Consolid
dated Financcial Results foor the First T
Three Quarteers of the Fisscal Year Endding March 31,
3 2016(Appril 1, 2015 tthrough Deccember 31, 20
015)(Prepared purrsuant to Jap
panese GAAPP)
All financcial informatioon has been preparedpin acccord with accoounting princiiples generallyy accepted in Japan.
This is a ppartial Englishh translation ofo the originall Japanese-lan
nguage docum
ment. All inform
mation pertain
ns to
consolidaated results unnless otherwisee noted. Informrmation on thee basis of presentation of coonsolidated fin
nancialstatementts does not apppear in this traanslation.
February 2, 2016
Compaany name:
Stock eexchange listinngs:
Stock ccode:
URL:
Represeentative:
Contactt:Phone:

IT Hooldings Corporration
The First
F
Section off the Tokyo Stock Exchangge3626
http:///www.itholdinngs.co.jp/e/Norio Maenishi, Prresident
Akio Kita,
K Executivve Officer, Deeputy Divisionn Manager, Addministration Division+81 3-5338-2272

Scheduuled dates
Submisssion of quarteerly report:
Commeencement of dividenddpaym
ments:

Februarry 10, 2016-

mentary materials to the quuarterly resultss:
Supplem
Quarterrly results presentation heldd:Available
Yes (targeted at institu
utional investtors and analysts)

Figgures in millio
ons of yen aree rounded dow
wn to the neareest million
1. Consoolidated Resu
ults for the FirstF
Three Q
Quarters of the Fiscal Yea
ar Ending M
March 31, 201
16(Apriil 1, 2015 – DecemberD
31,, 2015)(1) Consoolidated Finanncial Results
Percentaages indicate yyear-over-yeaar changes
Net inncome
attributtable toNet
N sales
Reecurring profitt
Operating income
ownerss of theparent coompanymillioons of yen%

millions of yenn%milllions of yen%

millions of yeny%27
70,59525
54,887

6.22
6.99

14,139910,803
3

30.9
28.8

14,448
10,829

33..4
31..3

7,11
13
4,86
66

46.2
51.5

First Thhree Qtrs., FY
Y2016First Thhree Qtrs., FY
Y2015

Note: Compprehensive incom
me: First Three Qtrrs., FY 2016: (4,3335) million yen (--%), First Three Qtrs.,
Q FY 2015: 21,,802 million yen (170.3%)(

Net
N income
per share – basic
First Thhree Qtrs., FY
Y2016First Thhree Qtrs., FY
Y2015

Net income
per shaare –diluteedYen

yen

81.36655.59955.55(2) Consoolidated Finanncial Position
Total assets
End of T
Third Quarterr, FY2016
End of F
FY2015

Net assets

Equuity ratio

millions of yeen

millions of yen%

319,5788
345,8511

178,676
188,789

54.8
53.3

For referennce: Total equitty: End of third quarter, FY20116: 174,981 million yen End of FY2015: 1884,400 million yen.
y*Total equuity = Shareholdders’ equity plu
us total accumullated other com
mprehensive income

2. Cash D
Dividends forr Shareholderrs of Commoon Stock
Cash dividends
dper share
Record date End-Q
Q1
End-Q2End-Q3Y
Year-endor period
FY20155
FY20166
FY20166(forecasst)

Total
T

y
yen

yen

yen

yen

-

10.00
11.00

-

20.00

30.00
3

yen

22.00

33.00
3

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

3. Forecast of Consolidated Results for FY2016 (April 1, 2015 – March 31, 2016)
Percentages indicate year-over-year changes
Net income
attributable to Net income per
OperatingRecurring profit
Net sales
owners of theshare – basic
incomeparent company
Full FY2016(year ending Mar. 31,
2016)

millions of yen%

millions of yen%

millions of yen%

millions of yen%

Yen

370,000

2.5

23,50011.3

23,0008.2

12,80024.6

146.61

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

※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: Yes
3) Changes in accounting estimates: Yes
4) Retrospective restatement: None
Note: For further details, please refer to “(1) Changes in Accounting Policy, Changes in Accounting
Estimates, and Retrospective Restatement” in the “2. Other Information” on page 4 in the
Accompanying Materials.
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-Third Quarter, FY2016 (December 31, 2015): 87,789,098 shares
End-FY2015 (March 31, 2015):
87,789,098 shares
2) Treasury stock as of period-end:
End-Third Quarter, FY2016 (December 31, 2015):
864,084 shares
End-FY2015 (March 31, 2015):
320,444 shares
3) Average number of shares (during the respective nine-month period):First Three Quarters, FY2016 (ended December 31, 2015): 87,430,841 sharesFirst Three Quarters, FY2015 (ended December 31, 2014): 87,539,797 shares*Quarterly review status
These materials are not subject to the quarterly review procedure requirements of Japan’s Financial Instruments
and Exchange Act. As of this report’s publication, a review of the quarterly consolidated financial statements inaccordance with the Act had not been completed.
Caution on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans andexpectations based on information available to ITHD at the time of preparation and on certain other information
ITHD believes to be reasonable. These forward-looking statements are not guarantees of future performance, andactual results, performance, achievements or financial position may differ materially from those expressed or
implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to“(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results ofOperations” section on page 4 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

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

4Statements
2. Other Information

4(1) Changes in Accounting Policy, Changes in Accounting Estimates, and4

Retrospective Restatement(2) Additional Information

4

3. Consolidated Financial Statements

6(1) Consolidated Balance Sheets

6(2) Consolidated Statements of Income and Comprehensive Income

8

Consolidated Statements of Income
For the First Three Quarters

8

Consolidated Statements of Comprehensive Income
For the First Three Quarters

9(3) Notes on the Consolidated Financial Statements

10(Notes on the Going-concern Assumption)

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

10

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first nine months of fiscal 2016 (April 1, 2015 – December 31, 2015), the Japanese economy
continued its moderate recovery owing mainly to improved corporate earnings. Caution over the
future economic outlook grew, however, due to concern over the impact of slowing growth in China
and other Asian emerging countries, as well as the steep decline in oil prices.
The business environment surrounding the IT services industry, to which the IT Holdings Groupbelongs, remained robust. The Bank of Japan’s Short-term Economic Survey of Enterprises in Japan(issued in December 2015) revealed growth in corporate IT investment, as reflected in sucheconomic indicators as a 8.1% year-on-year increase in software investment plans (all manufacturing& financial institutions).
Under these circumstances, the IT Holdings Corporation (“ITHD”) Group is promoting various
measures for implementing Group-wide reform to achieve further growth and raise corporate value,
based on the Group management strategy developed under the third medium-term management plan(from fiscal 2016 through fiscal 2018) launched in the year under review.
Consolidated net sales for the Group for the first nine months of the fiscal year increased 6.2%
year on year to ¥270,595 million. Operating income rose 30.9% year on year to ¥14,139 million,
recurring profit increased 33.4% year on year to ¥14,448 million, and net income attributable toowners of the parent company rose 46.2% year on year to ¥7,113 million.
Consolidated net sales grew year on year as the Group accurately grasped the IT investment needsof its customers in areas where IT investment is growing.
Profits also increased, as the increase in sales and measures to improve profitability absorbed theimpact of a decline in sales from some existing clients which restrained IT investment or reduced thescale of projects, as well as the impact of unprofitable projects.
In the second quarter, ITHD decided to review the future strategy for the data center operations ofsubsidiary TIS Inc. and to sell investment securities held by TIS Inc. As a result, ITHD recorded an
impairment loss of ¥14.3 billion as an extraordinary loss as well as a gain on sale of investment
securities of ¥16.0 billion as extraordinary income.
Segment results for the first nine months of the fiscal year are as follows. The sales figures for eachsegment include inter-segment sales.
1) IT Infrastructure Services
Consolidated sales rose 5.9% year on year to ¥91,795 million and operating income rose 14.8% to¥5,715 million. Net sales increased on the back of steady growth in the data center and BPO
businesses, along with the added revenues of two BPO companies that became consolidated
subsidiaries in the first half. Despite a reduction in the scale or reduced profitability of projects withsome existing clients, operating income increased year on year due to the sales growth and a decline
in depreciation expenses.
2) Financial IT Services
Consolidated sales declined 1.3% year on year to ¥56,282 million, while operating income declined
39.3% to ¥2,184 million. While there was solid overall expansion in clients’ IT investments, thereduction in IT investment by some existing customers had a significant impact on results, leading tolower year-on-year sales and operating income.
3) Industrial IT Services
Consolidated sales increased 10.4% year on year to ¥124,877 million, while operating income
increased by 206.0% to ¥4,782 million. Sales grew primarily due to robust IT investment in theenergy field in conjunction with Electricity System Reform in Japan. Operating income rosesignificantly as a result of the higher sales and successful measures to improve profitability.

-2-4) Other
Consolidated sales rose 2.0% year on year to ¥11,219 million, and operating income increased
15.8% to ¥1,807 million.
As previously stated, the Group has initiated its third medium-term management plan from the year
under review. In the initial year of the plan, the Group has formulated the following management
strategy in accordance with the management plan’s basic concepts, and is promoting various
measures for implementing Group-wide reform to achieve further growth and raise corporate value.

Third medium-term
management plan basic
concepts
Profit Emphasis

IT Brain(expansion of value-added
business)
Portfolio Management

Group management strategy for fiscal 2016
(1) Emphasize ROE as the key performance indicator (KPI) andaim to raise corporate value(2) Improve business profitability through higher productivity(3) Manage with an emphasis on return on investment(1) Sharpen unique strengths and growth engines(2) Promote planned business initiatives (value-added business)(3) Promote industry platform business (market development
business)(1) Achieve business portfolio management(2) Implement “corporate governance reforms” as a Group(3) Integrate and consolidate common Group functions

IT Holdings Group’s key initiatives in the first nine months of the fiscal year were as follows.
The IT Holdings Group is planning measures to reform the current Group organizational structure,and through these reforms to establish an optimal Group organizational structure in order to optimize
the entire Group and achieve portfolio management. As a first step in these reforms, it was decidedin October 2015 that ITHD will merge with TIS Inc. in July 2016 and the new company will serve asa holding company for the Group. As part of this plan, representative directors will be appointed to
new positions and the company name of IT Holdings Corporation will be changed to TIS Inc. as ofJuly 1, 2016. These plans are conditional on their proposal and approval at ITHD’s eighth generalshareholders’ meeting scheduled for June 24, 2016. In conjunction with this, the Group brand will be
unified under the name “TIS INTEC Group.” Preceding the merger, core Group companies TIS Inc.
and INTEC Inc. plan to reorganize businesses between them in April 2016. The companies are
currently making preparations to ensure a smooth transition.
This reorganization is aimed at further raising corporate value and shareholder value by
maximizing the Group’s business competitiveness and strengthening governance.
Additionally, in order to strengthen the distinctive businesses of each Group company, optimize
the entire Group, and bolster the business foundation, the BPO business currently dispersed
throughout the Group is being consolidated into AGREX Inc. As the first step in this strategy, a partof the BPO business managed by TIS Inc. was transferred to AGREX Inc. in October 2015. The
Group will continue to review and deliberate measures to further consolidate the business.
Regarding the data center business, the business environment is changing dramatically due to the
expansion of cloud computing and other factors. In response to the declining profitability of thebusiness, a comprehensive plan to reform TIS Inc.’s approach to the data center business and thefuture direction of this business was announced on September 30, 2015. Sweeping measures are
required to deal with aging equipment and ensure that the Group can provide continuous services
into the future. As a result, measures will be taken to integrate data center operations in Tokyo andOsaka areas as a way to minimize large future costs to upgrade aging facilities. Moving ahead, theGroup will gradually begin activities to attract clients and make new proposals for the core data
centers.

-3-

The Group is also integrating and consolidating its offices in conjunction with the integration andconsolidation of common functions. Office consolidation has been completed in the Tokyo area andwas implemented in the Osaka area in July 2015. Preparations have also begun to consolidate officesin the Nagoya area in the summer of 2016.
During the third quarter, ITHD acquired 540,400 shares of treasury stock (total acquisition cost of¥1,599 million) based on a Board of Directors’ resolution of October 29, 2015. The acquisition wasmade to execute a flexible capital policy adaptive to changes in the operating environment, as wellas to improve shareholder returns and capital efficiency.
(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
As the Group’s consolidated business performance has been proceeding largely in line with the plan,
there is no change to the consolidated earnings forecast announced on May 8, 2015.
Regarding dividend policy, beginning with the fiscal year under review, ITHD has changed its
policy from a consolidated dividend payout ratio target of about 30% to a consolidated return ratio
target of about 35%. As a result of the previously explained treasury share buyback, ITHD expects
the consolidated return ratio for the current fiscal year to be 35.2%.
*Consolidated return ratio: Combined amount of dividends and treasury stock buybacks as apercentage of net income.
2. Other Information(1) Changes in Accounting Policy, Changes in Accounting Estimates, and Retrospective
Restatement
Change in an accounting policy which is difficult to distinguish from a change in accounting
estimates(Change in depreciation method for property and equipment)
Until the year under review, the IT Holdings Group had mainly used the straight-line method forbuildings, structures, and transportation equipment excluding leased assets, and the decliningbalance method for machinery and equipment excluding leased assets. Since the first quarter of theyear under review, the Group has also used the straight-line method for machinery and equipment
excluding leased assets.
In recent years, the external environment surrounding the IT market has changed significantly due
to the emergence of cloud services and other trends. In order to achieve medium- to long-term
growth, the Group has promoted the establishment of a management structure that can more
effectively use its diverse management resources.
Starting with the year under review, the Group has launched a new third medium-term management
plan with the slogan, “Beyond Borders 2017.” Under this plan, assets related to the cloud services
business will assume greater importance as the business delivers stable profits, leading the Group toreconsider depreciation methods that would best reflect the use conditions of equipment. As a result,the Group decided that recognizing expenses evenly over the period of asset use was the most
reasonable method and would more appropriately demonstrate actual management conditions.
As a result of this change, operating income, recurring profit, and income before income taxes forthe first nine months of the year under review rose by ¥191 million respectively.
(2) Additional Information
The provisions of Article 39 of the “Accounting Standard for Consolidated Financial Statements(Accounting Standards Board of Japan (ASBJ) Statement No. 22 of September 13, 2013)” are madeapplicable. As a result, presentation of net income and other related items have been changed, andminority interests has been changed to non-controlling interests.
The prior year financial statements for the third quarter and the full year have been reclassified toreflect the change in the method of presentation.

-4-

Conclusion of Merger Contract
At the Board of Directors’ meeting held on October 29, 2015, ITHD approved a resolution to
conduct an absorption-type merger of TIS Inc., a wholly owned subsidiary. A merger contract
between ITHD and TIS Inc. was concluded the same day.
1. Overview of business combination(1) Company names and business descriptions of combining companies(Surviving company of absorption-type merger)
Company name: IT Holdings Corporation
Business description: Management of Group companies and related business(Expiring company of absorption-type merger)
Company name: TIS Inc.
Business description: Outsourcing services, software development, and solutions services
related to information technology investments(2) Date of business combination
July 1, 2016 (current schedule)(3) Legal form of business combination
An absorption-type merger will be conducted in which ITHD will be the surviving company
and TIS Inc. will be dissolved.
(4) Allotment of shares in business combination
ITHD owns all shares of TIS Inc., and therefore ITHD will neither issue new shares nor allot
outstanding shares in this business combination.
(5) Company name after business combination
IT Holdings Corporation
The company name will be changed to TIS Inc. as of July 1, 2016, conditional on the approvalof a proposal to change a part of the articles of incorporation at ITHD’s eighth generalshareholders’ meeting scheduled for June 24, 2016.
(6) Overview of transaction, including purpose
The purpose of the merger is to establish an optimal Group organization by reviewing andreorganizing the current Group organizational structure, thereby achieving the goals of optimizing
the overall Group and achieving portfolio management as stated in the third medium-term
management plan.
2. Overview of accounting treatment applied
This business combination is scheduled to be accounted for as a transaction under common
control based on “Accounting Standard for Business Combinations” and “Revised Guidance on
Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures.”-5-3. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2015

Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-6-

As of Dec. 31, 2015

millions of yen

millions of yen

29,211
78,874
6,711
661
4,552
5,546
243
6,007
8,784
(143)
140,450

44,472
65,128
6,230
1,901
5,395
11,431
262
4,829
11,095(123)
150,624

53,6704,853
24,342
3,995
4,552
91,41339,1904,348
22,7444,353
4,622
75,2601,197
15,555
16,752762
15,84016,603

71,256
7,028
5,199
14,034(283)
97,235
205,401
345,851

51,773
7,179
4,778
13,641(282)
77,090168,953
319,578

As of March 31, 2015

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Net defined benefit liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-7-

As of Dec. 31, 2015

millions of yen

millions of yen

21,681
12,521
3,140
11,331
1,318
27,673
77,666

17,314
16,057
6,524
5,692
999
31,587
78,174

39,593
5,497
10,720663
90
16,874
5,955
79,395
157,062

31,624
6,004
457
424
76
17,522
6,616
62,726140,901

10,001
83,601
67,019(514)
160,107

10,001
82,92071,921(2,123)
162,719

26,191(1,898)396(397)
24,292
4,388
188,789
345,851

14,986(2,397)152(480)
12,262
3,694
178,676
319,578

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Three Qtrs.,
First Three Qtrs.,
FY2015FY2016
Items(Apr. 1 – Dec. 31, 2014) (Apr. 1 – Dec. 31, 2015)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company-8-

millions of yen

millions of yen

254,887
210,593
44,29433,49010,803

270,595
222,105
48,49034,351
14,139

44
704
694
1,443

49
1,173
522
1,745

385
265
765
1,416
10,829

365
159
911
1,435
14,448376
3379

16,781266
17,048

594
1,351
1,945
9,263
1,609
2,390
3,999
5,264
398
4,866

15,726
3,355
19,081
12,4158,584(3,424)
5,159
7,255
141
7,113

Consolidated Statements of Comprehensive Income
First Three Qtrs.,
First Three Qtrs.,
FY2015FY2016(Apr. 1 – Dec. 31, 2014) (Apr. 1 – Dec. 31, 2015)

Items

millions of yen

Net income
Other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests-9-

millions of yen

5,264

7,255

16,308105
122(11,197)
0
(199)
(81)

2

(112)

16,53821,802(11,591)(4,335)

21,373(4,417)429

81

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
Not applicable- 10 -