Japan Post : Financial Results of the Principal Subsidiaries Nine Months Ended December 31, 2019

Financial Results

of the Principal Subsidiaries

for the Nine Months Ended December 31, 2019

February 14, 2020

Copyright © 2020 JAPAN POST GROUP. All Rights Reserved.

	Table of Contents
I	Japan Post Holdings .....................................................................................................	1
Year-on-Year Changes of Income for the Nine Months Ended December 31, 2019 ....	1
II	Japan Post Co..............................................................................................................	3
1. Interim Consolidated Balance Sheets .......................................................................	4
2. Interim Consolidated Statements of Income and Interim Consolidated Statements
	of Comprehensive Income ......................................................................................	6
	(1) Interim Consolidated Statements of Income........................................................	6
	(2) Interim Consolidated Statements of Comprehensive Income..............................	7
3. Segment Information.................................................................................................	8
III	Japan Post Bank.......................................................................................................	10
IV	Japan Post Insurance ................................................................................................	11
Note: Please refer to the documents on consolidated financial results announcements
	of Japan Post Bank and Japan Post Insurance released on the respective
	company's website for their consolidated financial results.

I Japan Post Holdings

Year-on-Year Changes of Income for the Nine Months Ended December 31, 2019

Net ordinary income

					(Billions of yen)
	Japan Post Holdings
	Japan Post Co.	Japan Post Bank	Japan Post Insurance	Others
	(Consolidated)	(Including consolidated
	(Consolidated)	(Consolidated)	(Consolidated)
		accounting procedures)
Nine months ended	638.8	136.4	281.8	214.0	6.4
December 31, 2018
Nine months ended	688.8	153.1	289.2	233.9	12.4
December 31, 2019
Year-on-year change	+50.0	+16.7	+7.4	+19.9	+5.9

Net income

					(Billions of yen)
	Japan Post Holdings
	Japan Post Co.	Japan Post Bank	Japan Post Insurance	Others
	(Consolidated)	(Including consolidated
	(Consolidated)	(Consolidated)	(Consolidated)
		accounting procedures)
Nine months ended	392.1	123.8	203.3	96.6	(31.6)
December 31, 2018
Nine months ended	422.0	135.9	210.0	115.0	(38.9)
December 31, 2019
Year-on-year change	+29.8	+12.0	+6.7	+18.3	(7.2)

• 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.

1

2

II Japan Post Co.

3

Japan Post Co.

1. Interim Consolidated Balance Sheets

						(Millions of yen)
				As of March 31, 2019		As of December 31, 2019
	Assets
	Current assets
	Cash and deposits			1,871,936		1,887,407
	Notes receivable and operating	347,649	340,901
	accounts receivable
	Securities			15,000		15,000
	Inventories	21,727	21,221
	Outstanding amount of banking			22,767		43,219
	business consignment
	Other current assets	90,889	89,814
	Reserve for possible loan losses			(2,832)		(2,868)
	Total current assets	2,367,139	2,394,696
	Non-current assets
	Tangible fixed assets
	Buildings			1,013,063		965,657
	Land	1,306,333	1,304,768
	Right-of-use assets			-		160,400
	Other tangible fixed assets	345,982	338,209
	Total tangible fixed assets			2,665,379		2,769,036
	Intangible assets	97,944	90,742
	Investments and other assets
	Other investments and other assets	54,350	51,078
	Reserve for possible loan losses			(2,004)		(2,220)
	Total investments and other assets	52,345	48,857
	Total non-current assets			2,815,669		2,908,637
	Total assets	5,182,809	5,303,334

4

Japan Post Co.

(Millions of yen)

As of March 31, 2019

As of December 31, 2019

Liabilities

Current liabilities

Notes payable and operating accounts payable

Short-term borrowings

Current portion of long-term

borrowings

Other accounts payable

Outstanding amount of life insurance business consignment

Income taxes payable

Deposits received

Fund deposits for post offices

Reserve for bonuses

Other current liabilities

Total current liabilities

Long-term liabilities

Long-term borrowings

Lease obligations

Deferred tax liabilities

Reserve for losses on rebuilding of branches

Reserve for management board benefit trust

Liability for retirement benefits

Other long-term liabilities

Total long-term liabilities

Total liabilities

Net assets

Shareholders' equity

Capital stock

Capital surplus

Retained earnings

Total shareholders' equity Accumulated other comprehensive

income

Net unrealized gains (losses) on available-for-sale securities

Net deferred gains (losses) on hedges Foreign currency translation

adjustments Accumulated adjustments for

retirement benefits

101,504	125,499
124,752	153,924
76,509	95,704
311,386	218,056
2,577	1,436
16,837	7,662
280,030	238,677
870,000	970,000
108,463	29,945
188,790	233,267
2,080,852	2,074,174
75,760	49,107
16,595	171,190
12,167	11,428
197	197
310	332
2,010,351	2,019,237
71,443	72,793
2,186,826	2,324,286
4,267,678	4,398,461
400,000	400,000
142,661	141,911
294,738	304,932
837,400	846,843
38	19
30	43
(89,350)	(91,667)
153,924	137,820

	Total accumulated other comprehensive			64,644		46,214
	income
	Non-controlling interests	13,085	11,814
	Total net assets			915,130		904,872
Total liabilities and net assets	5,182,809	5,303,334

5

Japan Post Co.

2. Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive Income

1. Interim Consolidated Statements of Income
   Nine months ended December 31

	(Millions of yen)
Nine months ended	Nine months ended
December 31, 2018	December 31, 2019

Operating income

Postal service business income Commissions for banking business

consignment

Commissions for life insurance business consignment

Funds to maintain post office network International logistics business income Other operating income

1,573,872	1,587,226
454,546	281,825
268,057	200,793
-	221,455
534,757	486,342
167,410	151,722

	Total operating income	2,998,644	2,929,365
	Operating costs			2,672,154		2,579,233
Gross operating income	326,490	350,131
	Sales, general and administrative costs			188,883		188,420
Net operating income	137,606	161,710
	Other income
	Interest income	436	240
	Dividend income			1		11
	Equity in earnings of affiliates	416	108
	Foreign exchange gains			790		625
	Subsidy income	1,056	184
	Others			2,322		1,596
	Total other income	5,024	2,768
	Other expenses
	Interest expenses			4,731		10,356
	Others			1,476		941
	Total other expenses	6,207	11,298
	Net ordinary income			136,422		153,180
Extraordinary gains
	Gains on sales of fixed assets			1,386		2,286
	Contribution for post office refurbishment	6,685	4,220
	expenses
	Others			117		2,893
	Total extraordinary gains	8,189	9,400
	Extraordinary losses
	Losses on sales of fixed assets	92	249
	Losses on impairment of fixed assets			884		539
	Post office refurbishment expenses	6,685	4,220
	Others			2,852		3,702
	Total extraordinary losses	10,515	8,712
	Income before income taxes			134,096		153,868
Income taxes current	9,217	18,060
	Income taxes deferred			440		(778)
Total income taxes	9,658	17,282
	Net income			124,438		136,586
Net income attributable to	541	675
	non-controlling interests
	Net income attributable to			123,897		135,911
	Japan Post Co.

6

Japan Post Co.

(2) Interim Consolidated Statements of Comprehensive Income

Nine months ended December 31

	(Millions of yen)
Nine months ended	Nine months ended
December 31, 2018	December 31, 2019

Net income

Other comprehensive loss

Net unrealized gains (losses) on available-for-sale securities

124,438	136,586
57	(14)

Net deferred gains (losses) on hedges

Foreign currency translation adjustments

Adjustments for retirement benefits

Share of other comprehensive loss of affiliates

66	12
(4,677)	(3,624)
(16,050)	(16,104)
(1)	(4)

Total other comprehensive loss	(20,606)	(19,736)
Comprehensive income	103,832	116,849
Total comprehensive income (loss)
attributable to:
Japan Post Co.	103,848	117,481
Non-controlling interests	(16)	(631)

7

Japan Post Co.

3. Segment Information

Nine months ended December 31, 2018

1. Operating income and segment profit of reportable segments

							(Millions of yen)
		Reportable segments
	Postal and		International		Other			Total
	domestic	Post office	logistics	Subtotal
	logistics	business	business
	business		(Note 2)
Operating income (Note 1)
Operating income from	1,577,965	885,921	534,757	2,998,644		-		2,998,644
third parties
Intersegment operating	11,268	153,050	-	164,319		-		164,319
income
Total	1,589,234	1,038,972	534,757	3,162,964		-		3,162,964
Segment profit	86,935	47,788	6,551	141,275		-		141,275

(Notes)

1. "Operating income" is presented instead of net sales which is typical for companies in other industries.
2. The amount presented in segment profit for the international logistics business segment is EBIT.

1. Reconciliation between total segment profit of reportable segments and net operating income on the interim consolidated statements of income

	(Millions of yen)
Items	Amount
Total segment profit of reportable segments	141,275
Segment profit in other business	-
Eliminations of intersegment transactions	1,051
Corporate expenses (Note)	(1,214)
Other adjustments	(3,506)
Net operating income on the interim consolidated	137,606
statements of income

(Note)

"Corporate expenses" consists mainly of general and administrative costs which are not attributable to any reportable segments.

8

Japan Post Co.

Nine months ended December 31, 2019

(1) Operating income and segment profit (loss) of reportable segments

					(Millions of yen)
		Reportable segments
	Postal and		International		Other	Total
	domestic	Post office	logistics	Subtotal
	logistics	business	business
	business		(Note 2)
Operating income (Note 1)
Operating income from	1,591,345	851,677	486,342	2,929,365	-	2,929,365
third parties
Intersegment operating	10,323	153,106	121	163,551	-	163,551
income
Total	1,601,669	1,004,784	486,464	3,092,917	-	3,092,917
Segment profit (loss)	119,321	51,780	(5,913)	165,188	-	165,188

(Notes)

1. "Operating income" is presented instead of net sales which is typical for companies in other industries.
2. The amount presented in segment loss for the international logistics business segment is EBIT.

1. Reconciliation between total segment profit (loss) of reportable segments and net operating income on the interim consolidated statements of income

	(Millions of yen)
Items	Amount
Total segment profit (loss) of reportable segments	165,188
Segment profit in other business	-
Eliminations of intersegment transactions	1,014
Corporate expenses (Note)	(1,498)
Other adjustments	(2,993)
Net operating income on the interim consolidated	161,710
statements of income

(Note)

"Corporate expenses" consists mainly of general and administrative costs which are not attributable to any reportable segments.

9

III Japan Post Bank

Note: Please refer to the documents on consolidated financial results announcements of Japan Post Bank for consolidated financial results of the company.

10

IV Japan Post Insurance

Note: Please refer to the documents on consolidated financial results announcements of Japan Post Insurance for consolidated financial results of the company.

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