Consolid
dated Financcial Results foor the First T
Three Quarteers of the Fisscal Year Endding March 31,
3 2017(Appril 1, 2016 tthrough Deccember 31, 20
016)(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.
February 2, 2017
Compaany name:
Stock eexchange listinngs:
Stock ccode:
URL:
Represeentative:
Contactt:Phone:TIS Innc. (Former coompany namee: IT Holdingss Corporation))
The First
F
Section off the Tokyo Stock Exchangge3626
http:///www.tis.com/
m/Toru Kuwano,
K
Pressident
Tsuneeyoshi Ito, Deppartment Man
nager of Finannce & Accountting Dept., Co
orporate
Planning SBU.
+81 3-5337-4232

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

Februarry 10, 2017-

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
Three Q
Quarters of the Fiscal Yea
ar Ending M
March 31, 201
17(Apriil 1, 2016 – DecemberD
31,, 2016)(1) Consoolidated Finanncial Results
Percentaages indicate yyear-over-yeaar changes
ncome
Net inattributtable toNet
N sales
Reecurring profitt
Operating income
ownerss of theparent coompanymillioons of yen%

millions of yenn%milllions of yen%

millions of yen
y%28
80,70827
70,595

3.77
6.22

15,931
1
14,139
9

12.7
30.9

16,10814,448

11..5
33..4

11,25
51
7,11
13

58.2
46.2

First Thhree Qtrs., FY
Y2017First Thhree Qtrs., FY
Y2016

Note: Compprehensive incom
me: First Three Qtrrs., FY 2017: 14,8800 million yen (-%%), First Three Qtrs.,
Q FY 2016: (4,3335) million yen (-%)(

Net
N income
per share – basic

Net income
per shaare –diluteed

YenFirst Thhree Qtrs., FY
Y2017First Thhree Qtrs., FY
Y2016

yen

130.34481.366-(2) Consoolidated Finanncial Position
Total assets
End of T
Third Quarterr, FY2017
End of F
FY2016

Net assets

Equuity ratio

millions of yeen

millions of yen%

315,8299
336,4955

190
0,001
180
0,539

58.9
52.5

For referennce: Total equitty: End of Thirdd Quarter, FY20017: 186,111 millionmyen Endd of FY2016: 1 76,549 million yen.
*Total equuity = Shareholdders’ equity plu
us total accumullated other com
mprehensive income

Dividends forr Shareholderrs of Commoon Stock
2. Cash D
Cash dividends
dper share
Record date End-Q
Q1 End-Q2 End-Q3 Y
Year-endor period
FY20166
FY20177
FY20177(forecasst)

Total
T

y
yen

yen

yen

yen

-

11.00
12.00

-

22.00

33.00
3

24.00

36.00
3

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

3. Forecast of Consolidated Results for FY2017 (April 1, 2016 – March 31, 2017)
Percentages indicate year-over-year changes
Net income
Operatingattributable to Net income per
Recurring profit
Net sales
incomeowners of theshare – basic
parent company
Full FY2017(year ending Mar. 31,
2017)millions of yen%

millions of yen%

millions of yen%

millions of yen%

Yen

390,000

1.9

26,5008.4

26,0006.0

15,00018.3

173.88

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

※ Notes(1) Material reclassifications of subsidiaries during the period: Yes(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: 1 company: TIS Inc.
Note: For details, please refer to P. 5, “Other Information (1) Change in important subsidiary during theperiod”(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: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(4) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-Third Quarter, FY2017 (December 31, 2016):
87,789,098 shares
End-FY2016 (March 31, 2016):
87,789,098 shares
2) Treasury stock as of period-end:
End-Third Quarter, FY2017 (December 31, 2016):
1,701,146 shares
End-FY2016 (March 31, 2016):
864,683 shares
3) Average number of shares (during the respective nine-month period):First Three Quarters, FY2017 (ended December 31, 2017): 86,327,920 sharesFirst Three Quarters, FY2016 (ended December 31, 2016): 87,430,841 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 TIS Inc. (“TIS”)’s plans and expectations based on
information available to TIS at the time of preparation and on certain other information TIS believes to bereasonable. These forward-looking statements are not guarantees of future performance, and actual 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(1) Change in important subsidiary during the period(2) Additional information

55
5

3. Consolidated Financial Statements

6(1) Consolidated Balance Sheets

6(2) Consolidated Statements of Income and Comprehensive Income

8

Consolidated Statements of Income

8

For the First Three Quarters
Consolidated Statements of Comprehensive Income

9

For the First Three Quarters(3) Notes on the Consolidated Financial Statements

10(Notes on the Going-concern Assumption)

10(Notes on Significant Changes in the Amount of Shareholders’ Equity)

10

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
In the first nine months of fiscal 2017 (April 1, 2016 ~ December 31, 2016), the Japanese
economy continued an overall moderate recovery owing to high corporate earnings and an
improvement in employment conditions. Regarding the economic forecast, it will be necessary
to monitor the potential impact of slowing growth in China and emerging Asian economies,
Britain’s decision to exit the European Union, along with uncertainties in the global economy
and fluctuations in financial markets stemming from the change in U.S. government
administrations.
The business environment surrounding the IT services industry, to which the TIS INTECGroup belongs, was robust during the nine-month period. The Bank of Japan’s Short-term
Economic Survey of Enterprises in Japan (issued in December 2016) revealed companies’
growing orientation towards digital management, as reflected in such economic indicators as a
6.9% year-on-year increase in software investment plans (all manufacturing & financial
institutions).
Under these circumstances, the TIS INTEC Group promoted various measures for
implementing Group-wide reform to achieve further growth and raise corporate value, based on
the Group management strategy developed under the third medium-term management plan(from fiscal 2016 through fiscal 2018) currently being implemented.
Consolidated net sales for the Group in the first nine months of the fiscal year increased 3.7%
year on year to ¥280,708 million. Operating income rose 12.7% from a year earlier to ¥15,931
million, recurring profit increased 11.5% to ¥16,108 million, and net income attributable toowners of the parent company rose 58.2% to ¥11,251 million.
Consolidated net sales grew year on year as the Group accurately grasped the IT investment
needs of its customers in areas where IT investment is growing.
Operating income and recurring profit grew year on year due to the increased sales as well as
the success of various initiatives to improve earnings, which absorbed the impact of
unprofitable projects. Net income attributable to owners of the parent company grewsignificantly year on year for the same reasons, as well as an improvement in the balance of
extraordinary income and losses.
Segment results for the fiscal year are as follows. The sales figures for each segment include
inter-segment sales.
1) IT Infrastructure Services
Consolidated sales rose 1.0% year on year to ¥92,733 million and operating income rose 29.8%
to ¥7,421 million during the nine-month period. The data center business expanded steadily
with contributions from large public-sector projects and the BPO business also grew, whilecosts were reduced through the successful promotion of business efficiency measures. As aresult, both sales and income increased year on year.
2) Financial IT Services
Consolidated sales increased 7.3% year on year to ¥60,399 million, while operating income
declined 55.1% to ¥980 million during the nine-month period. Sales increased as a result of
successfully capturing customers’ growing IT investment demand in the settlement field, mostly
among credit card companies. The segment posted a decline in operating income, however, due
to the significant impact of large-scale unprofitable projects, mostly in the second quarter.
3) Industrial IT Services
Consolidated sales increased 5.8% year on year to ¥132,105 million, while operating income
increased by 47.5% to ¥7,052 million during the nine-month period. Business expansion was
driven by continued robust IT investment in the energy field in conjunction with electric power
and natural gas system reforms, large-scale investments by public-sector institutions, and-2-

successful measures to serve clients expanding their IT investments to support growth strategies.
Measures promoting earnings improvement, including the reduction of unprofitable projects,
were also successful. As a result, both sales and income increased.
4) OtherConsolidated sales declined 20.8% year on year to ¥8,886 million, and operating income
declined 58.0% to ¥759 million. Sales and income declined due primarily to the impact ofGroup reorganization.
As previously stated, the Group is implementing its third medium-term management plan (fromfiscal 2016 through fiscal 2018). For the fiscal year under review, the Group has formulated thefollowing Group 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 2017
Thoroughly implement profit-oriented management.
Promote the optimization of the entire Group by leveraging
the new holding company structure, while expanding
added-value business to support customers’ digital-based
management.
Reorganize the business portfolio, while nurturing andattracting talent suited for the business models.

The IT Holdings Group took a new step forward on July 1, 2016 through its reorganization as
the TIS INTEC Group. The purpose of this reorganization is to optimize the overall Group andachieve portfolio management. In the reorganization, IT Holdings Corporation merged withwholly owned subsidiary TIS Inc. through an absorption-type merger and then changed its
company name to TIS Inc. in order to unify the Group brand.
Prior to the reorganization, the Group had operated a decentralized governance systemorganized under a pure holding company. The new governance structure features a central
operating company which can leverage its centripetal force and make overall Group
optimization the primary goal. This new structure will enable the Group to reallocate
management resources rapidly in response to changes in the external environment and strategic
shifts, while facilitating further reforms to the Group’s organizational structure.
The TIS INTEC Group is refocusing its viewpoint on markets and customers in order tosupport “customers’ digital-based management” through unified Group initiatives. To this end,
the Group is establishing a business structure to generate the maximum value from the current
management resources within the Group. With the aim of advancing its distinctive competencies
and growth engines, the Group has promoted the consolidation of the BPO business, thenational health insurance-related business, the electric power and gas-related business, and theoverseas business. Moving forward, the Group will continue to steadily review and implement
various measures to achieve portfolio management.
The Group recognizes that responding to developments in the fields of Fintech, IoT, AI,
robotics and other new technologies as well as to various industry trends is critical toperforming customers’ digital-based management. The Group is taking active measures to build
new strengths using these technologies and promote the expansion of value-added business.
As part of this strategy, the Group has strengthened collaboration with Digital Garage, Inc.,
with which it has had a capital alliance, to promote collaborative development in the EC field.

-3-

The Group participates as a technology development partner in the open-innovation R&D
organization DG Lab, established by Digital Garage and two other companies, and jointly
established strategic technology development company DG Technologies, Inc. with Digital
Garage for the development of Fintech-related business. In support of this strengthened
collaboration, TIS is raising its shareholding ratio in Digital Garage to reinforce its role as an IT
strategic partner. The Group also founded the “Toyama Blockchain Research Society” topromote blockchain technologies in which many parties share transaction data over the internet
for mutual monitoring. The purpose of the society is to propose technology field testing tocompanies and organizations with growing interest in the technology. In the field of robotics,
the Group leveraged motion recognition technologies for smartwatches to develop a
self-executing presentation system for the Pepper humanoid robot developed and sold by
SoftBank Robotics Corp., as well as a remote site monitoring system utilizing a platform-based
mobile robot.
The Group is also making strategic investments to offer new added value by collaboratingwith venture companies through open innovation. These include seed money investment in AI
company Elvez, Inc. and a capital and business alliance with settlement company QUADRAC
Co., Ltd. The Group has also established a “corporate venture capital” system to enable active
and rapid investments in promising technologies. Furthermore, the Group newly established“bit&innovation” as a business creation site which will leverage multifaceted communicationand collaboration schemes for open innovation.
The Group is promoting the expansion of its business sphere. The Group made PromptNow
Co., Ltd., a leading Thai developer of applications in the banking, insurance and other financial
industries, a consolidated subsidiary. PromptNow was formerly a subsidiary of MFEC PublicCompany Limited, a listed Thai company with which the Group has a capital and businessalliance. Through this initiative, the Group is introducing the settlement business, its corestrength, outside Japan and expanding business.
The Group has also taken measures to offer comprehensive security solutions and expand the
security business in Japan, where interest in security is rising. A strategic partnership contract
was signed with major Singaporean telecom company Singapore Telecommunications Limited
for managed security services. Through the partnership, a subsidiary of Singapore
Telecommunications Limited has begun offering managed security services in Japan fromTrustwave Holdings, Inc., one of the largest security vendors in North America.
The reduction of unprofitable projects is a critical management issue for the Group. The
Group continues to strengthen and reform existing systems, while improving training toenhance on-site risk monitoring and project management capabilities, among other measures.
The TIS INTEC Group Production Innovation Committee was established to strengthen
objective monitoring functions and thoroughly promote effective measures to prevent
unprofitable projects. In this way, the entire Group is working together to prevent unprofitableprojects.
In the first quarter, TIS Inc. acquired 834,900 shares of treasury stock (aggregate acquisition
cost of ¥2,099 million) as part of its policy of executing a dynamic capital strategy responsive tochanges in the business environment and raising shareholder profit and capital efficiency.
(2) Consolidated Earnings Forecast and Caution on Forward-Looking Statements
As the Group’s consolidated business performance has been proceeding largely in line with theplan, the Group did not make any changes to the consolidated earnings forecast announced on
May 10, 2016.
TIS has adopted a total return ratio benchmark of around 35%. As a result of the previously
mentioned share buyback, TIS estimates a total return of 35% in the current fiscal year.
*Total return ratio: The ratio of the combined value of dividend payments and share buybacks
versus net income attributable to owners of the parent company.

-4-2. Other Information(1) Change in important subsidiary during the period
IT Holdings Corporation conducted an absorption-type merger of TIS Inc., a specified
subsidiary, on July 1, 2016, with IT Holdings Corporation as the surviving company. In
conjunction with this merger, TIS Inc. was excluded from the scope of consolidation beginningwith the second quarter of the fiscal year under review. After the merger, the company namewas changed to TIS Inc.
(2) Additional information(Adoption of “Guidance on the Recoverability of Deferred Tax Assets”)
The Company has applied “Guidance on the Recoverability of Deferred Tax Assets”(Accounting Standards Board of Japan Guidance No. 26, issued on March 28, 2016) from thefirst quarter of the fiscal year under review.

-5-3. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of March 31, 2016

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-6-

As of Dec. 31, 2016

millions of yen

millions of yen

46,741
84,722
6,381
2,201
4,145
5,278
264
7,161
9,952
(181)
166,666

31,247
68,931
5,264
100
4,553
10,316240
4,251
12,835(157)
137,584

38,497
5,433
22,583
4,092
4,623
75,22938,377
6,330
22,485
4,344
5,598
77,136724
17,50918,233926
18,517
19,44349,2054,369
6,558
16,465(234)
76,365
169,828
336,495

55,521
4,418
5,571
16,378(223)
81,665
178,245
315,829

As of March 31, 2016

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Provision for loss on order received
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
Other allowances
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-7-

As of Dec. 31, 2016

millions of yen

millions of yen

22,617
13,06911,998
11,8602,472
661
28,82791,50818,471
7,738
784
5,928
3,209
238
28,93765,307

31,460
6,050
440
403
76
570
18,363
7,081
64,447
155,955

26,749
5,613
1,066
403
71
475
18,9497,191
60,520125,828

10,001
82,92077,485(2,124)
168,282

10,001
82,92085,792(4,228)
174,485

13,659(2,375)125(3,141)
8,266
3,990
180,539
336,495

17,322(2,375)(209)(3,111)
11,625
3,890
190,001
315,829

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
First Three Qtrs.,
First Three Qtrs.,
FY2016FY2017
Items(Apr. 1 – Dec. 31, 2015) (Apr. 1 – Dec. 31, 2016)
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
Loss on disposal of fixed assets
Impairment loss
Other
Total extraordinary loss
Income before income taxes
Income taxes: current
Income taxes: deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent company-8-

millions of yen

millions of yen

270,595
222,105
48,49034,351
14,139280,708
228,857
51,85135,91915,931

49
1,173
522
1,745

43
889
433
1,366

365
159
911
1,435
14,448

257
349
582
1,189
16,108

16,781266
17,048

1,811
60
1,871

203
15,726
3,152
19,081
12,4158,584(3,424)
5,159
7,255
141
7,113

168
144
451
764
17,215
2,683
3,117
5,801
11,414
162
11,251

Consolidated Statements of Comprehensive Income
First Three Qtrs.,
First Three Qtrs.,
FY2016FY2017(Apr. 1 – Dec. 31, 2015) (Apr. 1 – Dec. 31, 2016)

Items
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-9-

millions of yen

millions of yen

7,255

11,414(11,197)
0
(199)
(81)

3,671
(199)
31

(112)

(116)

(11,591)(4,335)3,386
14,800(4,417)

14,61081

189

(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- 10 -