Three-month Consolidated Financial Reportfor the Fiscal Year ending October 31, 2009
March 12, 2009
Company name: Kanamoto Company, Ltd.
Code number:9678

Stock Change Listing: Tokyo, Sapporo

URL http://www.kanamoto.co.jp
Representative
Kanchu Kanamoto President
Inquiries

Nobuhito Utatsu
Director & Corporate Officer, Division Manager, Accounting Division
TEL +81-11-209-1631

1. Operating Results for the Three-month of the Fiscal Year Ending October 31, 2009
(November 1, 2008 - January 31, 2009)(1) Consolidated Operating Results(Numbers less than one million yen have been rounded down)

Revenues
Millions of yen％

Operating income

Ordinary income

Millions of yen

Millions of yen％％

Fiscal Year Ending October 31,
2009: First Quarter

17,441

-

669

-

607

-

Fiscal Year Ended October 31,
2008: First Quarter

18,375( -2.5 )1,016( -53.2 )974( -53.9 )Net Income
per Share

Net income
Millions of yen％

Diluted Net Income
per Share
Yen

Yen

Fiscal Year Ending October 31,
2009: First Quarter

-105

-

-3.20

－

Fiscal Year Ended October 31,
2008: First Quarter499( -69.2 )

15.20

－

(2) Consolidated Financial Position(Numbers less than one million yen have been rounded down)

Total Assets

Fiscal Year Ending October
31, 2009: First Quarter
Fiscal Year Ended October
31, 2008(Reference) Shareholder’s equity

Net Assets

CapitalAdequacy Ratio

Net Assets
per Share

Millions of yen

Millions of yen％

Yen

98,81937,72837.9

1,139.45

91,741

38,20241.4

1,155.47

Fiscal Year Ending October 31, 2009 First Quarter: 37,418 million yen
Fiscal Year Ended October 31, 2008: 37,947 million yen

2. Dividends(Record date)

End of 1Q
Yen

Dividend per share
End of 2Q
End of 3Q
Year-end
Yen

Fiscal Year ended October 31,2008
10.00――
Fiscal Year ending October 31,2009
Fiscal Year ending October 31,2009――
10.00(Projected)(Note) Revision of dividend project for the current quarter: No

YenFull year

Yen

Yen

――

10.00
――

20.00
――

-

10.00

20.00

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009
P.1

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2009
(November 1, 2008 - October 31, 2009)(Percentages show the change from the prior year)

Revenues

Operating
IncomeOrdinary
IncomeMillions of yen% Millions of yen% Millions of yen

Net Income
per Share

Net Income% Millions of yen%

Yen

Interim period

32,300

-

780

-

580

-

-130

-

-3.96

Full year

63,900

-7.9

510

-77.1

90

-95.6

-800

-

-24.36(Note) Revision of Projected Consolidated Operating Results for the current quarter: No
4. Other(1) Changes to material subsidiaries during the period (transfer of specified subsidiaries in conjunction
with revision to scope of consolidation)? : No
(2) Has the Company adopted simplified methods for accounting treatment? : Yes(Note) For details, see “4. Other matters” on Page 5 (Qualitative information and financial statements).
(3) Changes in accounting principles, procedures, or representation methods relating to preparation of theconsolidated quarterly financial statements (Matters stated in the Change to the Basis for presentationof the Consolidated Quarterly Financial Statements)(a) Changes in accordance with revisions to accounting standards: Yes(b) Changes other than the above: Yes(Note) For details, see “4. Other matters” on Page 5 (Qualitative information and financial statements).
(4) Number of shares issued (Common stock)(a)Number of shares outstanding at the end of period (including treasury stock):
Fiscal Year Ending October 31, 2009 First Quarter: 32,872,241 sharesFiscal Year Ended October 31, 2008: 32,872,241 shares(b)Number of shares of treasury stock at the end of period
Fiscal Year Ending October 31, 2009 First Quarter: 33,128 sharesFiscal Year Ended October 31, 2008: 30,848 shares(c)Average number of shares during the period (Consolidated cumulative period)
Fiscal Year Ending October 31, 2009 First Quarter: 32,840,650 sharesFiscal Year Ended October 31, 2008: 32,844,319 shares
Note: Explanation concerning appropriate use of the projected operating results and other items to note
(1) The projections above represent an outlook for the future and assumptions about uncertain factorsthat might affect future results, based on information available as of the date of the announcement of
this document. Actual results may differ from the projections as a result of factors arising in the
future.
(2) Commencing the current fiscal year, the Company is applying the Accounting Standard for Quarterly
Financial Reporting (Accounting Standards Board of Japan Statement No.12) and Guidance on
Accounting Standard for Quarterly Financial Reporting (ASBJ Guidance No.14). Quarterly
consolidated financial statements are prepared under the Rules for Quarterly Consolidated Financial
Statements.

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Fiscal year ending October 31, 2009
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Qualitative Information and Financial Statements
1. Qualitative information concerning consolidated operating results< Management Environment > (From November 1, 2008 to January 31, 2009)
During the Company’s first quarter, Japan’s economy was battered by the aftereffects of the simultaneous
slowdown of the global economy since last autumn. As the earnings environment for export industries
deteriorated rapidly because of the sharp appreciation of the yen, the effects rippled through the entire
manufacturing sector. The sense of deepening recession spread further as concerns over job insecurity,heightened by so-called dispatch worker layoffs centered on manufacturing, and the continuing drop in
personal consumption, were added to a political situation that remained unsettled and the government’s
failure to boost public spending to spur an economic recovery.
Amidst this environment, the construction industry, which is the main customer of the Kanamoto Group(Kanamoto and its consolidated subsidiaries), witnessed construction demand shrink at an accelerating pacefrom November, as the volume of domestic construction orders fell 11.3% from the same period of theprevious year in November, 21.6% year-on-year in December and 34.9% year-on-year in January (Japan
Federation of Construction Contractors survey). Among construction-related firms, corporate bankruptcies
reached the highest level in Japan’s history.
< First Quarter Operating Results > (From November 1, 2008 to January 31, 2009)
Despite efforts to strengthen its business base, operating results for the Kanamoto Group fell below the
Company’s business plan from the start of the business period because of the extremely severe operatingclimate confronting the construction industry. Although the Company expanded its market share in eachregion in the first quarter in terms of construction equipment rental orders, revenues fell significantly below
the Company’s initial plan because of the absolute decline in construction demand and the downward trend
in rental prices throughout Japan. In addition, for sales of used construction equipment, the Company
adopted an initial plan that envisioned constrained sales volume, and revenues and earnings from overseas
sales of used equipment were lower because sales were restricted to the number of units in the Company’s
initial plan, and because of the slump in the used construction equipment market that resulted from theglobal economic slowdown.
As a result of these factors, consolidated revenues for the first quarter of the Business Period ending October
2009 were ¥17,441 million.
From an earnings perspective, operating results were affected directly by the decline in construction
equipment rental revenue, and fell sharply compared with the first quarter of the previous consolidated
accounting fiscal year. Consolidated operating income was ¥669 million, and consolidated ordinary income
was ¥607 million. The Company also reported a valuation loss on negotiable securities for an asset
impairment write-off for the first quarter of ¥484 million for negotiable securities affected by sharp declines
in market prices. As a result, the Company reported a disappointing first quarter consolidated net loss of¥105 million.
A summary of operating results for each of the Company’s business segments is described below.
[Business related to the Construction Equipment Rental Division]
Despite being able to increase its regional market share in both the Hokkaido Region and Tohoku Region,
there was no change in the downward market trend in both regions because of cutbacks in public works.
Private sector capital investment as well in both regions was frozen because of the deterioration in businessconditions. As a result, construction equipment rental revenues by region decreased 4.9% from the same
period of the previous consolidated accounting fiscal year in the Hokkaido Region, and fell 7.0%
year-on-year in the Tohoku Region. In the Kanto Region, revenues expanded 5.0% from the same period
one year earlier, as a result of large-scale works such as the Tokyo International Airport (Haneda) expansion
project and the synergistic effects from operations with Toyo Industry Co., Ltd., which was added to theCompany’s subsidiaries subject to consolidation. In the Kinki & Chubu Region, demand remained flat, andAichi Prefecture, which until now had enjoyed a robust economy, joined Hyogo Prefecture as a cause ofslowing demand. Revenues in the region slipped 4.3% year-on-year.
In the Kyushu Region, revenues exhibited steady expansion in northern Kyushu, but demand in southern
Kyushu slumped and caused revenues for the region as a whole to shrink 8.9% from the same period of theprevious consolidated accounting fiscal year. As a result of these factors, rental revenues in this businesssector for the first quarter of the consolidated accounting fiscal year decreased 3.8% from the same period
one year earlier.
Revenues from sales for the first quarter of the consolidated accounting fiscal year in this business sector fell
8.3% year-on-year. The main reason was a drop in sales of parts, grease and oil, and lower sales of usedequipment overseas as stated above.
As a result of these factors, in the construction-related businesses of the entire Kanamoto Group revenues
for the first quarter of the consolidated accounting fiscal year were ¥16,274 million, and operating income
was ¥671 million.

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Fiscal year ending October 31, 2009
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[Business related to the Steel Sales Division]
In the Company’s steel products sales business, construction demand in the Doo Block could not besustained, and unit prices suffered as well. Revenues for the first quarter of the consolidated accounting
fiscal year were ¥1,052 million, and operating income was ¥3 million.
[Business related to the Information Products Division and other business]
In the Company’s information and telecommunications-related division, revenues from both rentals andused equipment sales were lower because of the general trend in spending cutbacks by customers.
Revenues for the first quarter of the consolidated accounting fiscal year were ¥113 million, and operating
income was ¥7 million.
[Business development issues deserving special mention and status of branch office changes](1) During the first quarter of the consolidated accounting fiscal year, Kanamoto opened its new Tsugaru
Dam Branch (Nishimeya-mura, Nakatsugaru-gun, Aomori Prefecture), Soma Branch (Shinchi Town,
Soma-gun, Fukushima Prefecture) and Yaita Branch (Sakura City, Tochigi Prefecture) in November. The
Company did not close any branches during the quarter. In addition, during the quarter the Company madeToyo Industry Co., Ltd. (Head Office: Taito Ward, Tokyo) a consolidated subsidiary.
(2) The Company took the lead over other firms and expanded rentals of new energy-saving, recyclable
rental equipment, including hybrid trucks, LED-type night lighting and reflector LED lamps.
(3) Shanghai Jinheyuan Equipment Rental Co., Ltd. (Head Office: Shanghai, People’s Republic of China, a
non-consolidated subsidiary), which is developing a construction equipment rental business in China, closed
the books on its first full year of operations. The recently established company achieved operating resultsthat exceeded initial expectations.

2. Qualitative information concerning consolidated financial position(1) Assets, liabilities and net assets
Compared with the end of the previous consolidated accounting fiscal year, total assets at the end of the firstquarter under review increased by ¥7,078 million to ¥98,819 million. This mainly reflected an increase inrental equipment of ¥4,279 million.
Total liabilities increased by ¥7,551 million compared with the end of the previous consolidated accounting
fiscal year to ¥61,090 million. This was mainly the result of an increase in funds provided by long-term bankloans of ¥2,743 million.
Total net assets were ¥37,728 million, a decrease of ¥473 million compared with the end of the previous
consolidated accounting fiscal year. This mainly reflected a decrease of ¥433 million in earned surplus.
(2) Cash flows
Cash flow from operating activities was ¥2,697 million. Cash was generated mainly from depreciation andamortization expense of ¥1,077 million and a decrease in accounts receivable, trade of ¥719 million.
Cash flow used for investing activities was ¥1,359 million. This mainly reflected ¥1,268 million of funds used
for the purchase of tangible fixed assets.
Cash flow from financing activities was ¥2,137 million. This mainly reflected ¥6,000 million of funds provided
by long-term bank loans.
As a result of the above, the balance of cash and cash equivalents at the end of the first quarter consolidated
accounting period under review was ¥21,066 million. Together with an increase in cash and equivalents of¥24 million in conjunction with the merger of an unconsolidated subsidiary, the balance of cash and cash
equivalent increased by ¥3,500 million compared with the end of maturity the previous consolidated
accounting fiscal year.

3. Qualitative information concerning projected consolidated operating results
The projected consolidated operating results were prepared using projections based on information
available to the Company as of the date this material was released and forecasts of the future economic,
environment, and include various risks and uncertainty factors. (The Company previously released its
projected operating results in the press release “Notification Concerning Valuation Loss on Negotiable
Securities for the First Quarter of the Business Period Ending October 2009” dated Monday, February 23,
2009 and the press release “Notification Concerning Revision of Interim Period Operating Results andProjected Full-Year Operating Results for the Business Period Ending October 2009” dated Monday, March 9,
2009, respectively.)
Although the Company is not at the present time studying any change to its interim dividend and year-end
dividend based on this revision of its operating results forecast, there is a possibility the Company could
revise the dividend based on future changes in its operating results. Furthermore, there is a possibility theCompany’s actual consolidated operating results will differ from the projected amounts shown above as aresult of various future factors, including but not limited to economic conditions surrounding the Kanamoto
Group, market trends, and competitive conditions.

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Fiscal year ending October 31, 2009
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4. Other matters(1) Changes in material subsidiaries during the period under review (changes in specific subsidiaries in
conjunction with a change in the scope of consolidation)
The Company had no material items to report.
(2) Application of simplified accounting method and special accounting method in the preparation ofquarterly consolidated financial statements
Simplified accounting method
Appraisal methods for inventory assets
The appraisal value of inventories at the end of the first quarter under review has been calculated using areasonable method based on physical inventories at the end of the previous consolidated accounting fiscal
year, rather than physical inventories at the end of the quarter under review.
(3) Changes in accounting principles, procedures and presentation methods pertaining to preparation of thequarterly consolidated financial statementsa) Beginning from this consolidated accounting fiscal year, the Company has adopted the “AccountingStandard for Quarterly Financial Reporting” (Accounting Standards Board of Japan Statement No. 12) andthe “Guidance on Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board ofJapan Implementation Guidance No. 14). In addition, the quarterly consolidated financial report has been
prepared in accordance with the “Regulation for Quarterly Consolidated Financial Statements.”b) Changes in appraisal standards and appraisal methods for principal assets
Inventory assets
Traditionally the Company has valued merchandise inventories held by the Company for normal sales
purposes at cost, with cost being determined by the lower of cost or market based on the Last-in, First-out
method. Beginning from the first quarter consolidated accounting fiscal period under review, the Company
will apply the “Accounting Standard for Measurement of Inventories” (Accounting Standards Board of Japan
Statement No. 9, issued July 5, 2006) and will value inventories based on the original cost method, with cost
being determined mainly by the Last-in, First-out method (amounts shown on Balance Sheets will the
reduced book value based on decline in profitability).
The affect of this change on earnings is not material.
Construction equipment
Traditionally, the Company and its domestic consolidated subsidiaries valued construction equipment using
the amount after deduction of depreciation expense as calculated according to the declining-balance methodfrom the original prices, by separate fiscal year of purchase. Beginning from the first quarter consolidated
accounting period under review, the Company will calculate the amount after deduction of depreciation
expense as calculated according to the straight-line method from the original prices, by separate fiscal yearof purchase.
Because rental earnings obtained from construction equipment are generated on average over the period
during which the construction equipment is used, the Company has made this change in conjunction with thechange of depreciation method for rental equipment from the declining balance method to the straight-line
depreciation method from the first quarter consolidated accounting period under review, in order to similarly
recognize a fixed expense amount corresponding to earnings, achieve a correspondence between expenses
and earnings and more properly calculate accounting period profits and losses for construction equipmentthat contributes to the acquisition of rental earnings.
As a result, the cost of revenues from operations decreased by ¥16 million, and gross profit, operating
income, ordinary income and income before taxes and adjustments increased by the same amount,respectively, compared to what they otherwise would have been had the accounting standards used in past
periods been applied.
The affect of this change on the Company’s information by segment is described in the relevant section.
c) Changes in accounting standards used for normal accounting treatment
Application of accounting standards for lease transactions(Lessor side)
The Company traditionally accounted for finance lease transactions other than leases that transfer
ownership of the property by applying accounting treatment based on the method applied for ordinary rental
transactions. For quarterly consolidated financial statements pertaining to the consolidated fiscal year thatbegins on or after April 1, 2008, however, corporations will be able to apply the “Accounting Standard forLease Transactions” (Accounting Standards Board of Japan Statement No. 13 (issued June 17, 1993
(Business Accounting Council, First Subcommittee), revised March 30, 2007)) and the “Guidance on
Accounting Standard for Lease Transactions” (Accounting Standards Board of Japan Implementation
Guidance No. 16 (issued January 18, 1994 (The Japanese Institute of Certified Public Accountants,
Accounting System Committee), revised March 30, 2007)), and beginning from the first quarter
consolidated accounting period under review, the Company will apply these standards and account for suchThree-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.5

transactions using a method similar to that used for ordinary sale and purchase transactions. In addition, fordepreciation for lease assets related to finance lease transactions other than leases that transfer ownershipof the property, the Company has adopted the straight-line depreciation method, using the term of the leaseas the depreciable life and a residual value of zero.
For finance lease transactions other than leases that transfer ownership of the property for which the leasetransaction starting date predates the beginning of the first year in which the lease accounting standard will
be applied, the Company will continue to apply the accounting practices based on the method for ordinary
rental transactions.
The affect of this change on earnings is not material.
Change in depreciation methods for principal depreciable assets
Tangible fixed assets
Traditionally, the Company and its domestic consolidated subsidiaries have applied the declining balancemethod for depreciation of rental equipment. Beginning from the first quarter consolidated accounting
period under review, the Company and its domestic subsidiaries have adopted the straight-line depreciation
method.
Because rental earnings obtained from rental equipment are generated on average over the period during
which the rental equipment is used, the Company has made this change as a result of investigating a more
appropriate method for allocation of expenses, following an increase in the size of purchases and increase in
the monetary importance of rental equipment as a result of changing its method for acquisition of rental
equipment from leasing agreements to purchases, in order to recognize a fixed expense amountcorresponding to earnings, achieve a correspondence between expenses and earnings and more properly
calculate accounting period profits and losses.
As a result, the cost of revenues from operations decreased by ¥588 million, and gross profit, operating
income, ordinary income and income before taxes and adjustments increased by the same amount,respectively, compared to what they otherwise would have been had the accounting standards used in past
periods been applied.
The affect of this change on the Company’s information by segment is described in the relevant section.

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Fiscal year ending October 31, 2009
P.6

5. Consolidated Financial Statements(1)Consolidated Quarterly Balance Sheets(Unit: Thousands of yen)
As of January 31, 2009

As of October 31,2008

Cash and deposits

16,298,381

14,070,345

Notes and accounts receivable-trade

14,578,186

15,297,757

Short-term investment securities

4,850,000

3,700,000

201,705

147,054546,138

662,924

Raw materials and supplies

131,870

146,343

construction machine parts

889,183874,680

540

110,491

Consumption taxes receivable

41,883

282,196

Deferred tax assets

162,884

256,893

Other

646,313534,758

Allowance for doubtful accounts-562,183-526,414

37,784,906

35,557,032

AssetsCurrent assets

Costs on uncompleted construction
contracts
Merchandise and finished goods

Income taxes receivable

Total current assets
Noncurrent assets
Property, plant and equipment
rental equipment

48,463,671

43,694,544

accumulated depreciation-31,926,693-31,437,026

rental equipment, net

16,536,97812,257,517

18,475,425

17,869,527

Buildings and structures
Accumulated depreciation-11,245,936-10,968,596

Buildings and structures, net

7,229,489

6,900,931

Machinery, equipment and vehicles

4,770,014

4,622,991

Accumulated depreciation-3,957,341-3,854,409

Machinery, equipment and vehicles, net

812,673768,582Land

29,179,148

29,075,816

Construction in progress

1,127,902

683,294

Other

1,189,866

1,163,486

Accumulated depreciation-948,430-930,597

Other, net

241,436

232,889

55,127,628

49,919,031

Goodwill

514,602557,260

Other

202,997

170,056

Total intangible assets

717,600

727,316

Investment securities

2,389,290

2,847,982

Deferred tax assets

1,268,640

1,054,883

Other

2,537,865

2,552,794

Allowance for doubtful accounts-1,006,399-917,742

Total investments and other assets

5,189,396

5,537,917

61,034,625

56,184,266

98,819,531

91,741,299

Total property, plant and equipment
Intangible assets

Investments and other assets

Total noncurrent assets
Total assets

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.7

(Unit: Thousands of yen)
As of January 31, 2009

As of October 31,2008

14,120,529

12,878,993

455,929

338,521

10,226,030

9,599,494

Current portion of bonds

62,00062,000

Income taxes payable

230,376

149,932

Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans
payableProvision for bonuses

238,828

549,981

Accounts payable-other

3,944,534

3,325,933

Other

1,659,080

1,490,017

Total current liabilities

30,937,308

28,394,874

55,00086,000Long-term loans payable

22,123,392

19,379,661

Provision for retirement benefits

1,119,107

1,080,005

188,228

174,824

6,212,587

3,935,016

455,138

488,61230,153,453

25,144,119

61,090,762

53,538,994

Noncurrent liabilities
Bonds payable

Provision for directors' retirement
benefits
Long-term accounts payable-other
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock

9,696,717

9,696,717

Capital surplus

10,960,869

10,960,869

Retained earnings

16,716,371

17,149,945-23,475-22,729

37,350,483

37,784,803

67,955

162,358

67,955

162,358

Treasury stock
Total shareholders' equity
Valuation and translation adjustments
Valuation difference on
available-for-sale securities
Total valuation and translation
adjustments
Minority interests
Total net assets
Total liabilities and net assets

310,331

255,143

37,728,769

38,202,305

98,819,531

91,741,299

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009
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(2)Consolidated Quarterly Balance Sheets(Unit: Thousands of yen)
3 months FY2009(November 1, 2008
-January 31, 2009)
Net sales

17,441,366

Cost of sales

12,417,428

Gross profit

5,023,938

Selling, general and administrative expenses

4,354,480

Operating income

669,457

Non-operating income
Interest income

9,482

Dividends income

7,794

Insurance income

13,106

Rent income

11,532

A receipt bonus

233

Other

27,554

Amortization of negative goodwill

17,458

Total non-operating income

87,164Non-operating expenses
Interest expenses

93,183

Loss on sales of notes payable

19,664

Other

35,970Total non-operating expenses
Ordinary income

148,818
607,803

Extraordinary income
Reversal of allowance for doubtful accounts

3,117

Reversal of provision for retirement benefits

16,816

Other

2,363

Total extraordinary income

22,297Extraordinary loss
Loss on sales and retirement of noncurrent
assetsImpairment loss

2,936
312

Loss on valuation of investment securities

484,378

Other

36,029Total extraordinary losses

523,655

Income before income taxes and minority
interests

106,445

Income taxes-current

212,174

Income taxes-deferred-55,756

Total income taxes

156,417

Minority interests in income

55,187

Net income-105,160

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Fiscal year ending October 31, 2009P.9

(3) Consolidated quarterly statements of cash flows(Unit: Thousands of yen)
3 months FY2009(November 1, 2008
-January 31, 2009)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Amortization of goodwill
Loss (gain) on sales and retirement of noncurrent
assets
The amount of assets buy on the installment planpurchase for small rentals
The amount of cost price transfer with theconstruction machine parts sale
The amount of cost price transfer with asset sell-off
for rentals
Expenditure by the assets acquisition for rentals
Loss (gain) on valuation of investment securities
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in provision for directors'
retirement benefits
Interest and dividends income
Assets buy on the installment plan purchase
payment interest for rentals
Interest expenses
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in accounts payable-other
Other, net
SubtotalInterest and dividends income received

106,445
1,077,108
312
42,657
2,936
17,637
4,499
45,182-1,631,391
484,378
124,426-311,153
39,101
13,404-17,277
33,877
87,688719,571
76,606444,599405,360
1,078,428
2,844,401
16,690Interest expenses paid
Income taxes paid

-141,732-21,778

Net cash provided by (used in) operating activities

2,697,580

Net cash provided by (used in) investment activities
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Purchase of investments in subsidiaries
Other, net

122,129-1,268,239

Net cash provided by (used in) investment activities-1,359,374

10,076-8,988-197,114-18,000
760

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.10

(Unit: Thousands of yen)
3 months FY2009(November 1, 2008
-January 31, 2009)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Repayments of installment payables
Purchase of treasury stock
Cash dividends paid

117,4076,000,000-2,629,733-31,000-990,183-746-328,413

Net cash provided by (used in) financing activities

2,137,330

Net increase (decrease) in cash and cash equivalents

3,475,536

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents resulting frommerger with unconsolidated subsidiaries
Cash and cash equivalents at end of period

17,566,695
24,62921,066,861

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Fiscal year ending October 31, 2009
P.11

Beginning from this consolidated accounting fiscal year, the Company has adopted the “AccountingStandard for Quarterly Financial Reporting” (Accounting Standards Board of Japan Statement No. 12) andthe “Guidance on Accounting Standard for Quarterly Financial Reporting” (Accounting Standards Board ofJapan Implementation Guidance No. 14). In addition, the quarterly consolidated financial report has been
prepared in accordance with the “Regulation for Quarterly Consolidated Financial Statements.”(4) Notes relating to the going concern assumption
The Company had no material items to report.
(5) Business Segment Information[Segment information by type of business]
Current quarter (From November 1, 2008 to January 31, 2009)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

16,274,824

1,052,950

113,591--

16,274,824

671,150

Eliminations
or entirecompany

Consolidated

17,441,366-

17,441,366

-

-

-

-

1,052,950

113,591

17,441,366-

17,441,366

3,647

7,639

682,437-12,980

669,457

Total

Revenues(1)Revenues from
customers(2)Intersegment revenue

Total

Operating income

Changes in accounting method
1. Changes in appraisal methods for principal assets
As described in Section 4. (3) b) under Qualitative Information and Financial Statements, the Company andits domestic consolidated subsidiaries traditionally valued construction equipment using the amount after
deduction of depreciation expense as calculated according to the declining-balance method from the original
prices, by separate fiscal year of purchase. Beginning from the first quarter consolidated accounting period
under review, the Company will calculate the amount after deduction of depreciation expense as calculated
according to the straight-line method from the original prices, by separate fiscal year of purchase.
In conjunction with this change, the operating income of the Company’s construction-related businessincreased by ¥16,126,000 compared with what it otherwise would have been had the accounting standard
used in past periods been applied.
2. Change in depreciation method for depreciable assets
As described in Section 4. (3) c) under Qualitative Information and Financial Statements, beginning from thefirst quarter consolidated accounting period under review the Company and its domestic subsidiaries havechanged the method for depreciation of rental equipment from the declining balance method to thestraight-line depreciation method.
In conjunction with this change, the operating income of the Company’s construction-related businessincreased by ¥588,137,000 compared with what it otherwise would have been had the accounting standard
used in past periods been applied.
[Segment information by location]
First quarter consolidated year-to-date (from November 1, 2008 to January 31, 2009)
The Company had no material items to report because the Company did not have any consolidated
subsidiaries or important offices located in countries or regions outside of Japan.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.12

[Foreign sales]First quarter consolidated year-to-date (from November 1, 2008 to January 31, 2009)
The Company has omitted a description of foreign sales because foreign sales are less than 10% ofconsolidated revenues.
(6) Note on significant changes to shareholders’ equity
The Company had no material items to report.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.13

(Reference) Financial Statements for the Previous Fiscal Year
(1) (Summary) Consolidated statements of income(Unit: Thousands of yen)
Prior FY Quarter
3
monthsFY Quarter
Period(First Quarter of theConsolidated Accounting

Item

Fiscal Year Ended October
31, 2008)

AmountI Revenues

18,375,372

II Cost of revenues from operations

12,807,517

Gross profit
III Selling, general and administrative expenses
Operating incomeIV

1,016,484

1.Interest revenue

10,7602.Dividend income

17,436－

4.Insurance benefits

9,432

5.Rents received

19,702

6.Cash bonus received
7.Other
Total non-operating revenues

266
34,40892,007

Non-operating expenses
1. Interest expense

80,694

2. Loss on sale of notes receivable

22,3903.Other

VI

4,551,370

Non-operating revenues

3.Gain on sale of investment securities

V

5,567,854

30,801

Total non-operating expenses

133,886

Ordinary income

974,605

Extraordinary profits
1.Gain on sale of fixed assets
Gain on reversal of allowance for doubtful
2.
accounts
3.Other
Total extraordinary profits

16,261
19,654681
36,597VII Extraordinary losses
1.Loss on sale or retirement of fixed assets
2.Impairment loss

17,308490

3.Valuation loss on investment securities

5,873

4.Other

21,688

Total extraordinary losses

45,360

Income before taxes and adjustments

965,842

Corporate, local and business taxes

400,836

Adjustment for corporate and other taxes

46,150Minority interest in income

19,611

Net income

499,243

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.14

(2) (Summary) Consolidated quarterly statements of cash flows

PeriodItem(Unit: Thousands of yen)
Prior FY Quarter
3 months FY Quarter(First Quarter of theConsolidated Accounting
Fiscal Year Ended October
31, 2008)

AmountⅠ Cash flow from operating activities
Income before taxes and adjustments

965,842

Depreciation and amortization expense

1,196,652

Impairment loss

490

Amortization of goodwill

63,624Gain on sale of fixed assets-16,261

Loss on sale or retirement of fixed assets
Gain on reversal of accrued employees retirement
benefits
Installment purchases of assets for small-value
rentals
Reclassification of cost of sales associated withdisposal of construction equipment
Reclassification of cost of sales associated withdisposal of rental assets
Expenditures for acquisition of rental assets

17,308Valuation loss on investment securities－
41,2581,467
61,463-394,441
5,873

Gain on sale of investment securities－

Loss on sale of investment securities

1,317

Increase in allowance for doubtful accounts

73,807

Increase in accrued bonuses to employees
Decrease in accrued bonuses to directors andauditors
Increase in accrued employees retirement benefits
Increase in retirement allowances to directors andauditors
Interest revenue and dividend income
Interest expense on installment purchases ofrental assets
Interest expense

181,644

Decrease in accounts receivable, trade96,396

Increase (decrease) in inventory assets

112,667

Increase (decrease) in accounts payable, trade602,257

Decrease in accounts payable, other-91,640

Other-946,488

Subtotal

2,077,484

Interest and dividends received
Interest expense
Payment of corporate and other taxes
Cash flow from operating activities－
19,793
6,448-26,887
24,19680,69427,378-101,587-1,431,135
572,139

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009
P.15

Period(Unit: Thousands of yen)
Prior FY Quarter
3 months FY Quarter(First Quarter of theConsolidated Accounting
Fiscal Year Ended October
31, 2008)

Item

AmountII Cash flow from investing activities
Funds used for investment in term deposits
Funds provided from redemption of term deposits
Funds used for the purchase of tangible fixed
assetsFunds provided from the sale of tangible fixed
assetsFunds used for the purchase of intangible fixed
assetsFunds used for the purchase of investment
securities
Funds provided from sale of investment securities
Funds used for the purchase of consolidated
subsidiary stock
Funds used for the purchase of non-consolidated
subsidiary stock
Funds used for establishment of affiliated company
Other
Cash flow from investing activities-15,179
8,400-504,428
128,035-7,250-8,24018,042－-29,581－-10-410,213

III Cash flow from financing activities
Increase (decrease) in short-term bank loans-67,177

Funds provided by long-term bank loans

3,640,000

Funds used to repay long-term bank loans-2,679,594

Funds used for redemption of bonds-20,000

Funds used for repayment of installment
obligations-640,351

Funds used for the purchase of treasury stock-687

Payment of dividends to parent company-361,311

Cash flow from financing activities-129,122

IV

Increase (decrease) in cash and equivalents

V

Balance of cash and equivalents at beginning of
period17,213,890

VI

Increase in cash and equivalents resulting fromnewly consolidated subsidiaries

742,877

VII

Balance of cash and equivalents at end of theperiod32,804

17,989,573

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.16

(3)Business Segment Information[Segment information by type of business]
3 months FY2008 (From November 1, 2007 to January 31, 2008)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

Revenues

17,076,798

1,154,943

143,629

Operatingexpenses

16,052,952

1,170,639

Operatingincome1,023,846-15,695

Eliminations
or entirecompany

Consolidated

18,375,372－

18,375,372

125,622

17,349,214

9,674

17,358,888

18,007

1,026,158-9,674

1,016,484

Total[Segment information by location]
Three-month period ended January 31, 2008 (November 1, 2007 to January 31, 2008)
The Company had no material items to report because the Company did not have any consolidated
subsidiaries or important offices located in countries or regions outside of Japan.
[Foreign sales]
Three-month period ended January 31, 2008 (November 1, 2007 to January 31, 2008)
There are no pertinent items to report because the Company did not have any foreign sales.

Three-month Consolidated Financial Report for the
Fiscal year ending October 31, 2009P.17