2009

Semiannual Report
For the six-month period ended September 30, 2008

TONAMI HOLDINGS CO., LTD.

Contents
1
4
6
7
8
12
13
13

A Message from the President
Unaudited Consolidated Balance Sheets
Unaudited Consolidated Statements of Operations
Unaudited Consolidated Statements of Cash Flows
Notes to the Unaudited Consolidated Financial Statements
Consolidated Subsidiaries
Board of Directors and Statutory Auditors
Corporate Data

Forward-Looking Statements
This report includes forward-looking statements that represent Tonami’s assumptions and expectations in light of currently available information. Thesestatements reflect industry trends, clients’ situations and other factors, and involve risks and uncertainties which may cause actual performance results todiffer from those discussed in the forward-looking statements in accordance with changes in the business environment.

A

M e s s a g e

f r o mt h e

P r e s i d e n t
and decreases in public-sector investment andhousing-related investment. The price of diesel oil,though trending downward, remains above the prioryear level.

Performance
I welcome this opportunity to report to ourshareholders on the operating environment andbusiness results for the six-month period ended
September 30, 2008.

In these circumstances, the Tonami Group launchedthe 18th three-year medium-term business plan in
April 2008. In order to reinforce group management,
the Group completed the shift to a holding company
structure on October 1, 2008. Eyeing possibilities of
M&A and business partnerships, we endeavored to
become a highly profitable concern that delivers highadded value through expansion of the third-party
logistics (3PL) business, so as to increase the Group’s
enterprise value. In these endeavors, we adhered to ourfundamental policy of providing our customers withhigh-quality services that are highly valued and inspire
their trust in the Tonami Group.

Amid worldwide economic deceleration brought
about by disarray in financial markets in the U.S., theeconomic slowdown in Japan deepened during theperiod under review as falling stock prices, yen
appreciation, and a spike in the price of crude oilpushed up prices of consumer goods.
In the distribution industry, the business environment
remains adverse. Domestic freight volumes are
expected to decrease following a decline last year
owing to sluggish growth in individual consumption

Unaudited Consolidated Financial Highlights
TONAMI HOLDINGS CO., LTD. AND CONSOLIDATED SUBSIDIARIES
Millions of yen
Year ended
March 31,2008

Six months
ended
September 30,
2008¥ 65,291
59,739
1,244
4,308
558
142

¥130,188
117,614
2,446
10,1281,887(911)$ 630,405
576,799
12,011
41,595
5,388
1,371

¥

1.57
1.44
3.00

¥ (10.03)
—
6.00

$

¥113,206
45,495¥112,511
45,962$1,093,038
439,268

Six months
ended
September 30,
2008

For the period:
Operating revenues . .......................................................................
Logistics .....................................................................................
Information processing ...............................................................
Other .........................................................................................
Operating income ..........................................................................
Net income (loss) ...........................................................................
Per share (yen and U.S. dollars):
Net income (loss), basic ..................................................................
Net income, diluted . ......................................................................
Cash dividends ...............................................................................
At period-end:
Total assets .....................................................................................
Total net assets . ..............................................................................

Thousands of
U.S. dollars

0.01520.01390.0290Notes: 1. U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥103.57 = U.S.$1, prevailing on September 30,
2008, has been used for the translation into U.S. dollar amounts.
2. The computation of net income (loss) per share of common stock is based on the weighted average number of shares outstanding (which
represents the number of issued shares less treasury stock.) during each period.

1

In particular, we have positioned the 3PL business as ahigh-priority business, seeking to strengthen our sales
and marketing capabilities by focusing on the proposalof a system that optimizes the entire flow of activities
from raw materials procurement and purchasing to
final delivery. We have worked to increase synergy
between the 3PL business and the mainstay road
haulage business.

Operating revenues from other businesses, which
include automobile repair and merchandising,decreased 0.4% or ¥19 million compared with thesame period of the previous year to ¥4,308 million.
With regard to capital expenditures, expansion of the
Kawasaki Distribution Center (Kawasaki City,
Kanagawa Prefecture) of Tonami Transportation Co.,
Ltd. and new construction of the Kobe Distribution
Center (Yasakadai, Suma-ku, Kobe City) of Keishin
Warehouse Co., Ltd. are expected to be completed
during the current fiscal year.

As a result of these efforts, in the six-month period
under review consolidated operating revenues
increased 3.4% or ¥2,163 million compared with thesame period of the previous year to ¥65,291 million.
The increase was partly attributable to the expansionof the Group as a result of consolidation of additional
subsidiaries. With regard to profit, operating income
fell 29.4% or ¥232 million to ¥558 million. Although
we strove to increase transport efficiency, integrate
operations, and reduce indirect expenses, costs
increased owing to a sharp increase in the price ofdiesel oil that exceeded expectations. Net income was¥142 million, an improvement of ¥1,658 million
compared with the same period of the previous year,
partly owing to the recording of an impairment loss
on fixed assets as an extraordinary loss.

Full-Year Outlook
Turning to the outlook for the full year, we expect thebusiness environment to remain a source of concern
owing to the impact of deceleration of the U.S.
economy on the Japanese economy and the downward
trend of the volume of freight transport resulting froma reduction in the movement of goods triggered bysharp increases in raw material prices and changes in
distribution patterns.

By business segment, operating revenues from thelogistics-related business increased 3.6% or ¥2,050
million compared with the same period of theprevious year to ¥59,739 million. This increase wasattributable to the expansion of the Group resulting
from the consolidation of additional subsidiaries aswell as promotion of the 3PL business as a highpriority business and the development of logistics
solutions, despite lower volume of freight transport of
the road haulage operations in the truck transportbusiness and the freight forwarding business.

As a result, for the full year ending March 31, 2009,
we expect operating revenues of ¥133,600 million, an
increase of 2.6% year on year, operating income of¥1,770 million, a decrease of 6.2%, and net income of¥850 million.

Issues to Be Addressed
Concerning issues to be addressed, in April 2008 theCompany launched the 18th three-year medium-termbusiness plan under the slogan “Running start to jump
to the new stage––Challenging issues to reform––
Growing into a genuine integrated logistics provider.”Our key objectives under the new plan are as follows:

Operating revenues from the information processing
business increased 11.9% or ¥132 million comparedwith the same period of the previous year to ¥1,244
million.

2

(1) Develop into a highly profitable company, andraise our value within society(2) Extend 3PL business and develop overseas business(3) Realize quality that is highly valued and trusted byour customers(4) Take steps to increase our activities in regard to theenvironment(5) Improve the workplace to ensure that ouremployees can find their job rewarding, take pride andexperience satisfaction through their work.
By working to achieve these objectives, we will
strengthen group management capabilities and costcompetitiveness in order to facilitate businessreorganization. At the same time, we will increase thescope of group management by emphasizing creationof greater value in our logistics businesses andfulfillment of corporate social responsibility.
The Tonami Holdings Group’s quantitative targets forthe final year (the year ending March 31, 2011) of themedium-term business plan are: consolidated
operating revenues of ¥142 billion, operating incomeof ¥4 billion (operating income ratio of 2.8%), andnet income of ¥2,140 million.
We plan to pay annual dividends of ¥6.0 per share forthe fiscal year ending March 31, 2009, including aninterim dividend of ¥3.0 per share.
We request your continued support for our endeavors.

December 2008

Katsusuke Watanuki
President and Representative Director

3Unaudited Consolidated Balance Sheets

TONAMI HOLDINGS CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Millions of yen
September 30,
March 31,
2008
2008

Thousands of
U.S. dollars(Note 1)
September 30,
2008

ASSETS
Current assets:
Cash and time deposits ........................................................................

¥ 10,047¥ 11,686

Marketable securities (Note 2) .............................................................

—

20

—

$

97,007

Trade receivables:
Notes and accounts .........................................................................

21,994

21,169212,359

Less: allowance for doubtful accounts . ...........................................

(57)

(51)

(550)

Inventories (Note 5) . ...........................................................................

1,006

542

9,713

Deferred tax assets . ..............................................................................

594

544

5,735

Other current assets .............................................................................

2,676

2,107

25,837

Total current assets . ...............................................................

36,26036,017350,101Land ....................................................................................................

37,73737,291

364,362

Buildings and structures .......................................................................

20,57321,008

198,639

Machinery and vehicles ........................................................................

2,625

2,684

25,345

Property and equipment (Note 3):

Construction in progress ......................................................................

642

592

6,199

Other ...................................................................................................

2,280

619

22,014

Total property and equipment ...............................................

63,85762,194

616,559

Investments in securities (Note 2) ........................................................

6,555

7,594

63,290

Deferred tax assets . ..............................................................................

879

917

8,487

Investments and other assets:

Goodwill ..............................................................................................

418

476

4,036

Other ...................................................................................................

5,237

5,313

50,565

Total investments and other assets . ........................................

13,08914,300126,378

Total assets . ...........................................................................

¥113,206¥112,511$1,093,038

The accompanying Notes are an integral part of these statements.

4

LIABILITIESCurrent liabilities:
Short-term bank loans (Note 3) ...........................................................
Current portion of long-term debt (Note 3) . .......................................
Current portion of bonds (Note 3) ......................................................
Trade notes and accounts payable ........................................................
Income taxes payable . ..........................................................................
Other current liabilities ........................................................................
Total current liabilities ...........................................................
Long-term liabilities:
Long-term debt, less current portion (Note 3) .....................................
Deferred tax liabilities from revaluation reserve for land .......................
Employees’ severance and retirement benefits ......................................
Retirement benefits for directors and statutory auditors .......................
Negative goodwill ................................................................................
Other long-term liabilities . ..................................................................
Total long-term liabilities .......................................................
Total liabilities .......................................................................

Millions of yen
September 30,
March 31,
2008
2008

Thousands of
U.S. dollars(Note 1)
September 30,
2008¥ 12,956
1,159
2,500
11,491
348
6,655
35,109¥ 9,508
1,213
7,000
12,188599
6,483
36,991$ 125,094
11,191
24,138110,949
3,360
64,256
338,988

8,251
5,455
16,033196
6
2,661
32,602
67,711

6,141
5,455
16,542
214
7
1,199
29,55866,54979,66652,670154,803
1,892
58
25,693314,782
653,770

NET ASSETS
Shareholders’ equity:
Common stock:
Authorised: 299,200,000 shares at September 30, 2008
299,200,000 shares at March 31, 2008
Issued:97,610,118 shares at September 30, 2008
97,610,118 shares at March 31, 2008 .........................
Capital surplus .....................................................................................
Retained earnings . ...............................................................................
Treasury stock, at cost: 6,793,124 shares at September 30, 2008 and
6,765,163 shares at March 31, 2008 . ..............
Total shareholders’ equity ......................................................

14,183
11,957
14,29014,183
12,22914,148

136,941
115,449
137,974(2,008)38,422(2,001)
38,559(19,388)
370,976

Valuation and translation adjustments:
Unrealized gain on securities ................................................................
Revaluation reserve for land .................................................................
Total valuation and translation adjustments ...........................

689
5,787
6,476

1,020
5,787
6,807

6,653
55,87562,528

Minority interest:
Minority interest ..................................................................................
Total net assets .......................................................................
Total liabilities and net assets .................................................

597
45,495¥113,206596
45,962¥112,511

5,764
439,268$1,093,038

5Unaudited Consolidated Statements of Operations
TONAMI HOLDINGS CO., LTD. AND CONSOLIDATED SUBSIDIARIESFor the six months ended September 30, 2008 and 2007

2007

Thousands of
U.S. dollars(Note 1)
2008

¥65,291¥63,128$630,405

65,291

63,128630,405

Operating cost .....................................................................................

61,56459,203

594,419

Selling, general and administrative expenses .........................................

3,169

3,135

30,59864,73362,338625,017

558

790

5,388

Interest and dividend income ...............................................................

195

184

1,883

Equity in earnings of unconsolidated subsidiaries and affiliates ............

61

73

589

Loss on sells of property and equipment, net . ......................................

(39)

(63)

(377)

Interest expenses ..................................................................................

(182)

(133)

(1,757)

Impairment losses ................................................................................

(11)

(971)

(106)

Other, net ...........................................................................................

104

(261)

1,004

128

(1,171)

1,236

686

(381)

6,624

Current ................................................................................................

324

348

3,129

Deferred . .............................................................................................

212

787

2,047

536

1,135

5,176

8

0

77

142

¥(1,516)$ 1,371

Millions of yen
2008

Operating revenues:
Operating revenues ..............................................................................
Operating costs and selling, general and administrative expenses:

Operating income
Other income and expenses:

Income (loss) before income taxes and minority interests .....................
Income taxes:

Minority interests ....................................................................................
Net income (loss) . ...................................................................................

The accompanying Notes are an integral part of these statements.

6¥Unaudited Consolidated Statements of Cash FlowsTONAMI HOLDINGS CO., LTD. AND CONSOLIDATED SUBSIDIARIESFor the six months ended September 30, 2008 and 2007

2007

Thousands of
U.S. dollars(Note 1)
2008

686
1,282
11
39
4
41
14
56
(61)
23
(509)
(18)
43
(195)
182
(836)
(464)
(700)
(94)
(689)
(1,185)
195
(124)
(662)
(1,776)¥ (381)
1,227
971
63
—
5
1
(71)
(73)
(20)
(525)
182
(12)
(184)
170
808
(221)
(405)
(17)
(517)
1,001
184
(133)
(360)
692

$ 6,624
12,378
106
377
39
396
135
541
(589)
222
(4,915)(174)415(1,883)
1,757(8,072)(4,480)(6,759)(908)(6,652)(11,442)
1,883(1,197)(6,392)(17,148)

Cash flows from investing activities:
Purchase of time deposits . ..................................................................................
Proceeds from redemption of time deposits ........................................................
Proceeds from sales of marketable securities.........................................................
Purchase of property and equipment ..................................................................
Proceeds from sales of property and equipment ..................................................
Purchase of investments in securities . .................................................................
Proceeds from sales of investments in securities ..................................................
Proceeds from redemption of investments in securities .......................................
Investments in loans receivable ...........................................................................
Proceeds from collection of loans receivable . ......................................................
Other, net . .........................................................................................................
Net cash used in investing activities ...........................................................

(21)
25
20
(1,304)
56
(43)
1
500
(3)
12
320
(437)

(28)
124
—
(966)
489
(74)
—
—
(4)
13
21
(425)

(203)
241
193
(12,591)
541
(415)
10
4,828
(29)
116
3,090
(4,219)Cash flows from financing activities:
Net (decrease) increase in short-term loans .........................................................
Proceeds from long-term debt . ...........................................................................
Repayment of long-term debt .............................................................................
Proceeds from issuance of bonds . .......................................................................
Redemption of bonds .........................................................................................
Purchase of treasury stock ...................................................................................
Dividends paid ...................................................................................................
Dividends paid to minority interests . .................................................................
Other, net . .........................................................................................................
Net cash provided by (used in) financing activities . ...................................

3,447
2,458
(901)
3,000
(7,000)
(7)
(273)
(7)
(123)
594

(3,944)
—
(402)
—
—
(9)
(273)
(7)
—
(4,635)33,282
23,733(8,699)28,966(6,7587)(68)(2,636)(68)(1,188)5,735

Net decrease in cash and cash equivalents .............................................................
Cash and cash equivalents at beginning of period ................................................
Cash and cash equivalents at end of period ...........................................................

(1,619)
11,638¥10,019(4,368)14,383¥10,015(15,632)
112,369$ 96,737

Cash flows from operating activities:
Income (loss) before income taxes and minority interests . ..................................
Depreciation and amortization ...........................................................................
Impairment losses ...............................................................................................
Loss on disposal of property and equipment .......................................................
Loss on sales of investments in securities . ...........................................................
Loss on devaluation of investments in securities . ................................................
Loss on devaluation of golf club memberships ....................................................
Amortization of goodwill . ..................................................................................
Equity in earnings of unconsolidated subsidiaries and affiliates . .........................
Increase (decrease) in allowance for doubtful accounts . ......................................
Decrease in employees’ severance and retirement benefits ...................................
Increase (decrease) in retirement benefits for directors and statutory auditors ...........
Increase (decrease) in accrued bonuses to employees ...........................................
Interest and dividend income .............................................................................
Interest expenses .................................................................................................
(Increase) decrease in trade receivables ................................................................
Increase in inventories ........................................................................................
Decrease in accounts payable ..............................................................................
Decrease in accrued consumption taxes ..............................................................
Other, net . .........................................................................................................
Subtotal ........................................................................................................
Interest and dividends received ...........................................................................
Interest paid .......................................................................................................
Income taxes paid ...............................................................................................
Net cash provided by (used in) operating activities ....................................

The accompanying Notes are an integral part of these statements.

7

Millions of yen
2008¥Notes to the Unaudited Consolidated Financial Statements
TONAMI HOLDINGS CO., LTD. AND CONSOLIDATED SUBSIDIARIES

1.

Basis of presenting financial statements

The accompanying unaudited consolidated financial statements have been prepared based on the accounts maintained by Tonami Holdings Co.,
Ltd. (the “Company”) and consolidated subsidiaries in accordance with accounting principles generally accepted in Japan, which differ in certain
respects as to the application and disclosure requirements of International Financial Reporting Standards. In preparing these unaudited
consolidated financial statements, certain reclassifications and rearrangements have been made to the Company’s consolidated financial statements
issued domestically in order to present them in a format which is more familiar to readers outside Japan.
U.S. dollar amounts presented in the unaudited financial statements are included solely for convenience and should not be construed as
representations that Japanese yen amounts have been or could in the future be converted into U.S. dollars. The rate of ¥103.57 = U.S.$1,
prevailing on September 30, 2008, has been used for the translation into U.S. dollar amounts in the unaudited financial statements.
Change in important items that form the basis for preparation of quarterly consolidated financial statements(a) Changes in matters concerning the scope of consolidation
The newly established Tonami Transportation Demerger Preparatory Co., Ltd. has been included in the scope of consolidation since the firstquarter of the fiscal year ending March 31, 2009. Tonami Air Service Co., Ltd. has been excluded from the scope of consolidation owing to amerger with consolidated subsidiary Keishin Warehouse Co., Ltd. during the second quarter of the fiscal year ending March 31, 2009.
(b) Changes in accounting policies(Application of the Accounting Standard for Lease Transactions)
The Company has applied the Accounting Standard for Lease Transactions (Accounting Standards Board of Japan Statement No. 13, issued onJune 17, 1993, and revised on March 30, 2007) and the Guidance on Accounting Standard for Lease Transactions (Accounting Standards Board ofJapan Guidance No. 16, issued on January 18, 1994, and revised on March 30, 2007) from the first quarter of the fiscal year ending March 31,
2009. With respect to finance lease transactions that do not transfer ownership, the Company has changed from an accounting method similar to
the accounting treatment for ordinary operating lease transactions to an accounting treatment similar to the accounting treatment for ordinary
sales and purchase transactions and recorded the lease transactions as leased assets.
The Company has adopted a straight line method for calculation of depreciation of leased assets based on the assumption that the lease
period is the useful life and the residual value equals zero.
With respect to finance lease transactions that do not transfer ownership for which lease transaction commencement dates are prior to thebeginning of the fiscal year in which application of the Accounting Standard for Lease Transactions started, the Company continues to apply an
accounting treatment similar to the accounting treatment for ordinary operating lease transactions.
As a result of this change, property and equipment includes leased assets for the six-month period ended September 30, 2008, amounting to¥1,600 million. The impact of this change on operating income and income before income taxes and minority interests is negligible. The impactof this change on the segment information is negligible.
Simplified accounting treatment(Method of calculating depreciation of fixed assets)
For assets depreciated using the declining-balance method, depreciation expenses for the fiscal year are calculated on a pro-rata basis.

2.

Fair value of securities

There is no significant change in the amount of marketable securities on the consolidated balance sheet or other amounts compared with those on
the final day of the previous fiscal year.

3.	Short-term bank loans and long-term debt(a) Short-term bank loans

1.287%-2.375% bank loans:
Secured .........................................................................................................................
Unsecured .....................................................................................................................
Total ...............................................................................................................................

8

Millions of yen
September 30,
March 31,
2008
2008

Thousands of
U.S. dollars
September 30,
2008¥2,7206,788¥9,508$ 29,062
96,032$125,094¥ 3,010
9,946¥12,956

(b) Long-term debt

0.89% ¥6.4 billion unsecured straight bonds due 2008 . .................................................
0.52% ¥0.6 billion unsecured straight bonds due 2008 . .................................................
0.00% ¥2.5 billion unsecured convertible bond type–bonds
with stock acquisition rights due 2009 ..........................................................................
2.11% ¥3.0 billion unsecured straight bonds due 2013 . .................................................
1.000%–3.550% loans from financial institutions due 2009 to 2013 and thereafter
Secured .....................................................................................................................
Unsecured . ...............................................................................................................
Total . .................................................................................................................
Less: amount due within one year ...................................................................................

Millions of yen
September 30,
March 31,
2008
2008
¥
—
¥ 6,400—
600

Thousands of
U.S. dollars
September 30,
2008
$
—
—

2,500
3,000

2,500
—

24,13828,966

1,139
5,271
11,9103,659¥ 8,251

1,635
3,219
14,3548,213¥ 6,141

10,99850,893
114,995
35,329$ 79,666

The maturity of the ¥2.5 billion 0.00% unsecured convertible bond type-bonds with stock acquisition rights, issued in July 2004, isSeptember 30, 2009.
The maturity of the ¥3.0 billion 2.11% unsecured straight bonds, issued in June 2008, is June 5, 2013.

(c)

Pledged assets

4.

Overdraft facility and credit line commitment agreements

Property and equipment having a net value of ¥14,660 million ($141,547 thousand) was pledged as collateral for short-term bank loans and longterm debt as at September 30, 2008.

The Company has entered into overdraft facility and credit line commitment agreements with ten banks for the purpose of efficient procurementof working capital.
Outstanding balance of unused credit concerning overdraft facility and credit line commitment agreements at September 30, 2008, was asfollows:
Maximum credit line of overdraft facility and commitment agreement ...........................
Used credit ......................................................................................................................
Total . ............................................................................................................................

5.

Inventories

6.

Cash flow statements

Thousands of
U.S. dollars$28,966—$28,966

Millions of yen¥3,000—¥3,000Inventories as at September 30, 2008 consisted of merchandise of ¥629 million ($6,073 thousand), raw materials of ¥215 million ($2,076
thousand), and work in process of 162 million ($1,564 thousand).

Reconciliation of cash and time deposits shown in the unaudited consolidated balance sheets and cash and cash equivalents shown in theunaudited consolidated statements of cash flows as at September 30, 2008 and 2007 is as follows:—
Millions of yen

Cash and time deposits ...................................................................................................
Time deposits with maturities exceeding three months . ..................................................
Cash and cash equivalents ...............................................................................................

92008¥10,047(28)¥10,0192007¥10,141(126)¥10,015

Thousands of
U.S. dollars
2008$97,007(270)$96,737

7.

Amounts per share

Amounts per share of common stock were as follows:—
Yen

Year ended
March 31,2008

September 30,
2008¥ 1.57
1.44
3.00¥494.38(¥ 10.03)—
6.00¥499.38$0.0152
0.01390.0290$4.7734

September 30,
2008
Net income (loss) per share:
Basic .............................................................................................................................
Diluted .........................................................................................................................
Cash dividends . ..............................................................................................................
Net assets per share .........................................................................................................

U.S. dollars

Six months
ended

Six months
ended

Although dilutive securities were outstanding, diluted net income per share for the year ended March 31, 2008 was not disclosed because of the
net loss in this year.
Basis for the calculation of net assets per share was as follows:—

Total net assets as reported on the unaudited consolidated balance sheets . ......................
Deduction:
Adjusted net assets allocated in common stock ................................................................
Minority interests . .......................................................................................................
Number of shares of common stock issued . ....................................................................
Number of shares of common stock in treasury . .............................................................
Number of shares of common stock outstanding at the end ofyear on which net assets per share is calculated .............................................................

Millions of yen
September 30,
March 31,2008
2008
¥45,495¥45,962

Thousands of
U.S. dollars
September 30,
2008$439,268

45,366596

433,504
5,764

44,898597
Shares97,610,118
6,793,124

97,610,118
6,765,163

90,816,994

90,844,955

Basis for the calculation of basic and diluted net (loss) income per share for the six months ended September 30, 2008 and 2007 was as follows:—

Net income (loss) available to shareholders of common stock:
Net income (loss) ..........................................................................................................
Net income (loss) not available to shareholders of common stock .................................
Net income (loss) available to shareholders of common stock . ......................................
Weighted-average number of shares of common stock outstanding ...............................
Diluted net income available to shareholders of common stock:
Adjustments to net income ...........................................................................................
Incremental number of shares of common stock ...........................................................
(of which stock acquisition rights) . ............................................................................

Common stock equivalents not included in calculation of diluted net
income per share due to their non-dilutive effect8.

Millions of yen
2008

2007

Thousands of
U.S. dollars
2008

¥142
—
142
90,837,221(¥1,516)—(1,516)90,899,545$1,371—
1,371¥—
8,012,820(8,012,820)

¥—
—
(—)
—

$—

(Stock option)
Stock options (stock acquisitionrights) approved at the annual
shareholders’ meeting of theCompany held on June 29, 2005
(The number of stock acquisitionrights was 1,100.)Subsequent event

At a meeting held on November 11, 2008, the board of directors of the Company resolved the following interim cash dividends:—
Dividends (¥3.00 per share) ............................................................................................

10

Millions of yen¥273

Thousands of
U.S. dollars$2,636

9.

Segment information

The Company’s business segments consist of logistics related services classified as Logistics, information processing operations classified as
Information processing, and other services classified as Others.
A summary of segment information by business segment for the six months ended September 30, 2008 and 2007 was as follows:—

Logistics
Net Sales:
Outside customers ................................................................
Inter segment sales ................................................................
Total ..............................................................................
Costs and expenses ......................................................................
Operating income .......................................................................

¥59,739959,74859,462¥ 286

Logistics
Net Sales:
Outside customers ................................................................
Inter segment sales ................................................................
Total ..............................................................................
Costs and expenses ......................................................................
Operating income .......................................................................

¥57,689
5
57,69457,298¥ 396

Logistics
Net Sales:
Outside customers ................................................................
Inter segment sales ................................................................
Total ..............................................................................
Costs and expenses ......................................................................
Operating income .......................................................................

$576,799
87
576,886
574,124$ 2,762

For the six months ended September 30, 2008
Millions of yen
Information
OthersTotal
Eliminations Consolidated
processing(Note 1)
¥1,244
182
1,426
1,238
¥ 188¥4,308
4,328
8,636
8,481
¥ 155¥65,291
4,519
69,81069,181¥ 629¥ —(4,519)(4,519)(4,448)¥ (71)¥65,291—
65,29164,733¥ 558For the six months ended September 30, 2007
Millions of yen
Information
OthersTotal
Eliminations Consolidated
processing(Note 1)
¥1,112
153
1,265
1,083
¥ 182¥4,327
3,534
7,861
7,573
¥ 288

¥63,128
3,692
66,82065,954¥ 866¥—(3,692)(3,692)(3,616)¥ (76)¥63,128—
63,12862,338¥ 790

For the six months ended September 30, 2008
Thousands of U.S. dollars
Information
OthersTotal
Eliminations Consolidated
processing(Note 1)
$12,011
1,757
13,768
11,953$ 1,815$41,595
41,78883,38381,887$ 1,496$630,405
43,632
674,037
667,964$ 6,073$—(43,632)(43,632)(42,947)$ (685)$630,405—
630,405
625,017$ 5,388

The business segments mainly consist of the following services:
Logistics ................................. Road haulage, freight forwarding, warehousing, and harbor transport and customs services
Information processing . ....... Information processing
Others .................................... Vehicle maintenance, casualty insurance, leasing, merchandising and commissioned sales and purchases, travel
services, mail order services, travel inn, carriage of passengers, and other businesses
Neither geographical segment information nor overseas sales have been presented because none of the Company’s consolidated subsidiaries are
domiciled outside Japan, and the Company and its consolidated subsidiaries had no overseas sales for the six months ended September 30, 2008
and 2007.

11

Consolidated Subsidiaries

Logistics
Company NameBusiness Line

Tonami Transportation Co., Ltd.

Road haulage

Keishin Warehouse Co., Ltd.

Warehousing

Zento Transportation Co., Ltd.

Road haulage

Osaka Tonami Transportation Co., Ltd.

Road haulage

Fukui Tonami Transportation Co., Ltd.

Road haulage

Ishikawa Tonami Transportation Co., Ltd.

Road haulage

Gosei Tonami Transportation Co., Ltd.

Road haulage

Kansai Tonami Transportation Co., Ltd.

Road haulage

Kanto Tonami Transportation Co., Ltd.

Road haulage

Kanagawa Tonami Transportation Co., Ltd.

Road haulage

Ibaraki Tonami Transportation Co., Ltd.

Road haulage

Chukyo Tonami Transportation Co., Ltd.

Road haulage

Shonan Tonami Transportation Co., Ltd.

Road haulage

Kawai Transportation Co., Ltd.

Road haulage

ATS Co., Ltd.

Road haulage

Takefu Transportation Co., Ltd.

Road haulage

Saitama Tonami Transportation Co., Ltd.

Road haulage

Niigata Tonami Transportation Co., Ltd.

Road haulage

Anan Transportation Co., Ltd.

Road haulage

Nationwide Shirobo JSE Courier Co., Ltd.

Road haulage

Tonami Global Logistics Co., Ltd.

Harbor transport service

Information Processing and Others
Company NameBusiness Line

Tonami Trading Co., Ltd.

Trading Company

Toyo Gomu Hokuriku Hanbai Co., Ltd.

Sale of tires

Shogawa Kanko Co., Ltd.

Travel inns

Toyama Jizake Hanbai Co., Ltd.

Sale of liquor

Keishin System Research Co., Ltd.

Development and sale of software

Tonami Staff Support Co., Ltd.

Detached service

Tonami Business Service Co., Ltd.

Financial service

Toyo Tire Toyama shop Co., Ltd.

Sale of tires

Shogawa Pleasure Boat Co., Ltd.

Carriage of passengers

Tonami Automobile Technology Research Institute Co., Ltd.

Automobile technology R&D

12

Board of Directors and Statutory
Auditors

Corporate Data

Chairman and Representative Director

Head Office

Yoshihiro Minami

2-12, Showa-machi 3-chome, Takaoka,
Toyama Prefecture 933-8788, Japan
Phone: (0766) 32-1073
Fax: (0766) 32-1077

President and Representative Director
Katsusuke Watanuki

Tokyo Headquarters

Senior Managing Directors

3-8, Higashinihonbashi 3-chome, Chuo-ku,
Tokyo 103-0004, Japan
Phone: (03) 3664-5403
Fax: (03) 3664-5405

Akiyoshi Kunisada
Kohichi Kishida

Managing Director

Date of Establishment

Shigeki Sakamoto

June 1943

Director and Adviser

Common StockYohsuke Konishi¥14,183 million

Issued and Outstanding Shares

Directors

97,610,118 shares

Yasuo Terabayashi
Yoshinobu Watanabe
Toshiyuki Koroku
Shigeyuki Okada
Masayuki Ishimaru
Yoshimi Nagahara
Kazuo Takata
Shinichi Izumi

Shareholders
7,525

Employees
83(As of October 1, 2008)

Standing Statutory Auditors
Mitsuo Matsuda
Masafumi Takebe

Statutory Auditors
Shinichiro Inushima
Toshio Yaeda
Yohji Ishiguro(As of October 1, 2008)13

TONAMI HOLDINGS CO., LTD.
URL:http://www.tonamiholdings.co.jp/