This document is an English translation of quarterly financial results report released on January 31, 2020 and written initiallyin Japanese.
The Japanese original should be considered as the primary version.

January 31, 2020

Consolidated Financial Results for the First Nine Months of
the Fiscal Year Ending March 31, 2020
<under IFRSs>
Company name:
Listing:
Stock code:
URL:
Representative:
Contact:

Itochu Enex Co., Ltd.
Tokyo Stock Exchange, 1st Section
8133
https://www.itcenex.com/english/
Kenji Okada, Representative Director, President and CEO
Keisuke Hioki, General Manager, Finance & General Accounting Department
Tel: +81-3-4233-8008

Scheduled date to file quarterly securities report: February 10, 2020
Scheduled date to commence dividend payments: –Preparation of supplementary results briefing material on quarterly financial results: Yes
Holding of quarterly financial results presentation meeting: None
(Millions of yen with fractional amounts rounded, unless otherwise noted)

1. Consolidated financial results for the first nine months of the fiscal year ending March 31, 2020
(from April 1, 2019 to December 31, 2019)(1) Consolidated operating results(Percentages indicate year-on-year changes.)
Revenue

Nine months ended
December 31, 2019
December 31, 2018

Profit fromoperatingactivities

Millions%of yen671,116 (10.6)

Millionsof yen15,219750,618

13,26738.0

Basic earnings per
share attributable
to Itochu Enex’s
shareholders

Profit before tax

14.7

Millionsof yen15,852(7.2)

13,566%

Net profit

Net profit
attributable to
Itochu Enex’s
shareholders

Comprehensive
income18.8

Millionsof yen11,58925.4(15.8)

9,238(21.5)

16.8

Millionsof yen11,005

17.1

Millionsof yen9,282(13.6)

9,400(14.0)

7,812

%

%

%

Diluted earnings
per share
attributable to
Itochu Enex’s
shareholders

Yen
Yen
Nine months ended
December 31, 2019
82.23–
December 31, 2018
69.21–
Reference: Total trading transactions
For the nine months ended December 31, 2019: 826,528 million yen
For the nine months ended December 31, 2018: 931,822 million yen
Note: “Total trading transactions” are presented in accordance with the Japanese accounting practices.

%

(2)

Consolidated financial position
Total assets

As ofDecember 31, 2019
March 31, 2019

Total shareholders’equityTotal equity

Millions of yen

Millions of yen

408,799374,373

Ratio of shareholders’equity to total assets

Millions of yen

149,363
144,566%

126,151
122,290

30.9
32.7

2. Cash dividends
Annual cash dividends per share
Second quarterend

First quarter-end
Fiscal year ended
March 31, 2019
Fiscal year ending
March 31, 2020

Third quarter-end

Fiscal year-end

Total

Yen

Yen

Yen

Yen

Yen

–

20.00

–

22.00

42.00

–

21.00

–
21.00

42.00

Fiscal year ending
March 31, 2020
(Forecast)
Note: Revisions to the forecasts of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2020
(from April 1, 2019 to March 31, 2020)

Profit from operating
activities

Revenue

Millions of yen

Fiscal year ending
March 31, 2020

1,000,000% Millions of yen(0.7)

16,500(Percentages indicate year-on-year changes.)
Basic earnings
Net profit
per share
Profit before tax attributable to Itochu attributable toEnex’s shareholders Itochu Enex’s
shareholders% Millions of yen(7.6)

19,200% Millions of yen(1.1)

Note: Revisions to the consolidated earnings forecasts most recently announced: None

11,800

%

2.1

Yen

104.54

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in thechange in scope of consolidation): None
(2) Changes in accounting policies and changes in accounting estimatesa. Changes in accounting policies required by IFRSs:
Yes
b. Changes in accounting policies other than the above:Nonec. Changes in accounting estimates:
None(Note) For details, please refer to “2. Condensed Quarterly Consolidated Financial Statements andSignificant Notes Thereto, (6) Changes in Accounting Policies” on page 14 of the attached materials.
(3) Number of issued shares (common stock)a. Total number of issued shares at end of period (including treasury stock)
As of December 31, 2019

116,881,106 shares

As of March 31, 2019

116,881,106 sharesb. Number of treasury stock at end of period
As of December 31, 2019

4,000,476 shares

As of March 31, 2019

4,002,462 sharesc. Average number of outstanding shares during period (cumulative from the beginning of the fiscal year)
For the nine months ended December 31, 2019112,879,808 shares

For the nine months ended December 31, 2018

112,878,888 shares* Quarterly financial results reports are exempt from quarterly review conducted by certified public accountants oran audit corporation.
* Proper use of earnings forecasts, and other special notes(Caution regarding forward-looking statements and others)
The forecasts and other forward-looking statements in this report are based on information currently available to
the Company and on certain assumptions deemed to be reasonable by the Company. Actual business and otherresults may significantly differ from these forecasts due to various factors.
Please refer to “1. Qualitative Information Regarding Results for the First Nine Months, (3) Explanation ofConsolidated Earnings Forecasts and Other Forward-Looking Statements” on page 6 of the attached materials
for the suppositions that form the assumptions for earnings forecasts and cautions concerning the use thereof.

Contents of Attached Materials
1. Qualitative Information Regarding Results for the First Nine Months ..........................................................2(1) Explanation of Operating Results................................................................................................................2(2) Explanation of Financial Position ................................................................................................................5(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements .................6
2. Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto ...........................7(1) Condensed Quarterly Consolidated Statement of Financial Position ......................................................7(2) Condensed Quarterly Consolidated Statement of Comprehensive Income .............................................9(3) Condensed Quarterly Consolidated Statement of Changes in Equity....................................................11(4) Condensed Quarterly Consolidated Statement of Cash Flows ...............................................................12(5) Notes on Uncertainties of Entity’s Ability to Continue as Going Concern ............................................14(6) Changes in Accounting Policies .................................................................................................................14(7) Segment Information ..................................................................................................................................15

-1-

1.

Qualitative Information Regarding Results for the First Nine Months(1) Explanation of Operating Results
The Group has adopted IFRS 16 “Leases” (issued in January 2016; hereinafter, “IFRS 16”) from the firstquarter ended June 30, 2019. For the details of the impact of the adoption of IFRS 16, please refer to “2.
Condensed Quarterly Consolidated Financial Statements and Significant Notes Thereto, (6) Changes in
Accounting Policies.”
1)

Results of operations
During the nine months ended December 31, 2019, the tone of the Japanese economy was one of moderate
recovery. However, the outlook for the global economy remained uncertain due to uncertainties in overseas
economies and geopolitical risk in the Middle Eastern regions.
In addition, Japan’s energy industry has been encountering drastically changing circumstances, particularly
with respect to consolidation of major oil companies, market entry by companies from other industries as aresult of Japan having fully liberalized retail power and city gas sales, alliances forged across industry lines,
and mounting worldwide awareness of climate change.
In this environment, the Itochu Enex Group announced its two-year medium-term business plan “Moving
2020 Horizons” in April 2019, and has been advancing its business based on the following basic policies:
Overview of medium-term business plan
1. Name of the plan:

Moving 2020 Horizons

2. Period:

Two years (FY2019 to FY2020)

3. Basic policy:

Promotion of Growth Strategies(1) Maintaining and deepening the revenue base: Create Group synergy andfurther cultivate customer base.
(2) Making inroads overseas and in peripheral fields: Proactively invest inoverseas businesses and promote M&A of peripheral businesses.
(3) Creating new businesses: Promote environmental businesses and so on.
Evolution of the Organizational Base
(1) Strengthening Group management: Advance consolidated management andconstruct effective governance management structures.
(2) Human resource strategies for growth: Promote diversity and nurture global
human resources.
(3) Promoting innovation: Pursue more efficient operations in existing
business and promote digital solutions.

4. Quantitative plan (FY2020):(1) Net profit attributable to Itochu Enex’s shareholders: ¥12.5 billion(2) ROE: 9.0% or above(3) Dividend payout ratio: 40% or above(4) Planned investment (2-year total): ¥60.0 billion-2-The operating results for the nine months ended December 31, 2019 are as follows.
Revenue was ¥671,116 million (down 10.6% year on year), due mainly to the impact resulting from thedecrease in sales volumes of domestic petroleum products and declining sales prices caused by a fall in the
crude oil prices.
Profit from operating activities was ¥15,219 million (up 14.7% year on year), and net profit attributable to
Itochu Enex’s shareholders was ¥9,282 million (up 18.8% year on year), a new record high. This was
mainly due to increased profit margins in the electric power business of the Power & Utility Division.
2)

Results of operations by segment
Results of operations by segment are as follows. Following the reorganization of the Group carried out on
April 1, 2019, the Mobility Life Department was included in the Life & Industrial Energy Division. In linewith this, the classification of reportable segments has been changed to the Home-Life Division, Life &Industrial Energy Division and Power & Utility Division from the first quarter ended June 30, 2019.
In addition, following the reorganization of the Group carried out on October 1, 2019, the Life & Industrial
Energy Division was reorganized into two divisions: the Car-Life Division and Industrial Business
Division. In line with this, the classification of reportable segments has been changed to the Home-Life
Division, Car-Life Division, Industrial Business Division and Power & Utility Division from the third
quarter ended December 31, 2019.
For that reason, the year-on-year comparisons have been recalculated based on the reportable segments asthey exist after the reorganization.
Home-Life Division
In the Home-Life Division during the nine months ended December 31, 2019, the number of customers
under direct LP gas supply contracts increased by 1,000 to approximately 552,000, compared with the end of
the previous fiscal year.
Regarding sales of electricity for households, the division promoted the expansion of the customer base by
focusing mainly on sales of combined LP gas and electricity supply packages. As a result, the number ofsupply contracts increased by around 14,000 for a total of approximately 95,000, compared with the end of
the previous fiscal year.
In the industrial gas sales business and container inspection business, sales volumes posted year-on-year
declines due to the decrease in the sales volume of hydrogen associated with a decline in the export ofelectronic components, and the lower sales of carbonic acid gas caused by market conditions.
As a result of these activities, the operating results for the nine months ended December 31, 2019 are as
follows.
Revenue was ¥60,037 million (down 9.7% year on year), due mainly to the declining sales price caused by afall in the import price and the decrease in the sales volume of LP gas.
Profit from operating activities was ¥1,204 million (down 41.3% year on year). Net profit attributable to
Itochu Enex’s shareholders was ¥804 million (down 36.6% year on year). This was due mainly to the impact
of inventories in relation to a fall in the LP gas import price.
Car-Life Division
Looking at the Car-Life Division during the nine months ended December 31, 2019, in the Car-Life Stations(CS)*1 business, the number of the CS was 1,734, a decrease of 32 from the end of the previous fiscal period.
Sales volumes of petroleum products decreased year on year, reflecting a decrease in the number of CS,
increasing fuel efficiency of vehicles, the impact of a warm winter, and a decrease in demand-and-supply
transactions. The retail market for petroleum products continued to see robust sales.
In the automotive business, our car dealer business subsidiary OSAKA CAR LIFE GROUP CO., LTD.
experienced a year-on-year decline in sales volume in reaction to the consumption tax hike.
As a result of these activities, the operating results for the nine months ended December 31, 2019 are as
follows.

-3-

Revenue was ¥410,856 million (down 11.8% year on year), due mainly to a decrease in sales volume ofdomestic petroleum products and declining sales prices caused by a fall in the crude oil prices.
Profit from operating activities was ¥6,438 million (up 0.8% year on year). Net profit attributable to Itochu
Enex’s shareholders was ¥3,540 million (down 3.8% year on year). This was mainly attributable to anincrease in profit margins on new car sales and increased profits from service revenue in the car dealer
business, along with inclusion of certain expenses previously accounted as selling, general andadministrative expenses within financial costs following the application of IFRS 16, despite a decrease insales volume of petroleum products in Japan.
*1

Car-Life Stations: Car-Life Stations are service stations offering multiple services provided by the Company.

Industrial Business Division
Looking at the Industrial Business Division during the nine months ended December 31, 2019, in theindustrial petroleum product sales business, sales volumes decreased year on year, mainly due to the impactof a decline in domestic demand for petroleum products driven by a transition to low-carbon energy.
In the asphalt sales business, sales were steady, and sales volumes rose year on year.
In the marine fuel sales business, as a result of expanding transactions including starting to supply new
shipping routes, domestic sales volumes rose year on year.
As a result of these activities, the operating results for the nine months ended December 31, 2019 are as
follows.
Revenue was ¥128,856 million (down 14.3% year on year), due mainly to a decrease in sales volume ofindustrial petroleum products and declining sales prices caused by a fall in the crude oil prices.
Profit from operating activities was ¥1,866 million (down 5.4% year on year). Net profit attributable to
Itochu Enex’s shareholders was ¥1,299 million (down 5.6% year on year), due mainly to a decrease in sales
volume of industrial petroleum products.
Power & Utility Division
Looking at the Power & Utility Division during the nine months ended December 31, 2019, in the electric
power business, retail electricity sales volumes decreased year on year due to a downturn in large, highvoltage power contracts for business users, despite an increase in volume of low-voltage power sales tohouseholds.
In the heat supply business*2, lower temperatures than in the same period of the previous fiscal year led to a
year-on-year decrease in demand for heat.
As a result of these activities, the operating results for the nine months ended December 31, 2019 are as
follows.
Revenue was ¥71,367 million (up 5.3% year on year), due mainly to an increase in retail sales volume of
low-voltage power in the electric power business.
Profit from operating activities was ¥5,221 million (up 148.4% year on year). Net profit attributable to
Itochu Enex’s shareholders was ¥3,368 million (up 236.8% year on year). This was mainly due to anincrease in profit margins in the electric power business with a stable wholesale electricity market.
*2 Heat supply business: The heat supply business supplies cold and hot water for air conditioning to multiple officebuildings and other buildings from a heat source plant using pipes.

-4-

(2) Explanation of Financial Position
Assets, liabilities and equity
Total assets amounted to ¥408,799 million as of December 31, 2019, an increase of ¥34,426 million fromMarch 31, 2019. This increase mainly reflected an increase in property, plant and equipment of ¥41,453 million
with the application of IFRS 16. Total liabilities amounted to ¥259,436 million, an increase of ¥29,629 million
from March 31, 2019, mainly due to an increase in lease liabilities of ¥50,207 million with the application of
IFRS 16. Total equity totaled ¥149,363 million, an increase of ¥4,797 million from March 31, 2019, due tofactors including an increase of ¥9,282 million from net profit attributable to Itochu Enex’s shareholders, adecrease of ¥5,278 million by payment of cash dividends and a decrease of ¥1,535 million with the applicationof IFRS 16.
Cash flows
The group has set goals in FY 2020 of net profit attributable to Itochu Enex’s shareholders of ¥12.5 billion and
ROE of 9.0% or above. Using the cash flow generated from our core businesses, we are proactively investingin new businesses. Going forward, while further evolving group management and creating a balanced asset
portfolio, we will build a system that can create synergies among our businesses.
(Millions of yen)
Nine months ended
December 31, 2018

Nine months ended
December 31, 2019

Cash flows from operating activities

9,715

16,104

6,389

Cash flows from investing activities(3,490)(1,010)2,480[Free cash flows][6,225][15,094][8,869]Cash flows from financing activities(7,522)(17,854)(10,332)

Net increase in cash and cash equivalents(1,297)(2,760)(1,463)

10

1

(9)

21,286

15,966(5,320)Effect of exchange rate changes on cash and cash
equivalents
Cash and cash equivalents at the end of theperiodChangeCash and cash equivalents (net cash) totaled ¥15,966 million as of December 31, 2019, down ¥2,759 million
from March 31, 2019.
Cash flows from operating activities(Millions of yen)
Nine months ended
December 31, 2018

Nine months ended
December 31, 2019

Cash flows from operating activities

9,715

16,104

6,389

Changes in working capital and others(5,261)(10,495)(5,234)

Real operating cash flow*

14,976

26,599

11,623

Change*Real operating cash flow excludes working capital, etc. from cash flows from operating activities.

Operating activities provided net cash of ¥16,104 million. Major items included profit before tax of ¥15,852
million, depreciation and amortization of ¥14,631 million, and an increase in funds required for trading of¥5,937 million. Net cash provided increased ¥6,389 million year on year. Moreover, real operating cash flow
also increased year on year, even after excluding special factors such as an increase of ¥6,543 million due tothe application of IFRS16 and income taxes refund of ¥2,533 million.

-5-

Cash flows from investing activities
The Group has always made investments with an awareness of capital efficiency based on our investment
strategy. In the two years from FY2019 to FY2020, we are planning investments of ¥20,000 million inmaintaining and deepening our important revenue base that generates cash flow, as well as ¥40,000 million inoverseas and peripheral fields and new businesses centered on the Power & Utility Division. Proactively
investing the cash flow generated from our core businesses in new businesses has resulted in ¥1,010 million infunds used for investing activities. Cash used included purchase of investments accounted for by the equity
method of ¥2,750 million, mainly in the Power & Utility Division, acquisition of subsidiaries of ¥5,566 million,
and payments for purchase of property, plant and equipment and investment property of ¥8,666 million.
Meanwhile, cash provided included proceeds from sales of subsidiaries of ¥2,905 million and decrease indeposits paid of ¥10,000 million. Net cash used decreased ¥2,480 million year on year.
Cash flows from financing activities
The Group aims to streamline Group-wide financing activities to enhance our corporate value. Enhancing
Group-wide financial management through the introduction of our Group Financial System* resulted in¥17,854 million in funds used for financing activities. Major items included repayments of bonds andborrowings of ¥6,480 million, repayments of lease liabilities of ¥8,078 million, and cash dividends paid of¥5,278 million. Net cash used increased ¥10,332 million year on year.
*The Group Financial System streamlines fund management and procurement costs by sharing funds within the Group.

(3) Explanation of Consolidated Earnings Forecasts and Other Forward-Looking Statements
Although operating performance could be affected by various factors, including crude oil prices, market
conditions, changes in the weather, and the Japanese government’s energy policy, we have not revised our fullyear consolidated earnings forecasts announced on April 26, 2019.

-6-

2.

Condensed Quarterly Consolidated Financial Statements and Significant Notes
Thereto(1) Condensed Quarterly Consolidated Statement of Financial Position
As ofMarch 31, 2019ASSETS
Current assets
Cash and cash equivalents
Trade receivables
Other current financial assets
Inventories
Income taxes receivable
Trade advances paid
Other current assets
Total current assets
Non-current assets
Investments accounted for by the equity method
Other investments
Non-current financial assets other than investments
Property, plant and equipment
Investment property
Goodwill
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets-7-(Millions of yen)
As ofDecember 31, 201918,725
106,165
36,03433,053
2,533
111
3,154

15,966108,047
27,79926,628
507
95
3,761

199,775

182,803

29,441
4,186
11,29287,5999,819
521
20,0919,913
1,736

36,256
4,416
12,001129,052
12,713521
20,027
9,191
1,819

174,598

225,996374,373

408,799

As ofMarch 31, 2019
LIABILITIES AND EQUITYCurrent liabilities
Short-term bonds and borrowings
Trade payables
Lease liabilities
Other current financial liabilities
Income taxes payable
Advances from customers
Other current liabilities(Millions of yen)
As ofDecember 31, 201911,217
121,677
–
7,905
3,193
9,651
11,82010,956111,212
9,300
6,644
2,052
7,805
8,728

165,463

156,697

22,893–23,531
9,936
2,287
5,462
235

18,65152,04814,086
10,118
2,378
5,260
198

Total non-current liabilities

64,344

102,739

Total current liabilities
Non-current liabilities
Non-current bonds and borrowings
Lease liabilities
Other non-current financial liabilities
Non-current liabilities for employee benefits
Deferred tax liabilities
Provisions
Other non-current liabilities
Total liabilities

229,807259,436

EquityCommon stock
Capital surplus
Retained earnings
Other components of equity
Treasury stock

19,87818,922
86,769(1,406)(1,873)

19,87818,91990,028(804)(1,870)Total shareholders’ equity

122,290

126,151

22,27623,212

144,566

149,363374,373

408,799

Non-controlling interests
Total equity
Total liabilities and equity-8-(2) Condensed Quarterly Consolidated Statement of Comprehensive Income
Nine months ended
December 31, 2018

(Millions of yen)
Nine months ended
December 31, 2019

Revenue
Cost of sales

750,618(688,451)

671,116(607,427)

Gross profit

62,167

63,689Other income and expense
Selling, general and administrative expenses
Profit (loss) from tangible assets, intangible assets and goodwill
Other – net(49,059)(331)
490(49,884)
1
1,413(48,900)(48,470)

13,267

15,219Financial income and costs
Interest income
Dividends received
Interest expense
Other financial income and costs – net

43
64
(665)
(46)

43
94
(839)
(33)

Total financial income and costs

(604)

(735)

903

1,368

13,56615,852(4,166)(4,847)

Net profit

9,400

11,005

Net profit attributable to:
Net profit attributable to Itochu Enex’s shareholders
Net profit attributable to non-controlling interests

7,812
1,588

9,282
1,723

9,400

11,005

Total other income and expense
Profit from operating activities

Share of profit of investments accounted for by the equity method
Profit before tax
Income tax expense

Total

-9-

Nine months ended
December 31, 2018
Other comprehensive income, net of tax effectItems that will not be reclassified to profit or loss
FVTOCI financial assets
Other comprehensive income of investments accounted for by theequity method
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations
Cash flow hedges
Other comprehensive income of investments accounted for by theequity method(Millions of yen)
Nine months ended
December 31, 2019

(25)

212

(58)

45

(8)
15

1
54

(86)

272

(162)

584

Comprehensive income

9,238

11,589Comprehensive income attributable to:Comprehensive income attributable to Itochu Enex’s shareholders
Comprehensive income attributable to non-controlling interests

7,651
1,587

9,866
1,723

9,238

11,589Total other comprehensive income, net of tax effect

Total

(Yen)
Earnings per share attributable to Itochu Enex’s shareholders
Basic
DilutedTotal trading transactions(Note)

69.21–

931,822

82.23–(Millions of yen)
826,528

Total trading transactions are presented in accordance with the Japanese accounting practices. This item is voluntarily
disclosed by the Company for investors’ convenience and is not required to be disclosed under International Financial
Reporting Standards (“IFRSs”).

- 10 -

(3) Condensed Quarterly Consolidated Statement of Changes in Equity
Nine months ended December 31, 2018
(Millions of yen)
Shareholders’ equity

Balance at April 1, 2018

Commonstock

CapitalsurplusRetainedearnings

Other
componentsof equity

Treasury
stock

Total
shareholders’equityNoncontrollinginterests

Total equity

19,87818,89280,352(1,145)(1,873)

116,104

20,962137,066

7,812

1,588

9,400

(162)

(162)

(1)

(162)

(162)

7,650

1,587

9,238

(4,971)(459)(5,430)

22

(249)

(227)

Net profit

7,812

Other comprehensive
income7,812

Comprehensive income
Transactions with owners
Cash dividends(4,971)

Changes due to additional
acquisitions and sales ofinterests in subsidiaries

22

Transfer from othercomponents of equity toretained earnings

2(2)

Purchase and disposal oftreasury stock(0)
3

Share-based payments
Balance at December 31,
2018

19,87818,917

83,195(1,308)(1,873)

–

–

(0)

(0)

3

3

118,809

21,841

140,650

Nine months ended December 31, 2019
(Millions of yen)
Shareholders’ equity

Balance at April 1, 2019

Commonstock

CapitalsurplusRetainedearnings

Other
componentsof equity

Treasury
stock

Total
shareholders’equityNoncontrollinginterests

Total equity

19,87818,922

86,769(1,406)(1,873)

122,290

22,276

144,566(1,146)(389)(1,535)

121,144

21,887143,031

9,282

1,723

11,005

584

584

0

584

584

9,866

1,723

11,589(4,859)(419)(5,278)–21

21

Cumulative effect ofaccounting change
Restated balance(1,146)
19,87818,922

Net profit

85,623(1,406)(1,873)

9,282

Other comprehensive
income9,282

Comprehensive income
Transactions with owners
Cash dividends(4,859)Changes due to additional
acquisitions and sales ofinterests in subsidiaries
Transfer from othercomponents of equity toretained earnings

(18)

18

Purchase and disposal oftreasury stock(3)

Share-based payments
Balance at December 31,
2019

19,87818,91990,028- 11 -

(804)

–

–

(0)

(0)

(0)

3

–

–

(1,870)126,151

23,212

149,363(4) Condensed Quarterly Consolidated Statement of Cash Flows(Millions of yen)
Nine months ended
December 31, 2018

Nine months ended
December 31, 2019

Cash flows from operating activities
Profit before tax
Depreciation and amortization
Loss (profit) from tangible assets, intangible assets and goodwill
Financial income and costs
Share of profit of investments accounted for by the equity method
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Decrease in trade payables
Other – net
Dividends received
Interest received
Interest expense
Income taxes paid
Income taxes refund

13,566
7,522
331
604
(903)
4,790
(2,188)(477)(7,386)
405
40
(596)
(5,993)–15,852
14,631(1)735(1,368)(1,897)
6,425(10,465)(4,558)
671
26
(808)
(5,672)
2,533

Net cash flows provided by operating activities

9,715

16,104(2,359)(2,750)

–

138

(104)
46
–
22
–
(736)
478

(66)
66
(5,566)
–
2,905
(703)
857

(7,595)(8,666)

730

1,834

(664)
54
5,000
1,638

(978)
16
10,0001,903(3,490)(1,010)Cash flows from investing activities
Purchase of investments accounted for by the equity method
Proceeds from sales of investments accounted for by the equity
methodPurchase of investments
Proceeds from sales of investments
Acquisition of subsidiaries, net of cash acquired
Proceeds from acquisition of subsidiaries
Proceeds from sales of subsidiaries, net of cash acquired
Payment for loans receivableCollection of loans receivable
Payments for purchase of property, plant and equipment andinvestment property
Proceeds from sales of property, plant and equipment andinvestment property
Purchase of intangible assets
Proceeds from sales of intangible assets
Decrease in deposits paid – net
Other – net
Net cash flows used in investing activities- 12 -

(Millions of yen)
Nine months ended
December 31, 2018
Cash flows from financing activities
Repayments of bonds and borrowings
Repayments of lease liabilities
Net increase in short-term borrowings
Payments for additional acquisitions of interests in subsidiaries
from non-controlling interests
Cash dividends paid to Itochu Enex’s shareholders
Capital contribution from non-controlling interests
Cash dividends paid to non-controlling interests
Purchase of treasury stock

Nine months ended
December 31, 2019

(2,769)–830(6,480)(8,078)
1,962

(228)

(30)

(4,971)
75
(459)
(0)

(4,859)
50
(419)
(0)

Net cash flows used in financing activities(7,522)(17,854)

Net decrease in cash and cash equivalents(1,297)(2,760)Cash and cash equivalents at the beginning of the period

22,57318,725

Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period- 13 -

101

21,286

15,966

(5) Notes on Uncertainties of Entity’s Ability to Continue as Going Concern
No items to report.
(6) Changes in Accounting Policies
From the first quarter ended June 30, 2019, the following standard has been applied.
Standard
IFRS 16

Title
LeasesDescription of new/amended
standards or interpretations
Amendments to accounting forlease contracts

Following the application of IFRS 16, for leases as lessee in cases where the contract is a lease or contains alease, right-of-use assets and lease liabilities are recorded in the condensed quarterly consolidated statement offinancial position on the commencement date of the lease.
Lease liabilities are measured using the present value of unpaid lease payments. Lease payments are allocatedto financial costs and repayments of lease liabilities based on the effective interest method with financial costs
recognized in the condensed quarterly consolidated statement of comprehensive income.
Right-of-use assets are measured at cost, with the acquisition cost on the commencement date of the lease being
determined, and the asset being depreciated thereafter using the straight-line method over the period from thecommencement date to the end of the asset’s useful life or of the lease term, whichever is the shorter.
Furthermore, the Group has not recognized right-of-use assets and lease liabilities for leases of intangible assets,
short-term leases with a lease term of less than 12 months, and leases for low-value assets. Lease payments
related to the above are recognized as expense on either a straight-line basis or some other systematic basis to
the total lease payments over the lease term.
In accordance with the transition under IFRS 16 upon its application, the Group has recognized the cumulative
effect of initially applying IFRS 16 as an adjustment to the opening balance of retained earnings for the firstquarter ended June 30, 2019. The weighted average of the lessee’s incremental borrowing rate applied to leaseliabilities recognized in the condensed quarterly consolidated statement of financial position as of the date ofinitial application of the standard is 0.5%.
A schedule reconciling the operating lease contracts disclosed as of the end of the previous fiscal year under
IAS 17 “Leases” (hereinafter, “IAS 17”) and the lease liabilities recognized in the condensed quarterly
consolidated statement of financial position as of the date of initial application of the standard is provided
below.

Noncancelable operating lease contracts disclosed (March 31, 2019)
Operating leases discounted using the incremental borrowing rate (April 1, 2019)
Finance lease obligations disclosed (March 31, 2019)
Cancelable operating lease contracts, etc.
Lease liabilities as of April 1, 2019

Amount(Millions of yen)
6,168
6,096
11,141
48,83566,072

In applying IFRS 16, the Group has elected to apply the practical expedient provided in paragraph C3 of IFRS
16 to grandfather the assessment of whether a contract contains a lease under IAS 17 and IFRIC 4“Determining whether an Arrangement contains a Lease.”
With regard to leases previously classified as operating leases under IAS 17, these were recognized as right-ofuse assets and lease liabilities on the date of initial application of IFRS 16, with lease liabilities measured using
the present value of unpaid lease payments at commencement, discounted by the lessee’s incremental
borrowing rate as of the initial application of the standard. In addition, with regard to leases that werepreviously classified as finance leases under IAS 17, the book values of right-of-use assets and lease liabilities
at the date of initial application of the standard are measured at the book value of lease assets and lease- 14 -

obligations respectively on the day directly before the date of initial application, based on IAS 17.
As a result, total assets increased by ¥53,395 million, lease liabilities increased by ¥54,931 million, while
retained earnings decreased by ¥1,146 million as of the beginning of the first quarter ended June 30, 2019.
In relation to the application of IFRS 16, the Group has elected to use the following practical expedients.
Initial direct costs are excluded from the measurement of right-of-use assets performed at the date of theinitial application of the standard.

When computing the lease term in cases where the contract contains an option to extend or cancel the lease,etc., a post-facto decision shall be taken.

(7) Segment Information
For the nine months ended December 31, 2018
(Millions of yen)
Reportable segment

Revenue
Revenue from externalcustomers
Intersegment revenue
Total revenue

Home-Life
Division

Car-Life
Division

Industrial
Business
Division

Power &
Utility
Division

Total

66,521

465,952

150,360

67,785

145

5,261

5,876

Adjustment

Consolidated

750,618–

750,618

4,764

16,046(16,046)–

66,666471,213156,236

72,549766,664(16,046)

750,618

Gross profit

16,01036,478

4,095

5,584

62,167–

62,167

Profit from operating
activities

2,050

6,385

1,973

2,102

12,510757

13,267

Profit before tax

2,575

6,253

1,987

2,108

12,923643

13,566

Net profit attributable
to Itochu Enex’s
shareholders

1,268

3,680

1,376

1,000

7,324

488

7,812

Total assets

64,365

162,524

38,27281,700346,861

28,948375,809

Total tradingtransactions

74,413

611,316

175,654

70,439931,822–

931,822

Other items(Note)

Intersegment transactions have been decided by reference to the market price.
The adjustment of ¥488 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥28,948 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

- 15 -

For the nine months ended December 31, 2019
(Millions of yen)
Reportable segment

Revenue
Revenue from externalcustomers
Intersegment revenue

Home-Life
Division

Car-Life
Division

Industrial
Business
Division

Power &
Utility
Division

Total

60,037

410,856

128,856

71,367

Adjustment

Consolidated

671,116–

671,116

78

8,501

6,536

2,508

17,623(17,623)–

60,115419,357

135,392

73,875

688,739(17,623)

671,116Gross profit

15,29336,343

3,972

8,081

63,689–63,689Profit from operating
activities

1,204

6,438

1,866

5,221

14,729490

15,219Profit before tax

1,492

6,178

1,879

5,898

15,447405

15,852

804

3,540

1,299

3,368

9,011

271

9,282

Total assets

66,421

179,673

39,70496,566382,364

26,435

408,799

Total tradingtransactions

66,372533,750

152,970

73,436

826,528–

826,528

Total revenue

Net profit attributable
to Itochu Enex’s
shareholders
Other items(Note)

Intersegment transactions have been decided by reference to the market price.
The adjustment of ¥271 million to net profit attributable to Itochu Enex’s shareholders represents corporate profit(loss) not allocated to reportable segments.
The adjustment of ¥26,435 million to total assets represents corporate assets not allocated to reportable segments.
Total trading transactions are unaudited items voluntarily disclosed by the Company and represent the amount ofsales in accordance with Japanese accounting practices.

As of March 31, 2019
(Millions of yen)
Reportable segment

Total assets(Note)

Home-Life
Division

Car-Life
Division

Industrial
Business
Division

Power &
Utility
Division

Total

Adjustment

Consolidated

65,584

153,116

36,21782,439337,356

37,017374,373

The adjustment of ¥37,017 million to total assets represents corporate assets not allocated to reportable segments.

Change in reportable segments
In the first quarter ended June 30, 2019, the now former Mobility Life Department was included in the Life &Industrial Energy Division.
In addition, in the third quarter ended December 31, 2019, Life & Industrial Energy Division was reorganized
into two divisions: the Car-Life Division and Industrial Business Division.
In line with this, the classification of reportable segments has been changed from the Home-Life Division, Life
& Industrial Energy Division and Power & Utility Division to the Home-Life Division, Car-Life Division,
Industrial Business Division and Power & Utility Division from the third quarter ended December 31, 2019.
Due to the change in segments, segment information for the first nine months of the previous fiscal year and asof the end of the previous fiscal year (March 31, 2019) has been adjusted based on the classification ofreportable segments after the change.

- 16 -