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

Fiscal Year March 2011
Consolidated Earnings Results Update
May 2011

1

Kyoritsu Maintenance Consolidated Financial Data at a Glance
100,000

Consolidated Sales and YY Change

35%

90,00030%
80,00025%

70,00060,00020%

50,00015%

40,00030,00010%

20,0005%
10,00000%3/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12E

m

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

-30%
3/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12E

m

Consolidated Net Income and YY Change
3,000

80%
60%

2,500

40%
2,000
20%
1,500
0%
1,000
-20%
500

-40%

0
m

-60%
3/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11 3/12E(Units: Million Yen)2

160,000
140,000
120,000
100,000
80,00060,00040,00020,00003/99 3/00 3/01 3/02 3/03 3/04 3/05 3/06 3/07 3/08 3/09 3/10 3/11
total assets

net assets (shareholders' equity)(Units: Million Yen)

3

(Units: Million Yen)

4

3/01
37,884
7,834
2,828
2,643
1,147

18,10047,76865,86727,031
23,76150,792
15,073

3/02
50,065
10,221
3,908
3,580
1,822

0.1%
5.5%
6.1%
8.5%
11.9%

22,13849,49771,64731,61023,14654,755
16,824

3/03
50,10910,785
4,149
3,885
2,039

19.5%
7.4%
7.5%
4.0%

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

22,122
55,71577,86529,37429,43358,806
18,935

3/04
54,081
10,541
4,004
4,060
2,138

11.3%
2.7%
24.3%

18.8%
7.6%
7.6%
4.0%

3/05
58,014
10,894
4,407
4,411
2,343

18.7%
7.3%
7.6%
3.2%

18.5%
5.6%
5.7%
3.6%

9.9%
2.4%
23.8%

18.8%
5.9%
5.5%
3.6%

14.1%
15.9%
19.9%
10.0%
13.6%

7.4%
1.7%
23.0%

18.8%
6.5%
5.5%
2.6%

8.9%
9.3%
19.1%
8.2%
-22.2%

4.2%
0.9%
21.4%

16.5%
4.8%
3.6%
1.5%

2.7%
-10.0%-24.6%-33.2%-41.2%

3.5%
0.7%
21.3%

18.1%
5.4%
3.9%
1.2%

0.6%
10.4%
14.3%
9.8%
-16.1%

23,350 24,901 19,967 21,852 23,104 36,783
74,681 85,562 95,728 103,891 115,980 104,428
98,047 110,507 115,738 125,793 139,209 141,314
44,039 37,342 44,119 41,615 41,499 50,546
28,316 46,068 44,079 55,266 67,956 60,600
72,355 83,411 88,199 96,882 109,455 111,147
25,512 27,096 27,538 28,911 29,753 30,166

3/06
63,085
11,783
4,611
4,824
2,011

8.9%
2.2%
24.5%

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%

23,25462,336
85,62031,58533,07764,663
20,788

7.9%
2.1%
26.0%

na
na
na

na
5.3%
3.8%
1.6%

8.3%
na
5.2%
5.8%
35.8%

3/11
3/12E
84,983 92,000
15,408
na
4,610
4,850
3,308
3,500
1,052
1,430

3/00
36,788
7,173
2,369
2,281
907

23,79340,47864,32728,51322,06450,577
13,747

32.2%
30.5%
38.2%
35.4%
58.8%

21.5%
8.3%
7.8%
4.1%

11.3%
2.7%
24.3%

3/10
84,513
13,957
4,033
3,012
1,254

Consolidated Income Statement
net sales
gross income
operating income
ordinary income
net income

19,90029,86749,88019,731
16,97736,707
13,169

3.0%
9.2%
19.4%
15.9%
26.5%

20.4%
7.8%
7.2%
3.6%

12.1%
2.8%
23.5%

3/09
82,303
15,507
5,349
4,510
2,133

Consolidated Balance Sheetcurrent assets
fixed assets
total assets
current liabilities
fixed liabilities
total liabilities
net assets (shareholders' equity)

13.3%
9.0%
-3.9%
3.5%
6.7%

20.7%
7.5%
7.0%
3.0%

12.1%
2.8%
22.9%

3/08
75,60614,183
4,492
4,167
2,740

yy change
net sales
gross income
operating income
ordinary income
net income

19.5%
6.4%
6.2%
2.5%

8.3%
1.8%
21.4%

3/07
66,287
12,242
3,745
3,787
2,413

margins
gross margins
operating margins
ordinary margins
net margins

6.9%
1.8%
26.4%

na
na
na
na
na
na
na

other benchmarks
ROE
ROA
equity ratio
Units: million yen

5Fiscal Year March 2011 Consolidated Earnings Announcement
May 13, 2011
Tokyo Stock Exchange

Company Name:
Kyoritsu Maintenance Co., Ltd.
Stock Code:9616
URL: http://www.kyoritsugroup.co.jp/
Director:
Mitsutaka Sato, President
Contact:
Takumi Ueda, Vice President
Tel: +81-3-5295-7778
General Shareholders Meeting (Anticipated):
June 28, 2011
Financial Report Filing Date (Anticipated):
June 28, 2011
Dividend Payment Date (Anticipated):
June 29, 2011
Earnings Presentation Document: available
Earnings Presentation Meeting: available for institutional investors(All figures of less than one million yen are rounded down to the nearest digit)

1. Fiscal Year March 2011 Consolidated Earnings (From April 1, 2010 to March 31, 2011)(1) Consolidated Earnings (Aggregated)
Net Sales

Operating Income

Million yen% yyMillion yen

Ordinary Income% yyMillion yen

Net Income% yyMillion yen

% yy

1,052
1,254

-16.1
-41.2

84,983
0.6
4,610
14.3
3,308
9.8
FY3/11
84,513
FY3/10
2.7
4,033
-24.6
3,012
-33.2
(Note) Comprehensive income: 1,209 million yen (-15.5% yy) in FY3/11, 1,430 million yen (--%) in FY3/10
EPS

Fully Diluted EPS
YenOrdinary Income toTotal Asset Ratio

ROE

Yen

%

FY3/11
73.29
61.24
3.5
FY3/10
87.33
71.32
4.3
(Reference) Equity accounting method profit: - yen in FY3/11, - yen in FY3/10

OperatingMargin
%

%

2.4
2.3

5.4
4.8

(2) Consolidated Financial Position
Total Assets

Net Assets

Million yen

Equity Ratio

Million yen

FY3/11
141,314
30,166
FY3/10139,20929,753(Reference) Shareholders’ equity: 30,164 million yen in FY3/11, 29,518 million yen in FY3/10

Book Value per Share
％

Yen

21.3
21.2

2,099.90
2,054.83(3) Consolidated Cash Flow Conditions
Operating Cash Flow

Investing Cash Flow

Financing Cash FlowMillion yen

Million yen

Million yen

Million yen

5,226
5,083

8,338
-16,236

1,871
11,682

26,898
11,460FY3/11
FY3/10Cash and Equivalents at Term End

2. Dividend Conditions
Registry Date

End
1Q
Yen

Dividends per Share
End
End
End
3Q
2Q
Year
Yen

19.00
19.00
19.00

FY3/10FY3/11
FY3/12 (Projected)

Yen

Full
Year

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

Dividend to Net
Asset Ratio(Consolidated)

Yen

Yen

Million Yen

%

%

19.00
19.00
19.00

38.00
38.00
38.00

545
545
―

43.5
51.8
38.2

1.9
1.8
―

3. Fiscal Year March 2012 Consolidated Earnings Projection (April 1, 2011 to March 31, 2012)
Net SalesFirst Half
Full Year

Operating Income

Ordinary Income

Million Yen%yy

Million Yen%yy

Million Yen%yy

Million Yen

%yy

Yen

43,30092,000

1.2
8.3

2,580
4,850

-9.4
5.2

1,780
3,500

-18.7
5.8

720
1,430

14.0
35.8

50.12
99.55

6

Net Income

EPS

4. Others(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 preparation of our consolidated
financial statements:① Changes accompanying revisions in accounting standards: Yes② Other changes: None
(3) Shares issued (Common stock)① Shares issued as of term end (including treasury stock): 15,125,582 at end FY3/11, 15,125,582 at end
FY3/10② Treasury stock as of term end: 760,687 at end FY3/11, 760,215 at end FY3/10③ Average number of shares outstanding: 14,365,167 during FY3/11, 14,365,837 during FY3/10(Reference) Parent Earnings Results
1. Fiscal Year March 2011 Parent Earnings (From April 1, 2010 to March 31, 2011)(1) Parent Earnings
Sales
FY3/11
FY3/10Ordinary Income

Net Income％yyMillion yen％yyMillion yen％yyMillion yen％yy69,31865,498

5.8
2.8

3,902
3,181

22.7
-21.8

2,711
2,421

12.0
-32.8

927
1,162

-20.3
-33.1

EPS
FY3/11
FY3/10Operating Income

Million yen

Fully Diluted EPS
Yen

Yen

64.54
80.93

53.93
66.09

(2) Parent Financial Position
Total Assets

Net Assets

Million yen

Equity Ratio

Million yen

FY3/11
125,600
28,185
FY3/10121,790
27,664(Reference) Shareholders’ equity: 28,185 million yen in FY3/11, 27,664 million yen in FY3/10

Book Value per Share
％

Yen

22.4
22.7

1,962.14
1,925.75

2. Fiscal Year March 2012 Parent Earnings Projection (April 1, 2011 to March 31, 2012)
Sales
First Half
Full Year

Ordinary Income

Net Income

EPS

Million Yen%yy

Million Yen%yy

Million Yen

%yy

Yen

36,50074,200

1.9
7.0

1,570
2,850

-21.2
5.1

710
1,330

7.8
43.5

49.43
92.59

* Regarding the implementation of audit procedures in the display of this document:This earnings announcement is exempted from the Financial Instruments and Exchange Act founded in the audit
procedures, and at the time of the disclosure of this earnings announcement the auditing procedures for the financial
statements in this document have not been completed.
* Explanation of appropriate usage of earnings estimates and other notes:
All earnings estimates and forward looking statements in this document are based on the best information available andrational decisions of management at the time of its preparation, and actual earnings may diverge largely from thoseestimates and forward looking statements put forward in this document due to various unforeseen factors.
Moreover, for information regarding earnings estimates and the assumptions upon which they are based, and the usagesof these earnings estimates, please refer to the section “Analysis of Business Results” on page 10.

7

Index1. Business Results(1) Analysis of Business Results(2) Analysis of Financial Conditions(3) Our Basic Policy Regarding the Distribution of Profits in the Current and Next Terms(4) Business Risks
2. Corporate Structure
3. Management Policy
4. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Income, Comprehensive Income Statements(3) Consolidated Cash Flow Statements(4) Assumptions Regarding Going Concern(5) Business Segment Information

8

9
9
14
16
16
18
19
20
20
22
25
26
26

1. Business Results(1) Analysis of Business Results① Overview of Our Earnings Performance(Consolidated Earnings)(Units: Million Yen)

Pervious Term

Current Term

YY Change

FY3/10FY3/11(%)

Net sales

84,51384,983

0.6

Operating Income

4,033

4,610

14.3

Ordinary Income

3,012

3,308

9.8

Net Income

1,254

1,052

-16.1

During the current fiscal year, the Japanese economy continued to be negatively affected by weak consumption andemployment trends, but economic stimulus and improvement in exporting companies’ earnings helped to put it back on apath to recovery. Against this backdrop, the Great Eastern Japan Earthquake that devastated Japan in March acted as ablow to the Japanese economy and raised considerable concern over its future. Furthermore the prolonged disasterrecovery and rolling power outages are impacting consumer spending and making forecasting the future difficult.
Kyoritsu Maintenance also incurred damages to some of its facilities in the Sendai region, but there were no injuries toeither our customers or employees at our facilities affected by the disaster. However, our hotel business suffered fromnumerous cancellations on a nationwide basis resulting from the earthquake and related disasters.
Against this backdrop and in our main dormitory business, we were able to form new relationships with new four year
universities for student dormitories. Furthermore we sought to cover the weakness we encountered at the start of thecurrent term by promoting aggressive marketing of new products including monthly lease contracts for corporate training
and capturing foreign students dormitories from the fall (Japanese school year normally starts in spring.) to raise our
occupancy rates.
With regards to our hotel business, profitability improved by a large margin as we focused upon strict cost management,
and as the occupancy rates of our Dormy Inn business hotels continued on a recovery trend and as our resort hotels
received high ratings from our customers.
Consequently, sales rose by 0.6% or 469 million yen year-over-year to 84,983 million yen. The improvements in
profitability allowed operating and ordinary incomes to rise by 14.3% and 9.8% year-over-year to 4,610 and 3,308
million yen respectively.
Furthermore when the negative impact of the earthquake disaster that depressed ordinary income by 765 million yen isconsidered, our earnings would have approached our outstanding earnings estimates.
With regards to net income, the implementation of asset retirement obligation accounting standards required us to incur a
696 million yen loss for asset retirement at the extraordinary level. Also the earthquake disaster also contributed to aloss of 111 million yen at the extraordinary level. Consequently we saw a 16.1% year-over-year decline in net income to
1,052 million during the term under review.
In an effort to strengthen our overall structure, we fortified our financial balance by liquidating 140 million yen in realestate owned.

9

② Our Main Business Segment Performance
Dormitory Business (Student, Corporate, Domeal, Consigned Dormitories)
Previous Term
FY3/10Current Term
FY3/11% YY Change

Contracted Residents

28,64629,956

4.6

Sales (Million Yen)

38,18838,599

1.1

Operating Income (Million Yen)

5,024

5,842

16.3

With regards to the operating environment for the student dormitory business, students became more selective in theschools that they chose to attend due to the difficult employment environment, with an increase in the rate of students
advancing to universities and vocational schools and a tendency to favor schools and universities in major metropolitan
areas. Against this backdrop, we sought to fortify our relationships with existing client universities, vocational schools,
and preparatory schools, and formed relationships with new four year universities including the Shonan Institute ofTechnology, Nippon Sport Science University, Sagami Women’s University, Japan Women’s University, and others on
the back of our marketing efforts highlighting our unique features including “healthy food menus,” “safe andcomfortable facilities made possible through full time supervision.” Consequently we were successful in expanding theuser bases of our student dormitory facilities. As a result of these efforts the number of schools which use ourdormitories stood at 1,581, and the number of contracted residents and sales rose by 4.7% and 1.9% year-over-year to
18,180 residents and 23,001 million yen respectively.
In our corporate dormitory business, the operating environment was extremely severe with the number of the total
workforce declining by 0.4% year-over-year to 62.56 million and the number of new graduate hires falling by 23.5%
year-over-year to 725,000. Against this backdrop, our business trended relatively well while large lot contracts
decreased year-over-year, and the number of our contracted residents rose by 2.8% year-over-year to 7,722.
Consequently, the number of corporate clients using our dormitories stood at 1,203, and sales declined by 2.4% yearover-year to 9,126 million yen.
In our Domeal business we leveraged our expertise acquired in our student and corporate dormitory businesses to capture
demand from the diversifying needs of single students and workers by providing studio-type dormitory facilities andfacilities with commissaries and by having client schools and companies introducing residents to us. Consequently the
number of contracted residents rose by 7.4% year-over-year to 4,054 and sales grew by 2.7% year-over-year to 3,479
million yen.
In our consigned dormitory business, we manage corporate and school dormitory facilities on an outsourced basis, and
we endeavored to expand new orders by promoting our status “as Japan’s best dormitory operator.” Consequently, salesrose by 3.7% year-over-year to 2,991 million yen.
As a result of the above efforts, the number of dormitory facilities rose by 4 to 412 (excluding consigned facilities),
contracted residents grew by 811 to 31,660, and sales increased by 1.1% year-over-year to 38,599 million yen. With
regards to expenses, strict management of costs on a facility by facility basis, allowed operating income to rise by 16.3%
year-over-year to 5,842 million yen. Moreover we conducted more detailed marketing activities and strategies to reduce
vacant rooms and bring about a recovery in stagnant occupancy rates. Consequently occupancy rates rose by 2.4%
points year-over-year to 95.3% at the start of the next term.

10Hotel Business (Dormy Inn, Resort Hotels)(Units: Million Yen)

Previous Term
FY3/10
Sales

Current Term
FY3/11% YY Change

26,89830,275

12.6

-346

336

―

Operating Income

In our Dormy Inn (Business Hotel) business, we sought to differentiate our Company by reflecting the needs of each of
our customers in Kyoritsu’s unique hospitality and services amidst the backdrop of reduced service levels within theoverall industry. In particular we focused upon the main themes of providing customers with “large hot spring typebathing facilities” and “good tasting breakfast menus,” in addition to provision of “late night soba noodle” and otherdetailed services targeting not only the needs of corporate users but also those of pleasure travelers.
Against this backdrop, the six facilities opened in the previous term combined with the five facilities opened in thecurrent term (Including Natural Hot Springs Shirakaba no Yu Dormy Inn Obihiro, Natural Hot Springs Kamui no Yu
Dormy Inn Asahikawa, Natural Hot Springs Hanahotaru no Yu Dormy Inn PREMIUM Kyoto Ekimae, Dejima no Yu
Dormy Inn Nagasaki, and Natural Hot Springs Kanmon no Yu Dormy Inn PREMIUM Shimonoseki.) to raise sales by
18.8% year-over-year to 14,369 million yen.
In our resort hotel business, we sought to satisfy our customers by providing them with “high quality resort styleaccommodations at reasonable prices” and “comforting accommodations.” The “Kusatsu Hot Springs Yuyado Tokino
Niwa, Oyado Konoha” newly opened during the current term was received favorably by various media. Furthermore wesought to raise the occupancy rates at our existing facilities by fortifying our product lineup and strengthening ourmarketing strategies. Moreover we sought to differentiate ourselves by focusing upon our high cost performance tocustomers. Consequently sales rose by 7.4% year-over-year to 15,906 million yen.
As a result of these efforts, we were able to increase the total number of our hotel facilities by 6 to 59 and the number ofrooms by 1,054 to 8,906, and sales rose by 12.6% year-over-year to 30,275 million yen. Despite nationwide
cancellations resulting from the earthquake disaster that occurred on March 11, efforts to expand our sales channel andcontinued strict cost management carried over from the previous term allowed an operating income of 336 million yen to
be realized, marking a large improvement from the operating loss of 346 million yen recorded in the previous term.
Contracted Services Business(Units: Million Yen)
Previous Term
FY3/10

Sales
Operating Income

Current Term
FY3/11% YY Change

11,61911,755

1.2

176

185

4.9

The contracted services business includes maintenance and management services for both offices and residences, rentalof consigned buildings, and parking lot management. In particular the building maintenance business suffered fromsevere operating conditions, with conditions in the greater Tokyo metropolitan area worsening due to demands for pricecuts, reductions in service levels, and cancelation of contracts due to consolidation of service providers. Against the
backdrop, large contract cancellations in the consigned building rental business that appeared in the previous term havebottomed and now occupancy rates are on the recovery. However declines in rental prices have prevented a full scale
recovery in this business’ performance. Consequently contracted services sales and operating income rose by 1.2% and4.9% year-over-year to 11,755 and 185 million yen.

11

Food Service Business(Units: Million Yen)
Previous Term

Current Term

FY3/10FY3/11Sales% YY Change

3,752

4,059

8.2

4

-208

―

Operating Income

In the food service business, consumer spending contracted a even further with a shift towards lower pricing,
contributing to a worsening in the operating environment. With these conditions in place, we continued to fortify ourmanagement of variable costs from the previous term and effectively realized some cost reductions. However the
opening costs of new restaurants caused losses to be realized at the operating level of 208 million yen despite an 8.2%
year-over-year increase in sales to 4,059 million yen.
Construction Business(Units: Million Yen)
Previous Term
FY3/10

Sales

Current Term
FY3/11% YY Change

9,339

7,451

-20.2

365

225

-38.3

Operating Income

While signs of an improvement in the real estate market appeared, our Group development plans have been carefully
selected and sales of our construction business declined. Against this backdrop, we promoted strict management of costs
but higher construction materials costs contributed to a 20.2% year-over-year decline in sales to 7,451 million yen, andoperating income fell by 38.3% year-over-year to 225 million yen.
Other Business

Sales
Operating Income(Units: Million Yen)
Previous Term

Current Term

FY3/10FY3/11% YY Change

4,521

3,286

-27.3

151

-37

―

Our other business is comprised of the wellness life (management of senior citizen housing), single life support services
and insurance agency business, advertising agency services, rental property brokerage and management, comprehensive
human resources, financing services, and administrative outsourcing services. Sales of this segment fell by 27.3% yearover-year to 3,286 million yen and operating losses of 37 million yen were recorded.

12

③ Earnings Projections for the Coming Term
Consolidated Earnings(Units: Million Yen)

Current Term

Next Term

FY3/11

FY3/12% YY Change

Net Sales

84,98392,000

8.3

Operating Income

4,610

4,850

5.2

Ordinary Income

3,308

3,500

5.8

Net Income

1,052

1,430

35.8

Non Consolidated Earnings(Units: Million Yen)
Current Term
FY3/11

Next Term
FY3/12% YY Change

Sales69,31874,200

7.0

Operating Income

3,902

4,100

5.1

Ordinary Income

2,711

2,850

5.1

927

1,330

43.5

Net Income

Due in part to the impact of the Great Eastern Japan Earthquake that struck during March, we anticipate thecontinuation of the severe operating environment with consumers becoming even more cautious in their spending
patterns and are concerned over the future of the Japanese economy. Against this backdrop, our Group hasreconfirmed its management policy of “contributing to society through the provision of high quality food andresidential services,” and will fortify our earnings and management structure to leverage the strength of our Group andto respond to various changes in the operating environment.
With regards to our earnings estimates for the coming fiscal year, in our dormitory business we saw a relatively strong
95.3% initial occupancy rate in April. This was made possible due to our ability to accurately assess the needs of ourresidents through our expansion in our facility network, which grew by 7 facilities and 689 rooms, bringing the total to
416 facilities and 32,062 rooms. Also we have implemented a strategy where we review and analyze the occupancy
rate conditions and control costs at each facility on an individual basis. Furthermore we will respond with proposals
that are even more flexible and cover a broader range of services by adding a consigned business division andleveraging our Group capabilities to respond to the expansion in the needs of our customer base.
In our hotel business, our Dormy Inn business hotel operations have been received strongly by our customers, and wehave opened them in various parts of Japan to provide “large hot spring type public baths” and “good tasting
breakfasts,” that capture demand from both business travelers as well as pleasure travelers. In our resort hotelbusiness, the earthquake disaster is expected to negatively impact consumer spending and demand to travel, but wewill continue our efforts to provide high quality services at each of our facilities with the themes of “high quality resort
style facilities at reasonable prices” and “comfortable accommodations” in mind. We will also maintain our endeavors
to strictly control costs and to become the best service provider in each region. Furthermore as part of our efforts tostrengthen our sales function, we are also considering expanding our Dormy Inn business hotels to overseas markets
and have newly established an overseas business expansion division.
Our contracted services business encountered a further worsening of pricing competition, along with revisions inservice contracts from our customers, demands for price reductions, and cancellation of contracts due to theconsolidation of the number of consigned service providers. Amidst these conditions, we will increase the trust of ourcustomers by aggressively promoting our expertise and know-how as a comprehensive service provider and offer ourcustomers high quality services to raise our competitive standing within the industry.
13With regards to our food service business, we will continue to focus our attention upon improving our profitability
through strict management of variable costs and developing products and services that meet high levels of customer
satisfaction.
In our construction business, we will continue to support the Kyoritsu Group development and new facility opening
plans, in addition to developing external clients and strictly managing costs.
In our other business we will focus upon developing a jointly conducted consigned services business for regional
government bodies called Public Kyoritsu Partnership (PKP). Furthermore we will separate our comprehensive
marketing division from our dormitory management division so that it can oversee the development of products andservices for our Group as a whole and conduct a wider based marketing strategy.
As a result of the above factors, we expect consolidated net sales, and operating, ordinary and net incomes to rise by
8.3%, 5.2%, 5.8%, and 35.8% year-over-year to 92,000, 4,850, 3,500, and 1,430 million yen respectively. On a nonconsolidated basis we anticipate sales and operating, ordinary and net incomes to rise by 7.0%, 5.1%, 5.1%, and 43.5%
year-over-year to 74,200, 4,100, 2,850, and 1,330 million yen respectively.
Furthermore, we expect the earthquake related disaster to contribute to losses in sales and operating and ordinary
incomes of 1,900, 1,030, and 1,030 million yen respectively.
(2) Analysis of Financial Conditions① Conditions of Our Assets, Liabilities, and Net Assets
At the end of the current term, total consolidated assets rose by 2,105 million yen from the end of the previous fiscal
year to 141,314 million yen. The main factor behind this increase was the rise in cash and equivalents.
Total liabilities also rose by 1,691 million yen from the end of the previous term to 111,147 million yen. An
increase in long term debt was the main factor behind this rise.
Net assets grew by 413 million yen from the end of the previous year to 30,166 million yen. The main factor behind
this increase was the rise in retained earnings.
Consequently net asset ratio rose by 0.1% point from the previous fiscal year to 21.3% .
② Cash Flow Conditions
During the current term, cash and equivalents rose by 15,437 million yen from the end of the previous fiscal year to26,898 million yen.
(Cash Flow from Operating Activities)
We saw an increase of 143 million yen in the net inflow from the previous year to 5,226 million yen in our operating
cash flow. Declines in accounts receivables and accounts payables were factors influencing operating cash flow.
(Cash Flow from Investing Activities)
Cash flow from investing activities improved by 24,575 million yen from the previous term to an inflow of 8,338
million yen. Sale of tangible fixed assets offset purchases of tangible fixed assets and contributed to this inflow.
(Cash Flow from Financing Activities)
We saw a 9,811 million decline from the previous term in the net inflow of cash in our financing activities to 1,871
million yen. Among the main factors behind this change were the repayment of short term debt and income fromthe issuance of a corporate bond.

14

(Reference) Trends in Our Cash Flow Indicators
FY3/07

FY3/08

FY3/09FY3/11

FY3/10Equity Ratio (%)

24.4

23.6

22.8

21.2

21.3

Equity Ratio, Market
Capitalization Based (%)

36.9

22.1

17.6

14.2

12.0

Cash Flow to Interest Bearing
Liability Ratio (%)

14.7

17.5

8.9

15.8

16.0

4.9

3.6

7.7

4.5

3.8

Interest Coverage Ratio

Equity Ratio: Shareholders’ Equity / Total Assets
Equity Ratio, Market Capitalization Based: Market Capitalization / Total Assets
Cash Flow to Interest Bearing Liability Ratio: Interest Bearing liabilities / Operating Cash Flow
Interest Coverage Ratio: Operating Cash Flow / Interest Payments
1.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.

15

(3) Our Basic Policy Regarding the Distribution of Profits in the Current and Next Terms
We consider the capital contributed by shareholders to be invaluable, and place a high priority on the distribution of
profits to our shareholders in line with our earnings performance. One of our goals is to maintain a stable level ofdividends over the long-term and we have established a target dividend payout ratio of over 20%. With regards todistribution of profits to shareholders during the current term, we expect to maintain the same full year dividend as theprevious term of 38 yen per share. In the future, we will endeavor to maintain a stable level of dividends while also
responding flexibly to reflect changes in our earnings. At the same time we also seek to retain a level of earnings thatwill give our management the flexibility to make necessary capital investments in response to changes in the market andto develop new businesses whenever appropriate.

(4) Business Risks
Below we note the important risk factors that maybe influence 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
under review.
① Our Sales Conditions
In our core dormitory business, we operate and manage various facilities with the goal of providing a highly relaxing
environment and experience to our residents, making them feel as if they were in their own home. In addition to ourefforts to strengthen our relationships with various schools to provide their students with room and board, we provide
flexible housing solutions to Japanese corporations, whose employee numbers change dramatically, by supplying themwith only the number of rooms they need to match the number of employees needing housing. But because ourdormitories are primarily leased from the owners of the facilities, we are able to provide flexible solutions as mentioned
above. At the same 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 atour Dormy Inn Hotels by providing various unique services and amenities such as extended-stay programs which help todifferentiate our facilities from our competitors. However we remain vulnerable to fluctuations and volatility incorporate demand caused by changes in the economy. In our resort hotel business, we are also subject to the volatility inoccupancy rates arising from weather related calamities such as typhoons, as well as from 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 which could result in a loss ofbusiness resulting from cancellations of outsourcing contracts for management of restaurants and cafeterias at golfcourses and corporate facilities. Therefore our Group 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 our intermediateterm management strategy, but the attainment of this growth is premised upon our ability to secure assets which can beused dormitories and hotels. In the development of these assets, we take our financial standing into consideration andseek 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 realestate market, volatility in asset prices, extreme declines in cash flows from our existing assets, and inability to proceed
as expected with development of assets due to volatility in the financial markets.

16

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 toperform 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 are at 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 “Opinion Brief 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” (Implementation Guidance Number
6) 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 andfinancial markets.
⑤ Important Contracts
The dormitories and hotels we operate are leased by our company from the owners of the assets under long-term leaseagreements ranging from 10 to 20 years. Some of these facilities have stipulations in their lease contracts that prohibit
the cancellation of the lease agreement prior the end of the lease term. Therefore weak trends in occupancy rates of thesemanaged assets could negatively affect their profitability, which in turn could negatively impact our overall earnings andfinancial position.
⑥ Our Dependence upon Interest Bearing Liabilities and the Influence of Interest Rate Trends
In our business we use bank debt in addition to our own capital, and our interest bearing liabilities ratio as a percentage
of our total assets stood at 59.1% at end fiscal year March 2011. As for our Group, we are pursuing a strategy of
reducing our dependence upon interest bearing liabilities, which includes the sale of some of our self-owned facilities toinvestors while retaining the management and operational contracts for these facilities. At the end of fiscal year March
2011, 90.8% of our interest bearing liabilities was fixed interest rates and we therefore are insulated from near termincreases in interest rates. However, our earnings still remain at risk of higher funding costs arising from increases ininterest rates over the longer term.

17

2. Corporate Structure
The Kyoritsu Maintenance Group consists of the parent company, 10 subsidiaries, and four affiliated companies. Our
main businesses consist of dormitories, hotels, contracted services, food service, construction business, and otherbusiness. The details of our businesses and the services provided by our various subsidiaries and affiliates are listed
below.
Business Segment

Business Description

Participating Companies

Dormitories

Student and corporate dormitories, and outsourced dormitory
management

Kyoritsu Maintenance Co., Ltd.
One other company

HotelsDormy Inn (Business hotels)
Resort hotels

Kyoritsu Maintenance Co., Ltd.
Six other companies

Contracted Services

Office building management businessResidential property management business

Builnet Co., Ltd.
One other company

Food Service BusinessRestaurant businessOutsourced catering business
Hotel restaurant outsourcing business

Kyoritsu Food Services Co., Ltd.

Construction Business

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

Kyoritsu Estate Co., Ltd.

Other Businesses

Wellness Life Business (senior citizen residence management
and operations)Single resident insurance and other lifestyle support services
Comprehensive human resources business
Financing business
Other related businesses

Kyoritsu Maintenance Co., Ltd.
Kyoritsu Trust Co., Ltd.
Japan Placement Center Co., Ltd.
Kyoritsu Financial Service Co., Ltd.
Two other companies

183. Management Policy(1) Our Basic Management Policy(2) Management Benchmarks and Our Intermediate to Long-Term Management Strategy(3) Key Management Issues
With regards to the above three issues, we have chosen to eliminate any explanation of them because there have been no
substantive changes made to them since our previous announcement in our fiscal year March 2009 earnings
announcement released on May 15, 2009.
For further details please refer to the earnings announcement report for fiscal year March 2009 at the following url.
(Kyoritsu Maintenance website)
http://www.kyoritsugroup.co.jp/05/index.html(Tokyo Stock Exchange Home Page: Search Function for Listed Companies)
http://www.tse.or.jp/listing/compsearch/index.html

19

4. Consolidated Financial Statement(1) Consolidated Balance Sheet(Units: Million Yen)
Previous Term FY3/10

Current Term FY3/11(March 31, 2010)(March 31, 2011)

AssetsCurrent assets
Cash and deposits
Notes, accounts receivable
Marketable securities
Real estate for sale
Uncompleted construction payment
Deferred tax assets
OthersDoubtful account reserves

12,59427,855

3,882
3

2,832
－

268
999

1,081
235

516
4,885

539
4,271

-44

-32

23,10436,78346,48544,559Depreciation, aggregated-13,311-14,231

Buildings, structures (net)33,17430,327

Land

28,62624,454

Buildings, structures in trust
Depreciation, aggregated

10,767-1,361

10,767-1,845

9,406

8,921

Land in trust
Construction in progress

2,558
6,396

2,558
3,342

OthersDepreciation, aggregated

6,520-4,523

7,170-5,488

1,997

1,681

82,15971,285

3,848

3,785

Total current assets
Fixed assets
Tangible fixed assets
Buildings, structures

Buildings, structures in trust (net)Others (net)Total tangible fixed assets
Intangible fixed assets
Others

3,848

3,785

Investments, other assets
Investment securities

Total intangible fixed assets

6,646

5,783

Long term loans
Security deposits

1,417
8,582

1,405
8,948

Deposits
Deferred tax assets

7,512
2,698

7,787
2,791

OthersDoubtful account reserves

3,315
-198

2,810
-169

Total investments, other assets

29,972

29,357

115,980

104,428

Bond issuance fees

124

101

Total deferred assets

124

101

139,209141,314

Total fixed assets
Deferred assets

Total assets

20

Previous Term FY3/10(March 31, 2010)

Current Term FY3/11(March 31, 2011)

Liabilities
Current liabilities
Notes, accounts payable

3,846

2,609

Short term debt
Bond, portion redeemable within 1 year

17,9371,890

17,945
11,640

Unpaid corporate taxes
Prepayments

581
11,932955
10,975

Bonus reserves
Director bonus reserves

623
147

581
128

Completed construction guarantee reserves
Construction work loss reserves

11
4

12
4

Others

4,524

5,694

Total current liabilities

41,49950,546

Bonds
Long term debt

19,38541,264

7,745
45,701Long term security deposits
Deferred tax liabilities

4,155
848

3,484
833

Retirement benefit reserves
Director retirement benefits reserves

1,199
339

1,223
313

－
762

155
1,143

Fixed liabilities

Asset retirement obligation
OthersTotal fixed liabilities

67,95660,600109,455

111,147

Shareholders’ equity
Capital

5,136

5,136

Capital surplus
Retained earnings

5,943
20,704

5,943
21,211

Total liabilities
Net assets

Treasury stock-1,470-1,470Total shareholders’ equity

30,31330,820

Other marketable security valuation difference

-795

-655

Total other comprehensive income, aggregated

Other comprehensive income, aggregated
-795

-655

Minority interests

235

1

Total net assets

29,75330,166

Total liabilities, net assets

139,209141,31421

(2) Consolidated Income Statement, Comprehensive Income Statement(Consolidated Income Statement)(Units: Million Yen)
Previous Term FY3/10(From April 1, 2009

Current Term FY3/11(From April 1, 2010

to March 31, 2010)

to March 31, 2011)

Net Sales

84,51384,983CGS

70,556

69,575Gross income

13,957

15,408

2,712
485

3,275
556

Bonus reserves provisions
Director bonus reserves provisions

152
147

136
128

Retirement benefit reserves provisions
Director retirement benefit reserves provisions

98
3

118
3

1,431
2,162

1,227
2,406

Doubtful account reserve provisions
Outsourcing expenses

68
867

37
926

Rent
Depreciation, amortization

281
188

278
219

Goodwill amortization
Others

18
1,305

86
1,395

Total SG&A

9,923

10,797

Operating income

4,033

4,610

73

73

Dividend income
Deposit redemption income

26
170

34
162

Subsidies
Others

－
170

129
180

Total non-operating income

441

581

1,153

1,364

Bond issuance fee amortization
Commissions

20
163

22
－

Others

125

496

1,462

1,883

3,012

3,308

SG&A
Payroll, bonuses
Employee benefits

Sales promotion expense
Commissions

Non-operating income
Interest income

Non-operating expense
Interest payment

Total non-operating expense
Ordinary income22

(Units: Million Yen)
Previous Term FY3/10

Current Term FY3/11(From April 1, 2009
to March 31, 2010)(From April 1, 2010
to March 31, 2011)

Extraordinary income
Marketable securities sale profit
Fixed asset sale profit

17
－

－
652

Government subsidies
Insurance policy redemption refunds

84
33

－
－

Others12108

Total extraordinary income

147

761

Fixed asset sale loss
Impairment loss

－
75

323
53

Marketable security valuation loss
Disaster related loss

330
－

153
111

Impact from implementation of asset retirement
obligation accounting standards－

696

Others37

142

Total extraordinary loss

443

1,481

Net income before taxes

2,716

2,588

Corporate, residence, enterprise taxes
Corporate tax adjustment

1,381
45

1,624
-105

Total taxes
Net income before adjustment for minority interests inincome

1,427

1,519

－

1,069

Extraordinary loss

Minority interests in income
Net income

23

34

16

1,254

1,052

(Consolidated Comprehensive Income Statement)(Units: Million Yen)
Previous Term FY3/10(From April 1, 2009

Current Term FY3/11(From April 1, 2010

to March 31, 2010)

to March 31, 2011)

Net income before adjustment for minority interests inincomeOther comprehensive income

－

1,069

Other marketable securities valuation difference－140

Total other comprehensive income

－

140

－

1,209

Comprehensive income of parent company
shareholders

－

1,192

Comprehensive income of minority shareholdings－

16

Comprehensive income(Details)

24

(3) Change in Consolidated Shareholder’s Equity Statement
Previous Term FY3/10(Units: Million Yen)
Current Term FY3/11(From April 1, 2009
to March 31, 2010)(From April 1, 2010
to March 31, 2011)

Shareholder’s equity
CapitalBalance at previous term end

5,136

5,136

Balance at current term end

5,136

5,136

Capital reserves
Balance at previous term end

5,943

5,943

Change in current term
Treasury stock elimination－-0

Total change in current term
Balance at current term end

－

-0

5,943

5,943

19,99520,704

-545
1, 54

-545
1,052

708

506

Retained earnings
Balance at previous term end
Change in current term
Dividends from retained earnings
Net income
Total change in current term
Total change in current term

20,704

21,211

Treasury stock
Balance at previous term end-1,468-1,470Change in current term
Treasury stock acquisition-1-0Treasury stock elimination－0

Total change in current term

-1-0Balance at current term end-1,470-1,470Total shareholder’s equity
Balance at previous term end

29,60730,313

-545

-5 5

1,254
-1

1,052
-0

Change in current term
Dividends from retained earnings
Net income
Treasury stock acquisition
Treasury stock elimination－0

Total change in current term

706

506

30,31330,820

Balance at current term end

25

(Units: Million Yen)
Previous Term FY3/10

Current Term FY3/11(From April 1, 2009
to March 31, 2010)(From April 1, 2010
to March 31, 2011)

Total other comprehensive income
Other marketable securities valuation difference
Balance at previous term end
Change in current term
Net change in current term of accounts otherthan shareholder’s equity
Total change in current term

-937

-795

141

140

141

140

Balance at current term end

-795

-655

Total other comprehensive income
Balance at previous term end

-937

-795

141

140

Change in current term
Net change in current term of accounts otherthan shareholder’s equity
Total change in current term

141

140

-795

-655

241

235

Net change in current term of accounts other thanshareholder’s equity

-6

-233

Total change in current term

-6

-233

235

1

28,91129,753

-545
1,254

-545
1,052

Treasury stock acquisition
Treasury stock elimination

-1
－

-0
0

Net change in current term of accounts other thanshareholder’s equity

134

-92

Balance at current term end
Minority shareholdings
Balance at previous term end
Change in current term

Total change in current term
Total net assets
Balance at previous term end
Change in current term
Dividends from retained earnings
Net income

Total change in current term
Balance at current term end

26

841

413

29,75330,166

(4) Consolidated Cash Flow Statement(Units: Million Yen)
Previous Term FY3/10(From April 1, 2009

Current Term FY3/11(From April 1, 2010

to March 31, 2010)

to March 31, 2011)

Cash flow from operating activities
Net income before taxes

2,716

2,588

4,068
243

4,278
244

－
－

-291
159

Change in bonus reserves
Interest, dividends received

-286
-100

-41
-108

Interest paid
Marketable securities valuation difference

1,153
330

1,364
153

Change in receivables
Change in inventories

-986
158

1,049
－

Change in payables
Change in prepayments received

651
241

-1,198-1,483

Change in unpaid consumption tax
Change in deposits received

-184
－

344
-146

Change in security deposits
Change in advanced revenues
Impact of implementation of asset retirement
obligation accounting standard
Others

-710
-143

-471
-143

－

696

347

718

Subtotal

7,499

7,710

Interest, dividends received
Interest payment

71-1,13080-1,371

Corporate, other tax returns
Corporate, other tax payment

43-1,40144-1,237

Cash flow from operating activities

5,083

5,226

Cash flow from investing activities
Acquisition of marketable securities-428-1,166

Sale of marketable securities
Acquisition of tangible fixed assets

261-12,418

1,698-2,870

Sale of tangible fixed assets
Acquisition of intangible fixed assets－-785

11,398－Acquisition of long term prepayments
Loans extended-486-1,648－-848

Loans recovered
Deposits, security deposits payments

732-2,277

1,067-1,478Return of deposits, security deposits
Acquisition of subsidiary shares

676
－

374
-311

Redemption of insurance policy
Others

－
136

685
-210

-16,236

8,338

Depreciation, amortization
Amortization of long term prepayments
Fixed asset impairment, sale loss
Amortization of security deposits

Cash flow from investing activities

27

(Units: Million Yen)
Previous Term FY3/10

Current Term FY3/11(From April 1, 2009
to March 31, 2010)(From April 1, 2010
to March 31, 2011)

Cash flow from financing activities
Change in short term debt
Long term debt

1,169
18,810-1,787
16,840

Repayment of long term debt
Bond issuance-11,329
6,905-10,607－

Bond redemption payment
Treasury stock acquisition-3,306-1-1,890
-0

-544
-19

-546
-9

Dividend payment
Dividend payment to minority shareholders

－

-126

11,682

1,871

Change in cash and equivalents

528

15,437

Cash and equivalents at term start

10,931

11,460Cash and equivalents at term end

11,46026,898OthersCash flow from financing activities(5) Assumptions Regarding Going Concern
Not applicable(6) Business Segment Informationa. Information on Our Various Business Segments
Consolidated Figures for FY March 2010 (From April 1, 2009 to March 31, 2010)(Units; Million Yen)
Dormitories

Contracted
Food Services Construction
Services

Hotels

Other

Total

Company
Wide

Consolidated

Sales, operating
incomeSales(1)External
sales

37,44726,805

8,043

1,916

7,418

2,882

84,513―84,513(2)

Internal
sales

116

93

3,723

2,313

1,921

1,638

9,806

(9,806)―

Total

37,56426,898

11,766

4,229

9,339

4,521

94,320(9,806)

84,513Operatingexpense32,561

27,245

11,555

4,238

8,974

4,369

88,944(8,464)80,479Operatingincome

5,002

-346

211

-8

365

151

5,376

(1,342)

4,033

Assets47,19456,74010,062

1,521

5,825

6,099

127,444

11,764

139,209

Depreciation,amortization

1,000

2,881

118

39

41

29

4,111

(42)

4,068

Impairment loss

10

63

―

3

―

―

77

(1)

75

9,180

4,439

24

89

19

23

13,776(102)

13,673

Assets,depreciation,
impairment loss,
capital expenditure

Capitalexpenditure

28

(Note) 1. Main Businesses of Our Reported Business Segments
Business Segment
Dormitories

Business Description
Dormitories provided to students and corporate employees, Domeal, managementof outsourced dormitories

HotelsDormy Inn business hotel businessResort hotel businessContracted Services

Office building management service businessResidential property management service business

Food Services

Restaurant business
Management of outsourced cafeterias
Hotel restaurants and other facility outsourced management business

Construction

Planning, design, construction and brokerage businessCondominium sales business
Other related services

OthersWellness Life business (management of senior citizen housing)
Rental property brokerage and management business
Single life support services, insurance agency businessComprehensive human resources business
Financing services, administrative outsourcing service businessComprehensive advertising agency business
Other related services

2. Within operating expenses, the following amount is the portion which cannot be allocated to a specific business segment andis mainly accounting and financing related administrative tasks of the headquarters included in the eliminations andcompany wide data.
FY3/101,200 million yen

3. Within assets, the following amount includes cash and equivalents, marketable securities, investment securities, and assets
and deferred tax assets of the management division is the portion which cannot be allocated to a specific business segment
and is mainly accounting and financing related administrative tasks of the headquarters included in the eliminations andcompany wide data.
FY3/1015,499 million yen

4. Accounting Policy Changes
Current Fiscal year
(Construction Contract Related Accounting Standards)
For construction contracts entered into from the current fiscal year, we have commenced application of Accounting Standards
Board of Japan’s Statement No. 15, “Accounting Standard for Construction Contracts” and Guidance No. 18, “Guidance on
Accounting Standard for Construction Contracts” issued on December 27, 2007. These changes led to increases of 809 and 88
million yen in consolidated sales and 10 and 5 million yen in consolidated operating income of our construction and contracted
services business segments respectively during the current fiscal year.

b. Regional Sales Information
Fiscal Year March 2010 (From April 1, 2009 to March 31, 2010)
We did not have any overseas consolidated subsidiaries or important offices and therefore we do not report any regionalsales information.
c. Overseas Sales
Fiscal Year March 2010 (From April 1, 2009 to March 31, 2010)
We did not have any overseas sales29

d. Business Segment Information
Fiscal Year March 2011 (From April 1, 2010 to March 31, 2011)
1. Overview of Reported Segments
Financial information relating to the individual divisions of our business segments is readily available, and ourmanagement considers the validity of these segments on a regular basis during their board of directors meetings inassessing segment earnings and the allocation of business resources in accordance with these segments.
Our divisions and subsidiaries responsible for the various services within our Group are also responsible developing both
strategies and business activities for their respective businesses
Therefore our segments are defined by the basic services provided by each of the divisions and subsidiaries and divided
into five main segments including “dormitories,” “hotels,” “contracted services,” “food services,” and “construction.”
We provide an overview of our reported business segments as follows.
Dormitories:
Dormitories provided to students and corporate employees, Domeal, management ofoutsourced dormitories
Hotels:Dormy Inn business hotels, resort hotels
Contracted Services:
Office building and residential property management services
Food Services:
Restaurant business, management of outsourced cafeterias, hotel restaurants and otherfacilities
Construction:
Planning, design and construction, real estate brokerage business, condominiums for sale,other related services
2. Information pertaining to segment sales, operating income and losses, assets, liabilities and other Items
Consolidated Figures for FY March 2010 (From April 1, 2009 to March 31, 2010)(Units: Million Yen)
Others(Note) 1

Reported Segments

Total

Adjustments(Note) 2

Values Used in
Consolidated
Financial
Statements(Note) 3

Dormitories

HotelsContracted
Services

Food
Services

Construction

External sales

38,04626,805

7,899

1,460

7,418

81,631

2,882

84,513―84,513

Internal sales

141

93

3,719

2,291

1,921

8,168

1,638

9,806

-9,806―

Total

38,18826,898

11,619

3,752

9,339

89,7994,521

94,320-9,806

84,513Operating income

5,024

-346

176

4

365

5,224

151

5,376

-1,342

4,033

Assets

48,65356,740

9,369

756

5,825

121,345

6,099

127,444

11,764

139,209

Depreciation

1,053

2,881

88

16

41

4,081

29

4,111

-42

4,068

Goodwill
amortization

―

―

15

0

―

16

2

18

―

18

Impairment loss

10

63

―

3

―

77

―

77

-1

75

Capital expenditure

9,260

4,439

24

9

19

13,75323

13,776-102

13,673

Total

Sales

Other items

30

Fiscal Year March 2011 (From April 1, 2010 to March 31, 2011)(Units: Million Yen)
Others(Note) 1

Reported Segments

Total

Adjustments(Note) 2

Values Used in
Consolidated
Financial
Statements(Note) 3

Dormitories

HotelsContracted
Services

Food
Services

Construction

External sales

38,49130,192

7,507

1,252

4,941

82,386

2,597

84,983―84,983

Internal sales

107

83

4,247

2,807

2,510

9,757

689

10,446-10,446―

38,59930,275

11,755

4,059

7,451

92,143

3,286

95,429-10,446

84,983Operating income

5,842

336

185

-208

225

6,381

-37

6,343

-1,733

4,610

Assets40,67453,422

9,094

624

5,468

109,284

4,668

113,952

27,361

141,314

1,146

2,921

87

48

39

4,242

44

4,287

-9

4,278

Goodwill amortization

―

―

12

1

62

76

10

86

―

86

Impairment loss

4

12

―

35

―

53

―

53

―

53

1,617

2,418

60

136

6

4,239

128

4,367

-145

4,221

Total

Sales

Total

Other items
Depreciation

Capital expenditure(Notes)1. Other is not considered as a reported business segment and is comprised of the wellness life (management of senior citizen
housing), rental property brokerage and management, single life support services, insurance agency business, comprehensive
human resources and administrative outsourcing services, financing services and advertising agency services.
2. Details of Adjustments Are Described Below(Units: Million Yen)
Segment Income

FY3/10FY3/11

Transactions between segments,
cancelling

-142

5

Company wide expenses (Note)-1,200-1,738

Total-1,342-1,733(Note) Company wide expenses are mainly finance and accounting division related expenses of the headquarters(Units: Million Yen)
Segment Assets

FY3/10Transactions between segments,

FY3/11-3,735-3,669Company wide assets (Note)

15,49931,031

Total

11,76427,361cancelling(Note) Company wide assets include cash and equivalents, marketable securities, investment securities, and assets
and deferred tax assets of the administrative division.
3. Segment income and loss are adjusted to coincide with operating income of the consolidated financial statements.

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e. Related Information
Fiscal Year March 2011 (From April 1, 2010 to March 31, 2011)
1. Products and Services Information(Units: Million Yen)
Student

Corporate

Consigned,
DomealDormitories

Dormitories

23,001

9,040

Dormy Inn
Outsourced

OfficeResidential
Property Food Service Construction
Resort Hotels Building
Management Management

Others

Total

Sales toExternal Clients

3,473

2,976

14,34815,843

5,429

2,078

1,252

4,941

2,597

84,983

2. Regional Information
We did not have any overseas consolidated subsidiaries or important offices and therefore we do not report any
regional sales information.
f. Information Relating to Amortization of and Outstanding Goodwill by Reported Segment
Fiscal Year March 2011 (From April 1, 2010 to March 31, 2011)(Units: Million Yen)
Dormitories

Contracted
Services

HotelsFood
Services

Construction

Other (Note)

Company
Wide

Total

Amortization,
current term

―

―

12

1

62

10

―

86

Outstanding value

―

―

18

―

―

―

―

18

(Note) “Others” includes rental property brokerage and management, single life support services and insurance agency
business, comprehensive human resources, financing services, and administrative outsourcing services and advertising
agency services.

g. Information relating to income derived from negative goodwill by reported segment
Fiscal Year March 2011 (From April 1, 2010 to March 31, 2011)
None(Additional Information)
During the current fiscal year, “accounting standards for the disclosure of segment information” (Corporate AccountingStandard Number 17, March 27, 2009) and “implementation guidance for accounting standards for the disclosure of segment
information” (Corporate Accounting Standard Implementation Guidance Number 20, March 21, 2008) are applied.

32