Consolid
dated Financcial Results foor the First H
Half of the Fiiscal Year En
nding Marchh 31, 2016
(Ap
pril 1, 2015 tthrough Septtember 30, 2015)(Prepared purrsuant to Jap
panese GAAPP)
All financcial informatioon has been preparedpin acccord with accoounting princiiples generallyy accepted in Japan.
This is a ppartial Englishh translation ofo the originall Japanese-lan
nguage docum
ment. All inform
mation pertain
ns to
consolidaated results unnless otherwisee noted. Informrmation on thee basis of presentation of coonsolidated fin
nancialstatementts does not apppear in this traanslation.
October 29, 2015
Compaany name:
Stock eexchange listinngs:
Stock ccode:
URL:
Represeentative:
Contactt:Phone:

IT Hooldings Corporration
The First
F
Section off the Tokyo Stock Exchangge3626
http:///www.itholdinngs.co.jp/e/Norio Maenishi, Prresident
Akio Kita,
K Executivve Officer, Deeputy Divisionn Manager, Addministration Division+81 3-5338-2272

Scheduuled dates
Submisssion of quarteerly report:
Commeencement of dividenddpaym
ments:

Novembber 9, 2015
Decembber 10, 2015

mentary materials to the quuarterly resultss:
Supplem
Quarterrly results presentation heldd:Available
Yes (targeted at institu
utional investtors and analysts)

Figgures in millio
ons of yen aree rounded dow
wn to the neareest million
1. Consoolidated Resu
ults for the FirstF
Half of the Fiscal Yeear Ending March
M
31, 20016(Apriil 1, 2015 – September 30
0, 2015)(1) Consoolidated Finanncial Results
Percentaages indicate yyear-over-yeaar changes
Net inncome
attributtable toNet
N sales
Reecurring profitt
Operating income
ownerss of theparent coompanyFirst Haalf, FY2016First Haalf, FY2015

millioons of yen%

millions of yenn%milllions of yen%

millions of yen
y%18
82,68317
72,851

5.77
5.88

9,373
3
7,670
0

22.2
0.2

9,900
7,981

24..0
1..6

5,60
01
3,88
89

44.0
0.8

Note: Compprehensive incom
me: First Half, FY
Y 2016: (7,891) m
million yen (-%), FirstF Half, FY 2015: 2,792 millionn yen (-57.5%)

Net
N income
per share – basic
First Haalf, FY2016First Haalf, FY2015

Net income
per shaare –diluteedyen

yen

64.04444.42244.40(2) Consoolidated Finanncial Position
Total assets
End of F
First Half, FY
Y2016
End of F
FY2015

Net assets

Equuity ratio

millions of yeen

millions of yen%

324,4577
345,8511

177
7,725
188,789

53.6
53.3

For referennce: Total equitty: End of first half,hFY2016: 1173,906 million
n yen End of FY2015:
F
184,4000 million yen.
*Total equuity = Shareholdders’ equity plu
us total accumullated other com
mprehensive income

2. Cash D
Dividends forr Shareholderrs of Commoon Stock
Cash dividends
dper share
Record date End-Q
Q1
End-Q2End-Q3Y
Year-endor period
FY20155
FY20166
FY20166(forecasst)

Total
T

y
yen

yen

yen

yen

-

10.00
11.00

-

20.00

30.00
3

-

22.00

33.00
3

Note: Revvisions from thee latest release ofo dividends forrecasts: Noneyen

3. Forecast of Consolidated Results for FY2016 (April 1, 2015 – March 31, 2016)
Percentages indicate year-over-year changes
Net income
Operatingattributable to Net income per
Recurring profit
Net sales
incomeowners of theshare – basic
parent company
Full FY2016(year ending Mar. 31,
2016)

millions of yen%

millions of yen%

millions of yen%

millions of yen%

Yen

370,000

2.5

23,50011.3

23,0008.2

12,80024.6

146.34

Note: Revisions from the latest release of earnings forecasts: None

※ Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Accounting methods specific to quarterly consolidated financial statements: None
(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: None
2) Changes other than noted in 1) above: Yes
3) Changes in accounting estimates: Yes
4) Retrospective restatement: None
Note: For further details, please refer to “(1) Changes in Accounting Policy, Changes in Accounting
Estimates, and Retrospective Restatement” in the “2. Other Information” on page 4 in the
Accompanying Materials.
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-First Half, FY2016 (September 30, 2015):
87,789,098 shares
End-FY2015 (March 31, 2015):
87,789,098 shares
2) Treasury stock as of period-end:
End-First Half, FY2016 (September 30, 2015):
322,444 shares
End-FY2015 (March 31, 2015):
320,444 shares
3) Average number of shares (during the respective six-month period):First Half, FY2016 (ended September 30, 2015):
87,467,547 sharesFirst Half, FY2015 (ended September 30, 2014):
87,574,388 shares*Quarterly review status
These materials are not subject to the quarterly review procedure requirements of Japan’s Financial Instruments
and Exchange Act. As of this report’s publication, a review of the quarterly consolidated financial statements inaccordance with the Act had not been completed.
Caution on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans andexpectations based on information available to ITHD at the time of preparation and on certain other information
ITHD believes to be reasonable. These forward-looking statements are not guarantees of future performance, andactual results, performance, achievements or financial position may differ materially from those expressed or
implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to“(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements” in the “1. Results ofOperations” section on page 4 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results2(2) Consolidated Earnings Forecast and Caution on Forward-Looking

4Statements
2. Other Information

4(1) Changes in Accounting Policy, Changes in Accounting Estimates, and4

Retrospective Restatement(2) Additional Information

4

3. Consolidated Financial Statements

5(1) Consolidated Balance Sheets

5(2) Consolidated Statements of Income and Comprehensive Income

7

Consolidated Statements of Income
For the First Half7

Consolidated Statements of Comprehensive Income
For the First Half

8(3) Notes on the Consolidated Financial Statements

9(Notes on the Going-concern Assumption)

9(Notes on Significant Changes in the Amount of Shareholders’ Equity)9(Significant Subsequent Events)

9-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first half of fiscal 2016 (April 1, 2015 - September 30, 2015), the Japanese economy
continued its moderate recovery owing mainly to improved corporate earnings. Caution over the
future economic outlook strengthened, however, due to slowing pace of growth in China and other
Asian emerging countries.
The business environment surrounding the IT services industry, to which the IT Holdings Groupbelongs, remained robust. The Bank of Japan’s Short-term Economic Survey of Enterprises in Japan(issued in September 2015) revealed growth in corporate IT investment, as reflected in sucheconomic indicators as a 7.9% year-on-year increase in software investment plans (all manufacturing& financial institutions).
Under these circumstances, the Group is promoting various measures for implementing
Group-wide reform to achieve further growth and raise corporate value, based on the Groupmanagement strategy developed under the third medium-term management plan (from fiscal 2016
through fiscal 2018) launched in the year under review.
Consolidated net sales for the Group in the first half increased 5.7% year on year to ¥182,683
million. Operating income rose 22.2% to ¥9,373 million from a year earlier, recurring profit
increased 24.0% to ¥9,900 million, and net income attributable to owners of the parent company
rose 44.0% to ¥5,601 million.
Consolidated net sales grew year on year as the Group accurately grasped the IT investment needsof its customers in areas where IT investment is growing.
Profits also increased, as the increase in sales and measures to improve profitability absorbed theimpact of a decline in sales from some existing clients which restrained IT investment or reduced thescale of projects.
As announced on September 30, 2015 in the “Notice of Extraordinary Loss and Extraordinary
Income,” IT Holdings Corporation (“ITHD”) has decided to review the future strategy for the data
center operations of subsidiary TIS Inc. and to sell investment securities held by TIS Inc. As a result,
ITHD recorded an impairment loss of approximately ¥14.0 billion as an extraordinary loss as well asa gain on sale of investment securities of ¥16.0 billion as extraordinary income in the second quarter.
Segment results for the first half are as follows. The sales figures for each segment include
inter-segment sales.
1) IT Infrastructure Services
Consolidated sales rose 4.9% year on year to ¥61,101 million and operating income declined 7.2%
to ¥3,257 million. Net sales increased year on year on the back of steady growth in the data centerand BPO businesses, along with the added revenues of two companies that became consolidated
subsidiaries in the second quarter. Operating income declined due to a reduction in the scale or
reduced profitability of projects with some existing clients.
2) Financial IT Services
Consolidated sales declined 3.0% year on year to ¥37,693 million, while operating income declined
33.5% to ¥1,816 million. While there was solid overall expansion in clients’ IT investments, thereduction in IT investment by some existing customers had a significant impact on results, leading tolower year-on-year sales and operating income.
3) Industrial IT Services
Consolidated sales increased 10.4% year on year to ¥85,226 million, while operating income
increased by 310.7% to ¥3,405 million. Sales grew primarily due to robust IT investment in theenergy field in conjunction with Electricity System Reform in Japan. Operating income rosesignificantly as a result of the higher sales and successful measures to improve profitability.

-2-4) Other
Consolidated sales rose 5.5% year on year to ¥7,688 million, and operating income increased 1.0%
to ¥1,161 million.
As previously stated, the Group has initiated its third medium-term management plan (from fiscal
2016 through fiscal 2018) from the year under review. In the initial year of the plan, the Group has
formulated the following management strategy in accordance with the management plan’s basic
concepts, and is promoting various measures for implementing Group-wide reform to achieve
further growth and raise corporate value.

Third medium-term
management plan basic
concepts
Profit Emphasis

IT Brain(expansion of value-added
business)
Portfolio Management

Group management strategy for fiscal 2016
(1) Emphasize ROE as the key performance indicator (KPI) andaim to raise corporate value(2) Improve business profitability through higher productivity(3) Manage with an emphasis on return on investment(1) Sharpen unique strengths and growth engines(2) Promote planned business initiatives (value-added business)(3) Promote industry platform business (market development
business)(1) Achieve business portfolio management(2) Implement “corporate governance reforms” as a Group(3) Integrate and consolidate common Group functions

IT Holdings Group’s key initiatives in the first half of fiscal 2016 were as follows:
In May 2015, the IT Holdings Group began to review its organizational structure and plan areorganization in order to establish an optimal organizational structure. The final aim is to optimize
the overall Group and achieve portfolio management. Decisions have been made throughdiscussions about a specific organizational structure after the Group reorganization to
shift toward a new organizational structure under which ITHD serves as a holding
company. Specifically, ITHD will merge with its wholly owned subsidiary TIS Inc. in July 2016 tobecome the Group’s new holding company. Preceding the merger, TIS Inc. and INTEC Inc. plan toreorganize businesses between them in April 2016.
As part of this plan, representative directors will be appointed to new positions to implement thetransition to a new management structure, and the company name of ITHD will be changed to TIS
Inc. as of July 1, 2016. These plans are conditional on their proposal and approval at ITHD’s eighth
general shareholders’ meeting scheduled for June 24, 2016.
This reorganization is aimed at further raising corporate value and shareholder value by
maximizing the Group’s business competitiveness and strengthening governance. For more
information, please refer to the following announcements made today: “Notice regarding Group
Reorganization (Merger of Subsidiaries (Simplified and Short-Form)), Name Change and Partial
Revision of Articles of Incorporation” and “Notice regarding a Change in Representative Director.”
Additionally, in order to strengthen the distinctive businesses of each Group company, optimize
the entire Group, and bolster the business foundation, the BPO business currently dispersed
throughout the Group is being consolidated into AGREX Inc. As the first step in this strategy, a partof the BPO business managed by a subsidiary of TIS Inc. will be transferred to AGREX Inc. in
October 2015. The Group will continue to review and deliberate measures to further consolidate thebusiness.
Regarding the data center business, the business environment is changing dramatically due to the
expansion of cloud computing and other factors. In response to the declining profitability of thebusiness, the Group had considered rationalizing the entire business. As announced on September 30,-3-

2015 in the “Notice of Extraordinary Loss and Extraordinary Income,” the Group has decided on acomprehensive plan to reform TIS Inc.’s approach to the data center business and the future
direction of this business. To provide continuous services into the future, it was decided thatsweeping measures would be required to deal with ageing equipment. As a result, measures will betaken to integrate data center operations in Tokyo and Osaka areas as a way to minimize large future
costs to upgrade ageing facilities. At the same time, an impairment was made against some data
center facilities.
The Group is also integrating and consolidating its offices in conjunction with the integration andconsolidation of common functions. Office consolidation has been completed in the Tokyo area andwas implemented in the Osaka area in July 2015. Preparations have also begun to consolidate officesin the Nagoya area in the summer of 2016.
(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
As the Group’s consolidated business performance has been proceeding largely in line with the plan,
the Group did not make any changes to the consolidated earnings forecast announced on May 8,
2015.
2. Other Information(1) Changes in Accounting Policy, Changes in Accounting Estimates, and Retrospective
Restatement
Change in an accounting policy which is difficult to distinguish from a change in accounting
estimates(Change in depreciation method for property and equipment)
Until the year under review, the IT Holdings Group has mainly used the straight-line method forbuildings, structures, and transportation equipment excluding leased assets, and the decliningbalance method for machinery and equipment excluding leased assets. From the first quarter of theyear under review, the Group will also use the straight-line method for machinery and equipment
excluding leased assets.
In recent years, the external environment surrounding the IT market has changed significantly due
to the emergence of cloud services and other trends. In order to achieve medium- to long-term
growth, the Group has promoted the establishment of a management structure that can more
effectively use its diverse management resources.
Starting with the year under review, the Group has launched a new third medium-term management
plan with the slogan, “Beyond Borders 2017.” Under this plan, assets related to the cloud services
business will assume greater importance as the business delivers stable profits, leading the Group toreconsider depreciation methods that would best reflect the use conditions of equipment. As a result,the Group decided that recognizing expenses evenly over the period of asset use was the most
reasonable method and would more appropriately demonstrate actual management conditions.
As a result of this change, operating income, recurring profit, and income before income taxes forthe first half of the year under review rose by ¥102 million respectively.
(2) Additional Information
The provisions of Article 39 of the “Accounting Standard for Consolidated Financial Statements(Accounting Standards Board of Japan (ASBJ) Statement No. 22 of September 13, 2013)” are madeapplicable. As a result, presentation of net income and other related items have been changed, andminority interests has been changed to non-controlling interests.
The prior year financial statements for the second quarter and the full year have been reclassified toreflect the change in the method of presentation.

-4-3. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2015

Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets-5-

As of Sep. 30, 2015

millions of yen

millions of yen

29,211
78,874
6,711
661
4,552
5,546
243
6,007
8,784
(143)
140,450

25,31772,401
6,255
201
4,945
8,656
225
6,798
30,467(165)
155,10353,6704,853
24,342
3,995
4,552
91,41340,091
4,320
22,865
4,396
4,528
76,202

1,197
15,555
16,752789
15,253
16,042

71,256
7,028
5,199
14,034(283)
97,235
205,401
345,851

50,076
7,222
6,281
13,872(344)
77,107
169,353
324,457

As of March 31, 2015

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Net defined benefit liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets-6-

As of Sep. 30, 2015

millions of yen

millions of yen

21,681
12,521
3,140
11,331
1,318
27,673
77,666

19,135
13,905
9,312
11,779788
23,84878,771

39,593
5,497
10,720663
90
16,874
5,955
79,395
157,062

36,589
5,833
435
424
75
17,402
7,199
67,960146,731

10,001
83,601
67,019(514)
160,107

10,001
82,92071,371(519)
163,773

26,191(1,898)396(397)
24,292
4,388
188,789
345,851

12,646(2,397)346(462)
10,133
3,818
177,725
324,457

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Half, FY2015
First Half, FY2016
Items(Apr. 1 – Sep. 30, 2014) (Apr. 1 – Sep. 30, 2015)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investment securities
Other
Total extraordinary income
Extraordinary loss
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income (loss) attributable to non-controlling interests
Net income attributable to owners of the parent company-7-

millions of yen

millions of yen

172,851
142,971
29,88022,2107,670

182,683
149,949
32,73323,360
9,373

25
623
454
1,104

55
1,077
365
1,499

259
130
402
792
7,981

266
182
522
971
9,900

376
2
379

16,755223
16,978

254
1,139
1,394
6,966
2,029
829
2,859
4,107
217
3,889

15,726
1,844
17,5709,309
9,381(5,837)
3,544
5,765
163
5,601

Consolidated Statements of Comprehensive Income
First Half, FY2015
First Half, FY2016(Apr. 1 – Sep. 30, 2014) (Apr. 1 – Sep. 30, 2015)

Items

millions of yen

Net income
Other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equitymethod affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to noncontrolling interests-8-

millions of yen

4,107

5,765

(1,305)(84)
83(13,543)
0
(48)
(64)

(8)

(0)

(1,315)
2,792(13,656)(7,891)

2,582(8,058)209

166

(3) Notes on the Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Significant Changes in the Amount of Shareholders’ Equity)
Not applicable-9-(3) Notes on Consolidated Financial Statements(Notes on the Going-concern Assumption)
Not applicable(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
Not applicable(Significant Subsequent Events)
Stock Repurchases
At the Board of Directors’ meeting held on October 29, 2015, ITHD approved a resolution to
repurchase its own shares pursuant to Article 156 of the Companies Act of Japan, as applied
pursuant to Article 165, Paragraph 3 of the Act.
1. Reason for repurchasing shares
To utilize for executing a dynamic capital strategy in response to the changes in the management
environment.
2. Details of Board of Directors’ resolution to repurchase shares(1) Class of shares to be repurchased
Common stock(2) Total number of shares repurchased
800,000 shares (maximum)(3) Total repurchase cost
¥1,600 million (maximum)(4) Repurchase period
From October 30, 2015 to January 31, 2016
(5) Repurchase method
Market purchases on Tokyo Stock Exchange

Conclusion of Merger Contract
At the Board of Directors’ meeting held on October 29, 2015, ITHD approved a resolution to
conduct an absorption-type merger of TIS Inc., a wholly owned subsidiary. A merger contract
between ITHD and TIS Inc. was concluded the same day.
1. Overview of business combination(1) Company names and business descriptions of combining companies(Surviving company of absorption-type merger)
Company name: IT Holdings Corporation
Business description: Management of Group companies and related business(Expiring company of absorption-type merger)
Company name: TIS Inc.
Business description: Outsourcing services, software development, and solutions services
related to information technology investments(2) Date of business combination
July 1, 2016 (current schedule)(3) Legal form of business combination
An absorption-type merger will be conducted in which ITHD will be the surviving company
and TIS Inc. will be dissolved.
(4) Allotment of shares in business combination- 10 -

ITHD owns all shares of TIS Inc., and therefore ITHD will neither issue new shares nor allot
outstanding shares in this business combination.
(5) Company name after business combination
IT Holdings Corporation
The company name will be changed to TIS Inc. as of July 1, 2016, conditional on the approvalof a proposal to change a part of the articles of incorporation at ITHD’s eighth generalshareholders’ meeting scheduled for June 24, 2016.
(6) Overview of transaction, including purpose
The purpose of the merger is to establish an optimal Group organization by reviewing andreorganizing the current Group organizational structure, thereby achieving the goals of
optimizing the overall Group and achieving portfolio management as stated in the third
medium-term management plan.
2. Overview of accounting treatment
This merger will be conducted as a transaction under common control based on the provisions of
the “Accounting Standard for Business Combinations” (ASBJ Statement No. 21 of December 26,2008) and “Guidance on Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (ASBJ Guidance No. 10 of December 26, 2008).

- 11 -