Japan Post : Summary of Consolidated Financial Results for the Six Months Ended September 30, 2020

Summary of Consolidated Financial Results for the Six Months Ended September 30, 2020

								November 13, 2020
Company name:	Japan Post Holdings Co., Ltd.		Stock exchange listing:	Tokyo Stock Exchange
Code number:	6178			URL:		https://www.japanpost.jp/en/
Representative:	MASUDA Hiroya, Director and Representative Executive Officer, President & CEO
Contact:	TSURUDA Nobuo, Executive Officer, Head of IR Office
Phone:	[phone]
Scheduled date of filing interim securities report:		November 25, 2020
Scheduled date of commencing dividend payments:	-
Trading accounts:	Unestablished
Availability of supplementary briefing material on interim financial results:		Available
Schedule of interim financial results briefing session:		Scheduled (for institutional investors and analysts)
					(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Six Months Ended September 30, 2020
(April 1, 2020 to September 30, 2020)
(1) Consolidated Results of Operations		(% indicates changes from the previous corresponding period.)
		Ordinary income		Net ordinary income	Net income attributable to
			Japan Post Holdings
		Million yen	%		Million yen		%	Million yen		%
Six months ended		5,639,129	(5.5)		360,636		(10.4)	178,951		(24.4)
September 30, 2020
Six months ended		5,969,326	(4.8)		402,623		(3.2)	236,599		5.8
September 30, 2019

(Note) Comprehensive income: Six months ended September 30, 2020: ¥2,759,243 million [316.0%] Six months ended September 30, 2019: ¥663,202 million [- %]

	Net income per share	Diluted net income per share
	Yen	Yen
Six months ended	44.26	-
September 30, 2020
Six months ended	58.52	-
September 30, 2019

(Note) Because there was no potential common stock, the amount for diluted net income per share is omitted.

(2) Consolidated Financial Position

	Total assets	Net assets	Equity ratio (Note)
		Million yen	Million yen	%
As of September 30, 2020		296,211,387	15,261,029	4.4
As of March 31, 2020		286,098,449	12,616,774	3.8
(Reference) Equity: As of September 30, 2020: ¥13,148,978 million
As of March 31, 2020:	¥10,934,152 million
(Note) Equity ratio = [(Net assets - Non-controlling interests) / Total assets] x 100

2. Dividends

					Annual dividend
		1st		2nd		3rd		Year-end		Total
		quarter-end		quarter-end		quarter-end
		Yen		Yen		Yen		Yen		Yen
Fiscal year ended March 31, 2020	-	25.00	-		25.00	50.00
Fiscal year ending March 31, 2021	-	0.00
Fiscal year ending March 31, 2021					-		50.00	50.00
(Forecast)

(Note 1) Revision of dividends forecast to the latest announcement: Yes

(Note 2) For the revisions to the dividends forecast, please refer to "Notice Regarding Revisions to the Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 and Dividends Forecast" released today.

The source of dividends for the fiscal year ending March 31, 2021 is to be capital surplus.

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021)

(% indicates changes from the previous corresponding period.)

	Ordinary income	Net ordinary income	Net income attributable	Net income per share
	to Japan Post Holdings
Fiscal year ending	Million yen	%	Million yen	%	Million yen	%	Yen
11,360,000	(4.9)	620,000	(28.3)	340,000	(29.7)	84.09
March 31, 2021

(Note 1) Revision of financial results forecast to the latest announcement: Yes

(Note 2) For the revisions to the consolidated financial results forecast, please refer to "Notice Regarding Revisions to the Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 and Dividends Forecast" released today.

* Notes:

1. Changes in significant subsidiaries during the fiscal period under review (changes in specified subsidiaries resulting in changes in scope of consolidation): No
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
3. 1. Changes in accounting policies due to the revision of accounting standards: No
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
4. Total number of shares issued (common stock)
5. 1. Total number of shares issued at the end of the fiscal period (including treasury stock):

As of September 30, 2020: 4,500,000,000 shares

As of March 31, 2020:

4,500,000,000 shares

1. Total number of treasury stock at the end of the fiscal period: As of September 30, 2020: 456,635,301 shares

As of March 31, 2020:

456,667,501 shares

3) Average number of shares during the fiscal period:

Six months ended September 30, 2020: 4,043,349,612 shares

Six months ended September 30, 2019: 4,043,225,669 shares

(Note) The total number of treasury stock at the end of the fiscal period includes the shares of the Company held by the management board benefit trust of 496,100 shares and 528,300 shares as of September 30, 2020 and March 31, 2020, respectively. The number of treasury stock excluded from calculation of the average number of shares during the fiscal period includes the shares of the Company held by the management board benefit trust of 511,187 shares and 635,130 shares for the six months ended September 30, 2020 and 2019, respectively.

(Summary of non-consolidated financial results)

1. Non-consolidated Financial Results for the Six Months Ended September 30, 2020 (April 1, 2020 to September 30, 2020)

(1) Non-consolidated Results of Operations	(% indicates changes from the previous corresponding period.)
		Operating income	Net operating income	Net ordinary income		Net income
		Million yen		%	Million yen	%	Million yen		%		Million yen	%
Six months ended		128,284		(16.8)	100,602	(21.1)	105,466		(18.8)		(2,931,673)	-
September 30, 2020
Six months ended		154,146		0.2	127,573	0.9	129,887		1.9		270,814	108.3
September 30, 2019
		Net income per share
					Yen
Six months ended				(725.06)
September 30, 2020
Six months ended				66.98
September 30, 2019
(2) Non-consolidated Financial Position
					Total assets		Net assets			Equity ratio (Note)
						Million yen			Million yen					%
As of September 30, 2020				5,076,287			5,004,603					98.6
As of March 31, 2020				8,129,402			8,031,667					98.8
(Reference) Equity: As of September 30, 2020: ¥5,004,603 million
	As of March 31, 2020:	¥8,031,667 million

(Note) Equity ratio = (Net assets / Total assets) x 100

• This summary of interim consolidated financial results is outside the scope of interim audit procedures by Certified Public Accountants or Audit Firm.
• Explanation on appropriate use of financial results forecast and other specific matters

Forecasts and other forward-looking statements presented in this document are based on information that the Company is aware of 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 the impact of the spread of COVID-19, 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.

Japan Post Holdings Co., Ltd

[Attachment]
Table of Contents
1. Qualitative Information on Interim Consolidated Financial Results for the Fiscal Period under Review..............	2
(1)	Explanation of Results of Operations.........................................................................................................	2
(2)	Explanation of Financial Position ..............................................................................................................	2
(3)	Explanation of Consolidated Financial Results Forecast and Other Future Projections ............................	3
2. Interim Consolidated Financial Statements and Primary Notes .............................................................................	4
(1)	Interim Consolidated Balance Sheets.........................................................................................................	4
(2)	Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive
	Income........................................................................................................................................................	6
(3)	Interim Consolidated Statements of Changes in Net Assets.......................................................................	8
(4)	Notes to Interim Consolidated Financial Statements ...............................................................................	10
	(Notes on Going-Concern Assumption) ...................................................................................................	10
	(Additional Information) ..........................................................................................................................	10
	(Segment Information) ..............................................................................................................................	11
3. Interim Non-consolidated Financial Statements ...................................................................................................	12
(1)	Interim Non-consolidated Balance Sheets ...............................................................................................	12
(2)	Interim Non-consolidated Statements of Income .....................................................................................	14
(3)	Interim Non-consolidated Statements of Changes in Net Assets .............................................................	15

Supplementary Briefing Material:

Materials for Consolidated Financial Results for the Six Months Ended September 30, 2020

1

Japan Post Holdings Co., Ltd

1. Qualitative Information on Interim Consolidated Financial Results for the Fiscal Period under Review

(1) Explanation of Results of Operations

Consolidated ordinary income for the six months ended September 30, 2020 amounted to ¥5,639,129 million (down ¥330,196 million year-on-year), of which the postal and domestic logistics business segment accounted for ¥964,257 million (down ¥27,902 million year-on-year); the post office business segment accounted for ¥617,308 million (down ¥48,706 million year-on-year); the international logistics business segment accounted for ¥373,720 million (up ¥55,297 million year-on-year); the banking business segment accounted for ¥830,516 million (down ¥79,468 million year-on-year); and the life insurance business segment accounted for ¥3,385,358 million (down ¥275,973 million year-on-year). Consolidated net ordinary income amounted to ¥360,636 million (down ¥41,986 million year-on-year) as a result of net ordinary income of ¥7,370 million in the postal and domestic logistics business segment (down ¥21,918 million year-on-year); net ordinary income of ¥23,010 million in the post office business segment (down ¥13,217 million year-on-year); net ordinary loss of ¥11,341 million in the international logistics business segment (net ordinary loss of ¥11,322 million for the same period of the previous fiscal year); net ordinary income of ¥172,002 million in the banking business segment (down ¥29,135 million year-on-year); and net ordinary income of ¥162,723 million in the life insurance business segment (up ¥21,219 million year-on-year).

As a result of the above, net income attributable to Japan Post Holdings amounted to ¥178,951 million (down ¥57,647 million year-on-year), which comprises consolidated net ordinary income after adjusting for extraordinary gains (losses), provision for reserve for policyholder dividends, income taxes and net income attributable to non-controlling interests.

1. Explanation of Financial Position
2. 1. Assets

Consolidated total assets were ¥296,211,387 million, up ¥10,112,938 million from the end of the previous fiscal year.

Major factors include an increase in cash and due from banks of ¥4,625,816 million, an increase in securities of ¥3,898,073 million and an increase in loans of ¥1,591,935 million, as well as a decrease in receivables under securities borrowing transactions of ¥797,224 million and a decrease in call loans of ¥350,000 million.

2) Liabilities

Consolidated total liabilities were ¥280,950,357 million, up ¥7,468,682 million from the end of the previous fiscal year.

Major factors include an increase in deposits of ¥4,525,937 million and an increase in borrowed money of ¥3,942,685 million, as well as a decrease in policy reserves of ¥1,389,683 million.

3) Net Assets

Consolidated total net assets were ¥15,261,029 million, up ¥2,644,255 million from the end of the previous fiscal year.

Major factors include an increase in net unrealized gains (losses) on available-for-sale securities of ¥2,130,461 million and an increase in non-controlling interests of ¥429,428 million, as well as a decrease in foreign currency translation adjustments of ¥2,282 million.

2

Japan Post Holdings Co., Ltd

(3) Explanation of Consolidated Financial Results Forecast and Other Future Projections

The Company has revised the full year consolidated financial results forecast for the fiscal year ending March 31, 2021 announced on May 15, 2020. For details, please refer to the "Notice Regarding Revisions to the Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2021 and Dividends Forecast" released today.

3

Japan Post Holdings Co., Ltd

2. Interim Consolidated Financial Statements and Primary Notes

(1) Interim Consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2020	As of September 30, 2020
Assets
Cash and due from banks	53,680,384	58,306,201
Call loans	1,420,000		1,070,000
Receivables under resale agreements	9,731,897	10,172,035
Receivables under securities borrowing transactions	3,304,202		2,506,978
Monetary claims bought	634,394	681,958
Trading account securities	31		30
Money held in trust	7,804,150	8,922,644
Securities	191,127,051		195,025,125
Loans	10,624,482	12,216,417
Foreign exchanges	147,469		234,056
Other assets	2,787,487	2,612,383
Tangible fixed assets	3,186,558		3,156,550
Intangible assets	291,694	273,418
Asset for retirement benefits	55,308		55,192
Deferred tax assets	1,312,378	988,443
Reserve for possible loan losses	(9,043)		(10,049)
Total assets	286,098,449	296,211,387

4

		Japan Post Holdings Co., Ltd
		(Millions of yen)
	As of March 31, 2020	As of September 30, 2020
Liabilities
Deposits	181,377,859	185,903,796
Payables under repurchase agreements	14,855,624		15,656,797
Policy reserves and others	64,191,926	62,735,274
Reserve for outstanding claims	461,224		426,713
Policy reserves	62,293,166	60,903,482
Reserve for policyholder dividends	1,437,535		1,405,078
Payables under securities lending transactions	6,509,525	5,789,832
Commercial papers	-		110,417
Borrowed money	302,200	4,244,886
Foreign exchanges	511		441
Bonds	100,000	100,000
Other liabilities	2,820,086		2,356,498
Reserve for bonuses	121,875	125,418
Liability for retirement benefits	2,220,241		2,232,342
Reserve for employee stock ownership plan trust	605	309
Reserve for management board benefit trust	984		806
Reserve for reimbursement of deposits	80,324	76,949
Reserve for insurance claims and others	29,722		7,817
Reserve under the special laws	858,339	830,900
Reserve for price fluctuations	858,339		830,900
Deferred tax liabilities	11,845	777,868
Total liabilities	273,481,674		280,950,357
Net assets
Capital stock	3,500,000		3,500,000
Capital surplus	4,084,763	4,085,184
Retained earnings	4,057,087		4,134,942
Treasury stock	(831,707)	(831,661)
Total shareholders' equity	10,810,143		10,888,465
Net unrealized gains (losses) on available-for-sale	295,671	2,426,132
securities
Net deferred gains (losses) on hedges	(291,823)		(292,659)
Foreign currency translation adjustments	(89,698)	(91,981)
Accumulated adjustments for retirement benefits	209,860		219,022
Total accumulated other comprehensive income	124,008	2,260,513
Non-controlling interests	1,682,622		2,112,051
Total net assets	12,616,774	15,261,029
Total liabilities and net assets	286,098,449		296,211,387

5

Japan Post Holdings Co., Ltd

1. Interim Consolidated Statements of Income and Interim Consolidated Statements of Comprehensive Income
   Interim Consolidated Statements of Income Six months ended September 30

		(Millions of yen)
	Six months ended	Six months ended
	September 30, 2019	September 30, 2020
Ordinary income	5,969,326	5,639,129
Postal business income	1,286,105	1,318,047
Banking business income	909,174	829,693
Life insurance business income	3,661,313	3,385,350
Other ordinary income	112,732	106,038
Ordinary expenses	5,566,702	5,278,492
Operating expenses	4,125,880	3,883,451
Personnel expenses	1,278,396	1,229,740
Depreciation and amortization	145,885	143,517
Other ordinary expenses	16,539	21,782
Net ordinary income	402,623	360,636
Extraordinary gains	34,834	33,377
Gains on sales of fixed assets	2,454	2,379
Reversal of reserve under the special laws	25,637	27,439
Reversal of reserve for price fluctuations	25,637	27,439
Compensation for transfer	339	982
Compensation income	-	1,795
Gains on transfer of business	6,249	-
Other extraordinary gains	153	779
Extraordinary losses	6,079	15,380
Losses on sales and disposal of fixed assets	1,854	1,127
Losses on impairment of fixed assets	1,009	9,305
Post office refurbishment expenses	2,128	976
Other extraordinary losses	1,086	3,970
Provision for reserve for policyholder dividends	54,558	47,281
Income before income taxes	376,820	331,351
Income taxes current	131,048	101,377
Income taxes deferred	(34,254)	4,125
Total income taxes	96,793	105,503
Net income	280,026	225,848
Net income attributable to non-controlling interests	43,427	46,896
Net income attributable to Japan Post Holdings	236,599	178,951

6

Japan Post Holdings Co., Ltd

Interim Consolidated Statements of Comprehensive Income

Six months ended September 30

			(Millions of yen)
	Six months ended	Six months ended
	September 30, 2019	September 30, 2020
Net income		280,026		225,848
Other comprehensive income	383,175	2,533,395
Net unrealized gains (losses) on available-for-sale		416,890		2,525,903
securities
Net deferred gains (losses) on hedges	(6,980)	(843)
Foreign currency translation adjustments		(3,887)		(1,182)
Adjustments for retirement benefits	(22,841)	9,523
Share of other comprehensive loss of affiliates		(5)		(5)
Comprehensive income	663,202	2,759,243
Total comprehensive income attributable to:
Japan Post Holdings	533,780	2,315,447
Non-controlling interests		129,421		443,795

7

Japan Post Holdings Co., Ltd

1. Interim Consolidated Statements of Changes in Net Assets Six months ended September 30, 2019

(Millions of yen)

						Shareholders' equity
	Capital stock		Capital surplus		Retained earnings			Treasury stock		Total shareholders'
							equity
Balance at the beginning of the	3,500,000		4,135,429		3,799,974		(831,887)			10,603,516
fiscal period
Cumulative effects of							(24,426)					(24,426)
changes in accounting
policies
Restated balance at the	3,500,000		4,135,429		3,775,547		(831,887)			10,579,089
beginning of the fiscal period
Changes in the fiscal period
Cash dividends							(101,096)					(101,096)
Net income attributable to							236,599						236,599
Japan Post Holdings
Changes in equity of Japan
Post Holdings due to					(50,674)										(50,674)
transactions with non-
controlling shareholders
Disposals of treasury stock												36			36
Net changes in items other
than shareholders' equity in
the fiscal period
Net changes in the fiscal period			-		(50,674)		135,502			36			84,865
Balance at the end of the fiscal	3,500,000		4,084,755		3,911,050		(831,850)			10,663,955
period
			Accumulated other comprehensive income
												Non-
	Net unrealized				Foreign	Accumulated				Total
	gains (losses)		Net deferred			accumulated	controlling	Total net assets
		currency	adjustments for
	on available-		gains (losses)				other	interests
		translation	retirement
	for-sale		on hedges		comprehensive
		adjustments	benefits
	securities							income
Balance at the beginning of the	2,580,765		(55,415)	(89,350)	253,992				2,689,992	1,495,145	14,788,654
fiscal period
Cumulative effects of															(24,426)
changes in accounting
policies
Restated balance at the	2,580,765		(55,415)	(89,350)	253,992				2,689,992	1,495,145	14,764,227
beginning of the fiscal period
Changes in the fiscal period
Cash dividends															(101,096)
Net income attributable to															236,599
Japan Post Holdings
Changes in equity of Japan
Post Holdings due to															(50,674)
transactions with non-
controlling shareholders
Disposals of treasury stock															36
Net changes in items other	216,193		(6,192)	(2,140)	(23,499)				184,360	591,375	775,736
than shareholders' equity in
the fiscal period
Net changes in the fiscal period	216,193		(6,192)	(2,140)	(23,499)				184,360	591,375	860,602
Balance at the end of the fiscal	2,796,958		(61,608)	(91,490)	230,493				2,874,353	2,086,521	15,624,830
period

8

												Japan Post Holdings Co., Ltd
Six months ended September 30, 2020
															(Millions of yen)
						Shareholders' equity
	Capital stock		Capital surplus		Retained earnings			Treasury stock		Total shareholders'
							equity
Balance at the beginning of the	3,500,000		4,084,763		4,057,087		(831,707)			10,810,143
fiscal period
Cumulative effects of																-
changes in accounting
policies
Restated balance at the	3,500,000		4,084,763		4,057,087		(831,707)			10,810,143
beginning of the fiscal period
Changes in the fiscal period
Cash dividends							(101,096)					(101,096)
Net income attributable to							178,951						178,951
Japan Post Holdings
Changes in equity of Japan
Post Holdings due to					421											421
transactions with non-
controlling shareholders
Disposals of treasury stock													45			45
Net changes in items other
than shareholders' equity in
the fiscal period
Net changes in the fiscal period			-		421		77,855			45			78,321
Balance at the end of the fiscal	3,500,000		4,085,184		4,134,942		(831,661)			10,888,465
period
			Accumulated other comprehensive income
													Non-
	Net unrealized				Foreign		Accumulated				Total
	gains (losses)		Net deferred				accumulated	controlling	Total net assets
		currency		adjustments for
	on available-		gains (losses)					other	interests
		translation		retirement
	for-sale		on hedges			comprehensive
		adjustments		benefits
	securities								income
Balance at the beginning of the	295,671		(291,823)	(89,698)		209,860			124,008	1,682,622	12,616,774
fiscal period
Cumulative effects of																-
changes in accounting
policies
Restated balance at the	295,671		(291,823)	(89,698)		209,860			124,008	1,682,622	12,616,774
beginning of the fiscal period
Changes in the fiscal period
Cash dividends																(101,096)
Net income attributable to																178,951
Japan Post Holdings
Changes in equity of Japan
Post Holdings due to																421
transactions with non-
controlling shareholders
Disposals of treasury stock																45
Net changes in items other	2,130,461		(835)	(2,282)		9,162			2,136,504	429,428	2,565,933
than shareholders' equity in
the fiscal period
Net changes in the fiscal period	2,130,461		(835)	(2,282)		9,162			2,136,504	429,428	2,644,255
Balance at the end of the fiscal	2,426,132		(292,659)	(91,981)		219,022			2,260,513	2,112,051	15,261,029
period

9

Japan Post Holdings Co., Ltd

1. Notes to Interim Consolidated Financial Statements (Notes on Going-Concern Assumption)

None

(Additional Information)

On December 27, 2019, the Company and its consolidated subsidiary Japan Post Co., Ltd. received administrative dispositions pursuant to the Insurance Business Act, etc. from the Minister for Internal Affairs and Communications and the Financial Services Agency of Japan, and Japan Post Insurance Co., Ltd., a consolidated subsidiary of the Company, received administrative dispositions pursuant to the Insurance Business Act from the Financial Services Agency of Japan, on account of improper solicitation actions regarding insurance policies, and underlying systemic problems. The Company is resolved to treat the implementation of the business improvement plan that it formulated as its top-priority management issue, and is making group-wide efforts. Additionally, Japan Post Insurance Co., Ltd. has been confirming with all customers with insurance policies whether their insurance policies are in line with their intentions, and compensating customers who have suffered disadvantages.

In the six months ended September 30, 2020, the Company recorded the refund of premiums and payment of insurance claims to compensate for the disadvantages suffered by customers as part of insurance claims and others(operating expenses, etc.), and the corresponding adjustment to policy reserves as part of reversal of policy reserves(life insurance business income), while recording a reduction of the net amount totaling ¥15,866 million from reserve for insurance claims and others at the end of the previous fiscal year, and a reversal of ¥6,038 million, a decrease as a result of reflecting the status of progress in the investigation of insurance policies on estimates. Consequently, insurance claims and others stood at ¥7,817 million at the end of the six months ended September 30, 2020. The amounts of the aforementioned reduction and reversal of insurance claims and others are included in life insurance business income in the consolidated statement of income for the six months ended September 30, 2020.

10

Japan Post Holdings Co., Ltd

(Segment Information)

1. Ordinary income and segment profit (loss) of reportable segments

							(Millions of yen)
			Reportable Segments
	Postal and		International		Life		Other	Total
	domestic	Post office	Banking
	logistics	insurance	Subtotal	business
	logistics	business	business
	business	business
	business
Ordinary income
Ordinary income from	945,588	78,144	373,624	829,693	3,385,350	5,612,400	24,006	5,636,407
third parties
Intersegment ordinary	18,668	539,164	96	823	8	558,761	134,222	692,983
income
Total	964,257	617,308	373,720	830,516	3,385,358	6,171,161	158,229	6,329,391
Segment profit (loss)	7,370	23,010	(11,341)	172,002	162,723	353,766	107,215	460,982

(Notes) 1. Ordinary income is presented instead of net sales which is typical for companies in other industries.

2. "Other business" includes the hotel business and hospital business. Segment profit in "Other business" includes dividend income from subsidiaries and affiliates recorded by the Company in the amount of ¥97,209 million.

2. Reconciliation of amounts reported on reportable segments and interim consolidated financial statements

1. Reconciliation between total ordinary income of reportable segments and ordinary income on the interim consolidated statements of income

	(Millions of yen)
Items	Amount
Total ordinary income of reportable segments	6,171,161
Ordinary income of other business	158,229
Eliminations of intersegment transactions	(692,983)
Adjustments	2,721
Ordinary income on the interim consolidated statements	5,639,129
of income

(Notes) 1. Ordinary income is presented instead of net sales which is typical for companies in other industries.

1. 2. "Adjustments" are primarily due to differences in the calculation methods used for ordinary income for the international logistics business segment and the interim consolidated statements of income.

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

	(Millions of yen)
Items	Amount
Total segment profit of reportable segments	353,766
Segment profit in other business	107,215
Eliminations of intersegment transactions	(97,904)
Adjustments	(2,440)
Net ordinary income on the interim consolidated	360,636
statements of income

(Note) "Adjustments" are primarily due to differences in the calculation methods used for segment loss for the international logistics business segment and net ordinary income on the interim consolidated statements of income.

11

Japan Post Holdings Co., Ltd

3. Interim Non-consolidated Financial Statements

(1) Interim Non-consolidated Balance Sheets

		(Millions of yen)
	As of March 31, 2020	As of September 30, 2020
Assets
Current assets
Cash and deposits	294,921		365,896
Inventories	248	221
Prepaid expenses	267		580
Short-term loan	24,936	32,736
Accounts receivable	45,167		20,232
Income taxes receivable	54,886	21,671
Others	5,247		5,319
Reserve for possible loan losses	(3)	(294)
Total current assets	425,671		446,363
Non-current assets
Tangible fixed assets
Buildings	44,990	42,812
Tools and fixtures	14,077		18,916
Land	90,308	90,093
Others	4,380		4,552
Total tangible fixed assets	153,757	156,374
Intangible assets	25,137		24,213
Investments and other assets
Investment securities	12,850		13,997
Stocks of subsidiaries and affiliates	7,313,387	4,229,313
Money held in trust	198,341		202,854
Long-term loan	2,880	2,880
Claims provable in bankruptcy	59		59
Long-term prepaid expenses	2,355	2,118
Prepaid pension costs	-		3,160
Others	174	164
Reserve for possible loan losses	(59)		(59)
Allowance for investment loss	(5,152)	(5,152)
Total investments and other assets	7,524,836		4,449,336
Total non-current assets	7,703,731	4,629,923
Total assets	8,129,402		5,076,287

12

			Japan Post Holdings Co., Ltd
			(Millions of yen)
	As of March 31, 2020	As of September 30, 2020
Liabilities
Current liabilities
Accounts payable		27,377		12,780
Accrued expenses	902	840
Income taxes payable		162		320
Reserve for bonuses	1,637	1,698
Reserve for point service program		402		386
Others	6,544	6,339
Total current liabilities		37,026		22,366
Long-term liabilities
Reserve for retirement benefits		35,881		24,926
Reserve for management board benefit trust	228	183
Reserve for compensation for accidents in the course		17,415		17,057
of duty
Others	7,183	7,149
Total long-term liabilities		60,708		49,317
Total liabilities	97,734	71,684
Net assets
Shareholders' equity
Capital stock		3,500,000		3,500,000
Capital surplus
Capital reserve		875,000		875,000
Other capital surplus	3,628,856	3,628,856
Total capital surplus		4,503,856		4,503,856
Retained earnings
Other retained earnings
Retained earnings brought forward	963,958	(2,068,811)
Total retained earnings		963,958		(2,068,811)
Treasury stock	(831,707)	(831,661)
Total shareholders' equity		8,136,107		5,103,382

Valuation and translation adjustments

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

Total valuation and translation adjustments

Total net assets

Total liabilities and net assets

	(104,439)		(98,779)
	(104,439)		(98,779)
	8,031,667		5,004,603
	8,129,402		5,076,287

13

Japan Post Holdings Co., Ltd

1. Interim Non-consolidatedStatements of Income Six months ended September 30

				(Millions of yen)
		Six months ended	Six months ended
		September 30, 2019	September 30, 2020
Operating income
Brand royalty income	6,838	6,698
Dividend income from subsidiaries and affiliates		121,873		97,209
Income from business consignment	7,486	15,488
Subsidy income equivalent to deposit insurance		255		164
premiums
Income from hospital business	7,010	6,363
Income from hotel business		10,681		2,358
Total operating income	154,146	128,284
Operating expenses
Expenses for business consignment	8,007	17,003
Expenses for hospital business		8,834		8,493
Expenses for hotel business	13,047	8,685
Administrative expenses		(3,316)		(6,500)
Total operating expenses	26,572	27,681
Net operating income		127,573		100,602
Other income
Dividend income		1,064		3,400
Rent income	1,311	1,326
Others		619		1,171
Total other income	2,996	5,898
Other expenses
Rent expenses	543	628
Others		138		406
Total other expenses	682	1,034
Net ordinary income		129,887		105,466
Extraordinary gains
Gains on sales of fixed assets		130		121
Gains on transfer of business	6,249	-
Gains on sales of stocks of subsidiaries and affiliates		129,365		-
Others	60	198
Total extraordinary gains		135,805		319
Extraordinary losses
Losses on sales and disposal of fixed assets		1,112		96
Losses on impairment of fixed assets	870	4,674
Losses on valuation of stocks of subsidiaries		-		3,040,496
and affiliates
Share of post office refurbishment expenses	2,478	1,184
Others		232		312
Total extraordinary losses	4,693	3,046,764
Income (loss) before income taxes		261,000		(2,940,978)
Income taxes current	(9,814)	(9,304)
Total income taxes		(9,814)		(9,304)
Net income (loss)		270,814	(2,931,673)

14

Japan Post Holdings Co., Ltd

1. Interim Non-consolidatedStatements of Changes in Net Assets Six months ended September 30, 2019

					(Millions of yen)
			Shareholders' equity
			Capital surplus		Retained earnings
	Capital stock				Other retained
	Capital reserve	Other capital	Total capital	earnings	Total retained
		surplus	surplus	Retained earnings	earnings
					brought forward
Balance at the beginning of	3,500,000	875,000	3,628,856	4,503,856	768,504	768,504
the fiscal period
Changes in the fiscal
period
Cash dividends					(101,096)	(101,096)
Net income					270,814	270,814
Disposals of treasury
stock
Net changes in items
other than shareholders'
equity in the fiscal
period
Net changes in the fiscal	-	-	-	-	169,718	169,718
period
Balance at the end of the	3,500,000	875,000	3,628,856	4,503,856	938,222	938,222
fiscal period
	Shareholders' equity	Valuation and translation adjustments
			Net unrealized	Net deferred	Total valuation and	Total net assets
		Total shareholders'	gains (losses) on
	Treasury stock	gains (losses)	translation
	equity	available-for-sale
		on hedges	adjustments
			securities
Balance at the beginning of	(831,887)	7,940,472	(29)	-	(29)	7,940,442
the fiscal period
Changes in the fiscal
period
Cash dividends		(101,096)				(101,096)
Net income		270,814				270,814
Disposals of treasury	36	36				36
stock
Net changes in items
other than shareholders'			(6,210)	252	(5,958)	(5,958)
equity in the fiscal
period
Net changes in the fiscal	36	169,755	(6,210)	252	(5,958)	163,797
period
Balance at the end of the	(831,850)	8,110,227	(6,240)	252	(5,987)	8,104,239
fiscal period

15

					Japan Post Holdings Co., Ltd
Six months ended September 30, 2020
					(Millions of yen)
			Shareholders' equity
			Capital surplus		Retained earnings
	Capital stock				Other retained
	Capital reserve	Other capital	Total capital	earnings	Total retained
		surplus	surplus	Retained earnings	earnings
					brought forward
Balance at the beginning of	3,500,000	875,000	3,628,856	4,503,856	963,958	963,958
the fiscal period
Changes in the fiscal
period
Cash dividends					(101,096)	(101,096)
Net loss					(2,931,673)	(2,931,673)
Disposals of treasury
stock
Net changes in items
other than shareholders'
equity in the fiscal
period
Net changes in the fiscal	-	-	-	-	(3,032,769)	(3,032,769)
period
Balance at the end of the	3,500,000	875,000	3,628,856	4,503,856	(2,068,811)	(2,068,811)
fiscal period
	Shareholders' equity	Valuation and translation adjustments
			Net unrealized	Total valuation and	Total net assets
		Total shareholders'	gains (losses) on
	Treasury stock	translation
	equity	available-for-sale
		adjustments
			securities
Balance at the beginning of	(831,707)	8,136,107	(104,439)	(104,439)	8,031,667
the fiscal period
Changes in the fiscal
period
Cash dividends		(101,096)			(101,096)
Net loss		(2,931,673)			(2,931,673)
Disposals of treasury	45	45			45
stock
Net changes in items
other than shareholders'			5,660	5,660	5,660
equity in the fiscal
period
Net changes in the fiscal	45	(3,032,724)	5,660	5,660	(3,027,064)
period
Balance at the end of the	(831,661)	5,103,382	(98,779)	(98,779)	5,004,603
fiscal period

16