July 20, 2017
To whom it may concern
TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO(Code No. 3167 Tokyo Stock Exchange First Section)

Making Tokyo Bay Network Consolidated Subsidiary
TOKAI Holdings Corporation (hereinafter “the Company”) has acquired additional shares in Tokyo Bay
Network Co., Ltd. (hereinafter “Tokyo Bay Network”), an equity method affiliate of the Company, making it aconsolidated subsidiary.
The TOKAI Group started the CATV business in Shizuoka Prefecture in 1988 and has expanded the service
areas to the five prefectures of Shizuoka, Kanagawa, Chiba, Nagano, and Okayama. Today, the TOKAI Group
provides broadcasting services to 510,000 customers and communications services to 230,000 customers. In
addition to providing unique local information rooted in each community and multi-channel broadcasting, theTOKAI Group has supported people’s comfortable life by combining broadcasting and communications services
such as providing high-speed communications services using FTTH networks.
Tokyo Bay Network is a CATV operator providing services in Koto-ku and Chuo-ku, Tokyo whereredevelopment and revitalization are expected in line with the construction of stadiums, the Olympic Village, andother facilities for the 2020 Tokyo Olympic and Paralympic Games. Tokyo Bay Network is providing services
ranging from multi-channel broadcasting and high-speed Internet access to land line phones to 250,000 customers.
As a result of making Tokyo Bay Network a consolidated subsidiary, the number of customers using theTOKAI Group’s CATV business has increased by 34% from 730,000 to 980,000 customers (simple sum of thenumber of customers of both companies as of March-end 2017), significantly facilitating the expansion of revenuebase.
Against a backdrop that the Ministry of Internal Affairs and Communications is aiming to achieve a 50%
penetration rate for 4K broadcasting by 2020, the Company is working to further expand its CATV business basedon a strategy to secure the first mover advantage by capturing the needs of customers to watch 4K broadcasting byinstalling fiber-optic lines from center equipment to the last one mile and advancing broadcasting.
The Company strives to further expand business by generating synergies with Tokyo Bay Network by making
the most of opticalization knowhow, which has been cultivated by the TOKAI Group over many years, and theTOKAI Group’s comprehensive life services such as energy and information and communications services.
The Company announced its medium-term management plan “Innovation Plan 2020 ‘JUMP’”, which ends infiscal 2020, on May 9, 2017. Over the next four years, the Company aims to accelerate the Group’s trowthby making the most of M&A and alliances using leveraged investments in addition to growing the existingbusinesses. As part of the efforts, the Company will proactively make investments totaling 100 billion yen on
M&A. This is the first step in the M&A investment plan. The Company will continue expanding revenue base ofthe TOKAI Group’s mainstay businesses such as gas, CATV, and information and communications services,
through proactive M&A and alliance investments.

Outline of TOKAI Group’s CATV business
Developing a business in Shizuoka Pref., Kanagawa Pref., Chiba Pref., Nagano Pref., Okayama Pref., andoperated by seven companies.
The total number of customers are 730 thousand of which 510 thousand broadcasts and 230 thousand
communications (as of the end of March 2017)
Sales are the third in the industry, the number of broadcast households is No. 6 in the industry, the number ofcommunication subscribing households is No. 4 in the industry
Construct wide-area CATV optical network and offer one-stop triple service of high-quality broadcasting,communication, and telephone
ATSUGI ISEHARALCV Co.

CABLE NETWORK Co.

NaganoPref.
KURASHIKI CABLE TELEVISION Inc.

Chiba
Pref.

ShizuokaPref.

OkayamaPref.

Kanagawa
Pref.
ICHIHARA COMMUNITY NETWORK TELEVISION Co.
EAST COMMUNICATIONS COMPANY Ltd.

TOKAI Cable Network Co.
Toco Channel Shizuoka Co.

In-house optical fiber network laying total distance Approximately 6,000 km

The 3rdSales (¥13,032mn)

in the industry※ Quoted from "Nikkei MJ" issued in November 2016. Urban CATV sales

Broadcast households (510,000)

No. 6

Communication households(230,000)

No. 4

in the industry
in the industry※ Quoted from SATEMAGA BI Inc. "Cable Yearbook 2017" (number as of the end of March 2017)

1

TOKAI Group’s CATV Strengths “The community-based services”
Maximize community channels and provide useful information for daily living, including
local news and event information.
Contributing to strengthening regional ties by creating and delivering programs thatviewers can participate in.
Actively participate in the major events of the community and improve the awareness ofcommunity channels by utilizing the ToCoChan family*.
Cooperative broadcasting withmajor events in the region□ Regional celebration
A celebration and events

Shizuoka Festivalof each region broadcast
live for a long time

□ Documentary□ Daily news

High quality program production

Distribution of events andfocused on regional history etc.

seasons in each region on"Manchuria Fujimi village - 70live broadcast on weekdays

years testimony after the war"
Winner of the 53rd Galaxy Award TV Division□ Viewer participation program
Kano River Firework Display*Provided by Numazu City

Street performer world cup*Singer, artist, comedian who is active in community channel "ToCoChan" of our group CATV.

Programs which local people canappear, including Karaoke Grand Prix2

Outline of Tokyo Bay Network
Service area is Koto Ward and Chuo Ward Tokyo
In both areas the future population growth is expected, further development of business is expected
The total number of connected households was 249 thousand, among which, the number of telecommunication
subscribing households was 14 thousand (as of the end of March 2017)
Number of households used is No.9 in the industry

Population transition and estimate(Unit: thousand people)※ quoted from the National Institute of Social Security and Population ResearchNationwide
127,768

128,057

127,095

123,161

2005

2010

2015

2024

418

467

494

554

2005

2010

2015

2024

98

123

141

158

2005

2010

2015

2023

Koto Ward
中央区

江東区

Chuo Ward

Connected households
249 thousand

No. 9in the industry※ Quoted from SATEMAGA BI Inc. "Cable Yearbook 2017" (number as of the end of March 2017)

3

TOKAI Group CATV Business Growth Strategy
Expand customer base by promoting "Opticalization of broadcasting" respond to 4K demand
triggered by the Tokyo Olympic Games in 2020
Improve ARPU by promoting TLC (Total Life Concierge) that provides various lifestyle-related
services such as energy, information and communications developed by the Group on a one-stopbasis
Expand business by exploiting new business areas and utilizing M & A
Number of customers in CATV business at Medium-term
management plan image (Unit: thousands)
M&A
Broadcast (Existing)Communication (Existing)

710

733

499

508

211

225

End of FY2015

End of FY2016

End of FY2017

End of FY2018

End of FY2019

End of FY2020

4

The performance forecasts and forward-looking statements in these materials arebased on information currently available to the Company, and include potential risks
and uncertainties. Please be aware that due to changes in a variety of factors, actual
results may differ materially from the projections and other forward-looking
statements in these materials.

Please contact us with any questions regarding these materials.
Public Relations and Investor Relations Office
TOKAI Holdings Corporation
2-6-8 Tokiwa-cho, Aoi-ku, Shizuoka 420-0034, Japan
Phone: +81-(0)54 275-0007
Fax: +81-(0)54-275-1110
http://tokaiholdings.co.jp/e-mail： overseas_IR@tokaigroup.co.jp

July 20, 2017
To whom it may concern
TOKAI Holdings Corporation
Katsuhiko Tokita, President & CEO(Code No. 3167 Tokyo Stock Exchange First Section)

Change in Status of Equity Method Affiliate to Consolidated Subsidiary
TOKAI Holdings Corporation (hereinafter “the Company”) has acquired additional shares in Tokyo Bay Network Co., Ltd.
(hereinafter “Tokyo Bay Network”), an equity method affiliate of the Company, making it a consolidated subsidiary.
1.

Reasons for status change
The TOKAI Group entered the city gas (piped natural gas) business in 1950, and since then we have continued todiversify our businesses, providing a wide range of products and services vital for people’s daily lifestyles, includingliquefied petroleum gas (LP gas), information and communications services, CATV, Aqua (bottled water delivery),household equipment, security, insurance, bridal services, nursing care, and comprehensive renovations. In addition, we
have expanded our sales area from Shizuoka and the Kanto region to all over Japan. Today we are proud to serve 2.56
million customers (as of March 31, 2017).
In the TOKAI Group, consolidated subsidiaries, namely TOKAI Cable Network Corporation, ICHIHARACOMMUNITY

NETWORKTELEVISIONCORPORATION,

ATSUGIISEHARACABLE

NETWORKCORPORATION, EAST COMMUNICATIONS COMPANY LIMITED, LCV CORPORATION, KURASHIKI CABLETELEVISION Inc., and Toco Channel Shizuoka Corporation, are engaged in the CATV business. In addition, Net
Technology Shizuoka Co., Ltd. is engaged in the related business. The Company is providing broadcasting andcommunication (Internet access service) services in five prefectures of Shizuoka, Kanagawa, Chiba, Nagano, and Okayama,providing broadcasting services to 510,000 customers and communication services to 230,000 customers.
Our broadcasting services deliver local information via community channels and a variety of information to customers in
the areas via nearly 100 digital channels. Our communication services offer optical fiber Internet and optical telephoneservices whose fiber-optic lines from line networks to each home have been owned and installed by the Company, inaddition to the existing CATV Internet. By combining broadcasting and communication services, we have created a highquality broadcasting, communication and telephone “triple-play* service”.
The Company made Tokyo Bay Network, a company engaging in the CATV business in Koto-ku and Chuo-ku, Tokyo
where redevelopment and revitalization are expected in line with the construction of stadiums, the Olympic Village, andother facilities for the 2020 Tokyo Olympic and Paralympic Games, an equity method affiliate through capital participationin February 2017 and has facilitated collaboration.
By acquiring additional shares in Tokyo Bay Network and making it a consolidated subsidiary, the Company has
expanded its sales areas and customer bases. Going forward, the Company aims to expand CATV business and enhance its
corporate value by maximizing synergies based on expertise of both companies.
*Triple play: Provision of three communications services: voice communications including telephone, video communications including TV, and data
communications including the Internet in a single line by a single network provider

12.

Overview of Tokyo Bay Network, which will be a consolidated subsidiary (as of March 31, 2017)

(1)

Name

Tokyo Bay Network Co., Ltd.

(2)

Address

Toyocho SH Building 4F, 4-10-4, Toyo, Koto-ku, Tokyo

Name and title of(3)representative

Kazutoshi Hirata, President & Representative Director(4)Main business

CATV and ancillary businesses(5)

Capital1,385 million yen(6)Date of establishment

October 2, 1989

Major shareholders and(7)shareholding ratio

Relationship between the(8)listed company and therelevant company

TOKAI Holdings Corporation

25.78%Development Bank of Japan Inc.

11.15%

Yomiuri Shimbun Tokyo Headquarters

8.69%

HASEMAN Corporation

7.69%

The Chunichi Shimbun

7.40%

CapitalThe relevant company is an equity method affiliate of therelationship

Company.

Personnel

Nonerelationship
BusinessNonerelationship(9)

Financial conditions and operating results of last three years of the relevant company
Fiscal year

FY03/15

FY03/16

FY03/17

Net assets

1,830 million yen

1,926 million yen

2,027 million yen

Total assets

4,015 million yen

3,941 million yen

3,711 million yen

53,734 yen

56,531 yen

59,516 yen

2,775 million yen

2,752 million yen

2,838 million yen

Operating profit

134 million yen

195 million yen

129 million yen

Recurring profit

108 million yen

175 million yen

120 million yen

Net income

66 million yen

112 million yen

135 million yen

Net income per share

1,949 yen

3,297 yen

3,985 yen

Dividend per share

1,000 yen

500 yen

1,000 yen

Net assets per share
Sales

3.

Number of shares acquired, acquisition price, and status of shareholding before and after acquisition
(1)

(2)
(3)
(4)

4.

Number of shares held
before status change

8,784 shares(number of voting rights: 8,784 units)(proportion of voting rights: 25.8%)

Number of shares

21,944 sharesacquired(number of voting rights: 21,944 units)

Acquisition price

1,577,268,000 yen

Number of shares held
after status change

30,728 shares(number of voting rights: 30,728 units)(proportion of voting rights: 90.2%)

Schedule(1)

Date of execution ofagreement(2)

Effective date of transferof shares

June 20, 2017 to July 7, 2017
July 20, 2017
25.

Future prospects
There will be no revision to the Company’s consolidated earnings forecast for FY03/18.

(Reference) Consolidated earnings forecast for FY03/18 (announced on May 9, 2017) and consolidated results for FY03/17
Net income
Sales

Operating profit

Recurring profit

attributable toowners of the parent

Consolidated earnings
forecast for FY03/18
Consolidated results for
FY03/17

189,400 million yen

11,410 million yen

11,360 million yen

6,450 million yen

178,631 million yen

12,750 million yen

12,775 million yen

7,337 million yen

3