Kyoritsu Maintenance Co., Ltd.
(Securities Code:9616)

Fiscal Year March 2008
Consolidated Earnings Results Update

May 2008-１-

Kyoritsu Maintenance FY3/08 Earnings Update

Kyoritsu Maintenance Consolidated Financial Data at a Glance
Consolidated Sales and YY Change
90,00035%

80,00030%

70,00025%
60,00050,00020%

40,00015%

30,00010%
20,0005%

10,0000%0
mn yen

3/99

3/00

3/01

3/02

3/03

3/04

3/05

3/06

3/07

3/08

3/09e

Consolidated Operating Income and YY Change
6,000

50%
40%

5,000
30%
4,000
20%
3,000

10%
0%

2,000
-10%
1,000
-20%
0
mn yen

-30%
3/98

3/99

3/00

3/01

3/02

3/03

3/04

3/05

3/06

3/07

3/08 3/09e

Consolidated Net Income and YY Change
3,000

70%
60%

2,500
50%
2,000

40%
30%

1,500
20%
10%

1,000

0%
500
-10%
-20%

0
mn yen

3/99

3/00

3/01

3/02

3/03

3/04

-２-

3/05

3/06

3/07

3/08

3/09e

Kyoritsu Maintenance FY3/08 Earnings Update

120,000
100,000
80,00060,00040,00020,0000
3/ 98 3/ 99 3/ 00 3/ 01 3/ 02 3/ 03 3/ 04 3/ 05 3/ 06 3/ 07 3/ 08
total assets

net assets (shareholders' equity)

14%
12%
10%
8%
6%
4%
2%
0%
3/ 98

3/ 99

3/ 00

3/ 01

3/ 02

3/ 03

ROE

3/ 04
ROA

-３-

3/ 05

3/ 06

3/ 07

3/ 08

Kyoritsu Maintenance FY3/08 Earnings Update

4,018
, 5%

3/ 07
15,251 , 19%

Dormitories
33,447 , 41%

HotelsContracted Services

4,330 , 5%

Food Service
Construction

11,680 , 14%

Other
13,428 , 16%

4,482
, 5%

3/ 08
13,529 , 15%
Dormitories
35,730 , 39%
4,718 , 5%HotelsContracted Services
Food Service

12,097 , 13%Construction
Other
20,357 , 23%-４-

Kyoritsu Maintenance FY3/08 Earnings Update

Consolidated Income Statement
net sales
gross income
operating income
ordinary income
net income
Consolidated Balance Sheetcurrent assets
fixed assets
total assets
current liabilities
fixed liabilities
total liabilities
net assets (shareholders' equity)

3/99
3/00
3/01
3/02
3/03
3/04
3/05
3/06
3/07
3/08
3/09e
32,458 36,788 37,884 50,065 50,109 54,081 58,014 63,085 66,287 75,606 85,100
6,578 7,173 7,834 10,221 10,785 10,541 10,894 11,783 12,242 14,183
na
2,465 2,369 2,828 3,908 4,149 4,004 4,407 4,611 3,745 4,492 5,260
2,203 2,281 2,643 3,580 3,885 4,060 4,411 4,824 3,787 4,167 4,600
850
907 1,147 1,822 2,039 2,138 2,343 2,011 2,413 2,740 2,790

15,336
25,695
41,14420,921
10,946

19,90029,86749,88019,731
16,977

23,79340,47864,32728,51322,064

18,10047,76865,86727,031
23,761

22,13849,49771,64731,61023,14622,122
55,71577,86529,37429,43323,25462,336
85,62031,58533,077yy change
net sales
gross income
operating income
ordinary income
net income

3.6%
6.3%
25.1%
18.2%
64.6%

13.3%
9.0%
-3.9%
3.5%
6.7%

3.0%
9.2%
19.4%
15.9%
26.5%

32.2%
30.5%
38.2%
35.4%
58.8%

0.1%
5.5%
6.1%
8.5%
11.9%

7.9%
-2.3%
-3.5%
4.5%
4.8%

7.3%
8.7%
5.1%
3.3%
8.2%
3.9%
10.1%
4.6% -18.8%
8.6%
9.4% -21.5%
9.6% -14.2% 20.0%

14.1%
15.9%
19.9%
10.0%
13.6%

12.6%
na
17.1%
10.4%
1.8%

margins
gross margins
operating margins
ordinary margins
net margins

20.3%
7.6%
6.8%
2.6%

19.5%
6.4%
6.2%
2.5%

20.7%
7.5%
7.0%
3.0%

20.4%
7.8%
7.2%
3.6%

21.5%
8.3%
7.8%
4.1%

19.5%
7.4%
7.5%
4.0%

18.8%
7.6%
7.6%
4.0%

18.7%
7.3%
7.6%
3.2%

18.5%
5.6%
5.7%
3.6%

18.8%
5.9%
5.5%
3.6%

na
6.2%
5.4%
3.3%

other benchmarks
ROE
ROA
equity ratio

9.2%
2.1%
22.6%

6.9%
1.8%
26.4%

8.3%
1.8%
21.4%

12.1%
2.8%
22.9%

12.1%
2.8%
23.5%

11.3%
2.7%
24.3%

11.3%
2.7%
24.3%

7.9%
2.1%
26.0%

8.9%
2.2%
24.5%

9.9%
2.4%
23.8%

na
na
na

-５-

23,350 24,901 19,967
74,681 85,562 95,728
98,047 110,507 115,738
44,039 37,342 44,119
28,316 46,068 44,079

na
na
na
na
na

Kyoritsu Maintenance FY3/08 Earnings Update

Fiscal Year March 2008 Earnings Annoucement
May 16, 2008

Company Name: Kyoritsu Maintenance Co., Ltd.
Stock Exchange: Tokyo Stock Exchange, First Section
Stock Code: 9616
Homepage: http://www.kyoritsugroup.co.jp
President: Mitsutaka Sato
Contact: Takumi Ueda, Vice President
Telephone: +81-3-5295-7778
Shareholders Meeting Date: June 26, 2008 (anticipated)
Dividend Payment Date: June 27, 2008 (anticipated)
Earnings Announcement Filing Date: June 26, 2008
(Figures are rounded down to the nearest million yen)

1. Fiscal Year March 2008 Consolidated Earnings (from April 1 to March 31, 2008)(1) Consolidated Earnings
Net Sales

Operating Income

Million Yen%yy

75,606
66,287

FY3/08
FY3/07

Million Yen

4,492
3,745

14.1
5.1

Net Income

Ordinary Income%yyMillion Yen

19.9
-18.8

%yy

4,167
3,787

Million Yen

2,740
2,413

10.0
-21.5

%yy

13.6
20.0
2.

EPS

(Reference)(2)

Operating Income
Ratio

%
%
10.1
3.7
9.2
3.6
¥28 million, FY3/07: ¥24 million

5.9
5.7

Fully Diluted EPS
Yen

FY3/08
FY3/07

Ordinary Income toTotal Assets Ratio

ROE

Yen

186.66
149.64176.98151.74Equity Accounting Method Income: FY3/08:%

Consolidated Financial Position
Total Assets

FY3/08
FY3/07(Reference) Capital:

Net Assets

Net Asset Ratio

Book Value per Share

Million Yen

Million Yen%

Yen

115,738
110,507

27,53827,09623.6
24.4

1,897.73
1,809.86¥27,266 million in FY3/08, ¥26,948 million in FY3/07(3) Consolidated Cash Flow
Cash Flow fromOperating Activities

Cash Flow from
Financing Activities

Cash and Equivalents at
Year End

Million Yen

Million Yen

Million Yen

Million Yen

3,355
3,568

-13,604-3,654

4,590
1,034

8,061
13,721

FY3/08
FY3/07

2.

Cash Flow from
Investment Activities

Dividend Conditions
Registry Date

FY3/07
FY3/08
FY3/09 (Projected)

Dividends per Share
End Fiscal
End Interim
Year

Total

Total Dividend
Payment(Annual)Dividend Payout
Ratio(Consolidated)

Dividend to Net
Asset Ratio(Consolidated)

Yen

Yen

Yen

Million Yen

%

%

18.00
18.00
19.00

18.00
20.00
19.00

36.00
38.00
38.00

491
555
―

20.3
20.4
19.6

1.9
2.0
―

-６-

Kyoritsu Maintenance FY3/08 Earnings Update

3.

Fiscal Year March 2009 Consolidated Earnings Projection (April 1, 2008 to March 31, 2009)
Net SalesInterimFull Year

4.

Operating Income

Million Yen%yy

42,90085,100

8.6
12.6

Million Yen

%yy

3,310
9.9
5,260 17.1

Ordinary Income
Million Yen

Net Income

EPS

%yy

Million Yen

%yy

Yen

2,870
3.1
4,600 10.4

1,575
2,790

0.2
1.8

109.62
194.19Others(1)

Important changes in our subsidiaries, including changes to the scope of our consolidation:

None

(2)

Changes in the accounting methods, procedures, display methods used in the creation of our consolidated
financial statements during the most recent fiscal year:(3)①

Changes accompanying revisions in accounting standards:②

Other changes:

Yes

None

Shares issued (Common stock)①

Shares issued as of term end (including treasury stock):

15,125,582 shares at end FY3/08, 15,118,142

shares at end FY3/07②

Treasury stock as of term end:

757,865 shares at end FY3/08, 228,295 at end FY3/07(Reference) Our Parent Earnings
1. FY March 2008 Parent Earnings (From April 1, 2007 to March 31, 2008)(1)
Parent Earnings
Operating Income

Ordinary Income

Million Yen

Sales
%yy

Million Yen%yy

Million Yen%yy

Million Yen%yy

57,13047,967

19.1
10.9

3,241
2,633

23.1
-26.7

3,304
3,113

6.1
-21.4

2,427
2,185

11.1
35.6

FY3/08
FY3/07EPS

Net Income

EPS, Fully Diluted

FY3/08
FY3/07

Yen

Yen

165.32160.25132.54137.42(2) Parent Financial Position
Total Assets

Net Assets

Million Yen

FY3/08
FY3/07(Reference) Capital:
2.

Net Asset Ratio

Million Yen

100,751
90,09825,89725,917

Book Value per Share

%

Yen

25.7
28.8

1,802.48
1,740.61¥25,897 million in FY3/08, ¥25,917 million in FY3/07

Parent Earnings Projections for Fiscal Year March 2009 (From April 1, 2008 to March 31, 2009)
Sales

InterimFull Year

Million Yen%yy

33,60064,300

14.4
12.5

Operating Income

Ordinary Income

Million Yen

Million Yen%yy

3,050 16.2
4,200 29.6

%yy

2,800
8.5
3,870 17.1

Net Income
Million Yen%yy

1,630 9.3
2,580 6.3

EPS
Yen

113.45179.57

 Notes and explanations regarding the appropriate uses of our earnings projections
All projections provided within this document are based on the most accurate information available at the timeof this writing.

However our actual results may differ from our projections due to various unforeseen reasons.

-７-

Kyoritsu Maintenance FY3/08 Earnings Update

1.

Our Earnings Results(1) Analysis of Our Earnings Results
1. Our Overall Earnings during the Term under Review(Consolidated Earnings)(Units:FY3/07

FY3/08Million yen)

% Year-Over-Year

Net Sales

66,28775,606

14.1

Operating Income

3,745

4,492

19.9

Ordinary Income

3,787

4,167

10.0

Net Income

2,413

2,740

13.6

During the term under review, the Japanese economy continued to recover on support of strong capital
investments and improvements in the employment market and wages. However confusion in global financial
markets due to the “subprime loan problem” in the United States, pronounced weakening of the dollar, andcontinued high crude oil and other materials prices contributed to uncertainty over the future of our economy.
Against this backdrop, sales of our student dormitories rose due to our successful efforts to increase the number ofcontracts through strengthened relationships with universities and vocational schools.

Also sales of ourcorporate dormitories grew as the labor market recovered with Japanese corporations increasing their new
graduate hiring activities and from strong demand to manage training facilities.

Furthermore the steady and highoccupancy rates in our new Dormir business (studio type condominium dormitories) also contributed to growth insales of our core dormitory business. The high occupancy rates at and full year contribution from 10 new
facilities opened during the previous fiscal year, and six new Dormy Inn (business hotels) and three resort hotels
opened during the current year allowed us to record growth in sales of our hotel business.

Furthermore in ourcontracted services business, we focused upon extracting synergies between our office and residential property
management operations.

In our food service business we continued to promote strict control of variable costs,

while at the same time we focused upon developing new dormitories and hotels in our construction business.
Consequently we recorded sales growth of 14.1% year-over-year or ¥9,319 million to ¥75,606 million.

And

despite the higher operating costs associated with the opening of 9 new hotels, higher taxes arising from therevision of corporate tax laws, and increased depreciation charges we were able to record a 19.9% year-over-year
rise in our operating income to ¥4,492 million.

At the same time our ordinary income rose by 10.0%

year-over-year to ¥4,167 million and we were able to recover from the decline in profits we recorded during theprevious fiscal year.

Furthermore extraordinary profits arising from the liquidation of three consolidated

subsidiaries allowed us to see a 13.6% year-over-year rise in net income to ¥2,740 million, for the second
consecutive year of record high net income.
As a result of these efforts our earnings per share rose by 9.68 yen to 186.66 yen, and our return on equity rose by
0.9% points to 10.1%.

-８-

Kyoritsu Maintenance FY3/08 Earnings Update2.

Our Key Data by Business Segment<Dormitory Business (Student, Corporate, Dormir, Outsourced)>
FY3/07(Units:FY3/08million yen)

% YY Change

Contracted Residents

25,65627,198

6.0

Sales

33,44735,730

6.8

Operating Income

5,340

5,461

2.3

In our student dormitory business we note that the college age Japanese population continued to contract with thenumber of 18 year old Japanese falling by 3.1% year-over-year to 1.27 million.

However concerns over future

employment opportunities contributed to a rise in the advancement rates of high school students to colleges andvocational schools and increases in students studying at educational facilities located in major metropolitan areas.
Against this backdrop, we continued to strengthen our relationships with both vocational schools and college
preparatory schools, and with major universities.

Therefore we were able to form new contracts with Rikkyo

University, Komazawa University, Meikai University and Toyo University during the current term. We also
strove to increase the usage of our student dormitory service system which offers “healthy food menus” and “fully
supervised, safe and comfortable” living facilities.
Consequently the number of schools using our dormitory services rose by 1.5% year-over-year to 1,588, ourcontracted residents rose by 3.5% year-over-year to 15,992, and our sales grew by 5.0% year-over-year to ¥20,546
million.
The market for our corporate dormitories remained favorable with the work force growing by 0.5% year-over-year
to 64.12 million workers, and new graduate hires rising by a large 18.0% year-over-year to 825,000. Along withthis increased hiring of younger workers, Japanese corporations are also beginning to rely more often upon
corporate dormitories to provide housing for their workers because of the important role that dormitories play in“providing opportunities for employees to communicate with each other.”At the same time Japanese

corporations continue to outsource the management of these dormitory facilities.
Against this backdrop, Kyoritsu Maintenance continued our proactive marketing efforts to provide our customers
with solutions designed to resolve various problems surrounding their dormitories and training facilities. Thereby
we were able to grow the number of corporate clients by 1.4% year-over-year to 1,249 and raise our sales by 9.6%
year-over-year to ¥9,259 million.
In our Dormir business we used know-how and expertise acquired in our student and employee dormitory
operations to develop various types of contracts to accommodate the diversifying needs of students choosing tolive in corporate dormitories for single employees. We also increased our supply of studio-type condominium
dormitories and effectively extracted synergies from the students and employees referred to us from our clients at
our dormitories with food services and our other functions. During the year under review, the four new facilities
we opened enjoyed high occupancy rates and consequently the number of our residents rose by 5.1%

-９-

Kyoritsu Maintenance FY3/08 Earnings Updateyear-over-year to 3,392 and our sales grew by 9.8% year-over-year to ¥3,392 million.
In our outsourced dormitory business we are responsible for the management of dormitories owned bycorporations and schools. During the term under review we were able to accurately assess the outsourcing needsof various facilities accompanying the recovery in corporate earnings and we sought to expand our orders bydifferentiating ourselves from our competitors to become “Japan’s best dormitory operator.”

Therefore sales

grew by 8.7% year-over-year to ¥2,532 million.
As a result of our efforts, the total number of facilities in our dormitory business increased by 20 to 387 and ourresidents grew by 1,768 to 28,763. Consequently our sales grew by 6.8% to ¥35,730 and operating income grew
2.3% year-over-year to ¥5,461 million despite higher taxes due to revisions in corporate tax laws and the increased
depreciation charges.
<Hotel Business (Dormy Inn, Resorts)>(Units: million yen)

FY3/07

FY3/08% YY Change

Sales

13,42820,357

51.6

Operating Income-1,127-456―

In our Dormy Inn business (business hotels), we have chosen to differentiate our operations by offering uniquehospitality services which reflect the needs of our customers while most of our competitors have adopted strategies
which pursue labor-savings by specializing in accommodations functions only.

Among the services sought by ourcustomers, we have noted strong demand for “large hot spring type bathing facilities” and “good tasting
breakfasts,” and we also offer business trip packages, and late night check-in to accommodate our customers’
special needs.

Furthermore we also offer special accommodation plans catering to female customers andweekend plans designed to capture demand from traveling families.

Amidst these developments, we opened six

new facilities including “La Vista Kushiro River,” “Dojima River Hot Springs Tenzin no Yu Dormy Inn Umeda
East,” “Natural Hot Springs Hagi no Yu Dormy Inn Sendai Station,” “Natural Hot Springs Azusa no Yu Dormy Inn
Matsumoto,” “Natural Hot Springs Tenpoku no Yu Dormy Inn Wakkanai,” and “Natural Hot Springs Kaiji no Yu
Dormy Inn Koufu.” during the term under review, bringing the total number of our Dormy Inn facilities to 28.
Also during the term our efforts were successful in maintaining high occupancy rates of 80.2%. Consequently
our sales of this division rose by 36.4% year-over-year to ¥8,726 million.
In our resort business (resort hotel operations), we maintain the objective of providing hotels that offer “highquality resort lifestyles at reasonable prices” as well as providing “comfortable accommodations.” And during
the period under review we opened three new facilities including our “Asahidake Hot Springs La Vista
Daisetsuzan,” “Okuhida Hot Springs Hirayu Takumi no Yado Miyamaouan,” and “Nanki Shirahama Keisho no
Yado Hamachidori no Yu Kaisyu.”

All of these new facilities also received wide coverage in various media andhave enjoyed a high level of customer satisfaction since their opening. Additionally we have fortified our costmanagement at each of our five facilities opened during the previous term and at all of the remainder of ourexisting facilities, and have strengthened our marketing for all of our facilities.

-１０-

As a result of these efforts, weKyoritsu Maintenance FY3/08 Earnings Update

saw a 65.5% year-over-year increase in sales to ¥11,630 million.
These efforts allowed us to grow the total number of our facilities by eight year-over-year to 44, our rooms by
1,250 to 5,362, and sales by 51.6% year-over-year to ¥20,357 million.

However higher operating charges anddepreciation from the nine new facilities, and increased taxes arising from revisions in the corporate tax laws
caused us to realize an operating loss of ¥456 million. However adjusting for the ¥780 million increase indepreciation during the current term, our cash flow improved by a large margin to ¥1,451 million and our overallprofitability is continuing to improve.

<Contracted Services Business>(Units:FY3/07

Sales

FY3/08million yen)

% YY Change

11,68012,097

3.6

625

579

-7.3

Operating Income

The contracted services business includes maintenance and management services for both offices and residences,
rental of consigned buildings, and parking lot management. Pricing competition within the building maintenanceindustry remained severe during the term under review, and consolidation of service providers contributed todemands for price cuts and cancelation of contracts, which in turn contributed to the continued difficult operating
environment.
Against this backdrop, we used our proposal based management strategy to develop new clients and strengthen ourcapabilities in the areas of property management and building management.

At the same time we endeavored tofortify our operating foundation.
Consequently our contracted services business sales rose by 3.6% year-over-year to ¥12,097 million, while
operating income declined by 7.3% year-over-year to ¥579 million.
<Food Service Business (Restaurants, Outsourced Cafeterias, Hotels and Restaurants)>
FY3/07

FY3/08(Units: million yen)
% YY Change

Sales

4,330

4,718

9.0

Operating Income

-174

28

―

In our food services business, weakening consumer sentiment on the back of the sharp rise in crude oil and otherraw materials prices and diversification of customer tastes led to a continuation of a weak operating environment.
With these trends in place, we continued our efforts to control variable costs and strengthen our earnings structure
in part by promoting a strategy designed to cultivate new management contracts for new restaurants in hotels.
As a result of our efforts, our sales rose by 9.0% year-over-year to ¥4,718 million and we realized ¥28 million ofoperating income.

-１１-

Kyoritsu Maintenance FY3/08 Earnings Update<Construction Business>(Units: million yen)
FY3/07

Sales

FY3/08% YY Change

15,251

13,529

-11.3

379

373

-1.6

Operating Income

Operating conditions in our construction business rapidly weakened as a result of revisions in the construction
standards law, higher crude oil and other raw materials prices, and the tightening of loan requirements on realestate. Against this backdrop, we continued our strategy of the previous fiscal year of focusing upondevelopment of dormitories and Dormir (studio type condominium dormitories) in the Tokyo and surrounding
regions, business hotels, and resort hotels.
Consequently in our construction business we saw declines in both our sales and operating income of 11.3%
year-over-year to ¥13,529 million and 1.6% year-over-year to ¥373 million respectively.
<Other Business>(Units: million yen)
FY3/07

Sales
Operating Income

FY3/08% YY Change

4,018

4,482

11.6

254

240

-5.3

Our other business is comprised of the wellness life (management of senior citizen housing), life (catalog andrental sales), advertising agency, rental property brokerage, comprehensive human resources, and financing
services. This division’s sales rose 11.6% from the previous fiscal year to ¥4,482 million, while operating income
fell by 5.3% year-over-year to ¥240 million.

-１２-

Kyoritsu Maintenance FY3/08 Earnings Update3.

Earnings Projections(Consolidated)(Units: million yen)
FY3/08 Results

FY3/09 Projections

Net Sales

75,606

85,100

12.6

Operating Income

4,492

5,260

17.1

Ordinary Income

4,167

4,600

10.4

Net Income

2,740

2,790

1.8

(Parent)% YY Change(Units: million yen)
FY3/08 Results

FY3/09 Projections% YY Change

Sales

57,13064,30012.5

Operating Income

3,241

4,200

29.6

Ordinary Income

3,304

3,870

17.1

Net Income

2,427

2,580

6.3

On the one hand we anticipate the Japanese economy to benefit from the strong employment market with
continued increases in the hiring of new graduates and younger workers. However at the same time we remain
cautious over the future economy due to the subprime loan problems in the United States and the subsequent
uncertainty in the financial markets, higher crude oil and other raw material prices, pronounced weakening of thedollar and uncertainty over the current strong corporate earnings environment.

In addition we remain aware of

the potential weaker consumer spending trends resulting from higher prices of parts and goods due to the rise in
crude oil prices, and stagnant growth in personal income.

Amidst these trends, the Kyoritsu Maintenance Groupwill pursue a strategy designed to increase our overall competitive standing within the industry by creating a more
efficient management and earnings structure.
With regards to our projections for the coming fiscal year, in our dormitory business we saw a strong 95.0%
occupancy rates in April, which is a leading indicator for our earnings performance in the coming year.

In thecoming fiscal year March 2009 we expect to develop 16 new units with 1,730 rooms primarily in the Tokyo capitalregion, which accurately match the diversifying needs of our residents and will bring the total number of units androoms which we operate to 401 and 30,213 respectively. With regards to our marketing function in the area of
our student dormitory business, we will continue to strengthen our relationships with major universities nationwide.
At the same time we will use our highly attractive food services to develop demand in new operating regions andto fortify our relationships with vocational schools and college preparatory schools.

In the area of our corporate

dormitories, we are pursuing a flexible marketing strategy designed to capture the growing demand for outsourcing
of corporate dormitory and other facilities brought about by Japanese corporations’ attempts to shift a larger
portion of their fixed costs to variable costs.

Furthermore we are also aggressively marketing to corporations toreceive outsourcing contracts for their training facility management to our company as part of their strategy to
restructure their costs.

In response to strong demand in the market for our Dormir business, we will increase thespeed of our development of these facilities in the major metropolitan regions of Japan.

-１３-

Kyoritsu Maintenance FY3/08 Earnings Update

In our hotel business, we plan to open new facilities in major metropolitan areas throughout Japan given the strong
occupancy rates on the back of the favorable reception from our customers of our existing Dormy Inn Hotelfacilities.

At these facilities we will offer our guests special business trip and late night check-in functions inaddition to “large hot spring type public baths” and “good tasting breakfasts.” In our resort hotel business we will
review the development and opening of new facilities in the coming year and focus upon a strategy of “earnings
structure allowing consistent growth” by fortifying services and controlling costs at each and every one of ourfacilities.

At the same time we will maintain our strategy of providing customers with “high quality resort stylefacilities at reasonable prices” and offering “comfortable accommodations” to maintain a high level of customer
satisfaction.
Our contracted services business is suffering from increased pricing competition within the industry, reviews ofcontracts from our customers, demands for price reductions, and cancellation of contracts due to the consolidationof the number of consigned service providers.

Against this backdrop, we will increase the trust of our customers

by aggressively promoting our expertise and know-how as a specialist service provider and offer our customers
improved services to raise our competitive standing within the industry.
With regards to our food service business, we will continue to focus our attention on improving our profitability
through close management of variable costs.

The Kyoritsu Group seeks to raise the efficiency of our restaurants

operations at our nationwide network of hotels, and to strengthen our operational know-how related to restaurants
located at golf courses. We also seek to develop new business with new restaurants outside of our Group.
In our construction business, we will continue to increase the supply of our Dormir facilities (studio-typecondominium dormitories) to meet the continued strong demand for student and corporate dormitories in theTokyo region, as well as increasing the supplies of our business hotels and resort hotels.
In our other business we will focus upon fortifying our earnings foundation by offering comprehensive humanresources services designed to satisfy the needs of our customers.

At the same time we will promote a growthstrategy to expand this business along with our other businesses.
Consequently at the consolidated level for the Kyoritsu Maintenance Group, we project sales to grow by 12.6%
year-over-year to ¥85,100 million, and operating, ordinary and net incomes to rise by 17.1%, 10.4% and 1.8%
year-over-year to ¥5,260, ¥4,600, and ¥2,790 million respectively.

And at the parent level we project our sales torise by 12.5% year-over-year to ¥64,300 million, and our operating, ordinary, and net incomes to grow by 29.6%,
17.1% and 6.3% year-over-year to ¥4,200, ¥3,870, and ¥2,580 million respectively, putting Kyoritsu squarely backon a growth trend.

-１４-

Kyoritsu Maintenance FY3/08 Earnings Update(2) Analysis of Financial Conditions
1.

Conditions of Our Assets, Liabilities, and Net Assets

Our total assets increased by ¥5,230 million from the end of the previous fiscal year to ¥115,738 million. The
main reason for this growth was the rise in tangible fixed assets.
Liabilities grew by ¥4,788 million year-over-year to ¥88,199 million during the term under review. The main
factor for this increase was the rise in current liabilities.
Our net assets also rose by ¥442 million from the end of the last fiscal year to ¥27,538 million.
2.

Cash Flow Conditions

During the term under review our consolidated cash and equivalents fell by ¥5,659 million to ¥8,061 million.

We

provide details of our cash flow below.
(Cash Flow from Our Operating Activities)
During the current fiscal year, we saw large increases in prepayments associated with the contracts of ourdormitories, and in real estate inventories for our construction business. Consequently our operating cash flow
declined by ¥213 million to a net inflow of ¥3,355 million during the term under review.
(Cash Flows from Investing Activities)
During the period under review, we saw an outflow of cash for the acquisition of new facilities in our dormitory
and hotel businesses and for security deposits and refurbishment of new and existing offices and other facilities.
Consequently we saw a ¥9,950 million increase in our net outflow to ¥13,604 million from the previous year.
(Cash Flows from Our Financing Activities)
During the current year, we saw an inflow from increases in debt to be used for capital investments for the
expansion of our business operations.

Consequently our financing cash flow increased by ¥3,555 million to a net

inflow of ¥4,590 million.
(Reference) Cash Flow Indicators
Trends in our cash flow indicators for our parent and group companies are listed below.
FY3/04

FY3/05

FY3/06

FY3/07

FY3/08Net Asset Ratio (%)

24.3

24.3

26.0

24.4

23.6

Capital Adequacy Ratio, Market Capitalization Based (%)

29.7

29.3

61.1

36.9

22.1

Cash Flow to Interest Bearing Debt Ratio (%)

12.3

5.7

7.7

14.7

17.5

Interest Rate Coverage Ratio

5.3

13.0

10.6

4.9

3.6

Net Asset Ratio:

Net Assets / Total Assets

Capital Adequacy Ratio:

Market Capitalization / Total Assets

Cash Flow to Interest Bearing Debt Ratio:
Interest Coverage Ratio:

Interest Bearing Debt / Operating Cash Flow

Operating Cash Flow / Interest Payments-１５-

Kyoritsu Maintenance FY3/08 Earnings Update1.

Each indicator is based on consolidated financial data.

2.

Market capitalization excludes treasury stock.

3.

Cash flow is based on our operating cash flow.

4.

Interest bearing debt includes all of the liabilities which bear interest payments on our consolidated balance sheet.

5.

We use interest payments from our consolidated cash flow statements.

(3) Our Basic Policy Regarding the Distribution of Profits During the Current and Next Terms
We consider the capital sourced from the capital markets and contributed by shareholders to be invaluable, andplace a high priority on the distribution of profits to our shareholders in line with our earnings performance.

Oneof our goals is to maintain a stable level of dividends over the long-term and we have established a target dividend
payout ratio of over 20%.

During recent years we have been able not only to increase our dividends, but also tooffer stock splits, effectively raising our overall dividend payout. With regards to distribution of profits toshareholders during the current term, we have decided to raise our term end dividend by ¥2 to ¥20 per share, andour full year dividend is expected to reach ¥38 per share. In the future, we will endeavor to maintain a stable levelof dividends while also responding flexibly to reflect changes in our earnings and with a view to the conversion of
our convertible bond type stock options issued in September 2004 and September 2006. At the same time we alsoseek to retain a level of earnings that will give our management the flexibility to make necessary capital
investments in response to changes in the market and to develop new businesses whenever appropriate.
(4) Business Risks
Below we note the important risk factors that maybe considerations when making an investment in our Company.
We consider these factors to be the main risks existing during the course of our operations during the term underreview.
1.

Our Sales Conditions

In our core dormitory business, we operate and manage various facilities with the goal of providinga hig
hly relaxing environment and experience to our residents, making them feel as if they were intheir own
home.

In addition to our efforts to strengthen our relationships with various schools to provide their stu

dents with room and board, we provide flexible housing solutions to Japanese
mployee numbers change dramatically, by supplying them with only theto match the number of employees needing housing.

corporations, whose e

number of rooms they needBut because our dormitories are primarily leased f

rom the owners of the facilities, we are able to provide flexible

solutions as mentioned above.

At thesame time we are at risk of being negatively impacted by the cancellation of resident contracts by schools, and by corporations due to restructuring of their work force.
With regards to our hotel business, we have been able to insulate ourselves from large fluctuations in occupancy
rates at our Dormy Inn Hotels by providing various unique services and amenities such as extended-stay programs
which help to differentiate our facilities from our competitors.

However we remain vulnerable to fluctuations andvolatility in corporate demand caused by changes in the economy.

In our resort hotel business, we are also subject

to the volatility in occupancy rates arising from weather related calamities such as typhoons, as well as from

-１６-

Kyoritsu Maintenance FY3/08 Earnings Update

fluctuations in the economy.

Therefore our sales may fall below our expectations during peak seasonal periods

and our Group earnings may also be impacted by these events.
Regarding our food services business, we are vulnerable to changes in consumer demand in our stand-alone
restaurants management operations, and may also incur loss of business resulting from cancellations of outsourcing
contracts for management of restaurants and cafeterias in golf courses and corporate facilities. Therefore ourGroup earnings could be negatively impacted by these changes.
2.

Financial Conditions

The Kyoritsu Maintenance Group endeavors to maintain consistent long-term growth as outlined in ourintermediate-term management strategy, but the attainment of this growth is premised upon our ability to secure assets
which can be used dormitories and hotels.

In the development of these assets, we take our financial standing into

consideration and seek to make the most efficient use of all our resources by utilizing various financial methods to yield
the biggest returns.

However our earnings and financial position are at risk of being negatively impacted by potential

stagnation in the real estate market, volatility in asset prices, extreme declines in cash flows from our existing assets, andinability to proceed as expected with development of assets due to volatility in the financial markets.

3.

Legal Regulations and Quality Control

Our Group provides both services and goods and we are subject to various rules and regulations relating to food safety
and sanitation, personal information privacy security, hotel and fire laws, and a host of other safety related regulations
and laws.

Therefore our Group maintains compliance structures, risk committees and internal control structures, which

perform routinely scheduled checks to ensure that we are in strict compliance with the various laws and regulations
which are part of our business.

But despite our best efforts to prevent accidents, we still run the risk of losing ourcustomers’ trust in the highly unlikely event that an incident such as food poisoning and leakage of personal information
were to occur and our earnings may also be profoundly impacted.

4.

Regarding the Implementation of “Asset Impairment Accounting”

On August 9, 2002 the Business Accounting Council announced a report entitled “White Paper on the AccountingStandards for Fixed Asset Impairment Accounting” and the policy paper entitled “Policy Statement for the
Implementation of Accounting Standards for Fixed Asset Impairment Accounting” was released on October 31, 2003.
In response to these moves by the accounting industry, we are now required to implement asset impairment accounting
with regards to our Group’s tangible and intangible fixed assets, including investments, other assets and leases.

And

we recognize the risk of an extreme contraction in our cash flow by the implementation of asset impairment accounting
at times when there are dramatic fluctuations in the economy and financial markets.

5.

Important Contracts

344 of the 387 dormitories we operate, and another 35 other facilities we operate are leased by our company fromthe owners of the assets under long-term lease agreements ranging from 10 to 20 years.

Of these facilities, 25

have stipulations in their lease contracts that prohibit the cancellation of the lease agreement prior the end of thelease term.

Therefore weak trends in occupancy rates of these managed assets could negatively affect their-１７-

Kyoritsu Maintenance FY3/08 Earnings Update

profitability, which in turn could negatively impact our overall earnings and financial position.

As a note, thebalance of rent remaining under these irrevocable lease contracts stood at ¥12,962 million as of end March 2008.
6. Our Dependence upon Interest Bearing Debt and the Influence of Interest Rate Trends
In our business, we use bank debt in addition to our own capital and our interest bearing debt ratio as a percentage of our
total assets stood at 50.6% at end fiscal year March 2008. As for our Group, we are pursuing a strategy of reducing ourdependence upon interest bearing liabilities which includes the sale of some of our self-owned facilities to investors
while retaining the management and operational contracts for these facilities.

At the end of fiscal year March 2008,

76.8% of our interest bearing debt was fixed interest rate debt and we therefore are insulated from near term increases ininterest rates.

However, our earnings still remain at risk of higher funding costs arising from increases in interest rates

over the longer term.

2.

Corporate Structure

The Kyoritsu Maintenance Group consists of the parent company, 14 subsidiaries, and three affiliated companies.
Our main businesses consist of dormitories, hotels, contracted services, food service, real estate development
business, and other business. The details of our businesses and the services provided by our various subsidiaries
and affiliates are listed below.

Business Segment

Business Description

Participating Companies

Student and corporate dormitories, and outsourced dormitory
management

Kyoritsu Maintenance Co., Ltd.
One other company

HotelsDormy Inn (Long-term stay business hotels)
Resort hotels

Kyoritsu Maintenance Co., Ltd.
Six other companies

Contracted Services

Office building management businessResidential property management business

Builnet Corporation
Kyoritsu Maintenance Co., Ltd.
One other company

Food Service BusinessRestaurant businessOutsourced catering business
Hotel restaurant outsourcing business

Kyoritsu Food Services Co., Ltd.

Real Estate
Development Business

Construction, planning, design, brokerage, condominium
sales, other related real estate development businessDormitories

Other Businesses

Wellness Life Business (senior citizen residence management
and operations)
Brokerage and management of rental real estate
Single resident insurance and other lifestyle support services
Comprehensive human resources business
Financing business
Advertising business
Other related businesses-１８-

Kyoritsu Estate Co., Ltd.

Kyoritsu Maintenance Co., Ltd.
Kyoritsu Livenet Co., Ltd.
Kyoritsu Trust Co., Ltd.
Nihon Placement Center Co., Ltd.
Kyoritsu Financial Service Co., Ltd.
Kyoritsu Creative Co., Ltd.
One other company

Kyoritsu Maintenance FY3/08 Earnings Update-１９-

Kyoritsu Maintenance FY3/08 Earnings Update

3. Management Policy(1) Our Basic Management Policy
Our Group has exerted every possible effort to provide the “highest level of customer satisfaction” since ourfounding, and we seek to raise our brand recognition by offering our residents useful and high quality services
which focus upon themes such as “dining,” “living,” and “comfort.” We also offer guests at our facilities modern
versions of the “traditional Japanese boarding house” (Geshukuya) that “provide heart-warming comfort” to help
satisfy all of their lifestyle needs, including the provision of high quality and helpful services.

Furthermore as a

specific part of our business strategy, we aim to “further expand and raise the profitability of our core dormitory
business,” “expand into other business fields related to our dormitory business,” and “fortify the foundation of ourhotel business and establish it as a driver of our future earnings.” Finally, we seek to fortify our corporate
structure to further improve the quality of our services, and to be able to contribute to the prosperity of our clients,
our business partners, and our community.
(2) Benchmarks of Our Intermediate- to Long-Term Management Strategy
The Kyoritsu Group maintains a basic goal of increasing its consolidated return on equity, and seeks to create a
corporate structure that “emphasizes profitability.”

In order to become a company with an even stronger market

presence, we seek to dominate the market by steadily growing our share of the dormitory business, to cultivate ourhotel business as the second driver of our earnings growth, and to increase the synergies within our Group.
In order to achieve these goals, our Group has established the following targets.
1. We recognize the importance of strengthening our cooperation with universities to expand our share of
the student dormitory market, which has been the source of Kyoritsu’s growth since our founding. At
the same time we will accelerate the pace of our development activities and increase the resources weallocate to this business area.
2.

In our corporate dormitory business, we note the trend by Japanese corporations to abandon the
management of their own dormitories as part of their restructuring of corporate benefit programs, andthe growing demand for dormitories for employees working in the Tokyo metropolitan region.

In

response to this changing environment, we will strengthen our marketing efforts to capture more of thisdemand for single-employee housing and for outsourcing services for dormitories and other corporate
housing facilities.
3. Our Dormy Inn business (business hotels) has become an established part of our overall business model,
and we will expand our hotel operations to all of the major cities throughout Japan to help fortify thisbusiness’s earnings structure.
4. With regards to our resort business, we maintain a corporate philosophy of providing “high quality resort
lifestyle at reasonable prices” to our customers.

At the same time we will open facilities designed to“achieve harmony with the surrounding natural environment” as the theme for our next generation ofresorts.
5.

In our contracted services business, we will fortify our nationwide business network in addition toraising the level of our technical expertise and the attractiveness of our services.

6.

We seek to strengthen our overall financial position by optimizing the allocation of our business-２０-

Kyoritsu Maintenance FY3/08 Earnings Update

resources to restrain increases in capital employed, and by increasing the liquidity of our real estateholdings through a shift of assets off our balance sheet.
Additionally, we maintain the following management goals.
1. Actively hire new staff and promote their training.
2.

Consolidate back office and other administrative functions, and streamline and increase the efficiency of
our overall operations.

3.

Strengthen our IR function.

(3) Key Management Issues
In our efforts to further raise our shareholder value, the Kyoritsu Maintenance Group maintains as its core principle
the belief that our customers are our primary concern and helping them is the foundation of our work ethic.
For this reason, in the development of our dormitory business we will accurately assess the demands of the market
and always place an emphasis on allocating our business resources effectively.

Specifically, we strive todifferentiate our services by raising the attractiveness of the facilities and the services we provide to students
entering colleges and schools in the major metropolitan areas.

Furthermore, we seek to strengthen our standing in

the market and expand our operating territory by fortifying our cooperation with vocational schools and major
universities throughout Japan. Also, we will take advantage of the approaching wave of business from theoutsourcing of corporate housing management accompanying the review of corporate benefit programs.

As partof this strategy we will strengthen our proposal-based marketing function to cultivate new customers by helping
them to solve problems in managing their employee fringe benefit facilities.
Using the know-how developed in our dormitory business as a base for our Dormir business (studio-typecondominium dormitories), we will increase the supply of these facilities to respond to the trend for students to live
alone instead of with roommates, and the growing trend for companies to provide rental housing to employees on
an individual basis.

Furthermore, we will continue to create dormitories that are cleaner and more modern thanour competitors, and aggressively target students, women, and single workers.
In our hotel business, we will speed up the nationwide development of our Dormy Inn business (business hotelbusiness), which has become an established part of our earnings structure. And in our resort business we seek toraise the appeal of our existing facilities, and to attract retiring Japanese baby-boomers to our facilities by providing“reasonable and high quality resort lifestyles” and “comforting accommodations.”
In our contracted services business, we are strengthening our proposal-based marketing capability and raising thequality levels and service line-up of our contracted service business to raise our competitive standing in theindustry.
With regard to our food service business, we seek to improve both the flavor and service of our hotel restaurants,
stand alone restaurants, and restaurants attached to golf courses. We also seek to strictly control food and othervariable costs to improve our profitability.

-２１-

Kyoritsu Maintenance FY3/08 Earnings Update

In our real estate development business, we will continue to focus our efforts upon developing traditional
dormitories, Dormir studio type condominium dormitories, and business and resort hotels with an eye tomaintaining profitability amidst the trend for increases in land costs, which is making the development environment
difficult.
In our other business, we will re-examine the roles of all companies within our Group to identify and extract further
synergies.
With regard the development of facilities, not only will we continue to our efforts to increase our facilities throughlong-term lease contracts and acquisition of our own facilities, but we will also sell some of our self-owned
facilities to investors while retaining the management contracts for these facilities. Through the implementationof this diversified strategy we will be able restrain growth in interest bearing debt, maintain a healthy financial
position, and improve our return on investment while securing adequate numbers of rooms for our residents. Thisin turn should allow us to improve profitability through the quick recovery of investments.
Each year our management identifies certain themes to pursue in our business strategy, and last year we chose astrategy of “excel” (To overcome obstacles and to break free of impediments to progress.) to create a high level ofquality control which permeates all of our services.

During the coming year we have chosen the term “progress”

as the theme of our business strategy (To steadily progress, and to achieve our goals.).
will steadily advance our business strategy.

As part of this strategy we

Also we are conscious of “the role we are obligated to fulfill insociety” and we therefore seek to create a corporate culture and develop new business areas by working together
with our customers and using our unique business resources without being distracted by short-lived trends.

-２２-

Kyoritsu Maintenance FY3/08 Earnings Update

4. Consolidated Financial Statements(1) Consolidated Balance Sheet

Item
AssetsI Current assets
1. Cash and deposits
2. Notes and accounts receivables
3. Marketable securities
4. Inventories
5. Deferred tax assets
6. Others
Doubtful account reserves
Total current assets
II Fixed assets
1.
Tangible fixed assets(1) Buildings and structures
Aggregated depreciation(2) Land(3) Buildings, structures in trust
Aggregated depreciation(4) Real estate trust(5) Construction in progress(6) Others
Aggregated depreciation
Total tangible fixed assets
2.
Intangible fixed assets(1) Goodwill(2) Others
Total intangible fixed assets
3.
Investments and other assets(1) Investment securities(2) Long-term loans(3) Guaranteed deposits(4) Security deposits(5) Deferred tax assets(6) Others
Doubtful account reserves
Total investments and other assets
Total fixed assets
Ⅲ
Deferred assets
Bond issuance expense
Total deferred assets
Total assets

Units:
Previous Term FY3/07(March 31, 2007)
Value
Share %

14,333
2,899
28
1,939
831
4,913
-43
24,901

27,538-7,092
8,453
-384

3,333
-1,966

9,193
2,973
79
3,030
834
3,903
-46
19,96722.6

34,130-8,912

20,445
19,787

6,810
-326

8,068
4,902
6,255
1,367
60,827

Current Term FY3/08(March 31, 2008)
Value
Share %

4,347
-2,678million yen
Change17.3-4,93325,21822,563
6,484
2,558
8,318

55.0

1,669
66,812

57.7

5,984

2.4

－
2,910
2,910

2.5

272

5,510
849
6,429
5,327
1,672
2,409
-101
22,09585,562

20.0
77.4

6,879
795
6,974
6,453
2,542
2,471
-110
26,00595,728

22.5
82.7

3,909
10,16643
43
110,507

0.0
100.0

41
41
115,738

0.0
100.0

-1
5,230

92
2,545
2,638

-２３-

Kyoritsu Maintenance FY3/08 Earnings Update

Item
Liabilities
Current liabilities
Ⅰ
1. Accounts payable
2. Short term debt
3. Redeemable portion of bond within one year
4. Accrued corporate and other tax
5. Deferred tax liabilities
6. Deposits
7. Bonus reserves
8. Bonus reserves for directors
9. Compensation for completed work reserves
10. Others
Total current liabilities
Fixed liabilities
Ⅱ
1. Bonds
2. Long-term debt
3. Long-term lease payables
4. Long-term guarantees received
5. Deferred tax liabilities
6. Retirement benefit reserves
7. Director retirement reserves
8. Others
Total fixed liabilities
Total liabilities(Net assets)
Shareholders' equity
Ⅰ
1. Capital stock
2. Capital reserves
3. Retained earnings
4. Treasury stock
Total shareholders' equity
Valuation, translation gains
Ⅱ
1. Other marketable security valuation gains
2. Gains from deferred hedges
Total valuation, translation gains
Ⅲ
Minority holdings
Total net assets
Total liabilities, net assets

Previous Term FY3/07(March 31, 2007)
Value
Share

Current Term FY3/08(March 31, 2008)
Value
Share

2,989
12,311
1,600
2,349
3
11,658
799
122
82
5,424
37,342

33.8

3,093
20,235
1,760
1,035
－
11,972
1,072
167
24
4,757
44,119

38.1

6,777

14,90722,364
1,069
4,146
877
1,033
395
1,275
46,06883,411

41.7
75.5

14,731
20,773
1,014
4,171
830
1,058
403
1,096
44,07988,19938.1
76.2-1,989
4,788

5,128
5,935
16,191-348
26,907

4.6
5.4
14.7
-0.4
24.3

5,136
5,943
18,422-1,46628,036

4.4
5.1
15.9
-1.2
24.2

40
41
147
27,096
110,507

0.1
0.1
0.1
24.5
100.0

-770
－
-770
272
27,538
115,738

-0.6
－
-0.6
0.2
23.8
100.0

8
8
2,231
-1,118
1,128
△
-810
0
-811
124
442
5,230

-２４-

ChangeKyoritsu Maintenance FY3/08 Earnings Update(2) Consolidated Income Statement

Items
Ⅰ
Ⅱ
Ⅲ
Ⅳ

Ⅴ

Ⅵ

Ⅶ

Net sales
CGS
Gross income
SG&A
Operating income
Non-operating income
1. Interest received
2. Dividend received
3. Marketable securities sale
4. Deposit returns
5. Minority shareholding profit
6. Others
Non-operating expense
1. Interest payment
2. Bond issuance expense
3. Others
Ordinary income
Extraordinary income
1. Marketable securities sale
2. Fixed asset sale profit
3. Liquidation gain on investment securities
4. Others
Extraordinary loss
1. Impairment accounting loss
2. Marketable securities valuation loss
3. Others
Net income before taxes
Corporate and other taxes
Adjustment for taxes
Minority shareholding profits
Net income

Units:

million yen

Previous Term
From April 1, 2006
to March 31, 2007
Value
Share

Current Term
From April 1, 2007
to March 31, 2008
Value
Share

66,28754,044
12,242
8,496
3,745

75,60661,422
14,183
9,691
4,492

100.0
81.2
18.8
12.9
5.9

9,319
7,377
1,941
1,195
746

799

1.1

-218

1,123
4,167

1.5
5.5

148
380

1,859

2.5

120

645
5,381

0.9
7.1

-26
526

2,533
106
2,740

3.4
0.1
3.6

113
85
327

45
246
160
157
24
383
725
16
234

38
51
1,605
43
547
－
124
3,148
-727

1,017

975
3,787

1,739

100.0
81.5
18.5
12.8
5.7

1.5

1.5
5.7

2.6

672
4,854

1.0
7.3

2,420
21
2,413

3.7
3.6

-２５-

302
62
－
162
28
242
866
12
245

139
1,350
－
369
370
235
39
2,895
-362

ChangeKyoritsu Maintenance FY3/08 Earnings Update(3) Change in Consolidated Shareholder's Equity Statement (Summary)
FY3/07 (From April 1, 2006 to March 31, 2007)

As of March 31, 2006

Capital5,051

Changes in the fiscal year
New shares resulting from CB, stock
option exercise
Dividends from retained earnings (note)
Dividends from retained earnings
Director bonuses (note)
Net income
Rise from increase in consolidated subsidiaries
Treasury stock acquisition
Treasury stock disposal
Other changes
Total changes during the quarter

77

154

77
5,128

77
5,935

1,510
16,191

Valuation, Translation Gains
Valuation,
OthersDeferredTranslation
249
―
249

Changes in the fiscal year
New shares resulting from CB, stock
option exercise
Dividends from retained earnings (note)
Dividends from retained earnings
Director bonuses (note)
Net income
Rise from increase in consolidated subsidiaries
Treasury stock acquisition
Treasury stock disposal
Other changes
Total changes during the quarter
As of March 31, 2007

76
-222
-223
-157
2,413
-299

As of March 31, 2007

As of March 31, 2006

Shareholders' Equity
Capital Reserves Retained Earnings Treasury Stock Shareholders' Equity
5,857
14,680-326
25,263

Minority
Holdings
179

-22
-

-222
-223
-157
2,413
-299
-22
1

-21
-348

1,643
26,907

Total Net Assets
25,691
154

-208
-208
40

-

(Note) Allocation of profits determined in
the annual shareholders meeting held in

-２６-

-207
-207
41

-31
-31
147

-222
-223
-157
2,413
-299
-22
1
-239
1,404
27,096

Kyoritsu Maintenance FY3/08 Earnings Update

FY3/08 (From April 1, 2007 to March 31, 2008)

As of March 31, 2007
Changes in the fiscal year
New shares resulting from CB, stock
option exercise
Dividends from retained earnings
Director bonuses
Net income
Rise from increase in consolidated subsidiaries
Treasury stock acquisition
Treasury stock disposal
Other changes
Total changes during the quarter

Capital5,128

Shareholders' Equity
Capital Reserves Retained Earnings Treasury Stock Shareholders' Equity
5,935
16,191-348
26,907

8

7

16
-536
2,740
26

8
5,136

As of March 31, 2008

8
5,943

2,231
18,422

Valuation, Translation Gains
OthersDeferred
Valuation,
40
41

As of March 31, 2007
Changes in the fiscal year
New shares resulting from CB, stock
option exercise
Dividends from retained earnings
Director bonuses
Net income
Rise from increase in consolidated subsidiaries
Treasury stock acquisition
Treasury stock disposal
Other changes
Total changes during the quarter
As of March 31, 2008

-1,119
-

-536
2,740
26
-1,119--1,118-1,466

1,128
28,036

Minority
Total Net Assets
Holdings
147
27,096
16

-810
-810
-770

0
0
―

-２７-

-811
-811
-770

124
124
272

-536
2,740
26
-1,119-686
442
27,538

Kyoritsu Maintenance FY3/08 Earnings Update

Units: million yen(4) Consolidated Cash Flow Statement

Items
I Cash flows from operating activities
Net income before taxes and other adjustments
Depreciation and amortization
Fixed asset liquidation loss
Impairment loss
Change in bonus reserves
Change in director bonus reserves
Interest and dividends received
Interest payment
Liquidation of marketable securities
Valuation loss on marketable securities
Liquidation loss on marketable securities
Change in receivables
Change in trust benefit
Change in accounts due
Change in inventories
Change in accounts payable
Change in prepayment received
Change in deposits
Bonus payment to directors
Change in deposits from customers
OthersSubtotalInterest and dividends received
Interest payment
Corporate tax returns
Corporate tax payment
Cash flows from operating activities
II Cash flows from investing activities
Change in time deposits
Acquisition of marketable securities
Sales of marketable securities
Liquidation of marketable securities
Acquisition of tangible fixed assets
Tangible fixed assets liquidation income
Intangible fixed asset acquisition
Long term prepayments
Loans extended
Loans recovered
Rental deposits paid
Rental deposits recovered
Shares acquired from subsidiaries
OthersCash flows from investing activities
III Cash flows from financing activities
Increase in short-term debt
Increase in long-term debt
Repayment of long-term debt
Income from bond issued
Payment for bond redeemed
Acquisition of treasury stock
Dividend payment
Dividend payment to minority shareholder
OthersCash flows from financing activities
IV Translation gains for cash and equivalents
V Net change in cash and equivalents
VI Cash and equivalents at term start
VII Addition to cash from consolidation changes
VIII Cash and equivalents at term end

Previous Term
From April 1, 2006
to March 31, 2007
Value

Current Term
From April 1, 2007
to March 31, 2008
Value

4,854
2,101
―
547
-191
122
-291
725
-198
―
-1,605
654
-293
410
-641
-1,240
544
60
-164
-114
367
5,647
280
-724
―
-1,635
3,568

5,381
2,927
-1,338
370
261
―
-365
866
-193
235
―
17
100
-38
-1,089
412
335
―
―
-143
341
8,082
344
-934
58
-4,196
3,355

526
825
-1,338
-176
453
-122
-73
141
4
235
1,605
-636
393
-449
-448
1,652
-208
-60
164
-29
-25
2,435
63
-209
58
-2,561-213―-4,114
6,620
1,761-15,404
8,787
-522
-414
-480
517
-1,016287―
325-3,654-500-4,937
1,498―-13,082
4,982
-184
-430
-559
528
-2,141
1,094
-23
152
-13,604-500-823-5,122-1,761
2,321-3,804
337
-15
-78
11
-1,124806-23-173-9,950-10,540
12,360-10,355
11,584-1,440
-22
-445
-27
-79
1,034
―
949
12,236535
13,721

8,220
10,012-11,900
1,589-1,600-1,119
-535
-24
-52
4,590
―
-5,65913,721―
8,061

18,760-2,348-1,544-9,995-160-1,096
-89
2
26
3,555
―
-6,6091,484-535-5,659-２８-ChangeValueKyoritsu Maintenance FY3/08 Earnings Update

Segment Information(1) Information by Business Segment
FY3/07 (From April 1, 2006 to March 31, 2007)
Dormitories Hotels
Ⅰ

Sales, Operating income
Sales（1）External sales
Internal sales（2）
Special accounts
Total
Operating expense
Operating income
Ⅱ Assets, depreciation,other outlays
AssetsDepreciation
Impairment accounting
Capital outlay

Contracted

Food
Service

Construction

Other

Total

33,396

13,274

8,257

2,177

6,689

2,491

66,287―66,287

50

153

3,423

2,153

8,562

1,527

15,87015,870―33,447
28,107
5,340

13,42814,556-1,127

11,68011,055
625

4,330
4,504
-174

15,251
14,872
379

4,018
3,764
254

82,15776,8605,297

15,87014,3191,551

66,28762,541
3,745

39,100780
148
997

41,926
1,101―
14,963

12,909
127
―
408

1,627
42
204
31

6,900
21
―
20

5,405 107,870
38
2,113
204
558
19 16,440

2,636
11
11
980

110,507
2,101
547
15,460Contracted

Food
Service

Construction

FY3/08 (From April 1, 2007 to March 31, 2008)
Dormitories Hotels
Ⅰ

Sales, Operating income
Sales（1）External sales
Internal sales（2）
Special accounts
Total
Operating expense
Operating income
Ⅱ Assets, depreciation,other outlays
AssetsDepreciation
Impairment accounting
Capital outlay(Units: Million yen)Company Consolidated
Wide

Other

Total

(Units: Million yen)Company Consolidated
Wide35,65520,180

8,666

2,523

5,758

2,822

75,606―75,606

74

176

3,431

2,195

7,771

1,659

15,30915,309―35,73030,2695,461

20,357
20,813-456

12,097
11,517
579

4,718
4,689
28

13,52913,156
373

4,482
4,242
240

90,916
84,6896,226

15,30913,575
1,734

75,606
71,114
4,492

35,121
833
267
3,556

52,447
1,882
98
10,193

13,127
137
―
38

1,613
22
8
10

6,499
27
―
576

5,755 114,563
39
2,942
―
374
1 14,376

1,174
15
4
1,194

115,7382,927
370
13,182-２９-