whichgain on sales of non-current assets were recorded.
Net sales for the six months ended December 31, 2018 were ¥39,146 million, an achievement rate of 34.0% against
the net sales forecast of ¥115,000 million for the fiscal year ending June 30, 2019 (six months ended December 31,
2017: 29.5%). This is attributable to seasonal fluctuations in the Group’s net sales where a significant percentage
of its business commonly tends to increase its percentage of achievement in the second half of the fiscal year. In
addition, because expenses such as selling, general and administrative expenses were generated fairly evenly
throughout the year, the Group recorded an operating loss, an ordinary loss and loss attributable to owners of parent
for the six months ended December 31, 2018.
Business results for each segment are as follows:[Domestic Consulting Operations]
The Domestic Consulting Operations worked to further reinforce the management base, by reconstructing orderreceiving and production systems, securing and improving quality, while also pursuing more effective business
management. In addition, we worked to support the actions under the global strategy cooperating with theInternational Consulting Operations and the R&D Center, as well as to develop new businesses by utilizing themanagement know-hows, as its core, to improve the value of infrastructure.

2

As a result, orders received increased 8.3% year on year to ¥23,471 million. Net sales increased 122.1% year on
year to ¥14,071 million, operating loss decreased 37.3% year on year to ¥1,990 million and ordinary loss decreased
39.6% year on year to ¥1,987 million.
[International Consulting Operations]
In the International Consulting Operations, we worked to acquire and develop human resources, mainly in therailways business, as well as strengthening the production system by enhancing project management capabilities,
and practicing strict management of profit, risks and safety. In addition, we were actively involved in theconcessions business, which leverage public sector facility concessions in the Public Private Partnership (PPP),
Private Finance Initiative (PFI) businesses and the private sector business.
As a result, orders received decreased 18.5% year on year to ¥11,569 million. Net sales decreased 16.1% year on
year to ¥10,685 million, operating loss was ¥72 million (operating income of ¥ 1,397 million for the six months
ended December 31, 2017) and ordinary loss was ¥87 million (ordinary income of 1,324 million for the six months
ended December 31, 2017).
[Power Engineering Operations]
In the Power Engineering Operations, we expanded the mechanical and electrical consulting business by entering
into new areas such as traffic, transport, as well as maintenance and management in view of global development.
Further, we strengthened the group-wide cooperation in the energy-related business as well as maintenance andmanagement business, and we strove to develop products and technologies of a global standard specification. We
also continued to enhance price competitiveness and sales capabilities with a rigorous cost reduction.
As a result, orders received decreased 30.8% year on year to ¥4,568 million. Net sales increased 19.8% year on
year to ¥6,718 million, operating income increased 116.4% year on year to ¥519 million and ordinary income
increased 29.5% year on year to ¥487 million.
[Urban & Spatial Development Operations]
In the Urban & Spatial Development Operations, as well as responding to changes in the UK market, we expanded
our business in the Asian market through collaboration with another Group member located in Singapore, also
aiming to break into the markets of British Commonwealth of Nations countries.
As a result, orders received increased 46.1% year on year to ¥7,824 million. Net sales increased 8.9% year on yearto ¥6,761 million, operating loss increased 111.7% year on year to ¥21 million and ordinary loss decreased 7.1%
year on year to ¥21 million.
[Energy Business Operations]
The Energy Business Operations promoted improved profitability in the power generation business such as
through renewable energy and worked to form new projects including PFI business. In addition, we accumulated a
track record in the renewable energy and storage battery EPC (engineering, procurement & construction) businessin the energy management business, further sought to promote the resource aggregator (an operator that plays acentral role in control and management in relation to both energy operators and sources of demand) and VPP (virtual
power plant) businesses.
As a result, we saw orders received of ¥225 million, net sales of ¥364 million, operating loss of ¥113 million andordinary loss of ¥123 million.
[Real Estate Leasing Operations]
In the Real Estate Leasing Operations, net sales decreased 2.3% year on year to ¥217 million. Both operating
income and ordinary income were ¥204 million, almost unchanged year on year.

3(2) Explanation of Financial Position
Total assets as of the end of the second quarter of the fiscal year, amounted to ¥122,072 million, an increase of¥8,182 million from the end of the previous fiscal year.
In the Assets section, current assets were ¥63,909 million, an increase of ¥9,645 million from the end of theprevious fiscal year. This was mainly due to a ¥5,031 million increase in notes and accounts receivable-trade and a¥4,285 million increase in work in process.
Non-current assets were ¥58,163 million, a decrease of ¥1,463 million from the end of the previous fiscal year.
This was mainly due to a ¥1,649 million decrease in investment securities included in other items of investments
and other assets.
In the Liabilities section, current liabilities were ¥43,161 million, an increase of ¥14,720 million from the end of
the previous fiscal year. This was mainly due to a ¥878 million decrease in accrued expenses, a ¥477 million
decrease in accounts payable-other, and a ¥398 million decrease in accrued consumption tax included in other itemsof current liabilities, while a ¥17 billion increase in short-term loans payable.
Non-current liabilities were ¥23,887 million, a decrease of ¥2,111 million from the end of the previous fiscal year.
This was mainly due to a ¥1,061 million decrease in long-term loans payable and a ¥1,171 million decrease indeferred tax liabilities included in other items of non-current liabilities.
Net assets were ¥55,022 million, a decrease of ¥4,426 million from the end of the previous fiscal year. The primaryfactors behind this were ¥2,331 million in net loss attributable to owners of parent, ¥1,192 million in cash dividends
paid, a ¥623 million decrease in valuation difference on available-for-sale securities and a ¥470 million decrease inforeign currency translation adjustments.
As a result, the shareholders’ equity ratio decreased 7.0 percentage points from the end of the previous fiscal year
to 44.2%.
Moreover, the Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) and relevant Guidances from the beginning of the first quarter ended
September 30, 2018. These accounting standards have been applied retrospectively for comparison and analysis
with financial position in the previous fiscal year.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Statements
The consolidated financial results forecast for the fiscal year ending June 30, 2019 have not changed from theforecast announced in the Consolidated Financial Results for the Fiscal Year Ended June 30, 2018 dated August
13, 2018.

42. Quarterly Consolidated Financial Statements and Primary Notes(1) Quarterly Consolidated Balance Sheets(Millions of yen)
As of June 30, 2018
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Land
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

5

As of December 31, 201816,392
26,214
7,942
3,796
(83)
54,263

16,146
31,246
12,2284,366(78)
63,9096,082
16,598
4,943
27,624

5,951
16,6005,409
27,961

8,185
4,778
12,964

7,725
4,381
12,106

19,214(177)
19,03759,626
113,890

18,259(164)
18,09558,163122,072(Millions of yen)
As of June 30, 2018
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Advances received
Provision for bonuses
Provision for directors' bonuses
Provision for loss on construction contracts
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for directors' retirement benefits
Provision for environmental measures
Liability for retirement benefits
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Defined retirement benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

6

As of December 31, 2018

4,164
2,050
1,012
8,693
1,860
83
176
10,39828,441

3,734
17,0001,763
360
10,217
1,418
194
8,472
43,161

18,934
32
34
3,873
3,124
25,99954,44017,873
30
34
3,931
2,018
23,88767,0497,415
6,466
45,528(1,180)58,2297,437
6,488
42,004(972)
54,957

1,195(2,045)
983
133
1,086
59,449113,890571(2,516)
946
(997)
1,062
55,022122,072

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
For the Six months ended December 31, 2017 and 2018
(Millions of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)
Non-operating income
Interest income
Dividend income
Gain on sales of investment securities
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on valuation of investment securities
Share of loss of entities accounted for using equity method
Other
Total non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of property, plant and equipment
Total extraordinary income
Extraordinary losses
Head office transfer expenses
Total extraordinary losses
Income (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income (loss)
Net income (loss) attributable to
Net income (loss) attributable to owners of parent
Net income (loss) attributable to non-controlling interests
Other comprehensive income (loss)
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of entities accounted forusing equity method
Total other comprehensive income (loss)
Comprehensive income (loss)
Comprehensive income (loss) attributable toComprehensive income (loss) attributable to owners of parent
Comprehensive income (loss) attributable to non-controlling7

For the six months
For the six months
ended December 31, 2017 ended December 31, 2018
(From July 1, 2017
(From July 1, 2018
to December 31, 2017)
to December 31, 2018)
31,23339,146
21,70928,930
9,523
10,215
12,121
13,033(2,597)(2,817)
81
155
158
197
593

129
87
219
435

99
145
95
339
(2,344)

124
254
106
34
519
(2,901)

1,276
1,276

-

488
488
(1,556)
514
(755)
(240)
(1,315)(2,901)491(1,052)(560)(2,340)(1,312)(3)(2,331)
(8)

568
721
(21)

(625)
(474)
(36)

-

4

1,267
(47)

(1,131)(3,472)(44)(3)(3,463)(8)

(3) Quarterly Consolidated Statements of Cash Flows(Millions of yen)
For the six months
For the six months
ended December 31, 2017 ended December 31, 2018
(From July 1, 2017
(From July 1, 2018
to December 31, 2017)
to December 31, 2018)
Cash flows from operating activities
Income (loss) before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Share of loss (gain) of entities accounted for using equity method
Loss (gain) on sales of property, plant and equipment
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for loss on construction contracts
Interest and dividend income
Loss (gain) on derivatives
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Decrease (increase) in consumption taxes refund receivable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Net decrease (increase) in time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Proceeds from sales of treasury shares
Purchase of treasury shares
Cash dividends paid
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8(1,556)
768
236
(158)
145
(1,280)
4
(29)
191
(237)
(102)
(797)
(10,258)
(315)
(39)
2,548
(2,043)(1,363)(14,287)
173(98)(1,106)(15,319)(2,901)
779
230
16
254
106
0
(18)
(431)
17
(216)
(75)
(5,140)(4,261)
(426)
(477)
1,529
(912)
(828)
(12,755)130(120)(1,070)(13,816)

1,137
(283)
2,336
(300)
172
(530)
129
(157)
2,504

601
(796)
1
(179)
555
(416)
(75)
(310)

9,000
(1,079)152(24)(1,187)
(27)
6,833
132
(5,848)17,083
11,23417,000(1,367)213(5)(1,186)(17)
14,636(173)
335
15,233
15,569(4) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
There is no relevant information.
(Notes on Significant Changes in Shareholders’ Equity)
In accordance with the resolution of the Extraordinary Board of Directors Meeting held on September 27, 2018,
we issued new shares as restricted stock compensation for Directors on October 26, 2018. As a result, capital stockand capital reserve increased by ¥22 million, respectively, during the six months ended December 31, 2018.
Subsequently, capital stock and capital surplus at the end of the first six months of the fiscal year were ¥7,437
million and ¥6,488 million, respectively.
(Accounting Policies Adopted Specially for the Preparation of Quarterly Consolidated Financial Statements)(Deferral of cost variance)
Cost variance caused by seasonal changes in operation rates, etc. is expected to be almost completely
eliminated by the end of the cost accounting period, which is, therefore, deferred as other current liabilities.

(Changes in Accounting Policies that are difficult to distinguish from Changes in Accounting Estimates, andChanges in Accounting Estimates)(Change in depreciation method for property, plant and equipment)
We took the opportunity provided by drawing up the Medium-term Management Plan, whose first year is thecurrent fiscal year, to investigate the status of property, plant and equipment usage. As a result, because it isexpected that the economic benefit derived from property, plant and equipment will be consumed equally overits useful life at some of our domestic subsidiaries, from the first quarter ended September 30, 2018 thedepreciation method for property, plant and equipment has been changed from the declining-balance method
to the straight-line method, and costs have been allocated more appropriately.
Also, as a consequence of this change in the depreciation method, for certain property, plant and equipment
assets, upon consideration of the price at the time of disposal, the residual value has been changed to amemorandum of value.
As a result of this change, the depreciation expenses for the second quarter of the fiscal year decreased by¥33 million, and each of operating loss, ordinary loss, and loss before income taxes decreased by ¥33 million
from the amounts based on the previous method.

9

(Segment Information)
For the six months ended December 31, 2017 (from July 1, 2017 to December 31, 2017)1)

Net sales and segment income or loss by reportable segment(Millions of yen)
Reportable segment

Operations

Power
Engineering
Operations

6,335

12,731

5,608

265

11

6,600

12,742Others(Note)

Real Estate
Leasing
Operations

Subtotal

6,209

-

222

31,107

126

31,233

109

14

-

78

480

1

481

5,718

6,224

-

301

31,587

127

31,714

Segment income (loss)(3,293)
1,324
376
(22)
204
(1,411)(952)(Note) “Others” refers to a group of operations from which no income is gained or that produce only incidental gains.

(2,363)

2)

International

Urban &

EnergyBusiness
Operations

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers
Total

Domestic
Consulting
Operations

Consulting

SpatialDevelopment
Operations

Total

Differences between the total amount of income or loss of reportable segments and the amounts in quarterly
consolidated statement of income and comprehensive income, and major breakdown of such differences(reconciliation)(Millions of yen)
IncomeAmountReportable segment total(1,411)

Loss of “others” category(952)

Elimination of intersegment transactions

19

Ordinary Income (loss) in the quarterly consolidated
statement of income and comprehensive income(2,344)10

For the six months ended December 31, 2018 (from July 1, 2018 to December 31, 2018)1)

Net sales and segment income or loss by reportable segment(Millions of yen)
Reportable segment

Operations

Power
Engineering
Operations

14,071

10,685

6,718

373

18

14,445

10,704

Others(Note)

Real Estate
Leasing
Operations

Subtotal

6,761

364

217

38,819326

39,146

136

32

-

82

643

444

1,088

6,855

6,793

364

300

39,463771

40,234

Segment income (loss)(1,987)
(87)
487
(21)
(123)
204
(1,527)(1,385)(Note) “Others” refers to a group of operations from which no income is gained or that produce only incidental gains.

(2,912)

2)

International

Urban &

EnergyBusiness
Operations

Net sales
Net sales to externalcustomers
Intersegment sales ortransfers
Total

Domestic
Consulting
Operations

Consulting

SpatialDevelopment
Operations

Total

Differences between the total amount of income or loss of reportable segments and the amounts in quarterly
consolidated statement of income and comprehensive income, and major breakdown of such differences(reconciliation)(Millions of yen)
IncomeAmountReportable segment total(1,527)

Loss of “others” category(1,385)

Elimination of intersegment transactions

11

Ordinary Income (loss) in the quarterly consolidated
statement of income and comprehensive income

3)(2,901)

Information regarding changes in reportable segments, etc.
In the previous fiscal year, we established the Energy Business Division with its business domains of electric
power generation and energy management using distributed energy, and therefore added “Energy Business
Operations” to the reportable segments.
The segment information for the six months ended December 31, 2017 disclosed as comparative information
to the six months ended December 31, 2018 is stated according to the revised designation of the reportablesegment.

11

(Significant Subsequent Events)
Business Combination by Acquisition
As of February 4, 2019, a consolidated subsidiary of BDP Holdings Limited (hereinafter referred to as“BDP”) which is our consolidated subsidiary acquired shares in Quadrangle Architects Limited (hereinafterreferred to as “Quadrangle”), a Canadian architectural design firm.
1. Overview of business combination(1) Name and business line of the acquired company
Name of the acquired company: Quadrangle Architects Limited
Business line: Architectural design(2) Main reasons for business Combination
Nippon Koei and BDP place “overseas expansion of Urban & Spatial business” as a focus area in theMedium-Term Management Plan “NK-Innovation 2021”, promoting business expansion outside the
U.K. as their growth strategy. Quadrangle is a comprehensive architecture and interior design company
having strengths in architectural design of commercial facilities, complex facilities, condominiums, etc.,
in Canada, with over 200 architects and interior designers.
With Quadrangle in the Group, synergies are expected through leveraging the company’s business in
Canada, which shares many similarities in business with the U.K. and utilizing the strength of bothcompanies enabling business expansion into the Canadian market.
(3) Date of business combination
February 4, 2019(4) Legal form of business combination
Stock acquisition(5) Name of the acquired company after business combination
Quadrangle Architects Limited(6) Percentage of voting rights acquired49%(7) Main rationale for determining the company acquired
A consolidated subsidiary of BDP, which is our consolidated subsidiary, acquired shares of Quadrangle
in exchange for cash.
2. Acquisition cost and breakdown of type of consideration
Cash
34 million Canadian dollars
Consideration
Acquisition cost34

3. Amount of goodwill occurred, cause of occurrence, method and period of amortization
Not yet determined.
4. Amount of assets and liabilities assumed on the date of the business combination, and the major breakdown
Not yet determined.

123. Other Information(1) Status of Orders and Sales
By period_

Net sales 1

Orders received

Category/Segment
Domestic Consulting
International Consulting

6,598

13.8

4,568

9.5

15,943

15.3

Urban & Spatial Development

5,356
--

11.2

7,824

16.4

12,855

12.3

225
--

0.5

179
--

0.2

Energy Business--

Real Estate Leasing
Others

4

0.0

48

0.1

(Note 1) 126

0.1

Total

47,832100.0

47,707100.0

104,350

100.0

Domestic Consulting
International Consulting

6,553
13,55621.0
43.4

14,714
11,472

37.6
29.3

48,78430,70346.0
29.0

Power Engineering

4,696

15.0

5,638

14.4

12,616

11.9

Urban & Spatial Development
Energy Business

6,204
--

19.9

6,748
310

17.2
0.8

12,998
354

12.3
0.3

222

0.7

217

0.6

440

0.4

0
31,233

0.0
100.0

45
39,146

0.1
100.0

125
106,0230.1
100.0

Domestic Consulting

6,335

20.3

14,07135.9

46,595

43.9

International Consulting
Power Engineering

12,731
5,608

40.7
18.0

10,685
6,718

27.3
17.2

28,88915,762

27.3
14.9

Urban & Spatial Development

6,209
--

19.9

6,761

17.3

13,040

12.3

Energy Business

364

0.9

354

0.3

Real Estate Leasing

222

0.7

217

0.6

440

0.4

Others

126

0.4

326

0.8

940

0.9

Total

31,233100.0

39,146100.0

106,023

100.0

Real Estate Leasing

Net sales 2

By period_
Category/Segment
Impact of foreignexchange fluctuations

For the fiscal year ended
June 30, 2018
AmountRatio (%)
(Millions of yen)
48,52946.5(Note 1) 26,716
25.6

Power Engineering

Others
Total

Outstanding Orders

For the six months ended
For the six months ended
December 31, 2017
December 31, 2018
AmountAmountRatio (%)
Ratio (%)
(Millions of yen)
(Millions of yen)
21,67545.3
23,471
49.2
14,19729.7
11,56924.3

Domestic Consulting

As of December 31, 2017
As of December 31, 2018
AmountAmountRatio (%)
Ratio (%)
(Millions of yen)
(Millions of yen)---

As of June 30, 2018
AmountRatio (%)
(Millions of yen)-(1,036)

International Consulting
Power Engineering

301
(0)

25
--

Urban & Spatial Development

615
--

(422)

0
(57)

--

--

--

--

--

--

--

--

Energy Business
Real Estate Leasing
Others(396)(1,093)Total
Domestic Consulting

917
46,455

32.3

39,83530.0

31,07825.0

International Consulting

72,31050.2

66,46750.1

66,34553.5

Power Engineering
Urban & Spatial Development

11,60913,456--

8.1
9.4

11,96414,1429.0
10.7

13,034
13,488

10.5
10.9

196

0.2

116
--

0.1

0.0

24

0.0

100.0

124,087

100.0

Energy Business
Real Estate Leasing
Others
Total

-29

0.0

27

143,861

100.0

132,635

Notes: 1. This includes the outstanding orders at the beginning of consolidation for Myanmar Koei International Ltd. and DSI Inc.,
which were consolidated from the previous fiscal year.
2. The above amounts are exclusive of consumption taxes.
3. The above amounts are for external customers, and do not include intersegment transactions or transfers.
4. Net sales 1 is by segment which received orders. Net sales 2 is by segment which provided services.

13