Summary of Consolidated Financial Results
For the Nine Months Ended October 31, 2011
[Japanese Standards] (Consolidated)
December 5, 2011
Company name: Pigeon Corporation (Stock code: 7956)
Listings: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Akio Okoshi (President and COO)
Contact: Tsutomu Matsunaga (Managing Officer, Corporate Planning & Administration Division)//Tel: +81-3-3661-4188
Date of release of Business Report: December 15, 2011
Planned Commencement Date of Dividend Payment: Not yet determined
Supplementary materials for the quarterly financial results: None
Investor conference for the quarterly financial results: None (For analysts and institutional investors)

1. Consolidated Financial Results (February 1 – October 31, 2011)(1) Performance(¥ millions, rounded down, % figures denote year-on-year change)
Operating Income
Ordinary Income
Net Income

Net Sales
Nine Months Ended October 31, 2011

43,595

4.7%

3,552

31.6%

3,426

29.6%

2,089

25.6%

Nine Months Ended October 31, 2010

41,621

4.5%

2,699

(24.9)%

2,644(26.5)%

1,663(27.1)%

Nine Months Ended October 31, 2011

104.41

Diluted Net
Income Per Share
(¥)－

Nine Months Ended October 31, 2010

83.10

－

Total Assets

Net Assets

Net Income per
Share (¥)

(2) Financial Position
At October 31, 2011

43,191

60.1

Net Assets Per
Share (¥)
1,297.42

62.2

1,325.71

Equity Ratio (%)

26,480At January 31, 2011
42,684
27,044
Reference: Equity: ¥25,966 million (At October 31, 2011); ¥26,533 million (At January 31, 2011)

2. Cash Dividends
Annual Dividends (¥)
1Q

2Q
－
－

Year Ended January 31, 2011
Year Ending January 31, 2012
Year Ending January 31, 2012
(Forecast)

3Q

Year-end

44.00
44.00

Full-year

－

44.00

88.00

－

44.00

88.00

(Note) Changes in dividend forecasts during the quarter under review: None

3. Forecast for the Year Ending January 31, 2012
(February 1, 2011 – January 31, 2012)
Net SalesYear Ending January 31, 2012(% figures denote year-on-year change)

61,100

7.1 %Operating
Income
5,000

10.0%

Ordinary
Income4,950(Note) Changes in projections during the quarter under review: None

11.6%(¥ millions, rounded down)
Net Income per
Net Income
Share (¥)
3,300

12.7%

164.88

4. Other (For details, please see “Other Information” on page 7 of “Appendix.”)(1) Changes in important subsidiaries during the period: No(Note) Whether or not specified subsidiaries were changed resulting in the changes in scope of consolidation
during the period.
(2) Application of simplified methods of accounting and specific accounting methods: Yes(Note) Whether or not the simplified accounting methods or the accounting methods specific for producing
quarterly consolidated financial statements was applied.
(3) Changes in accounting principles, processes, presentation methods, etc.
1) Changes due to revisions to accounting standards, etc.: Yes
2) Changes other than 1): Yes(Note) Whether or not accounting principles, processes and presentation methods associated with producing ofquarterly consolidated financial statements were changed. These are indicated in changes to important
items that form the basis for preparation of quarterly consolidated financial statements.
(4) Number of outstanding shares (ordinary shares)
1) Number of shares outstanding at term-end (including treasury shares)
Nine Months ended October 31, 2011: 20,275,581
Year ended January 31, 2011: 20,275,581
2) Number of treasury shares at term-end
Nine Months ended October 31, 2011:261,608
Year ended January 31, 2011: 261,343
3) Average number of shares during the period (cumulative figure for consolidated quarterly accounting period)
Nine Months ended October 31, 2011: 20,014,128
Nine Months ended October 31, 2010: 20,014,586*Indication regarding the situation of quarterly review procedures
Financial results for this third 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 was 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 details on the conditions that form the assumptions used for earnings forecasts, and notes on using earnings
forecasts, please refer to appendix page 5, “(3) Qualitative Information Regarding Consolidated Performance
Forecasts”.

Table of contents of the appendix
1. Qualitative Information Regarding the Financial Performance for the Current Quarter ................. 2(1) Qualitative Information Regarding Consolidated Business Results ........................................... 2(2) Qualitative Information Regarding Consolidated Financial Position ......................................... 5(3) Qualitative Information Regarding Consolidated Performance Forecasts .................................. 5
2. Other Information ............................................................................................................................ 7(1) Changes in important subsidiaries during the period (changes in specific subsidiaries affecting
the scope of consolidation) ........................................................................................................ .7(2) Overview of simplified accounting method or accounting methods specific to the preparationof quarterly financial statements................................................................................................ .7(3) Changes in accounting principles, processes, presentation methods, etc., related to the
preparation of quarterly consolidated financial statements ........................................................ 7
3. Quarterly Consolidated Financial Statement ................................................................................... 9(1) Quarterly Consolidated Balance Sheets ...................................................................................... 9(2) Quarterly Consolidated Statements of Income .......................................................................... 11(3) Quarterly Consolidated Statements of Cash Flows ................................................................... 12(4) Notes Regarding Going Concern Assumption .......................................................................... 13(5) Segment Information ................................................................................................................. 13(6) Notes Regarding Substantial Changes in Shareholders’ Equity ............................................... 15(7) Notes Regarding Relationships Such As Business Combination .............................................. 16

1

1. Qualitative Information Regarding the Financial Performance for the Current Quarter(1) Qualitative Information Regarding Consolidated Business Results
Overview of Performance
In the third quarter under review—nine months ended October 31, 2011—the Japanese economy at
first showed a tendency towards recovery due to the improvement of corporate profits and theoverseas economy. However, due to the large-scale and widespread damage of the infrastructurecaused by the Great East Japan Earthquake on March 11, many enterprises experienced either asuspension or a sharp decline of production activities, there was a lot of confusion in the supply
chain centering on the areas stricken by the disaster, and there was a severe stagnation in economic
activities. Subsequently, the situation is already on the path of gradual recovery and personal
consumption has also recovered as compared to the downturn immediately after the earthquake.
Even so, due to concern regarding the global economic recession originating from financial andcurrency instability in European countries such as Greece, rapid appreciation of the yen, andlarge-scale damage to associated factories of Japanese corporations due to flooding in Thailand,
there is a risk of a downward turn in the Japanese economy.
Due to power outages, water cutoff, and facility damage caused by the Great East Japan
Earthquake on March 11, the Group at first temporarily suspended or scaled down operations at two
distribution sites in Ibaraki and the production site of its consolidated subsidiary PHP Ibaraki. Since
the damage was comparatively small and limited, the ordinary operation system recovered by lateMarch and after that the Group has by and large been conducting business as usual.
Moreover, in order to ensure safety regarding Thailand flooding that occurred due to heavy
rain in late October, we temporarily stopped operation at our local production base THAI PIGEON
CO., LTD. However, we subsequently resumed operation and restored normal operating systems
from late November.
Under these circumstances, the Group made a new start in the initial year of the fourth
medium-term business plan “Independence as a Global Company,” starting February 2011 andending January 2014. The business policies in the medium-term business plan are as follows:
1) Focus on positive business development in overseas markets, aiming to further grow and expand
as a global company.
2) In our domestic and international operations, we will seek to further strengthen and improve theprofitability of current existing businesses as well as work to achieve solid growth in new anddeveloping businesses.
3) Build a global business management system based on the core components of “Fostering Human
Resources” and “Creating new value based on fundamental research.”
The segments below have been set for this consolidated fiscal year that is the first year of the fourth
medium-term business plan. In the nine-month period of the third quarter of consolidated
accounting, starting February 1, 2011 and ending October 31, 2011, the Group implemented
activities steadily in accordance with the segments.
Domestic Baby and Mother Care Business
By establishing and extending the large merchandise business and promoting the category of
women’s care, the Group will improve profitability in the current fields. Furthermore, the Groupwill establish and extend the Mamas & Papas business to launch new business in the IT field.
Child-rearing Support Services
The Group will continue steady business development by enriching the personnel development
system, extending services, and further improving child-rearing quality.
2

Health Care and Nursing Care Business
The Group will restructure the business operation system and take efficient measures to improve
brand awareness and promote the understanding of merchandise. By cultivating priority
merchandise categories, the Group will improve merchandise competitiveness and aggressively find
new sales channels.
Overseas Business
The Group will target aggressive investment in proactive business as a growth driver of the Groupto extend the production system and strengthen the business operation system. In China, tie-ups
with the current agencies will be strengthened and new agencies will be fostered.
Accompanying the launch of the new Changzhou Factory, the Group will strengthen thedevelopment system and in-house production system. In North America and Europe, the Group will
extend the merchandise category centered on the mOmma brand and develop new markets.
As a result, consolidated net sales for the period amounted to ¥43,595 million, up 4.7% from theprevious corresponding period. With respect to earnings, although new investments in plants andequipment were made to promote the expansion of foreign operations, costs decreased due toin-house production and efficient utilization was realized for marketing expenses, etc. As a result,operating income was ¥3,552 million, up 31.6%, and ordinary income was ¥3,426 million, up
29.6% from the previous corresponding period. Net income for the period was ¥2,089 million, up
25.6% from the previous corresponding period as ¥150 million was accounted as extraordinary loss
mainly for repairing facilities and discarding merchandise damaged by the Great East Japan
Earthquake.
The business report segments are "Domestic Baby and Mother Care Business," "Child-rearing
Support Services," "Health Care and Nursing Care Business," and "Overseas Business." Eachsegment is outlined below. In accordance with "Accounting Standards Regarding the Disclosure of
Segment Information etc.," the segments have been changed from "Baby and Child Care segment","Healthcare segment", and "Other segment") to the above, starting from this consolidated fiscal
year. In the outline for each segment, descriptions on comparisons with the same quarter of theprevious year provide figures calculated by replacing performance in the same quarter of theprevious year.
Domestic Baby and Mother Care Business
Sales in this segment amounted to ¥18,087 million, up 0.4% from the same quarter of the previous
year. Segment income was ¥2,753 million, up 8.6% from the same quarter of the previous year. In
terms of new products, the Group marketed "MOGUTTOYASAI" as single-meal retort-pouchedbaby foods all enriched with vegetables, "Body Massage Cream" and "Body HIKISHIME Gel"containing hyaluronic acid for skin care during pregnancy and after birth, easy-to-prepare "Range
de MUSHI-PAN" baby snacks by mixing milk or water, "MAGUMAGU Baby", "MAGUMAGU
Spout", "SODACHI OUEN Sandal YOCHIYOCHI-ANYO/TOKOTOKO-ANYO" baby sandals
for selection according to the growth of your baby in February, and the "MUSHI-KURURIN
OHEYANIOKU Type" insect repellent using natural ingredients in March, and in June newly
released an infant seat "SALVAJE " which can be used for children starting right from birth andthat offer high safety and amenity. In August, we launched the new brand "Baby Laundry," alaundry series which is gentle to the skin for mothers and babies, "Skin Thermometer
H20—CHIBION Touch," a thermometer which measures body temperature at the forehead, "BabyOil Jelly," a gel-type skin care product, "HAJIMETE no Mask," sanitary masks which can be usedfrom 18 months of age, "Dental Paste (Medicated)," a low-stimuli toothpaste which can be easily
used during pregnancy, and "ONEGAI Origo," water which is Pigeon’s first specified health food.
Furthermore, in October, we launched "Baby Rhythm Breast Pump—Electric Premium Model," a3highly-functional breast pump which replicates lactation rhythms.
Regarding the maternity events we are committed to as part of our direct communications
program aimed at strengthening brand loyalty, although under the influence of the Great East Japan
Earthquake we canceled a part of them, in the cumulative consolidated quarterly accounting period
we have held 21 such events, during which a total of about 1,500 people who are pregnant haveparticipated. Another new venture was to hold "First Steps in Preparing for Pregnancy" classtargeting those beginning preparations for pregnancy. We made good progress in attracting newmembers to “Pigeon Info”—a word-of-mouth community portal that supports women during
pregnancy, in childbirth, and when raising children. In the Internet and home shopping business,order reception and shipping were suspended temporarily under the influence of the Great East
Japan Earthquake but returned to the ordinary sales system from April.
Child-rearing Support Services
Sales in this segment amounted to ¥4,457 million, up 10.0% from the same quarter of the previous
year. Segment income was ¥108 million, up 23.0% from the same quarter of the previous year.
Some facilities were temporarily closed under the influence of the Great East Japan Earthquake. In
April, however, one authorized nursery school and three nursery facilities within businessestablishments were launched under a new contract of entrustment, and while improving the service
quality, the Group is raising sales steadily.
Health Care and Nursing Care Business
Sales in this segment amounted to ¥4,800 million, down 0.4% from the same quarter of the previous
year. Segment income was ¥298 million, up 704.2% from the same quarter of the previous year, as
selling, general and administrative expenses were suppressed by effective and efficient marketingmeasures suited to the characteristics of the merchandise and sales channels greatly improving the
profitability of the enterprise. As for the Habinurse brand of elder care products, the Group newly
marketed the "HAGUKI NI YASASHII Brush" and "FUSSOIRI HAMIGAKI Gel" oral care series
for the elderly and "YAWARARKAI KAIJO Spoon" nursing-care tableware designed for careproviders and care receivers in February. Regarding the brand "Recoup" for elderly people seeking
good health, the Group marketed an environmentally-friendly, easy-to-use "NUNO Type KYUSYU
Pad" for attachment on regular underwear in the same month. In the future, the Group will extend
business by marketing merchandise through intensive research on priority categories andimplementing efficient measures.
Overseas Business
Sales in this segment amounted to ¥15,481 million, up 11.0% from the same quarter of the previous
year. Segment income was ¥2,688 million, up 12.1% from the same quarter of the previous year. In
China, the distribution system has been improved and restructured to a stable level. The sale ofvarious products including newly released ones is also progressing steadily. On the basis of local
currency, net sales are greatly exceeding over the same quarter of the previous year. To strengthen
the merchandise supply system, Pigeon Industries (Changzhou) Co., Ltd., located in Changzhou,
Jiangsu Province started operations in January of this year. As the second production site in China,
this consolidated subsidiary is working steadily, expanding the quantity of output and the number of
products handled. In India, a distribution system is being constructed, the sales network is being
extended, and Pigeon Corner is being set up as dedicated sales floors, thanks to the activities of theconsolidated subsidiary PIGEON INDIA PVT. LTD. In Malaysia, where the consolidated
subsidiary PIGEON SINGAPORE PTE.LTD. acquired the shares of a local sales agency in January(company renamed to PIGEON MALAYSIA (TRADING) SDN.BHD. after stock acquisition), weare steadily going forward with our business on the basis of a newly adopted system striving toextend business while remaining especially committed to branding activities. In North America andEurope, the consolidated subsidiary LANSINOH LABORATORIES,INC. is carrying out sales
activities steadily. Including the mOmma business that was acquired by the subsidiary last4

December, the Group will further promote business aggressively.
OthersSales in this segment amounted to ¥768 million, down 1.9% from the same quarter of the previous
year, due to a decline of OEM merchandise orders. Segment income was ¥97 million, up 2.9% fromthe same quarter of the previous year.
(2) Qualitative Information Regarding Consolidated Financial Position
1) Assets
As of October 31, 2011, Pigeon had consolidated total assets of ¥43,191 million, up ¥506 million
from a year earlier. Within this amount, total current assets increased ¥703 million, and total fixed
assets decreased ¥196 million.
The major factor boosting current assets was a ¥1,210 million increase in goods andproducts.
The main reasons for the decline in fixed assets were depreciation and amortization of
goodwill.
2) Liabilities
Total liabilities as of October 31, 2011 stood at ¥16,711 million, up ¥1,070 million from theprevious fiscal year-end. Current liabilities increased ¥42 million, and long-term liabilities
increased by ¥1,028 million.
Main factor boosting current liabilities was a ¥977 million decrease in current portion of
long-term loans payable while there were a ¥449 million increase in notes and accounts payable anda ¥455 million increase in accrued bonuses to employees.
Main factor boosting long-term liabilities was a ¥1,019 million increase in long-termborrowings.
3) Net Assets
At October 31, 2011, consolidated net assets amounted to ¥26,480 million, down ¥563 million fromJanuary 31.
(3) Qualitative Information Regarding Consolidated Performance Forecasts
In the fourth medium-term business plan “Independence As a Global Company,” the Group aims to
improve profitability in the current business fields and increase new merchandise fields and sales
channels by enriching the merchandising categories for Domestic Baby and Mother Care Businessin Japan, extending new business in IT home shopping, deeply cultivating priority merchandise
categories in the Health Care and Nursing Care Business, and finding new sales channels.
Regarding Overseas Business, the Group aims to deeply cultivate current markets and implementbusiness expansion in China and North America by enriching merchandise categories while
extending the production system and strengthening the business operation system by aggressive
business investment. In India, the Middle and Near East, Korea, and South and Central America,
the Group aims to promote aggressive market development. Regarding this consolidated fiscal year
as the first year of the fourth medium-term business plan, the basic policies below are set. We will
do our utmost to achieve the plan securely while considering how the domestic economy and Group
performance is influenced by the Great East Japan Earthquake which occurred on March 11th, theglobal economic recession due to financial and currency instability in European countries, and rapid
appreciation of the yen.
Basic Policies
1. To realize the objectives of our fourth medium-term business plan, we will put together strategies
for each business and functional strategies that serve as the basis for such businesses into a specific
enforcement plan, which we will steadily implement.
5

2. By effectively utilizing production facilities and capacity within the Group, we will improve ourcost of sales situation and enhance profitability.
3. Seeking “Independence As a Global Company,” we will focus on nurturing human resources,
while formulating medium-term strategies of each business and building organizational frameworks
according to our growth potential.
The prospects of the Group throughout the term remain unchanged from the performance
predictions announced on March 7, 2011.

6

2. Other Information(1) Changes in important subsidiaries during the period (changes in specific subsidiaries
affecting the scope of consolidation)
Not applicable.
(2) Overview of simplified accounting method or accounting methods specific to the
preparation of quarterly financial statements
1) Simplified Accounting Method- Calculation of estimated bad debt losses on general receivables
For the end of the quarter under review, the Company has used the estimated bad debt loss ratio thatwas used for the end of the previous fiscal year, recognizing that no significant changes have arisen
since that time.
- Valuation of inventory assets
The value of inventories at the end of the quarter under review is calculated using a rational method,
based on physical inventories at the end of the previous fiscal year, rather than physical inventories
at the end of the quarter under review.
The Company has reduced the book price of certain inventory assets that were clearly deemed to be
declining in profitability, after estimating the net selling value of such assets.
- Method of calculating depreciation of fixed assets
For fixed assets that are depreciated using the declining-balance method, the depreciation expense
is computed by the proportional distribution of the depreciation expense for the fiscal year.
- Determining recoverability of deferred tax assets
In judging the recoverability of deferred tax assets, the Corporation employs a method using future
performance forecasts using results from the previous fiscal year, as well as tax planning, having
confirmed that that no significant changes in the operating environment or temporary differences
have occurred since the end of the previous fiscal year.
2) Special accounting treatment applied in preparation of quarterly financial statements
Not applicable.
(3) Changes in accounting principles, processes, presentation methods, etc., related to the
preparation of quarterly consolidated financial statements
1) Changes of matters pertaining to the scope of consolidation- Change in scope of consolidation
From the first quarter of this consolidated accounting period, PIGEON MALAYSIA(TRADING) SDN.BHD., is included in the scope of consolidation by stock acquisition.
During the third quarter of this consolidated accounting period, HealthQuest Ltd. was made a
consolidated subsidiary through stock acquisition. However, during the same consolidated
accounting period, HealthQuest Ltd. merged with the consolidated subsidiary LANSINOHLABORATORIES, INC. As a result, there was no change in the number of consolidated
subsidiaries.
- Number of consolidated subsidiaries after change: 172) Changes of matters pertaining to accounting standards- Application of "Accounting Standards Regarding the Equity Method" and "Temporary Treatment
Regarding the Accounting of Affiliates Subject to the Equity Method"
From the first quarter of this consolidated fiscal year, "Accounting Standards Regarding theEquity Method" (ASBJ No. 16, March 10, 2008) and "Temporary Treatment Regarding the
Accounting of Affiliates Subject to the Equity Method" (Practical Solutions Report No. 24,
March 10, 2008) have been applied.
This affected ordinary income or income before income taxes and minority interests only7

slightly.
- Application of "Accounting Standards Regarding Asset Retirement Obligations"
From the first quarter of this consolidated fiscal year, "Accounting Standards Regarding Asset
Retirement Obligations" (ASBJ No. 18, March 31, 2008), and "Application Guidelines for
Accounting Standards Regarding Asset Retirement Obligations" (ASBJ Guideline No. 21, March
31, 2008) have been applied.
This affected ordinary income or income before income taxes and minority interests only
slightly.
- Application of ""Accounting Standards for Business Combinations"
From the first quarter of this consolidated fiscal year, "Accounting Standards for Business
Combinations" (ASBJ No. 21, December 26, 2008), "Accounting Standards for Consolidated
Financial Statements"(ASBJ No. 22, December 26, 2008), "Partial Revision of AccountingStandards Regarding Research and Development Costs" (ASBJ No. 23, December 26, 2008),"Accounting Standards for Business Divestitures" (ASBJ No. 7, December 26, 2008),"Accounting Standards Regarding the Equity Method" (ASBJ No. 16 announced on December
26, 2008), and "Application Guidelines for Accounting Standards Regarding Business
Combinations and Accounting Standards Regarding Business Divestitures" (ASBJ Guideline No.
10, December 26, 2008) have been applied.
3) Changes in Description Method(Quarterly consolidated financial statements)- In the third quarter of this consolidated fiscal year, this has been presented by the account of"Income before minority interest" because of the "Cabinet Order for Partial Revision of theOrdinance on Terminology, Forms, and Preparation Methods of Financial Statements, etc."(Cabinet Order No. 5, March 24, 2009) based on the "Accounting Standards for Consolidated
Financial Statements" (ASBJ No. 22 dated December 26, 2008)."- Since "rental income" which had been recorded separately for the previous third cumulative
consolidated quarterly accounting period was 20/100 or less of the total amount of other income,it was decided to list it under "other" heading among other income. The amount of "rental
income" listed under "other" heading among other income of this third cumulative consolidated
quarterly accounting period was ¥24,718 thousand.
- Since the degree of importance of "rental income-related costs "which had been recorded
separately for the previous third cumulative consolidated quarterly accounting period became
low, it was decided to list it under "other" heading among other income. The amount of "rental
income-related costs" listed under "other" heading among other income of this third cumulative
consolidated quarterly accounting period was ¥19,440 thousand.

83. Quarterly Consolidated Financial Statement(1) Quarterly Consolidated Balance Sheets(Thousands of yen)
At October 31, 2011

At January 31, 2011ASSETS
I. Current Assets:
Cash and time deposit

6,056,925

6,827,706

Notes and accounts receivable

10,103,575

9,874,273

Goods and products

5,760,113

4,549,808

Goods in process

145,843

54,401

Raw material and inventory goods

1,363,063

1,194,021

Other current assets

1,547,100

1,776,585

Allowance for doubtful accounts(110,575)(113,948)

Total Current Assets

24,866,046

24,162,848

Buildings and structures-net

5,071,021

5,350,520

Land

5,978,173

6,012,825

Other tangible fixed assets-net

3,981,099

4,045,967

Total Tangible Fixed Assets

15,030,295

15,409,313

Goodwill

790,549599,728

Other intangible fixed assets

534,757

588,350

Total Intangible Fixed Assets

1,325,306

1,188,079

Other

2,046,966

2,001,729

Allowance for doubtful accounts(76,888)(77,222)

Total Investments and Other Assets

1,970,078

1,924,506

Total Fixed Assets

18,325,679

18,521,899

Total Assets

43,191,726

42,684,748

II. Fixed Assets:
1. Tangible Fixed Assets:

2. Intangible Fixed Assets:

3. Investments and Other Assets:9

(Thousands of yen)
At October 31, 2011

At January 31, 2011

LIABILITIES
I. Current Liabilities:
Notes and accounts payable

4,434,298

3,984,705

Short-term borrowings

2,153,300

2,258,000

Current portion of long-term loans payable

22,9661,000,000

Income taxes payable

495,502561,952

Accrued bonuses to employees

992,624

537,505

Returned goods adjustment reserve

54,61746,084

Other current liabilities

4,116,099

3,838,892

Total Current Liabilities

12,269,409

12,227,140

2,634,516

1,615,000

252,613

243,710

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

348,694

322,447

1,206,093

1,232,411

Total Long-Term Liabilities

4,441,918

3,413,570

Total Liabilities

16,711,327

15,640,710

Capital stock

5,199,597

5,199,597

Additional paid-in capital

5,180,246

5,180,246

Retained earnings

18,779,868

18,451,368

Treasury stock(448,423)(447,673)

Total Shareholders’ Equity

28,711,289

28,383,538

3,206

11,237(2,747,816)(1,861,586)(2,744,609)(1,850,348)

III. Minority Interests

513,719

510,847

Total Net Assets

26,480,398

27,044,037

Total Liabilities, Minority Interests and Net Assets

43,191,726

42,684,748

NET ASSETS
I. Shareholders’ Equity:

II. Valuation and Translation Adjustments:
Net unrealized gains on securities
Foreign currency translation adjustment
Total Valuation and Translation Adjustments10(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
Rental income
Equity in earnings of non consolidated subsidiaries
and affiliates
Other
Total Other Income
V. Other Expenses:
Interest expense
Sales discounts
Rental income-related costs
Foreign exchange losses
Other
Total Other Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of property
Reversal of allowance for doubtful accounts
Other
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of property
Loss on disposal of property
Loss on liquidation of subsidiaries and affiliates
Loss on disaster
Other
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

11

Nine months ended
October 31, 2010
41,621,822
24,631,530
16,990,291
62,09562,38916,989,997
14,290,194
2,699,802(Thousands of yen)
Nine months ended
October 31, 2011
43,595,355
25,724,040
17,871,314
46,01555,402
17,861,927
14,309,618
3,552,308

21,48175,53425,276－48,01149,133

175,207
320,235

216,680
291,091

36,158
165,792
45,818
118,9738,720
375,4622,644,575

57,714
164,803－150,435
43,900416,854
3,426,545

666
－
163
829

2,224
3,426
－
5,651

429
7,622
71,769－12,522
92,3432,553,061
972,795(155,794)
817,000－

23
13,612－
132,371
4,692
150,700
3,281,496
1,139,275(36,308)
1,102,967
2,178,529

72,79988,7801,663,261

2,089,748

(3) Quarterly Consolidated Statements of Cash Flows
Nine months ended
October 31, 2010
I. Cash Flows from Operating Activities:
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in accrued bonuses to employees
Increase (decrease) in employees’ retirement benefits
Increase (decrease) in directors’ retirement benefits
Interest and dividend income
Equity in (gains) losses of non consolidated subsidiaries andaffiliates
Interest expense
Loss (gain) on sale of fixed assets
Loss on disposal of fixed assets
Loss (gain) on liquidation of subsidiaries and affiliates
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in account payable
Increase (decrease) in consumption tax payable
Decrease (increase) in bankruptcy claims
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net Cash Provided by Operating Activities
II. Cash Flows from Investing Activities:
Acquisition of property, plant and equipment
Proceeds from sales of property, plant and equipment
Acquisition of intangible assets
Purchase of insurance funds
Purchase of investments in subsidiaries resulting in change inscope of consolidation
Loans advanced
Collection of loan receivables
Payment for lease deposits
Proceeds from recovery of lease deposits
Other
Net Cash Used in Investing Activities
III. Cash Flows from Financing Activities:
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term loans payable
Repayment of long-term debt
Payment of cash dividends
Payment of cash dividends to minority shareholders
Acquisition of treasury stock
Other
Net Cash Used in Financing Activities
IV. Effect of Exchange Rate Changes on Cash and Cash
Equivalents
V. Net Change in Cash and Cash Equivalents
VI. Cash and Cash Equivalents at Beginning of the Period
VII. Cash and Cash Equivalents at End of the Period

12(Thousands of yen)
Nine months ended
October 31, 2011

2,553,061
1,210,028
236,850
20,921
393,807
17,31018,788(25,270)

3,281,496
1,234,057
197,952(2,581)
460,161
9,172
26,247(28,884)(48,011)(49,133)

36,158(237)
7,622
71,769(905,508)(884,040)
229,829
477,02070,72889(246,531)
3,234,386
54,449(41,928)(1,368,534)
1,878,372

57,714(2,200)13,612－(293,133)(1,412,231)
513,170
316,728(64,458)
289(194,706)
4,063,272
27,407(58,011)(1,206,033)
2,826,634(1,821,268)
13,830(125,511)(3,730)(1,107,759)
5,645(84,023)(3,744)－(348,040)(2,016)
2,362(18,770)
25,294(9,578)(1,939,390)(2,515)
16,045(17,691)
15,025(28,312)(1,555,369)

5,963,510(4,745,130)－(105,120)(1,509,551)(49,894)(382)(11,621)(458,189)

7,450,440(7,652,063)
1,074,200(1,019,816)(1,750,181)(39,212)(750)(8,515)(1,945,899)(171,077)(96,146)(690,284)
6,905,541
6,215,257(770,780)
6,827,706
6,056,925

(4) Notes Regarding Going Concern Assumptions
Not applicable.
(5) Segment Information
Performance by Business Segment
Nine Months Ended October 31, 2010(¥ thousands)

Baby andchild care

Healthcare

OthersTotal

Eliminations
or corporate

Consolidated

Sales
33,947,449

4,782,529

2,891,843

41,621,822－

41,621,822

－

－

－

－

(－)

－

33,947,449

4,782,529

2,891,843

41,621,822(－)

41,621,822

Operating income
4,630,678
71,874
398,327
5,100,881
Notes:
1. The Company’s business is segmented for internal control purposes.
2. Main products/services of each segment are shown below.
Segment
Main products/services(2,401,078)

2,699,802(1) Sales to outside customers(2) Intersegment sales
Total

Baby and child care

Breastfeeding and weaning products, skincare products, child-rearing support services, other

Healthcare

Elder care products, elder care services, other

Others

Women’s care products (supplements, maternity products, etc.), wet tissues, other

Performance by Geographic Region
Nine Months Ended October 31, 2010(¥ thousands)
Eliminations orConsolidated
corporate

Japan

Asia

OthersTotal

29,670,618

8,328,987

3,622,216

41,621,822

－

Sales
(1) Sales to outside customers

41,621,822(2) Inter-segment sales

1,731,912

1,804,703－

3,536,616(3,536,616)

－

Total

31,402,531

10,133,691

3,622,216

45,158,439(3,536,616)

41,621,822

Operating income
3,605,765
1,263,813
275,932
5,145,511(2,445,708)
2,699,802
Notes:
1. Segmentation of countries and regions is based on geographic proximity.
2. Major countries and regions are as follows:(1) Asia: Singapore, Thailand, China, India(2) Other: United States, etc.
3. Geographical Segment Name Change
In conjunction with the establishment in November 2009 of consolidated subsidiary Pigeon India Pvt. Ltd., the Group haschanged the name of the “East Asia” geographical segment to “Asia.”13

Oversea Sales
Nine Months Ended October 31, 2010(¥ thousand)
Asia

Overseas sales
Consolidated net sales

North America

Middle East

Other

Total

8,757,005

2,881,554

1,123,061

1,152,428

13,914,051

－

－

－

－

41,621,822

Share of overseas sales in
21.0
6.9
2.7
2.8
33.4
consolidated net sales (%)
Notes:
1. Segmentation of countries and regions is based on geographic proximity.
2. Major countries and regions are as follows:(1) Asia: China, Singapore, South Korea, etc.
(2) North America: United States, Canada, etc.
(3) Middle East: United Arab Emirates, etc.
(4) Other: South Africa, Panama, United Kingdom, etc.
3. Overseas sales refer to sales in countries or regions outside of Japan reported by the Company and its consolidated subsidiaries.
4. Overseas sales Segment Name Change
In conjunction with the establishment in November 2009 of consolidated subsidiary Pigeon India Pvt. Ltd., the Group haschanged the name of the “East Asia” geographical segment to “Asia.”

14

Segment Information
1. Outline of Report Segments
The report segments are units of organization of the Group for which financial information is separately available and reviewed
periodically by the Board of Directors to determine the distribution of managerial resources and to evaluate performance.
The Group mainly sells baby-care products separately in and outside Japan and is engaged in sales and service related tohealth & elder care, service related to the support of nursing, and product and other services by business activities throughlocalized business div.
Therefore, the Group consists of segments by products and services based on business div. and by area. The report
segments are four: "Domestic Baby and Mother Care Business," "Child-rearing Support Services," "Health Care and Nursing
Care Business," and "Overseas Business."
The report segments of the Group are as follows:
1) Domestic Baby and Mother Care Business
In Japan, we mainly manufacture and sell baby-care products and products for women's use.
(Main products) Breastfeeding and weaning products, skincare products, wet tissues, baby foods, baby products for outsideuse, women's care products (supplements, maternity products), and others.
2) Child-rearing Support Services
In Japan, we provide child-rearing support services.
(Main services) Management of own or entrusted nursery facilities, management of nursery schools, provision ofbaby-sitting services, and others.
3) Health Care and Nursing Care Business
In Japan, we manufacture and sell healthcare products and elder care products and provide care services.
(Main products) Products for urination, skincare products, wet tissues, wheelchairs, products for care facilities, elder careservices, and others.
4) Overseas BusinessIn the world, we mainly manufacture and sell baby-care products and products for women's use.
2. Information Regarding Net Sales and Profit & Loss in Each Report Segment

Nine Months Ended October 31, 2011(¥ thousand)Report Segment

HealthDomestic
Child-rearing Care andBaby andSupportNursingMother Care
Services
Care
Business
Business
Sales
Sales tooutsidecustomers
Total

Overseas
Business

Sub Total

Other(Note) 1

Total

AmountAccounted on
Adjustment Quarterly
Consolidateds(Note) 2 Statements ofIncome(Note)3

18,087,852

4,457,385 4,800,005 15,481,844 42,827,087

768,267 43,595,355－

43,595,355

18,087,852

4,457,385 4,800,005 15,481,844 42,827,087

768,267 43,595,355－

43,595,355

Segment income
2,753,615
108,410298,391 2,688,297 5,848,714
97,170 5,945,885 (2,393,576)
3,552,308
Notes:
1. "Other" means a segment not in the report segments and mainly includes manufacture and sale by our production subsidiaries
outside the Group.
2. Operating income adjustments are all selling costs that cannot be allocated. Main adjustments are costs in the management
division and the research and development division of the Group
3. Operating income is adjusted with that in Quarterly Consolidated Statements of Income.
(Additional Information)
From the first quarter of this consolidated fiscal year, "Accounting Standards Regarding the Disclosure of Segment Informationetc." (ASBJ No. 17, March 27, 2009), and "Application Guidelines for Accounting Standards Regarding the Disclosure of
Segment Information, etc." (ASBJ Guideline No. 20, March 21, 2008) have been applied.

(6) Notes Regarding Substantial Changes in Shareholders’ Equity
Not applicable.

15(7) Notes Regarding Relationships Such As Business Combination
Third quarter of this consolidated accounting period (August 1st, 2011 to October 31st, 2011)
Business combinations due to acquisition.
1. Name and business activities of acquired corporation, main purpose for business combination,
date of business combination, legal form of business combination and name of corporation after
combination, acquired ratio of voting rights and major grounds leading to determination of acquired
corporation.
(1) Name and business activities of acquired corporation
HealthQuest Ltd.
Manufacturing and sales of skincare products(2) Main purpose for business combination
The purpose is to promote expansion of the categories of the products handled and market
channels.
(3) Date of business combination
July 20th, 2011(4) Legal form of business combination and name of corporation after combination
Legal form of business combination: Acquisition of stock through cash considerations
Name of corporation after combination: HealthQuest Ltd.
On August 31st, 2011, HealthQuest Ltd. merged with the subsdiary LANSINOHLABORATORIES,INC.
(5) Acquired ratio of voting rights
100%(6) Major grounds leading to determination of acquired corporation
By acquiring stock through cash considerations, LANSINOH LABORATORIES,INC.
acquired 100% of voting rights for HealthQuest Ltd.
2. Period of performance for the acquired corporation included within the quarterly consolidated
statements of income related to the consolidated quarterly accounting period and the cumulative
consolidated quarterly accounting period
July 21st, 2011 to September 30th, 2011
3. Cost of acquisition for acquired corporation and related details
Acquisition considerations
Cash and time deposit 3 million￡
Acquisition cost
3 million￡
4. Amount, factors that arose goodwill, amortization method and amortization period of arising
goodwill (1) Amount of resulting goodwill
2.425 million￡(2) Factors that arose goodwill
Rational estimate of future excess earnings power.
(3) Amortization method and period
Straight-line amortization over a 5-year period.
5. Assuming that business combination is completed on the starting date for this consolidated fiscal
year, approximate amount of influence on the quarterly consolidated statements of income related
to this cumulative consolidated quarterly accounting period
This item is omitted due to difficulty in calculating the effects.

16