Member of Financial Accounting Standards Foundation

Summary of Consolidated Financial Statements for the Third Quarter, FY2017
July 31, 2017
Exchange: First Section of Tokyo Stock Exchange
Name of listed company:

GMO Payment Gateway, Inc.

Stock code:

3769

Representative:

Issei Ainoura

President &Representative Director

Contact:

Ryu Muramatsu

Executive Vice President

Tel: +81-3-3464-0182

Scheduled submission date ofquarterly reportAugust 10, 2017

Scheduled date ofcommencement for
dividend payment-

Supplemental materials preparedfor financial results

Yes

Information meeting arranged
related to financial resultsYes (for institutional investors andanalysts)

URL: http://corp.gmo-pg.com/(Amounts rounded down to the nearest one million yen)

1.

Consolidated Financial Statements for the Third Quarter, FY2017 (Cumulative)(From October 1, 2016 to June 30, 2017)(1) Consolidated Financial Statements (Percentages denote the increase or decrease from the previous period)
Revenue
3Q FY2017
3Q FY2016

Million yen
15,708
8,820

%
78.1
37.2

Operating profit

Ordinary profit

Million yen
3,937
2,953

Million yen
3,753
2,941

%
33.3
28.4

(Note) Comprehensive income: 3Q FY2017: 1,862 million yen (18.8%)

3Q FY2017
3Q FY2016

Net profit per share
Yen
40.74
48.70

%
27.6
26.9

Profit attributable toowners of parent
Million yen%
1,513(16.3)
1,809
24.4

3Q FY2016: 1,567 million yen (2.9%)

Diluted net profit per share
Yen
—
48.70

(Note) In order to appropriately disclose net income per share, stock attributed to the directors’ remuneration board incentive plantrust is not included in treasury stock since it has the right to a claim of dividend.

(2) Consolidated Financial Position

3Q FY2017
FY2016

Total assets
Million yen
75,68054,771

Net assets
Million yen
19,932
19,108Reference: Equity: 3Q FY2017: 18,945 million yen

2.

Equity ratio
%
25.0
33.2

Net assets per share
Yen
510.01488.88FY2016: 18,160 million yen

Dividends
1Q

FY 2016
FY 2017
FY 2017 (forecast)

2Q
Yen
0.00
0.00

Yen
0.00
0.00

Yearly dividends
3Q
Fiscal Year end
Yen
Yen
0.00
27.00
0.00
37.00

Total
Yen
27.00
37.00

(Note) Revision of the most recently released dividend forecast: No

3.

Consolidated Financial Forecast for the Fiscal Year Ending September 2017
(From October 1, 2016 to September 30, 2017)

Revenue
Operating profit
Ordinary profit
Million yen% Million yen% Million yen%
Full year
20,370
68.2
5,013
31.2
4,673
23.6
(Note) Revision of the most recently released financial forecast: No

Profit attributable toowners of parent
Million yen
%
2,762
(5.1)

Net profit per
share
Yen
74.35

Notices:
(1)

(2)
(3)

(4)

Changes of important subsidiaries during the period (change of specific subsidiaries that lead to a change
in the scope of consolidation): No
Number of new subsidiaries: - (Name:), number of excluded subsidiaries: - (Name:)
Application of special accounting procedures for the execution of the financial statements: No
Changes in the accounting policy / changes in the accounting estimation / restatement of corrections[1] Changes associated with the revision of accounting policy, etc.: No[2] Changes other than [1]: No[3] Changes in accounting estimations: No[4] Restatement of corrections: No
Number of shares issued (common stock)[1] Number of shares issued at the end of
the term (including treasury stock)

3Q FY2017: 37,150,500

FY 2016: 37,150,500[2] Number of treasury stocks at the end of
the term

3Q FY2017: 2,500

FY 2016: 2,500[3] Average number of shares

3Q FY2017: 37,148,000

3Q FY2016: 37,146,153(Note) In order to appropriately disclose the number of treasury shares at the end of the term and average number ofshares, stock attributed to the directors’ remuneration board incentive plan trust is not included in treasury stock
since it has the right to a claim of dividend.

**

These quarterly financial statements are not subject to the quarterly review procedures.
Explanation of the proper use of financial forecasts and other important notes
1. The above forecasts are outlooks based on information currently available, and include various uncertain
factors. Actual performance may differ substantially from the forecasts due to changes in business conditions
and other factors. For the assumption on which financial forecasts are based and matters to be considered inusing financial forecasts, please refer to“(3) Review of consolidated earnings forecasts and other forecasts”
under “1. Qualitative Information on Consolidated Financial Statements for the Quarter” on page 5 of theattachment.
2. Results Presentation for Investors and Analysts: August 1, 2017. Supporting materials and a video of thepresentation will be made available on the company's website after the event.

Table of contents of attachment
1. Qualitative Information on Consolidated Financial Statements for the Quarter(1) Qualitative information on consolidated operating results(2) Qualitative information on the consolidated financial condition(3) Review of consolidated earnings forecasts and other forecasts(4) Challenges to be addressed by the Company
2. Items concerning summary information (Notes)(1) Changes of important subsidiaries(2) Application of special accounting procedures for the execution of
the financial statements(3) Changes in the accounting policy/ changes in the accounting
estimation / restatement of corrections(4) Additional information
3. Consolidated quarterly financial statements(1) Consolidated quarterly balance sheet(2) Consolidated quarterly statements of income and consolidated quarterly
statement of comprehensive income(3) Consolidated statements of cash flows(4) Notes to consolidated quarterly financial statement(Notes regarding the Going Concern Assumption)(Notes for the consolidated quarterly profit and loss statement)(Notes in cases of extreme variation in the amount of shareholders’ equity)

－

1 －

2
2
5
6
6
7
7
7
7
7
8
8
10
12
14
14
14
14

1. Qualitative Information on Consolidated Financial Statements for the
Quarter(1)

Qualitative information on consolidated operating results

Regarding the economic environment in Japan during the period under review, corporate earnings, employment, andincome environments are trending toward improvement, supported by the economic and fiscal policy of the government
and the monetary easing measures by the Bank of Japan. However, the pace of economic recovery still remains moderate
due to uncertainties, with sharp fluctuations in financial and capital markets caused by the transition to the newadministration in the United States and the United Kingdom leaving the EU.
In regard to E-commerce, GMO Payment Gateway’s core business area, the B to C e-commerce market continues to growstrongly, thanks to favorable changes in the external environment such as broader use of smartphones as well as reforms
in logistics. The scope of Ecommerce itself is also growing as seen in the new areas such as B to B and C to C Ecommerce.
In addition, the transition to online payments is steadily proceeding outside of the Ecommerce field, including
non-merchandizing services, public dues such as utility bills and taxes, and fields which are closely linked to living such as
medical care.
Meanwhile, performance has been strong in credit card shopping within the card-present market, a principal market of
GMO Financial Gate Co., Ltd., which became a consolidated subsidiary in the previous consolidated fiscal year. As the2020 Tokyo Olympics and Paralympics draw closer, a transition to more cashless payments including means other thancredit cards is expected. We expect this to create new business opportunities, expanding the business domain of our groupeven further.
With regard to overseas business, we established entities in South East Asia to provide “Z.com Payment,” acomprehensive solution of necessary payment methods, to Japanese merchants which entered the local market. Also, we
have continued investment activities through “GMO Global Payment Fund” to form capital alliances with prospective
payment processing companies; in fact, local payment processing companies in which we invest have performed steadily.
In the previous consolidated fiscal year, we acquired a substantial stake in Macro Kiosk Berhad, a leading Malaysian
enterprise mobility solution enabler which offers complete services of mobile payment, authentication and notification. Witha view to incorporating the huge growth potential of South East Asia, the center of global growth, into the Group’s
mid-to-long-term business growth, we will continue to introduce new measures while driving synergetic effects within thegroup.
Under such circumstances, the group’s operating results for the consolidated cumulative third quarter of the current
consolidated fiscal year were as follows. We have generated a revenue of 15,708,082 thousand yen (increase of 78.1% on
a year-on-year basis) from an increase in transaction volume and value as well as expansion of payment processing
services by winning large-scale businesses. Other major factors for the revenue growth include winning of large-scale
merchants by our consolidated subsidiary GMO Payment Services Inc. as well as business expansion of Macro Kiosk
Berhad that started being included in the consolidated profit and loss statement from the second quarter of this fiscal year.
Looking at operating expenses in terms of cost of revenue, despite the advantages of economies of scale we gained fromour revenue growth, revenue cost ratio rose due to strong performance in high revenue cost ratio products in "GMO-PG
Remittance Service", "GMO payment after delivery" service, and payment terminal sales in GMO Financial Gate, Inc. As aresult, cost of revenue amounted to 4,746,395 thousand yen (increase of 137.6% on a year-on-year basis). Selling, generaland administrative expenses came to 7,024,270 thousand yen (increase of 81.5% on a year-on-year basis) due to theincrease of revenue cost from MSB expansion and an increase in personnel expenses. Operating profit grew 33.3% on a
year-on-year basis to 3,937,416 thousand yen.
Equity method investment loss of 254,029 thousand yen resulted in ordinary profit of 3,753,726 thousand yen (increase of
27.6% on a year-on-year basis.)
For extraordinary loss, we have recognized loss on changes in equity of 186,598 thousand yen, in accordance withchanges in our stake of our equity affiliates. With regards to income taxes, temporary differences have increased with thebusiness expansion of GMO Payment Service Inc. However, we have decided not to recognize deferred tax asset on these
temporary differences since it is difficult to reasonably estimate future taxable income at the the end of this cumulative third
quarter, which resulted in higher tax burden ratio from income taxes. Consequently, the net profit for this quarter
attributable to owners of parent company has become 1,513,324 thousand yen (decrease of 16.3% on a year-on-yearbasis)－

2 －② Results by segment
Performance by reportable segment is explained below.
From the second quarter of the current fiscal year, business segment categorization methodology has changed, andseveral business segments previously included in “Other” have been aggregated as “Payment Enhancement Business,”
and were added on as a reporting segment. And Macro Kiosk Berhad, which started being included in the consolidated
profit and loss statement from the second quarter of this fiscal year, is included in Payment Enhancement Businesscategory.
First nine months of theFirst nine months of theprevious consolidated
current consolidated
Segment
fiscal year
fiscal year
Rate of change (%)(From October 1, 2015
(From October 1, 2016
to June 30, 2016)
to June 30, 2017)
Payment Processing Business
6,361,261
8,798,189
38.3
Revenue (thousand yen)
3,845,844
5,078,217
32.0
Operating profit (thousand yen)
Money Service Business
164.0
1,554,482
4,104,506
Revenue (thousand yen)－
159,923(22,289)
Operating profit (thousand yen)
Payment Enhancement Business
904,670
2,805,386
210.1
Revenue (thousand yen)
124,217444,647
258.0
Operating profit (thousand yen)
Adjustments(217)
Revenue (thousand yen)
(1,176,636)(1,563,158)
Operating profit (thousand yen)Total
8,820,198
15,708,082
78.1
Revenue (thousand yen)
2,953,348
3,937,416
33.3
Operating profit (thousand yen)a. Payment Processing BusinessIn the Payment Processing Business, online payments grew steadily, thanks to growth of Ecommerce market and its arena
expansion, as well as receiving system development order from major companies.
In the field of recurring payments, we have continued to attempt to develop this field to enable the use of credit cards forpaying utility charges, taxes, public dues and other monthly services closely connected with everyday life. We provide
payment methods to various public institutions and local governments nationwide. Examples include Tokyo Metropolitan
Government credit card payment site for metropolitan tax; and National Tax Agency’s credit card payment site for nationaltax.
The number of the merchants during the current consolidated cumulative third quarter increased by 11,169 to 88,425
compared to the end of the previous consolidated fiscal year. The number and amount of processed payments steadily
increased.
Changes in number of operating stores

Number of operating

End of September

End of September

End of September

End of September

End of June

2013

2014

2015

2016

2017

44,32849,72559,55977,25688,425storesNote: Number of operating stores is the number of IDs assigned to each store to use the service. It shows the number of stores(merchants) which have an agreement with the Group, are connected to the system, and in principle are able to process
payments at any time, though the number does not include the stores which use non-payment processing services such as
GMO Payment after delivery service or Online advertising service nor the number of operating terminals provided by GMO
Financial Gate, Inc.

Regarding the card-present market business, payment processing services provided by GMO Financial Gate, Inc. showedstrong performance. GMO Financial Gate, Inc. became a consolidated subsidiary in the previous consolidated fiscal year,
and contributed to earnings growth in the third quarter of the current consolidated cumulative period.
Revenue came to 8,798,189 thousand yen (increase of 38.3% on a year-on-year basis) and profit for the segment(operating profit) was 5,078,217 thousand yen (increase of 32.0% on year-on-year basis).

b. Money Service Business－

3 －Money Service Business (MSB) includes “early payment service” to help set up payment cycles that cater to the needs ofmerchants and improve their cash flow, “transaction lending service” to provide loans that give merchants the funding theyneed to boost sales, and “GMO-PG Remittance Service”. In addition, our subsidiary GMO Payment Service, Inc. provides“GMO Payment after delivery” service that allows user to pay after receiving goods. The highly-demanded “GMO Payment
after delivery” service has been adopted by an increasing number of merchants and has performed favorably since its
introduction in May 2013.
Revenue was 4,104,506 thousand yen (increase of 164.0% on a year-on-year basis) and loss for the segment (operatingloss) was 22,289 thousand yen (segment (operating profit) was 159,923 thousand yen on the previous year) due to theincrease of sales cost related to growth of the MSB.

c. Payment Enhancement Business
Payment Enhancement Business includes collective services of mobile payment, authentication and notification provided
by Macro Kiosk Berhad, Online Advertising Service to boost merchant sales, SSL server certifications, and shipping
services.
For the consolidated cumulative third quarter, services of Macro Kiosk Berhad and “GMO-PG Online Advertising Service”
showed solid growth.
Revenue was 2,805,386 thousand yen (increase of 210.1% on a year-on-year basis) and income for the segment(operating profit) was 444,647 thousand yen (increase of 258.0% on a year-on-year basis).

③ Results by revenue model
Performance by revenue model is explained below.
Starting from the first quarter of this consolidated accounting period, we have changed the segmentation of our revenue
models and split "running revenue" into "stock (monthly revenue)" and "fee (transaction processing revenue.)" We havealso reviewed items included in each revenue model in the second quarter of this consolidated fiscal year to disclose moreaccurate management indicators based on reality. In line with this change, part of the commissions received in “GMO
payment after delivery,” which is the revenue provided by transaction value times a certain rate, has moved from fee(transaction processing revenue) to spread (merchant acquiring service revenue.) Accordingly, in the comparison below,
figures from the same period of the previous fiscal year have been restated to reflect the changes.

Business model
Initial(thousand yen)
(Initial revenue)
Stock(thousand yen)(Monthly revenue)
Fee(thousand yen)
(Transaction processing
revenue)
Spread (thousand yen)
(Merchant acquiring service revenue)
Total（thousand yen）

First nine months of theprevious consolidated
fiscal year
(From October 1, 2015
to June 30, 2016)

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)

Rate of change

454,493

1,038,693

128.5

2,140,326

2,711,883

26.7

2,141,201

4,730,794

120.9

4,084,176

7,226,711

76.9

8,820,198

15,708,082

78.1

－

4 －

(%)

(2)

Qualitative information on the consolidated financial condition[1]

AssetsThe balance of total assets at the end of the third quarter of the current consolidated fiscal year was
75,680,610 thousand yen, up 20,909,065 thousand yen as compared with the end of the previous
consolidated fiscal year. This increase was mainly due to an increase in cash and deposits (+3,029,222
thousand yen), an increase in advance payments-trade (+5,517,633 thousand yen), an increase in accounts
receivable-other (+12,014,178 thousand yen) and an increase in allowance for doubtful accounts of 1,660,565
thousand yen. The main factors for the increase in accounts receivable-other is the increase in transactions for
GMO payment after delivery service.

[2]

Liabilities
The balance of liabilities at the end of the third quarter of the current consolidated fiscal year was 55,748,123
thousand yen, up 20,084,748 thousand yen as compared with the end of the previous consolidated fiscal year.
This increase was mainly caused by an increase in long-term borrowings due within one year of 782,504
thousand yen, an increase in accounts payable-other of 8,813,463 thousand yen, and an increase in deposits
received of 6,733,367 thousand yen. It is the increase in “GMO payment after delivery” volume that pushed up
accounts-payable-other. Deposits received from merchants in accordance with the merchant acquiring service
agreement drove up deposits received.

[3]

Net assets
The balance of net assets at the end of the third quarter of the current consolidated fiscal year was 19,932,486
thousand yen, up 824,317 thousand yen as compared with the end of the previous consolidated fiscal year.
The increase was mainly caused by profit attributable to owners of parent of 1,513,324 thousand yen, an
increase of valuation difference on available-for-sale securities of 80,142 thousand yen, and the increase offoreign currency translation adjustment of 216,849 thousand yen, despite the payment of 1,002,996 thousand
yen in dividends.

[4]

Cash FlowsAt the end of the third quarter of the current consolidated fiscal year, cash and cash equivalents (“Funds”) were28,211,111 thousand yen, up 3,023,575 thousand yen as compared with the balance at the beginning of theperiod. Cash flows at the end of the cumulative third quarter of the current consolidated fiscal year were as
follows.
Net cash provided by (used in) operating activities
Cash provided by operating activities during the cumulative third quarter of the current consolidated fiscal year
amounted to 1,542,905 thousand yen (as compared with the inflow of 3,260,157 thousand yen in the same
period previous fiscal year). This was mainly due to recording profit before income taxes of 3,485,198 yen, an
increase in accounts payable-other of 8,799,634thousand yen as well as an increase in deposits of 6,733,367
thousand yen, despite the increases in advance payments-trade of 5,517,633 thousand yen and accounts
receivable-trade other of 11,854,163 thousand yen.
Net cash provided by (used in) investing activities
Cash used in investment activities totaled 1,404,684 thousand yen (as compared with 2,198,365 thousand yen
outflow in the same period previous fiscal year.) This was mainly due to purchase of intangible non-current
assets of 780,323 thousand yen and purchase of stocks of subsidiaries and affiliates of 369,329 thousand yen.
Net cash provided by (used in) financing activities
Cash obtained in financing activities totaled 2,863,577 thousand yen (as compared with 639,660 thousand yen
outflow in the same period previous fiscal year). This was primarily attributable to an increase of 4,000,000
thousand yen in proceed from long-term borrowings despite the dividend payout of 1,001,161 thousand yen.

－

5 －

(3)

Review of consolidated earnings forecasts and other forecasts

For the term ending September 2017, we project a revenue expansion in all segments of payment processing business,
Money Service Business, and Payment Enhancement Business. The expected major contributors to the revenue growth
are acquisition of major or promising merchants as well as large-scale businesses, provision of value-added services
including MSB and “GMO-PG Online Advertising Service,” and consolidation of Macro Kiosk Berhad which became asubsidiary of our group at the end of the previous fiscal year.
Financial results of Macro Kiosk Berhad gets consolidated based on their provisional financial statement as of three months
before our closing date, since their account closing falls on December 31. For this reason, income statement of Macro
Kiosk has been consolidated starting from the second quarter of this fiscal year ending in September 2017, and we plan toincorporate the results of Macro Kiosk for the nine months of October 1, 2016 to June 30, 2017.
Our consolidated earnings forecast for the Fiscal Year Ending September 2017 revised on May 1, 2017 is as follows.
Revenue 20,370 million yen (increase of 68.2% on a year-on-year basis), operating profit 5,013 million yen (increase of
31.2% on a year-on-year basis), ordinary profit 4,673 million yen (increase of 23.6% on a year-on-year basis), profit
attributable to owners of parent 2,762 million yen (decrease of 5.1% on a year-on-year basis).

(4)

Challenges to be addressed by our company

There is no material change under the cumulative third quarter of the current fiscal year to “Challenges to be addressed byour company,” within “Summary of Consolidated Financial Statements for the Second Quarter, FY 2017.”－

6 －2. Items concerning summary information (Notes)(1)

Changes of important subsidiaries(2)

Application of special accounting procedures for the drafting of financial
statements

N/A

N/A

(3)

Changes in accounting policy / changes or restatements in the accounting
estimates
N/A(4)

Additional information(Application of Guidelines for applying recoverability of deferred tax)
"Guidelines for Applying Recoverability of Deferred Tax Assets" (Business Accounting Principles Guideline No. 26 issued
on March 28, 2016)(Recognition basis for important provisions)
Provision for information security countermeasure
Upon leakage of information from unauthorized accesses, we have recognized estimated amounts in order to provide for
expenditures required on sending letters of apology to our customers, handling of inquiries, and investigations into
unauthorized accesses as well as information leakage.

－

7 －3. Consolidated quarterly financial statements(1) Consolidated quarterly balance sheet(Unit: Thousand yen)

Summary of balance sheet atthe end of the previous
consolidated fiscal year
(September 30, 2016)
AssetsCurrent assets
Cash and deposits
Accounts receivable-trade
Lease receivables
Merchandise
Supplies
Advance payments-trade
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Tangible assets
Buildings, net
Tools, furniture and fixtures
Other
Total tangible assets
Intangible assets
Goodwill
Right of trademark
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and affiliates
Investments in other securities ofsubsidiaries and affiliates
Long-term loans receivable from directors
and employees
Claims provable in bankruptcy, claims
provable in rehabilitation and other
Long-term prepaid expenses
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets－

8 －End of the third quarterof the current consolidated
fiscal year
(June 30, 2017)25,231,522
3,924,904
7,291,439
38,377972
6,388,955
118,723
300,169
515,689
1,742,612
323,683(327,887)
45,549,162

28,260,745
5,884,400
6,865,312
70,764882
11,906,588
187,547
44,488547,514
13,756,790
194,821(1,988,452)
65,731,403

83,143
122,782
146,354352,280

99,004
119,992
170,151
389,148

2,271,697
212
1,079,334
346,9713,698,215

2,203,296
162
1,288,782
537,353
4,029,594

2,251,124
2,203,234

2,300,466
2,279,461

309,174

422,468

962

592

31,468

46,115

8,285
231,035
87,62980,437(31,468)
5,171,884
9,222,381
54,771,544

7,462
328,531112,280
79,200(46,115)
5,530,463
9,949,206
75,680,610

(Unit: Thousand yen)

Summary of balance sheet atthe end of the previous
consolidated fiscal year
(September 30, 2016)
Liabilities
Current liabilities
Accounts payable-trade
Short-term borrowings
Long-term borrowings due within one year
Accounts payable-other
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Provision for bonuses
Provision for information security
countermeasure
Provision for others
Other
Total current liabilities
Noncurrent liabilities
Long-term borrowings
Provision for directors’ remuneration Board
Incentive Plan Trust
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Accumulated other comprehensive
incomeSubscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets－

9 －End of the third quarterof the current consolidated
fiscal year
(June 30, 2017)

2,726,492
50,617
17,8962,784,175
901,767
78,482447,442
27,634,302
478,8083,440,576
28,064800,400
11,597,638
875,375
519,385
421,760
34,367,670
4,696

－

53,821125,000
85,76435,330,748－
93,08852,202,478

30,1503,204,487

170,000

197,995

132,476
332,626
35,663,374

143,1613,545,644
55,748,123

4,712,900
4,964,712
8,893,549(265,236)
18,305,926

4,712,900
4,933,388
9,403,877(256,269)
18,793,897(48,004)

32,137(97,162)

119,686(145,167)

151,824

1,066
946,344
19,108,169
54,771,544

923
985,841
19,932,486
75,680,610

(2) Consolidated quarterly statements of income and consolidated quarterly statement ofcomprehensive income(Consolidated quarterly statements of income)(Cumulative third quarter of the consolidated fiscal year)(Unit: Thousand yen)

Revenue
Cost of revenue
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest received
Dividends received
Equity method investment gain
Gain on investment in partnership
Gain on reversal of dividends payable
Rent received
Commissions received
Foreign exchange gain
Other
Total non-operating income
Non-operating expenses
Interest paid
Equity method investment loss
Loss on investment in partnership
Rent paid
Foreign exchange loss
Other
Total non-operating expenses
Ordinary profit
Extraordinary profit
Income from securities soldInsurance reimbursement
Gain on liquidation of subsidiary
Total extraordinary profit
Extraordinary loss
Loss on change in equity
Loss on retirement of noncurrent assets
Information security countermeasure expenses
Loss on disaster
Total extraordinary loss
Profit before income taxes
Corporate, inhabitant and enterprise taxes
Income taxes-deferred
Total income taxes
Profit before minority interests
Profit attributable to non-controlling interests
Profit attributable to owners of the parent－

First nine months of theprevious consolidated
fiscal year
(From October 1, 2015
to June 30, 2016)
8,820,198
1,997,568
6,822,630
3,869,281
2,953,348

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)15,708,082
4,746,395
10,961,687
7,024,270
3,937,416

3,620
6,719
19,804
10,857933
13,615
16,741－
7,206
79,49814,288
9,977
－
－
1,159
930
15,10645,614
8,093
95,1692,880－－
13,36975,105
181
91,537
2,941,309

20,842254,029
1,146
1,083
－
1,757
278,859
3,753,726

－
－
－
－

936
160,000
27,225
188,161

－
3,088
－
1,797
4,885
2,936,424
1,023,742
103,651
1,127,393
1,809,030－
1,809,030

186,59845
270,046－
456,689
3,485,198
1,680,206
240,487
1,920,693
1,564,504
51,179
1,513,324

10 －(Consolidated quarterly statements of comprehensive income)(Cumulative third quarter of the consolidated fiscal year)(Unit: Thousand yen)

Profit before minority interests
Other comprehensive income
Other valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Amount corresponding to the equity holdings ofthe equity-method affiliates
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests－

First nine months of theprevious consolidated
fiscal year
(From October 1, 2015
to June 30, 2016)
1,809,030

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)
1,564,504(147,890)

80,142(93,331)

68,302－

149,899(241,222)
1,567,808

298,344
1,862,848

1,567,808

1,810,315－

52,53211 －(3)Consolidated statements of cash flows(Unit: Thousand yen)First nine months of theprevious consolidated
fiscal year
(From October 1, 2015
to June 30, 2016)
Net cash provided by (used in) operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase and decrease in provision () =decrease
Interest and dividends received
Foreign exchange gain and loss () =gain
Interest paid
Equity method investment gains and losses () =gain
Gain and loss on investment in partnership () =gain
Gain and loss on investment securities sold () =gain
Insurance reimbursement
Gain on liquidation of subsidiary () =gain
Gain and loss on change in equity () =gain
Loss on retirement of noncurrent assets
Information security countermeasure cost
Loss on disaster
Increase and decrease in accounts receivable () =Increase
Increase and decrease in lease receivables () =Increase
Increase and decrease in inventories () =Increase
Increase and decrease in advance payments-trade() =Increase
Increase and decrease in accounts receivable-other() =Increase
Increase and decrease in purchase debts () =decrease
Increase and decrease in accounts payable-other() =decrease
Increase and decrease in deposits received () =decrease
Other
SubtotalInterest and dividends income received
Interest expenses paid
Payment for deposit of guaranteed deposit money
Proceeds from returned guaranteed deposits
Payment on information security countermeasure
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plants and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales and redemptions of investment
securities
Purchase of stocks of subsidiaries and affiliates
Purchase of other stocks of subsidiaries and affiliates
Gain from liquidation of subsidiary
Distributions from an investment partnership
Payment on leasehold deposits
Other
Net cash provided by (used in) investing activities

－

12 －

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)

2,936,424
265,976
1,950
54,649(10,340)
72,4332,880(19,804)(10,857)
－
－
－
－
3,088
－
1,797
(680,263)(3,710,441)(2,668)3,485,198
438,670
151,639
1,111,722(24,265)(15,057)
20,842254,029
1,146(936)(160,000)(27,225)
186,59845
270,046－(1,774,281)
426,127(32,194)(3,976,675)(5,517,633)(521,003)(11,854,163)

463,169

606,187

913,337

8,799,634

8,756,298
161,399
4,701,351
4,371(2,880)(350,000)
370,000－(1,462,685)
3,260,157

6,733,367
441,951
3,521,449
15,317(20,500)(20,000)－(215,235)(1,738,125)
1,542,905(25,320)(467,163)(1,525,587)(94,061)(780,323)(27,687)－

30,947(124,950)－－
30,328(1,225)(84,447)(2,198,365)(369,329)(125,000)
27,22523,640(67,774)(22,320)(1,404,684)

(Unit: Thousand yen)First nine months of theprevious consolidated
fiscal year
(From October 1, 2015
to June 30, 2016)
Net cash provided by (used in) financing activities
Net increase or decrease in short-term borrowings() =decrease
Proceeds from long-term borrowings
Repayment of long-term borrowings
Proceeds from issuance of common stock
Dividends paid
Purchase of shares of subsidiaries not resulting in change
in scope of consolidation
Other
Net cash provided by (used in) financing activities
Translation differences of cash and cash equivalents
Increase and decrease in cash and cash equivalents() =decrease
Balance of cash and cash equivalents at the beginning of theperiodCash and cash equivalents at the end of period

－

13 －

First nine months of thecurrent consolidated
fiscal year
(From October 1, 2016
to June 30, 2017)－(7,741)－－
2,749(599,259)

4,000,000(50,023)250(1,001,161)(6,076)(26,960)(37,073)(639,660)(85,573)(50,785)
2,863,577
21,776

336,558

3,023,575

30,113,605

25,187,536

30,450,163

28,211,111

(4)Notes for the consolidated quarterly financial statement(Notes regarding the Going Concern Assumption)
N/A(Notes for the consolidated quarterly profit and loss statement)
Information security countermeasure cost
We found there were unauthorized external access to the payment site of consignment merchants, Tokyo Metropolitan
Government credit card payment site for metropolitan tax and credit card payment site for group life insurance rider ofJapan Housing Finance Agency which led to information leakage.
From this, we recognized information security countermeasure cost of 270,046 thousand yen (18,409 thousand yen on
expenditures for information security countermeasure and 251,637 thousand yen on provision for information security
countermeasure) as an extraordinary expense, as payments required for sending letters of apology to our customers,
handling of inquiries and investigations into unauthorized accesses as well as information leakage under the second
quarter of the current fiscal year. Although there is no additional extraordinary expense recognition for the third quarter,
197,815 thousand yen out of the 251,637 thousand yen (provision for information security countermeasure) has turned
into actual debt. Therefore, we have reported 270,046 thousand yen of information security countermeasure cost
(information security countermeasure cost of 216,224 thousand yen, and provision for information security
countermeasure of 53,821 thousand yen) as extraordinary expense for the cumulative third quarter.
Also, for this incident, we received insurance reimbursement of 160,000 thousand yen.
With regards to those costs, while there are possibilities that the amount may vary going forward due to discovery of
new facts or occurrence of additional measures, a reasonable estimation as of now has been carried out.
In addition, we will be recognizing occurrence of expenditures relating to reissuance of credit cards and fraudulent
uses of credit cards when we receive bills from operating bodies of the above two websites, which they will be doing
when various credit card issuers bill the said expenditures to those operating bodies. Therefore while the likelihood of
occurrences of those expenditures is considerably high, we cannot directly ascertain the status of such occurrences.
We are working closely together with various credit card companies, but occurrence of the said expenditures has notbeen recognized at the end of the cumulative third quarter of this consolidated fiscal year, and as we are also unable toreasonably estimate the probability of future occurrence, we have not recognized expenditures relating to credit card
reissuance and fraudulent use of credit cards in the cumulative third quarter of this consolidated fiscal year. Since
those costs are expected to be eligible for insurance reimbursement to a certain extent, their impact on the profit andloss of the company is believed to be negligible even if those are to take place.
(Notes in cases of extreme variation in the amount of shareholders’ equity)
N/A

－

14 －