This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Quarterly Report（Report Pursuant to Article 24, Paragraph 1 of the Financial Instruments
and Exchange Act）
Fiscal Year
From January 1, 2022
（The 1st Quarter of the 65th Term）
To March 31,2022

Coca-Cola Bottlers Japan Holdings Inc.

（E00417)

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Table of Contents[Cover Page]
Part I Corporate information ..................................................................................................................................................................... 1
Section 1. Corporate overview .............................................................................................................................................................. 1
1. Summary of business results ......................................................................................................................................................... 1
2. Business content ............................................................................................................................................................................ 1
Section 2. Business situations................................................................................................................................................................ 2
1. Risk of Business ............................................................................................................................................................................ 2
2. Management's analysis of financial condition, results of operations and cash flows ..................................................................... 2
3. Significant management contracts ................................................................................................................................................. 6
Section 3. Status of the filing company ................................................................................................................................................. 7
1. Status of Shares ............................................................................................................................................................................. 7
2. Status of Officers ........................................................................................................................................................................... 8
Section 4 Accounting status................................................................................................................................................................... 9
1. Condensed Quarterly Consolidated Financial Statements and Notes .......................................................................................... 10
2. Others .......................................................................................................................................................................................... 27
Part II Information of guarantor companies of the filing company ......................................................................................................... 28

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

【Cover Page】[Documents to be submitted]

Quarterly Report[Underlying article]

Article 24, Paragraph 1 of the Financial Instruments andExchange Act[Recipient]

Director-General of the Kanto Local Finance Bureau[Submission date]

May 13, 2022

[Fiscal year]

65th fiscal term (from January 1, 2022 to March 31,2022)[Company name]Coca-Cola Bottlers Japan Holdings Inc.

[Name and position of representative]

Calin Dragan, Representative Director & President[Address of head office]9-7-1 Akasaka, Minato-ku, Tokyo[Telephone number]+81-3-6896-1707[Name of administrative contact]

Ishikawa Tatsuhiro, Head of Controllers Senior Group Division, Finance[Closest contact point]

9-7-1 Akasaka, Minato-ku, Tokyo[Telephone number]+81-3-6896-1707[Name of administrative contact]

Ishikawa Tatsuhiro, Head of Controllers Senior Group Division, Finance[Location provided for viewing]

Tokyo Stock Exchange, Inc.
（2-1 Nihonbashi Kabutocho, Chuo-ku, Tokyo）

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) filed with the Director-General of the Kanto
Local Finance Bureau via Electronic Disclosure for Investors` NETwork (“EDINET”) pursuant to the Financial Instruments andExchange Act of Japan. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki
Hokokusho shall prevail.
For the purpose of this Quarterly Report, unless context indicates otherwise, the “Company”, “we”, and “CCBJH” refer to Coca-Cola
Bottlers Japan Holdings Inc., and the “Group” refers to the Company and its subsidiaries.

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Part I Corporate information
Section 1. Corporate overview
1. Summary of business results
The 64th Term
The 65th Term
Consolidated Cumulative Consolidated Cumulative
First Quarter
First Quarter

Issuance

From
January 1, 2021
toMarch 31, 2021

Accounting period

From
January 1, 2022
toMarch 31,2022

The 64th Term
From
January 1, 2021
toDecember 31, 2021

Revenue(Millions of yen)

168,399

168,853785,837

Loss for the period before tax benefits(Millions of yen)

(15,414)(10,031)(21,683)

Net income (loss) for the period attributable(Millions of yen)
to owners of the parent

1,316(6,568)(2,503)Comprehensive income (loss) attributable to(Millions of yen)owners of the parent

5,023(5,330)780

Equity attributable to owners of the parent(Millions of yen)502,232

482,379

492,320

Total Assets(Millions of yen)

930,972

865,012867,111

Basic earnings (loss) per share

(Yen)

7.34

(36.62)(13.96)

Diluted earnings per share

(Yen)

－

－

－

Ratio of equity attributable to owners of theparent to total assets

(%)

53.9

55.8

56.8

Cash flows from operating activities(Millions of yen)

16,706

12,96435,982

Cash flows from investing activities(Millions of yen)

28,834(5,619)15,271

Cash flows from financing activities(Millions of yen)

(6,863)(6,632)(67,134)

Cash and cash equivalents at the end of the(Millions of yen)period165,055

111,210

110,497

Notes: 1. Because the Company prepares quarterly consolidated financial statements, the summary of standalone business results for the Company is not described.
2. Diluted earnings per share is not presented, as the effects of dilutive stock on earnings per share are anti-dilutive.
3. The consolidated financial statements are disclosed in accordance with International Financial Reporting Standards ("IFRS") as issued by theInternational Accounting Standards Board.
4. Figures are rounded to the nearest million yen.

2. Business content
There were no significant changes in the businesses that the Group (the Company and its subsidiaries) is engaged in during
the First quarter of 2022.

－1－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Section 2. Business situations
1. Risk of Business
During the first quarter of the current fiscal year (January 1, 2022 to March 31, 2022, hereinafter referred to as "the first quarter"),the coronavirus infection (COVID-19), continued to impact the business influenced by the government response. On January 9, thegovernment declared a quasi-emergency, which continued until March 21 due to the spread of the Omicron variant. The government
implemented measures to prevent the spread of the disease, such as shortening the opening hours of restaurants and asking people
to refrain from outing and traveling of less importance. Therefore, the outlook for sales in the beverage business remained uncertain
during the first quarter.
In this circumstance, the Company is actively monitoring the risk and responding to the changes in the business environment.
We have sped up our business transformation and management reforms, responded to changes in customer and consumer behavior,and pushed forward with cost reductions. In addition, placing the safety of our employees as our top priority, the Company
vaccinated our employees, their families, and subcontractors for the third time at our workplaces with the COVID-19 vaccine, anddistributed antigen test kits to employees engaged in sales, production, and other activities. Furthermore, the Company has
continued telecommuting, mainly in the indirect departments, thereby reducing employee exposure in the workplace.
In the second quarter (April 1, 2022 to June 30, 2022), we will continue to actively monitor our overall risk environment. There
are no significant changes to other business risks as described in the Annual Securities Report for the 2021 fiscal year.

2. Management's analysis of financial condition, results of operations and cash flows
Note that matters related to future developments that are mentioned in this section are judgments of the Group that were madeas of the date of quarterly securities report submission.
(1) Qualitative Information on Consolidated Financial Results
In this first quarter (January 1, 2022 to March 31, 2022), although there were expectations of increased demand with the numberof people returning to the streets of Japan recovering, the total domestic nonalcoholic ready-to-drink (NARTD) beverage industry
is estimated to have only increased by about 2% compared to the previous year due to restrictions on people's activities bygovernment measures to prevent the spread of COVID. In addition, the business environment remains uncertain and challenging
due to factors including changes in consumer purchasing behaviors, continued intense competition against a backdrop of delayed
recovery in overall demand, and sharp rise in raw materials, materials, crude oil and other commodity prices globally.
Under these circumstances, we have positioned 2022 as the "year of building a foundation for sustainable growth" and have beenworking to build a foundation for steady and sustainable growth and to promote further transformation. For commercial activities,
we have worked to grow sales volume and sales revenue by introducing new products and responding to diversifying consumer
needs. As a part of our profitability focused pricing strategy, we have announced price revisions for large PET and have been
negotiating with our customers. In the manufacturing and supply chain fields, despite being affected by rising raw materials,
materials, crude oil and other commodities, we have been transforming our supply chain network, which will be the foundation forsustainable growth. In addition to the stable operation of the "Saitama Mega DC" that started operation in 2021 and preparing forthe smooth launch of the "Akashi Mega DC" scheduled to start operation in July, we have been consolidating and closing sales anddistribution centers to reduce and optimally allocate product inventories in synchronization with the operation of the Mega DCs.
In addition, we have announced the full-year 2022 earnings forecast, which was not determined as of February 10. Furthermore,considering our current business performance, we are now developing a new mid-term business plan to achieve sustainable growthover the medium to long term in the post-corona environment.
Activities to realize ESG targets based on creating shared value with society includes the increased use of sustainable materials
in PET bottles and expanding label-less products. In addition, we endorse the recommendations of the Task Force on Climaterelated Financial Disclosure (TCFD) and are a member of the TCFD Consortium. Based on the recommendations, we will analyze
the financial impact of climate change-related risks and opportunities, consider measures to address them, and work towards
enhanced information disclosure. Our ESG initiatives have received a certain level of recognition, and in March 2022, we wereselected as a constituent of the FTSE Blossom Japan Sector Relative Index, an ESG investment index.
Details for the first quarter results are as follows.

－2－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Summary of Consolidated Financial Results(Millions of yen)

Year-to-date Q1 (January to March)
2021

In million JPY

2022

Change168,399

168,853

0.3％

97

101

4%

Gross Profit

74,16172,011(2.9％)

Selling, General & Administrative Expenses

85,42684,892(0.6％)

Other income (Recurring)

199

298

49.6％

Other expenses (Recurring)

391

189

(51.8％)

Investment loss on equity method

(139)

22

－

(11,596)(12,749)－

Other income (Non-recurring)

991

5,690

474.4％

Other expenses (Non-recurring)

4,537

2,611

(42.4％)(15,142)(9,670)－1,316(6,568)－

Revenue
Sales volume (million cases)

Business Income (Loss)

Operating Income (Loss)Net Income (Loss) Attributable to Owners of Parent

Note: 1. “Business Income (loss)” is a measure of our underlying or recurring business performance. Business Income (loss) deducts cost of sales and selling,
general and administrative expenses from revenue, and includes other income and expenses which we believe are recurring in nature.
2. Net Income (Loss) Attributable to Owners of Parent in 2021 first quarter is a total of continuing operation and discontinued operation results.

Consolidated net revenue was 168,853 million yen (0.3% increase of 454 million yen from the same period in the prior year).
Despite the continued impact from COVID, sales volume increased by 4% versus the previous year due to a certain recovery incustomer traffic, as well as the launch of new products and channel-specific efforts to capture the diversifying needs ofconsumers. However, sales revenue remained at a similar level as the prior year due to the impact of changes in consumerpurchasing behavior on channel and packaging, and a decline in revenue per case due to intensified competition.
Consolidated business loss was 12,749 million yen (11,596 million loss in prior year period). Despite cost reduction efforts
in all areas including transformation efforts, we were impacted by a deteriorating channel and package mix, lower revenue percase, and rising raw materials, materials, crude oil and other commodities prices, as well as the cycling of the one-time costsavings achieved in the same period of the previous fiscal year.
Consolidated operating loss was 9,670 million yen (15,142 million loss in prior year period). This is mainly due to gains onsales of fixed assets, an increase in the government subsidies for employment adjustment ("temporary leave"), and a decrease intemporary leave expenses. Other income (non-recurring) for the first quarter includes, gain on sales of fixed assets of 3,680
million yen and 2,011 million yen in government subsidies for employment adjustment. Other expenses (non-recurring) include
2,146 million yen in temporary leave expenses and 431 million yen in special retirement allowances due to the voluntary
employee retirement programs.
Net income attributable to owners of parent for the quarter was a loss of 6,568 million yen (1,316 million income in prior year
period). This was due to a gain on transfer of shares of subsidiary Q'sai Co., Ltd. in the same period of the previous year, being
recorded in discontinued operations.
Sales volume trends (% change from same period of previous year)
Sales volume grew by 4% in the first quarter. Sales at supermarkets, drugstores and discounters increased 3% and 5%
respectively, driven by the introduction of new products fitted to the sales space and by capturing continued at-homeconsumption demand. Vending recorded 3% volume growth, with customer traffic recovering, we were able to increase the sales
volume per vending machine by strengthening the product line-up including new products, and by implementing campaigns
through the "Coke ON" smartphone app, as well as strengthening efforts to install vending machines in prime locations whileaccounting for cost-effectiveness. The value share of vending continued to grow for 36 consecutive months. CVS volume
decreased by 5% despite contributions from new products, due to factors including intense competition continuing as competitors
stepped up promotions. In retail food, despite the impact of the government strengthening measures to prevent the spread of－3－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

COVID in restaurants and other facilities, customer traffic increased compared to the same period last year when it was under astate of emergency, resulting in a 10% increase in sales volume. Online grew 39%, with growth in all categories, driven by an
expanded lineup of label-less products and tie-up promotions with major customers.
By beverage category performance, sparkling was flat due to weakness in large PET bottles, despite contributions from CocaCola’s fortune bottle campaign, new products from Fanta, and the expansion of the 350ml PET and 700ml PET product lineups
sold at supermarkets and other retailers. Sales volume of tea products increased by 4%, mainly due to contributions from Yakan
Barly Tea from Hajime and Ayataka Cafe Matcha Latte that are steadily increasing sales since their launch in the previous year.
Coffee sales increased 4% due to contributions from COSTA Coffee and Georgia Shots & Break, as well as a new campaign for
Georgia with the message "a cup that makes you shine". Sports grew by 13%, with both small and large PET growing due toeasing of restrictions on events and other activities. Water sales volume increased 8%, with the increase in large PET capturing
demand from at-home consumption and the contribution of Ilohas Shine Muscat, launched in the previous year.
In the alcohol category, sales volume grew by 7% with the contribution from non-alcoholic beverage "Yowanai Lemon-dou,"launched in February 2022. In addition, the alcoholic beverage "Lemon-dou" launched the new "Lemon-dou Muto Lemon" and"Lemon-dou Umashio Lemon" at the end of March, as well as the renewal of the packaging of existing products to revitalize thebrand.
(2) Qualitative Information on Consolidated Financial Position
Assets at the end of the quarter were 865,012 million yen, a decrease of 2,099 million yen from the end of the prior year period.
This is mainly due to a decrease in Trade and other receivables, and additionally due to an increase in deferred tax assets andinventories.
Liabilities at the end of the quarter were 382,497 million yen, an increase of 7,837 million yen from the end of the prior year
period. This is mainly due to the increase in "Trade and other payables" and “Other current liabilities”.
Equity at the end of the quarter was 482,515 million yen, a decrease of 9,937 million yen. This mainly reflects a decrease inretained earnings as a result of dividend payments.
(3) Cash flows
The cash flow conditions for the first quarter of the current year are as follows:< Cash Flows from Operating Activities >Net cash generated from operating activities was 12,964 million yen (16,706 million yen generated from operating activities
in the prior year period). This results from the depreciation and amortization and also the decrease of the trade and otherreceivables offset by a loss before income taxes from continuing operations.
<Cash Flows from Investment Activities>
Net cash used for investment activities was 5,619 million yen (28,834 million yen generated from investment activities in
the prior year period) due to proceeds from expenditure on the acquisition of property, plant and equipment and intangible
assets', despite 'proceeds from sales of property, plant and equipment and intangible assets' to influence through such results.
<Cash Flows from Financing Activities>
Net cash used for financing activities was 6,632 million yen (6,863 million yen in the prior year period), driven mainly bycash spent for paying year-end dividends and lease liabilities.
As a result of those activities, cash and cash equivalents at the end of first quarter was 111,210 million yen, an increase of 713
million yen in comparison to the end of the previous period.
(4) Business and financial challenges to be addressed
1. Issues to be addressed
There are no material changes regarding the issues that the Group needs to address during the consolidated cumulative firstquarter of the current year.

－4－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

2. Basic Policies on the Control of the Joint-stock Company
a. Descriptions of basic policies
The Company believes that the persons and/or entities (hereinafter referred as “Persons”) who control decisions on the
Company’s financial and business policies need to understand the source of the Company’s corporate value and will make itpossible to continually and persistently ensure and enhance the Company’s corporate value and, in turn, the common interestsof its shareholders. The Company believes that a decision on any proposed acquisition that would involve a change of corporate
control of the Company should ultimately be made based on the intent of its shareholders as a whole. Also, the Company
would not reject a large-scale acquisition of the shares in the Company if it would contribute to the corporate value of theCompany and, in turn, the common interests of its shareholders.
However, there are some forms of large-scale acquisition of shares that benefit neither the corporate value of the target
company nor the common interests of its shareholders: those with a purpose that would obviously harm the corporate value ofthe target company and, in turn, the common interests of its shareholders; those with the potential to substantially coerce
shareholders into selling their shares; those that do not provide sufficient time or information for the target company’s boardof directors and shareholders to consider the terms of the large-scale acquisition of shares, or for the target company’s boardof directors to present a business plan or an alternative proposal; and those that require the target company to discuss ornegotiate with the acquirer in order to procure more favorable terms for shareholders than those presented by the acquirer.
The Company believes that the Persons who control decisions on the Company’s financial and business policies need to be
Persons who (A) fully understand the importance of (i) providing freshness and refreshment to people around the world andembedding the ”Coca-Cola” brand, which is now a part of our life style, in local communities; (ii) striving aggressively to win
in the market as the customers’ preferred partner with a deep understanding of the Company’s corporate philosophy; (iii)appreciating employees who have a strong sense of responsibility to thoroughly pursue customer satisfaction, and proactively
working on building a workplace environment that can make each and every employee feel rewarded, motivated and proud of
being a member of the Coca-Cola family; and (iv) contributing to local communities and proactively dealing withenvironmental issues with a strong sense of responsibility as a corporate citizen that continues to strive to assist in therealization of an affluent society, (B) preserve relationships of mutual trust with customers, business partners, shareholders
and employees and perform to their expectations, and (C) make it possible to continually and persistently ensure and enhance
the Company’s corporate value and, in turn, the common interests of its shareholders from a mid- to long-term perspective.
Therefore, the Company believes that Persons who would make a large-scale acquisition of the shares in the Company in amanner that does not contribute to the corporate value of the Company and, in turn, the common interests of its shareholders
would be inappropriate to become Persons who would control decisions on the Company’s financial and business policies.
b. Initiatives to realize the basic policies(a) Summary of special initiatives that contribute to realizing the basic policies
The Group not only assumes a leading role in transforming the Coca-Cola business in Japan by deploying various joint
initiatives such as product development and test marketing with The Coca-Cola Company and Coca-Cola (Japan) Company,
Limited (100% subsidiary of The Coca-Cola Company) as a strategic partner, but also strives to become a company trusted
by the stakeholders of consumers, customers, shareholders, and employees.
Soft drink industry volume growth in Japan is expected to be muted, given the developed nature of the market as a whole,and the business environment surrounding the Company is projected to stay competitive as multiple players compete in themarket.
Under such circumstances, the Group aims at becoming the preferred partner of our customers and consumers in all
drinking occasions by establishing a robust and sustainable operating model, pursuing success in high-priority areas, anddrastically transforming the business to ensure growth.
The Company also made a transition to a company with an Audit and Supervisory Committee in order to further reinforce
the governance system. The Audit and Supervisory Committee serves as the auditing body of the Company that is comprised
exclusively of external directors, including multiple independent external directors. To strengthen the management oversightfunction, these external directors that serve as members of the Audit and Supervisory Committee have each been grantedwith a voting right in the Board of Directors meetings, in addition to the right to state their opinions in shareholders’ meetings－5－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

on matters pertaining to the designation of board members and their remuneration, among others. In order to separate thedecision-making, business management and business execution functions, the Company is implementing a corporate
executive officer system. In addition to the foregoing, for more fruitful deliberations of highly important matters in the
Board of Directors meetings, the Company is delegating the authority to make decisions on certain important matters that
require prompt business executions to specific directors as well as facilitating speedy decision making of other matters.
(b) Outline of measures to prevent inappropriate persons from controlling the finance and business policy decisions of theCompany in light of the basic policy
Upon any substantial acquisition of the Company shares, the Company strives to proactively collect and timely disclose
information in order to ensure and improve the corporate value of the Company and the common interest of shareholders
as well as make appropriate measures as needed under the scope permitted by laws and regulations and the Articles ofIncorporation.
When a Board Meeting determines it necessary to apply anti-takeover measures in order to ensure and improve thecorporate value of the Company and the common interest of shareholders, taking into consideration of the future trend of
the society, the Company consults with shareholders at the Meeting of Shareholders as stipulated in the Articles ofIncorporation for decision of the implementation.
c. Decisions of the Board of Directors of the Company on the specific measures and the reasons
The measure described in the previous b. (a) was introduced as a specific measure to continuously and sustainably
improve the corporate value of the Company and the common interest of shareholders and is consistent with the Company’s
basic policy.
In addition, the measure described in the previous b. (b) was introduced as a specific measure to ensure and improve thecorporate value of the Company and the common interest of shareholders as needed under the scope permitted by laws andregulations and the Articles of Incorporation focusing on the intention of shareholders, and it is not intended to undermine
the shareholders’ common interests or preserve the positions of the Company officers.
(5) Research and development activities
Not applicable(6) Major facilities
The new installation of the important facilities that had been planned as of the end of the prior year and completed during theconsolidated cumulative first quarter of the current year are as listed below.

Name of company
Coca-Cola Bottlers Japan Inc.

Name of office / site (location) Name of business segment
Branches / (-)

Beverage businessNote: Consumption tax is not included in the above amounts.

3. Significant management contracts
Not applicable.

－6－

Facility description
Vending machines/coolers

Amount(millions of yen)
3,855Completed in
March 2022

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Section 3. Status of the filing company
1. Status of Shares(1) Total number of shares① Total number of shares
Class

Total Number of Authorized Shares

Common shares

500,000,000

Total

500,000,000② Issued shares
No. of issued shares as of endof First Quarter（March 31,2022）

Class

No. of issued shares as offiling date
（May 13, 2022）

Name of listed stock
exchange or registeredauthorized financial
instruments firms`
association

Details

Commonshares206,268,593

206,268,593

Tokyo Stock Exchange（Prime Market）

100 per unit shares

Total

206,268,593

206,268,593--

Note: Our Company was listed on the First Section of the Tokyo Stock Exchange, however, following a review of the market
classification of the Tokyo Stock Exchange on April 4 2022, the name of the financial instruments exchange on which ourCompany was listed is at the Tokyo Stock Exchange Prime Market after that date.
(2) Status of stock acquisition rights① Status of share options
Not applicable.
② Other stock acquisition rights
Not applicable(3) Status of exercised moving strike convertible bonds
Not applicable.
(4) Total number of issued shares, transition of capital
Date

Increase/decrease in total
no. of issued shares(thousand share)

January 1, 2022 –March 31,2022－

Balance of total no. Increase/ decrease of
Capital balanceof issued shares
capital(Millions of yen）
(thousand share） (Millions of yen)
206,269－(5) Major shareholder status
Not applicable as this is the first quarter of the current year－7－

15,232

Increase/decrease ofcapital reserve(Millions of yen)

Capital reservebalance(Millions of yen)－

108,167

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(6) Status of voting rights① Issued shares
As of March 31,2022
Class

Number of shares

Number of votes

Details

Non-voting shares

－

－

－

Shares with restricted voting right (Treasury Shares)

－

－

－

Shares with restricted voting right (Others)

－

－

－

－

－

Shares with full voting rights (Treasury Shares)

Common shares

26,925,000

Shares with full voting rights (Others)

Common shares

178,553,400

Odd lot shares

Common shares

790,193－－

206,268,593－-

Total number of issued shares

1,785,534－

Voting rights of all shareholders

1,785,534－-(Note): “Shares with full voting rights (Others)” includes 2,300 shares in JASDEC’s name (23 voting rights).

② Treasury Shares
As of March 31,2022
Name of owner

Coca-Cola Bottlers
Japan Holdings Inc.

Address of owner

No. of shares
owned under own
nameNo. of shares
owned underothers’ name

Total number ofshares owned

Ratio of shares owned
against total no. of issued
shares (%)

9-7-1 Akasaka, Minato-ku, Tokyo

26,925,000－

26,925,000

13.05

－

26,925,000－

26,925,000

13.05

Total

2. Status of Officers
Not applicable.

－8－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Section 4 Accounting status
1. Preparation of Accounting methods for the quarterly consolidated financial statements
The Company’s condensed quarterly consolidated financial statements have been prepared in accordance with International
Accounting Standards Article 34 "Interim Financial Reporting" based on the Ordinance on the Terminology, Forms, and Preparation
Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No. 64 of 2007).

2. Audit certification
The Company’s quarterly consolidated financial statements for the first quarter of the current year (January 1, 2022 to March 31,2022) and the first three-month period of the current year (January 1, 2022 to March 31, 2022) have been reviewed by Ernst &Young ShinNihon LLC based on the provisions of Article 193-2 Paragraph 1 of the Financial Instruments and Exchange Act.

－9－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

1. Condensed Quarterly Consolidated Financial Statements and Notes(1) Condensed Quarterly Consolidated Balance Sheets
Notes

AssetsCurrent assets:
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets
Total current assets
Non-current assets:
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments accounted for using the equity
methodOther financial assets
Deferred tax assets
Other non-current assets

10

10

Total non-current assets
Total assets－10－(Millions of yen)
As ofMarch 31,2022

As ofDecember 31, 2021

110,497
105,320
67,583
1,320
16,275111,21090,40071,4882,790
17,846300,995

293,734

434,994
25,144
66,219434,663
26,80066,192281

304

19,511
13,960
6,006
566,116

19,482
18,117
5,719
571,277

867,111865,012

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

As ofDecember 31, 2021

(Millions of yen)
As ofMarch 31,2022

Liabilities and equity
Liabilities
Current liabilities:
Trade and other payables
Bonds and debts
Lease liabilities
Income taxes payable
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities:
Bonds and debts
Lease liabilities
Net defined benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

10

10

Total liabilities
Equity:Capital stock
Capital surplus
Retained earnings
Treasury shares
Accumulated other comprehensive income(loss)
Equity attributable to owners of parent
Non-controlling interests

7

Total equity
Total liabilities and equity

103,260
30,990
4,050
1,139
9
16,085
155,535

106,042
30,995
5,547
1,249
9
19,036
162,878

156,622
22,462
17,605
2,137
17,3792,920
219,125

156,142
22,991
18,093
2,143
17,3102,940
219,618

374,660

382,497

15,232450,832
109,273(85,661)

15,232450,958
98,224(85,662)

2,644

3,627

492,320131

482,379136
482,515

492,451
867,111－11－865,012

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(2) Condensed Quarterly Consolidated Statements of Income【First three -months period of this fiscal year】(Millions of yen)
Notes

Continuing operations
Revenue
Cost of sales
Gross profit
Selling and general administrative expenses
Other income
Other expenses
Investment income (loss) on equity method
Operating income (loss)
Financial revenue
Finance costs
Income (Loss) for the period before income taxes
Loss tax expense
Net income (loss) for the period from continuing
operations
Discontinued operations
Net income (loss) for the period from discontinued
operations
Net income (loss) for the period

8

9
9

6

Net income (loss) for the period attributable to
Owners of parent
Profit (loss) from continuing operations attributableto owners of parent
Profit from discontinued operations attributable toowners of parent
Non-controlling interests
Earnings (Loss) per share (yen)Continuing operations
Discontinued operations
Earnings (Loss) per share

11

－12－

Three months ended
March 31, 2021

Three months ended
March 31,2022

168,399
94,23974,16185,426
1,190
4,928
(139)
(15,142)68
340(15,414)(4,216)

168,853
96,84272,011
84,892
5,988
2,800
22
(9,670)20
381(10,031)(3,467)(11,199)(6,564)

12,505－

1,306(6,564)(11,189)(6,568)12,505－(10)

5(62.39)69.72
7.34(36.62)－(36.62)

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(3) Condensed Quarterly Consolidated Statements of Comprehensive Income【First Three -months period of this fiscal year】(Millions of yen)
Notes

Net income (loss) for the period
Other comprehensive income (loss):
Items that will not be reclassified subsequently to income orloss:
Share of other comprehensive income of investments
accounted for using equity method

Three months ended
March 31, 2021

Three months ended
March 31,2022

1,306(6,564)(12)－

Net changes in financial assets measured at fair value throughother comprehensive income (loss)

2,016

76

Subtotal

2,005

76

Subtotal
Total other comprehensive income (loss) for the period
Total comprehensive income (loss) for the period

1,703
1,703
3,707
5,013

1,162
1,162
1,239
(5,325)Comprehensive income (loss) attributable to:
Owners of parent
Non-controlling interests

5,023
(10)

(5,330)5

Items that may be reclassified subsequently to income (loss):
Cash flow hedges－13－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(4) Condensed Quarterly Consolidated Statements of Changes in Equity
Three months ended March 31,2021(Millions of yen)

Capitalstock

Capitalsurplus

Equity attributable to owners of the parent
Accumulated otherAccumulatedcomprehensive
otherincome of disposal
Retained
Treasury comprehensive groups classified as
earnings
sharesincome (loss)
held for sale

15,232450,605

120,473(85,654)

1,095

－

－

1,316

－

Other comprehensive income(loss)－－－

Total comprehensive income (loss)
for the period

－

－

Notes
Balance as of January 1, 2021

Total

Noncontrollinginterests

Total

(107)

501,643450

502,093

－

－

1,316

(10)

1,306

－

3,707

－

3,707

－

3,707

1,316

－

3,707

－

5,023

(10)

5,013

Comprehensive income (loss) forthe period
Net income (loss) for the period

Transactions with owners

Dividends of surplus－－(4,484)－－－(4,484)－(4,484)Purchase of treasury stock

－

－

－

(3)

－

－

(3)

－

(3)

Transactions of share-based
payment

－

94

－

－

－

－

94

－

94

－

－

18

－

(18)

－

－

－

－

－

－

－

－

(42)

－

(42)

－

(42)

－

－

(107)

－

－

107

－

(297)

(297)

－

94

(4,573)

(3)

(60)

107

(4,434)(297)(4,731)

15,232450,699

117,216(85,657)

4,742－

502,232143

502,375

Reclassification fromaccumulated othercomprehensive income toretained earnings
Reclassification fromaccumulated othercomprehensive income (loss) to
non-financial assets
Changes from loss of control
Total transactions with owners
Balance as of March 31, 2020

7

－14－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Three months ended March 31, 2022
(Millions of yen)
Equity attributable to owners of the parent

Capitalstock

CapitalsurplusRetainedearnings

Treasuryshares

Accumulated
othercomprehensive
income (loss)

15,232450,832

109,273(85,661)－－(6,568)Other comprehensive income(loss)－－

Total comprehensive income (loss)
for the period

－

Notes
Balance as of January 1, 2022

Total

Noncontrollinginterests

Total

2,644

492,320131

492,451－－(6,568)

5(6,564)

－

－

1,239

1,239

－

1,239

－

(6,568)－

1,239(5,330)5(5,325)Comprehensive income (loss) forthe period
Net income (loss) for the period

Transactions with owners
Dividends of surplus－－(4,484)－－(4,484)－(4,484)Purchase of treasury stock

－

－

－

(1)

－

(1)

－

(1)

Transactions of share-based
payment

－

125

－

－

－

125

－

125

－

－

3

－

(3)

－

－

－

－

－

－

－

(252)

(252)

－

(252)

－

125

(4,480)

(1)

(256)

(4,611)－(4,611)

15,232450,958

98,224(85,662)3,627

482,379136

482,515

Reclassification fromaccumulated othercomprehensive income (loss) toretained earnings
Reclassification fromaccumulated othercomprehensive income (loss) to
non-financial assets

Total transactions with owners
Balance as of March 31,2022

7

－15－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(5) Condensed Quarterly Consolidated Statements of Cash Flows(Millions of yen)Three months ended
March 31, 2021

Notes

Three months ended
March 31,2022

Cash flows from operating activities
Income (Loss) for the period before income tax(15,414)(10,031)

12,841－

14,607

11,409benefit from continuing operations
Income for the period before income tax benefit fromdiscontinued operations
Adjustments for:
Depreciation and amortization
Gain on sales of subsidiaries' stock
Change in allowance for doubtful accounts(decrease)
Interest and dividends income(12,841)

－

732

(222)

(6)

(10)

250

217

139

(22)

(1)

(3,680)Interest expenses
Share of income (loss) of entities accounted forusing equity method
Gain on sale of property, plant and equipment
Loss on disposal and sale of property, plant andequipment(Increase) decrease in trade and other receivables

248

78

14,671

15,049

Increase in inventories(1,111)(3,888)(Increase) decrease in other assets(1,099)954

Increase in trade and other payables

10,281

3,230(Decrease) Increase in net defined benefit liabilities

663

488

Decrease in other liabilities

(261)

796

Others(35)

399

23,664

14,76610

SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash (used in) generated from operating activities

Cash flows from investing activities
Acquisitions of property, plant and equipment andintangible assets
Proceeds from sales of property, plant and equipment
and intangible assets
Proceeds from collection of loans receivable resulting
from sales of investments in subsidiaries

6

Purchases of other financial assets
Proceeds from sale of other financial assets
Proceeds from sale of shares of subsidiaries

6

Other
Net cash (used in) generated from investing activities

－16－

5

10

(251)

(225)

(6,721)(1,588)8

0

16,706

12,964(15,653)(10,388)

1

4,794

7,400

－

(10)

(6)

2,578

16

34,490

－

28

(35)

28,834(5,619)

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(Millions of yen)
Notes

Three months ended

Three months ended

March 31, 2021

March 31,2022

Cash flows from financing activities－

Increase in short-term loans payable
Repayments of long-term loans payable
Dividends paid

7

Purchases of treasury stock

(38)

(525)

(565)

(4,484)(4,484)(3)(1)(1,852)(1,544)

Net cash used in financing activities(6,863)(6,632)

Net change in cash and cash equivalents

38,677

713

Cash and cash equivalents at the beginning of the year

126,378

110,497

Cash and cash equivalents at the end of the period

165,055

111,210

Repayments of lease liabilities－17－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Notes to consolidated financial statements
1. Introduction
The Company is a holding company domiciled in Japan and is listed on the Prime Market of the Tokyo Stock Exchange.
Under the Coca-Cola brand, the Company and its subsidiaries (collectively, the "Group") engage in purchases, sales, bottling,
packaging, distribution and marketing of carbonated beverages, coffee beverages, tea-based beverages, mineral water, Alcoholand other soft drinks in Japan.
The Group’s consolidated financial statements consist of the Company, subsidiaries, and associates. The Consolidated
Financial Statements were approved by our Representative Director & President, Calin Dragan and our Representative Director,
Vice President and Chief Financial Officer (head of finance), Bjorn Ivar Ulgenes on May 13, 2022 and takes into account events
after the reporting period to that date (see notes 12, "events after the reporting period").
2. Basis of preparation
The Company’s condensed quarterly consolidated financial statements have been prepared in accordance with International
Accounting Standards Article 34 "Interim Financial Reporting" based on the Ordinance on the Terminology, Forms, andPreparation Methods of Quarterly Consolidated Financial Statements (Cabinet Office Ordinance No. 64 of 2007).
Condensed quarterly consolidated financial statements should be used in conjunction with consolidated financial statements
for the prior year as they do not include all the information required in the annual consolidated financial statements.
Condensed quarterly consolidated financial statements have been prepared on the basis of cost except for measurement at fairvalue.
Condensed quarterly consolidated financial statements are stated in Japanese yen. All condensed quarterly consolidated
financial information is rounded to the nearest million yen unless otherwise stated.
3. Significant accounting policies
The significant accounting policies applied by the Group in the condensed quarterly consolidated financial statements are thesame as the accounting policies applied in the consolidated financial statements for the prior year.
Income tax benefit for the Three months ended March 31,2022, has been calculated on the basis of the annual estimatedeffective tax rate.
4. Critical accounting judgments, estimates and assumptions
In preparing the condensed quarterly consolidated financial statements in accordance with IFRS, management is required tomake judgments, estimates and assumptions that affect the application of the Group’s accounting policies and the reported
amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates. The estimates and theassumptions underlying the estimates are continually reviewed and are based on historical experience and other factors,
including future events, which are believed to be reasonable under the circumstances. Accounting estimates are based on themost appropriate information at the time the condensed quarterly consolidated financial statements are filed. The future of thedomestic soft drink market and business environment is expected to remain uncertain due to the spread of COVID-19 strains
and other factors, the situation is expected to remain uncertain, and accounting estimates have been made based on theassumption that the impact will continue for a certain period of time from the fiscal year ending December 31, 2022.
If there are changes to any future estimates, the impact of the revision is recognized in the condensed quarterly consolidated
statements of income and condensed quarterly consolidated statements of comprehensive income subsequent to the reporting
period in which they are revised.
Accounting-judgments, estimates and assumptions that have a significant impact on the condensed quarterly consolidated
financial statements will be revised based on the same concept as in the consolidated financial statements for the previous
consolidated fiscal year.
(The Change in useful life of property, plant and equipment)
The group depreciated its sales equipment mainly over the useful life with 9 years. However, as consumer spending pattern
has been impacted by pandemic, we have decided to further strengthen the margin & ROI-focus commercial strategy from 2022
－18－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

and determined the policy to utilize our sales equipment on a longer-term basis and more efficiently than in the past. Also, these
are to be reflected into our new mid-term business plan which is under development. As a result, the main useful life of sales
equipment has been revised to 11 years and it will be applied prospectively from this first quarter.
As a result of this change, operating loss and loss before tax for the first quarter decreased by 2,331 million yen, respectively,
compared with those based on the previous useful life.
5. Segment Information
The Group has a single segment as "Beverage Business”. The Products and services of the reportable segments are referred
to Note 9 "Revenue".
6. Discontinued operations
On December 15, 2020, the Company’s Board of Directors resolved to sell all of the shares of the Company’s consolidated
subsidiary, Q’sai Co., Ltd. (“Q’sai”) to Q-Partners Co., Ltd., a company formed for this purchase led by investment funds inwhich Advantage Partners Inc. provides services (“Advantage Partners”), euglena Co., Ltd., and Tokyo Century Corporation.
As a result of executing the share transfer agreement, Q’sai was classified as discontinued operations from the fiscal year
ended December 31, 2020. The transfer of all shares in Q’sai was completed on February 1 2021.
(1) Gain/(Loss) from discontinued operations
The results of discontinued operations are as follows:
In the first quarter of the previous fiscal year, the gain on the sale of all shares of Q’sai was 12,841 million yen, andthe income tax expense related to this was 337 million yen. Due to immateriality, no gains or losses other than thosefrom sales transactions related to discontinued operations were recognized in the previous fiscal year.
(Millions of yen)Three months ended
March 31, 2021
Discontinued operations
Revenue
Cost of sales－－

Gross profit－

Selling and general administrative expenses
Other income
Other expenses－
12,841

Operating income

12,841

Financial revenue
Finance costs－－－

Income for the period before income taxes
Income tax expense
Net income for the period from discontinued
operations

12,841337
12,505(2) Cash flows of discontinued operations
The results of discontinued operations are as follows:(Millions of yen)Three months ended
March 31, 2021
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities－
34,490－(Note) Cash flows from investing activities in the first quarter of the previous fiscal year was due to the proceeds from thesale of all shares of Q’sai.

－19－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(3) The component of assets and liabilities as of the date of loss of control(Millions of yen)
Date of loss of control
February 1,2021
AssetsCurrent assets

6,501

Non-current assets

33,137

Total assets

39,638

Liabilities
Current liabilities

12,991

Non-current liabilities

1,602

Total liabilities

14,593Note 1. Current assets include cash and cash equivalents.
2. Current liabilities include short-term loans payable of 7,400 million yen from the Company. This loan was repaid infull during the first quarter of the previous fiscal year.
(4) Change in cash and cash equivalents relation to loss of control(Millions of yen)
As ofMarch 31,2021
Proceeds received for sales

37,590Cash and cash equivalents received for sales
Cash and cash equivalents held at the time of loss ofcontrol
Increase from loss of control over subsidiaries

37,5903,099
34,490－20－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

7. Dividends
Dividends payments were as follows:First three -month of the prior year (January 1, 2021 – March 31, 2021)
Type of shares

Total amount ofdividends paid
(Millions of yen)

Dividends per
share
(Yen)

Dividend record date

Effective dateOrdinary share

4,484

25

December 31, 2020

March 26, 2021

Resolution
March 25, 2021
Ordinary General Meetingof Shareholders

First three-month of the current year (January 1, 2022 – March 31,2022)
Resolution

Type of shares

Total amount ofdividends paid
(Millions of yen)

Dividends per share(Yen)

Dividend record date

Effective dateOrdinary share

4,484

25

December 31, 2021

March 25, 2022

March 24, 2022
Ordinary General Meetingof Shareholders

8. Revenue
The Group's organizational structure is based on the single business segment of the Beverage business. The business iscomponents for which discrete financial information is available, and whose operating results are regularly reviewed by theentity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its
performance. Therefore, the revenue in beverage business is presented as “Revenue” in the consolidated financial statementof profit or loss. In the Beverage business, the Group purchases, manufactures, and sells carbonated beverages such as CocaCola, coffee beverages, black tea beverages, mineral water, alcohol and other beverages in Japan.
Revenue for sales of these products is recognized primarily at the time of delivery as customer has obtained control overthe products and the performance obligation is satisfied.
Payments relating to such performance obligation are received generally within two months of delivery. The contracts
with customer do not include any material financial elements.
The contract liabilities, refund liabilities, amount of assets recognized from the costs of obtaining a contract or to fulfil acontract and amount of revenue recognized from performance obligation satisfied in prior periods were immaterial. In
addition, information regarding the remaining performance obligation is omitted as there are no significant transactions inwhich the estimated individual contract periods exceed one year in the Group.
(Millions of yen)Three months ended
March 31, 2021

Three months ended
March 31, 2022

168,286
113

168,8467

168,399

168,853

Beverage
Other
Total

－21－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

9. Other income and other expenses
The breakdown of other income and other expenses are as follows:(Millions of yen)Three months ended
March 31, 2021
Other income
Gains on sales of property, plant and equipment(Note 1)
Rent income

Three months ended
March 31,2022

1

3,680

79

75

Government subsidies (Note 2)

990

2,011

Other

120

223

1,190

5,988

Total
Other expense－
Losses on sales and disposals of property, plantand equipment
Transformation related expenses (Note 3)

340

180

257

10

Special retirement allowance (Note 4)

185

431

Temporary paid leave expenses (Note 5)

3,736

2,146

System failure-related costs (Note 6)

354

－

Other

56

34

4,928

2,800

Total

(Note) 1. Gains on sales of property, plant and equipment represents gain on sales of land and other assets.
2. Government subsidies are grants to cover employee’s temporary leave cost due to the spread of COVID-19.
3. Transformation expenses are expenses related to measures aimed at building an efficient new system with the aim of creating
more value and further improving productivity for the sustainable growth of the Group.
4. Special retirement allowances are allowances and outplacement support expenses incurred in the implementation of thevoluntary retirement program.
5. Temporary paid leave expenses are the allowance associated with employee’s temporary leave to respond to the impact toour business by the economic contraction and to secure the safety and health of our employee following the state of
emergency declaration due to the spread of COVID-19. The expenses are reclassified 165 million yen and 90 million yen
from cost of sales and 3,571 million yen and 2,056 million yen from selling and general administrative expenses to otherexpenses, respectively.
6. System failure-related expenses are expenses incurred to recover the system failures that occurred in the core system usedby the Group during the first quarter of the previous fiscal year.

－22－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

10. Fair value of financial instruments(a) Classification by level of the fair value hierarchy
Financial instruments measured at fair value on a recurring basis after initial recognition are classified into three levelsof the fair value hierarchy, depending on the observability and significance of the inputs used in the measurement.
The fair value hierarchy is defined as follows:
Level 1: fair value (unadjusted) in the active market of the same asset or liability
Level 2: fair value based on inputs other than quoted prices included in Level 1, either directly observable inputs orindirectly, of observable inputs for asset or liability
Level 3: fair value based on unobservable inputs for asset or liability
When more than one input is used to measure the fair value, the level of the fair value hierarchy is determined basedon the lowest level of input that is significant to the fair value measurement as a whole. Transfers between levels of thefair value hierarchy are recognized as having occurred at the beginning of each quarter.
There were no transfers between Level 1 and Level 2 during the First quarter of the prior year and First quarter of thecurrent year.
(b) Fair value measurement
Securities are classified as Level 1 of the fair value hierarchy by the measurement of share prices, if any, in active
market for the same asset or liability. If there is no active market stock price for the same asset or liability, the Group uses
valuation techniques such as stock prices in non-active markets, and quoted market prices of similar companies. If
significant inputs, such as quoted market prices and discount rates used in measurement are observable, such financial
instruments are classified as Level 2, but are classified as Level 3 if inputs used in its measurement include significant
unobservable inputs.
Unlisted securities are classified into Level 3 of the fair value hierarchy using valuation techniques based on valuation
techniques based on quoted market prices of similar companies, valuation techniques based on net asset value, and othervaluation techniques. In the fair value measurement of unlisted securities, the Group uses unobservable inputs such as
valuation multiples and considers certain illiquidity discounts and non-controlling interest discounts as needed. The
measurement methods for such fair value are determined by the Finance division in accordance with the Group’s
accounting policies.
The valuation techniques and significant unobservable inputs used in Level 3 fair value measurement are as follows:
As of December 31, 2021
Type
Financial instrument measured atfair value through othercomprehensive income(Securities)

Valuation technique

Comparison ofsimilar companies

Significant unobservable inputs

Interactions between significant unobservable
inputs and fair value measurement

EBIT Multiple: 5.2-51.0 times

Estimated fair value increases (decreases)

EBITDA Multiple: 5.9 times

when equity indices of comparable listed

PBR: 0.9-2.6 times

companies of the target are high (low)Significant unobservable inputs

Interactions between significant unobservable
inputs and fair value measurement

EBIT Multiple: 5.1-14.5 times

Estimated fair value increases (decreases)

EBITDA Multiple: 7.2 times

when equity indices of comparable listed

PBR: 0.7－2.4 times

companies of the target are high (low)As of March 31,2022
Type
Financial instrument measured atfair value through othercomprehensive income(Securities)

Valuation technique

Comparison ofsimilar companies

EBIT Multiple: Corporate Value/EBIT
EBITDA Multiple: Corporate Value/EBITDAPBR: Price Book Value Ratio－23－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

(c) Financial instrument measured fair value on a recurring basis
The breakdown of financial instrument measured at fair value on a recurring basis is as follows:
As of December 31, 2021
(Millions of yen)
Level 1

Level 2

Level 3

Total

Financial assets
Financial instrument measured at fair value
through profit or loss:
Derivative assets

－

1,863

－

1,863

－

1,863

－

1,863

9,443
－

－
－

4,283

13,726140140

Subtotal

9,443

－

4,423

13,866

Total

9,443

1,863

4,423

15,729

－

－

－

－

－

－

－

－

Subtotal
Financial instrument measured at fair value
through other comprehensive income:Securities
Other

Financial liabilities
Financial instrument measured at fair value
through profit or loss:
Derivative liabilities
Total
As of March 31,2022(Millions of yen)
Level 1

Level 2

Level 3

Total

Financial assets
Financial instrument measured at fair value
through profit or loss:
－

3,209

－

3,209

－

3,209

－

3,209

10,112
－

－
－

3,723
137

13,835
137

Subtotal

10,112－

3,860

13,972

Total

10,112

3,209

3,860

17,181

－

－

－

－

－

－

－

－

Derivative assets
Subtotal
Financial instrument measured at fair value
through other comprehensive income:Securities
Other

Financial liabilities
Financial instrument measured at fair value
through profit or loss:
Derivative liabilities
Total

－24－

This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

A reconciliation of the beginning and ending balances of financial instrument classified as Level 3 is as follows:(Millions of yen)
Financial assets measured at fair value through othercomprehensive income
Balance on January 1, 2021

4,694

Disposals
Gains recognized in other comprehensive income

(25)
728

Balance on March 31, 2021

5,396

Balance on January 1, 2022
Disposals

4,423
(11)

Losses recognized in other comprehensive income
Other

(554)
2

Balance on March 31,2022

3,860

Gains or losses recognized in other comprehensive income are recognized in "Net changes in financial asset
measured at fair value through other comprehensive income" in the consolidated statements of comprehensive income.
(d) Financial instrument measured at amortized cost
The components of carrying amount and fair value of financial instruments measured at amortized cost are as follows:
As of December 31, 2021
(Millions of yen)
Carrying amountLong-term loans payable and bonds

187,612Fair value

Difference

187,982(370)

As of March 31,2022(Millions of yen)
Carrying amountLong-term loans payable and bonds

187,137

Fair value
186,411Difference726

Long-term loans payable and bonds include current portion. Cash and cash equivalents, trade and other receivables,
trade and other payables are not included in the above table because their fair value approximates their carrying amountbecause they are collected and settled in a short period of time.
The main valuation techniques used to measure fair value of the financial instruments in the table above are as follows:a. Loans payable
Loans payable with variable interest rates are calculated using the carrying amount as its fair value because interest
rates are considered to reflect market interest rates in the short term. Loans payable with fixed interest rates are calculated
based on the present value of future cash flows discounted using interest rates adjusted for the remaining term and credit
risk. Loans payable with fixed interest rates are classified into level 2 of the fair value hierarchy.
b. Bonds
For bonds with quoted market prices, the fair value is estimated based on quoted market prices. For bonds without
quoted market prices, the fair value is calculated based on the present value of future cash flows discounted using interest
rates adjusted for the remaining term and credit risk. Bonds with quoted market prices are classified into level 1 of thefair value hierarchy and bonds without quoted market prices are classified into level 2.

－25－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

11. Earnings per share
The calculation of basic earnings per share attributable to owners of the parent is based on the quarterly net income
attributable to owners of the parent and the weighted average number of common shares issued.
The basis for calculating the basic earnings per share for the First quarter of the current year and prior year is as follows:

Three months ended
March 31, 2021
Income (Loss) from continuing operations attributable toowners of parent (millions of yen)
Profit from discontinued operations attributable to ownersof parent (millions of yen)
Weighted-average shares of ordinary share outstanding (inthousands)
Earnings (Loss) per share (yen)Continuing operations
Discontinued operations
Earnings (Loss) per share (yen)Three months ended
March 31,2022(11,189)(6,568)12,505－

179,348

179,344(62.39)(36.62)
－

69.72
7.34

(36.62)

Note 1. In the first quarter of the previous fiscal year and the first quarter of the current fiscal year, 392 thousand and 741 thousand
shares of stock-based compensation “diluted earnings per share” is not shown because they were antidilutive.
2. For more information on the quarterly income from discontinued operations attributable to owners of the parent company, seeNote 6. “Discontinued operations”.
12. Events after the reporting period
Not applicable－26－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

2. Others
Not applicable－27－This is an English translation of the original Quarterly Report (“Shihanki Hokokusho”) ended March 31, 2021 pursuant to the Japanese Financial Instrument andExchange Law. In the event of any discrepancy between Shihanki Hokokusho and this English translation, Shihanki Hokokusho shall prevail.

Part II Information of guarantor companies of the filing company
Not applicable－28－