Consolidated Financial Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018
(April 1, 2017 through December 31, 2017)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan.
This is a partial English translation of the original Japanese-language document. All information pertains toconsolidated results unless otherwise noted. Information on the basis of presentation of consolidated financial
statements does not appear in this translation.
February 2, 2018
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:TIS Inc.
The First Section of the Tokyo Stock Exchange3626
http://www.tis.com/
Toru Kuwano, President
Tsuneyoshi Ito, Department Manager of Finance & Accounting Dept., Corporate
Planning SBU.
+81 3-5337-4569

Scheduled dates
Submission of quarterly report:
Commencement of dividend payments:

February 9, 2017-

Supplementary materials to the quarterly results:
Quarterly results presentation held:

Available
Yes (targeted at institutional investors and analysts)

Figures in millions of yen are rounded down to the nearest million

1. Consolidated Results for the First Three Quarters of the Fiscal Year Ending March 31, 2018
(April 1, 2017 – December 31, 2017)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net income
attributable toOperating income
Recurring profit
owners of theparent company

Net sales
millions of yen%

millions of yen%

millions of yen%

millions of yen%

289,021
280,708

3.0
3.7

20,696
15,931

29.9
12.7

20,955
16,10830.1
11.5

13,460
11,251

19.6
58.2

First Three Qtrs., FY2018First Three Qtrs., FY2017

Note: Comprehensive income: First Three Qtrs., FY 2018: 25,083 million yen (69.5%), First Three Qtrs., FY 2017: 14,800 million yen (-%)

Net income
per share –basic

Net income
per share –dilutedYenFirst Three Qtrs., FY2018First Three Qtrs., FY2017

yen

157.47130.34-(2) Consolidated Financial Position
Total assets
End of Third Quarter, FY2018
End of FY2017

Net assets

Equity ratio

millions of yen

millions of yen%

342,734
337,622

217,765
199,202

62.3
57.8

For reference: Total equity: End of Third Quarter, FY2018: 213,371 million yen End of FY2017: 195,053 million yen.
*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date End-Q1 End-Q2 End-Q3 Year-end
or period
FY2017FY2018FY2018(forecast)

yen

-

yen

12.00
14.00

yen

-

yen

Total
yen

24.00

36.00

26.00

40.00

Note: Revisions from the latest release of dividends forecasts: None

3. Forecast of Consolidated Results for FY2018 (April 1, 2017 – March 31, 2018)
Percentages indicate year-over-year changes
Net income
Operatingattributable to Net income per
Net sales
Recurring profit
incomeowners of theshare – basic
parent company
Full FY2018(year ending Mar. 31,
2018)millions of yen%

millions of yen%

millions of yen%

millions of yen%

Yen

400,000

1.7

30,00011.0

30,00010.7

18,00010.4

210.76

Note: Revisions from the latest release of earnings forecasts: None

※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-Third Quarter, FY2018 (December 31, 2017):
87,789,098 shares
End-FY2017 (March 31, 2017):
87,789,098 shares
2) Treasury stock as of period-end:
End-Third Quarter, FY2018 ( December 31, 2017):
2,612,418 shares
End-FY2017 (March 31, 2017):
1,701,923 shares
3) Average number of shares (during the respective nine-month period):First Three Quarters, FY2018 (ended December 31, 2017): 85,482,158 sharesFirst Three Quarters, FY2017 (ended December 31, 2016): 86,327,920 shares*Quarterly review status
These materials are not subject to the quarterly review procedure requirements of Japan’s Financial Instruments
and Exchange Act.
Caution on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect TIS Inc. (“TIS”)’s plans and expectations based on
information available to TIS at the time of preparation and on certain other information TIS believes to bereasonable. These forward-looking statements are not guarantees of future performance, and actual results,
performance, achievements or financial position may differ materially from those expressed or implied herein
due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to“(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results ofOperations” section on page 4 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results2(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements

4

2. Consolidated Financial Statements

5(1) Consolidated Balance Sheets

5(2) Consolidated Statements of Income and Comprehensive Income

7

Consolidated Statements of Income
For the First Three Quarters

7

Consolidated Statements of Comprehensive Income
For the First Three Quarters

8(3) Notes on the Consolidated Financial Statements

9(Notes on the Going-concern Assumption)

9(Notes on Significant Changes in the Amount of Shareholders’ Equity)

9-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first nine months of fiscal 2018 (April 1, 2017 ~ December 31, 2017), the Japanese
economy continued a moderate recovery owing to strong corporate earnings and an
improvement in employment conditions. Regarding the outlook, although it is necessary tomonitor the impact of uncertainties surrounding the global economy and financial market
fluctuations, the Japanese economy is expected to continue its moderate recovery trend.
The business environment surrounding the IT services industry, to which the TIS INTECGroup belongs, was robust during the period. The Bank of Japan's Short-term Economic Surveyof Enterprises in Japan (December 2017) revealed growth in IT investment among companies
embracing digital management, as reflected in a 7.0% year-on-year increase in software
investment plans (all manufacturing & financial institutions).
Under these circumstances, the TIS INTEC Group promoted various measures for
implementing Group-wide reform to achieve further growth and raise corporate value, based on
the Group management strategy developed under the third medium-term management plan(from fiscal 2016 through fiscal 2018) currently being implemented.
Consolidated net sales for the Group in the first nine months increased 3.0% year on year to¥289,021 million. Operating income increased 29.9% from a year earlier to ¥20,696 million,
recurring profit increased 30.1% to ¥20,955 million, and net income attributable to owners of
the parent company increased 19.6% to ¥13,460 million.
Consolidated net sales grew year on year as the Group accurately grasped the IT investment
needs of its customers in areas where IT investment is growing.
Profit grew year on year due to the increased sales and measures to improve profitability,
including measures to restrain unprofitable projects. These positive factors absorbed higher
employee benefits, along with increased selling, general and administrative expenses formeasures to enhance competitiveness, including the establishment of specialized organizations
and measures to bolster the corporate structure.
Segment results for the period are as follows. The sales figures for each segment include
inter-segment sales.
1) IT Infrastructure Services
Consolidated sales rose 3.7% year on year to ¥96,183 million while operating income increased
15.7% to ¥8,588 million.
The data center business expanded steadily with contributions from large public-sector
projects and growth in cloud-related business, while the BPO business also expanded. This
growth absorbed higher expenses for business-reinforcing initiatives and led to higher sales andprofit for the segment.
2) Financial IT Services
Consolidated sales increased 9.3% year on year to ¥66,030 million, while operating income
increased 422.7% year on year to ¥5,124 million.
Sales and profits increased as a result of contributions from large-scale projects for credit
card companies and business expansion driven by growing IT investment in the payment
settlement field, along with successful efforts to restrain unprofitable projects.
3) Industrial IT Services
Consolidated sales increased 0.4% year on year to ¥132,663 million, while operating income
declined 6.0% to ¥6,628 million.
While sales from large-scale projects declined from robust levels in the same period of theprevious year, overall sales remained on par with the previous year due to ERP upgrade demandin the manufacturing sector and overall expanding IT investment. Although progress was madeon initiatives to enhance profitability, profit declined year on year due to higher expenses formeasures to enhance competitiveness, including the establishment of specialized organizations
and measures to bolster the corporate structure.

-2-4) Other
Consolidated sales declined 10.2% year on year to ¥7,981 million, and operating income
declined 6.1% to ¥712 million.
As previously stated, the Group is implementing its third medium-term management plan,
which ends with the current fiscal year. For the fiscal year under review, the Group formulated
the following Group management strategy in accordance with the management plan's basic
concepts, and is promoting various measures for implementing Group-wide reform to achieve
further growth and raise corporate value.
Third medium-term management
plan basic concepts
Profit Emphasis
IT Brain(expansion of value-added business)
Portfolio Management

Group management strategy for fiscal 2018
Implement profit-oriented management morethoroughly.
Make further upfront investments to establish new
growth engines.
Strengthen collaboration among Group companies
by leveraging the operating holding company
structure and rapidly execute structural reforms.

Regarding more thorough implementation of profit-oriented management, the Group
recognizes that the steady promotion of large-scale projects and the vigorous promotion of
productivity innovation are critical initiatives. Regarding the steady promotion of large-scale
projects, we are thoroughly implementing company-wide management monitoring systems toensure that each project progresses according to schedule. Regarding the vigorous promotion of
productivity innovation measures, the Group Production Innovation Committee is sharing
information on issues and countermeasures for unprofitable projects at each company. Measures
are being taken in accordance with the level of priority of each project, while Group-wide
information sharing conferences and working groups are being held to enhance technologicalcapabilities. Through these and other measures, we are steadily implementing productivity
innovation.
Regarding further upfront investments to establish new growth engines, the Group is taking
initiatives to further strengthen its settlement business, a core strength. As one initiative, in
September 2017 we concluded a capital and business alliance with CardInfoLink, a Chinese
FinTech company offering processing services in the QR code and credit card settlement fields.
We will collaborate with CardInfoLink to expand the QR code settlement business in Japan andSoutheast Asia using CardInfoLink's QR code settlement solutions, while jointly promoting thecredit card processing business in China by utilizing TIS's long track record of success andknow-how in settlement system development. TIS INTEC Group and CardInfoLink will
collaborate to provide IT services with high value-added in Japan, China, and Southeast Asia.
Additionally, the Group has taken steps to establish an API platform as a shared platform for theretail settlement solution "PAYCIERGE 2.0" to maintain and enhance its competitiveness in thefinancial field amid growing open API movements and open API trends for various services. In
this way, the Group is establishing environments in which services can be securely and rapidly
implemented. The Group is also taking measures to support the full-scale growth of business insuch fast-growing new technology fields as AI and IoT. We are developing and testing various
types of new solutions, while also creating new business structures through the establishment ofspecialized organizations and investments in and collaborations with start-ups and ventures.
Additionally, in November 2017, TIS and INTEC Inc. jointly established the TIS INTECGroup Silicon Valley Innovation Lab in the United States. Managed by the two companies’ local
subsidiaries, the lab aims to create innovative new businesses and leading-edge products and-3-

rapidly launch them in Japan and the rest of Asia through open innovation among U.S. start-ups,
mainly in Silicon Valley, and the local offices and new business divisions of major Japanesecompanies. The lab has already begun multiple demonstration tests of collaborative projects
between Fintech-related start-ups and Japanese financial institutions.
Regarding efforts to strengthen collaboration among Group companies by leveraging theoperating holding company structure and rapidly execute structural reforms, the Group is
actively deliberating and promoting priority and collaborative initiatives. As one example,
Group companies have integrated their data centers into the closed area network "DCAN"(Datacenter and cloud services - Customer Adapted Network) to strengthen competitiveness bypromoting cross-selling among Group companies and raising convenience. Additionally, theGroup's BPO business, which was merged into AGREX INC., has been consolidated into the
new BPO center "Biz TRUXIA" in the Tama district of Tokyo as a way to fully realize thebenefits of integration, including improved service levels.
In conjunction with the transition to an operating holding company system in July 2016, theGroup formulated and announced in May 2017 a new Group vision as its ideal corporate image
for 2026: "Create Exciting Future" ~ Utilize advanced technologies and know-how to realize
business innovation and market creation. Amid dramatic changes in the business environment,
the Group is uniting to leverage its accumulated IT strengths and expand its business fields
beyond traditional frameworks to ensure sustainable growth. Company management is leading
seminars for Group executives, vision booklets are being distributed, and training is being
implemented to raise awareness and foster a sense of unity. Additionally, the Group has begun
to create specific measures as part of the ongoing effort to formulate the fourth medium-term
management plan, including initiatives to transition to four strategic domains.
The Group is actively implementing workstyle reforms to fully utilize the talents of a diverse
workforce, which is a critical management resource for the Group's sustainable growth. These
initiatives are being implemented from the viewpoints of raising motivation, improving
workplace environments, and enhancing labor environments. The success of these measures has
been gradually reflected in training days per employee, monthly average overtime hours, andthe rate of expending annual paid leave. Reflecting the success of Group initiatives, INTEC Inc.,IT Service Force Inc., and AGREX INC. were certified by Japan's Minister of Health, Labor andWelfare as outstanding companies for promoting women's participation in the workplace,receiving the highest certification, the Grade 3 "Eruboshi" symbol.
Between May and July 2017, in accordance with its basic policy on shareholder returns, TIS
Inc. ("the Company") acquired 908,300 shares of treasury stock (aggregate acquisition cost of¥2,859 million) as part of its policy of executing a dynamic capital strategy responsive tochanges in the business environment and raising shareholder profit and capital efficiency.
(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
The Company achieved robust consolidated business performance for the period under review
and will continue striving to achieve full-year targets by steadily implementing various
measures. At the current time, there is no change to the consolidated earnings forecast
announced on May 10, 2017.
The Company has adopted a total return ratio benchmark of around 35%*. As a result of thepreviously mentioned share buyback, the Company estimates a total return of 35% in thecurrent fiscal year based on the current consolidated earnings forecast.
*Total return ratio: The ratio of the combined value of dividend payments and share buybacks
versus net income attributable to owners of the parent company.

-4-2. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2017

Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-5-

As of Dec. 31, 2017

millions of yen

millions of yen

26,137
92,915
5,179
100
4,341
4,526
240
6,889
12,003(170)
152,162

29,23272,501
4,406
100
4,007
10,122
221
3,742
15,341(152)
139,523

37,118
6,665
21,435
3,937
6,723
75,87836,374
7,768
19,672
3,152
9,368
76,336803
17,863
18,666688
18,61819,30664,1565,027
6,129
15,810(210)
90,914
185,459
337,62278,643
4,915
6,192
18,087(270)
107,568
203,210
342,734

As of March 31, 2017

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Other allowances
Net defined benefit liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-6-

As of Dec. 31, 2017

millions of yen

millions of yen

24,047
6,084
5,932
12,402
3,379
297
26,532
78,676

17,151
5,172
802
6,290
1,268
73
32,55763,31726,263
5,304
2,676
403
66
419
16,876
7,735
59,743
138,420

23,773
4,107
7,681
403
65
665
17,213
7,740
61,651
124,968

10,001
82,91890,846(4,230)179,535

10,00182,742
101,138(7,098)
186,784

20,478(2,375)51(2,636)
15,517
4,149
199,202337,622

31,368(2,375)75(2,481)
26,586
4,394
217,765
342,734

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Three Qtrs.,
First Three Qtrs.,
FY2017FY2018Items(Apr. 1 – Dec. 31, 2016) (Apr. 1 – Dec. 31, 2017)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Other
Total non-operating expenses
Recurring profit

millions of yen

millions of yen

280,708
228,857
51,85135,91915,931

289,021230,770
58,251
37,554
20,696

43
889
433
1,366

24
1,019
574
1,619

257
349
582
1,189
16,108

253
661
444
1,360
20,955

1,811
6
53
1,871

42
440
7
490

168
144
157
294
764
17,215
2,683
3,117
5,801
11,414
162
11,251

51
512
0
400
964
20,481
3,300
3,267
6,567
13,913452
13,460Extraordinary income
Gain on sale of investment securities
Gain on sales of fixed assets
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Impairment loss
Loss on sales of investment securities
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company-7-

Consolidated Statements of Comprehensive Income
First Three Qtrs.,
First Three Qtrs.,
FY2017FY2018(Apr. 1 – Dec. 31, 2016) (Apr. 1 – Dec. 31, 2017)

Items
Net income
Other comprehensive income
Net unrealized gains on other securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests-8-

millions of yen

millions of yen

11,414

13,913

3,671
(199)
31

10,916
93
157

(116)

3

3,386
14,80011,17025,083

14,61024,529189554

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
Not applicable-9-