Fiscal Year ending October 31, 2005

Summary of Third Quarter Operating Results (Consolidated)
September 2, 2005

Listed Company Name

Kanamoto Company, Ltd.

Company Code Number

9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange（URL http://www.kanamoto.co.jp）
Representative

Kanchu Kanamoto

Inquiries

Nobuhito Utatsu

President

Director & Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600
1. Matters Related to Preparation of the Summary of Third Quarter Operating Results① Has the Company adopted simplified methods for accounting treatment? Yes
The Company uses book value for inventory.
The Company charges an amount to its allowance for doubtful accounts
based on actual loss experience in the prior consolidated accounting fiscal
year for normal accounts.
② Are there any differences with the methods of recognition used in theaccounting treatment for the most recent consolidated fiscal year? No③ Are than any changes in the scope of consolidation and/or application of theequity method? No
2. Operating Results for the Third Quarter of the Fiscal Year Ending October 31, 2005
(November 1, 2004 - July 31, 2005)(1) Consolidated Operating Results(Numbers less than one million yen have been rounded down)

Revenues

Fiscal Year Ending October
31, 2005: Third Quarter
Fiscal Year Ended October
31, 2004: Third Quarter(Reference) Fiscal Year
Ended October 31, 2004

Operating Income

Millions of yen％

46,374 (4.3 )44,478 ( −)61,336

Fiscal Year Ending October
31, 2005: Third Quarter
Fiscal Year Ended October
31, 2004: Third Quarter(Reference) Fiscal Year
Ended October 31, 2004％

Millions of yen％

170 ( - 74.4 )

14 ( - 97.5 )

666 (

574 (

−

)

1,878

)

1,749

of Common Stocka Fully Diluted Basis

Yen

％

Yen

- 349 ( −)- 11.71−549 ( −

)

18.40

−

36. 50

−

1,097

−

Net Income per Share Net Income per Share on

Net Income
Millions of yen

Millions of yen

Ordinary Income(Note) The percentages shown for revenues, operating income, ordinary income and net income
are the percent increase or decrease compared to the same period of the prior fiscal year.

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.1

(Qualitative information concerning consolidated operating results)< Management Environment >(From November 1, 2004 to July 31, 2005)

During the third quarter, Japan’s economy showed signs of throwing off the weakness that has hampered
corporate operating results. In addition to improved corporate earnings, particularly in large-scale key
industries such as electric machinery and automobiles, personal consumption also recovered.
Nevertheless, prices for raw materials such as iron and steel and crude oil also surged, and overallbusiness conditions remained fundamentally unchanged. In the construction industry, which is the main
customer of the Kanamoto Group, business conditions continued to recover in the Tokyo metropolitan
area and in the Tokai Region, where private demand is vigorous. A negative outlook remained strong inother regions, however, where increased private demand cannot be anticipated and public works spending
is being curtailed, and in general the challenging business environment continued.
< Operating Results Through the Third Quarter >In the construction equipment rental business, which is the main business of the Kanamoto Group, thethird quarter in a typical year is the off-season when construction equipment rental demand declines. This
year, the environment overall was even more difficult, because of factors such as the marked drop in
demand in regional areas. Despite regions such as Hokkaido and Kyushu where competition is extremely
fierce, however, construction equipment rental net revenues rose as the Company achieved stronger
results compared to the same period of the previous consolidated fiscal year.
On the other hand, the Construction Equipment Rental Division’s revenues from sales were lower than in
the same period of the previous consolidated fiscal year because the Company limited sales of rental
assets (used construction equipment) in accordance with its initial plan.
In addition, from an earnings standpoint operating results were weak, reflecting a larger decline inearnings at certain consolidated companies than the Company projected in its initial plan and measurestaken by the Company from a conservative accounting standpoint, such as bolstering reserves equivalent
to valuation losses on loans to subsidiaries and affiliated companies and stock investments.
As a result, consolidated revenues for the third quarter of the consolidated fiscal year ending October 2005
were ¥46,374 million, while consolidated operating income was ¥170 million, consolidated ordinary
income was ¥14 million and the consolidated net loss was ¥349 million. A summary of operating results foreach of the Company's main businesses, as well as business development issues deserving special
mention, is provided below.
< Summary of operating results by business >[ Business related to the Construction Equipment Rental Division ]Construction equipment rentals grew steadily in the Tohoku, Kanto-Shinetsu, and Kinki-Chubu territories.
By territory, revenues in the Tohoku territory increased 4.8% year-on-year in the third quarter, boosted
by opportunities in specialized sectors such as ground improvement machines. In addition, both the
Kanto-Shinetsu territory and the Kinki-Chubu territory, which include the Tokyo, Nagoya and Osaka
metropolitan areas, increased revenues at a steady pace, achieving double-digit growth of 10.8% and10.2%, respectively.
Nevertheless, in regions other than those described above, the economic environment still has not begun
to improve. In Hokkaido and Kyushu in particular, where public works and large-scale private construction
projects are limited, business conditions were weaker than in the same period of the previous consolidated
fiscal year. Revenues from net sales also declined year-on-year for the reason mentioned above.
In addition, although the affect on consolidated operating results is not material, rentals of temporary
scaffolding and the rental of items such as safety products, which the Company is pursuing in Hokkaido,
were affected by the drop in construction volume in Hokkaido, and revenues from rental of these products
declined as a result.

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.2

Earnings from the manufacture and sale of temporary housing units, which frequently are a special orderproduct, declined substantially because of the lack of growth in sales of manufactured buildings and theaffects from consolidation of manufacturing facilities.
[ Business related to the Steel Sales Division ]Sales grew 8.3% compared to the same period of the prior consolidated fiscal year as the result of strong
prices, which remained high despite steel materials inventory released to the market, plus contributions
from the sale of new commercial materials (KT roof system of highly durable insulation and waterproof
roofing materials).
[ Business related to the Information Products Division and Other Businesses ]Demand for personal computers was higher as a result of the economic recovery in the Tokyo metropolitanarea, and rental net revenues rose 8.6% compared with the same period of the prior consolidated fiscal
year. Product sales fell sharply, however, because of a lack of key products. As a result, net revenues forthe entire division declined 7.1% year-on-year.
< Business development issues deserving special mention and status of branch office changes >During the third quarter under review, the Company newly established a Yubari Branch (Yubari, Hokkaido)
and Ojiya Branch (Ojiya, Niigata Prefecture). The Company did not close any existing branches. The new
Yubari Branch was established to support construction of the Shuparo Dam, which will have the fourthlargest water storage capacity in Japan once completed, while the Ojiya Branch was set up in response torestoration efforts following the Niigata Prefecture Chuetsu Earthquake that occurred last year. In new
public works, construction for the Hokkaido Shinkansen has been budgeted and construction started on
the route as far as the New Hakodate Station, and Kanamoto is concentrating keenly on supporting related
construction demand.
(2) Change in Consolidated Financial Position(Numbers less than one million yen have been rounded down)

Total Assets

Fiscal Year Ending October
31, 2005: Third Quarter
Fiscal Year Ended October
31, 2004: Third Quarter(Reference) Fiscal Year
Ended October 31, 2004

Shareholders’EquityShareholders’Equity Ratio

Shareholders’Equity per
Share

％

Yen

Millions of yen

Millions of yen

86,15232,31937.5

1,082.53

88,48932,17536.4

1,077.38

89,32332,74536.7

1,096.42[Consolidated Cash Flows](Numbers less than one million yen have been rounded down)

Cash Flow from
Cash Flow fromOperating Activities Investing Activities
Millions of yen

Fiscal Year Ending October
31, 2005: Third Quarter
Fiscal Year Ended October 31,
2004: Third Quarter(Reference) Fiscal Year
Ended October 31, 2004

Millions of yen

Cash Flow from Balance of Cash
Financingand Equivalents
Activities
at End of Period
Millions of yen

Millions of yen

11,609- 440-2,745

20,158

5,078

- 230

- 269

16,541

6,230-1,535-4,923

11,734

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.3

(Qualitative information concerning change in consolidated financial position)
Compared with the end of the prior consolidated accounting fiscal year, total assets at the end of thethird quarter under review had decreased ¥3,171 million to ¥86,152 million. This mainly reflected adecrease in accounts receivable, trade accompanying the liquidation of bill receivables, and a reduction
interest-bearing debt including long-term bank loans.
Shareholders' equity decreased ¥426 million compared with the end of the prior consolidated accounting
fiscal year to ¥32,319 million. The shareholders' equity ratio was 37.9%.
(Cash flow from operating activities)
Cash flow from operating activities was ¥11,609 million yen, an increase of ¥6,530 million from the same
period of the prior consolidated accounting fiscal year. This change was mainly from the increase in cash
provided by the reduction in accounts receivable, trade because of the liquidation of bill receivables.
(Cash flow from investing activities)
Cash flow used in investing activities rose ¥209 million from the same period of the prior consolidated
fiscal accounting year to ¥440 million. This mainly reflected a decrease in cash provided from the sale ofinvestment securities and an increase in funds used for the purchase of tangible fixed assets.
(Cash flow from financing activities)
Cash flow used in financing activities was ¥2,745 million, an increase of ¥2,475 million from the same
period of the prior consolidated accounting fiscal year. This mainly reflected a decrease in funds provided
by long-term bank loans.
As a result of the above, the balance of cash and cash equivalents at the end of the third quarter underreview increased ¥8,424 million from the end of the prior consolidated fiscal accounting year to ¥20,158
million.
3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2005
(November 1, 2004 - October 31, 2005)

Full-year

Projected
Revenues

Projected
Operating
IncomeProjected
Ordinary
IncomeMillions of yen

Millions of yen

Millions of yen

63,5001,220

980

Projected
Net Income
Millions of yen

280(Reference) Projected net income per share (full-year) ¥ 9.38
(Qualitative information concerning projected operating results)
Projected fiscal year operating results
Though operating results for the third quarter under review fell below the initial plan level, the Company
believes full-year operating results generally will be in line with the revised projected operating results
issued at the time of the Company released its Interim Financial Statements Bulletin because revenues
increased year-on-year in the third quarter, which is typically the slow season in the Company’s main
business in the construction equipment rental industry, and because in normal years the volume of
construction work increases briefly from the middle of the fourth quarter.
Therefore the projected operating results indicated above are the revised projected consolidated
operating results for the full year described in the Interim Financial Statements Bulletin (Consolidated) for
the fiscal year ending October 31, 2005 released in June of this year.
Qualitative information
These projected consolidated operating results were prepared using projections based on information
available to the Company as of the date this material was released and forecasts of the future economic
environment, and include various risks and uncertainty factors.
Accordingly, there is a possibility the Company's actual consolidated operating results will differ from the
projected amounts shown above as a result of various future factors, including but not limited to economic
conditions surrounding the Company, market trends, and competitive conditions.

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.4

1. (Summary) Third Quarter Consolidated Balance Sheets(Unit: Thousands of yen, %)Current Quarter Prior FY Quarter

PeriodItem(Third Quarter of(Third Quarter of
the Consolidated
the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended October
October 31, 2005)
31, 2004)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2004

Change fromprior year

AmountAmountAmountPercent

1．Cash and deposits
and accounts
2．Notesreceivable, trade
3．Negotiable securities

20,166,799

16,549,679

3,617,120

21.9

11,742,173

11,331,353

19,140,415-7,809,061-40.8

23,480,548−

18,978-18,978-100.0−4．Inventory
5．Construction
equipment
6．Deferred tax assets

781,963

1,027,582-245,618-23.9

703,059

1,587,776

2,002,688-414,912-20.7

1,905,762

222,939

225,155-2,216-1.0

252,069

1,074,291

942,289

132,001

14.0

429,435-650,006-515,489-134,516-26.1-730,669

34,515,117

39,391,300-4,876,182-12.4

37,782,380

10,247,862

10,363,067-115,205-1.1

10,309,578

6,605,139

6,750,136-144,996-2.1

7,011,800(3) Land

26,205,408

24,651,537

1,553,871

6.3

26,112,181(4) Other
Total Tangible
Fixed Assets
Intangible Fixed
2. Assets
Consolidation(1) adjustment

1,451,143

1,355,979

95,1637.0

1,271,445

44,509,554

43,120,721

1,388,832

3.2

44,705,006

461,806−

461,806−

559,067

262,825

245,291

17,534

7.1

262,569

724,632

245,291

479,341

195.4

821,637

4,941,219

4,000,629

940,589

23.5

3,938,162

506,587

733,594-227,006-30.9

911,019（
I

AssetsAmount）Current Assets

7．Other
Allowance for
doubtful accounts
Total Current Assets
II

Fixed Assets
Tangible Fixed
1. Assets(1) Rental equipment
Buildings and(2) structures(2) Other
Total Intangible
Fixed Assets
Investments andOther Assets
Investment(1) securities(2) Deferred tax assets

3.

(3) Other
Allowance for
doubtful accounts
Total Investments
and Other Assets

2,178,856

1,666,986

511,87030.7

2,826,514-1,223,694-668,589-555,105-83.0-1,660,994

6,402,968

5,732,620

670,347

11.7

6,014,701

Total Fixed Assets

51,637,154

49,098,632

2,538,521

5.2

51,541,344

86,152,272

88,489,932-2,337,660-2.6

89,323,725

Total Assets

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.5

(Unit: Thousands of yen, %)Current Quarter

PeriodItem

Prior FY Quarter(Third Quarter of(Third Quarter of
the Consolidated
the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended October
October 31, 2005)
31, 2004)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2004

Change fromprior year

AmountAmountAmountPercent

11,779,663

10,345,706

1,433,957

13.9

13,405,603

3,558,376

3,638,992-80,615-2.2

676,639

10,818,496

10,793,496

25,0000.2

10,935,496

142,574

72,81869,75595.8

368,813201,137

424,640-223,503-52.6

480,597

3,142,784

4,698,923-1,556,139-33.1

4,129,127

641,505

703,857-62,352-8.9

623,001

30,284,537

30,678,435-393,897-1.3

30,619,278

19,904,981

21,347,477-1,442,496-6.8

21,952,103

1,425,908

1,208,014

217,89318.0

1,228,829

125,254

95,666

29,58830.9

96,281

1,964,226

2,878,810-914,584-31.8

2,496,910−

13,218-13,218-100.0−62,19037,14625,04467.4

125,226

Total Long-term
Liabilities

23,482,560

25,580,333-2,097,772-8.2

25,899,351

Total Liabilities

53,767,098

56,258,768-2,491,669-4.4

56,518,630

65,73255,398

10,334

18.7

59,2458,596,737

8,596,737−−

8,596,737

9,720,343

9,720,343−−

9,720,343

12,989,248

13,365,814-376,566-2.8

13,913,568

1,198,040

672,308

525,732

78.2

697,675-184,927-179,437-5,4903.1-182,475

Total Shareholders’Equity32,319,441

32,175,766

143,675

0.4

32,745,849

Total Liabilities,
Minority Interests
and Shareholders’Equity86,152,272

88,489,932-2,337,660-2.6

89,323,725（

Liabilities

Amount）Current Liabilities
Notes
and accounts
1．payable,
trade
bank
2．Short-termloansLong-term bank
3．loans due within one
year
taxes
4．Corporate
payablebonuses to
5．Accrued
employees
payable,6．Accounts
other

I

7．Other
Total Current
Liabilities
II

Long-term Liabilities
bank
1．Long-term
loans
employees
2．Accrued
retirement benefits
Retirementto
3．allowances
directors andauditors
accrued4．Long-term
expenses
5．Consolidation
adjustment account
6．Other

Minority）
Interests
Minority Interests（（ Shareholders’ ）EquityI

Common stock
Additional paid-in
II capital
Consolidated
III retained earnings
Valuation difference
IV on other investment
securities
V

Treasury stock

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.6

2. (Summary) Third Quarter Consolidated Statements of Income(Unit: Thousands of yen, %)Current Quarter Prior FY Quarter

PeriodItem(Third Quarter of(Third Quarter of
the Consolidated
the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended October
October 31, 2005)
31, 2004)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2004

Change fromprior year

AmountAmountAmount46,374,018

44,478,850

1,895,167

4.3

61,336,258

36,019,255

34,278,907

1,740,348

5.1

47,017,429

10,354,762

10,199,943

154,819

1.5

14,318,828

10,184,534

9,533,773

650,761

6.8

12,440,160

170,227

666,170-495,942-74.4

1,878,668

1．Interest revenue

3,472

738

2,734

370.0

2,781

2．Dividend incomeon sale of
3．Gaininvestment securities

47,02647,659-633-1.3

68,30828,044

46,427-18,382-39.6

47,261

4．Rents received

68,194

67,192

1,001

1.5

113,474

5．Other

144,263

160,186-15,923-9.9

206,612

291,001

322,204-31,203-9.7

438,438

1．Interest expense

268,393259,167

9,226

3.6

347,660

2．Others

178,304

154,458

23,845

15.4

219,738

Total non-operating
expenses

446,697

413,625

33,071

8.0

567,399

Ordinary income

14,532574,749-560,217-97.5

1,749,707

5,238

466

4,772

−

8,334

−

606,420-606,420-100.0606,420

90,422−90,422−−

12,181

5,484

6,697

122.1

5,472

107,843

612,370-504,527-82.4

620,226

53,95776,739-22,782-29.7

97,824

192,465−

192,465−−

41,39724,803

16,594

66.9

59,960287,820

101,542

186,277183.4

157,785

I
II

Revenues
Cost of revenues fromoperations

Gross profit
Selling, general and
III administrative
expenses
Operating income

Percent

AmountIV Non-operating
revenues

V

Total non-operating
revenues
Non-operating
expenses

VI Extraordinary profits
Gain on sale or
1．retirement of fixed
assetsGain on return of
portion of
2．entrusted
corporate Employee
Welfare Pension Fund
Gain on reversal of
3．allowance for doubtful
accounts
4．Other
Total extraordinary
profits
VII Extraordinary losses
Loss on sale or
1．retirement of fixed
assetsTransfer to allowance
2．for doubtful accounts ataffiliates
3．Other
Total extraordinary
lossesSummary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.7

Current quarter (fiscal
year) income (loss)
before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment forcorporate and othertaxes
Minority
interest
inincome or loss
Current quarter (fiscal
year) net income (loss)-165,444

1,085,577-1,251,022−

2,212,149

83,38439,02644,357113.7

839,083

94,398

481,774-387,375-80.4

256,687

6,486

15,091-8,604-57.0

18,939-349,714

549,685-899,399−

1,097,439

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.8

3. (Summary) Third Quarter Consolidated Statements of Cash Flows
PeriodItem

Current Quarter(Third Quarter of theConsolidated Accounting
Fiscal Year Ending
October 31, 2005)

Amount(Unit: Thousands of yen)
Prior FY Quarter(Third Quarter of the
ChangeConsolidated Accounting
from priorFiscal Year Ended Octoberyear
31, 2004)

AmountAmountI Cash flow from operating activities
Current quarter (fiscal year)
income (loss) before taxes andadjustments
Depreciation and amortization
expenseAmortization of consolidation
adjustment accountGain on sale or retirement of
fixed assets
Loss on sale or retirement of
fixed assets
Installment purchases of assets
for small-value rentals
Reclassification of cost of sales
associated with disposal of
construction equipment
Reclassification of cost of sales
associated with disposal of rental
assetsExpenditures for acquisition ofrental assets
Valuation loss on investment
securities
Gain on sale of investment
securities
Increase (decrease) in allowancefor doubtful accounts
Increase (decrease) in accrued
bonuses to employees
Increase (decrease) in accrued
employees retirement benefits
Increase (decrease) in
retirement allowances todirectors and auditors
Interest revenue and dividend
incomeInterest expense on installment
purchases of rental assets
Interest expense(Increase) decrease in accounts
receivable, trade(Increase) decrease in inventory
assetsIncrease (decrease) in accounts
payable, trade
Increase (decrease) in accounts
payable, other
Directors and auditors' bonuses
paid
Other

-165,444

1,085,577

2,212,149

3,808,178

3,794,615

5,294,745

78,760-4,383-5,845-5,238-466-8,33453,95776,73997,82450,127

8,663

12,475

6,110

17,09722,224775,411

1,318,614

1,482,068-2,177,107-766,053-1,278,248

372

10,00042,544-28,044-46,427-47,261-517,963

126,386

152,945-279,459-18,227

6,692

197,078-569,300-548,485

28,972-101,427-101,749-50,499-48,398-71,090

52,22390,616111,954

268,393259,167

347,660

12,149,195

2,326,400-944,131-78,903-172,736

204,823-1,625,939-720,466

1,071,687

144,253

269,061

239,627-7,300-14,100-14,100-489,937-922,327-538,148

12,187,197

5,998,625

7,742,029

Interest and dividends received

50,49948,39871,090Interest expense
Payment of corporate and other
taxes
Cash
flow
from
operatingactivities-318,283-353,591-463,881-309,624-614,627-1,119,008

11,609,789

5,078,804

6,230,229

Subtotal

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.9

(Unit: Thousands of yen)
PeriodItem

Current Quarter

Prior FY Quarter(Third Quarter of theConsolidated Accounting
Fiscal Year Ending October
31, 2005)(Third Quarter of theConsolidated Accounting
Fiscal Year Ended October
31, 2004)

Changefrom prioryear

AmountAmountAmountII Cash flow from investing activities
Funds used for investments interm deposits
Funds used for the purchase of
tangible fixed assets
Funds provided from the sale oftangible fixed assets
Funds used for the purchase ofintangible fixed assets
Funds used for the purchase ofinvestment securities
Funds provided from sale ofinvestment securities
Funds used for purchase ofinvestments
Funds used for purchase of
subsidiary company stock
Funds provided from the sale ofsubsidiary company stock
Funds provided from purchase of
subsidiary company stock
following change in scope of
consolidation

−

−

-1

-534,146-167,326-1,899,402

132,867

4,065

15,555-44,770-182,209-182,859-670,709-1,012,816-1,044,472

672,827

1,204,422

1,332,729

−

-10

-10

−

-27,875-27,875

2,902

−

−

−

−

319,306

888-48,581-48,581-440,140-230,331-1,535,610

2,881,736

2,925,633-36,718

6,400,000

9,630,000

11,930,000-8,564,122-7,896,142-10,709,516-2,893,020-4,389,173-5,564,061-2,312-2,118-5,157-567,305-537,604-537,604

−

-150

-150

Cash flow from financing activities-2,745,023-269,555-4,923,208

Increase (decrease) in cash andI V equivalents

8,424,626

4,578,917-228,589

Balance of cash and equivalents
at beginning of period

11,734,154

11,920,620

11,920,620

Increase in cash and equivalents
V I accompanying merger with
non-consolidated subsidiary−

42,124

42,124

Balance of cash and equivalents
VII at end of the period

20,158,780

16,541,662

11,734,154

Other
Cash flow from investing activities
III Cash flow from financing activities
Increase (decrease) in short-termbank loans
Funds provided by long-termbank loans
Funds used to repay long-termbank loans
Funds used for repayment of
installment obligations
Funds used for the purchase oftreasury stock
Payment of dividends to parent
company
Other

V

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.10

4. Business Segment Information[ Segment information by type of business ]Third quarter (From November 1, 2004 to July 31, 2005)(Unit: Thousands of yen)
Construction
equipment
rental business

Steel sales
business

Information
products
business andother businesses

Revenues

41,706,993

4,345,045

321,978

Operatingexpenses

41,692,551

4,325,462

Operatingincome14,442

19,583Eliminations
or entirecompany

Consolidated

46,374,018−

46,374,018

305,937

46,323,951-120,160

46,203,790

16,04150,067

120,160

170,227

Total

Third quarter of the prior consolidated accounting fiscal year
(From November 1, 2003 to July 31, 2004)(Unit: Thousands of yen)
Construction
equipment
rental business

Steel sales
business

Information
products
business andother businesses

Revenues

40,120,324

4,011,768

346,757

Operatingexpenses

39,572,378

4,006,268

Operatingincome547,946

5,500

Eliminations
or entirecompany

Consolidated

44,478,850−

44,478,850

349,728

43,928,374-115,694

43,812,680-2,970550,475

115,694

666,170

Total[ Segment information by location ]Third quarter and third quarter of the prior consolidated accounting fiscal year
The Company does not report segment information by location because the Company does not haveany consolidated subsidiaries or important offices located in countries or regions outside of Japan.

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.11

5. (Summary) Third Quarter Company Balance Sheets(Unit: Thousands of yen, %)Current Quarter
Prior FY Quarter
Period (Third Quarter of the (Third Quarter of the
Fiscal Year Ending
October 31, 2005)

Fiscal Year Ended
October 31, 2004)

AmountAmount1．Cash and deposits
receivable,
2．Notestrade
receivable,
3．Accounts
trade

18,959,754(Reference)
Change fromprior year

Item

Fiscal Year
Ended
October 31,
2004

AmountPercent

Amount16,118,049

2,841,705

17.6

10,911,377

1,975,570

9,418,599-7,443,028-79.0

10,889,913

8,202,178

9,220,582-1,018,404-11.0

11,067,221

4．Negotiable securities−

18,978-18,978-100.0−5．Inventory
6．Construction
equipment
7．Deferred tax assets

539,782544,609-4,826-0.9

344,870

1,301,876

1,652,489-350,613-21.2

1,556,528

197,621

188,653

8,967

4.8

229,340

8. Other

Assets（I）

Current Assets

1,463,223

1,381,295

81,9275.9

800,216

Allowance for
doubtful accounts-549,346-522,831-26,515-5.1-629,663

Total Current Assets

32,090,660

38,020,426-5,929,766-15.6

35,169,805

Fixed Assets
Fixed
1. Tangible
Assets(1) Rental equipment

9,844,436

10,111,740-267,303-2.6

9,719,372(2) Building

5,440,032

5,555,228-115,195-2.1

5,731,090(3) Structures

903,681

1,042,767-139,086-13.3

1,000,057(4) Land

25,933,514

24,381,774

1,551,740

6.4

25,838,381(5) Other

1,412,296

1,326,125

86,1716.5

1,235,587

43,533,961

42,417,636

1,116,325

2.6

43,524,490

195,097

240,040-44,942-18.7

226,860

4,818,752

3,922,283

896,46822.9

3,800,470

1,034,307

949,957

84,3508.9

1,037,210

600,860

803,276-202,415-25.2

1,004,962

1,517,556

1,626,123-108,567-6.7

1,549,381-638,224-646,658

8,433

1.3

-564,006

II

Total Tangible
Fixed Assets
Intangible
Fixed
2. Assets
Total Intangible
Fixed Assets
and
3. Investments
Other Assets
Investment(1) securities
Stock of affiliated(2) companies(3) Deferred tax assets(4) Other
Allowance for
doubtful accounts
Reserve forinvestment losses
Total investments
and other assets-280,000-229,402-50,597-22.1-280,000

7,053,252

6,425,579

627,6729.8

6,548,018

Total Fixed Assets

50,782,311

49,083,255

1,699,055

3.5

50,299,369

Total Assets

82,872,971

87,103,682-4,230,710-4.9

85,469,174

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.12

(Unit: Thousands of yen, %)Current Quarter
Prior FY Quarter
Period (Third Quarter of the (Third Quarter of the
Item

Fiscal Year Ending
October 31, 2005)

Fiscal Year Ended
October 31, 2004)

AmountAmount(Reference)
Fiscal Year
Ended
October 31,
2004

Change fromprior year
AmountPercent

Amount（）
Liabilities
Current Liabilities

I

1．Notes payable, trade
payable,2．Accounts
trade
bank
3．Short-term
loans

8,309,802

7,584,434

725,368

9.6

8,967,156

1,917,873

2,305,106-387,232-16.8

2,838,409

3,000,000

3,000,000−−−

10,650,000

10,726,000-76,000-0.7

10,747,000

3,049,042

4,668,339-1,619,296-34.7

4,065,427

120,463

43,03577,428179.9362,284

147,792

393,833-246,041-62.5

436,029

714,985

826,367-111,381-13.5

659,869

27,909,960

29,547,116-1,637,155-5.5

28,076,177

18,800,000

21,250,000-2,450,000-11.5

20,735,000

1,862,211

2,810,376-948,165-33.7

2,426,551

1,399,999

1,206,786

193,21216.0

1,226,848

95,352

72,746

22,60631.1

71,542

22,157,563

25,339,909-3,182,345-12.6

24,459,941

50,067,523

54,887,025-4,819,501-8.8

52,536,118（ Shareholders’ ）EquityCommon stock

8,596,737

8,596,737−−

8,596,737

Capital surplus
Additional
paid-in capital

9,720,343

9,720,343−−

9,720,343

Total capitalsurplus9,720,343

9,720,343−−

9,720,343

1,375,287

1,375,287−−

1,375,287

General reserve
Unappropriatedretained earnings

11,831,684

11,281,684

550,000

4.9

11,281,684

268,296

749,732-481,436-64.2

1,443,580

Total earned surplus
Valuation difference
IV on other investment
securities
V Treasury stock

13,475,268

13,406,704

68,5630.5

14,100,552

1,198,026

672,308

525,718

78.2

697,897-184,927-179,437-5,4903.1-182,475

32,805,447

32,216,656

588,790

1.8

32,933,055

82,872,971

87,103,682-4,230,710-4.9

85,469,174

Long-term bank
4．loans due within one
year
payable,5．Accounts
other
taxes
6．Corporate
payablebonuses to
7．Accrued
employees
8．Other
Total Current
Liabilities
Long-term
Liabilities
bank
1．Long-term
loans
accrued2．Long-term
expenses
employees
3．Accrued
retirement benefits
Retirement
to4．allowances
directors andauditors
Total Long-term
Liabilities
Total Liabilities

II

I
II

III Earned surplus
Legal earned surplus
Voluntary reserves

Total Shareholders’EquityTotal Liabilities andShareholders’ Equity

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.13

6. (Summary) Third Quarter Company Statements of Income(Unit: Thousands of yen, %)PeriodCurrent Quarter

Prior FY Quarter

AmountAmount(Third Quarter of the (Third Quarter of the
Fiscal Year Ending
Fiscal Year Ended
October 31, 2005)
October 31, 2004)(Reference)
Fiscal Year
Ended
October 31,
2004

Change fromprior year

Item
AmountPercent

AmountI

Operating revenues

40,975,456

42,816,157-1,840,700-4.3

59,274,381

II

Cost of revenues

32,056,353

33,400,341-1,343,988-4.0

45,811,415

Gross profit
Selling,
general andIIIadministrative
Operating income

8,919,103

9,415,815-496,712-5.3

13,462,966

8,726,448

8,927,320-200,872-2.3

11,620,779

192,654

488,494-295,839-60.6

1,842,186

IV Non-operating
revenues
Interest
1．dividendsandon sale of
2．Gaininvestment securities

54,93852,9082,029

3.8

77,222

27,89046,427-18,536-39.9

47,261

3．Rents received

179,910116,037

63,872

55.0

176,170

4．Other

178,213

170,161

8,051

4.7

228,808

440,952

385,534

55,41714.4

529,462

1．Interest expense

237,877

247,787-9,909-4.0

332,619

2．Other

Total non-operating
revenues
VNon-operating
expenses

128,830

154,321-25,491-16.5

211,527

Total non-operating
expenses

366,708

402,108-35,400-8.8

544,146

Ordinary income

266,899471,920-205,021-43.4

1,827,502

VI Extraordinary profits
on disposal of
1．Gainfixed assets

4,742

466

4,275

917.3

8,334

−

606,420-606,420-100.0606,420

95,497

5,484

90,013−

5,472

100,239

612,370-512,131-83.6

620,226

42,86374,384-31,521-42.4

94,392

loss on2．Valuation
investment securities−

10,000-10,000-100.041,898to reserve3．Transfer
for investment losses

−

−

−

−

50,597

192,465−

192,465−−

Gain on return of
entrusted portion of
2．corporate Employee
Welfare Pension
Fund
3．Other

Total extraordinary
profits
VII Extraordinary losses
Loss on sale or1．disposal of fixed
assetsTransfer to allowance
4．for doubtful accounts
at affiliates
5．Other

24,35814,803

9,554

64.5

18,062

Total extraordinary
losses259,687

99,187

160,499161.8

204,949

Income before taxes andadjustments

107,451

985,103-877,652-89.1

2,242,779

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.14

Corporate, local andbusiness taxes
Adjustment forcorporate and other

61,322

9,243

52,079563.4

832,790

96,808482,599-385,791-79.9

222,880

Current quarter (fiscal
year) net income (loss)-50,678493,261-543,939−

1,187,109

Profit carry-forward fromprior period

587,686

557,483

30,202

5.4

557,483

268,711

268,785-74-0.0

268,785−

32,226-32,226-100.032,226268,296

749,732-481,436-64.2

1,443,580

Cash dividends
Loss on cancellation ofaffiliated company stock
related to merger
Unappropriated retained
earnings

Summary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2005

P.15