The English translation is for reference purpose only. If there is any discrepancy between this English translation and the Japanese original
version, the Japanese original version shall prevail.

Overview of First Half Results for the Year Ending
December 31, 2014 [Japanese GAAP]
August 12, 2014
Company Name
Securities Code
Representative
Contact Person

ASATSU-DK INC.
Exchange : Tokyo Stock Exchange First Section
9747
URL :http://www.adk.jp/en/l
Shinichi Ueno, President and Group CEO
Fuminori Unosawa, Department Director, Finance Department, Finance Division

Tel:+81-3-6830-3867

Inquiries in English

Kaori Nakajima, Office of Corporate Communications

Tel:+81-3-6830-3855

Scheduled date of commencement of dividend payment: September 16, 2014
Supplementary information for financial results : Available: August 15, 2014
Organization of financial results briefing(for institutional investors and analysts)(Unit: millions of yen, Rounded down under 1 million yen)

1. The First Six Months Consolidated Results ( January 1, 2014 to June 30, 2014 )(1) Consolidated Operating Results(Percentages shown for Gross Billings, Operating Income, Ordinary Income and Net Income represent increase/decrease from those in the corresponding period of the previous year.)

Gross Billings
6 months ended；

Jun. 30, 2014
Jun. 30, 2013

Operating Income

Ordinary Income

Net Income

millions of yen％

millions of yen％

millions of yen％

millions of yen％

174,489
174,469

0.0
(3.0)

2,128
1,807

17.7
(33.6)

3,966
3,381

17.3
(15.0)

1,255
2,114

(40.6)
19.2(Notes) Comprehensive income
at June 30, 2014 : (1,312) million yen (－%) ,at June 30, 2013 :Net Income per ShareJun. 30, 2014
Jun. 30, 2013

Fully Diluted Net Income per Share

Yen

Yen

30.01
50.27

29.98
50.25

(2) Consolidated Financial Position
Total Assets

Net Assets

Shareholder's Equity Ratio

millions of yen

millions of yen％

223,947
228,170

123,906
130,972

55.0
56.9

Jun. 30, 2014
Dec. 31, 2013
(Reference) Shareholders' equity

14,291 million yen (181.7% )June 30, 2014 : 123,247 million yen December 31, 2013 : 129,873 million yen

2. Dividend Information
Annual Dividend per Share
2nd quarter3rd quarter Fiscal year
end
end
end

1st quarter
end
Fiscal 2013(Actual)
Fiscal 2014(Actual)
Fiscal 2014(Forecast)

Total

Yen

Yen

Yen

Yen

Yen

－
－

10.00
10.00

－

131.00141.00－－－(Notes) Revisions from the most recent dividend forecasts : No
The fiscal year end dividend for FY 2013 consists of the ordinary dividend of 19 yen per share andextraordinary dividend of 112 yen per share.
The sum of the fiscal year end dividend for FY 2014 is undecided (But it is more than 10 yen per share).

3. Forecast of Consolidated results Fiscal 2014 ( January 1, 2014 to December 31, 2014)(Percentages shown for Gross Billings, Operating Income, Ordinary Income and Net Income represent increase/decrease from those in the corresponding period of the previous year.)

Gross Billings
millions ofyen

Full-year

348,800％

1.8

Operating
Incomemillions of
yen

3,700

(Notes) Revisions from the most recent forecasts : No

Ordinary
Income％167.5

millions of
yen

5,600

Net Income
per share

Net Income％

29.4

millions of
yen

2,770

％

Yen

(19.2)

64.55

* Notes(1) Changes in the Scope of Consolidation and Application of the Equity Method：No.
New ─ Companies (Company Name)
Except ─ Companies (Company Name)(2) Is there any accounting treatment particular to the quarterly financial statements ? : Yes.
(3) Changes to accounting policy,changes to accounting estimates, or restatements：No.
1. Changes due to revisions to accounting standards, etc.
：No.
2. Changes other than 1:：No.
3. Changes in accounting estimates：No.
4. Restatements(4) Number of outstanding stocks
1 Number of outstanding stocks at June 30, 2014
(including treasury stock) issued,end of term
2 Number of treasury stock, end of term
at June 30, 2014
3 Avg. number of shares (consolidated) at June 30, 2014
outstanding during the terms ended

42,155,400 at December 31, 2013
shares42,155,400
shares299,752 at December 31, 2013
shares41,834,854 at June 30, 2013
shares

333,481shares42,070,846
shares(Notes) The Company has introduced an "ESOP Trust Utilizing Employee Shareholding Association," and the shares
owned by this ESOP are reported as "treasury stock" in the quarterly consolidated financial statements.
Consequently, shares owned by this ESOP are included in the number of shares of treasury stock outstanding at
the period end above, and there were 220,100 shares and 255,200 shares at the end of the first half and at the endof the previous fiscal year, respectively.

*

Implementation status of quarterly review proceduresThis quarterly consolidated financial results report is exempt from quarterly review
procedures in accordance with the Financial Instruments and Exchange Act. At the time of
disclosure of this quarterly consolidated financial results report, the review procedures forquarterly consolidated financial statements have not finished.

*

Appropriate use of business forecasts and other special matters
The business forecasts and future prospects in this document are made based on information
currently available and contain potential risks and uncertainties. As such, actual businessresults may significantly differ from those expressed or implied in the forecasts due to changes invarious factors.
Refer to "1. Consolidated Results for the First Half of Fiscal 2014 (3) Forecasts for Fiscal 2014"
on page 4 for the suppositions that form the assumptions for the business forecasts and cautions
concerning the use thereof.

Contents

Page
1．Consolidated Results for the First Half of Fiscal 2014 ····················· ·············· 2(1) Overview of Operating Results ················································· ·············· 2(2) Financial Position ·································································· ·············· 4(3) Forecasts for Fiscal 2014 ························································· ·············· 4
2．Other Information····································································· ·············· 5(1) Changes in Significant Subsidiaries during the Period ················· ·············· 5(2) Adoption of Special Accounting Treatments for
Quarterly Consolidated Financial Statements ························· ·············· 5(3) Changes in Accounting Policies, Changes in
Accounting Estimates and Restatements ································ ·············· 5
3．Consolidated Financial Statements····························································· 6(1) Consolidated Balance Sheets ·································································· 6(2) Consolidated Income Statements andConsolidated Comprehensive Income Statements ···································· 8(3) Notes to Consolidated Financial Statements ············································· 10(Items related to going concern assumption) ··············································· 10(Notes on significant changes in the amount of shareholders’ equity) ·············· 10(Segment Information) ············································································ 10(Material Subsequent Events) ·································································· 11― 1 ―【Supplementary Information】
1.

Consolidated Results for the First Half of Fiscal 2014

(1) Overview of Operating Results
During the first half of the year (from January 1, 2014 to June 30, 2014), the Japanese
economy continued a mild upswing with the improvement of corporate earnings and therecovery of capital investments on the back of a steady growth of the US economy, coninuted
economic measures and monetary policies taken by the central government and the Bank ofJapan. Consumer spending on the whole grew steadily supported by the last-minute demandahead of the consumer tax hike and improvement of the employment and income environment
although there was a tentative pause immediately after the introduction of the hike.
According to the “Current Survey of Selected Service Industries” by the Ministry of
Economy, Trade and Industry, total gross billings in the advertising industry showed steadyyear-on-year gains in twelve consecutive months from April 2013 to March 2014. It showed atemporal drop of 0.4% in April 2014 when the consumption tax was raised. It turned back to
the positive territory soon on the following month with a 2.1% increase. As a whole, it kept
moving on a firm footing.
Amid these circumstances, ADK is striving to transform itself into the “Consumer Activation
Company” under the name of “VISION 2020”. ADK is assuring not only to deliver messages to
consumers, but to inspire them to take concrete actions. With the hope of bringing “Consumer
Activation” to fruition as planned, we are implementing measures to strengthen the Group
foundation and to diversify business models that include developing solution infrastructure,
tightening profit management structure, enhancing cooperation with subsidiaries at home andabroad, further expanding content business, namely ADK’s specialty.
As a result of those efforts, the gross billings the Company reported for the first six months ofthe period was ¥174,489 million, almost the same as what we had achieved the previous
corresponding period. Gross profit increased 6.9% to ¥24,625 million, while operating income
surged 17.7% to ¥2,128 million. Ordinary income increased 17.3% to ¥3,966 million after adding¥1,940 million non-operating income, such as dividend income, and ¥102 million non-operating
expenses. Extraordinary profit of ¥345 million did not offset extraordinary loss of ¥1,823 million,
mainly attributed to Office transfer expenses of the ADK headquarters as well as the main
subsidiaries’ head offices. As a result, net income before income taxes and minority interests forthe first half decreased 31.3% to ¥2,488 million, while the net income for the same period shrank
40.6% to ¥1,255 million.
Performance by Business Segment
Advertising Business
Gross billings to customers amounted to ¥172,327 million during the six months underreview, practically identical to that of the previous corresponding period, and segment― 2 ―income increased 7.8% to ¥2,388 million.
Total billings was almost on a par with that of the previous year although, geographically,
it varied greatly. The parent company and domestic subsidiaries enjoyed revenue growth
boosted by increased advertising placements prior to the tax hike. On the other hand,overseasbusinesses

experiencedadecline with

Chinesesubsidiaries

performing

unsatisfactorily even though the companies in other Asian nations and the US were brisk.
Overall segment profits also showed an increase, exceeding the last year’s results, as theparent and domestic subsidiaries performed healthily which offset sluggish overseas
business resulted from the weak performance in China.
ADK, which forms the core of the ADK Group, reported gross billings of ¥152,205 million,
up 0.2% from the previous year. Gross profit increased to ¥18,096 million, up 8.1% andoperating income also up 15.4% to ¥1,993 million. Measures taken to improve grossoperating income worked effectively to compensate for an increase of selling, general andadministrative expenses including Provision for bonuses and relocation costs, leading to arise in income.
Broken down by client business, ADK posted increases in gross billings from clients insuchindustries

asGovernment/Organizations,

Restaurants/Other

Services,

Cosmetics/Toiletry, Finance/Insurance, Automobile/Auto-Related Products. However, grossbillings from clients in such industries as Food, Beverages/Tobacco, Education/Healthcare
Services/Religion, Energy/Materials/Machinery, Real Estate/Housing.
Broken down by business discipline, gross billings in Digital Media, Marketing Promotion
experienced an increase over the previous year but in OOH Media, Creative and Others,
Newspaper, Magazine and Radio gross billings declined on a year on year basis.
Unconsolidated Performance by Discipline
Breakdown by DisciplineMedia

Gross Billings(Millions of Yen)

Magazine

6,280

4.1

(8.7)

Newspaper

10,1196.6(7.3)

TV (Program, Spot, Content)

70,451

46.3

3.1

Radio

1,430

0.9

(9.4)

Digital Media

7,217

4.7

37.3

OOH Media

3,887

2.6

(27.5)

99,38765.3

1.1

Marketing and Promotion

31,14120.5

1.9

Creative and Others

21,676

14.2

(6.0)

Sub-total

52,817

34.7

(1.5)

Total

152,205

100.0

0.2

Sub-total
NonMediaComposition Y-o-Y change
(%)
(%)

― 3 ―

Notes:1. Because we offer cross-media programs, data may not represent gross billings exactly
by media.
2. TV includes Program, Spot and Content.
3. Digital Media includes Internet and Mobile-related media.
(Digital Solutions, such as Website Creation and System Development are includedin “Marketing and Promotion”.)
4. OOH (Out of Home) Media includes transportation and outdoor advertising andinsertions.
5. Marketing and Promotion includes Marketing, Communication Planning, Promotion,
Events, PR, Exposition events and Digital Solutions, etc.

Other BusinessIn other business, gross billings to customers amounted to ¥2,161 million, almost flat yearon-year, and the segment loss amounted to ¥260 million, compared with ¥408 million loss inthe previous corresponding period.
An adverse situation remains, where it is difficult to ensure a profit in its main business of
publication and sales of books and magazines aimed the contraction in the overall publishingmarket, leading to an operating loss. However, the level of loss has become smaller on a yearon-year basis as a result of stepping up efforts to reduce products’ returns by improving theaccuracy in the number of distribution and further controlling SG&A expenses.

Overseas Sales
In the consolidated first six months under review, the ADK Group obtained 8.2% of its grossbillings from overseas, compared with 8.5% in fiscal 2013. All overseas sales are in theadvertising business.
(2) Financial Position
The consolidated financial position as of the end of previous accounting year (December 31,2013) in comparison with the current consolidated first half end is as follows.
Total assets amounted to ¥223,947 million, down ¥4,222 million from the previous
consolidated fiscal year-end, mainly due to a decrease in investment securities stemming fromdeclining stock prices. Despite the fact that there was a decrease in deferred tax liabilities
caused by the aforementioned stock price fall, total liabilities were up ¥2,843 million to¥100,041 million, mainly due to an increase in purchase accounts payable. Total net assets
amounted to ¥123,906 million, and the shareholder's equity ratio excluding minority equity
and subscription rights to share was 55.0 %.
(3) Forecasts for Fiscal 2014
During the current first half (from January 1, 2014 to June 30, 2014), the business― 4 ―performed steadily in line with the guidelines announced in the beginning of the term. We
project that economy remains on a recovery path for the rest of the year and advertisingmarket continues to perform briskly for the mid-to-long run.
While, on the other hand, for the short-term, a rise in the import price of materials, concernsof economic slowdown in the Eurozone and sagging economy in emergeing markets including
China remain to be seen. We also need to carefully watch how the higher tax may impact on
the domestic economy in the months to come and how advertisers’ business will be performing
accordingly, all of which will eventually influence the overall advertising market.
Taking into what discussed above into consideration, we have decided not to revise theconsolidated forecast officially announced on February 14, 2014.
We are determined to continue our efforts to grow the business by promoting development
and provision communication programs that capture changes of media environment andconsumer behaviors, ensuring to strengthen competitive edge and enhance profitability.
2．Other Information(1) Changes in Significant Subsidiaries during the Period
Not Applicable.
(2) Adoption of Special Accounting Treatments for Quarterly Consolidated Financial Statements
Calculation of tax expenses
Tax expenses for the period are calculated by using the effective tax rate, which is estimatedrationally based on the estimated annual consolidated income before tax after applying
deferred tax accounting, and applying that effective tax rate to income before income taxes forthe quarter.
(3) Changes in Accounting Policies, Changes in Accounting Estimates and Restatements
Not Applicable.

― 5 ―3．Consolidated Financial Statements(1) Consolidated Balance Sheets (Unaudited and before reclassifications and rearrangements)(Millions of Yen)
December 31, 2013
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Short-term investment securities
Inventories
Other
Allowance for doubtful accounts

June 30, 2014

25,55481,65911,371
8,469
2,391
(514)

27,561
77,718
10,467
8,258
4,005
(690)

128,932

127,321

3,392
2,132

4,604
1,783

Investment securities
Other
Allowance for doubtful accounts

84,8299,694(810)

81,572
9,420(755)

Total investments and other assets

93,71390,238

Total current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets

Total noncurrent assets
Total assets― 6 ―99,23896,626228,170

223,947

(Millions of Yen)
December 31, 2013
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Income taxes payable
Provision
Other

June 30, 2014

65,997
－
164
1,950
892
7,076

68,732
49
164
1,299
1,500
7,861

Total current liabilities

76,08079,608

Noncurrent liabilities
Long-term loans payable
Provision
Other

82
1,688
19,346－1,500
18,932

Total noncurrent liabilities

21,116

20,432

97,197100,041

37,581
11,98244,303(651)

37,581
11,98240,239(592)

93,21689,211

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment

35,142
1
1,513

33,045(1)992

Total accumulated other comprehensive income

36,65734,035

21
1,077

30
628

130,972

123,906

228,170

223,947

Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders' equity

Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets― 7 ―(2) Consolidated Income Statements and Consolidated Comprehensive Income Statements
Consolidated Income Statements (Unaudited and before reclassifications and rearrangements)
Six Months Ended June 30, 2014
Six Months Ended
June 30, 2013
(From January 1
to June 30, 2013)
174,469
151,423(Millions of Yen)
Six Months Ended
June 30, 2014
(From January 1
to June 30, 2014)
174,489
149,863

Gross profit

23,046

24,625

Selling, general and administrative expenses
Salaries and allowances
Provision for bonuses
Provision for directors' retirement benefits

11,360394
18

11,260922
9Provision of allowance for doubtful accounts
Other

(287)
9,751

180
10,124

Total selling, general and administrative expenses

21,23822,497

Operating income

1,807

2,128

Non-operating income
Interest income
Dividends income
Equity in earnings of affiliates
Other

125
1,142
68
296

126
1,431
90
293

Total non-operating income

1,633

1,940

6
0
8
44

3
22
33
43

Gross billings
Cost of sales

Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Loss on insurance cancellation
Other
Total non-operating expenses

59

102

3,381

3,966

Gain on sales of investment securities
Other

479
32

312
32

Total extraordinary income

511

345

－
117
24
－
44
82

207
2
78
396
989
148

268

1,823

Income before income taxes

3,624

2,488

Income taxes

1,476

1,168

Income before minority interests

2,148

1,320

33

65

2,114

1,255

Ordinary income
Extraordinary income

Extraordinary loss
Impairment loss
Loss on sales of investment securities
Loss on valuation of investment securities
Special retirement expenses
Office transfer expenses
Other
Total extraordinary losses

Minority interests in income
Net income― 8 ―Consolidated Comprehensive Income Statements (Unaudited and before reclassifications and rearrangements)
Six Months Ended June 30, 2014
Six Months Ended
June 30, 2013
(From January 1
to June 30, 2013)
2,148(Millions of Yen)
Six Months Ended
June 30, 2014
(From January 1
to June 30, 2014)
1,320

10,825
3(2,098)
(2)

1,313

(530)

－

(1)

12,143(2,633)Comprehensive income

14,291(1,312)Comprehensive income attributable toComprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests

14,211(1,365)

79

53

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income― 9 ―(3) Notes to Consolidated Financial Statements(Items related to going concern assumption)
No items(Notes on significant changes in the amount of shareholders’ equity)
No items(Segment Information)
Six Months Ended June 30, 2013 (Unaudited and before reclassifications and rearrangements)(Millions of Yen)
Amount on
Consolidated
Adjustment
Income(*Note1)Statements(*Note2)

Reportable segments
Advertising

Nonadvertising

Billings to customers

172,307

2,162

174,469－

174,469

Inter-segment billings

8

1

9

(9)

－

172,315

2,163

174,479(9)

174,469

2,216

(408)

1,807

0

1,807

Total

GROSS BILLINGS

Total billings
Segment income (loss)(Note)

1

Adjustment of segment income(loss)is mainly due to the deduction of the transaction between
the segments and unrealized income.

2

Segment income (loss) has been adjusted to equal the operating income on the consolidated
income statements.

Six Months Ended June 30, 2014 (Unaudited and before reclassifications and rearrangements)(Millions of Yen)
Amount on
Consolidated
Adjustment
Income(*Note1)Statements(*Note2)

Reportable segments
Advertising

Nonadvertising

Billings to customers

172,327

2,161

174,489－

174,489

Inter-segment billings

9

27

37

(37)

－

172,337

2,189

174,526(37)

174,489

2,388

(260)

2,127

0

2,128

Total

GROSS BILLINGS

Total billings
Segment income (loss)(Note)

1

Adjustment of segment income(loss)is mainly due to the deduction of the transaction between
the segments and unrealized income.

2

Segment income (loss) has been adjusted to equal the operating income on the consolidated
income statements.

― 10 ―

(Material Subsequent Events)
Consolidated 2nd Quarter under Review(Commenced January 1, 2014 and end June 30, 2014)
The Issuance of Equity Compensation Type Stock Options (Stock Options)
It was resolved at the Board of Directors meeting held on August 12, 2014 that stock acquisition rights as
stock compensation-type stock options shall be issued to four (4) executive directors and eighteen (18)
operating officers except those who are directors of the Company for the purpose of further enhancing theirmotivation and morale to contribute to the improvement of business performance and the stock price andmaking their share in the benefits and risks arising from the rise and fall in the stock price, together withthe shareholders, in accordance with Article 236, 238 and 240 of the Corporation Law.
Details are as included in the “Notice Regarding the Issuance of Stock Compensation-type Stock Options(Stock Acquisition Rights) to Directors” dated today and “Notice Regarding the Issuance of Stock
Compensation-type Stock Options (Stock Acquisition Rights) to Operating Officers”.

― 11 ―