Consolidated Financial Results for the First Half of the Fiscal Year ending March 31, 2010
(April 1, 2009 through September 30, 2009)
All financial information has been prepared in accordance with accounting principles generally accepted in Japan. This is apartial English translation of the original Japanese-language document. All information pertains to consolidated results unlessotherwise noted. Information on the basis of presentation of consolidated financial statements does not appear in thistranslation.
November 10, 2009
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:

IT Holdings Corporation
The First Section of the Tokyo Stock Exchange3626
http://www.itholdings.co.jp/e/Susumu Okamoto, President
Yukio Urata, Vice President+81 3-6738-7557

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

November 13, 2009
December 10, 2009

Figures in millions of yen are rounded down to the nearest million
1. Consolidated Results for the First Half of the Fiscal Year ending March 31, 2010
(April 1, 2009 – September 30, 2009)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net salesFirst Half, FY 2010
First Half, FY 2009

Operating income

Recurring profit

Net income

millions of yen%millions of yen%millions of yen%millions of yen%

146,954
163,426(10.1)-

5,805
9,400(38.2)-

5,792
9,479(38.9)-

3,207
4,491(28.6)-

Net income
per share – basic

Net income
per share – dilutedyen

First Half, FY 2010
First Half, FY 2009

yen

37.60
52.97

52.94

Total assets

Net assets(2) Consolidated Financial Position
millions of yen

End-First Half, FY 2010
280,943
End-FY 2009
295,327
For reference:
Shareholders’ equity: End-First Half, FY 2010: 134,590 million yen

Equity ratio%

yen

149,384
146,21647.9
44.4

1,558.63
1,541.17

End-FY 2009: 131,054 million yen.

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record dateor period

End-Q1yen

End-Q2yen

End-Q3Year-end

yen

yen

Total
yen

FY 2009
32.00
32.00
12.00
FY 2010
FY 2010
20.00
32.00(forecast)
Note: Revision of dividend forecast during the first half of the fiscal year ending March 31, 2010: No1Net assets per share

millions of yen

3. Forecast of Consolidated Results for FY 2010 (April 1, 2009 – March 31, 2010)
Net sales
Full FY 2010
(year ending Mar. 31, 2010)

millions of yen%

322,000(4.8)

Percentages indicate year-over-year changes
Net income perNet income
share – basic

Operating income

Recurring profit

millions of yen%

millions of yen%

millions of yen%

yen

20,000 (15.9)

19,500(17.4)

9,000(4.3)

104.87

Note: Revision of consolidated results forecast during the first half of the fiscal year ending March 31, 2010: No

4. Other(1) Material reclassifications of subsidiaries (scope of consolidation) during the period: No(2) Application of simplified accounting and/or accounting procedures specific to preparation of quarterly consolidated
financial statements: Yes
Note: For details, see “4. Other” on page 4 in the “Qualitative Information and Financial Statements” section.
(3) Changes in accounting principles, procedures, presentation methods, etc., used in the preparation of quarterly consolidated
financial statements (information reported in “Changes in Basis of Presentation of Consolidated Financial Statements”)
1) Changes associated with changes to accounting standards: Yes2) Changes other than the above: No
Note: For details, see “4. Other” on page 4 in the “Qualitative Information and Financial Statements” section.
(4) Issued shares of common stock
1) Period-end issued shares (including treasury stock):
End-First Half, FY 2010 (September 30, 2009):
86,373,919 shares
End-FY 2009 (March 31, 2009):
86,372,339 shares
2) Period-end treasury stock:
End-First Half, FY 2010 (September 30, 2009):
21,960 shares
End-FY 2009 (March 31, 2009):
1,337,013 shares
3) Average number of shares (for the six months):
First Half, FY 2010 (ended September 30, 2009):
85,293,484 sharesFirst Half, FY 2009 (ended September 30, 2008):
84,805,595 shares

Cautionary Statement on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans and expectations.
These forward-looking statements are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors that may cause ITHD’s actual results, performance, achievements or financial position to bematerially different from any future results, performance, achievements or financial position expressed or implied by theseforward-looking statements.
Refer to “3. Qualitative Information on the Consolidated Results Forecast” on page 4 in the “Qualitative Information andFinancial Statements” section for assumptions underlying earnings forecasts and cautionary statements on the use of earnings
forecasts.

2

Qualitative Information and Financial Statements
1. Qualitative Information on the Consolidated Results of Operations
Results for the first half of fiscal 2010 (six months ended September 30, 2009)
There were some mildly promising signs for the Japanese economy during the six months ended September 30, 2009,
as exports and industrial production staged a rally, but with corporate earnings showing only the weakest of recoveries,
the overall business climate remained extremely challenging as ongoing fallout from the global financial crisis anddeep-rooted concerns over the risk of a further economic downturn weighed heavily on capital spending.
These conditions once again made things very difficult for the information services industry, as reflected in figuresfrom the Bank of Japan’s September 2008 Short-term Economic Survey of Enterprises in Japan indicating that firms
are planning to significantly reduce their software investment versus the fiscal year ended March 31, 2009.
Our own sales for the first half of the fiscal year were adversely impacted as customers adopted an unexpectedly
cautious stance with regard to the economic outlook, but we made significant progress in our efforts to cut outsourcing
costs to more reasonable levels and reduce other expenditures while bolstering our project management capabilities
and stepping up our consultative sales initiatives.
We booked consolidated net sales of ¥146,954 million for the six months ended September 30, 2009, down 10.1%
versus the six months ended September 30, 2008. The decline in sales dealt our profits a blow, as did a decline inpersonnel utilization rates in our software development segment and an increase in sales-related costs in that segment
as we stepped up consultative sales efforts. We ended the first half with operating profit of ¥5,805 million (down38.2%), recurring profit of ¥5,792 million (down 38.9%), and net profit of ¥3,207 million (down 28.6%).
The breakdown of net sales by segment was as follows.
1) Outsourcing and network segment
Consolidated sales for the six months ended September 30, 2009, totaled ¥61,623 million, up 1.4% versus the sixmonths ended September 30, 2008, on the back of solid contributions from ongoing operations and Nexway Co., Ltd.,
which became a group subsidiary in July 2008.
2) Software development segment
Consolidated sales totaled ¥70,308 million, down 14.3% from a year earlier due to the impact of a broad-based
decline in corporate capital spending and the completion of a number of relatively large projects during the previous
fiscal year.
3) Solution services segment
Consolidated sales totaled ¥11,798 million, down 20.9% from a year earlier as the economic downturn continued tohamper demand for hardware.
4) Other businesses segment
Consolidated sales totaled ¥3,224 million, down 43.6% from a year earlier, largely reflecting a reduction in sales
figures due to the application of new accounting standards.
In April 2009 we launched a new three-year management plan—IT Evolution 2011—which aims to cement ourgroup’s position at the forefront of the IT services industry. The plan outlines key strategies for strengthening andexpanding our existing operations while simultaneously exploring new business opportunities both at home andabroad, and we have recently taken a significant step toward realizing these goals by forging a strategic collaboration
with British Telecommunications plc—one of the world’s leading providers of network IT services—that will better
enable us to: (1) provide worldwide support for our clients’ global business strategies and (2) offer cloud computing
services on a global scale.
On April 1, 2009 we established IT Service Force Inc. as a subsidiary that will provide shared back-office services
for each of our group companies with a view to achieving group-wide efficiency gains, cost savings, and operational
quality improvements.
Also in line with our medium- to long-term group strategy, we converted Systems Engineering Laboratory Co., Ltd.
into a wholly owned subsidiary in June of this year and then merged this firm with TIS Solution Business Co., Ltd. thefollowing month to launch a new firm under the name of Neoaxis Co., Ltd. We then completed the second step in ourgroup formation strategy in October by merging Intec Holdings, Ltd. into Intec Inc.
Additionally, when it met today, IT Holdings’ Board of Directors approved the purchase of Sorun Corporationshares via a tender-offer bid. For details, refer to the press release dated November 10, 2009, titled “Notice ofcommencement of tender offer for shares of SORUN Corporation.”3

2. Qualitative Information on Consolidated Financial Position
1) Assets
Assets totaled ¥280,943 million at the end of the fiscal first half (September 30, 2009), down ¥14,384 million from¥295,327 million at the end of last fiscal year (March 31, 2009). This decline reflected a ¥15,386 million decrease innotes and accounts receivable, which was only partly offset by a ¥3,478 million increase in the market value ofinvestment securities.
2) Liabilities
Liabilities totaled ¥131,558 million at September 30, 2009, down ¥17,552 million from ¥149,110 million at March 31,2009. This decline reflected a ¥7,491 million decrease in notes and accounts payable and a ¥2,494 million reduction in
long-term borrowings.
3) Net assets
Net assets totaled ¥149,384 million at September 30, 2009, up ¥3,168 million from ¥146,216 million at March 31,2009. Of this increase, ¥2,298 million was attributable to the disposal of treasury stock (including the sale of ITHoldings Corporation stock held by subsidiary Intec Holdings, Ltd.), and we also booked ¥1,807 million in net
unrealized gains on other securities as market values improved.
3. Qualitative Information on the Consolidated Results Forecast
The uncertain economic outlook continues to pose numerous challenges to our operations, but we are making groupwide efforts to secure new orders and decisively reduce costs, and have therefore left our consolidated earnings
forecasts for the fiscal year ending March 31, 2010 unchanged from those announced on August 11, 2009.
4. Other(1) Material reclassifications of subsidiaries (scope of consolidation) during the period
Not applicable(2) Application of simplified accounting and/or accounting procedures specific to preparation of quarterly consolidated
financial statements
1) Simplified accounting(a) Bad debt estimation method for general claims
Certain consolidated subsidiaries estimated the value of uncollectible general claims based on the credit loss rate
as of the end of the previous fiscal year, unless the credit loss rate as of the end of the first half was deemed tohave changed substantially relative to the rate calculated at the end of the previous fiscal year(b) Inventory valuation method
Certain consolidated subsidiaries write-down the book value of inventory to estimated net realizable value only
when utility has clearly diminished.
(c) Calculation method for income taxes and deferred-tax assets and liabilities
Certain consolidated subsidiaries calculate income tax payments with a method that limits deductible andtaxable items and tax-credit items to those that are material. To assess deferred assets’ collectability, certain
consolidated subsidiaries used the tax planning and earnings forecasts used at the end of the previous fiscal year,
as no substantial changes in the operating environment and status of temporary differences were deemed tohave taken place since the end of the previous fiscal year.
2) Accounting procedures specific to preparation of quarterly consolidated financial statements
Not applicable(3) Changes in accounting principles, procedures, presentation methods, etc., used in the preparation of quarterly
consolidated financial statements
Changes related to accounting standards
The Company previously used the completed-contract method to account for revenues associated with build-toorder software. Effective the first quarter of the fiscal year ending March 31, 2010, however, due to adoption ofthe Accounting Standard for Construction Contracts (ASBJ Statement No. 15, December 27, 2007) and its
accompanying Guidance on Accounting Standard for Construction Contracts (ASBJ Guidance No. 18,December 27, 2007), the percentage-of-completion method has been applied to build-to-order software thatwent into development during the first quarter ended June 30, 2009, for which certain elements weredeterminable with certainty at end of the fiscal first half. The percentage of completion is estimated with theproportion-of-cost method, under which the percentage of software development completed during the period iscalculated as the ratio of the development cost incurred during that period relative to the total development cost.
The completed-contract method was applied to other works.
The effects of this change on net sales and income/loss are negligible.
45. Consolidated Financial Results for the Second Quarter of the Fiscal Year ending March 31, 2010
(1) Consolidated Balance Sheets
As of Sept. 30, 2009
As of Mar. 31, 2009
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, netMachinery 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
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

5

millions of yen

millions of yen

36,02547,476
7,646
301
2,305
12,790
214
8,215
5,768
(229)
120,51337,52462,862
7,274
1,501
2,799
11,579234
11,0756,203(255)
140,799

53,003
5,433
21,925
1,703
7,938
90,00453,278
5,799
21,925
1,235
6,809
89,0484,109
11,03815,148

4,839
10,162
15,001

30,382
7,659
19,994(2,759)55,276
160,430
280,943

26,904
6,762
19,489(2,678)50,477
154,527
295,327

As of Sept. 30, 2009

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Corporate bonds (redeemed within one year)
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Corporate bonds
Long-tern debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to employees
Accrued retirement benefits to directors
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
Valuation and translation adjustments
Net unrealized gains on other securities
Revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

6

As of Mar. 31, 2009

millions of yen

millions of yen

11,135
21,278
8,000
1,579
9,970
72
18,11670,153

18,626
22,919
5,100
3,390
9,830
71
22,112
82,051

7,600
38,519
2,964
658
993
8,486
209
1,972
61,405131,558

11,50041,013
2,549
682
993
8,113
248
1,958
67,058149,110

10,001
85,20740,671(56)
135,823

10,00086,32140,186(2,354)
134,153689(1,841)(81)(1,233)18
14,775
149,384
280,943(1,118)(1,841)(139)(3,098)815,154
146,216
295,327

(2) Consolidated Statements of Income
Items
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Amortization of negative goodwill
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of non-consolidated subsidiaries andaffiliates
Organization expenses
OtherTotal non-operating expenses
Recurring profitExtraordinary income
Gain on sale of investment securities
Gain on liquidation of subsidiaries
Reversal of allowance for doubtful accounts
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Valuation loss on investment securities
Impairment loss
Other
Total extraordinary loss
Income before income taxes and minority interests
Income taxes: current
Income taxes: deferred
Total income taxes
Minority interests in earnings of consolidated subsidiaries
Net income

7First Half, FY 2009
(Apr. 1 – Sept. 30, 2008)

First Half, FY 2010
(Apr. 1 – Sept. 30, 2009)

millions of yen

millions of yen

163,426
133,81229,614
20,2139,400

146,954
119,987
26,967
21,162
5,805

36
386
478
300
1,202

40
429
44
340
854

560

526

40

37

110
411
1,123
9,479

303
867
5,792

8
20
31
29
89

20
53
7
81

173
307
330
811
8,757
2,407
1,128
3,536
729
4,491

151
112
135
103
502
5,371
1,151
722
1,873
290
3,207

(3) Notes on the Going-concern Assumption
Not applicable(4) Note on Significant Changes in the Amount of Shareholders’ Equity
Not applicable8