F&A AQUA Holdings Inc. : CONSOLIDATED FINANCIAL REPORT

CONSOLIDATED FINANCIAL REPORT?Japanese GAAP? NINE-MONTH PERIOD OF THE FISCAL YEAR ENDING FEBRUARY 28, 2013 (March 1, 2012 to November 30, 2012)

January 8, 2013

F&A Aqua Holdings, Inc. is listed on the First Section of the Tokyo Stock Exchange under the securities code number 8008. Representative: Saishi Kimura, President and Representative Director

Inquiries: Masahiko Iwamori, Executive Director in charge of operations

Tel: +81-3-5719-3429

URL: http://www.fa-aqua.co.jp

Quarterly Securities Report filing date (planned): January 11, 2013

Supplemental materials prepared for quarterly financial results: No

Holding of quarterly financial results meeting: No

Dividend payment commencement date (planned): No

(Millions of yen rounded down)

1. Consolidated Operating Results for Nine-Month Period of Fiscal 2012 (March 1, 2012 to November 30, 2012)

(1) Consolidated Operating Results (Cumulative)

(Percentage figures are the increase / (decrease) for the corresponding period of the previous fiscal year.)

	Operating Revenues	Operating Income	Ordinary Income	Net Income
FY2012 Nine-Month Period FY2011 Nine-Month Period	Millions of yen ? 34,360 4.3 32,954 (0.6)	Millions of yen ? 2,837 34.2 2,114 55.8	Millions of yen ? 3,225 39.5 2,312 35.9	Millions of yen ? 1,464 33.0 1,100 209.3

(Note) Comprehensive income: FY2012 Nine-Month Period: 1,394 million yen (43.5%) FY2011 Nine-Month Period: 971 million yen (-%)

	Net Income per Share	Net Income per Share after Dilution
FY2012 Nine-Month Period FY2011 Nine-Month Period	Yen 53.40 39.75	Yen - -

(2) Consolidated Financial Position

(Reference)

Shareholders' equity: November 30, 2012: 39,580 million yen February 29, 2012: 38,821 million yen

2. Dividends

(Note) Revisions to consolidated operating forecasts as of the end of the current quarter: No

Breakdown of period-end cash dividend for the fiscal year ending February 2013: Ordinary cash dividend ¥10.50 Special cash dividend ¥1.00

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3. Forecasts of Consolidated Operating Results for the Fiscal Year Ending February 28, 2013 (March 1, 2012 to February 28, 2013)

(% figures for the full fiscal year represent year-on-year increase or decrease)

	Net Sales	Operating Income	Ordinary Income	Net Income	Net Income per Share
Fiscal year ending February 28, 2013	Millions of yen % 48,000 2.8	Millions of yen % 4,200 22.6	Millions of yen % 4,700 20.8	Millions of yen % 2,500 26.9	Yen 91.15

(Note) Revisions to consolidated operating forecasts as of the end of the current quarter: No

Notes

(1) Changes in Important Subsidiaries during the Period

(Changes in specified subsidiaries that caused changes in the scope of consolidation): No

(2) Application of Special Accounting Practices in the Preparation of the Quarterly Consolidated

Financial Statements: No

Note: Application of the simplified accounting method and special accounting practices in the preparation of quarterly consolidated financial statements.

(3) Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements

1) Changes of accounting principles in line with revisions to accounting and other standards: No

2) Changes of accounting principles other than 1) above: Yes

3) Changes in accounting estimates: No

4) Retrospective restatement: No

(4) Number of Shares Issued and Outstanding (Common Stock)

1. Total number of shares issued and outstanding (including treasury stock) as of the period-end:

November 30, 2012: 29,331,356 shares Feb. 29, 2012: 29,331,356 shares

2. Total number of treasury stock as of the period-end:

November 30, 2012: 1,944,446 shares Feb. 29, 2012: 1,911,731 shares

3. Average number of shares for the period (Cumulative total for the quarterly consolidated

period)

FY2012 Nine-Month Period: 27,426,420 shares FY2011 Nine-Month Period: 27,689,031 shares

Note: The number of recorded treasury stock is inclusive of 247,400 of the Company's shares held by the F&A Aqua Holdings Employees' Shareholding Association Trust Account as of the end of the quarterly period.

Regarding the Status of Quarterly Review Procedure Implementation

This financial report for the nine-month period of fiscal 2012 is not subject to the quarterly review

procedures stipulated in the Financial Instruments and Exchange Act of Japan. As of the date of disclosure

of this report, the review procedures for the quarterly financial statements under the Financial Instruments and Exchange Act had not been completed.

Cautionary Statement Concerning Operating Results Forecasts and Other Special Items

The aforementioned forecasts were made based on information available to management as of the date of

this report. Actual results could differ significantly from forecasts due to a variety of factors. Please refer to "Qualitative Information Regarding Forecasts of Consolidated Business Results" on page 5 for assumptions of the revision of forecasts of business results.

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Contents

1.	Qualitative Information Regarding Consolidated Quarterly Business Results	4
	(1)	Qualitative Information Regarding Consolidated Operating Results	4
	(2)	Qualitative Information Regarding Consolidated Financial Position	5
	(3)	Qualitative Information Regarding Forecasts of Consolidated Business Results	5
2.	Summary Information (Notes)	5
	(1)	Changes in Important Subsidiaries During the Period	5
	(2)	Application of Special Accounting Practices in the Preparation of the Quarterly Consolidated Financial Statements	5
	(3)	Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements	5
	(4)	Additional Information	5
3.	Summary of Significant Events Related to the Going Concern Assumption	5
4.	Consolidated Quarterly Financial Statements	6
	(1)	Consolidated Quarterly Balance Sheets	6
	(2)	Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income	8
		Consolidated Quarterly Statements of Income Third Quarter Cumulative	8
		Consolidated Quarterly Statements of Comprehensive Income Third Quarter Cumulative	9
	(3)	Notes Regarding Going Concern Assumptions	10
	(4)	Segment Information	10
	(5)	Notes Regarding Substantial Changes in Shareholders' Equity	11

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1. Qualitative Information Regarding Consolidated Quarterly Business Results (1) Qualitative Information Regarding Consolidated Operating Results

During the third quarter cumulative period of fiscal 2012 (March 1, 2012 to November 30, 2012), the Japanese economy continued to gently recover from the stagnation following the Great East Japan Earthquake, on the back of recovery demand. However, the outlook for the economy remained clouded by such factors as a slowdown in exports and sluggish capital expenditures, stemming mainly from the European debt crisis and stagnant economic growth in developing countries.

In the retail industry, harsh business conditions remained as a result of increasing thriftiness and price consciousness on the part of consumers, as well as inclement weather.

Under such conditions, the F&A Aqua Holdings Group, with fiscal 2012 as the first year of its third medium-term management plan, worked to enhance its corporate value by practicing CSR-based

management to establish a highly trusted corporate group, by strengthening internal controls, by providing

returns to shareholders, and by making longer term investments linked to earnings growth.

As a result, operating revenues for the third quarter cumulative period of the subject fiscal year amounted to ¥34,360 million (up 4.3% from the same period of the previous fiscal year). Operating income totaled ¥2,837 million (up 34.2%), with ordinary income of ¥3,225 million (up 39.5%) and net income of

¥1,464 million (up 33.0%).

Operating income, ordinary income and net income reached record high levels during the subject fiscal period.

Note: Operating revenues are the sum total of net sales and other operating revenues. Operating results by business segment were as follows.

The F.D.C. Products Group

The F.D.C. Products group posted a considerable rise in sales and operating income from the same period of the previous fiscal year, due mainly to strong performance at existing locations of its mainstay 4°C brand jewelry stores following the opening of the new 4°C Pregence zone. Results were also buoyed by continued positive performance at the expanding network of 4°C BRIDAL and canal 4°C stores.

As a result, segment operating revenues amounted to ¥16,429 million (up 9.4% from the same period of the previous fiscal year), with operating income of ¥2,345 million (up 33.1%).

The AS'TY Group

The AS'TY group took steps to strengthen project planning capabilities in the apparel manufacturing business, centered on OEM, while also working to expand sales. Sales were up year on year, and operating income rose substantially as a result of positive trends in relationships with existing business partners, and steady efforts to cultivate new partners.

As a result, segment operating revenues amounted to ¥7,880 million (up 6.3% from the same period of the previous fiscal year), with operating income of ¥582 million (up 59.5%).

MISUZU

MISUZU Co., Ltd. took steps to enhance its brand value and strengthen SPA (Specialty store retailer of Private label Apparel) functions. However, sales and operating income declined from the same period of the previous fiscal year, due mainly to a falloff in customers and inclement weather.

As a result, segment operating revenues amounted to ¥4,484 million (down 8.5% from the same period of the previous fiscal year), with operating income of ¥64 million (down 62.9%).

âge

Although âge Co., Ltd.'s mainstay everyday fashion brand PALLET performed strongly, sales were down slightly from the same period of the previous fiscal year as a result of slow returns from LOU and RAPPORT. Operating income, however, rose substantially from a year earlier as a result of improvement in the gross margin percentage.

As a result, segment operating revenues amounted to ¥5,566 million (down 1.0% from the same period of the previous fiscal year), with operating income of ¥113 million (up 17.9%).

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(2) Qualitative Information Regarding Consolidated Financial Position

Assets, Liabilities and Net Assets

Total assets at the end of the subject third quarter cumulative period (November 30, 2012) amounted to

¥54,037 million, an increase of ¥2,895 million from the end of the previous fiscal year (February 29, 2012). This was due mainly to an increase of 2,387 million in merchandise and finished goods. Total liabilities amounted to ¥14,437 million, an increase of ¥2,132 million from the end of the previous fiscal year. This was due mainly to increases of 1,247 million in notes and accounts payable-trade; and ¥459 million in short-term loans payable. Total net assets at the end of the subject period amounted to ¥39,600 million, an increase of ¥762million from the end of the previous fiscal year.

(3) Qualitative Information Regarding Forecasts of Consolidated Business Results

Earnings forecasts are unchanged from those announced on October 9, 2012.

2. Summary Information (Notes) (1) Changes in Important Subsidiaries during the Period:

Not applicable

(2) Application of Special Accounting Practices in the Preparation of the Quarterly Consolidated Financial Statements:

Not applicable

(3) Changes in Accounting Policies, Changes in Accounting Estimates, and Restatements:

Change in Valuation Method for Inventories

The F&A Aqua Holdings Group had previously adopted the weighted-average cost method as its principal valuation method for inventories. From the subject first quarter period, however, the Company

has changed to the moving-average cost method as its principal method.

This change was made following the full replacement of core business systems at the Company's principal subsidiary F.D.C. Products Inc. to allow for calculation of costs in a timely manner, and is intended to facilitate calculation of periodic profit or loss more quickly and accurately. This change in accounting method has been applied retroactively. Figures in the financial statements for the previous quarter and previous fiscal year are after retroactive application.

The impact on results from this change is minimal.

Application of the Accounting Standard for Earnings per Share

Effective from the first quarter of the fiscal year under review, the Company has adopted the Accounting Standard for Earnings per Share of the Accounting Standards Board of Japan (ASBJ), ASBJ Standard No. 2 issued on June 30, 2010 as well as the Guidance on Accounting Standard for Earnings per Share ASBJ Guidance No. 4 issued on June 30, 2010.

In calculating diluted net income per share, the Company has switched, for stock options whose rights go into effect after a fixed period, to the method of adding to expected income from the exercise

of rights the portion of the fair value of stock options that relate to future services provided to the

Company.

There was no impact from this change.

(4) Additional Information

Application of Accounting Standard for Accounting Changes and Error Corrections

For accounting changes and corrections of previous errors made after the subject first quarter period, the Company has applied "Accounting Standard for Accounting Changes and Error Corrections" (ASBJ Statement No. 24, December 4, 2009) and "Guidance on Accounting Standard for Accounting Changes and Error Corrections" (ASBJ Guidance No. 24, December 4, 2009).

3. Summary of Significant Events Related to the Going Concern Assumption

Not applicable

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4. Consolidated Quarterly Financial Statements (1) Consolidated Quarterly Balance Sheets

(Thousands of yen)

ASSETS

Current assets:

End of the Fiscal Year Ended February 29, 2012 (As of February 29, 2012)
End of the Third Quarter of the Fiscal Year Ending February 28, 2013

(As of November 30, 2012)
Cash and deposits 1,287,321 544,040
Notes and accounts receivable ? trade 3,405,744 4,557,614
Merchandise and finished goods 5,205,017 7,592,565
Work in process 329,657 139,274
Raw materials and supplies 566,752 390,156
Other current assets 1,187,205 1,071,633

Allowance for doubtful accounts (6,941) (1,712) Total current assets 11,974,758 14,293,573

Noncurrent assets:

Property, plant and equipment:
Buildings and structures, net 5,531,699 5,690,498
Land 5,820,237 5,814,077

Other, net 489,110 669,288

Total property, plant and equipment 11,841,047 12,173,863
Intangible assets:
Goodwill 7,271,736 6,863,149

Other intangible assets 192,342 646,019

Total intangible assets 7,464,079 7,509,169
Investments and other assets:
Investment securities 13,444,132 13,350,002
Prepaid pension cost 1,990,625 1,996,816
Other 5,021,778 5,302,841

Allowance for doubtful accounts (593,824) (588,483) Total investments and other assets 19,862,712 20,061,178

Total noncurrent assets 39,167,839 39,744,211

Total assets 51,142,598 54,037,784

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(Thousands of yen)

LIABILITIES Current liabilities:

End of the Fiscal Year Ended February 29, 2012 (As of February 29, 2012)
End of the Third Quarter of the Fiscal Year Ending February 28, 2013

(As of November 30, 2012)
Notes and accounts payable ? trade 4,000,388 5,247,934
Short-term loans payable 97,700 557,400
Income taxes payable 1,034,486 375,910
Provision for bonuses 503,261 510,640
Provision for directors' bonuses 57,450 43,913

Other 2,836,780 3,207,381

Total current liabilities 8,530,067 9,943,179

Noncurrent liabilities:

Long-term loans payable 510,350 398,575
Provision for retirement benefits 554,593 537,671
Provision for directors' retirement benefits 397,046 456,781
Asset retirement obligations 806,554 873,822

Other 1,506,051 2,227,035

Total noncurrent liabilities 3,774,597 4,493,886

Total liabilities 12,304,664 14,437,066

NET ASSETS Shareholders' equity:

Capital stock 2,486,520 2,486,520
Capital surplus 18,300,303 18,300,303
Retained earnings 19,720,307 20,570,596

Treasury stock (1,476,415) (1,497,994) Total shareholders' equity 39,030,717 39,859,426

Other accumulated comprehensive income:

Valuation difference on available-for-sale securities 91,193 33,049
Deferred gains or losses on hedges 14,624 9,060

Revaluation reserve for land (264,512) (264,512) Foreign currency translation adjustments (50,172) (56,406) Total other accumulated comprehensive income (208,866) (278,808) Subscription rights to shares 14,286 18,566

Minority interests 1,796 1,533

Total net assets 38,837,933 39,600,718

Total liabilities and net assets 51,142,598 54,037,784

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(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of Comprehensive Income Consolidated Quarterly Statements of Income Third Quarter Cumulative

(Thousands of yen)

Nine-Month Period of the Fiscal Year Ended February 29, 2012 (March 1, 2011 to November 30, 2011)
Nine-Month Period of the Fiscal Year Ending February 28, 2013 (March 1, 2012 to November 30, 2012)

Net sales 32,198,292 33,629,791

Cost of Sales 14,997,184 15,397,806

Gross profit 17,201,108 18,231,985

Other operating revenue 756,459 730,730

Operating gross profit 17,957,568 18,962,715

Selling, general and administrative expenses 15,842,986 16,125,494

Operating income 2,114,581 2,837,221

Non-operating income

Interest income 1,867 1,495
Dividends received 39,811 42,865
Equity in earnings of affiliates 22,514 236,221
Rent of real estate for investment 70,830 66,172
Foreign exchange gains 10,606 19,744
Subsidy income 61,432 18,902
Other 33,240 30,645

Total non-operating income 240,302 416,047

Non-operating expenses

Interest expenses 24,246 11,152

Other 18,069 16,809

Total non-operating expenses 42,315 27,961

Ordinary income 2,312,568 3,225,306

Extraordinary income

Gain on sales of noncurrent assets 585 77,915
Gain on sales of investment securities 0 244
Reversal of allowance for doubtful accounts 668 ?
Foregift income ? 14,000

Refund of consumer taxes for prior periods 121,027 ?

Total extraordinary income 122,281 92,159

Extraordinary loss

Loss on sales of noncurrent assets 23,386 ?
Loss on retirement of noncurrent assets 21,713 4,036
Loss on valuation of investment securities 163,299 155,425
Impairment loss 20,783 52,828
Loss on closing of stores 13,971 9,935
Demolition expenses ? 18,000
Loss on disaster 42,910 ?
Loss on valuation of golf club membership ? 23,004
Loss on withdrawal from employees' pension fund ? 183,983

Other 1,061 ?

Total extraordinary losses 287,125 543,611

Net income before income taxes 2,147,724 2,773,855

Income taxes ? current 657,278 981,110
Income taxes for prior periods 61,183 ?

Income taxes ? deferred 328,845 328,550

Total income taxes 1,047,261 1,309,661

Income before minority interests 1,100,462 1,464,194

Minority interests in income (loss) (254) (263)

Net income 1,100,717 1,464,457

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Consolidated Quarterly Statements of Comprehensive Income Third Quarter Cumulative

(Thousands of yen)

Nine-Month Period of the Fiscal Year Ended February 29, 2012 (March 1, 2011 to November 30, 2011)
Nine-Month Period of the Fiscal Year Ending February 28, 2013 (March 1, 2012 to November 30, 2012)
Income before minority interests 1,100,462 1,464,194
Other comprehensive income
Other valuation difference on available-for-sale securities (105,303) (20,575) Deferred gains or losses on hedges 3,880 (5,563) Foreign currency translation adjustments (10,294) (6,233)
Share of other comprehensive income of associates accounted
for using equity method
(16,842) (37,568)

Total other comprehensive income (128,559) (69,941)

Comprehensive income 971,902 1,394,252

Comprehensive income attributable to 972,157 1,394,515
Comprehensive income attributable to owners of the parent (254) (263)

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(3) Notes Regarding Going Concern Assumptions

Not applicable

(4) Segment Information ? The nine-month period of the fiscal year ended February 29, 2012 (March 1, 2011 to November 30, 2011) 1. Information Regarding Sales and Income or Loss by Reporting Segment

(Thousands of yen)

	Reporting Segments	Adjustment amount (Note 1)	Amount recorded on consolidated quarterly statements of income (Note 2)
	F.D.C. Products group	AS'TY group	MISUZU	âge	Total	Adjustment amount (Note 1)	Amount recorded on consolidated quarterly statements of income (Note 2)
Operating revenues Operating revenues to outside customers Intrasegment operating revenues and transfers	15,015,133 17,327	7,415,631 1,094,220	4,901,669 45,054	5,622,317 138,229	32,954,752 1,294,831	? (1,294,831)	32,954,752 ?
Total	15,032,461	8,509,851	4,946,724	5,760,546	34,249,584	(1,294,831)	32,954,752
Segment income	1,762,010	365,087	173,203	96,057	2,396,359	(281,778)	2,114,581

Notes:

1. The adjustment amount of minus ¥281,778 thousand for segment income mainly includes corporate expenses that are not allocated to individual reporting segments. Corporate expenses are primarily general administrative expenses not

attributable to reporting segments.

2. Segment income figures have been adjusted to operating income on the consolidated quarterly income statements.

2. Information Regarding Impairment Loss of Fixed Assets, Goodwill and Related Items by Reporting Segment

There was no major impairment loss recorded during the period under review.

? The nine-month period of the fiscal year ending February 28, 2013

(March 1, 2012 to November 30, 2012) 1. Information Regarding Sales and Income or Loss by Reporting Segment

(Thousands of yen)

	Reporting Segments	Adjustment amount (Note 1)	Amount recorded on consolidated quarterly statements of income (Note 2)
	F.D.C. Products group	AS'TY group	MISUZU	âge	Total	Adjustment amount (Note 1)	Amount recorded on consolidated quarterly statements of income (Note 2)
Operating revenues Operating revenues to outside customers Intrasegment operating revenues and transfers	16,429,578 30,478	7,880,200 1,097,032	4,484,101 38,782	5,566,641 134,176	34,360,522 1,300,469	? (1,300,469)	34,360,522 ?
Total	16,460,056	8,977,232	4,522,883	5,700,818	35,660,991	(1,300,469)	34,360,522
Segment income	2,345,822	582,160	64,231	113,252	3,105,467	(268,246)	2,837,221

Notes:

1. The adjustment amount of minus ¥268,246 thousand for segment income mainly includes corporate expenses that are not allocated to individual reporting segments. Corporate expenses are primarily general administrative expenses not

attributable to reporting segments.

2. Segment income figures have been adjusted to operating income on the consolidated quarterly income statements.

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2. Information Regarding Impairment Loss of Fixed Assets, Goodwill and Related Items by Reporting Segment

There was no major impairment loss recorded during the period under review.

(5) Notes Regarding Substantial Changes in Shareholders' Equity

Not applicable

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