May 13, 2026 Financial Results

Name of Listed Company: Daiwa House Industry Co., Ltd. Representative: Hirotsugu Otomo, President and COO

Code No.: 1925

URL: https://www.daiwahouse.com/English/ Listed Exchanges: Prime Market of the Tokyo Stock Exchange Contact: Yuji Yamada, Managing Executive Officer

E-mail to: dh.ir.communications@daiwahouse.jp

May 13, 2026

Scheduled Date of Ordinary General Meeting of Shareholders: June 26, 2026 Scheduled Date of Filing Securities Report: June 17, 2026 Scheduled Date of Commencement of Dividend Payment: June 29, 2026 Supplemental documents for the financial results provided: Yes

Results briefing for the term under review provided: Yes (for institutional investors and securities analysts)

(Amounts below one million yen are omitted)

1. Consolidated Results of Operation for the Fiscal Year Ended March 31, 2026 (From April 1, 2025 to March 31, 2026)
   1. Consolidated Earnings Results (% figures represent year-on-year change)

      	Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent
      Fiscal year ended:	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      March 31, 2026	5,576,861	2.6	614,879	12.6	571,971	10.9	350,568	7.8
      March 31, 2025	5,434,819	4.5	546,279	24.1	515,985	20.7	325,058	8.8

      Note: Comprehensive income: Fiscal year ended March 31, 2026: 388,492 million yen (0.9%)

      Fiscal year ended March 31, 2025: 384,979 million yen (15.0%)

      	Basic net income per share	Diluted net income per share	Return on equity (ROE)	Ordinary income to total assets ratio	Operating income to net sales ratio
      Fiscal year ended:	Yen	Yen	%	%	%
      March 31, 2026	566.47	—	12.7	7.4	11.0
      March 31, 2025	514.00	—	12.9	7.6	10.1

      (Reference) Equity in earnings of affiliates

      Fiscal year ended March 31, 2026: 709 million yen; Fiscal year ended March 31, 2025: 1,676 million yen

   2. Consolidated Financial Conditions

      	Total assets	Net assets	Net assets ratio	Net assets per share
      Fiscal year ended:	Millions of yen	Millions of yen	%	Yen
      March 31, 2026	8,412,419	3,022,275	34.4	4,677.09
      March 31, 2025	7,049,323	2,716,745	37.1	4,226.17

      (Reference) Net assets ratio = (Net assets – Non-controlling interests) / Total assets×100

      (Net assets – Non-controlling interests): March 31, 2026: 2,896,744 million yen; March 31, 2025: 2,614,238 million yen

   3. Consolidated Cash Flows

      	Cash flows from operating activities	Cash flows from investing activities	Cash flows from financing activities	Cash and cash equivalents, end of the year
      Fiscal year ended:	Millions of yen	Millions of yen	Millions of yen	Millions of yen
      March 31, 2026	189,277	(726,053)	631,058	424,588
      March 31, 2025	420,561	(493,370)	(44,682)	326,954

2. Dividends

   	Dividend per share					Total dividends (annual)	Dividend payout ratio (consolidated)	Dividends to net assets ratio (consolidated)
   	End of 1st quarter (June 30)	End of 2nd quarter (Sept. 30)	End of 3rd quarter (Dec. 31)	Fiscal year-end (Mar. 31)	Annual
   Fiscal year:	Yen	Yen	Yen	Yen	Yen	Millions of yen	%	%
   ended March 31, 2025 ended March 31, 2026	— —	70.00 75.00	— —	80.00 100.00	150.00 175.00	93,936 108,340	29.2 30.9	3.7 3.9
   ending March 31, 2027 (forecasts)	—	86.00	—	45.00	—		48.0

   Notes: 1. Dividend for the fiscal year ended March 2026: Ordinary dividend 165.00 yen; 70th anniversary commemorative dividend

   10.00 yen

   2. At a meeting of its Board of Directors held on May 13, 2026, the Company resolved to conduct a two-for-one stock split of its common stock, with September 30, 2026 set as the record date and October 1, 2026 as the effective date. The fiscal year-end dividend per share for the fiscal year ending March 31, 2027 shown above has been calculated on a post–stock split basis. The annual dividend per share for the fiscal year ending March 31, 2027 is not presented, as the interim dividend and the fiscal year-end dividend cannot be simply aggregated due to the implementation of the stock split. If the stock split were not taken into account, the fiscal year-end dividend per share for the fiscal year ending March 31, 2027 would be

   90.00 yen, and the annual dividend per share would be 176.00 yen.

3. Consolidated Earnings Forecasts for the Fiscal Year Ending March 31, 2027 (From April 1, 2026 to March 31, 2027)

   (% figures represent year-on-year change)

   	Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent		Basic net income per share
   Fiscal year ending March 31, 2027	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
   	5,800,000	4.0	400,000	-34.9	342,000	-40.2	227,000	-35.2	183.26

   Notes: 1. In the above consolidated earnings forecasts, the results for the previous fiscal year, which serve as the basis for the percentage figures indicating the year-on-year changes, include the amortization of actuarial differences for retirement benefits, etc. arising in the previous fiscal year (decrease of 115,675 million yen in operating expenses). Excluding this impact, the year-on-year changes are respectively: operating income -19.9%, ordinary income -25.0%, and net income attributable to owners of the parent -16.4%. For details, please refer to the section of “1. Summary of Earnings Results, etc. (4) Future Outlook” on page 12 of “the Attached Material.”

   2. Basic net income per share in the consolidated earnings forecasts shown above has been calculated on a post–stock split basis as noted in “2. Dividends.” If the stock split were not taken into account, basic net income per share would be 366.51 yen.

   Notes:
   1. Significant Changes in Scope of Consolidation for the Fiscal Year under Review: Yes

      Addition: 1

      Company name: CRC Holdings LLC Exclusion: None

   2. Changes in Accounting Policies Applied, Changes in Accounting Estimates and Retrospective Restatement

      1. Changes in accounting policies applied due to amendment of accounting standards: None

      2. Changes in accounting policies due to reasons other than 1): None

      3. Changes in accounting estimates: None

      4. Retrospective restatement: None

   3. Number of Issued and Outstanding Shares (Common Stock)
      1. Number of shares at the end of the fiscal year (including treasury stock)

         As of March 31, 2026

         659,636,182 shares

         As of March 31, 2025

         659,478,962 shares

      2. Number of treasury stock at the end of the fiscal year

         As of March 31, 2026

         40,289,087 shares

         As of March 31, 2025

         40,895,047 shares

      3. Average number of shares for the fiscal year

Note: For the number of shares used as the basis of calculating basic net income per share (consolidated), please refer to the section of “3. Consolidated Financial Statements and Main Notes (5) Notes to Consolidated Financial Statements (Per Share Information)” of “the Attached Material” on page 27 for details.

1. Non-Consolidated Business Results (% figures represent year-on-year changes)

   	Net sales		Operating income		Ordinary income		Net income
   Fiscal year ended:	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
   March 31, 2026	2,228,120	3.6	297,941	5.3	349,356	5.5	218,138	-12.8
   March 31, 2025	2,149,973	0.0	282,894	15.6	331,035	12.0	250,165	2.3

   	Basic net income per share	Diluted net income per share
   Fiscal year ended:	Yen	Yen
   March 31, 2026	352.48	—
   March 31, 2025	395.58	—

2. Non-Consolidated Financial Conditions

(Reference) Net assets ratio = (Net assets – Non-controlling interests)/Total assets×100

(Net assets – Non-controlling interests): March 31, 2026: 1,924,448 million yen; March 31, 2025: 1,789,391 million yen

• This financial results report is not required to be audited by certified public accountants or audit corporations
• Remarks on the appropriate use of earnings forecasts and other special matters (Notes regarding forward-looking statements)

Consolidated earnings forecasts are based on assumptions in light of the information available as of the date of announcement of this material and the factors of uncertainty that may possibly impact the future results of operation. These statements do not mean that the Company pledges to realize such statements. Actual results may differ significantly from those presented herein as a consequence of numerous factors such as the financial market, economic conditions, competitor situations and fluctuations in land prices.

For the suppositions that form the assumptions for earnings forecasts, please refer to the section of “1. Summary of Earnings Results, etc. (4) Future Outlook” on page 12 of “the Attached Material.”

The Company plans to hold a briefing for institutional investors and securities analysts on May 13, 2026. Financial results presentation materials to be distributed at the briefing will be posted on the Company’s official website at the same time.

1. Summary of Earnings Results, etc. 7

   1. Summary of Consolidated Earnings Results 7

   2. Financial Conditions 9

   3. Cash Flow Position 11

   4. Future Outlook 12

2. Basic Approach to Selection of Accounting Standards 12

3. Consolidated Financial Statements and Main Notes 13

1. Consolidated Balance Sheets 13

2. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income 16

3. Consolidated Statements of Changes in Net Assets 19

4. Consolidated Statements of Cash Flows 21

5. Notes to Consolidated Financial Statements 23

Notes on Premise of Going Concern 23

Notes on Consolidated Balance Sheet 23

Notes on Segment Information 23

Per Share Information 27

Significant Subsequent Events 28

1. Performance Indicators

   Fiscal year	Fiscal year ended March 31, 2023	Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025	Fiscal year ended March 31, 2026	Forecasts for fiscal year ending March 31, 2027
   Net sales (millions of yen)	4,908,199	5,202,919	5,434,819	5,576,861	5,800,000
   Cost of sales (millions of yen)	3,953,004	4,210,511	4,333,754	4,335,041	—
   Selling, general and administrative expenses (millions of yen)	489,824	552,197	554,785	626,940	—
   Operating income (millions of yen)	465,370	440,210	546,279	614,879	400,000
   Ordinary income (millions of yen)	456,012	427,548	515,985	571,971	342,000
   Net income attributable to owners of the parent (millions of yen)	308,399	298,752	325,058	350,568	227,000
   Basic net income per share (yen)	469.12	457.16	514.00	566.47	183.26
   Return on equity (ROE) (%)	14.3	12.7	12.9	12.7	—
   Ordinary income to total assets ratio (%)	7.8	6.7	7.6	7.4	—
   Dividend per share (yen) (of which interim dividend per share)	130 (60)	143 (63)	150 (70)	175 (75)	— (86)
   Total annual dividends (millions of yen)	85,653	92,585	93,936	108,340	—
   Dividend payout ratio (%)	27.7	31.3	29.2	30.9	48.0
   Dividends to net assets ratio (%)	4.0	3.9	3.7	3.9	—
   Total assets (millions of yen)	6,142,067	6,533,721	7,049,323	8,412,419	—
   Net assets (millions of yen)	2,388,914	2,523,762	2,716,745	3,022,275	—
   Net assets ratio (%)	37.2	37.3	37.1	34.4	—
   Net assets per share (yen)	3,466.86	3,810.21	4,226.17	4,677.09	—
   Depreciation (millions of yen)	113,464	117,204	131,786	140,339	160,000
   Net increase in property, plant and equipment and intangible assets (millions of yen)	518,143	355,780	416,543	610,830	500,000
   Cash flows from operating activities (millions of yen)	230,298	302,294	420,561	189,277	—
   Cash flows from investing activities (millions of yen)	(505,181)	(310,419)	(493,370)	(726,053)	—
   Cash flows from financing activities (millions of yen)	287,452	97,399	(44,682)	631,058	—
   Cash and cash equivalents, end of year (millions of yen)	346,154	439,572	326,954	424,588	—

   Note: At a meeting of its Board of Directors held on May 13, 2026, the Company resolved to conduct a two-for-one stock split of its common stock, with September 30, 2026 set as the record date and October 1, 2026 as the effective date. Basic net income per share for the fiscal year ending March 31, 2027 shown above has been calculated on a post–stock split basis. If the stock split were not taken into account, basic net income per share would be 366.51 yen. In addition, the annual dividend per share for the fiscal year ending March 31, 2027 is not presented, as the interim dividend and the fiscal year-end dividend cannot be simply aggregated due to the implementation of the stock split. If the stock split were not taken into account, the dividend per share for the fiscal year ending March 31, 2027 would be 176.00 yen.

2. Sales and Operating Income by Segment

(Millions of yen)

1. Summary of Earnings Results, etc.
   1. Summary of Consolidated Earnings Results for the Fiscal Year under Review

      In the consolidated fiscal year under review, the global economy maintained moderate growth, mainly in major economies; however, the outlook remained uncertain due to trade policy developments and geopolitical risks such as deterioration in the Middle East situation since February 2026. In the Japanese economy, while consumer spending remained resilient against the backdrop of improved employment and income conditions, the impact of factors such as inflation, interest-rate trends and exchange rate fluctuations lengthened the time required for a full-fledged recovery.

      In the domestic housing market, the number of new constructions starts from April 2025 to March 2026 decreased year on year overall, as owner-occupied housing, rental housing, and built-for-sale houses all decreased. In the general construction market, the total floor area of new constructions starts decreased year on year as offices, stores, factories and warehouses decreased, resulting in a year-on-year decrease in the overall.

      Amid this operating environment, the Daiwa House Group recorded consolidated net sales of 5,576,861 million yen (+2.6% year on year) for the fiscal year ended March 2026. Operating income came to 614,879 million yen (+12.6% year on year), ordinary income came to 571,971 million yen (+10.9% year on year), while net income attributable to owners of the parent amounted to 350,568 million yen (+7.8% year on year). The Group achieved its net sales and operating income targets for the fiscal year ending March 31, 2027, which was planned as the final fiscal year in the 7th Medium-Term Management Plan, one year ahead of schedule.

      Additionally, in March 2026, the Company acquired the shares of Sumitomo Densetsu Co., Ltd. thereby making it a consolidated subsidiary.

      Operating income above includes 115,675 million yen gain on amortization of actuarial differences for retirement benefits, etc., and operating income excluding actuarial differences, etc. amounted in 499,203 million yen (+12.2% year on year).

      Results by business segment are as follows.

      Single-Family Houses Business

      Net sales for this segment amounted to 1,342,252 million yen (+17.3% year on year), while operating income came to 155,696 million yen (+123.0% year on year).

      In the domestic housing business, the number of units sold increased in both the custom-built housing and built-for-sale houses categories, partly due to sales expansion of “Smart Made Housing,” which combines the advantages of both custom designs and standardized houses, and the effects of various sales campaigns. In addition, the renovation and purchase-and-sale businesses of the Livness business also contributed to performance.

      Additionally, we made progress in strengthening our proposal capabilities and business foundations through initiatives to increase design efficiency, such as enhancing the functionality of “AI Plan Concierge ver.2,” an AI-based housing plan proposal tool, in February 2026.

      Overseas, mainly in the United States, orders received and units delivered increased year on year, supported by the expansion of sales communities and strengthened sales initiatives. In addition, a large-scale land sale carried out at the end of October 2025 also contributed to business performance.

      Rental Housing Business

      Net sales for this segment amounted to 1,429,273 million yen (+3.9% year on year), while operating income came to 141,142 million yen (+8.6% year on year).

      In the Rental Housing Business segment, through the development, management and operation of rental housing, the Company has been proposing and supporting rental housing management aimed at enhancing asset value for owners. In addition, the Company promoted the wider adoption of ZEH-M properties designed to reduce environmental impact through energy-saving and energy-generating features.

      Daiwa Living Co., Ltd. in addition to providing rental housing under the “D-ROOM” brand, focused on improving living environments through equipment upgrades, resulting in an increase in the number of properties under management and maintenance of a stable occupancy rate.

      Daiwa House Chintai Reform Co., Ltd. worked to strengthen relationships by conducting building inspections and diagnoses periodically at rental houses constructed by the Company, while also promoting warranty extension work and renovation proposals.

      Overseas, the Company has been promoting collaboration in rental housing development with Alliance Residential Company, which became an equity-method affiliate in November 2024. As the first phase of a multifamily housing development initiative, in February 2026, the Company started construction of Prose Ownsby Farms, a rental housing development comprising 414 units in Celina, Texas, USA.

      Condominiums Business

      Net sales for this segment amounted to 279,622 million yen (+3.8% year on year), while operating income came to 5,993 million yen (-45.1% year on year). This was mainly due to a year-on-year decrease in the number of condominium units delivered.

      In the Condominiums Business segment, the Company engaged in the sale of new condominiums, mainly in the Tokyo Metropolitan area and regional hub cities. Sales of PREMIST Tower Funabashi (Chiba Prefecture) and PREMIST Tower Oita, which have been on sale since February 2026, generally progressed steadily, supported by favorable evaluations of their prime station-front locations and mixed-use development features.

      Daiwa Lifenext Co., Ltd. has also seen a steady increase in the number of condominium units under management. In the “L-Place” series of corporate rental dormitories, business remained steady, with the opening of “L-Place Sorimachi” (Kanagawa Prefecture), which is the 77th in the series.

      Commercial Facilities Business

      Net sales for this segment amounted to 1,290,192 million yen (+5.1% year on year), while operating income came to 162,492 million yen (+11.4% year on year).

      In the Commercial Facilities Business segment, in addition to strengthening efforts for large-scale properties, sales and profit were supported by the built-for-sale business involving properties for which the Company acquired land and carried out integrated operations from development planning and tenant leasing through design and construction, as well as by the purchase-and-sale business for commercial facilities. In January 2026, “d_ll HIROSHIMA,” a mixed-use facility combining office and retail space and a multi-story car park, was completed, offering some of the largest office space in the Chugoku-Shikoku region.

      Meanwhile, Daiwa Lease Co., Ltd. opened “Frespo Utsunomiya Market,” a commercial facility developed on the former site of Utsunomiya Central Wholesale Market, and “ARCTOWN Utsunomiya,” a comprehensive park developed through a Park-PFI project.

      In the urban hotels business operated by Daiwa House Realty Mgt. Co., Ltd., the average occupancy rate

      increased year on year. In addition, as a result of strategically the strategic promotion of high unit-price sales, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room) also increased year on year.

      Logistics, Business & Corporate Facilities Business

      Net sales for this segment amounted to 1,189,808 million yen (-13.1% year on year), while operating income came to 127,645 million yen (-20.0% year on year). This was mainly due to a decrease in sales of development properties.

      Regarding logistics facilities, construction of DPL Saitama Fukaya and DPL Shizuoka Fukuroi commenced.

      In the medical, nursing care and R&D facilities business, “D-Medicare+ Nagoya Issha,” a mixed-use development centered around a care facility, and a corporate employee dormitory were completed.

      In support-related activities for offices, plants and other sites, orders received for large projects remained steady, and the Company commenced projects such as an automotive parts manufacturing plant, a frozen and refrigerated warehouse, and a marine parts manufacturing plant among others.

      In the Livness business, we made progress with the replacement of assets through the sale of existing properties and the acquisition of new properties.

      In the property management business, Daiwa House Property Management Co., Ltd. concluded new property management contracts for four facilities, including logistics facilities. As a result, as of the end of March 2026, the number of buildings under management reached 269, and the total area under management amounted to approximately

      11.24 million square meters.

      In the Daiwa LogiTech Group, which operates the logistics services business, orders centered on the IT business remained firm, supported by customer companies’ investments in DX. Meanwhile, Daiwa Logistics Co., Ltd. commenced commercial operations with Level 2 autonomous trucks developed by an outside partner as part of initiatives to address the “logistics 2030 Problem,” and Wakamatsu KONPOU UNYU SOKO, Inc. made progress acquiring new customers, pushing up the logistics center utilization rate.

      Overseas, progress was made on leasing activities at “Blue Ridge Commerce Center” in the U.S. and at “DPL Malaysia Ⅲ” in Malaysia.

      Environment and Energy Business

      Net sales for this segment amounted to 133,136 million yen (+1.5% year on year), while operating income came to 13,835 million yen (+11.4% year on year).

      In the Environment and Energy Business segment, the Group operates three businesses: the EPC business, the PPS business, and the IPP business.

      In the EPC business, the Group steadily captured demand for the introduction of renewable energy through the expansion of off-site PPAs and on-site PPAs. As of the end of March 2026, the Group operates 104 off-site PPA projects with a total capacity of 152 MW.

      In the PPS business, profitability improved due to stable spot prices in the wholesale electricity market, as well as measures such as the operation of constant backup systems.

      In the IPP business, the Company operates 825 power generation facilities nationwide, mainly solar power plants, including wind and hydroelectric power plants, with a total generation capacity of 1,046 MW as of the end of March 2026.

      Meanwhile, as a new initiative, the Company has been conducting a grid-connected power storage station demonstration project at its Kyushu Plant to enter the power storage station business. Construction has been completed, and the Company plans to commence operations in August 2026.

      Overseas, in Thailand, the Company commenced operation of its first overseas on-site PPA project through a joint venture with WHA Corporation PCL.

   2. Financial Conditions

      Total assets as of the end of the consolidated reporting fiscal year amounted to 8,412,419 million yen, an increase of 1,363,096 million yen compared with 7,049,323 million yen at the end of the previous consolidated fiscal year. This was mainly due to an increase in inventory assets accompanying the acquisition of real estate for sale in Commercial Facilities Business and Single-Family Houses Business.

      Total liabilities as of the end of the consolidated reporting fiscal year amounted to 5,390,144 million yen, an increase of 1,057,566 million yen compared with 4,332,577 million yen at the end of the previous consolidated fiscal year. The main factors behind this increase were borrowings and the issuance of commercial paper to fund the acquisition of real estate for sale and other assets, as well as the acquisition of shares of Sumitomo Densetsu Co., Ltd., which was made a consolidated subsidiary.

      Total net assets as of the end of the consolidated reporting fiscal year amounted to 3,022,275 million yen, an increase of 305,529 million yen compared with 2,716,745 million yen at the end of the previous consolidated fiscal year. This was mainly due to the posting of net income attributable to owners of the parent in the amount of 350,568 million yen, despite the payment of dividends to shareholders in the amount of 95,892 million yen. At the end of the term under review, these results were 3,076,706 million yen in interest-bearing liabilities excluding lease obligations among others, and a debt-equity ratio of 1.06 times. After taking the hybrid financing into account, the debt-equity ratio came to 0.98 times*. The net assets ratio as of the end of the fiscal year under review stood at 34.4%, showing little change from 37.1% at the previous fiscal year end.

      *The debt-equity ratio is calculated considering the publicly offered hybrid bonds (subordinated bonds) and hybrid loans (subordinated loans) totaling 250 billion yen with a 50% equity credit in terms of rating.

   3. Cash Flow Position

      Cash and cash equivalents at the end of consolidated fiscal year amounted to 424,588 million yen, for an increase of 97,633 million yen. Net cash provided by operating activities stood at 189,277 million yen, net cash used in investing activities came to 726,053 million yen, and net cash used in financing activities came to 631,058 million yen.

      Cash flows from operating activities

      During the reporting fiscal year, net cash provided by operating activities came to 189,277 million yen (-55.0% year on year). This decrease was mainly due to the acquisition of real estate for sale and the payment of income taxes and other related expenses, despite the posting of profit before income taxes of 542,449 million yen.

      Cash flows from investing activities

      During the reporting fiscal year, net cash used in investing activities came to 726,053 million yen (compared with 493,370 million yen used in the previous fiscal year). This was primarily due to the acquisition of property, plant and equipment, including large-scale logistics facilities and commercial facilities, as well as expenditures for the acquisition of shares in Sumitomo Densetsu Co., Ltd. to make it a consolidated subsidiary.

      Cash flows from financing activities

      During the reporting fiscal year, net cash provided by financing activities came to 631,058 million yen (compared with 44,682 million yen used in the previous fiscal year). This was mainly due to financing through borrowings and the issuance of commercial paper, despite the payment of shareholder dividends.

      (Reference) Cash Flow Indicators

      	Fiscal year ended March 31, 2024	Fiscal year ended March 31, 2025	Fiscal year ended March 31, 2026
      Net assets ratio	37.3%	37.1％	34.4％
      Net assets ratio on market-value basis	44.3%	43.3％	36.2％
      Repayment years of interest-bearing debt	6.9 years	5.5 years	16.3 years
      Interest coverage ratio	10.3	10.5	4.4

      * The standards for the indicators are as follows. All have been computed based on consolidated financial figures.

      Net assets ratio: (Net assets – Non-controlling interests) / Total assets

      Net assets ratio on market-value basis: Market capitalization / Total assets

      Repayment years of interest-bearing debt: Interest-bearing liabilities / Operating cash flows Interest coverage ratio: Operating cash flows / Interest expenses

      Market capitalization: Closing stock price at the fiscal year-end × Number of shares issued at the fiscal year-end (after deduction of treasury stock)

      Operating cash flows: Net cash provided by (used in) operating activities on the Consolidated Statements of Cash Flows

      Interest expenses: Interest expenses paid on the Consolidated Statements of Cash Flows

   4. Future Outlook

      The socioeconomic outlook is increasingly uncertain due to trends in energy and materials prices stemming from the situation in the Middle East since early 2026.

      Similarly in Japan, action to address challenges such as labor shortages, inflation, rising financing costs, and exchange rate fluctuations will still be required in the future.

      Based on this business environment, for the next fiscal year, assuming that the current situation in the Middle East will stabilize to a certain extent by around September 2026, and factoring in cost increases due to rising prices of construction materials and equipment, as well as the impact of construction delays, the Company forecasts net sales for the fiscal year ending March 31, 2027 in the amount of 5 trillion 800 billion yen, with operating income of 400 billion yen, ordinary income of 342 billion yen, and net income attributable to owners of the parent of 227 billion yen. Amortization of actuarial differences for retirement benefits is not expected in the above operating income. And we expect capital investments of 500 billion yen and depreciation of 160 billion yen.

      We have decided to postpone the announcement of the 8th Medium-Term Management Plan, which is scheduled to start from the fiscal year ending March 31, 2027, because we need time to assess the business environment outlook.

      (Reference) Comparison with Previous Fiscal Year (Ended March 31, 2026) Results Excluding the Amortization of Actuarial Differences for Retirement Benefits, etc. (% figures represent year-on-year change)

      	Net sales		Operating income		Ordinary income		Net income attributable to owners of the parent
      Fiscal year:	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      ending March 31, 2027 (forecasts)	5,800,000	4.0	400,000	-19.9	342,000	-25.0	227,000	-16.4
      ended March 31, 2026	5,576,861	2.6	499,203	12.2	456,296	10.0	271,439	6.1

2. Basic Approach to Selection of Accounting Standards

   The Daiwa House Group applies Japanese accounting standards as its selected accounting standards to maintain the comparability of consolidated financial statements between accounting periods and the comparability of performance between companies.

3. Consolidated Financial Statements and Main Notes

1. Consolidated Balance Sheets

   Previous fiscal year (as of March 31, 2025)

   (Millions of yen) Reporting fiscal year (as of March 31, 2026)

   Assets

   Current assets

   Cash and bank deposits		333,198		434,371
   Trade notes and accounts receivable		474,790		552,672
   Lease receivables and investments in leases		142,291		150,722
   Mortgage notes receivable held for sale		54,429		39,743
   Securities maturing within one year		402		195
   Costs on construction contracts in progress		54,916		74,010
   Real estate for sale	*1	1,906,871	*1	2,303,351
   Real estate for sale in process	*1	563,275	*1	760,317
   Undeveloped land for sale		1,119		710
   Merchandise and finished goods		20,569		22,342
   Work in process		13,972		9,313
   Raw materials and supplies		10,913		9,596
   Other current assets		309,095		348,538
   Allowance for doubtful accounts		(3,380)		(3,188)
   Total current assets		3,882,464		4,702,696

   Non-current assets

   Property, plant and equipment
   Buildings and structures	1,513,094	1,671,419
   Accumulated depreciation	(613,770)	(660,178)
   Buildings and structures, net	*1 899,323	*1 1,011,241
   Machinery, equipment and vehicles	193,306	201,931
   Accumulated depreciation	(118,155)	(126,190)
   Machinery, equipment and vehicles, net	*1 75,151	*1 75,741
   Tools, furniture and fixtures	95,823	105,117
   Accumulated depreciation	(69,976)	(77,370)
   Tools, furniture and fixtures, net	*1 25,846	*1 27,746
   Land	*1 858,719	*1 933,879
   Leased assets	132,139	146,622
   Accumulated depreciation	(41,756)	(49,799)
   Lease assets, net	90,382	96,822
   Construction in progress	*1 174,107	*1 178,321
   Other tangible assets	23,954	27,621
   Accumulated depreciation	(6,132)	(8,302)
   Other, net	17,822	19,318
   Total property, plant and equipment	2,141,352	2,343,071
   Intangible assets
   Goodwill	94,656	159,917
   Other intangible assets	*1 110,419	*1 222,849
   Total intangible assets	205,076	382,767

   Investments and other assets

   Previous fiscal year (as of March 31, 2025)

   (Millions of yen) Reporting fiscal year (as of March 31, 2026)

   Investment securities	220,868	303,797
   Long-term loans receivable	9,209	9,195
   Assets for employees’ retirement benefits	127,449	237,745
   Lease deposits	253,595	257,030
   Deferred tax assets	104,069	70,790
   Other assets	106,922	108,203
   Allowance for doubtful accounts	(1,684)	(2,878)
   Total investments and other assets	820,430	983,884
   Total non-current assets	3,166,858	3,709,723
   Total assets	7,049,323	8,412,419

   Previous fiscal year (as of March 31, 2025)

   (Millions of yen) Reporting fiscal year (as of March 31, 2026)

   Liabilities

   Current liabilities

   Trade notes and accounts payable	353,710	395,523
   Short-term loans from banks	170,293	757,904
   Current portion of bonds	75,000	65,000
   Current portion of long-term loans from banks	285,287	154,993
   Commercial papers	—	179,000
   Lease obligation	11,563	13,586
   Accounts payable-other	106,222	89,056
   Income taxes payable	99,097	93,233
   Advances received	128,665	140,055

   Advances received on construction projects

   Accrued bonuses 69,176 98,340

in progress

Provision for warranties for completed construction

195,231 243,683

8,811 13,543

Provision for loss on construction contracts 18,914 25,037

Other current liabilities 306,907 387,554

Asset retirement obligations 4,953 5,620

Total current liabilities 1,833,834 2,662,133

Non-current liabilities

Long-term loans from banks 1,034,496 1,205,808

Bonds 744,000 714,000

Lease obligation 112,189 120,866

Lease deposits received 301,383 315,410

Liabilities for employees’ retirement

benefits

98,504

97,857

Deferred tax liabilities on land revaluation 17,624 16,960

Asset retirement obligations 63,488 65,929

Other non-current liabilities 127,056 191,176

Total liabilities 4,332,577 5,390,144

Total non-current liabilities 2,498,743 2,728,010

Net assets

Shareholders’ equity

Capital surplus 299,395 293,897

Common stock 162,216 162,602

Retained earnings 2,132,816 2,387,104

Treasury stock (188,335) (185,546)

Accumulated other comprehensive income

Total shareholders’ equity 2,406,094 2,658,058

Unrealized gain (loss) on securities 45,848 64,810

Deferred gain (loss) on hedging

instruments

2,315

(794)

Foreign currency translation adjustments 149,181 163,148

Land revaluation reserve 10,799 11,520

Total accumulated other comprehensive income

208,144 238,685

Non-controlling interests 102,507 125,531

Total net assets 2,716,745 3,022,275

Total liabilities and net assets 7,049,323 8,412,419

1. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Consolidated Statements of Income)

   		(Millions of yen)
   	Previous fiscal year	Reporting fiscal year
   	(From April 1, 2024	(From April 1, 2025
   	to March 31, 2025)	to March 31, 2026)
   Net sales	5,434,819	5,576,861
   Cost of sales	4,333,754	4,335,041
   Gross profit	1,101,065	1,241,820
   Selling, general and administrative expenses
   Sales commission	23,104	23,611
   Advertising expenses	27,805	31,643
   Promotion expenses	3,857	3,553
   Provision of allowance for doubtful accounts	1,685	1,621
   Directors’ compensations	4,582	5,344
   Employees’ salaries and allowances	220,124	241,446
   Provision for bonuses	42,770	77,360
   Retirement benefit expenses	(33,675)	(38,396)
   Legal welfare expenses	31,870	35,057
   Office supplies expenses	30,723	32,985
   Communication and transportation expenses	21,832	22,303
   Rent expenses on land and buildings	21,333	22,399
   Depreciation	17,844	19,512
   Taxes and dues	47,098	52,086
   Other	93,827	96,412
   Total selling, general and administrative	554,785	626,940
   expenses
   Operating income	546,279	614,879
   Non-operating income
   Interest income	5,304	4,769
   Dividend income	4,465	5,358
   Equity in earnings of affiliates	1,676	709
   Insurance claim income	2,159	1,198
   Gain on valuation of derivatives	0	2,259
   Miscellaneous income	13,762	14,625
   Total non-operating income	27,369	28,921
   Non-operating expenses
   Interest expenses	41,563	44,314
   Provision of allowance for doubtful accounts	—	587
   Miscellaneous expenses	16,100	26,925
   Total non-operating expenses	57,663	71,828
   Ordinary income	515,985	571,971
   Extraordinary income
   Gain on sales of non-current assets	2,520	2,771
   Gain on sales of investments in securities	13,495	1,881
   Gain on sales of shares of subsidiaries and － 1,634 affiliates
   Gain on sales of investments in capital of subsidiaries and affiliates	115	—
   Gain on step acquisitions	739	—
   Total extraordinary income	16,870	6,287

   (Millions of yen)

   	Previous fiscal year	Reporting fiscal year
   	(From April 1, 2024	(From April 1, 2025
   	to March 31, 2025)	to March 31, 2026)
   Extraordinary losses
   Loss on sales of non-current assets	196	558
   Loss on disposal of non-current assets	3,347	2,171
   Impairment loss	38,859	30,647
   Loss on sales of investment securities	0	3
   Loss on revaluation of investment securities	661	324
   Loss on sales of shares of subsidiaries and affiliates	1,007	52
   Special retirement benefit expenses	—	2,051
   Total extraordinary losses	44,073	35,809
   Profit before income taxes	488,783	542,449
   Current	156,116	152,461
   Deferred	2,788	30,486
   Total income taxes	158,905	182,947
   Profit	329,877	359,501
   Profit attributable to non-controlling interests	4,818	8,933
   Profit attributable to owners of the parent	325,058	350,568

   (Consolidated Statements of Comprehensive Income)

   Previous fiscal year (From April 1, 2024

   to March 31, 2025)

   (Millions of yen)

   Reporting fiscal year (From April 1, 2025

   to March 31, 2026)

   Profit	329,877	359,501
   Other comprehensive income
   Unrealized gain (loss) on securities	(9,515)	18,947
   Deferred gain (loss) on hedging instruments	4,231	(3,109)
   Land revaluation reserve	631	332
   Foreign currency translation adjustments	60,876	11,952
   Share of other comprehensive income (loss) of affiliates accounted for by the equity method	(1,122)	868
   Total other comprehensive income	55,101	28,991
   Comprehensive income	384,979	388,492
   Total comprehensive income attributable to:
   Owners of the parent	373,689	380,721
   Non-controlling interests	11,289	7,771

2. Consolidated Statements of Changes in Net AssetsPrevious fiscal year (From April 1, 2024 to March 31, 2025)

   (Millions of yen)

   	Shareholders’ equity
   	Capital stock	Capital surplus	Retained earnings	Treasury stock	Total shareholders’ equity
   Balance at beginning of the period	161,957	301,318	1,903,326	(88,320)	2,278,281
   Changes of items during the period
   Issuance of new shares	259	259	-	-	519
   Dividends from surplus	-	-	(95,635)	-	(95,635)
   Net income attributable to owners of the parent	-	-	325,058	-	325,058
   Change of scope of equity method	-	(2,182)	-	-	(2,182)
   Reversal of revaluation reserve for land	-	-	66	-	66
   Purchase of treasury stock	-	-	-	(100,015)	(100,015)
   Disposal of treasury stock	-	-	(0)	1	1
   Net changes of items other than shareholders’ equity	-	-	-	-	-
   Total changes of items during the period	259	(1,923)	229,490	(100,014)	127,812
   Balance at end of the period	162,216	299,395	2,132,816	(188,335)	2,406,094

   	Accumulated other comprehensive income					Non-controlling shareholders’ interests	Total net assets
   	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Foreign currency translation adjustment	Total accumulated other comprehensive income
   Balance at beginning of the period	55,342	(1,916)	10,234	95,919	159,580	85,900	2,523,762
   Changes of items during the period
   Issuance of new shares	-	-	-	-	-	-	519
   Dividends from surplus	-	-	-	-	-	-	(95,635)
   Net income attributable to owners of the parent	-	-	-	-	-	-	325,058
   Change of scope of equity method	-	-	-	-	-	-	(2,182)
   Reversal of revaluation reserve for land	-	-	-	-	-	-	66
   Purchase of treasury stock	-	-	-	-	-	-	(100,015)
   Disposal of treasury stock	-	-	-	-	-	-	1
   Net changes of items other than shareholders’ equity	(9,494)	4,231	564	53,261	48,564	16,607	65,171
   Total changes of items during the period	(9,494)	4,231	564	53,261	48,564	16,607	192,983
   Balance at end of the period	45,848	2,315	10,799	149,181	208,144	102,507	2,716,745

   Reporting fiscal year (From April 1, 2025 to March 31, 2026)

   (Millions of yen)

   	Shareholders’ equity
   	Capital stock	Capital surplus	Retained earnings	Treasury stock	Total shareholders’ equity
   Balance at beginning of the period	162,216	299,395	2,132,816	(188,335)	2,406,094
   Changes of items during the period
   Issuance of new shares	386	386	-	-	772
   Dividends from surplus	-	-	(95,892)	-	(95,892)
   Net income attributable to owners of the parent	-	-	350,568	-	350,568
   Change of scope of equity method	-	(6,264)	-	-	(6,264)
   Reversal of revaluation reserve for land	-	-	(388)	-	(388)
   Purchase of treasury stock	-	-	-	(14)	(14)
   Disposal of treasury stock	-	380	-	2,803	3,183
   Net changes of items other than shareholders’ equity	-	-	-	-	-
   Total changes of items during the period	386	(5,497)	254,287	2,788	251,964
   Balance at end of the period	162,602	293,897	2,387,104	(185,546)	2,658,058

   	Accumulated other comprehensive income					Non-controlling shareholders’ interests	Total net assets
   	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Foreign currency translation adjustment	Total accumulated other comprehensive income
   Balance at beginning of the period	45,848	2,315	10,799	149,181	208,144	102,507	2,716,745
   Changes of items during the period
   Issuance of new shares	-	-	-	-	-	-	772
   Dividends from surplus	-	-	-	-	-	-	(95,892)
   Net income attributable to owners of the parent	-	-	-	-	-	-	350,568
   Change of scope of equity method	-	-	-	-	-	-	(6,264)
   Reversal of revaluation reserve for land	-	-	-	-	-	-	(388)
   Purchase of treasury stock	-	-	-	-	-	-	(14)
   Disposal of treasury stock	-	-	-	-	-	-	3,183
   Net changes of items other than shareholders’ equity	18,962	(3,109)	720	13,967	30,541	23,023	53,565
   Total changes of items during the period	18,962	(3,109)	720	13,967	30,541	23,023	305,529
   Balance at end of the period	64,810	(794)	11,520	163,148	238,685	125,531	3,022,275

3. Consolidated Statements of Cash Flows

   Previous fiscal year (From April 1, 2024

   (Millions of yen) Reporting fiscal year (From April 1, 2025

   to March 31, 2025) to March 31, 2026)
   Cash flows from operating activities:
   Profit before income taxes	488,783	542,449
   Depreciation	131,786	140,339
   Net increase (decrease) in assets and liabilities for (93,277) (107,673)
   employees’ retirement benefits
   Interest and dividend income	(9,770)	(10,128)
   Interest expenses	41,563	44,314
   Equity in losses (earnings) of affiliates	(1,676)	(709)
   Net loss (gain) on sales and disposal of property,	1,023	(40)
   plant and equipment
   Impairment loss	38,859	30,647
   Loss (gain) on revaluation of investment securities	661	324
   Decrease (increase) in trade receivables	23,463	5,357
   Decrease (increase) in inventories	(92,285)	(500,642)
   Increase (decrease) in advances received	20,201	10,297
   Increase (decrease) in advances received on	(1,827)	33,820
   construction projects in progress
   Increase (decrease) in trade payables	(14,943)	4,661
   Other	48,145	190,987
   Subtotal	580,706	384,006
   Interest and dividends received	10,164	11,776
   Interest paid	(40,168)	(43,231)
   Income taxes paid	(130,141)	(163,274)
   Net cash provided by (used in) operating activities	420,561	189,277

   Cash flows from investing activities:

   Purchase of property, plant and equipment and

   intangible assets

   (381,786)

   (493,832)

   Proceeds from sales of property, plant and

   Purchase of investment securities (17,815) (23,356)

equipment

Proceeds from sales and redemption of investment securities

9,694 12,027

20,742 7,472

Purchase of investments in associated companies － (140,445)

Purchase of investments in subsidiaries resulting

in change in scope of consolidation

(32,227)

(54,146)

Proceeds from purchase of shares of subsidiaries

resulting in change in scope of consolidation

98 －

Payments for sales of investments in subsidiaries

resulting in change in scope of consolidation

(386)

(596)

Proceeds from sales of investments in subsidiaries

resulting in change in scope of consolidation

2,500 267

(Millions of yen)

1. Notes to Consolidated Financial StatementsNotes on Premise of Going Concern

   No items to report.

   Notes on Consolidated Balance Sheet*1 Change of the holding purpose of Real estate for sale, etc. and Non-current assets

   Due to the change in the holding purpose, real estate for investment recorded under “Buildings and structures” and “Land” of Non-current assets were reclassified to “Real estate for sale” and others of current assets. The amounts are as follows:

   Previous fiscal year (As of March 31, 2025)

   (Millions of yen)

   Reporting fiscal year (As of March 31, 2026)

   89,818 93,697

   Notes on Segment Information
   1. Segment Information
      1. Outline of reportable business segments

         The reportable business segments of the Group consist of those for which separate financial information is available within the Group’s structural units. Segments are also subject to regular reviews as the management determines the allocation of management resources and assesses the business performance.

         The Group engages in a comprehensive business across a broad range of fields, including the construction of residential housing and commercial buildings. The Group established seven business segments, set up a comprehensive strategy for each business segment and operates to enhance competitiveness with prompt decision-making and sophisticated expertise, integrating its value chain and sharing its customer base.

         Accordingly, our business segments consist of different products and services, based on their business domains. Excluding the Other Businesses segment, there are six reportable business segments as core business domains: Single-Family Houses Business segment, Rental Housing Business segment, Condominiums Business segment, Commercial Facilities Business segment, Logistics, Business & Corporate Facilities Business segment, and Environment and Energy Business segment.

         In the Single-Family Houses Business segment, we engage in construction by order of single-family houses and the sale of a package of new house and land. In the Rental Housing Business segment, the Group conducts rental housing development, construction, management, operation, and real estate agency services. In the Condominium Business segment, we develop, sell, and manage condominiums. The Commercial Facilities Business segment develops, builds, manages, and operates commercial facilities. The Logistics, Business & Corporate Facilities Business segment develops, constructs, manages, and operates logistics, manufacturing, medical and nursing-care, and other facilities. In the Environment and Energy Business segment, we are engaged in the development and construction of renewable energy power plants, renewable energy generation, and electricity retailing.

      2. Method of calculating sales and operating income, assets and others by reportable business segment

         The accounting method applied to business segments reported herein, and the monetary amounts shown, are based on the accounting standard used for the preparation of consolidated financial statements.

         The reported segment income figures at the operating income stage. Inter-segment income and transfers are based on the prevailing market price.

      3. Sales and operating income, assets and others by reportable business segment Previous fiscal year (From April 1, 2024 to March 31, 2025)

         (Millions of yen)

         	Reportable Business Segments
         	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Total
         Sales
         (1) Sales to customers	1,135,306	1,373,970	260,791	1,221,417	1,332,175	85,958	5,409,619
         (2) Inter-segment sales or transfers	9,198	2,118	8,635	5,728	37,555	45,222	108,458
         Total	1,144,505	1,376,089	269,427	1,227,145	1,369,730	131,180	5,518,078
         Operating income	69,826	129,960	10,908	145,928	159,655	12,420	528,700
         Assets	1,347,127	951,410	555,090	1,808,698	1,947,520	84,319	6,694,166
         Others
         Depreciation	11,858	21,763	3,322	62,134	26,541	3,088	128,708
         Investment in equity method affiliates	1,592	69,759	18,630	2,960	22,679	1,909	117,531
         Net increase in property, plant and equipment, and intangible assets	13,686	48,709	8,236	119,878	209,197	4,199	403,907

         	Other Businesses (Note: 1)	Subtotal	Adjustments (Note: 2)	Amounts on the consolidated financial statements (Note: 3)
         Sales
         (1) Sales to customers	25,200	5,434,819	—	5,434,819
         (2) Inter-segment sales or transfers	25,718	134,177	(134,177)	—
         Total	50,918	5,568,997	(134,177)	5,434,819
         Operating income	2,840	531,541	14,738	546,279
         Assets	160,070	6,854,236	195,086	7,049,323
         Others
         Depreciation	1,002	129,711	2,075	131,786
         Investment in equity method affiliates	4,089	121,621	(24)	121,596
         Net increase in property, plant and equipment, and intangible assets	6,804	410,711	5,831	416,543

         Notes: 1. Other Businesses include financial business and others.

         1. Adjustment:

            1. 14,738 million yen in adjustments to operating income by business segment includes -5,759 million yen in elimination within business segments, 699 million yen in amortization of goodwill and others, and 19,798 million yen in corporate expenses not allocated to each business segment. Corporate expenses mainly consist of amortization of actuarial differences on retirement benefits (a decrease in operating expenses), general and administrative expenses and experiment and research expenses not attributable to reportable business segments.

            2. 195,086 million yen in adjustments to assets by business segment include -53,749 million yen in elimination within business segments, and 248,836 million yen in the Group assets. Group assets mainly consist of the Company’s surplus funds (cash and deposits), the Company’s long-term investment funds (investment securities), and the assets associated with Administration Headquarters of the Company.

            3. 2,075 million yen in adjustments to depreciation by business segment includes -496 million yen in elimination within business segments, and 2,571 million yen in the depreciation attributable to Group assets.

            4. -24 million yen in adjustments to investment in equity method affiliates represent elimination within business segments.

            5. 5,831 million yen in adjustments to net increase in property, plant and equipment, and intangible assets by business segment includes -2,201 million yen in elimination within business segments, and 8,033 million yen in Headquarters’ capital investment of the Company, such as properties and equipment.

         2. Operating income by business segment is adjusted to correspond to operating income in the consolidated statements of income.

         Reporting fiscal year (From April 1, 2025 to March 31, 2026)

         (Millions of yen)

         	Reportable Business Segments
         	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Total
         Sales
         (1) Sales to customers	1,334,831	1,426,094	271,502	1,283,062	1,146,215	87,009	5,548,715
         (2) Inter-segment sales or transfers	7,421	3,178	8,120	7,130	43,593	46,127	115,571
         Total	1,342,252	1,429,273	279,622	1,290,192	1,189,808	133,136	5,664,286
         Operating income	155,696	141,142	5,993	162,492	127,645	13,835	606,806
         Assets	1,557,169	1,120,603	596,083	2,146,757	2,521,395	89,785	8,031,795
         Others
         Depreciation	13,154	24,061	3,218	65,473	27,355	3,175	136,439
         Investment in equity method affiliates	2,715	65,324	21,072	2,981	23,236	1,555	116,886
         Net increase in property, plant and equipment, and intangible assets	23,667	39,687	13,081	162,901	335,100	5,846	580,285

         	Other Businesses (Note: 1)	Subtotal	Adjustments (Note: 2)	Amounts on the consolidated financial statements (Note: 3)
         Sales
         (1) Sales to customers	28,146	5,576,861	—	5,576,861
         (2) Inter-segment sales or transfers	27,689	143,260	(143,260)	—
         Total	55,835	5,720,122	(143,260)	5,576,861
         Operating income	4,204	611,011	3,868	614,879
         Assets	163,653	8,195,448	216,971	8,412,419
         Others
         Depreciation	1,067	137,507	2,831	140,339
         Investment in equity method affiliates	4,290	121,176	(27)	121,148
         Net increase in property, plant and equipment, and intangible assets	3,291	583,576	27,254	610,830

         Notes: 1. Other Businesses include financial business and others.

         1. Adjustment:

            1. 3,868 million yen in adjustments to operating income by business segment includes -2,209 million yen in elimination within business segments, 699 million yen in amortization of goodwill and others, and 5,378 million yen in corporate expenses not allocated to each business segment. Corporate expenses mainly consist of amortization of actuarial differences on retirement benefits (a decrease in operating expenses), general and administrative expenses and experiment and research expenses not attributable to reportable business segments.

            2. 216,971 million yen in adjustments to assets by business segment include -72,411 million yen in elimination within business segments, and 289,382 million yen in the Group assets. Group assets mainly consist of the Company’s surplus funds (cash and deposits), the Company’s long-term investment funds (investment securities), and the assets associated with Administration Headquarters of the Company.

            3. 2,831 million yen in adjustments to depreciation by business segment includes -501 million yen in elimination within business segments, and 3,333 million yen in the depreciation attributable to Group assets.

            4. -27 million yen in adjustments to investment in equity method affiliates represent elimination within business segments.

            5. 27,254 million yen in adjustments to net increase in property, plant and equipment, and intangible assets by business segment includes -507 million yen in elimination within business segments, and 27,761 million yen in Headquarters’ capital investment of the Company, such as properties and equipment.

         2. Operating income by business segment is adjusted to correspond to operating income in the consolidated statements of income.

   2. Information regarding impairment loss on non-current assets, by reportable business segment Previous fiscal year (from April 1, 2024 to March 31, 2025)

      (Millions of yen)

      	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Other Businesses (*)	Eliminations/ Corporate	Total
      Impairment loss	13	2,766	419	20,146	3,372	3	12,137	—	38,859

      (*) The amounts relate to the electric power generation business, among others.

      Reporting fiscal year (from April 1, 2025 to March 31, 2026)

      (Millions of yen)

      	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Other Businesses (*)	Eliminations/ Corporate	Total
      Impairment loss	297	2,356	88	6,976	1,540	276	19,023	87	30,647

      (*) The amounts relate to the electric power generation business, among others.

   3. Information regarding amortization of goodwill, and unamortized balances of goodwill, by reportable business segmentPrevious fiscal year (from April 1, 2024 to March 31, 2025)

      (Millions of yen)

      	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Other Businesses (*)	Eliminations/ Corporate	Total
      Amortization of goodwill	2,757	821	1,075	961	3,041	(490)	431	—	8,598
      Fiscal year-end unamortized balance of goodwill	38,980	12,916	9,539	5,260	29,171	(1,192)	(19)	—	94,656

      (*) The amounts relate to the electric power generation business, among others.

      Reporting fiscal year (from April 1, 2025 to March 31, 2026)

      (Millions of yen)

      	Single-Family Houses	Rental Housing	Condominiums	Commercial Facilities	Logistics, Business & Corporate Facilities	Environment and Energy	Other Businesses (*)	Eliminations/ Corporate	Total
      Amortization of goodwill	3,717	843	1,111	2,642	2,729	(490)	(15)	—	10,539
      Fiscal year-end unamortized balance of goodwill	36,201	12,560	8,427	4,492	98,941	(702)	(3)	—	159,917

      (*) The amounts relate to the advertising agency business, among others.

   4. Information regarding gain on negative goodwill, by reportable business segment

No items to report.

No items to report.

Notes: 1. Diluted net income per share is not presented because there are no dilutive potential shares.

2. The basis of calculating for basic net income per share is as follows:

The Company resolved, at a meeting of its Board of Directors held on May 13, 2026, to conduct a stock split, as described below.

1. Purpose of Stock Split

   The purpose of the stock split is to reduce the investment amount per trading unit of the Company’s shares, thereby enhancing the liquidity of the Company’s shares and expanding the investor base.

2. Overview of the Stock Split

   1. Method of the stock split

      With a record date of September 30, 2026, the Company will implement a two-for-one stock split, whereby each share of the Company’s common stock owned by shareholders listed or recorded in the final register of shareholders as of that date will be split into two shares.

   2. Number of shares to be increased by the stock split

      Total number of issued shares prior to the stock split	659,636,182
      Number of shares to be increased by the stock split	659,636,182
      Total number of issued shares after the stock split	1,319,272,364
      Total number of authorized shares after the stock split	1,900,000,000 (Unchanged)

      Note: The above number of shares is based on the total number of issued shares as of May 13, 2026.

   3. Schedule for the stock split

      Public notice of record date (scheduled)	September 11, 2026 (Friday)
      Record date	September 30, 2026 (Wednesday)
      Effective date	October 1, 2026 (Thursday)

   4. Impact on per share information

Assuming that the stock split had been conducted at the beginning of the previous consolidated fiscal year, the per share information would have been as follows:

Note: Diluted net income per share is not presented, as there were no dilutive potential shares.