Consolidated Financial Statements

Consolidated Balance Sheets

ASSETS	October 31, 2011	October 31, 2012
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Current assets :
Cash and deposits	¥ 20,059	¥ 19,387	$ 243,375
Notes and accounts receivable, trade	16,419	23,560	295,766
Negotiable securities	350	350	4,393
Merchandise inventories and products	621	521	6,548
Work in process	33	53	668
Raw materials and supplies	198	213	2,676
Construction equipment	1,557	2,578	32,362
Income taxes receivable	10	10	134
Consumption tax receivable	103	57	726
Deferred tax assets	383	616	7,733
Other	606	719	9,029
Allowance for doubtful accounts	(368)	(384)	(4,825)
Total current assets	39,975	47,683	598,587
Fixed assets :
Tangible fixed assets
Rental equipment assets	72,929	111,689	1,402,073
Accumulated depreciation	(41,233)	(65,644)	(824,059)
Net rental equipment assets	31,695	46,044	578,013
Buildings and structures	20,871	22,253	279,356
Accumulated depreciation	(13,481)	(14,565)	(182,840)
Net buildings and structures	7,389	7,688	96,515
Machinery, equipment, vehicles and delivery equipment	5,131	5,367	67,376
Accumulated depreciation	(4,491)	(4,771)	(59,895)
Net machinery, equipment, vehicles and delivery equipment	639	595	7,480
Land	29,907	29,548	370,927
Other	1,422	1,579	19,832
Accumulated depreciation	(1,186)	(1,301)	(16,338)
Net other	236	278	3,494
Total tangible fixed assets	69,869	84,155	1,056,432
Intangible fixed assets
Goodwill	159	192	2,415
Other	243	203	2,558
Total intangible fixed assets	402	396	4,974
Investments and other assets
Investment securities	3,202	3,196	40,131
Deferred tax assets	658	622	7,809
Other	1,866	1,947	24,445
Allowance for doubtful accounts	(732)	(590)	(7,409)
Reserve for investment losses	(122)	(67)	(853)
Total investments and other assets	4,872	5,107	64,122
Total fixed assets	75,144	89,659	1,125,528
Total assets	¥ 115,120	¥ 137,343	$ 1,724,116

LIABILITIES AND NET ASSETS	October 31, 2011	October 31, 2012
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Current liabilities :
Notes and accounts payable, trade	¥ 13,318	¥ 18,011	$ 226,102
Short-term bank loans	11,155	834	10,478
Long-term bank loans due within one year	9,853	12,671	159,071
Current portion of bonds	22	ー	ー
Lease obligations	1,087	1,106	13,890
Corporate taxes payable	322	2,344	29,432
Accrued bonuses to employees	531	774	9,721
Allowance for disaster losses	289	10	125
Accounts payable, other	7,574	9,386	117,832
Other	1,188	1,641	20,603
Total current liabilities	45,342	46,781	587,260
Long-term liabilities :
Long-term bank loans	17,063	25,945	325,700
Lease obligations	1,430	3,041	38,184
Accrued employees retirement benefits	37	0	12
Retirement allowances to directors and auditors	210	ー	ー
Long-term accrued expenses	13,251	19,707	247,400
Asset retirement obligations	147	207	2,607
Other	45	258	3,242
Total long-term liabilities	32,185	49,161	617,147
Total Liabilities	77,527	95,943	1,204,407
Net assets :
Shareholders’ equity
Capital stock	9,696	9,696	121,726
Capital surplus	10,960	10,960	137,594
Retained earnings	16,297	19,199	241,020
Treasury stock	(25)	(27)	(345)
Total shareholders’ equity	36,929	39,829	499,995
Accumulated other comprehensive income
Valuation difference on other investment securities	198	331	4,163
Translation adjustments account	(42)	(54)	(687)
Total accumulated other comprehensive income	156	276	3,475
Minority interests	507	1,293	16,237
Total net assets	37,592	41,399	519,708
Total liabilities and net assets	¥ 115,120	¥ 137,343	$ 1,724,116

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥79.66=US$1, the approximate exchange rate on October 31, 2012.

Consolidated Statements of Income

	Prior Consolidated Fiscal Year (From November 1, 2010 to October 31, 2011)	Current Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Total revenues	¥ 71,086	¥ 86,106	$ 1,080,929
Total cost of revenues	50,631	60,333	757,388
Gross profit	20,455	25,773	323,541
Selling, general and administrative expenses	17,550	19,343	242,821
Operating income	2,905	6,430	80,720
Non-operating revenues
Interest revenue	11	10	126
Dividend income	50	85	1,078
Insurance benefits	33	64	808
Rents received	45	53	676
Cash bonus received	5	23	291
Amortization of negative goodwill	69	69	876
Reversal of allowance for doubtful accounts	－	22	284
Reversal of allowance for disaster losses	－	101	1,273
Other	122	183	2,304
Total non-operating revenues	339	614	7,720
Non-operating expenses
Interest expense	792	856	10,750
Loss on sale of notes receivable	41	45	576
Other	170	209	2,636
Total non-operating expenses	1,005	1,112	13,963
Ordinary income	2,239	5,932	74,477
Extraordinary profits
Subsidies	32	177	2,228
Gain on sale of fixed assets	11	21	264
Gain on sale of investment securities	0	1	13
Gain on investment in partnership enterprise	1	－	－
Gain on reversal of allowance for doubtful accounts	13	－	－
Gain on termination of retirement benefit plan	1,465	－	－
Gain on negative goodwill	－	671	8,434
Other	9	19	246
Total extraordinary profits	1,534	891	11,188
Extraordinary losses
Loss on sale or retirement of fixed assets	132	185	2,322
Impairment loss	63	343	4,311
Loss on sale of investment securities	17	116	1,456
Valuation loss on investment securities	134	0	1
Loss from disaster	837	－	－
Provision of allowance for investment losses	41	－	－
Provision of allowance for doubtful accounts	1	－	－
Loss on adjustment for changes of accounting standard for asset retirement obligations	95	－	－
Other	2	－	－
Total extraordinary losses	1,327	644	8,091
Income before taxes and adjustments	2,446	6,179	77,574
Corporate, local and business taxes	862	2,752	34,548
Adjustment for corporate and other taxes	470	2	32
Total corporate and other taxes	1,332	2,754	34,581
Income before adjustment for minority interests (loss)	1,113	3,424	42,994
Minority interest in income (loss)	(52)	(150)	(1,884)
Net income	¥ 1,165	¥ 3,575	$ 44,878

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥79.66=US$1, the approximate exchange rate on October 31, 2012.

Consolidated Statements of Comprehensive Income

	Prior Consolidated Fiscal Year (From November 1, 2010 to October 31, 2011)	Current Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Income before adjustment for minority interests (loss)	¥ 1,113	¥ 3,424	$ 42,994
Other comprehensive income
Valuation difference on other investment securities	51	132	1,666
Translation adjustments account	(8)	(5)	(74)
Total other comprehensive income	43	126	1,592
Comprehensive income	1,156	3,551	44,586
(Breakdown)
Comprehensive income attributable to owners of the parent	1,214	3,695	46,395
Comprehensive income attributable to minority interests	¥ (57)	¥ (144)	$ (1,809)

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥79.66=US$1, the approximate exchange rate on October 31, 2012.

Consolidated Statements of Changes in Net Assets
(November 1, 2011 - October 31, 2012)

		Shareholders' equity					Accumulated other comprehensive income
	Number of shares of common stock	Common stock	Capital surplus	Retained earnings	Treasury stock	Total share- holders’ equity	Net unrealized holding gain (loss) on other securities	Foreign currency translation adjustments	Total accumu- lated other compre- hensive income	Minority interests	Total net assets
	Thousands of shares	Millions of yen
Balance at October 31, 2010	32,872	¥ 9,696	¥ 10,960	¥ 15,788	¥ (24)	¥ 36,420	¥ 147	¥ (40)	¥ 107	¥ 497	¥ 37,025
Net income				1,165		1,165			ー		1,165
Cash dividends				(656)		(656)			ー		(656)
Acquisition of treasury stock					(0)	(0)			ー		(0)
Disposal of treasury stock			(0)		0	0			ー		0
Otder						ー	51	(2)	49	9	58
Balance at November 1, 2011	32,872	¥ 9,696	¥ 10,960	¥ 16,297	¥ (25)	¥ 36,929	¥ 198	¥ (42)	¥ 156	¥ 507	¥ 37,592
Net income				3,575		3,575			ー		3,575
Cash dividends				(656)		(656)			ー		(656)
Increase (decrease) from change in scope of consolidation				(16)		(16)			ー	(26)	(42)
Acquisition of treasury stock					(2)	(2)			ー		(2)
Disposal of treasury stock			0		0	0			ー		0
Otder						ー	132	(12)	120	812	933
Balance at October 31, 2012	32,872	¥ 9,696	¥ 10,960	¥ 19,199	¥ (27)	¥ 39,829	¥ 331	¥ (54)	¥ 276	¥ 1,293	¥ 41,399

	Shareholders' equity					Accumulated other comprehensive income
	Common stock	Capital surplus	Retained earnings	Treasury stock	Total share- holders’ equity	Net unrealized holding gain on other securities	Foreign currency translation adjustments	Total accumu- lated other compr- ehensive income	Minority interests	Total net assets
	Thousands of U.S. dollars (Note)
Balance at November 1, 2011	$ 121,726	$ 137,594	$ 204,585	$ (316)	$ 463,589	$ 2,495	$ (536)	$ 1,959	$ 6,365	$ 471,914
Net income			44,878		44,878			ー		44,878
Cash dividends			(8,243)		(8,243)			ー		(8,243)
Increase (decrease) from change in scope of consolidation			(201)		(201)			ー	(332)	(533)
Acquisition of treasury stock				(32)	(32)			ー		(32)
Disposal of treasury stock		0		3	3			ー		3
Otder					ー	1,667	(150)	1,516	10,203	11,719
Balance at October 31, 2012	$ 121,726	$ 137,594	$ 241,020	$ 345	$ 499,995	$ 4,163	$ (687)	$ 3,475	$ 16,237	$ 519,708

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥79.66=US$1, the approximate exchange rate on October 31, 2012.

Consolidated Statements of Cash Flows

	Prior Consolidated Fiscal Year (From November 1, 2010 to October 31, 2011)	Current Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Cash flows from operating activities :
Income before taxes and adjustments	¥ 2,446	¥ 6,179	$ 77,575
Depreciation and amortization expense	8,835	11,071	138,980
Impairment loss	63	343	4,311
Amortization of goodwill	206	158	1,992
Gain on negative goodwill	－	(671)	(8,434)
Loss on sale or retirement of fixed assets	121	163	2,057
Installment purchases of assets for small-value rentals	38	46	577
Reclassification of cost of sales associated with disposal of construction equipment	3	5	71
Reclassification of cost of sales associated with disposal of rental assets	469	512	6,440
Expenditures for acquisition of construction equipment	(458)	(1,238)	(15,549)
Expenditures for acquisition of rental assets	(1,959)	(1,916)	(24,056)
Valuation loss on investment securities	134	0	1
Loss on sale of investment securities	16	114	1,443
Decrease in allowance for doubtful accounts	(94)	(151)	(1,908)
Increase in allowance for investment loss	41	7	88
Increase (decrease) in accrued bonuses to employees	(57)	140	1,762
Increase (decrease) in accrued employees retirement benefits	(1,304)	(35)	(448)
Increase (decrease) in retirement allowances to directors and auditors	4	(205)	(2,586)
Increase (decrease) in allowance for disaster losses	－	(142)	(1,788)
Interest revenue and dividend income	(61)	(95)	(1,204)
Interest expense on installment purchases of rental assets	183	238	2,989
Interest expense	792	856	10,750
Increase in notes and accounts receivable	(1,463)	(1,442)	(18,109)
(Increase) decrease in inventory	(49)	39	497
Increase in notes and accounts payable	261	1,165	14,630
Loss on adjustment for changes of accounting standard for asset retirement obligations	95	－	－
Loss from disaster	837	－	－
Increase in accounts payable, other	742	727	9,136
Other	(232)	287	3,607
Subtotal	9,613	16,157	202,826
Interest and dividends received	62	95	1,205
Interest expense	(926)	(1,065)	(13,373)
Payments for loss on disaster	(187)	(137)	(1,725)
Refund (payment) of corporate and other taxes	(1,657)	(744)	(9,340)
Cash flow from operating activities	¥ 6,903	¥ 14,306	$ 179,593
Cash flow from investing activities :
Revenue from redemption of term deposits	¥ 50	¥ 15	$ 188
Funds used for the purchase of tangible fixed assets	(517)	(451)	(5,673)
Funds provided from the sale of tangible fixed assets	16	121	1,531
Funds used for the purchase of intangible fixed assets	(9)	(10)	(131)
Funds used for the purchase of investment securities	(449)	(61)	(769)
Funds provided from sale of investment securities	0	174	2,195
Funds used for the purchase of investments in subsidiaries resulting in change in scope of consolidation	－	(662)	(8,320)
Funds used for the purchase of subsidiary stock	(61)	(50)	(628)
Funds used for establishment of subsidiary company	(45)	－	－
Funds used for short-term loans	(163)	－	－
Funds provided from collection of short-term loans receivable	105	45	569
Other	62	44	553
Cash flow from investing activities	(1,013)	(835)	(10,486)
Cash flow from financing activities :
Increase (decrease) in short-term bank loans	9,767	(2,340)	(29,383)
Funds provided by long-term bank loans	2,580	10,641	133,582
Funds used to repay long-term bank loans	(10,935)	(12,042)	(151,171)
Funds used to redeem corporate bonds	(22)	(22)	(276)
Funds used for repayment of installment obligations	(6,006)	(8,423)	(105,744)
Funds used for repayment of lease obligations	(1,057)	(1,253)	(15,735)
Funds used for the purchase of treasury stock	(0)	(2)	(32)
Funds provided from the sale of treasury stock	0	0	4
Funds used for the purchase of treasury stock of subsidiary	(0)	(0)	(0)
Payment of dividends	(656)	(659)	(8,282)
Funds provided by payment from minority shareholders	68	27	349
Cash dividends paid to minority shareholders	(1)	－	－
Cash flow from financing activities	(6,262)	(14,074)	(176,688)
Effect of exchange rate changes on cash and cash equivalents	(4)	(21)	(268)
Decrease in cash and equivalents	(376)	(625)	(7,850)
Balance of cash and equivalents at beginning of period	20,751	20,374	255,772
Decrease in cash and equivalents in conjunction with change in accounting period of consolidated subsidiary	－	(32)	(404)
Balance of cash and equivalents at end of period	¥ 20,374	¥ 19,717	$ 247,518

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥79.66=US$1, the approximate exchange rate on October 31, 2012.