LEOPALACE21 : Consolidated Financial Statements (Japanese Accounting Standard, for the nine months ended December 31, 2015)

Microsoft Word - Consolidated Financial Statements (Japanese Accoun Consolidated Financial Statements (Japanese Accounting Standard) February 12, 2016 (For the nine months ended December 31, 2015)

Name of Company Listed: Leopalace21 Corporation Stock Listing: Tokyo Stock Exchange Code Number: 8848 URL: http://eg.leopalace21.com/ Location of Head Office: Tokyo Representative: Position: President and CEO Name: Eisei Miyama

Name of Contact Person: Position: Executive Officer Name: Bunya Miyao Telephone: +81-3-5350-0216 Scheduled Date of Filing of Securities Report (Japanese only): February 15, 2016

Scheduled Date of Commencement of Dividend Payments: - Supplemental Explanatory Material Prepared: Yes

Results Briefing Held: No

1. Results for the Nine months ended December 31, 2015 (April 1, 2015 through December 31, 2015)

2. Consolidated financial results (Amounts less than one million yen are omitted) (The percentage figures indicate rate of gain or loss compared with the same period last year)

   Net sales		Operating profit		Recurring profit		Net income attributable to shareholders of the parent
   Nine months ended December 31, 2015	Million yen	%	Million yen 15,609 9,513	%	Million yen 14,664 8,637	%	Million yen 12,462 7,856	%
   	376,541	7.4		64.1		69.8		58.6
   Nine months ended December 31, 2014	350,756	2.1		8.7		20.3		22.7

   (Note) Comprehensive income As of December 31, 2015: 12,497 million yen (32.4 %); As of December 31, 2014: 9,442 million yen (-9.0 %)

   
   

   Net income per share	Diluted net income per share
   Nine months ended December 31, 2015 Nine months ended December 31, 2014	Yen 47.41 29.89	Yen ― ―

   
   

3. Consolidated financial position

Total assets	Net assets	Equity ratio		Equity per share
As of December 31, 2015	Million yen	Million yen	%	Yen
	313,236	138,991	44.4	528.54
As of March 31, 2015	308,274	126,473	41.0	481.05

(Reference) Shareholders' equity As of December 31, 2015: 138,939 million yen; As of March 31, 2015: 126,455 million yen




4. Dividend Status

   Dividend per share
   End of Q1		End of Q2		End of Q3		End of Q4		Annual
   FY ended March 31, 2015	Yen	― ―	Yen	Yen	― ―	Yen	Yen
   			0.00			0.00	0.00
   FY ending March 31, 2016			0.00
   FY ending March 31, 2016 (Estimate)	10.00		10.00

   (Note) Restatement of most recent dividend forecast: No

   
   

5. Estimation of Business Results for the Fiscal Year ending March 31, 2016 (April 1, 2015 through March 31, 2016)

   (The percentage figures for full year indicate rate of gain or loss compared with the previous FY, while those for the interim

   period indicate rate of gain or loss compared with the same term in the previous FY)

   Net Sales		Operating profit		Recurring profit		Net income attributable to shareholders of the parent		Net income per share
   FY ending March 31, 2016	Million yen 525,000	% 8.7	Million yen 19,500	% 32.1	Million yen 18,000	% 34.1	Million yen 16,000	% 10.3	Yen 60.87

   (Note) Restatement of most recent consolidated business results forecast: None

6. Other

1. Changes in major subsidiaries during the subject period (change in specific subsidiaries resulting in a change in the scope of consolidation): None

   
   

2. Use of accounting procedures specific to the preparation of quarterly financial statements: Yes

   (Note) For details, please refer to P.6 "2. Matters Relating to Summary Information (2) Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial Statements."

   
   

3. Changes in accounting principles, procedures or reporting methods used in preparation of financial statements (changes in important items concerning preparation of financial statements)

4. Changes in accounting policies accompanying revision of accounting standards, etc.: Yes

5. Changes in accounting policies other than (i) above: None

6. Changes in accounting estimates: None

7. Restatements: None

(Note) For details, please refer to P.6 "2. Matters Relating to Summary Information (3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements."




1. Total number of outstanding shares (common stock)

2. Total number of outstanding shares at term end (including treasury stock)

   As of December 31, 2015: 267,443,915 shares, As of March 31, 2015: 267,443,915 shares

3. Total treasury stock at term end

   As of December 31, 2015: 4,569,430 shares, As of March 31, 2015: 4,569,430 shares

4. Average number of outstanding shares during the period

As of December 31, 2015: 262,874,485 shares, As of December 31, 2014: 262,874,609 shares




*Indication regarding the status of auditing:

These financial statements are not subject to auditing under the Financial Instruments and Exchange Act. The review of these financial statements in accordance with the Financial Instruments and Exchange Act completed at the time of disclosure.




*Explanation on the proper use of the business forecasts, and other special notices: (Note on the business forecasts and other forward-looking statements)

The business forecasts and other forward-looking statements contained in this report are based on information currently available to the Company and on certain assumptions that Leopalace21 has judged to be reasonable. Readers should be aware that a variety of factors might cause actual results to differ significantly from these forecasts.

For assumptions of business forecasts and notes on the proper use of these forecasts, please refer to P.5 "1. Business Results (3) Explanation Concerning Business Forecasts and Other Forward-looking Statements."




(Method for the acquisition of supplemental explanatory material)

Supplemental Explanatory Material on quarterly financial statements is scheduled to be posted on the Company's web site on February 12, 2016.

【Table of Contents】

1. Business Results 4

2. Analysis of Business Results 4

3. Analysis of Consolidated Financial Position 5

4. Explanation Concerning Business Forecasts and Other Forward-looking Statements 5

5. Matters Relating to Summary Information 6

6. Changes in Significant Subsidiaries during the First Nine Months under Review 6

7. Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial Statements 6

8. Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements 6

9. Consolidated Financial Statements 7

10. Consolidated Balance Sheets 7

11. Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income 9

    Consolidated Statements of Operations 9

    Consolidated Statements of Comprehensive Income 10

12. Notes Regarding Consolidated Financial Statements 11

(Notes Regarding the Premise of the Company as a Going Concern) 11

(Note Regarding Significant Changes in Shareholders' Equity) 11

(Segment Information) 12

1. Business Results (1) Analysis of Business Results

(Million yen)

Net sales	Operating profit	Recurring profit	Net income attributable to shareholders of the parent
Nine months ended December 31, 2015	376,541	15,609	14,664	12,462
Nine months ended December 31, 2014	350,756	9,513	8,637	7,856
Difference	25,785	6,095	6,026	4,606




During the subject nine months, the domestic economy showed gradual progression, such as signs of recovery in individual consumption, due to an improvement in corporate earnings, employment, and income.

In the rental housing industry, negative effects of the rush demand from the increase in consumption tax began to fade, and as apartment construction continues to be an ideal inheritance tax-reduction strategy, new housing starts of leased units trended at a steady pace. On the other hand, as the number of vacant houses increases due to oversupply, achieving stable occupancy rates requires constructing apartments in areas with high demand, as well as providing high-quality housing and services.

Under these conditions, the Leopalace21 Group (the "Group") aims to achieve targets of the Medium-term Management Plan "EXPANDING VALUE," which is in its second year, by building a solid management structure focusing on the core businesses, made up of Leasing and Construction. In addition, the Group aims to establish new businesses that will contribute to future growth.

As a result, net sales for the first nine months were 376,541 million yen (up 7.4% year-on-year). Operating profit was 15,609 million yen (up 64.1% year-on-year), recurring profit was 14,664 million yen (up 69.8% year-on-year), and net income attributable to shareholders of the parent was 12,462 million yen (up 58.6% year-on-year).

The Group's Construction Business has many building construction contracts stipulating completion in the fourth quarter, which is when demand for apartments is highest. In the Leasing Business, the number of apartments under management will increase as apartments are completed, so seasonal fluctuations put a preponderance of earnings into the fourth quarter.




(Actual figures by segment) (Million yen)

Net sales			Operating profit
Nine months ended December 31, 2014	Nine months ended December 31, 2015	Difference	Nine months ended December 31, 2014	Nine months ended December 31, 2015	Difference
Leasing Business	296,353	304,987	8,633	15,146	18,155	3,009
Construction Business	37,694	51,494	13,799	(1,855)	852	2,708
Elderly Care Business	7,978	8,072	93	(380)	(934)	(554)
Hotels & Resort Business	6,546	8,518	1,972	(690)	(389)	301
Others	2,182	3,468	1,286	280	530	249
Adjustments	-	-	-	(2,987)	(2,605)	381
Total	350,756	376,541	25,785	9,513	15,609	6,095




(i) Leasing Business

The occupancy rate at the end of the third quarter was 86.89% (up 1.20 points from the end of the same quarter last year) and the average occupancy rate for the period was 87.41% (up 1.45 points year-on-year).

In the Leasing Business, to establish stable profits led by occupancy improvement, the Group implemented measures such as expanding tenant services including "Room Customize" and website for tenants "MY PAGE", as well as further strengthening sales for female and corporate customers by security system installations. In addition, the Group aims to increase foreign tenants by refining customer support.

The number of units under management at the end of the third quarter was 560,000 (increasing 5,000 from the end of the last fiscal year), the number of direct offices was 189 (increasing 1 from the end of the last fiscal year), and the number of franchise offices was 130 (decreasing 11 from the end of the last fiscal year).

As a result, net sales amounted to 304,987 million yen (up 2.9% year-on-year), and operating profit was 18,155 million yen (up 19.9% year-on-year).