Latest Financial Highlights

Financial topics for the 1st-3rd Quarter (9 months) of FY 2012

1-3Q "Net income attributable to ITOCHU" increased by ¥71.4 bil. to ¥216.7 bil. and recorded the highest ever 1-3Q earnings (including a loss of ¥9.7 bil. the reversal of deferred tax assets of accompanying the change in the effective income tax rate under Japanese taxation reform). Progress toward the previous Outlook for FY 2012 of ¥240.0 bil. was 90% and toward the revision of Outlook for FY 2012 of ¥280.0 bil. was 77%. Similarly, "Income before income taxes", "Equity in earnings of associated companies", Net income attributable to ITOCHU of group companies (subsidiaries and associated companies) reporting profits and total of group companies achieved record-high. Adjusted profit increased by ¥58.9 bil. to ¥297.8 bil.
For "Net income attributable to ITOCHU" by segment, "Ener., Met. & Min." increased significantly by ¥28.1 bil. to ¥115.1 bil., and increased by ¥8.1 bil. to ¥35.5 bil. for "Food", ¥5.5 bil. to ¥26.5 bil. for "Chem., FP & GM" and ¥4.2 bil. to ¥17.0 bil. for "Textile". These 4 segments recorded highest ever earnings. "ICT & Mach." increased by ¥9.2 bil. to ¥24.5 bil. In "Fin. & IS, LS" there was the reversal of deferred tax assets (a loss of ¥4.0 bil.) but due to the absence of impairment losses on Orient Corporation preferred stocks recorded in the same period of the previous FY, improved ¥12.6 bil. to ¥0.6 bil.; and "Const. & Rlty." recorded small loss.
Share of "Net income attributable to ITOCHU" by sector: Natural Resource/Energy-Related 53% (¥115.1 bil.), Consumer-Related 30% (¥65.2 bil.), Machinery-Related 11% (¥24.5 bil.), and Chemicals, Construction & Realty and Others 6% (¥12.0 bil.) Natural Resource/Energy-Related and Consumer-Related sectors reached record-high.
"Total ITOCHU stockholders' equity" increased by ¥44.4 bil. to ¥1,199.2 bil. from the previous FY end. Ratio of ITOCHU stockholders' equity to total assets was 19.1%.NET DER recorded 1.75 times and expected to be 1.6 times at the end of FY 2012. Total equity was ¥1,525.8 bil.

Consolidated Financial Results of Operations

(Unit: billion yen, (losses, decrease))
	Apr.-Dec. 2011	Apr.-Dec. 2010	Increase (Decrease)	Outlook for FY2012 (Announced on Feb. 2)
	Apr.-Dec. 2011	Apr.-Dec. 2010	Increase (Decrease)		Progress (%)
Net income attributable to ITOCHU	216.7	145.3	71.4	280.0	77.4%
Revenue	2,973.8	2,636.6	337.2
Gross trading profit (Note 1)	751.2	714.6	36.6	1,030.0	72.9%
Selling, general and administrative expenses (Note 1)	(542.4)	(531.5)	(10.8)	(740.0)	73.3%
Provision for doubtful receivables	(3.7)	(4.0)	0.3	(10.0)	37.5%
Net interest expenses	(9.3)	(13.3)	4.0	(15.0)	62.1%
Dividends received	16.9	17.6	(0.7)	25.0	67.5%
Net financial income	7.6	4.3	3.3	10.0	75.5%
Gain (loss) on investments-net	8.7	(27.9)	36.6	40.0	87.5%
Loss on property and equipment-net	(0.8)	(1.5)	0.7
Gain on bargain purchase in acquisition	10.5	-	10.5
Other-net	16.6	(6.2)	22.8
Total other expenses	(503.6)	(566.9)	63.4	(700.0)	71.9%
Income before income taxes and equity in earnings of associated companies	247.6	147.6	100.0	330.0	75.0%
Income taxes	(96.7)	(45.4)	(51.3)	(130.0)	74.4%
Income before equity in earnings of associated companies	150.9	102.2	48.7	200.0	75.4%
Equity in earnings of associated companies	81.4	51.6	29.8	100.0	81.4%
Net income	232.3	153.8	78.5	300.0	77.4%
Less:Net income attributable to the noncontrolling interest	(15.6)	(8.5)	(7.1)	(20.0)	77.9%

Reference

(Unit: billion yen, (losses, decrease))
	Apr.-Dec. 2011	Apr.-Dec. 2010	Increase (Decrease)	Outlook for FY2012 (Announced on Feb. 2)
	Apr.-Dec. 2011	Apr.-Dec. 2010	Increase (Decrease)		Progress (%)
Total trading transactions	8,877.2	8,505.1	372.0	11,800.0	75.2%
Gross trading profit ratio	8.5%	8.4%	0.1%	8.7%	-
Adjusted profit *	297.8	238.9	58.9	400.0	74.4%

* Adjusted profit = Gross trading profit + SG&A expenses + Net financial income + Equity in earnings of associated companies
(Note 1) As a result of the ITOCHU Group’s integration of food distribution and marketing business, the items in which distribution cost related to these operations has been included were changed from the beginning of fiscal year 2012. The relevant amounts for the same period of the previous fiscal year were reclassified based on this new classification.

Summary of changes from the same period of the previous fiscal year

Revenue:

Increase in Energy, Metals & Minerals Company (higher prices for iron ore, oil & gas and an increase in iron ore sales volume), in Chemicals, Forest Products & General Merchandise Company (acquisition of Kwik-Fit Group, higher market prices for chemicals and natural rubber) and in Food Company (higher market prices for food materials, such as feed grains and others, an increase in transaction volume in food-distribution-related companies)

Gross trading profit:

Textile/ Decr (94.8→92.7)	: Due to liquidation of apparel-related company at the previous fiscal year-end, despite rise in uniform products and textile materials transactions, as well as the strong sales on the domestic demand in China
ICT & Machinery/ Incr (130.3→145.9)	: Due to strong transactions in domestic ICT-related companies and acceptance in healthcare-related business as a result of reorganization, despite less transactions in automobiles as a result of aftermath of the Great East Japan Earthquake
Energy, Metals & Minerals/ Incr (149.3→163.8)	: Due to rise in price for oil & gas and improvement of operations in energy transactions, as well as higher prices for iron ore and sales volume, despite decrease in revenue due to lower coal production volume
Chemicals, Forest Products & General Merchandise/ Incr (88.3→102.2)	: Due to acquisition of Kwik-Fit Group, as well as higher market prices for natural rubber, in addition to strong domestic market conditions for plywood
Food/ Incr (208.4→209.9)	: Due to rise in transaction volume at food-distribution-related companies, despite decrease in some business as a result of aftermath of the Great East Japan Earthquake
Construction & Realty/ Incr (11.1→12.6)	: Due to higher sales of newly completed condominiums in favorable locations and sales to investors of real estate for leasing
Financial & Insurance Services, Logistics Services/ Decr (14.6→11.3)	: Due to sale of a travel-related domestic company and the transfer of foreign exchange operations to head office as a result of reorganization

SG & A:

Increase due to an increase accompanying a rise in revenue among existing consolidated companies and new consolidated subsidiaries, which offset decreases in the effect of cost reductions and the de-consolidation of certain subsidiaries

Net financial income:

Improvement of net interest expenses, even though decreased in dividends due primarily to a decrease in dividends from LNG-related investments accompanying a change of investee’s dividend policy

Gain (loss) on investments-net:

Net of impairment losses and remeasuring gain on investments +34.8, Net gain on sales of investments +0.7, Losses on business disposals and others +1.1

Loss on property and equipment-net:

Improved in impairment losses +6.1 [due to the absence of impairment losses on oil & gas assets recorded in the same period of the previous fiscal year], Net gain on sales of property and equipment and others
-5.3 [due to the absence of gain on sales of coal interests recorded in the same period of the previous fiscal year]

Gain on bargain purchase in acquisition:

Gain on acquisition of Brazil Japan Iron Ore Corporation for the first quarter of fiscal year 2012

Other-net:

Due to the receipt of insurance related to the Great East Japan Earthquake and to the absence of losses on disposal of three enterprises and business reconstruction costs on equipment-material-related business in North America, as well as the cost related to asset retirement obligations recorded in the same period of the previous year

Income taxes:

The reversal of deferred tax assets accompanying the change in the effective income tax rate under Japanese taxation reform

Equity in earnings of assoc. co.:

Equity-method associated companies of Brazil Japan Iron Ore Corporation +9.0, Orient Corporation [the absence of impairment losses on investment recorded in the same period of the previous fiscal year/ excluding tax effect] +5.3, Marubeni-Itochu Steel Inc. +3.9, Equity-method associated companies of IMEA +2.4, FamilyMart Co., Ltd. +2.1, Century Tokyo Leasing Corporation (Note 2) [Gain on negative goodwill accompanying the additional investment/ excluding tax effect] +1.5

(Note 2) ITOCHU has refrained from announcing the figures more than above since the company is scheduled to announce its results on February 2, which is the same day of ITOCHU's announcement day.
* The effect on Net income attributable to ITOCHU of the reversal of deferred tax assets accompanying the change in the effective income tax rate was a loss of ¥9.7 bil. (125 million U.S. dollars), including losses recognized by equity-method associated companies.

Dividend Information (Per Share)

FY 2012
Annual(Planned) 40.0 yen
Interim 16.5 yen

Financial Position

(Unit: billion yen, (losses, decrease))
	Dec. 2011	Mar. 2011	Increase (Decrease)	Outlook for March 31, 2012
Total assets	6,262.9	5,673.7	589.2	6,300.0
Interest-bearing debt	2,512.4	2,268.4	244.1	2,600.0
Net interest-bearing debt	2,103.2	1,633.2	470.0	2,100.0
Total ITOCHU stockholders' equity	1,199.2	1,154.8	44.4	1,300.0
Total equity	1,525.8	1,397.5	128.3	1,600.0
Ratio of stockholders' equity to total assets	19.1%	20.4%	(1.2%)	20.6%
Net debt-to-equity ratio (times)	1.75	1.41	0.34up	1.6

Summary of changes from the previous fiscal year end

Total assets	Significant decrease in Cash and cash equivalents and Time deposits due to new investments. However, Investments to associated companies increased due to investments in Textile, in ICT & Machinery and in Energy, Metals & Minerals. In addition, in Energy, Metals & Minerals and Chemicals and Forest Products & General Merchandise, there were increases in Net trade receivables and Inventories. Also, in Chemicals, Forest Products & General Merchandise there were increases in Inventories, Net property and equipment and Other assets due to acquisition of Kwik-Fit Group
Total ITOCHU stockholders' equity	Increased due to "Net income attributable to ITOCHU ", despite a decrease in dividend payment and a large deterioration of "Foreign currency translation adjustments. " As a result, "Ratio of stockholders' equity to total assets " (Note 3) decreased by 1.2 points to 19.1% from March 31, 2011. "NET DER " (Note 3) was 1.75 times. Total equity, or the total of ITOCHU stockholders' equity and noncontrolling interest was increased to 1,525.8 billion yen mainly due to acquisition of Brazil Japan Iron Ore Corporation

Total assets

Significant decrease in Cash and cash equivalents and Time deposits due to new investments. However, Investments to associated companies increased due to investments in Textile, in ICT & Machinery and in Energy, Metals & Minerals. In addition, in Energy, Metals & Minerals and Chemicals and Forest Products & General Merchandise, there were increases in Net trade receivables and Inventories.
Also, in Chemicals, Forest Products & General Merchandise there were increases in Inventories, Net property and equipment and Other assets due to acquisition of Kwik-Fit Group

Total ITOCHU stockholders' equity

Increased due to "Net income attributable to ITOCHU ", despite a decrease in dividend payment and a large deterioration of "Foreign currency translation adjustments. " As a result, "Ratio of stockholders' equity to total assets " (Note 3) decreased by 1.2 points to 19.1% from March 31, 2011. "NET DER " (Note 3) was 1.75 times. Total equity, or the total of ITOCHU stockholders' equity and noncontrolling interest was increased to 1,525.8 billion yen mainly due to acquisition of Brazil Japan Iron Ore Corporation