Consolidated Financial Statements

Consolidated Balance Sheets

	Prior consolidated fiscal year fiscalyear (As of October 31, 2015))	Current consolidated fiscal year (As of October 31, 2016)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
ASSETS
Current assets
Cash and deposits	¥35,900	¥33,209	$316,701
Notes and accounts receivable - trade	34,961	36,502	348,106
Electronically recorded monetary claims - operating	2,290	3,718	35,464
Securities	350	200	1,907
Merchandise and finished goods	672	693	6,614
Raw materials and supplies	272	379	3,623
Construction machine parts	8,214	10,265	97,901
Deferred tax assets	610	604	5,767
Other	623	1,059	10,104
Allowance for doubtful accounts	(701)	(689)	(6,572)
Total current assets	83,195	85,945	819,619
Non-current assets
Property, plant and equipment
Rental equipment	164,914	189,549	1,807,647
Accumulated depreciation	(97,573)	(114,596)	(1,092,856)
Rental equipment, net	67,341	74,953	714,791
Buildings and structures	25,840	31,029	295,910
Accumulated depreciation	(16,275)	(18,883)	(180,080)
Buildings and structures, net	9,564	12,145	115,830
Machinery, equipment and vehicles	5,714	6,999	66,750
Accumulated depreciation	(4,965)	(5,963)	(56,869)
Machinery, equipment and vehicles, net	749	1,036	9,881
Land	32,354	35,630	339,791
Other	2,539	2,343	22,347
Accumulated depreciation	(1,112)	(1,332)	(12,704)
Other, net	1,426	1,011	9,643
Total property, plant and equipment	111,436	124,776	1,189,938
Intangible assets
Goodwill	ー	628	5,993
Other	316	664	6,332
Total intangible assets	316	1,292	12,325
Investments and other assets
Investment securities	6,317	6,911	65,913
Deferred tax assets	285	419	4,004
Other	2,008	2,216	21,136
Allowance for doubtful accounts	(528)	(406)	(3,872)
Allowance for investment loss	(110)	(320)	(3,054)
Total investments and other assets	7,972	8,821	84,127
Total non-current assets	119,724	134,891	1,286,391
Total assets	¥202,919	¥220,836	$2,106,010

	Prior consolidated fiscal year fiscalyear (As of October 31, 2015))	Current consolidated fiscal year (As of October 31, 2016)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Liabilities
Current liabilities
Notes and accounts payable - trade	¥27,775	¥26,986	$257,359
Short-term loans payable	727	1,194	11,388
Current portion of bonds	ー	40	381
Current portion of long-term loans payable	12,550	13,951	133,051
Lease obligations	1,585	1,357	12,942
Income taxes payable	3,711	2,052	19,571
Provision for bonuses	856	1,091	10,411
Accounts payable - other	19,233	21,079	201,022
Other	3,093	2,399	22,885
Total current liabilities	69,534	70,152	669,014
Non-current liabilities
Long-term loans payable	19,614	26,644	254,092
Lease obligations	1,831	2,700	25,755
Long-term accounts payable - other	39,254	38,870	370,684
Provision for directors’ retirement benefits	ー	94	902
Net defined benefit liability	ー	234	2,236
Asset retirement obligations	317	384	3,663
Other	368	321	3,062
Total non-current liabilities	61,387	69,249	660,396
Total liabilities	130,921	139,402	1,329,411
Net assets
Shareholders’ equity
Capital stock	13,652	13,652	130,201
Capital surplus	14,916	14,916	142,256
Retained earnings	41,156	48,017	457,921
Treasury shares	(2,128)	(2,129)	(20,304)
Total shareholders’ equity	67,597	74,458	710,074
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	1,948	2,051	19,563
Deferred gains or losses on hedges	(0)	ー	−
Foreign currency translation adjustment	43	164	1,572
Remeasurements of defined benefit plans	ー	8	82
Total accumulated other comprehensive income	1,991	2,225	21,219
Non-controlling interests	2,409	4,750	45,306
Total net assets	71,998	81,434	776,599
Total liabilities and net assets	¥202,919	¥220,836	$2,106,010

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US$1, the approximate exchange rate on October 31, 2016.

Consolidated Statements of Income

	Prior consolidated fiscal year (From November 1, 2014 to October 31, 2015)	Current consolidated fiscal year (From November 1, 2015 to October 31, 2016)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Net sales	¥133,292	¥144,870	$1,381,562
Cost of sales	91,886	101,313	966,183
Gross profit	41,405	43,556	415,379
Selling, general and administrative expenses	25,134	28,422	271,051
Operating income	16,270	15,134	144,328
Non-operating income
Interest income	8	6	59
Dividend income	111	140	1,338
Insurance income	42	29	285
Rent income	65	71	684
A receipt bonus	26	10	98
Foreign exchange gains	96	ー	ー
Reversal of allowance for doubtful accounts	4	47	450
Other	225	222	2,125
Total non-operating income	581	528	5,042
Non-operating expenses
Interest expenses	461	267	2,554
Loss on sales of notes receivable - trade	18	11	112
Foreign exchange losses	ー	493	4,704
Provision of allowance for investment loss	ー	278	2,653
Other	208	206	1,970
Total non-operating expenses	688	1,257	11,996
Ordinary income	16,164	14,405	137,374
Extraordinary income
Gain on sales of non-current assets	12	35	340
Subsidy income	12	6	59
Gain on sales of investment securities	307	2	21
Gain on sales of shares of subsidiaries and associates	68	ー	ー
Compensation income for damage	118	ー	ー
Gain on step acquisitions	ー	14	142
Total extraordinary income	519	59	563
Extraordinary losses
Loss on sales and retirement of non-current assets	157	164	1,569
Impairment loss	171	254	2,427
Loss on valuation of investment securities	87	54	521
Loss on sales of investment securities	ー	4	42
Loss on valuation of shares of subsidiaries and associates	ー	141	1,353
Total extraordinary losses	416	620	5,913
Profit before income taxes	16,266	13,844	132,024
Income taxes - current	6,318	5,215	49,737
Income taxes - deferred	98	36	349
Total income taxes	6,416	5,252	50,087
Profit	9,850	8,591	81,937
Profit attributable to non-controlling interests	292	493	4,707
Profit attributable to owners of parent	¥9,557	¥8,098	$77,229

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US$1, the approximate exchange rate on October 31, 2016.

Consolidated Statements of Comprehensive Income

	Prior consolidated fiscal year (From November 1, 2014 to October 31, 2015)	Current consolidated fiscal year (From November 1, 2015 to October 31, 2016)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Profit	¥9,850	¥8,591	$81,937
Other comprehensive income
Valuation difference on available-for-sale securities	(29)	93	889
Deferred gains or losses on hedges	(0)	0	1
Foreign currency translation adjustment	25	121	1,158
Remeasurements of defined benefit plans, net of tax	−	11	108
Total other comprehensive income	(4)	226	2,157
Comprehensive income	9,845	8,818	84,095
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	9,556	8,323	79,373
Comprehensive income attributable to non-controlling interests	¥289	¥0,495	$4,722

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US$1, the approximate exchange rate on October 31, 2016.

Consolidated Statements of Changes in Equity
(From November 1, 2014 to October 31, 2016)

	Shareholders’ equity					Accumulated other comprehensive income					Non-controlling interests	Total net assets
	Capital stock	Capital surplus	Retained earnings	Treasury shares	Total shareholders’ equity	Valuation difference on available-for- sale securities	Deferred gains or losses on hedges	Foreign currency translation adjustment	Remeasur- ements of defined benefit plans	Total accumulated other comprehensive income
	Millions of yen
Balance at beginning of current period	¥13,652	¥14,916	¥32,860	¥ (56)	¥61,373	¥1,977	¥ー	¥14	¥ー	¥1,992	¥2,147	¥65,513
Changes of items during period
Dividends of surplus			(1,261)		(1,261)					ー		(1,261)
Profit attributable to owners of parent			9,557		9,557					ー		9,557
Purchase of treasury shares				(2,072)	(2,072)					ー		(2,072)
Net changes of items other than shareholders’ equity						(29)	(0)	28	ー	(0)	261	260
Total changes of items during period	ー	ー	8,296	(2,072)	6,223	(29)	(0)	28	ー	(0)	261	6,484
Balance at beginning of current period	¥13,652	¥14,916	¥41,156	¥(2,128)	¥67,597	¥1,948	¥(0)	¥043	¥ー	¥1,991	¥2,409	¥71,998
Changes of items during period
Dividends of surplus			(1,236)		(1,236)					ー		(1,236)
Profit attributable to owners of parent			8,098		8,098					ー		8,098
Purchase of treasury shares				(0)	(0)					ー		(0)
Net changes of items other than shareholders’ equity						103	0	121	8	233	2,341	2,574
Total changes of items during period	ー	ー	6,861	(0)	6,861	103	0	121	8	233	2,341	9,435
Balance at end of current period	¥13,652	¥14,916	¥48,017	¥(2,129)	¥74,458	¥2,051	¥ー	¥164	¥ 8	¥2,225	¥4,750	¥81,434

	Shareholders’ equity					Accumulated other comprehensive income
	Capital stock	Capital surplus	Retained earnings	Treasury shares	Total shareholders’ equity	Valuation difference on available-for- sale securities	Deferred gains or losses on hedges	Foreign currency translation adjustment	Remeasur- ements of defined benefit plans	Total accumulated other comprehensive income	Non-controlling interests	Total net assets
	Thousands of U.S. dollars (Note)
Balance at beginning of current period	$130,201	$142,256	$392,486	$(20,301)	$644,643	$18,577	$(1)	$0,414	$ー	$18,989	$22,980	$686,613
Changes of items during period
Dividends of surplus			(11,795)		(11,795)					ー		(11,795)
Profit attributable to owners of parent			77,229		77,229					ー		77,229
Purchase of treasury shares				(3)	(3)					ー		(3)
Net changes of items other than shareholders’ equity						986	1	1,158	82	2,229	22,325	24,555
Total changes of items during period	ー	ー	65,434	(3)	65,430	986	1	1,158	82	2,229	22,325	89,985
Balance at end of current period	$130,201	$142,256	$457,921	$(20,304)	$710,074	$19,563	$ー	$1,572	$82	$21,219	$45,306	$776,599

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US$1, the approximate exchange rate on October 31, 2016.

Consolidated Statements of Cash Flows

	Prior consolidated fiscal year (From November 1, 2014 to October 31, 2015)	Current consolidated fiscal year (From November 1, 2015 to October 31, 2016)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Cash flows from operating activities
Profit before income taxes	¥ 16,266	¥ 13,844	$132,024
Depreciation	20,273	22,097	210,730
Impairment loss	171	254	2,427
Amortization of goodwill	10	83	794
Loss (gain) on sales and retirement of non-current assets	145	128	1,229
The amount of cost price transfer with asset sell-off for rentals	944	840	8,011
Expenditure by the construction equipment and supplies	(132)	(492)	(4,698)
Expenditure by the assets acquisition for rentals	(1,198)	(3,034)	(28,938)
Loss (gain) on valuation of investment securities	87	54	521
Loss (gain) on sales of investment securities	(307)	2	20
Loss on valuation of shares of subsidiaries and associates	ー	141	1,353
Loss (gain) on sales of shares of subsidiaries and associates	(68)	ー	ー
Increase (decrease) in allowance for doubtful accounts	498	(61)	(587)
Increase (decrease) in allowance for investment loss	ー	278	2,653
Increase (decrease) in provision for bonuses	17	141	1,349
Increase (decrease) in net defined benefit liability	6	(14)	(136)
Interest and dividend income	(120)	(146)	(1,398)
Assets buy on the installment plan purchase payment interest for rentals	380	371	3,541
Interest expenses	461	267	2,549
Foreign exchange losses (gains)	(64)	292	2,787
Compensation income for damage	(118)	ー	ー
Decrease (increase) in notes and accounts receivable - trade	(3,613)	390	3,724
Decrease (increase) in inventories	(109)	(107)	(1,025)
Increase (decrease) in notes and accounts payable - trade	4,486	(1,654)	(15,782)
Increase (decrease) in accounts payable - other	2,101	1,298	12,385
Other, net	302	(877)	(8,372)
Subtotal	40,420	34,096	325,164
Interest and dividend income received	120	146	1,392
Compensation for damage income received	118	ー	ー
Interest expenses paid	(828)	(653)	(6,227)
Income taxes paid	(6,320)	(6,970)	(66,477)
Net cash provided by (used in) operating activities	¥ 33,509	¥ 26,618	$253,852
Cash flows from investing activities
Payments into time deposits	¥ (80)	¥ (0)	$ (0)
Purchase of property, plant and equipment	(4,113)	(2,729)	(26,029)
Proceeds from sales of property, plant and equipment	34	38	363
Purchase of intangible assets	(160)	(366)	(3,490)
Purchase of investment securities	(72)	(22)	(217)
Proceeds from sales of investment securities	330	48	462
Purchase of shares of subsidiaries	(213)	ー	ー
Proceeds from sales of shares of subsidiaries resulting in change in scope of consolidation	51	ー	ー
Purchase of shares of subsidiaries resulting in change in scope of consolidation	ー	(5,806)	(55,373)
Purchase of shares of subsidiaries and associates	(54)	ー	ー
Payments of loans receivable	(98)	(37)	(355)
Collection of loans receivable	4	25	238
Other, net	(115)	(90)	(860)
Net cash provided by (used in) investing activities	(4,488)	(8,940)	(85,260)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable	102	(894)	(8,534)
Redemption of bonds	ー	(50)	(476)
Proceeds from long-term loans payable	11,462	19,960	190,349
Repayments of long-term loans payable	(12,984)	(14,637)	(139,589)
Repayments of installment payables	(18,913)	(21,304)	(203,170)
Repayments of lease obligations	(1,188)	(1,967)	(18,761)
Purchase of treasury shares	(2,072)	(0)	(3)
Purchase of treasury shares of subsidiaries	(0)	(0)	(3)
Cash dividends paid	(1,259)	(1,235)	(11,785)
Dividends paid to non-controlling interests	(3)	(1)	(9)
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation	ー	(594)	(5,668)
Net cash provided by (used in) financing activities	(24,857)	(20,726)	(197,655)
Effect of exchange rate change on cash and cash equivalents	5	(33)	(316)
Net increase (decrease) in cash and cash equivalents	4,169	(3,080)	(29,380)
Cash and cash equivalents at beginning of period	31,980	36,150	344,746
Cash and cash equivalents at end of period	¥ 36,150	¥ 33,069	$315,366

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥104.86=US$1, the approximate exchange rate on October 31, 2016.