Summary of Settlement of Consolidated Accounts for the Second Quarter of the Fiscal Year ending March 31, 2012 Japanese Standards (Consolidated)

Transcription

1 Japanese Standards (Consolidated) Isetan Mitsukoshi Holdings Ltd. November 11, 2011 Securities code: 3099 (Listed on the First Section of Tokyo Stock Exchange and Fukuoka Stock Exchange) (URL: Representative: Kunio Isihizuka, President and Representative Director Contact: Yasuhiro Suzuki, Executive Manager, Investor Relations Corporate Administration Div., Administration Headquarters, Isetan Mitsukoshi Holdings Ltd. TEL: (03) Scheduled date of filing of the quarterly financial report (Shihanki Houkokusho): November 14, 2011 Scheduled date of dividend payments:- Preparation of quarterly results supplementary materials: Yes Convening of quarterly results explanation meeting: Yes (for securities analysts) (Figures are rounded down to the nearest million yen) 1. Consolidated Business Results for the Second Quarter of Fiscal 2011 (From April 1, 2011, to September 30, 2011) (1) Results of consolidated operations (cumulative) (Percentage figures indicate changes from the previous year) Net Sales Operating Income Recurring Income Net Income Millions of yen % Millions of yen % Millions of yen % Millions of yen % 2Q of FY , , , ,576-2Q of FY ,921 (6.0) 917-8, (90.1) Note: Comprehensive income (loss): 2Q of 2011: 21,025 million ( %), 2Q of 2010: - 5,832 million ( %) Net Income per Share (Basic) Net Income per Share (Diluted) Yen Yen 2Q of FY Q of FY (2) Consolidated financial position Total Assets Net Assets Shareholder s Equity Ratio Millions of yen Millions of yen % 2Q of FY2011 1,204, , FY2010 1,237, , (Reference) Shareholders equity: 2Q of FY2011: 424,116 million yen, FY2010: 406,501 million yen 2. Dividends Annual Dividends (Record date) First Quarter Second Quarter Third Quarter Year-end Total Yen Yen Yen Yen Yen FY FY FY2011 (Forecast) Note: Revision to recently announced dividend forecast: Yes 3. Forecast of Consolidated Results for Fiscal 2011 (From April 1, 2011, to March 31, 2012) (Percentage figures indicate changes from the same period of the previous year) Net Sales Operating Income Recurring Income Net Income Net Income per Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Half Year 580, , , , Full Year 1,214,000 (0.6) 19, , , Note: Revision to recently announced consolidated results forecast: Yes

2 4. Others Isetan Mitsukoshi Holdings Ltd. (3099) (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of consolidation): Yes Newly consolidated companies: - Companies removed from consolidation: 1 (company name: Isetan Co., Ltd.) (Note: For details, please refer to supporting data: 2. Summary Information (Others) (1) Changes in significant subsidiaries during the period on Page 6.) (2) Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements: Yes (Note: For details, please refer to supporting data: 2. Summary Information (Others) (2) Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements on Page 6.) (3) Changes in accounting policy, changes in accounting estimates or restatement due to correction 1) Changes in accounting policy in line with revision to accounting standards: No 2) Other changes: Yes 3) Changes in accounting estimates: No 4) Restatement due to correction: No (Note: For details, please refer to supporting data: 2. Summary Information (Others) (3) Changes in accounting policy, changes in accounting estimates or restatement due to correction on Page 6.) (4) Number of shares issued and outstanding (common stock) 1) Number of shares issued and outstanding at Second quarter the end of the period (including treasury stock) of FY2011 2) Number of shares of treasury stock at the end Second quarter of the period of FY2011 3) Average number of shares during the period Second quarter of FY ,720,394 shares FY ,630,834 shares 214,105 shares FY ,163 shares 394,484,775 shares Second quarter 394,503,409 shares of FY2010 (* Presentation of status of implementation of the quarterly review process) The review process of the quarterly consolidated financial statements for this period in accordance with the Financial Instruments and Exchange Law has been completed at the point of disclosing this. (* Disclaimer regarding Forward-looking Statements) This report contains forward-looking statements, which are based on the information currently available and certain assumptions the Company considers to be reasonable. Actual results, performance, achievements or financial position may be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. For assumptions on which forward-looking statements are based as well as for precautionary statements in the use of forward-looking statements, please refer to 1. Qualitative Information on the Quarterly Results of Consolidated Operations (3) Qualitative Information on Forecast of Consolidated Results on Page 4. Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

3 Table of Contents of Accompanying Materials 1. Qualitative Information on the Quarterly Results (1) Qualitative Information on the Results of Consolidated Operations...2 (2) Qualitative Information on the Changes in the Consolidated Financial Position...3 (3) Qualitative Information on Forecast of Consolidated Results...4 (4) Management Policies Summary Information (Others) (1) Changes in significant subsidiaries during the period (2) Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements...6 (3) Changes in accounting policy, changes in accounting estimates or restatement due to correction...6 (4) Additional information Consolidated Financial Statements...7 (1) Consolidated Balance Sheet...7 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income...9 Consolidated Statements of Income 9 Consolidated Statements of Comprehensive Income 10 (3) Consolidated Statement of Cash Flows...11 (4) Notes on going concern assumption...12 (5) Segment information...12 (6) Notes on significant changes in the amount of shareholders equity (if any)

4 1. Qualitative Information on the Quarterly Results (1) Qualitative Information on the Results of Consolidated Operations During the second quarter of fiscal 2011 (April 1, 2011 to September 30, 2011), the Japanese economy faced a continuation of extreme uncertainties that included concerns about the impact of the Great East Japan Earthquake that struck on March 11 and the power shortages and release of radioactive materials resulting from the ensuing accident at the Fukushima Daiichi nuclear power plant. Other concerns included revisions to the tax system to secure revenues for reconstruction and the ongoing appreciation of the yen due to unease over public finances in Europe and the sluggish U.S. economy. Meanwhile, household expenditures continued to post negative growth while the value of retail sales, which had become positive, moved back into negative territory again in August. Due to these factors, more time is still expected to be needed before a full-scale recovery in the Japanese economy is realized. In the department store sector, there was a further dissipation in the mood of voluntary restraint resulting from the disaster while a trend toward robust consumption of products related to energy conservation and a recovery in high-priced items could be seen. Nevertheless, sales declined year on year due to falling temperatures caused by unseasonable summer weather as well as due to the impact of lingering summer heat in September. Amid this environment, the Isetan Mitsukoshi Group progressed with the creation of a structure that reliably ensures profits even in times when achieving growth in sales is difficult. Under this initiative, the Isetan Mitsukoshi Group will strive to become my indispensable department store for each individual customer throughout his or her life by continually creating high-quality, new lifestyles and being of use to our customers in their many different roles in life. By doing so, we aim to become the world s foremost retail and services group with high profitability and sustained growth. As a result of the aforementioned initiatives, consolidated net sales for the second quarter amounted to 583,645 million, an increase of 0.6% from the second quarter of the previous fiscal year, operating income amounted to 9,046 million, an increase of 886.2%, recurring income was 15,704 million, an increase of 82.8%, and net income was 20,576 million compared with net income of 413 million in the previous second quarter due to the recording of deferred tax assets. Results by segment were as follows. 1) Department Store Business In the mainstay department store, there was a strong showing in products related to electricity conservation and disaster prevention as well as in gifts that re-examine bonds with loved ones, despite negative factors such as the implementation of rolling blackouts within the areas serviced by The Tokyo Electric Power Company, Inc. (TEPCO). At the same time, there has been a resurgence in consumption of high-priced items as well as store visits by foreign customers. Sendai Mitsukoshi Ltd., which suffered damage in the Great East Japan Earthquake, continued operations immediately following the disaster, particularly for foodstuffs, and operation of the entire store was resumed on April 28. Efforts are being made to ensure the stable supply of products to regional customers, which resulted in increases in sales and profits. Regarding the restructuring of the department store, on April 1, 2011, Mitsukoshi Ltd. and Isetan Co., Ltd. merged and started operations as Isetan Mitsukoshi Ltd. In September, the Isetan Mitsukoshi Group launched the ONLY MI brand for planning and proposing highly unique products that originate with the opinions of customers. In this manner, we will fully utilize the two Mitsukoshi and Isetan brands while promoting efforts to maximize profits throughout the Group s entire department store. In the Sapporo region, Sapporo Marui Imai, Ltd. and Sapporo Mitsukoshi Ltd. merged on the same day and Sapporo Marui Mitsukoshi Ltd. was established. This completed the restructuring of the department store. Looking at our overseas department stores, by expanding our department store in China and Southeast Asia, where growth is anticipated, Isetan Mitsukoshi intends to build an earnings foundation that can contribute to the overall Group. In this region, we recorded increases in total sales and profits from Group companies on the back of favorable economic growth. As a result, segment sales amounted to 529,867 million, a decrease of 1.9% from the second quarter of the previous fiscal year, and operating income was 5,250 million, a increase of 119.9% from the second quarter of the previous fiscal year

5 2) Credit & Finance Business/Customer Organization Management Business In the credit & finance /customer organization management, MICARD Co., Ltd. instituted a system that enabled shared services throughout Isetan Mitsukoshi Group stores before the end of the previous fiscal year. Although profits declined due to the occurrence of one-time expenses associated with the issuance of a Group Card in the previous fiscal year, we forecast a turnaround to increases in sales and profits in the current fiscal year. This forecast can be attributable to an increase in fee income from card use at department stores and externally along with the increased issuance of the card and to annual fees for the card at Mitsukoshi and Iwataya, which started the switch to MICARD in fiscal 2010 (first fiscal year was free of charge). From November, we will issue an American Express credit card as an international brand card in addition to VISA to further raise customer convenience. MI TOMONOKAI Co., Ltd. also established a system to integrate Customer Organization Management operations throughout the Isetan Mitsukoshi Group by the end of the previous fiscal year, which enabled the reciprocal use of Tomonokai shopping cards and shopping certificates. As a result, segment sales amounted to 13,834 million, an increase of 29.4% from the second quarter of the previous fiscal year, and operating income was 1,641 million compared with an operating loss of 2,204 million in the second quarter of the previous fiscal year. 3) Other Retail & Specialty Store Business In the other retail & specialty store, Queen s Isetan Co., Ltd., which operates a supermarket, merged with Niko, Ltd., which is involved in food manufacturing and wholesale, in April 2011, and Isetan Mitsukoshi Food Service Ltd. began operations. The company is undertaking initiatives that include expanding products by leveraging Niko s food manufacturing capabilities. As its first new store under the name Isetan Mitsukoshi Food Service, in summer 2012 it plans to open the Queens Isetan Fujimino Store (tentative name) to serve as a core tenant in a shopping center in Fujimino, Saitama Prefecture. Additionally, in April 2011 Isetan Mitsukoshi Direct Shopping Co., Ltd. was spun off from Mitsukoshi Ltd. as the Group s comprehensive specialist in mail order shopping. As one new sales channel, on October 22 Isetan Mitsukoshi Direct Shopping will start Isetan Mitsukoshi MI Deli, a membership-based foods home delivery service in line with efforts to further raise customer convenience. As a result, segment sales amounted to 41,954 million, an increase of 61.4% from the second quarter of the previous fiscal year, and operating loss was 36 million compared with an operating loss of 250 million in the second quarter of the previous fiscal year. 4) Real Estate Business In the real estate, Isetan Mitsukoshi Building Management Service Co., Ltd. worked to build sales support operations and disaster prevention related operations. As a result, segment sales amounted to 10,855 million, a decrease of 40.8% from the second quarter of the previous fiscal year, and operating income was 428 million, a decrease of 61.0% from the second quarter of the previous fiscal year. 5) Other Businesses In the other es segment, Group companies that engage in sales and marketing support made efforts to establish a highly productive operational infrastructure. These companies include Isetan Mitsukoshi Business Support Ltd., a logistics company, and Isetan Mitsukoshi Human Solutions Ltd., a personnel services company. As a result, segment sales amounted to 35,296 million, a decrease of 13.1% from the second quarter of the previous fiscal year, and operating income was 1,567 million, an increase of 72.3% from the second quarter of the previous fiscal year. (2) Qualitative Information on the Changes in the Consolidated Financial Position Total assets at the end of the second quarter amounted to 1,204,285 million, a decrease of 33,489 million from the end of the previous fiscal year. This was due mainly to a reduction in liquid funds on hand. Total liabilities amounted to 768,035 million, a decrease of 51,587 million from the end of the previous fiscal year. This was due mainly to a decrease in short-term borrowings. Net assets amounted to 436,250 million, an increase of 18,097 million from the end of the previous fiscal year. This was due mainly to an increase in retained earnings

6 Cash Flows Cash and cash equivalents at the end of the second quarter were 30,263 million, a decrease of 1,427 million from the end of the second quarter in the previous fiscal year. 1) Cash flows from operating activities Net cash provided by operating activities amounted to 9,589 million, a 6,722 million decrease in cash inflow from the second quarter in the previous fiscal year. This was due mainly to decreases in cash resulting from a 7,512 million increase in receivables and a 6,711 million decrease in payables despite a 9,058 million increase in income before income taxes and minority interests. 2) Cash flows from investing activities Net cash used in investing activities amounted to 10,803 million, a 16,143 million decrease in cash from the second quarter in the previous fiscal year. This was due mainly to 12,601 million for payments for purchase of tangible fixed assets. 3) Cash flows from financing activities Net cash used in financing activities amounted to 25,509 million, an increase of 30,851 million from the second quarter of the previous fiscal year. This was due primarily to a decrease in interest-bearing debt. (3) Qualitative Information on Forecast of Consolidated Results On a full-year basis, although we project a decline in net sales compared with the previous forecast due to continued uncertainty in the consumption environment, operating income and recurring income are expected to remain unchanged from the previous forecast. Net income is projected to exceed the previous forecast in line with the recording of deferred tax assets. (4) Management Policies (1) Basic Management Policies By orchestrating the know-how and resources cultivated by Mitsukoshi and Isetan, the Group strives to become my indispensable department store for each individual customer throughout his or her life by continually creating high quality, new lifestyles and being of use to our customers in their many different roles in life. Inspired by this vision, we aim to become the world s foremost solution provider with high profitability and sustained growth. (2) Target Performance Indicators 1. Raise operating income that serves as a resource for reinvestments aimed at maximizing customer satisfaction and cultivating growth es. 2. Reduce interest-bearing debt to improve our financial foundation. (3) Mid-term Business Strategies Under the Isetan Mitsukoshi Group Three-Year Plan (fiscal 2012 fiscal 2014), the Group s Mid-Term Management Plan, the Department Store and Specialty Store Business, Supermarket Business, Direct Sales Business (mail order, home delivery, Web), Overseas Business and Card Business are positioned as our five key es, and the Group will promote the following three core strategies. Key Strategy 1: Expand and Enhance Customer Contact To increase opportunities to be even more useful to our customers, we will continually strengthen (enhance customer contacts) our three flagship stores (Mitsukoshi Nihombashi Main store, Isetan Shinjuku Main store and Mitsukoshi Ginza store), which are the Group s greatest strength, while deploying the Group s various resources. By doing so, we aim to develop customer contact points suited to the consumption styles of our customers and expand opportunities for contact with our customers. Key Strategy 2: Rebuild High Productivity Customer Contact Points At each customer contact point, we aim to enhance products and product selection and sales services to a level that exceeds customer demands and expectations and raise customer satisfaction. To realize a balance between expanding product profit margins commensurate with the characteristics of each and format - 4 -

7 and strengthening profitability by reducing selling, general and administrative (SG&A) expenses, we aim to raise productivity by building new structures ( model reforms). Key Strategy 3: Strengthen Our Foundation to Utilize Group Resources Following the integration of Mitsukoshi and Isetan, the Group is expanding and utilizing its various resources, including the foundations built mainly in the department store, across the entire Group. By doing so, we aim to further accumulate Group know-how and resources and to create additional beneficial effects in the areas of sales, operations and costs. (4) Issues to be Addressed To ensure our survival as a department store, in accordance with the above Mid-Term Management Plan, we will organically align and mutually deploy the Group s resources and reallocate management resources. In the uncertain and harsh environment, by vigorously and steadily implementing various strategies and ensuring that these produce results, we can become a department store Group that is beneficial to customers and indispensable for each customer while raising the Group s medium- and long-term corporate value

8 2. Summary Information (Others) (1) Changes in significant subsidiaries during the period Isetan Mitsukoshi Ltd. (name changed from Mitsukoshi Ltd.), a consolidated subsidiary of the Company, became the surviving company as of April 1, 2011, and Isetan Co., Ltd., a specified subsidiary of the Company, was absorbed. In line with this, said specified subsidiary was dissolved. (2) Adoption of special accounting treatment used in preparation of the quarterly consolidated financial statements Calculation of tax expenses The effective tax rate on income before income taxes for the fiscal year after the application of tax effect accounting is reasonably estimated, and that estimated rate is applied to income before income taxes for the quarterly period to calculate estimated tax expenses. (3) Changes in accounting policy, changes in accounting estimates or restatement due to correction (Change in method of depreciation for tangible fixed assets) Previously, other tangible fixed assets (equipment and fixtures, etc.) within tangible fixed assets was accounted for by the declining-balance method at consolidated subsidiaries. The method has been changed to the straight-line method from this fiscal year. Isetan Mitsukoshi Holdings Ltd. conducted an evaluation and examination of recent investments made by the Isetan Shinjuku Main store and Mitsukoshi Ginza store in order to formulate an equipment investment plan and an earnings plan for the new company Isetan Mitsukoshi Ltd. following the merger of Mitsukoshi Ltd. and Isetan Co., Ltd., the two core companies of the Group, on April 1, Based on the results, the effects of investment are expected to emerge evenly and stably, and as such, the straight-line method enables more rational expense allocation in line with actual conditions. In accordance with this change, operating income, recurring income and income before income taxes respectively increased by 645 million for the second quarter compared with when using the previous method. (4) Additional information In terms of changes in accounting policies and correction of errors contained in past reports after the beginning of the first quarter of the fiscal year, Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No. 24 issued on December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No. 24 issued on December 4, 2009) have been applied

9 3. Consolidated Financial Statements (1) Consolidated Balance Sheets ASSETS Fiscal 2010 (As of March 31, 2011) (Millions of yen) 2Q of Fiscal 2011 (As of September 30, 2011) Current assets Cash and bank deposits 56,940 27,853 Notes and accounts receivable trade 87,431 93,242 Marketable securities 1, Merchandise and finished goods 55,884 56,886 Work in process Raw materials and supplies 1,118 1,076 Other current assets 43,228 50,325 Less: Allowance for doubtful accounts (2,924) (3,187) Total current assets 242, ,897 Property and equipment Tangible fixed assets Buildings and structures, net 187, ,227 Land 537, ,675 Other tangible fixed assets, net 20,969 20,195 Total tangible fixed assets 746, ,098 Intangible fixed assets Goodwill 1,320 Other intangible fixed assets 47,448 46,526 Total intangible fixed assets 48,768 46,526 Investments and other assets Investment securities 88,911 87,635 Other assets 112, ,824 Less: Allowance for doubtful accounts (1,879) (1,776) Total investments and other assets 199, ,683 Total property and equipment 994, ,308 Deferred assets Bond issue costs Total deferred assets Total assets 1,237,775 1,204,

10 (Millions of yen) Fiscal 2010 (As of March 31, 2011) 2Q of Fiscal 2011 (As of September 30, 2011) LIABILITIES Current liabilities Notes and accounts payable 96,230 97,472 Short-term borrowings 49,425 15,774 Commercial paper 50,000 50,000 Income taxes payable 2,389 2,430 Reserve for loss from redemption of gift vouchers 22,667 21,894 Allowance 12,570 10,820 Other current liabilities 185, ,735 Total current liabilities 418, ,128 Long-term liabilities Bonds payable 24,000 24,000 Long-term debt 90, ,300 Deferred tax liabilities 194, ,600 Reserve for accrued employees retirement benefits 44,257 44,587 Allowance Negative goodwill 26,468 19,851 Other long-term liabilities 21,332 19,534 Total long-term liabilities 401, ,907 Total liabilities 819, ,035 NET ASSETS Shareholders equity Common stock 50,047 50,088 Capital surplus 325, ,048 Retained earnings 47,693 65,508 Less: Treasury stock (191) (202) Total shareholders equity 422, ,443 Accumulated other comprehensive income Net unrealized gains (losses) on other securities (2,996) (3,951) Deferred gains (losses) on hedges 19 (7) Foreign currency translation adjustments (13,078) (12,368) Total accumulated other comprehensive income (16,055) (16,326) Stock acquisition rights 1, Minority interests 10,568 11,166 Total net assets 418, ,250 Total liabilities and net assets 1,237,775 1,204,

11 (2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Income Second Quarter Period (Millions of yen) 2Q of Fiscal 2010 (From April 1, 2010, to September 30, 2010) 2Q of Fiscal 2011 (From April 1, 2011, to September 30, 2011) Net sales 579, ,645 Cost of sales 415, ,589 Gross profit 164, ,056 Selling, general and administrative expenses 163, ,009 Operating income 917 9,046 Non-operating income Interest income Dividend income Amortization of negative goodwill 6,617 6,617 Equity in earning of affiliates 1,727 1,328 Other non-operating income 2,024 1,450 Total non-operating income 11,216 10,308 Non-operating expenses Interest expenses Loss on retirement of property and equipment Other non-operating expenses 2,103 2,378 Total non-operating expenses 3,540 3,650 Recurring income 8,593 15,704 Extraordinary gain Gain on sales of investment securities 489 Gain on liquidation of affiliates 37 Total extraordinary gain 526 Extraordinary loss Loss on sales of property and equipment Amortization of goodwill 1,099 Loss on sales of investment securities 7 Loss on valuation of investment securities 278 1,167 Loss on liquidation of affiliates 290 Amount from application of accounting standard for asset retirement obligations 5,522 Merger related expenses 379 Other extraordinary loss 848 Total extraordinary loss 6,168 3,694 Income before income taxes and minority interests 2,951 12,010 Income taxes 2,144 (9,024) Net income before minority interests ,034 Minority interests in earnings of consolidated subsidiaries Net income ,

12 Consolidated Statements of Comprehensive Income (Loss) Second Quarter Period (Millions of yen) 2Q of Fiscal 2010 (From April 1, 2010, to September 30, 2010) 2Q of Fiscal 2011 (From April 1, 2011, to September 30, 2011) Net income before minority interests ,034 Other comprehensive income Net unrealized gains (losses) on other securities (3,289) (126) Deferred gains (losses) on hedges (1) (32) Foreign currency translation adjustments (721) 596 Amount corresponding to equity interest in equity method affiliates (2,626) (446) Total other comprehensive income (loss) (6,639) (9) Comprehensive income (loss) (5,832) 21,025 (Breakdown) Comprehensive income (loss) attributable to parent company shareholders (5,972) 20,304 Comprehensive income attributable to minority shareholders

13 (3) Consolidated Statements of Cash Flows Cash flows from operating activities Q of Fiscal 2010 (From April 1, 2010, to September 30, 2010) (Millions of yen) 2Q of Fiscal 2011 (From April 1, 2011, to September 30, 2011) Income before income taxes and minority interest 2,951 12,010 Depreciation and amortization 11,222 12,248 Amortization of goodwill 1,320 Amortization of negative goodwill (6,617) (6,617) Increase (decrease) in allowance for bonuses (2,320) (1,721) Increase (decrease) in allowance for doubtful accounts Increase (decrease) in reserve for accrued employees retirement benefits (504) 614 Interest and dividend income (847) (911) Interest expenses Equity in loss (earnings) of affiliated companies (1,727) (1,328) Loss (gain) on sales of property and equipment 213 Loss (gain) on valuation of investment securities 278 1,167 Amount from application of accounting standard for asset retirement obligations 5,522 Decrease (increase) in receivables 1,770 (5,741) Decrease (increase) in inventories (1,563) (907) Increase (decrease) in payables 7,822 1,111 Other, net 2,053 (2,683) Sub-total 19,197 9,836 Interest and dividend income received 2,327 2,423 Interest expense paid (803) (886) Income taxes paid (4,408) (1,782) Net cash provided by operating activities 16,312 9,589 Cash flows from investing activities Increase in fixed deposits (135) (2,014) Payments for purchase of tangible fixed assets (20,204) (7,602) Proceeds from sales of tangible fixed assets Payments for purchase of intangible fixed assets (2,405) (2,295) Proceeds from collection of lease and guarantee deposits 2,734 1,377 Other, net (7,342) (573) Net cash used in investing activities (26,947) (10,803) Cash flows from financing activities Increase (decrease) in short-term borrowings (17,018) (31,749) Proceeds from borrowings of long-term debt 23,000 13,300 Repayment of long-term debt (30,000) (3,600) Proceeds from the issuance of bonds 23,887 Increase (decrease) in commercial paper 10,000 Dividends paid (3,909) (2,738) Other, net (618) (720) Net cash provided by (used in) financing activities 5,341 (25,509) Effect of exchange rate changes on cash and cash equivalents (382) 336 Net increase (decrease) in cash and cash equivalents (5,675) (26,386) Cash and cash equivalents at beginning of period 37,366 56,649 Cash and cash equivalents at end of period 31,690 30,263

14 (4) Notes on going concern assumption Not applicable (5) Segment information Segment information I. Second quarter consolidated accounting period (April 1, 2010, to September 30, 2010) Information Concerning Segment Sales, Income and Losses Sales Department store Credit & finance / Customer organization management Reporting segments Other retail & specialty store Real estate Subtotal Other es (Note 1) Total Adjusted amounts (Note 2) (Millions of yen) Amount listed on quarterly Consolidated Statement of Income (Note 3) (1) Sales to outside customers 540,021 4,864 21,244 6, ,335 7, , ,921 (2) Intersegment sales or transfer 175 5,826 4,744 12,133 22,879 33,012 55,892 (55,892) Total 540,197 10,690 25,988 18, ,215 40, ,813 (55,892) 579,921 Segment income (loss) 2,388 (2,204) (250) 1,098 1, ,941 (1,024) 917 Notes 1. The other es segment includes the services of manufacturing, exporting, importing, wholesaling, distribution, temporary personnel and data processing that are not included in other reporting segments. 2. The segment adjusted loss of 1,024 million is an intersegment elimination. 3. Segment income (loss) is adjusted with operating income. II. Second quarter consolidated accounting period (April 1, 2011, to September 30, 2011) 1. Information Concerning Segment Sales, Income and Losses Sales Department store Credit & finance / Customer organization management Reporting segments Other retail & specialty store Real estate Subtotal Other es (Note 1) Total Adjusted amounts (Note 2) (Millions of yen) Amount listed on quarterly Consolidated Statement of Income (Note 3) (1) Sales to outside customers 529,547 6,436 34,722 5, ,496 7, , ,645 (2) Intersegment sales or transfer 319 7,397 7,231 5,066 20,014 28,146 48,161 (48,161) Total 529,867 13,834 41,954 10, ,510 35, ,807 (48,161) 583,645 Segment income (loss) 5,250 1,641 (36) 428 7,284 1,567 8, ,046 Notes 1. The other es segment includes the services of manufacturing, exporting, importing, wholesaling, distribution, temporary personnel and data processing that are not included in other reporting segments. 2. The segment adjusted income of 194 million is an intersegment elimination. 3. Segment income is adjusted with operating income. 4. The method of depreciation for tangible fixed assets was changed to the straight-line method for equipment and fixtures from the first quarter. In line with this change, segment income increased by 589 million for the department store and 56 million for the other retail & specialty store compared with when using the previous method. 3. There are no applicable items concerning impairment of fixed assets or goodwill. Not applicable

15 (6) Notes on significant changes in the amount of shareholders equity (if any) Second Quarter of Fiscal 2011 (From April 1, 2011, to September 30, 2011) Not applicable