Japan Post : Financial Highlights for the Nine Months Ended December 31, 2019

Financial Highlights

for the Nine Months Ended December 31, 2019

February 14, 2020

Japan Post Holdings: Financial Highlights

 Results of Operations for the Nine Months Ended December 31, 2019		(Billions of yen)
	Japan Post Holdings
	Japan Post Co.	Japan Post Bank	Japan Post Insurance
	(Consolidated)
	(Consolidated)	(Consolidated)	(Consolidated)

Ordinary income	9,054.5	2,932.1	1,358.4	5,461.5
Year-on-year	(528.3)	(71.5)	(26.2)	(451.7)
(for the nine months ended
Dec. 31, 2018)	(5.5)%	(2.4)%	(1.8)%	(7.6)%
Change
Net ordinary income	688.8	153.1	289.2	233.9
Year-on-year	+ 50.0	+ 16.7	+ 7.4	+ 19.9
(for the nine months ended
Dec. 31, 2018)	+ 7.8%	+ 12.3%	+ 2.6%	+ 9.3%
Change
Net income	422.0	135.9	210.0	115.0
Year-on-year	+ 29.8	+ 12.0	+ 6.7	+ 18.3
(for the nine months ended
Dec. 31, 2018)	+ 7.6%	+ 9.7%	+ 3.3%	+ 19.0%
Change

• Forecast for the Fiscal Year Ending March 31, 2020

Net ordinary income		710.0	125.0	375.0	270.0
	[percentage achievement]		[97.0%]	[122.5%]	[77.1%]	[86.7%]
	Net income	420.0	100.0	270.0	134.0
	[percentage achievement]	[100.5%]	[135.9%]	[77.8%]	[85.8%]

Notes: 1.Figures less than ¥0.1 billion are rounded down. The figures of Japan Post Holdings (consolidated) and the combined figures of each subsidiary do not correspond because of other consolidated accounting procedures, etc. 2.The amount of ordinary profit on the consolidated statements of income of Japan Post Insurance has been used for net ordinary income of Japan Post Insurance.

3.The amounts of net income attributable to Japan Post Holdings, net income attributable to Japan Post Co., net income attributable to Japan Post Bank and net income attributable to Japan Post Insurance have been used for net income of Japan Post Holdings (consolidated), Japan Post Co. (consolidated), Japan Post Bank (consolidated) and Japan Post Insurance (consolidated), respectively.

4.The forecast for the fiscal year ending March 31, 2020 of Japan Post Insurance (Consolidated) refers to the revised forecast announced in November 2019.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 1

Japan Post Co. (Consolidated) [Postal and Domestic Logistics Business]:

Financial Results

• The volume of Yu-Pack(note1) handled increased by 0.6% year-on-year for the nine months ended December 31, 2019 (including an increase of 18.7% for Yu-Packet). The volume of Yu-Mail handled decreased by 1.8%, and the volume of Mail handled decreased by 0.5%.
• Operating income increased by ¥12.4 billion year-on-year (an increase of 0.8% year-on-year) due to a continuing increase in the volume of Yu-Packet handled and a rise in income from parcel field resulting from the impact of the revision of price per unit.
• Net operating income increased by ¥32.3 billion year-on-year (an increase of 37.3% year-on-year) as a decrease in operating expenses continued mainly owing to cost control initiatives.

Analysis of Year-on-year Change in Net Operating Income

〔Trends in Net Operating Income〕

(Billions of yen)

2017

2018

2019

28.9

86.9

119.3

(nine months ended December 31)

Other expenses (15.5)

Net operating

Collection,

income

transport

(Nine months

and delivery

Miscellaneous

ended Dec. 31,

outsourcing

expenses

2019)

Increase in

expenses

(4.3)

119.3

Net operating

Personnel

(11.2)

income

operating

expenses

(Nine months

income

(4.3)

ended Dec. 31,

+ 12.4

2018)

86.9

Salaries and

(4.3)

allowances, etc.

Legal welfare

＋ 0.3

expenses

Yu-Pack(note1) and Yu-Mail

＋ 20.6

Domestic collection,

transport and delivery

(7.3)

New year's postcards

(9.1)

outsourcing expenses

Notes: 1. Yu-Pack includes Yu-Packet.

2. Includes impact of transfer of subsidiary (operating income of ¥(11.1) billion and operating expenses of ¥(10.6) billion).

Trends in Volume of Items Handled

(Volume of items handled in millions)

15,000		14,824	(1.0)%	14,672	(0.7)%	14,576	Yu-Pack(note 1)
		656	+ 10.8%	727	+ 0.6%	731
12,500		2,663	+ 0.9%	2,687	(1.8)%	2,638	Yu-Mail
10,000
7,500		11,505	(2.1)%	11,258	(0.5)%	11,206	Mail
0
2017		2018		2019

(nine months ended December 31)

Results of Operations for the Nine Months Ended December 31, 2019

			For the nine	(Billions of yen)
		For the nine	Year-on-year
		months ended	months ended
		change
		Dec. 31, 2019	Dec. 31, 2018
Operating income	1,601.6	1,589.2	+ 12.4
Operating expenses	1,482.3	1,502.2	(19.9)
	Personnel expenses	942.8	947.1	(4.3)
	Other expenses	539.5	555.1	(15.5)
Net operating income	119.3	86.9	+ 32.3

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 2

Japan Post Co. (Consolidated) [Post Office Business]:

Financial Results

• Operating income decreased by ¥34.1 billion year-on-year (a decrease of 3.3% year-on-year) owing to the impact of refraining from active sales activities for Japan Post Insurance products(note), as well as a decrease in the merchandising business due to the contraction of certain businesses.
• Net operating income increased by ¥3.9 billion year-on-year (an increase of 8.4% year-on-year), thanks to a significant decrease (a decrease of ¥38.1 billion or 3.9% year-on-year) in operating expenses including personnel expenses.

	Analysis of Year-on-year Change in Net Operating Income					Trends in the Earnings Structure
〔Trends in Net Operating Income〕								(Billions of yen)	1,200.0							(Billions of yen)
	2017			2018			2019									1,036.6	+ 2.3	1,038.9	(34.1)	1,004.7	Other operating income
	39.6			47.7			51.7									1,000.0	Of which:
												167.4	+ 1.7	169.2	(15.9)	153.2		Merchandising
				(nine months ended December 31)						Net										business	96.7
	Net														operating	800.0	136.2	+ 10.8	147.1	+ 0.3	147.4		Real estate
															business	23.9
	operating														income										Third-party
	income														(Nine	600.0
																		281.8		financial product
	(Nine			Commissions											months				451.7	+ 2.7	454.5	(172.7)		agency services	14.4
	months											Other		ended Dec.	400.0			Postal service
	ended Dec.			for business							Personnel	expenses	31, 2019)					200.7	commissions
	31, 2018)			consignment							(8.2)	51.7								Banking commissions
47.7	(239.6)		Funds to				expenses	200.0				(67.2)		Insurance commissions
							281.1	(13.0)	268.0
						maintain	Other	(29.8)									221.4	Funds to maintain post
															office network
						post office	operating						0.0				+ 221.4
						network	income						2017		2018		2019
						+ 221.4	(15.9)
																		(nine months ended December 31)

						Results of Operations for the Nine Months Ended December 31, 2019
							For the nine	For the nine	(Billions of yen)
		Salaries and	(26.1)				Year-on-year
					months ended	months ended
		allowances, etc.				change
		Legal welfare	(2.5)				Dec. 31, 2019	Dec. 31, 2018
		expenses			Operating income	1,004.7	1,038.9	(34.1)
		Merchandising	(12.5)
		business			Operating expenses	953.0	991.1	(38.1)
		Third-party	(3.4)	Merchandising
		financial product	(10.5)	Personnel expenses	659.7	689.6	(29.8)
		agency services		business
Banking
(172.7)	Real estate	+ 0.6	Equipment	+ 6.5
commissions	business	purchase costs	Other expenses	293.2	301.5	(8.2)
Insurance	(67.2)	Note: Due to administrative dispositions, solicitation and conclusion of contracts
commissions	Net operating income	51.7	47.7	+ 3.9
Postal service	+ 0.3	for Japan Post Insurance products have been suspended since January
commissions		2020 (excluding cases in which voluntary intent is given by a customer).
						Copyright © 2020 JAPAN POST GROUP. All Rights Reserved.	3

Japan Post Co. (Consolidated) [International Logistics Business]:

Financial Results

• Operating income decreased by A$51 million year-on-year (a decrease of 0.8% year-on-year; a decrease of 9.0% year-on-year on a Japanese yen basis due to the impact of exchange rate fluctuations), due to a decrease mainly in the volume of Global Forwarding handled, owing to deterioration of external environment including a slowing Australian economy and U.S.-China trade friction.
• While operating income remained sluggish, operating expenses increased by A$107 million year-on-year (an increase of 1.7% year-on- year; a decrease of 6.8% year-on-year on a Japanese yen basis due to the impact of exchange rate fluctuations), owing to an increase in personnel expenses. As a result, net operating loss (EBIT) of A$78 million was recorded for the nine months ended December 31, 2019.

Results of Operations for the Nine Months

Trends in Net Operating Income (Loss) (EBIT)

Ended December 31, 2019

150

100

50

0

(50)

(100)

(150)

		(Millions of Australian dollars)	(Millions of Australian dollars)
Total EBIT(		)		[Billions of yen]

100		80		(78)		For the nine	For the nine
						Year-on-year
						months ended	months ended
						change
						Dec. 31, 2019	Dec. 31, 2018
129
				Operating	6,493	6,544	(51)
		113
				income (revenue)	[486.4]	[534.7]	[(48.2)]
3		1		44
		Operating	6,572	6,464	+ 107
(32)	(0)	(11)		(20)
(23)		expenses	[492.3]	[528.2]	[(35.8)]
(Global Express)		(57)
				Personnel	2,109	1,989	+ 120
				(45)	expenses	[158.0]	[162.5]	[(4.5)]
				Other	4,462	4,475	(12)
					expenses	[334.3]	[365.6]	[(31.3)]
2017		2018		2019	Net operating	(78)	80	(159)
			(nine months ended December 31)	income (loss)
			[(5.9)]	[6.5]	[(12.4)]
■ Global Logistics	■ Global Forwarding	■ Global Express	■ Corporate/Other	(EBIT）

Notes: 1. Operating income (revenue), operating expenses and net operating income (loss) (EBIT) are the total amount of Toll, JP Toll Logistics and Toll Express Japan, respectively.

1. IFRS16 (Leases) has been adopted from April 1, 2019. Figures for the nine months ended December 31, 2019 in the above graph and table are calculated on the basis of IFRS16 (Leases).
2. Figures in square brackets are presented in billions of yen (Average exchange rate for the nine months ended December 31, 2019: ¥74.92 to A$1.00 and for the nine months ended December
   31, 2018: ¥81.71 to A$1.00).

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 4

Japan Post Co. (Consolidated): Financial Highlights

• Operating income decreased by ¥69.2 billion year-on-year (a decrease of 2.3% year-on-year) (including a decrease of ¥40.9 billion due to the impact of exchange rate fluctuations).
• Operating expenses decreased by ¥93.3 billion year-on-year (a decrease of 3.3% year-on-year) (including a decrease of ¥40.7 billion due to the impact of exchange rate fluctuations).
• Net operating income increased by ¥24.1 billion year-on-year (an increase of 17.5% year-on-year) to ¥161.7 billion, net ordinary income increased by ¥16.7 billion year-on-year (an increase of 12.3% year-on-year) to ¥153.1 billion, and net income increased by ¥12.0 billion year-on-year (an increase of 9.7% year-on-year) to ¥135.9 billion.

		Analysis of Year-on-year Change in Net Income				Results of Operations for the Nine Months Ended December 31, 2019
								(Billions of yen)				(Billions of yen)
	〔Trends in Net Operating Income〕				〔Trends in Net Income〕
						For the nine	For the nine
	2017	2018	2019			2017	2018	2019				Year-on-year
	75.1	137.6	161.7			66.5	123.8	135.9				months ended	months ended
						change
		(nine months ended December 31)				(nine months ended December 31)			Dec. 31, 2019	Dec. 31, 2018

Net operating		Net operating				Operating income	2,929.3	2,998.6	(69.2)
income from	Net operating				Operating expenses
loss from				2,767.6	2,861.0	(93.3)
postal and	Other income
income from	international
domestic	post office	logistics	(expenses),			Personnel
logistics	extraordinary			1,760.6	1,799.3	(38.7)
business	business		Net income	expenses
business	＋ 3.9	(12.4)	gains	Income taxes,
＋ 32.3	(losses), etc.	(Nine months
		Other expenses
Net income			(4.1)	etc.	ended Dec. 31,	1,007.0	1,061.6	(54.6)
(Nine months			＋ 7.7
			2019)
ended Dec. 31,					135.9	Net operating income	161.7	137.6	+ 24.1
2018)
123.8
						Net ordinary income	153.1	136.4	+ 16.7
	Other income (expenses)	(7.3)			Extraordinary gains	0.6	(2.3)	+ 3.0
			(losses)
	Extraordinary gains (losses)	+ 3.0
			Income before income	153.8	134.0	+ 19.7
						taxes
			Income taxes	+ 7.6	Net income	135.9	123.8	+ 12.0
						Copyright © 2020 JAPAN POST GROUP. All Rights Reserved.	5

Japan Post Bank (Non-consolidated): Financial Highlights

Results of Operations for the Nine Months Ended December 31, 2019

(Billions of yen, %)

		For the nine months ended	Year-on-year
				change
		Dec. 31, 2019	Dec. 31, 2018
Gross operating profit	1,016.1	1,020.0	(3.9)
	Net interest income	752.6	795.9	(43.2)
	Net fees and commissions	98.3	81.2	+ 17.1
	Net other operating	165.1	142.9	+ 22.1
	income
General and administrative	769.2	782.3	(13.1)
expenses (Note 1)
Provision for general reserve	-	-	-
for possible loan losses
Net operating profit	246.9	237.7	+ 9.1
Non-recurring gains (losses)	42.2	44.1	(1.8)
Net ordinary income	289.2	281.8	+ 7.3
Net income	209.7	203.1	+ 6.6
(Reference) Consolidated Financial Highlights
Ordinary income	1,358.4	1,384.7	(26.2)
Net ordinary income	289.2	281.8	+ 7.4
Net income (Note 2)	210.0	203.3	+ 6.7
		As of	Change
		Dec. 31, 2019	March 31, 2019
Deposits (Note 3)	183,913.2	180,999.1	+ 2,914.1
Capital adequacy ratio	15.78	15.78	+ 0.00
(non-consolidated, domestic standard)

Overview

• In the adverse business environment from factors such as a low interest rate trend, gross operating profit (non-consolidated) for the nine months ended December 31, 2019 decreased by ¥3.9 billion year-on-year to ¥1,016.1 billion.
  Of which, net interest income decreased by ¥43.2 billion year- on-year mainly as a result of a decrease in interest on Japanese government bonds.
  Net fees and commissions increased by ¥17.1 billion year-on- year.
  Net other operating income increased by ¥22.1 billion year-on- year mainly as a result of an improvement in gains (losses) on Japanese government bonds, etc.
• General and administrative expenses (non-consolidated) decreased by ¥13.1 billion year-on-year to ¥769.2 billion.
• Net operating profit (non-consolidated) increased by ¥9.1 billion year-on-year to ¥246.9 billion.
• Net ordinary income (non-consolidated) increased by ¥7.3 billion year-on-year to ¥289.2 billion.
• Net income (non-consolidated) increased by ¥6.6 billion year-on- year to ¥209.7 billion.
• Net income (consolidated) was ¥210.0 billion, which achieved 77.8% of the financial results forecast for the fiscal year ending March 31, 2020.
• Deposits as of December 31, 2019 amounted to ¥183,913.2 billion.
• Capital adequacy ratio (non-consolidated, domestic standard) as of December 31, 2019 was 15.78%.

Notes: 1. Excludes non-recurring losses.

1. The amount of net income attributable to Japan Post Bank is used for net income of Japan Post Bank (consolidated).
2. Excludes accrued interest.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 6

Japan Post Bank (Non-consolidated): Business Results

Deposit Balance

(Trillions of yen)

190
			180.9	183.9
180	179.4	179.8
170
160	Mar. 31, 2017	Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2019

(as of)

Investment Trusts Sales

(Billions of yen)

800.0		699.9
600.0	572.6		562.6
400.0
200.0
0.0	2017	2018	2019

(nine months ended December 31)

Note: Figures are rounded down to the first decimal place.

Net Fees and Commissions

			(Billions of yen)
	For the nine months ended	Year-on-year
	Dec. 31, 2018	Dec. 31, 2019	change
Net fees and commissions	81.2	98.3	+ 17.1
relating to

Exchange and settlement	46.7	60.9	+ 14.1
transactions
ATMs	10.7	13.8	+ 3.0
Investment trusts	16.8	16.9	+ 0.0
Others	6.8	6.6	(0.2)

Net Assets of Investment Trusts

(Billions of yen)

2,600.0				2,592.5
2,400.0			2,285.9
2,200.0		2,067.6
2,000.0
1,800.0	1,642.3
1,600.0
1,400.0
1,200.0	Mar. 31, 2018	Dec. 31, 2018	Mar. 31, 2019	Dec. 31, 2019

(as of)

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 7

Japan Post Bank (Non-consolidated): Status of Investment Assets

(Billions of yen)

Short-term

investments and others

6.8%

Japanese

government

As of	Composition	As of	Composition
Dec. 31,	March 31,
ratio (%)	ratio (%)
2019	2019

Securities	136,866.1	64.4	137,135.2	66.5
	Japanese government	53,237.6	25.0	58,356.5	28.3
	bonds
	Japanese local
	government bonds,	16,062.0	7.5	16,279.1	7.9
	corporate bonds,
	etc.(Note 1)

Change

(269.0)

(5,118.8)

(217.0)

Due from

bonds 25.0%

Foreign securities, etc.

67,566.4

31.8

62,499.5

30.3

+ 5,066.8

banks, etc. Total 24.3%

investment assets

¥212 trillion

Loans			Foreign securities, etc.
2.2%			31.8%
			Japanese local
Money held in trust	government bonds,
(Stocks, JGBs, etc.)	corporate bonds, etc.
2.1%	7.5%

		Foreign bonds	23,780.3	11.1	22,035.5	10.6
		Investment	43,741.5	20.5	40,433.9	19.6
		trusts(Note 2)
Money held in trust	4,500.0	2.1	3,990.7	1.9
(Stocks, JGBs, etc.)
	Domestic stocks	2,306.1	1.0	2,141.7	1.0
Loans	4,738.5	2.2	5,297.4	2.5
Due from banks, etc.(Note 3)	51,795.2	24.3	50,674.2	24.6
Short-term investments	14,539.9	6.8	8,877.5	4.3
and others(Note 4)
Total investment assets	212,440.0	100.0	205,975.2	100.0

+ 1,744.7

+ 3,307.5

+ 509.2

+ 164.3

(558.8)

• 1,121.0
• 5,662.3
• 6,464.7

Notes: 1. "Japanese local government bonds, corporate bonds, etc." consists of Japanese local government bonds, commercial paper, Japanese corporate bonds and Japanese stocks.

1. The major investment target in "Investment trusts" is foreign bonds.
2. "Due from banks, etc." consists of negotiable certificates of deposit, Bank of Japan deposits and monetary claims bought.
3. "Short-terminvestments and others" consists of call loans and receivables under resale agreements, etc.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 8

Japan Post Insurance (Consolidated): Financial Highlights

Results of Operations for the Nine Months Ended December 31, 2019

(Billions of yen, %)

	For the nine months ended	Year-on-year
	Dec. 31, 2019	Dec. 31, 2018	change
Ordinary income	5,461.5	5,913.3	(451.7)
Ordinary expenses	5,227.5	5,699.2	(471.6)
Ordinary profit	233.9	214.0	+ 19.9
Net income	115.0	96.6	+ 18.3
(Reference) Non-consolidated Financial Highlights
Core profit	300.4	293.0	+ 7.3
Net capital gains (losses)	(57.4)	(57.4)	+ 0.0
Non-recurring gains (losses)	(8.7)	(21.8)	+ 13.1
Ordinary profit	234.2	213.7	+ 20.5
Annualized premiums from
new policies	143.8	273.7	(129.8)
(individual insurance)
	As of	Change
	Dec. 31, 2019	March 31, 2019
Annualized premiums from
policies in force	4,441.4	4,677.1	(235.7)
(individual insurance)(Note 1)
Solvency margin ratio	1,131.6	1,189.8	(58.2)
(consolidated)
Real net assets	13,490.2	13,535.7	(45.5)
(consolidated)

Overview

• Core profit for the nine months ended December 31, 2019 increased by ¥7.3 billion year-on-year to ¥300.4 billion, mainly due to a decrease in operating expenses reflecting the impact of the suspension of active sales activities since the middle of July, 2019 and an increase in positive spread, despite a decrease in the number of policies in force and an increase in expenses resulting from the investigation of insurance policies. Ordinary profit (consolidated) increased by ¥19.9 billion year-on-year to ¥233.9 billion due to an increase in non-recurring gains (losses).
• Net income (consolidated) increased by ¥18.3 billion year-on-year to ¥115.0 billion, mainly due to an increase in ordinary profit (consolidated), in addition to a decrease in provision for reserve for policyholder dividends associated with a decline in the number of participating insurance policies, and achieved 85.8% of the financial results forecast for the fiscal year ending March 31, 2020.
• Annualized premiums from new policies for individual insurance and medical care each decreased significantly compared with the same period of the previous fiscal year. Annualized premiums from policies in force for individual insurance and medical care each decreased compared with the end of the previous fiscal
  year.(Notes 1 and 3)
• Internal reserves, which are the sum of contingency reserve and reserve for price fluctuations, amounted to ¥2,726.0 billion. Solvency margin ratio (consolidated), an indicator of financial soundness, amounted to 1,131.6% and real net assets (consolidated) amounted to ¥13,490.2 billion, reflecting a continuously maintained high level of financial soundness.

Notes: 1. Policies in force for individual insurance include those for Postal Life Insurance Policies, which show contracts reinsured by Japan Post Insurance from the Organization for Postal Savings, Postal Life insurance and Post Office Network.

1. Figures less than ¥0.1 billion are rounded down.
2. Please refer to "Status of Insurance Policies" on page 10 for annualized premiums from new policies and policies in force for medical care.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 9

Japan Post Insurance (Consolidated): Status of Insurance Policies

New Policies

	Annualized Premiums from New Policies				Annualized Premiums from New Policies				Number of New Policies
			(Individual Insurance)							(Medical Care)					(Individual Insurance)
	(Billions of yen)					(Billions of yen)
									(Policies in thousands)
	300.0		294.5	273.7		50.0			48.7				1,500
				40.0		43.6					1,340	1,320
	200.0									1,000
					30.0
	100.0				143.8	20.0				22.0			500			630
					10.0
	0.0					0.0							0
	2017	2018	2019				2017	2018	2019			2017	2018	2019
				(nine months ended December 31)						(nine months ended December 31)
													(nine months ended December 31)

Policies in Force

Annualized Premiums from Policies in Force		Annualized Premiums from Policies in Force				Number of Policies in Force
		(Individual Insurance)						(Medical Care)					(Individual Insurance)
(Billions of yen)			New Category		(Billions of yen)			New Category		(Policies in thousands)			New Category
		Postal Life Insurance Category				Postal Life Insurance Category				Postal Life Insurance Category
6,000.0											40,000
	4,859.5	4,677.1	4,441.4		800.0		750.9	753.1	729.8		30,400	29,140
						368.8	342.1
4,000.0		1,492.1	1,313.2		600.0		326.5	30,000		27,730
	1,207.8											12,480	11,040
		3,367.3	3,363.9		400.0							20,000		10,190
		3,233.5				410.9	403.3
2,000.0				382.1				17,920	18,090	17,540
							200.0		10,000
0.0								0.0							0
	Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2019		Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2019		Mar. 31, 2018	Mar. 31, 2019	Dec. 31, 2019
						(as of)								(as of)								(as of)
Notes: 1. Figures less than ¥0.1 billion are rounded down, and number of policies is rounded down to the nearest ten thousand.

2. Annualized premiums are calculated by multiplying the amount of a single premium installment payment by a multiplier determined according to the relevant payment method to arrive at a single annualized amount. For lump-sum payments, annualized premiums are calculated by dividing the total premium by the insured period.

Annualized premiums for individual insurance include those for medical care. Annualized premiums for medical care are the total of those for individual insurance and individual annuity insurance.

3."New Category" shows individual insurance policies underwritten by Japan Post Insurance. "Postal Life Insurance Category" shows Postal Life Insurance Policies reinsured by Japan Post Insurance from the Organization for Postal Savings, Postal Life insurance and Post Office Network.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 10

Japan Post Insurance (Consolidated): Status of Investment Assets

Money held

in trust

4.7%

Other	Others
securities
8.0%
2.8%
Loans
	8.4%
Foreign		Japanese
Total assets	government
securities	¥ 71 trillion	bonds
6.8%	51.5%

Japanese

stocks 0.4%

Japanese corporate

bonds Japanese

7.6% local government

bonds 9.7%

				(Billions of yen)
As of	Composition	As of	Composition			Change
Dec. 31,	March 31,
ratio (%)	ratio (%)
2019	2019

Securities	56,708.3	78.9	58,451.5	79.1	(1,743.2)
	Japanese	37,036.2	51.5	38,041.4	51.5	(1,005.1)
	government bonds
	Japanese local	6,979.7	9.7	7,524.4	10.2		(544.6)
	government bonds
	Japanese	5,483.2	7.6	5,562.9	7.5		(79.6)
	corporate bonds
	Japanese stocks	282.1	0.4	205.5	0.3		+ 76.5
	Foreign securities	4,902.6	6.8	5,284.9	7.2	(382.2)
	Other securities	2,024.1	2.8	1,832.3	2.5	+ 191.8
Money held in trust	3,368.0	4.7	2,787.5	3.8	+ 580.4
Loans	6,031.3	8.4	6,786.0	9.2	(754.6)
Others	5,775.4	8.0	5,879.8	8.0	(104.3)
Total assets	71,883.2	100.0	73,905.0	100.0	(2,021.7)

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 11

[Appendix 1] Japan Post Holdings: Organization Chart

As of Dec. 31, 2019

(Japan Post Co.,Ltd.)

Japan Post Holdings

Postal and Domestic Logistics Business

Japan Post Transport	JP Media Direct
Japan Post Maintenance	Tokyo Beiyu
JP Biz Mail

Post Office Business

Japan Post Trading Service	UU Gift
Japan Post Building Management	JP Tokyo Tokusenkai
Japan Post Communications	Saison Asset Management (Note 1)
Japan Post Office Support	JA Foods Oita(Note 1)
JP General Insurance Agency	Ring Bell (Note 1)
JP Mitsukoshi Merchandising	System Trust Laboratory (Note 1)

International Logistics Business

Toll Holdings Limited, its consolidated subsidiaries and affiliates (Note 1)

JP Toll Logistics

Toll Express Japan

Banking Business

Japan Post Investment (Note 2)	JP Asset Management (Note 1)
SDP Center	ATM Japan Business Service (Note 1)

Life Insurance Business

Japan Post Insurance System Solutions

Other Business

Japan Post Staff	Japan Post Capital
Yusei Challenged	Japan Post Real Estate
Japan Post Hotel Service	System Trust Laboratory
Japan Post Information Technology	JP Twoway Contact

Notes: 1.Affiliates accounted for by the equity method

2.Including its consolidated subsidiaries

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 12

[Appendix 2] Japan Post Co. (Consolidated):

Quarterly Consolidated Statements of Income

(Billions of yen)

Japan Post Co. (Consolidated)

Postal and

Domestic

Logistics

Business

Post Office

Business

International

Logistics

Business

	For the three-month	For the three-month	Year-on-year		For the three-month	For the three-month	Year-on-year		For the three-month	For the three-month	Year-on-year
	period from Apr. to	period from Apr. to		period from July to	period from July to		period from Oct. to	period from Oct. to
	change		change		change
	June 2019	June 2018		Sept. 2019	Sept. 2018		Dec. 2019	Dec. 2018
Operating income	944.3	948.4	(4.1)	925.6	939.0	(13.3)	1,059.3	1,111.1	(51.7)
Operating expenses
904.0	923.3	(19.2)	909.1	938.6	(29.4)	954.4	999.0	(44.6)
Personnel expenses
587.4	595.0	(7.6)	579.1	591.6	(12.5)	594.0	612.6	(18.6)
Other expenses	316.6	328.3	(11.6)	330.0	346.9	(16.9)	360.3	386.3	(26.0)
Net operating income	40.2	25.1	+ 15.1	16.5	0.4	+ 16.1	104.9	112.0	(7.1)
Operating income	501.5	497.7	+ 3.7	489.1	468.7	+ 20.3	610.9	622.6	(11.6)
Operating expenses
480.0	482.9	(2.9)	482.2	488.4	(6.1)	520.0	530.9	(10.9)
Personnel expenses
310.5	311.1	(0.5)	309.0	310.3	(1.3)	323.2	325.7	(2.5)
Other expenses	169.4	171.8	(2.3)	173.2	178.1	(4.8)	196.7	205.1	(8.4)
Net operating income (loss)	21.5	14.8	+ 6.6	6.8	(19.6)	+ 26.4	90.9	91.7	(0.7)
Operating income	334.9	331.6	+ 3.2	330.5	345.0	(14.4)	339.2	362.2	(23.0)
Operating expenses
313.0	320.7	(7.6)	316.3	327.8	(11.5)	323.5	342.5	(18.9)
Personnel expenses
224.2	230.3	(6.0)	218.7	228.5	(9.8)	216.8	230.8	(13.9)
Other expenses	88.8	90.4	(1.6)	97.6	99.3	(1.6)	106.7	111.7	(4.9)
Net operating income	21.8	10.8	+ 10.9	14.1	17.1	(2.9)	15.7	19.7	(4.0)
Operating income	160.1	169.0	(8.9)	158.1	177.5	(19.4)	168.2	188.2	(19.9)
Operating expenses
162.0	168.3	(6.3)	160.9	174.2	(13.3)	169.3	185.5	(16.1)
Personnel expenses
52.6	53.6	(1.0)	51.3	52.7	(1.3)	54.0	56.1	(2.1)
Other expenses	109.4	114.7	(5.3)	109.5	121.5	(11.9)	115.3	129.4	(14.0)
Net operating income (loss)	(1.9)	0.6	(2.5)	(2.8)	3.2	(6.0)	(1.1)	2.6	(3.7)

Note: Figures for the international logistics business for the three-month period from July to September and from October to December were calculated by subtracting the accumulated figures in billions of yen until each previous quarter's end (translated by the average exchange rate for the corresponding period) from the accumulated figures in billions of yen until each quarter's end (translated by the average exchange rate for the corresponding period).

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 13

[Appendix 3]

Trends in Net Ordinary Income and Net Income

	Trends in Net Ordinary Income		Trends in Net Income
(Billions of yen)	(Billions of yen)

800.0

737.6

450.0

700.0

600.0

688.8

638.8

400.0

350.0

300.0

422.0

392.1 375.2

282.0

500.0
400.0	397.9
300.0		281.8	289.2
200.0	254.8	214.0	233.9
100.0		153.1
	136.4
	73.9
0.0
2017	2018	2019

(nine months ended December 31)

250.0

200.0

150.0

100.0

50.0

0.0

203.3 210.0

	123.8	135.9
75.0	96.6	115.0
66.5
2017	2018	2019

(nine months ended December 31)

Note: Figures for Japan Post Bank for the nine months ended December 31, 2017 is based on non-consolidated financial results, and the others are based on consolidated financial results.

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved. 14

Forecasts and other forward-looking statements presented in this document are based on information available to Japan Post Holdings Co., Ltd (the "Company") at present and certain assumptions that the Company has deemed reasonable, and the Company provides no assurance that the forecasts will be achieved or with respect to any other forward-looking statements. The actual future results may vary considerably depending upon various factors, such as interest rate fluctuations, stock price fluctuations, foreign exchange fluctuations, asset value fluctuations, changes in the economic and financial environment, changes in the competitive environment, the occurrence of large-scale disasters, etc. and changes in laws and regulations. The company disclaims any responsibility to update any forward-looking statements contained herein to the extent permitted by law or stock exchange rule.