* FY2011(Plan) announced at the FY2010 financial results briefing held on April 27, 2011.
For the FY2011 revised plan, please see the presentation materials.

The Housing Company utilizes the features of its unit construction method to develop business centered on high-performance and high value-added housing products. By employing a unique unit construction method, as much as 80% of the construction can be completed inside the factory, enabling both higher quality construction and shorter construction periods than other methods. Assembled from box-shaped units, our houses can easily be expanded or relocated and reconstructed on a different site. In addition, constructing the units inside the factory allows us to maintain an extensive database of the materials used in the construction. The database is a pivotal resource, which provides timely information to meet customer needs, such as for post-construction renovation projects.

The Housing Company is utilizing the database to develop a "cyclical value chain" that follows and meets customer needs at every stage, through the complete housing cycle, which includes new construction, maintenance renovation (painting, etc.), environmental reforms (such as solar power generation equipment installation, tiled exterior walls, etc.), refurbishing to life stages (kitchen and bathroom renovations, etc.), major refurbishments and additions, sales of existing houses, rebuilding, and relocation.

The housing market was firm in fiscal year 2010, with a year-onyear rise in new housing starts, supported by government measures to stimulate demand, which include housing finance incentives and an eco-point system for housing. Coupled with the upturn in the market environment, the Housing Company's efforts to attract orders and the success of its ongoing measures to fortify its earning structure resulted in growth in both net sales and operating income for the year.

In the housing business, net sales rose by 8.6 billions of yen year on year to 301.0 billions of yen in fiscal year 2010. The most significant factors in the improved performance were the recovery and growth in housing orders from a healthy order backlog at the start of the fiscal year as a result of the brisk orders in the previous year's second half and a year-on-year rise in orders in the first half of fiscal year 2010. Operating income rose by 2.8 billions of yen to 18.2 billions of yen as the increased revenue from sales (1.3 billions of yen) and savings realized from progress in cutting costs (3.8 billions of yen) overcame the negative impacts from higher material prices (1.0 billions of yen) and fixed costs (1.4 billions of yen).

In addition to the positive impact of various government measures to facilitate home purchases, order levels for the housing business were successfully revived and expanded by promoting the advanced environmental features of the company's products, centering on houses with built-in large-capacity solar power generation systems, as well as the comfort and other features. The Housing Company achieved year-on-year increases in housing orders of 9% in the first half, 1% in the second half, and 5% for the full year in fiscal year 2010. The order backlog at the start of fiscal year 2011 was 16% above the previous fiscal year level.

The living environment business, which centers on the refurbishment of residential houses, continued to fortify its business base, including adding 40 new sales staff during the year. It also worked to stimulate demand using a five-year periodic diagnostic testing system and successfully expanded sales of solar power generation equipment and other mainstay products. Consequently, net sales in the living environment business increased by 11.9 billions of yen year on year to 117.7 billions of yen. Operating income grew by 2.2 billions of yen to 6.2 billions of yen, which was largely the result of a 3.6 billions of yen increase in sales revenue, which more than offset a 1.4 billions of yen rise in fixed costs accompanying the expansion of staff.

The Housing Company, which combines the results for the housing and living environment businesses, reported an increase in net sales of 20.4 billions of yen to 418.7 billions of yen and growth in operating income of 5.0 billions of yen to 24.4 billions of yen in fiscal year 2010, thereby posting a new 10-year high in operating income for the third consecutive year.

Sales and Income Targets

We aim to expand sales in both the housing and living environment businesses. In the housing business, we are aiming to increase orders and enhance cost competitiveness by continuing to integrate the production and sales operations and reducing costs. Our fiscal year 2011 targets for the housing business are net sales of 315.6 billions of yen and operating income of 19.5 billions of yen.

In the living environment business, we plan to continue expanding sales of our solar, bath, kitchen, and other mainstay products while fortifying the business base, centered on increasing our sales staff, for ongoing growth in the future. Our fiscal year 2011 targets for the living environment business are net sales of 19.5 billions of yen and operating income of 7.5 billions of yen.

Combined, we are aiming for the Housing Company to attain net sales of 444.0 billions of yen and operating income of 27.0 billions of yen in fiscal year 2011.

Our main priority in fiscal year 2011 is to respond to the reconstruction needs following the disaster-first and foremost of which will be to meet the urgent need to construct temporary housing. This will be followed by the aggressive provision of high-performance housing with superior quake-resistance and natural energy usage capabilities as key elements for creating towns with greater disaster resistance.

As a homebuilder, we feel it is our corporate duty to play a principal role and put every effort into the reconstruction and reinforcement of the domestic infrastructure. We will focus on capturing replacement and new construction demand (including rebuilding on new sites) in the stricken regions and surrounding areas that can be anticipated in the first stages of full-fledged reconstruction. We will also actively promote sales of seismic-resistant housing and housing with built-in solar power generation equipment to respond to increasing demand for construction related to disaster resistance and for natural energy usage.

Specific measures to attract orders in the housing business will focus on expanding orders by introducing new products and emphasizing high-performance feature options to differentiate our products along with fortifying our sales force and organization. As a first step in new products and product differentiation, in April we launched the "Smart Heim" series of homes designed for maximum energy efficiency, and are moving to incorporate the energy-efficient systems into all of our housing products. With the aim of capturing demand in the price-volume zone of the housing market, we plan to aggressively introduce affordably priced models with readily perceivable cost performance. Sales force and organizational fortification will consist of expanding sales staff (by adding approximately 300 new recruits) and implementing region-specific strategies through ongoing integration of the production and sales operations.

Through these initiatives, we aim to realize year-on-year increases in unit orders of 2% in the first half, 8% in the second half, and 5% for the full-year period in fiscal year 2011.

We will also continue to implement cost-cutting measures to offset the negative impacts from higher materials costs and fixed costs and realize profit growth.

In the living environment business, efforts to increase orders and expand sales will continue to focus on differentiating our products by expanding sales of solar power generation equipment to take full advantage of the government support for the use of renewable energy. Strategies will also be implemented to expand sales of bath, kitchen, and other mainstay products. In addition, we plan to increase the refurbishing business sales staff by 70 people and fortify the business base for further growth from fiscal year 2011 onward.