Consolidated Financial Statements

Consolidated Balance Sheets

ASSETS	October 31, 2012	October 31, 2013
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Current assets :
Cash and deposits	¥ 19,387	¥ 32,627	$ 331,209
Notes and accounts receivable-trade	23,560	27,731	281,509
Securities	350	350	3,552
Merchandise and finished goods	521	642	6,525
Costs on uncompleted construction contracts	53	20	204
Raw materials and supplies	213	201	2,047
Construction machine parts	2,578	3,954	40,146
Deferred tax assets	616	983	9,979
Other	787	792	8,045
Allowance for doubtful accounts	(384)	(335)	(3,408)
Total current assets	47,683	66,968	679,811
Noncurrent assets :
Property, plant and equipment
Rental equipment	46,044	56,899	577,605
Buildings and structures	7,688	7,702	78,188
Machinery, equipment and vehicles	595	619	6,285
Land	29,548	29,798	302,490
Tools, furniture and fixtures	256	227	2,306
Construction in progress	21	75	769
Total property, plant and equipment	84,155	95,322	967,646
Intangible assets
Goodwill	192	19	201
Other	203	250	2,546
Total intangible assets	396	270	2,748
Investments and other assets
Investment securities	3,196	5,256	53,356
Deferred tax assets	622	147	1,499
Other	1,947	1,894	19,230
Allowance for doubtful accounts	(590)	(541)	(5,494)
Allowance for investment loss	(67)	(67)	(690)
Total investments and other assets	5,107	6,689	67,902
Total noncurrent assets	89,659	102,282	1,038,297
Total Assets	¥ 137,343	¥ 169,250	$ 1,718,108

LIABILITIES AND NET ASSETS	October 31, 2012	October 31, 2013
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Current liabilities :
Notes and accounts payable-trade	¥ 18,011	¥ 21,293	$ 216,154
Short-term loans payable	13,506	12,771	129,645
Lease obligations	1,106	1,085	11,018
Income taxes payable	2,344	3,533	35,866
Provision for bonuses	774	823	8,360
Provision for loss on disaster	10	ー	ー
Allowance for losses on employee pension fund withdrawal	ー	200	2,030
Accounts payable-other	9,386	12,728	129,212
Other	1,641	1,983	20,137
Total current liabilities	46,781	54,419	552,426
Noncurrent liabilities :
Long-term loans payable	25,945	26,288	266,866
Lease obligations	3,041	2,662	27,030
Provision for retirement benefits	0	7	80
Long-term accounts payable-other	19,707	29,329	297,733
Asset retirement obligations	207	210	2,133
Other	258	138	1,411
Total noncurrent liabilities	49,161	58,638	595,254
Total Liabilities	95,943	113,058	1,147,681
Net assets :
Shareholders' equity
Capital stock	9,696	13,652	138,594
Capital surplus	10,960	14,916	151,426
Retained earnings	19,199	24,462	248,320
Treasury stock	(27)	(48)	(492)
Total shareholders’ equity	39,829	52,983	537,848
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	331	1,567	15,914
Foreign currency translation adjustment	(54)	(1)	(17)
Total accumulated other comprehensive income	276	1,566	15,897
Minority interests	1,293	1,643	16,682
Total Net Assets	41,399	56,192	570,427
Total Liabilities and Net Assets	¥ 137,343	¥ 169,250	$ 1,718,108

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥98.51=US$1, the approximate exchange rate on October 31, 2013.

Consolidated Statements of Income

	Prior Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)	Current Consolidated Fiscal Year (From November 1, 2012 to October 31, 2013)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Net sales	¥ 86,106	¥ 110,831	$ 1,125,082
Cost of sales	60,333	76,522	776,799
Gross profit	25,773	34,309	348,283
Selling, general and administrative expenses	19,343	22,916	232,630
Operating income	6,430	11,392	115,652
Non-operating revenues
Interest revenue	95	67	680
Insurance benefits	64	84	861
Rent received	53	58	596
Foreign exchange gains	9	223	2,270
Amortization of negative goodwill	69	51	523
Reversal of allowance for doubtful accounts	22	19	197
Other	206	263	2,672
Total non-operating income	614	768	7,803
Non-operating expenses
Interest expenses	856	824	8,365
Loss on sales of notes payable	45	41	416
Other	209	223	2,264
Total non-operating expenses	1,112	1,088	11,046
Ordinary income	5,932	11,073	112,410
Extraordinary income
Subsidy income	177	36	370
Gain on sales of noncurrent assets	21	34	348
Gain on sales of investment securities	1	1	10
Gain on bargain purchase	671	ー	ー
Reversal of provision incurred from business combination	ー	55	564
Other	19	0	1
Total extraordinary income	891	127	1,294
Extraordinary losses
Loss on sales and retirement of noncurrent assets	185	95	964
Impairment loss	343	217	2,209
Loss on sales of investment securities	116	ー	ー
Loss on valuation of investment securities	0	187	1,906
Other	ー	13	137
Total extraordinary losses	644	514	5,218
Income before income taxes and minority interests	6,179	10,686	108,486
Income taxes-current	2,752	4,856	49,297
Income taxes-deferred	2	(315)	(3,201)
Total income taxes	2,754	4,540	46,096
Income before minority interests	3,424	6,146	62,390
Minority interests in income (loss)	(150)	336	3,418
Net income	¥ 3,575	¥ 5,809	$ 58,971

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥98.51=US$1, the approximate exchange rate on October 31, 2013.

Consolidated Statements of Comprehensive Income

	rior Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)	Current Consolidated Fiscal Year (From November 1, 2012 to October 31, 2013)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Income before minority interests	¥ 3,424	¥ 6,146	$ 62,390
Other comprehensive income
Valuation difference on available-for-sale securities	132	1,236	12,552
Foreign currency translation adjustment	(5)	74	756
Total other comprehensive income	126	1,310	13,308
Comprehensive income	3,551	7,457	75,698
(Breakdown)
Comprehensive income attributable to owners of the parent	3,695	7,098	72,058
Comprehensive income attributable to minority interests	¥ (144)	¥ 358	$ 3,640

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥98.51=US$1, the approximate exchange rate on October 31, 2013.

Consolidated Statements of Changes in Net Assets
(November 1, 2011 - October 31, 2013)

		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 November 1, 2011	32,872	¥9,696	¥ 10,960	¥ 16,297	¥ (25)	¥ 36,929	¥ 198	¥ (42)	¥ 156	¥ 507	¥ 37,592
Cash dividends				(656)		(656)			ー		(656)
Net income				3,575		3,575			ー		3,575
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
Other						ー	132	(12)	120	812	933
Balance at November 1, 2012	32,872	¥9,696	¥ 10,960	¥ 19,199	¥ (27)	¥ 39,829	¥ 331	¥ (54)	¥ 276	¥ 1,293	¥ 41,399
Issuance of new shares	03,220	3,956	3,956			7,912			ー		7,912
Cash dividends				(656)		(656)			ー		(656)
Net income				5,809		5,809			ー		5,809
Change of scope of consolidation				109		109			ー		109
Acquisition of treasury stock					(20)	(20)			ー		(20)
Other						ー	1,236	53	1,289	349	1,639
Balance at October 31, 2013	36,092	¥ 13,652	¥ 14,916	¥ 24,462	¥ (48)	¥ 52,983	¥ 1,567	¥ (1)	¥ 1,566	¥ 1,643	¥ 56,192

	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, 2012	$98,433	$ 111,265	$ 194,900	$ (279)	$ 404,320	$3,366	$ (555)	$2,810	$ 13,130	$ 420,261
Issuance of new shares	40,160	40,160			80,321			ー		80,321
Cash dividends			(6,665)		(6,665)			ー		(6,665)
Net income			58,971		58,971			ー		58,971
Change of scope of consolidation			1,113		1,113			ー		1,113
Acquisition of treasury stock				(212)	(212)			ー		(212)
Other					ー	12,547	538	13,086	3,552	16,638
Balance at October 31, 2013	$ 138,594	$ 151,426	$ 248,320	$ (492)	$ 537,848	$ 15,914	$ (17)	$ 15,897	$ 16,682	$ 570,428

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥98.51=US$1, the approximate exchange rate on October 31, 2013.

Consolidated Statements of Cash Flows

	Prior Consolidated Fiscal Year (From November 1, 2011 to October 31, 2012)	Current Consolidated Fiscal Year (From November 1, 2012 to October 31, 2013)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Net cash provided by (used in) operating activities :
Income before income taxes and minority interests	¥6,179	¥ 10,686	$ 108,486
Depreciation and amortization	11,071	15,181	154,111
Impairment loss	343	217	2,210
Amortization of goodwill	158	29	304
Gain on bargain purchase	(671)	ー	ー
Loss (gain) on sales and retirement of noncurrent assets	163	60	617
Amount of installment purchases of assets for small rentals	46	4	45
Amount of cost price transfer with sale of construction machine parts	5	9	93
Amount of cost price transfer with sale of rental assets	512	866	8,801
Expenditures for acquisition of construction machine parts	(1,238)	(64)	(650)
Expenditures for acquisition of rental equipment	(1,916)	(3,047)	(30,934)
Loss (gain) on valuation of investment securities	0	187	1,906
Loss (gain) on sales of investment securities	114	(1)	(11)
Increase (decrease) in allowance for doubtful accounts	(151)	(12)	(128)
Increase (decrease) in allowance for investment loss	7	ー	ー
Increase (decrease) in provision for bonuses	140	54	555
Increase (decrease) in provision for retirement benefits	(35)	6	70
Increase (decrease) in provision for directors’ retirement benefits	(205)	ー	ー
Increase (decrease) in provision for loss on disaster	(142)	(10)	(102)
Increase (decrease) in allowance for losses on employee pension fund withdrawal	ー	200	2,030
Interest and dividends income	(95)	(67)	(681)
Interest expense on installment purchases of rental assets	238	243	2,469
Interest expenses	856	824	8,366
Foreign exchange losses (gains)	0	(160)	(1,633)
Reversal of provision incurred from business combination	ー	(55)	(565)
Decrease (increase) in notes and accounts receivable-trade	(1,442)	(4,107)	(41,696)
Decrease (increase) in inventories	39	(72)	(731)
Increase (decrease) in notes and accounts payable-trade	1,165	3,331	33,815
Increase (decrease) in accounts payable-other	727	1,031	10,469
Other	287	114	1,163
Subtotal	16,157	25,452	258,380
Interest and dividends income received	95	67	681
Interest expenses paid	(1,065)	(1,087)	(11,039)
Payments for loss on disaster	(137)	ー	ー
Income taxes paid	(744)	(3,672)	(37,285)
Net cash provided by (used in) operating activities	¥ 14,306	¥ 20,759	$ 210,736
Net cash provided by (used in) investing activities :
Proceeds from withdrawal of time deposits	¥15	¥ ー	$ ー
Purchase of property, plant and equipment	(451)	(1,092)	(11,091)
Proceeds from sales of property, plant and equipment	121	100	1,016
Purchase of intangible assets	(10)	(123)	(1,253)
Purchase of investment securities	(61)	(343)	(3,486)
Proceeds from sales of investment securities	174	1	15
Purchase of investments in subsidiaries resulting in change in scope of consolidation	(662)	ー	ー
Purchase of investments in subsidiaries	(50)	ー	ー
Payments of loans receivable	ー	(76)	(777)
Collection of loans receivable	45	418	4,248
Other	44	(1)	(15)
Net cash provided by (used in) investing activities	(835)	(1,117)	(11,343)
Net cash provided by (used in) financing activities :
Net increase (decrease) in short-term loans payable	(2,340)	(322)	(3,275)
Proceeds from long-term loans payable	10,641	13,200	133,997
Repayment of long-term loans payable	(12,042)	(13,762)	(139,705)
Proceeds from issuance of common stock	ー	7,912	80,321
Redemption of bonds	(22)	ー	ー
Repayments of installment payables	(8,423)	(10,841)	(110,057)
Repayments of lease obligations	(1,253)	(2,040)	(20,709)
Purchase of treasury stock	(2)	(20)	(213)
Proceeds from sale of treasury stock	0	ー	ー
Purchase of treasury stock of subsidiaries in consolidation	(0)	ー	ー
Cash dividends paid	(659)	(656)	(6,664)
Proceeds from stock issuance to minority shareholders	27	ー	ー
Cash dividends paid to minority shareholders	ー	(1)	(10)
Net cash provided by (used in) financing activities	(14,074)	(6,532)	(66,315)
Effect of exchange rate change on cash and cash equivalents	(21)	134	1,368
Net increase (decrease) in cash and cash equivalents	(625)	13,244	134,446
Cash and cash equivalents at beginning of period	20,374	19,717	200,155
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation	ー	(4)	(41)
Increase (decrease) in cash and cash equivalents resulting from change in accounting period of subsidiaries	(32)	ー	ー
Cash and cash equivalents at end of period	¥ 19,717	¥ 32,957	$ 334,560

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥98.51=US$1, the approximate exchange rate on October 31, 2013.