Consolidated Financial Statements

Consolidated Balance Sheets

	Prior consolidated fiscal year fiscalyear (As of October 31, 2016)	Current consolidated fiscal year (As of October 31, 2017)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Assets
Current assets
Cash and deposits	¥33,209	¥35,220	$311,245
Notes and accounts receivable - trade	36,502	37,057	327,479
Electronically recorded monetary claims - operating	3,718	4,069	35,962
Securities	200	200	1,767
Merchandise and finished goods	693	583	5,159
Raw materials and supplies	379	288	2,552
Construction machine parts	10,265	12,193	107,750
Deferred tax assets	604	706	6,240
Other	1,059	1,237	10,937
Allowance for doubtful accounts	(689)	(784)	(6,934)
Total current assets	85,945	90,772	802,161
Non-current assets
Property, plant and equipment
Rental equipment	189,549	198,879	1,757,510
Accumulated depreciation	(114,596)	(125,211)	(1,106,500)
Rental equipment, net	74,953	73,668	651,009
Buildings and structures	31,029	32,910	290,827
Accumulated depreciation	(18,883)	(19,801)	(174,984)
Buildings and structures, net	12,145	13,108	115,842
Machinery, equipment and vehicles	6,999	7,290	64,430
Accumulated depreciation	(5,963)	(6,154)	(54,389)
Machinery, equipment and vehicles, net	1,036	1,136	10,041
Land	35,630	35,623	314,807
Other	2,343	2,170	19,180
Accumulated depreciation	(1,332)	(1,421)	(12,558)
Other, net	1,011	749	6,621
Total property, plant and equipment	124,776	124,286	1,098,322
Intangible assets
Goodwill	628	486	4,296
Other	664	1,110	9,812
Total intangible assets	1,292	1,596	14,108
Investments and other assets
Investment securities	6,911	8,417	74,388
Deferred tax assets	419	436	3,859
Other	2,216	2,308	20,396
Allowance for doubtful accounts	(406)	(272)	(2,410)
Allowance for investment loss	(320)	(0)	(0)
Total investments and other assets	8,821	10,889	96,233
Total non-current assets	134,891	136,772	1,208,664
Total assets	¥ 220,836	¥ 227,545	$ 2,010,825

	Prior consolidated fiscal year fiscalyear (As of October 31, 2016)	Current consolidated fiscal year (As of October 31, 2017)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Liabilities
Current liabilities
Notes and accounts payable - trade	¥26,986	¥28,773	$254,276
Short-term loans payable	1,194	994	8,784
Current portion of bonds	40	−	−
Current portion of long-term loans payable	13,951	12,029	106,301
Lease obligations	1,357	1,048	9,263
Income taxes payable	2,052	3,247	28,694
Provision for bonuses	1,091	1,099	9,720
Accounts payable - other	21,079	21,269	187,956
Other	2,399	3,060	27,044
Total current liabilities	70,152	71,521	632,042
Non-current liabilities
Long-term loans payable	26,644	23,846	210,733
Lease obligations	2,700	2,017	17,832
Long-term accounts payable - other	38,870	37,127	328,098
Provision for directors’ retirement benefits	94	106	937
Net defined benefit liability	234	259	2,295
Asset retirement obligations	384	431	3,810
Other	321	444	3,932
Total non-current liabilities	69,249	64,234	567,640
Total liabilities	139,402	135,756	1,199,683
Net assets
Shareholders’ equity
Capital stock	13,652	13,652	120,651
Capital surplus	14,916	14,916	131,822
Retained earnings	48,017	57,172	505,233
Treasury shares	(2,129)	(2,129)	(18,820)
Total shareholders’ equity	74,458	83,612	738,887
Accumulated other comprehensive income
Valuation difference on available-for-sale securities	2,051	2,538	22,429
Deferred gains or losses on hedges	ー	0	0
Foreign currency translation adjustment	164	85	758
Remeasurements of defined benefit plans	8	5	45
Total accumulated other comprehensive income	2,225	2,629	23,234
Non-controlling interests	4,750	5,547	49,021
Total net assets	81,434	91,788	811,142
Total liabilities and net assets	¥ 220,836	¥ 227,545	$ 2,010,825

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US$1, the approximate exchange rate on October 31, 2017.

Consolidated Statements of Income

	Prior consolidated fiscal year (From November 1, 2015 to October 31, 2016)	Current consolidated fiscal year (From November 1, 2016 to October 31, 2017)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Net sales	¥ 144,870	¥ 158,428	$ 1,400,038
Cost of sales	101,313	109,863	970,864
Gross profit	43,556	48,565	429,174
Selling, general and administrative expenses	28,422	31,899	281,896
Operating profit	15,134	16,665	147,277
Non-operating income
Interest income	6	4	41
Dividend income	140	148	1,316
Rent income	71	73	648
Foreign exchange gains	ー	253	2,244
Reversal of allowance for doubtful accounts	47	31	277
Other	263	424	3,749
Total non-operating income	528	936	8,278
Non-operating expenses
Interest expenses	267	199	1,766
Foreign exchange losses	493	−	−
Provision of allowance for investment loss	278	−	−
Other	218	209	1,851
Total non-operating expenses	1,257	409	3,617
Ordinary profit	14,405	17,193	151,938
Extraordinary income
Gain on sales of non-current assets	35	21	189
Gain on donation of non-current assets	ー	13	123
Subsidy income	6	9	87
Gain on sales of investment securities	2	220	1,948
Gain on step acquisitions	14	−	−
Total extraordinary income	59	265	2,348
Extraordinary losses
Loss on sales and retirement of non-current assets	164	140	1,245
Impairment loss	254	157	1,391
Loss on valuation of investment securities	54	−	−
Loss on sales of investment securities	4	−	−
Loss on valuation of shares of subsidiaries and associates	141	140	1,240
Loss on sales of shares of subsidiaries and associates	ー	79	703
Total extraordinary losses	620	518	4,580
Profit before income taxes	13,844	16,940	150,952
Income taxes - current	5,215	5,594	49,436
Income taxes - deferred	36	(204)	(1,809)
Total income taxes	5,252	5,389	47,626
Profit	8,591	11,551	103,325
Profit attributable to non-controlling interests	493	806	7,127
Profit attributable to owners of parent	¥8,098	¥10,744	$96,198

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US$1, the approximate exchange rate on October 31, 2017.

Consolidated Statements of Comprehensive Income

	Prior consolidated fiscal year (From November 1, 2015 to October 31, 2016)	Current consolidated fiscal year (From November 1, 2016 to October 31, 2017)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Profit	¥ 8,591	¥ 11,551	$ 102,080
Other comprehensive income
Valuation difference on available-for-sale securities	93	498	4,407
Deferred gains or losses on hedges	0	0	0
Foreign currency translation adjustment	121	(79)	(698)
Remeasurements of defined benefit plans, net of tax	11	(4)	(40)
Total other comprehensive income	226	415	3,668
Comprehensive income	8,818	11,966	105,748
Comprehensive income attributable to
Comprehensive income attributable to owners of parent	8,323	11,147	98,514
Comprehensive income attributable to non-controlling interests	¥495	¥818	$7,234

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US$1, the approximate exchange rate on October 31, 2017.

Consolidated Statements of Changes in Equity
(From November 1, 2015 to October 31, 2017)

	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	¥ 41,156	¥ (2,128)	¥ 67,597	¥ 1,948	¥ (0)	¥ 43	¥ 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					ー	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 beginning of current period	¥ 13,652	¥ 14,916	¥ 48,017	¥ (2,129)	¥ 74,458	¥ 2,051	¥ ー	¥ 164	¥ 8	¥ 2,225	¥ 4,750	¥ 81,434
Changes of items during period
Dividends of surplus			(1,590)		(1,590)					−		(1,590)
Profit attributable to owners of parent			10,744		10,744					−		10,744
Purchase of treasury shares				(0)	(0)					−		(0)
Net changes of items other than shareholders’ equity					−	486	0	(79)	(3)	404	796	1,200
Total changes of items during period	−	−	9,154	(0)	9,154	486	0	(79)	(3)	404	796	10,354
Balance at end of current period	¥ 13,652	¥ 14,916	¥ 57,172	¥ (2,129)	¥ 83,612	¥ 2,538	¥ 0	¥ 85	¥ 5	¥ 2,629	¥ 5,547	¥ 91,788

	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	$ 120,651	$ 131,822	$ 424,334	$ (18,815)	$ 657,992	$ 18,128	$ −	$ 1,457	$ 76	$ 19,663	$ 41,982	$ 719,638
Changes of items during period
Dividends of surplus			(14,053)		(14,053)					−		(14,053)
Profit attributable to owners of parent			94,952		94,952					−		94,952
Purchase of treasury shares				(4)	(4)					−		(4)
Net changes of items other than shareholders’ equity						4,300	0	(698)	(31)	3,571	7,038	10,609
Total changes of items during period	−	−	80,899	(4)	80,895	4,300	0	(698)	(31)	3,571	7,038	91,504
Balance at end of current period	$ 120,651	$ 131,822	$ 505,233	$ (18,820)	$ 738,887	$ 22,429	$	$ 758	$ 45	$ 23,234	$ 49,021	$ 811,142

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US$1, the approximate exchange rate on October 31, 2017.

Consolidated Statements of Cash Flows

	Prior consolidated fiscal year (From November 1, 2015 to October 31, 2016)	Current consolidated fiscal year (From November 1, 2016 to October 31, 2017)
	Millions of yen	Millions of yen	Thousands of U.S. dollars (Note)
Cash flows from operating activities
Profit before income taxes	¥ 13,844	¥ 16,940	$ 149,706
Depreciation	22,097	24,428	215,875
Impairment loss	254	157	1,391
Amortization of goodwill	83	142	1,258
Loss (gain) on sales and retirement of non-current assets	128	119	1,056
Amount of cost price transfer with asset sell-off for rentals	840	994	8,784
Expenditure by the construction equipment and supplies	(492)	(1,073)	(9,484)
Expenditure by the assets acquisition for rentals	(3,034)	(2,731)	(24,141)
Loss (gain) on valuation of investment securities	54	−	−
Loss (gain) on sales of investment securities	2	(220)	(1,948)
Loss on valuation of shares of subsidiaries and associates	141	140	1,240
Loss (gain) on sales of shares of subsidiaries and associates	ー	79	703
Increase (decrease) in allowance for doubtful accounts	(61)	(113)	(1,001)
Increase (decrease) in allowance for investment loss	278	−	−
Increase (decrease) in provision for bonuses	141	8	71
Increase (decrease) in net defined benefit liability	(14)	21	185
Interest and dividend income	(146)	(153)	(1,358)
Assets buy on the installment plan purchase payment interest for rentals	371	349	3,088
Interest expenses	267	199	1,766
Foreign exchange losses (gains)	292	(199)	(1,766)
Decrease (increase) in notes and accounts receivable - trade	390	(808)	(7,148)
Decrease (increase) in inventories	(107)	236	2,091
Increase (decrease) in notes and accounts payable - trade	(1,654)	1,915	16,929
Increase (decrease) in accounts payable - other	1,298	1,276	11,277
Other, net	(877)	884	7,818
Subtotal	34,096	42,593	376,396
Interest and dividend income received	146	153	1,355
Interest expenses paid	(653)	(553)	(4,892)
Income taxes paid	(6,970)	(4,404)	(38,922)
Net cash provided by (used in) operating activities	¥ 26,618	¥ 37,788	$ 333,937
Cash flows from investing activities
Payments into time deposits	¥ (0)	¥ (560)	$ (4,948)
Proceeds from withdrawal of time deposits	ー	640	5,656
Purchase of property, plant and equipment	(2,729)	(2,731)	(24,140)
Proceeds from sales of property, plant and equipment	38	31	277
Purchase of intangible assets	(366)	(461)	(4,077)
Purchase of investment securities	(22)	(583)	(5,159)
Proceeds from sales of investment securities	48	450	3,982
Purchase of shares of subsidiaries	ー	(917)	(8,105)
Proceeds from sales of shares of subsidiaries	ー	76	679
Purchase of shares of subsidiaries resulting in change in scope of consolidation	(5,806)	−	−
Purchase of shares of subsidiaries and associates	ー	(100)	(883)
Payments of loans receivable	(37)	(742)	(6,562)
Collection of loans receivable	25	28	250
Other, net	(90)	122	1,082
Net cash provided by (used in) investing activities	(8,940)	(4,747)	(41,949)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable	(894)	(212)	(1,875)
Redemption of bonds	(50)	(40)	(353)
Proceeds from long-term loans payable	19,960	10,900	96,323
Repayments of long-term loans payable	(14,637)	(15,667)	(138,451)
Repayments of installment payables	(21,304)	(22,582)	(199,559)
Repayments of lease obligations	(1,967)	(1,744)	(15,419)
Purchase of treasury shares	(0)	(0)	(4)
Purchase of treasury shares of subsidiaries	(0)	(0)	(1)
Cash dividends paid	(1,235)	(1,591)	(14,061)
Dividends paid to non-controlling interests	(1)	(22)	(198)
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation	(594)	−	−
Net cash provided by (used in) financing activities	(20,726)	(30,960)	(273,601)
Effect of exchange rate change on cash and cash equivalents	(33)	10	93
Net increase (decrease) in cash and cash equivalents	(3,080)	2,091	18,479
Cash and cash equivalents at beginning of period	36,150	33,069	292,235
Cash and cash equivalents at end of period	¥ 33,069	¥ 35,160	$ 310,714

Note: U.S. dollar amounts have been translated from yen for convenience only, at the rate ¥113.16=US$1, the approximate exchange rate on October 31, 2017.