Japan Post : Financial Results of the Principal Subsidiaries Three Months Ended June 30, 2020

Financial Results

of the Principal Subsidiaries

for the Three Months Ended June 30, 2020

August 7, 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 Three Months Ended June 30, 2020............	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

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 Three Months Ended June 30, 2020

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)
Three months ended	202.2	37.6	105.7	56.0	2.8
June 30, 2019
Three months ended	133.2	19.2	42.0	69.9	2.0
June 30, 2020
Year-on-year change	(69.0)	(18.4)	(63.6)	+ 13.9	(0.8)

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)
Three months ended	135.0	35.4	77.8	33.7	(11.9)
June 30, 2019
Three months ended	78.7	16.6	33.2	46.7	(17.8)
June 30, 2020
Year-on-year change	(56.2)	(18.7)	(44.6)	+ 12.9	(5.9)

• 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, 2020	As of June 30, 2020
	Assets
	Current assets
	Cash and deposits		1,920,713	1,995,833
	Notes receivable and operating	302,887	323,849
	accounts receivable
	Securities		15,000	15,000
	Inventories	30,673	32,152
	Other current assets		104,762	105,521
	Reserve for possible loan losses	(5,291)	(6,094)
	Total current assets		2,368,745	2,466,262
	Non-current assets
	Tangible fixed assets
	Buildings	958,586	943,256
	Land		1,300,555	1,302,047
	Right-of-use assets	132,401	139,653
	Other tangible fixed assets		290,924	293,572
	Total tangible fixed assets	2,682,468	2,678,530
	Intangible assets		81,080	79,136
	Investments and other assets
	Other investments and other assets		49,326	49,328
	Reserve for possible loan losses	(2,207)	(2,276)
	Total investments and other assets		47,118	47,052
	Total non-current assets	2,810,668	2,804,719
	Total assets		5,179,414	5,270,982

4

Japan Post Co.

(Millions of yen)

As of March 31, 2020

As of June 30, 2020

Liabilities

Current liabilities

Notes payable and operating accounts payable

Short-term borrowings

Current portion of long-term

borrowings

Other accounts payable

Outstanding amount of banking

business consignment 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

98,997	92,885
159,972	198,421
108,804	123,888
279,410	154,805
3,160	91,807
1,004	1,171
17,656	7,571
247,054	211,835
870,000	1,070,000
108,042	30,392
178,874	201,155
2,072,977	2,183,935
23,324	36
148,492	158,097
10,215	10,751
197	197
280	261
1,994,725	2,021,305
73,822	73,613
2,251,057	2,264,263
4,324,035	4,448,198
400,000	400,000
141,919	141,919
256,175	229,293
798,095	771,212
11	(5)
56	661
(89,698)	(91,720)
137,082	131,650

	Total accumulated other comprehensive	47,451	40,585
	income
	Non-controlling interests			9,831	10,985
	Total net assets	855,378	822,783
	Total liabilities and net assets			5,179,414	5,270,982

5

Japan Post Co.

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

(1) Interim Consolidated Statements of Income

Three months ended June 30

	(Millions of yen)
Three months ended	Three months ended
June 30, 2019	June 30, 2020

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

496,973	486,166
97,732	95,213
74,262	51,634
73,818	73,364
160,067	185,566
41,480	33,877

	Total operating income	944,334	925,824
	Operating costs				842,945		845,353
Gross operating income	101,388	80,471
	Sales, general and administrative costs				61,148		60,012
Net operating income	40,240	20,458
	Other income
	Interest income	111	55
	Dividend income				4		4
	Equity in earnings of affiliates	28	12
	Foreign exchange gains				560		274
	Subsidy income	64	969
	Others				512		795
	Total other income	1,282	2,111
	Other expenses
	Interest expenses				3,603		2,917
	Others				251		443
	Total other expenses	3,855	3,360
	Net ordinary income				37,667		19,209
Extraordinary gains
	Gains on sales of fixed assets				1,219		119
	Compensation for transfer	150	906
	Compensation income				-		715
	Contribution for post office refurbishment	739	313
	expenses
	Others				45		107
	Total extraordinary gains			2,153	2,161
	Extraordinary losses
	Losses on sales of fixed assets	55	23
	Losses on disposal of fixed assets				238		551
	Post office refurbishment expenses	739	313
	Others				645		1,367
	Total extraordinary losses	1,678	2,256
	Income before income taxes				38,143		19,114
Income taxes current	1,856	1,789
	Income taxes deferred				705		292
Total income taxes	2,561	2,081
	Net income				35,581		17,032
Net income attributable to	165	337
	non-controlling interests
	Net income attributable to				35,416		16,695
	Japan Post Co.

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Japan Post Co.

(2) Interim Consolidated Statements of Comprehensive Income Three months ended June 30

	(Millions of yen)
Three months ended	Three months ended
June 30, 2019	June 30, 2020

Net income

Other comprehensive income Net unrealized gains (losses) on

available-for-sale securities

Net deferred gains (losses) on hedges Foreign currency translation adjustments Adjustments for retirement benefits Share of other comprehensive loss

of affiliates

Total other comprehensive loss

Comprehensive income

Total comprehensive income (loss) attributable to:

Japan Post Co.

Non-controlling interests

35,581	17,032
(34)	(12)
2	604
(1,185)	(1,120)
(5,368)	(5,431)
(4)	(4)
(6,589)	(5,965)
28,992	11,067
29,228	9,828
(235)	1,238

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Japan Post Co.

3. Segment Information

Three months ended June 30, 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	498,359	285,907	160,067	944,334		-	944,334
third parties
Intersegment operating	3,200	49,030	42	52,273		-	52,273
income
Total	501,560	334,938	160,109	996,607		-	996,607
Segment profit (loss)	21,516	21,851	(1,919)	41,448		-	41,448

(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 (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 of reportable segments	41,448
Segment profit in other business	-
Eliminations of intersegment transactions	334
Corporate expenses (Note)	(490)
Other adjustments	(1,052)
Net operating income on the interim consolidated	40,240
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.

Three months ended June 30, 2020

(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	487,563	252,693	185,566	925,824		-	925,824
third parties
Intersegment operating	2,623	51,216	37	53,876		-	53,876
income
Total	490,187	303,910	185,603	979,701		-	979,701
Segment profit (loss)	15,412	14,735	(8,216)	21,932		-	21,932

(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 (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 of reportable segments	21,932
Segment profit in other business	-
Eliminations of intersegment transactions	314
Corporate expenses (Note)	(659)
Other adjustments	(1,129)
Net operating income on the interim consolidated	20,458
statements of income

(Note)

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

9