[Translation]
July 26 2012

Consolidated Summary Report of Operating Results for the Second Quarter of Fiscal 2012
(Year ending December 2012) [Japan GAAP]
Company name:

Future Architect, Inc.

Shares listed on: First Section of Tokyo Stock Exchange
Security code number 4722
Website: http://www.future.co.jp/
Representative:

Yasufumi Kanemaru, Chairman and CEO

Contact:

Yoshihiko Nakajima, Executive OfficerTel.:+81-3-5740-5724

Scheduled submit date of quarterly report: August 13, 2012
Scheduled date for distribution of dividend payments: September 21, 2012
Creation of supplemental material on quarterly financial results:

Yes

Holding of quarterly results briefing:

Yes (for institutional investors and securities analysts)(Amount rounded off to million yen)

1. Consolidated Results for the Second Quarter of Fiscal 2012 (January 1, 2012 to June 30, 2012)(1) Consolidated operating results (accumulated total)(Percentages are year-on-year changes)
Net sales
2Q, Fiscal 2012
2Q, Fiscal 2011

Operating income

Ordinary income

Quarterly net income

Million yen%

Million yen%

Million yen%

Million yen%

11,126
11,768

(5.5)
7.6

724
1,629

(55.5)
50.9

804
1,711

(53.0)
49.2

463
1,073

(56.8)
102.8(Reference) Comprehensive income 2Q, Fiscal 2012: 479 million yen (-52.6%)
2Q Fiscal 2011: 1,010 million yen (— %)Quarterly net income
per share

Quarterly net income
per share (fully diluted)

Yen

2Q, Fiscal 2012
2Q, Fiscal 2011

Yen

1,025.65
2,350.20––(2) Consolidated financial position
Total assets
2Q, Fiscal 2012
Fiscal 2011

Shareholders’equity ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

14,48914,453

11,42911,41078.0
78.9

25,115.05
24,964.67(Reference) Shareholders’ equity 2Q, Fiscal 2012:

11,307 million yen

Fiscal 2011:

11,399 million yen

2. Dividends
Dividends per share (yen)End of the first End of the second End of the third
quarter dividend quarter dividend quarter dividend
Yen

Fiscal 2011
Fiscal 2012
Fiscal 2012 (Forecast)

–
–

Yen

750.00750.00Note: Modification of the projected dividends announced most recently: No

Yen

Year-end
dividend

Total
Yen

Yen

–

750.001,500.00–

750.001,500.00

[Translation]

3. Projected Consolidated Results for Fiscal 2012 (January 1, 2012 to December 31, 2012)(Percentages are year-on-year changes)

Net sales
Million yen%

Operating income Ordinary income

Net income

Million yen

Million yen%

Million yen%

Net income per share%

Yen

Full year
24,8006.5
3,300 12.6
3,330
9.1
1,930 12.5
Note: Modification of the projected consolidated results announced most recently: No

4,268.68

[Translation]* Notes(1) Changes in significant subsidiaries in the consolidated second quarter under review (Changes in specified
subsidiaries that involved changes in the scope of consolidation): No(2) Application of special accounting for the preparation of quarterly consolidated financial statements: Yes
Income taxes and payables are calculated by appropriately estimating the legal effective tax rate after the adoption oftax effect accounting which is to be assessed upon net income before taxes of the consolidated fiscal year including theconsolidated second quarter under review and multiplying such estimated legal effective tax rate to the net income
before taxes of the previous consolidated quarter.
(3) Change in accounting policies or estimates and retrospective restatements
1) Change in accounting policies in accordance with revision of accounting standards: No2) Change in accounting policies other than item 1) above: No3) Change in accounting estimates: No4) Retrospective restatements: No(4) Number of outstanding shares (common stock)1) Total outstanding shares as of the end of
the period (including treasury stocks)2) Total treasury stocks as of the end of theperiod3) Average number of outstanding stocks
during the quarter under review(accumulated period for quarter)

2Q Fiscal 2012:

476,640 sharesFiscal 2011:

476,640 shares

2Q, Fiscal 2012:

26,408 sharesFiscal 2011:

20,008 shares

2Q, Fiscal 2012:

452,195 shares

2Q, Fiscal 2011:

456,632 shares* Indication of quarterly review procedure implementation status
This quarterly earnings report is exempt from the quarterly review procedures based upon the Financial Instruments and Exchange Act. At the time of thisdocument's release, review procedures for the quarterly financial statements under the Financial Instruments and Exchange Act had not been completed.

* Points to note about the proper use of projections, and other noteworthy events(Points to note regarding descriptions about future, etc.)
The above projection, representing our best estimate based on information currently available to us, incorporates uncertain factors. For details of thepreconditions used in making the above-mentioned forecast and other relevant matters, refer to “Qualitative Information on the Consolidated Results Forecast”
on page 3 of the accompanying material of the quarterly earnings report.

 Contents

1. Qualitative information about consolidated operating results for the second quarter of the fiscal year under review ...................... 2(1) Qualitative information about consolidated operating results ................................................................................................... 2(2) Qualitative information about consolidated financial condition ............................................................................................... 2(3) Qualitative information about consolidated earnings forecast .................................................................................................. 3
2. Matters related to summary information (notes) ................................................................................................................................. 3(1) Changes in significant subsidiaries in the consolidated first quarter under review ................................................................... 3(2) Application of special accounting for the preparation of quarterly consolidated financial statements ..................................... 3(3) Change in accounting policies or estimates and retrospective restatements ............................................................................. 3
3.

Quarterly Period Consolidated Financial Statements ...................................................................................................................... 4(1) Quarterly Period Consolidated Balance Sheets......................................................................................................................... 4(2) Quarterly Period Consolidated Statements of Income and Comprehensive Income (First half period) .................................... 6(3) Quarterly Period Consolidated Statements of Cash Flows........................................................................................................ 8(4) Notes on the going-concern assumption ................................................................................................................................. 10(5) Notes on significant changes to shareholders’ equity ............................................................................................................. 10(6) Segment information .............................................................................................................................................................. 11

4. Supplemental information............................................................................................................................................................... 12(1) Orders received ....................................................................................................................................................................... 12-1-

1. Qualitative information about consolidated operating results for the second quarter of the fiscal year underreview(1) Qualitative information about consolidated operating results
During the second quarter of the fiscal year under review, the outlook for the Japanese economy remained uncertain as there
were many sources of concern. These included a deceleration of overseas economies, originating in the European debt issue,
ongoing appreciation of the yen and power supply problems. Nevertheless, there were signs of recovery thanks to restoration
demand related to the Great East Japan Earthquake and other factors.
Under such circumstances, consolidated net sales of the Group for the second quarter were ¥11,126 million, down 5.5% fromthe corresponding period of the previous fiscal year, operating income was ¥724 million, down 55.5%, and ordinary income was¥804 million, down 53.0%. Net income declined 56.8% year-on-year to ¥463 million.
Operating results by business segment are as follows. The operating results by business segment represent values before
adjustment of internal sales or transfers among segments.
In the IT Consulting Business, one large project reached completion. At the same time, we were able to begin several projects
relating to new services, including cloud services for financial institutions, value added outsourcing (VAO) services, and global
ERP, which are part of new growth strategies on which the Group has worked since last year. We also broadened the base of new
customers. Meanwhile, costs for improving quality increased in some projects during the first quarter. In addition, businesses inSoutheast Asia, in which we made strategic investments, and the healthcare and other new businesses are still at the start-up stage,and need major investments. As a result, net sales were ¥7,068 million, down 4.7% from a year ago, with operating income at¥754 million, down 48.0%.
In the Package & Service Business, Ascendia Inc. continued to perform solidly, supported by stable orders received. At Future
One, Inc., whose performance picked up in the second quarter, the profit margins of projects deteriorated, due to an increase incosts for improving quality in some projects during the first quarter. Consequently, net sales fell 9.1% year on year to ¥1,992
million, and operating income decreased 91.1% to ¥10 million.
In the Corporate Revitalization Business, Uoei Shoten Corporation, which operates grocery supermarkets, enjoyed healthy
sales, mainly due to the expansion of sales floor space for products that meet the needs of individual stores. Uoei Shoten also
continued to record a stable gross profit margin through the implementation of IT measures, while working to reduce costs
chiefly by efficiently distributing leaflets. As a result, net sales were ¥2,249 million, down 3.2% year on year. The operatingbalance continued to be positive, with operating income of ¥32 million, down 31.9% year on year.
As a result, net sales were ¥2,249 million, down 3.2%, year on year and operating income was ¥32 million, up 31.9%. The
business segment has continued to post positive operating income.
(2) Qualitative information about consolidated financial condition(Assets, liabilities and net asset)
At the end of the second quarter under review, total assets were ¥14,489 million, up ¥35 million from a year earlier. The
increase is mainly attributable to a rise in fixed assets, such as software (increase of ¥297 million from the end of the previous
consolidated fiscal year) and investment securities (up ¥107 million), despite a fall in current assets, such as cash and deposits(decrease of ¥363 million from the end of the previous consolidated fiscal year) and securities (down ¥699 million), which
resulted from investments.
Liabilities stood at ¥3,059 million, up ¥17 million from the previous fiscal year. The increase was chiefly due to rises inaccounts payable (increase of ¥155 million from the end of the previous consolidated fiscal year) and other current liabilities,
despite a fall in income tax payable, etc. (down ¥205 million).
Net assets were ¥11,429 million, up ¥18 million from the previous fiscal year, primarily reflecting rises in retained earnings(increase of ¥121 million from the end of the previous fiscal year) and minority interests, and an increase in treasury shares(down ¥221 million).
(Analysis of cash flows)
Net cash outflow from operating activities was ¥22 million (compared to an inflow of ¥1,216 million for the corresponding
period of the previous fiscal year), which was primarily due to an increase in accounts receivable of ¥165 million and income tax,etc., paid of ¥569 million, despite booking net income before taxes of ¥832 million.
Net cash outflow from investing activities totaled ¥256 million (compared to an inflow of ¥87 million for the corresponding-2-

period of the previous fiscal year), chiefly due to the purchase of intangible fixed assets of ¥321 million and a payment of ¥64
million for the purchase of shares in subsidiaries resulting in changes to the scope of consolidation.
Net cash outflow from financial activities was ¥584 million (compared to an outflow of ¥562 million for the corresponding
quarter of the previous fiscal year), mainly due to purchase of treasury stock of ¥223 million and dividends paid of ¥343 million.
As a result of these operating, investment, and financial activities, the balance of cash and cash equivalents at the end of thesecond quarter under review was ¥4,663 million.
(3) Qualitative information about consolidated earnings forecast
The Company will make no revision to the earnings forecast for the full fiscal year ending December 2012 that it announced
on April 26, 2012.

2. Matters related to summary information (notes)(1) Changes in significant subsidiaries in the consolidated first quarter under review
Not applicable(2) Application of special accounting for the preparation of quarterly consolidated financial statements
Income taxes and payables are calculated by appropriately estimating the legal effective tax rate after the adoption of tax effectaccounting which is to be assessed upon net income before taxes of the consolidated fiscal year including the consolidated
second quarter under review and multiplying such estimated legal effective tax rate to the net income before taxes of theprevious consolidated quarter.
(3) Change in accounting policies or estimates and retrospective restatements
Not applicable

-3-

3.

Quarterly Period Consolidated Financial Statements(1) Quarterly Period Consolidated Balance Sheets
Previous consolidated
fiscal year
(December 31, 2011)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Investment securities
Merchandise and finished goods
Work in process
Accounts receivable-other
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total tangible fixed assets
Intangible fixed assets
Goodwill
Software
Other
Total intangible fixed assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-4-(in thousands of yen)
Consolidated second quarter
under review(June 30, 2012)

5,076,449
2,770,586
701,110
126,890
54,9281,357,981
448,566(7,364)
10,529,150

4,713,393
3,135,853
1,800
146,138
86,9701,395,265
581,168(4,949)10,055,640

3,077,281(2,654,607)
422,673
122,868
1,549,422(1,308,490)
240,931
786,474

3,095,919(2,693,196)
402,722
122,868
1,672,996(1,372,275)
300,721826,312

145,464
386,794
22,063554,322

228,361
684,476
22,591
935,429

1,523,639
1,119,817(60,043)2,583,414
3,924,210
14,453,360

1,631,176
1,100,111(59,489)
2,671,798
4,433,540
14,489,180

Previous consolidated
fiscal year
(December 31, 2011)
Liabilities
Current liabilities
Accounts payable
Short-term borrowings
Long-term borrowings due within one year
Income tax payable, etc.
Reserve for bonuses
Reserve for quality assurance
Reserve for loss on projects
Other
Total current liabilities
Non-current liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gain (loss) on available-for-salesecurities
Foreign currency translation adjustments
Total valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets-5-(in thousands of yen)
Consolidated second quarter
under review(June 30, 2012)

644,020
32,327
16,000590,481106,269
65,3594,200
1,257,508
2,716,167

799,91430,960385,149
97,901
24,545
1,397,386
2,735,857

309,408
16,899326,307
3,042,475

311,211
12,875
324,086
3,059,943

1,421,815
2,495,772
8,661,248(1,171,668)
11,407,167

1,421,815
2,495,772
8,782,567(1,393,328)
11,306,826(1,483)

10,727(6,017)(7,501)
11,22011,410,885
14,453,360(9,954)772
121,637
11,429,236
14,489,180

(2) Quarterly Period Consolidated Statements of Income and Comprehensive Income (First half period)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Officers’ remuneration
Salaries and bonuses
Employee training expenses
Research & development expenditures
Depreciation
Recruitment expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Amortization of negative goodwill
Equity in income of non-consolidated subsidiaries&affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission for purchase of treasury stock
Other
Total non-operating expenses
Ordinary income-6-First half of the previous
consolidated fiscal year
(from January 1, 2011
to June 30, 2011)
11,768,001
7,227,983
4,540,017(in thousands of yen)First half of the consolidated
fiscal year under review(from January 1, 2012
to June 30, 2012)
11,126,485
7,142,614
3,983,871

142,218
1,489,149
46,616
26,85751,648102,719
1,051,081
2,910,290
1,629,726

136,228
1,770,803
79,334
9,168
53,010100,167
1, 110,437
3,259,150
724,720

1,190
18,47528,3082,715
21,776–15,17334,424

20,46583,61322,85081,766

709
–
1,079
1,788
1,711,550

351
1,647
227
2,226
804,261(in thousands of yen)First half of the consolidated
fiscal year under review(from January 1, 2012
to June 30, 2012)

First half of the previous
consolidated fiscal year
(from January 1, 2011
to June 30, 2011)
Extraordinary income
Gains on sale of investment securities
Gains on sale of fixed assets
Gain on negative goodwill
Reversal of reserve for quality assurance
Compensation for damages received
Total extraordinary income
Extraordinary losses
Losses on disposal of fixed assets
Losses on sale of investment securities
Losses on devaluation of investment securities
Litigation expenses
Effects due to application of accounting standard for
asset retirement obligations
Other
Total extraordinary losses
Net income before taxes (quarterly period)
Income taxes
Income before minority interests
Minority interests in income
Quarterly net income
Minority interests in income
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Other comprehensive income
Quarterly comprehensive income(Breakdown)Comprehensive income attributable to ownersof the parent
Comprehensive income attributable to minority interests-7-160,275
203–
38,27594,945
293,700––
75,20975,209

5,743
1,349
1,191
–

–
–
1,275
44,000252,519–30,000290,803
1,714,448
641,272
1,073,175–
1,073,175–
1,073,175

1,666
46,942
832,528
359,827
472,701
8,908
463,7928,908
472,701(63,642)583

12,568(5,523)

(15)

(673)

(63,074)
1,010,100

6,371
479,072

1,010,100

472,066–

7,006

(3) Quarterly Period Consolidated Statements of Cash FlowsFirst half of the previous
consolidated fiscal year
(from January 1, 2011
to June 30, 2011)
Cash flows from operating activities
Net income before taxes (quarterly period)
Depreciation and amortization
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in reserve for bonuses
Increase (decrease) in reserve for quality assurance
Increase (decrease) in reserve for loss on projects
Earned interest and dividends
Interest expenses
Equity in income (losses) of subsidiaries & affiliates
Gain on negative goodwill
Compensation for damages received
Gains (losses) on sale of fixed assets
Losses on disposal of fixed assets
Gains (losses) on sale of investment securities
Gains (losses) on valuation of investment securities
Litigation expenses
Effects due to application of accounting standard for
asset retirement obligations
Increase (decrease) in accounts receivable
Increase (decrease) in inventories
Increase (decrease) in accounts payable
Other
SubtotalInterest and dividends received
Interest paid
Income and other taxes
Litigation expenses
Net cash provided by (used in) operating activities-8-(in thousands of yen)First half of the consolidated
fiscal year under review(from January 1, 2012
to June 30, 2012)

1,714,448
102,058(2,198)(30,190)(62,109)8,000(19,665)709(15,173)–(94,945)
(203)
5,743
(158,925)
1,191–

832,528
113,267(2,968)(9,582)(40,814)(4,200)(24,491)351(34,424)(75,209)
–
–
–
–
1,275
44,000252,519–524,072
17,17622,757(271,971)
1,993,290
20,465(791)(796,043)–
1,216,920(165,649)(39,968)
85,374(112,566)
566,922
24,866(433)(569,795)(44,000)(22,440)(in thousands of yen)First half of the consolidated
fiscal year under review(from January 1, 2012
to June 30, 2012)

First half of the previous
consolidated fiscal year
(from January 1, 2011
to June 30, 2011)
Cash flows from investing activities
Proceeds from withdrawal of time deposits
Purchase of short-term investment securities
Proceeds from redemption of securities
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets
Acquisition of intangible fixed assets
Payments for execution of asset retirement obligations
Proceeds from sale of investment securities
Purchase of investments in subsidiaries resulting inchange in scope of consolidation
Purchase of shares in affiliates
Payments for deposits and guarantee
Proceeds from collection of deposits and guarantees
Proceeds from transfer of business
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayment of long-term borrowings
Proceeds from payment by minority shareholders
Purchase of treasury stock
Dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the quarterly period-9-30,000––(10,067)
4,389(18,519)(3,800)228,255–(201,196)
400,464(39,851)–(321,287)(1,211)––(64,435)–(159,156)
14,058–2,150
87,309(56,833)(4,524)
22,3768,240
1,500(256,758)–(16,000)––(546,295)(562,295)(2,441)(38,721)24,021(223,307)(343,578)(584,028)

379

308

742,314
5,153,036
5,895,351(862,917)
5,526,311
4,663,393

(4) Notes on the going-concern assumption
Not applicable.
(5) Notes on significant changes to shareholders’ equity
Not applicable.

- 10 -

(6) Segment information
I. Second quarter of the previous consolidated fiscal year (from January 1, 2011 to June 30, 2011)
1. Amounts of net sales and income or loss by business segment reported
Segment reported

Net sales(1) Net sales tooutside clients(2) Inter-segment
sales or transfer
Total

IT
Consulting
Business

Package &Corporate
Service Revitalization
Business
Business

7,410,321

1,990,941

3,620

202,2317,413,941

2,193,172

Total

2,323,819 11,725,082
831

206,683

2,324,651 11,931,765

Others(Note 1)

Total

42,919 11,768,001(in thousands of yen)Amount on
Quarterly
PeriodAdjustment
Consolidated(Note 2)
Statementsof Income(Note 3)–

11,768,001

219,723(219,723)–

55,959 11,987,724(219,723)

11,768,001

13,040

Segment income
1,450,905
120,169
47,428 1,618,502(2,652) 1,615,850
13,876
1,629,726
or loss
Notes: 1. “Others,” a segment not included in the business segment reported, include Internet-related businesses and securities
investment, holding, and management activities.
2. “Adjustment” of segment income or loss of ¥13,876 thousand refers to elimination of inter-segment transactions.
3. Segment income or loss is adjusted with operating income in the Quarterly Period Consolidated Statements of Income.
II.

Second quarter of the consolidated fiscal year (from January 1, 2012 to June 30, 2012)
1. Amounts of net sales and income or loss by business segment reported
Segment reported

Net sales(1) Net sales tooutside clients(2) Inter-segment
sales or transfer
Total

IT
Consulting
Business

Package &Corporate
Service Revitalization
Business
Business

7,042,268

1,734,250

26,309258,350

7,068,578

1,992,601

Total

2,249,205 11,025,724
708

285,369

2,249,914 11,311,094

Others(Note 1)

Total

100,761 11,126,485(in thousands of yen)Amount on
Quarterly
PeriodAdjustment
Consolidated(Note 2)
Statementsof Income(Note 3)–

11,126,485

285,369(285,369)–

100,761 11,411,855(285,369)

11,126,485–

Segment income
754,418
10,69132,313
797,423(89,439)
707,983
16,736
724,720or loss
Notes: 1. “Others,” a segment not included in the business segment reported, include Internet-related businesses, publishing businessand securities investment, holding, and management activities.
2. “Adjustment” of segment income or loss of ¥16,736 thousand refers to elimination of inter-segment transactions.
3. Segment income or loss is adjusted with operating income in the Quarterly Period Consolidated Statements of Income.

- 11 -

4. Supplemental information(1) Orders received

Segment

First half of the previous consolidated
fiscal year
(from January 1, 2011 to June 30, 2011)
Orders received
Backlog(in thousands of yen)First half of the consolidated fiscal year
under review(from January 1, 2012 to June 30, 2012)
Orders received
Backlog

IT Consulting Business

6,336,395

3,597,032

7,035,693

3,552,577

Package & Service Business

2,252,117

958,234

1,380,380

831,444

47,04010,718

107,642

11,1308,635,553

4,565,984

8,523,716

4,395,152

OthersTotal- 12 -