Flash Report on the Consolidated Result
for the year Ended February 28, 2014
April 10, 2014
Listed Company Name: Lawson, Inc.
Code No.: 2651
(URL http://www.lawson.co.jp/company/ir/index.html)
Company Representative: Takeshi Niinami, Representative Director, CEOContact: Tomoki Takanishi, Financial & Accounting Office General Manager
Scheduled date for the ordinary general meeting of shareholders: May 27, 2014
Scheduled date for payment of dividend: May 28, 2014
Scheduled date for submission of annual report: May 28, 2014
Supplementary Documents for annual results: Yes
Presentation of annual results: Yes (for institutional investors and analysts)

Tel.: +81-3-5435-2773

1. Consolidated Performance for the 2013 fiscal year (from March 1, 2013, to February 28, 2014)(1) Consolidated operating results
Notes:
1. Amounts below one million yen are truncated.
2. Percentages for total operating revenues, operating income, ordinary income and net income show increase(decrease) from previous year.
Gross operating revenue
Operating income
Ordinary income¥ Million%¥ Million%¥ Million%
2013 fiscal year
485,247(0.5)
68,1262.8
68,8804.5
2012 fiscal year
487,445
1.8
66,246
7.2
65,9266.8

Net income

2013 fiscal year
2012 fiscal year

¥ Million
37,96533,182

Net income Fully diluted Return on
per share profit per share equity

%
14.4
33.3

¥
380.04332.20Notes: Comprehensive income:2013 fiscal year: 39,807 million yen (14.2%)
Equity in net income of affiliates:2013 fiscal year:
393 million yen¥
379.35331.692012 fiscal year:
2012 fiscal year:

%
16.1
15.2

Ratio ofordinary
income tototal assets
%
11.5
11.9

Ratio ofoperatingincome to grossoperatingrevenue
%
14.0
13.6

34,871 million yen (36.2%)
394 million yen(2) Consolidated financial position2013 fiscal year
2012 fiscal year
Notes: Shareholders’ equity:
2013 fiscal year:

Total assets¥ Million
620,992
579,809245,289 million yen

Net assets¥ Million
250,497
230,1812012 fiscal year:

Shareholders’ equity
ratio
%
39.5
39.1
226,475 million yen

Net assets per share¥
2,455.25
2,267.17

(3) Consolidated cash flows
Net cash provided by Net cash provided by Net cash provided by(used in) operating(used in) investing(used in) financing
activities
activities
activities¥ Million¥ Million¥ Million
81,503(47,924)(39,650)
85,188(54,196)(31,979)

2013 fiscal year
2012 fiscal year

Cash and cash
equivalents at end of
period¥ Million
68,75972,766

2. Dividends status

¥
200

Total
dividends
for theyear¥ Million
19,978

110

220

120

240

Annual dividends per share2012 fiscal year
2013 fiscal year
2014 fiscal year
(Forecast)

1Q

1H

3Q

¥
―

¥
100

¥
―

Year-end
dividend
¥
100

―

110

―

―

120

―

Total

%
60.2

Ratio ofdividends toshareholders’ equity%
9.1

21,978

57.9

9.3

―

61.6

―

Payoutratio

3. Forecast Consolidated Performance for 2014 fiscal year（from March 1, 2014 to February 28, 2015）
Gross operating revenue
Operating income
Ordinary income
Net income¥ Million%¥ Million%¥ Million%¥ Million%
2014 1H
252,000
1.5
37,900
6.4
37,2004.7
19,4001.8(accumulated)
498,000
2.6
75,00010.1
73,9007.3
38,9002.5
2014 fiscal year
References:
Forecast net profit per share for the 2014 half year:
194.18 yen
Forecast net profit per share for the 2014 fiscal year: 389.37 yen
4. Others(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting in revised
scope of consolidation): None
Added: None
Excluded:None(2) Changes in accounting policies, changes in accounting estimates, retrospective restatements
1. Changes of accounting policies associated with revision in accounting standards: Yes
2. Other changes: None
3. Changes in accounting estimates: Yes
4. Retrospective restatements: None
(3) Number of issued shares:i) The number of the stocks issued in the end of term
February, 2014: 100,300,000
February, 2013:ii) The number of treasury shares in the end of term
February, 2014:
395,953
February, 2013:iii) Average number of shares during the term
February, 2014:
99,898,281
February, 2013:

100,300,000
406,853
99,887,245

Note: Implementation of audit proceduresThis Flash Report on the Consolidated Results is exempt from audit procedures under the Financial Instruments andExchange Act. As of the time of disclosure of this report, audit procedures for the financial statements are incomplete.
Note: Remarks on appropriate use of financial performance forecasts and other special notes
Financial performance forecasts and other forward-looking statements included this report are based on currently
available information and certain preconditions deemed to be reasonable, and do not in any way guarantee that they
will be achieved. Actual financial and other performances may differ materially from the forward-looking statements
owing to various factors. For details concerning preconditions for and appropriate use of our financial forecasts,
please see “Analysis of Operating Results and Financial Position; Outlook for Fiscal 2014” on page 6 of the attachedmaterial.

Table of Contents
1. Analysis of Operating Results and Financial Position·············································································································(1) Analysis of Consolidated Operating Results ·····················································································································(2) Profit and Loss···································································································································································(3) Outlook for Fiscal 2013 ·····················································································································································(4) Analysis of Financial Position ···········································································································································
2. Management Policy·································································································································································(1) Basic Management Policy ·················································································································································(2) Performance Indicators (Target) ········································································································································(3) Medium-and-Long-Term Management Strategies·············································································································(4) Priority Issues of the Group ···············································································································································(5) Other Important Managerial Matters ·································································································································
3. Consolidated Financial Statements··········································································································································(1) Consolidated Balance Sheets (Unaudited) ·······················································································································(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)·····················
Consolidated Statements of Income (Unaudited) ············································································································
Consolidated Statements of Comprehensive Income (Unaudited) ····················································································(3) Consolidated Statements of Changes in Net Assets (Unaudited)·······················································································(4) Consolidated Statements of Cash Flows (Unaudited)········································································································(5) Notes Concerning Going Concern Assumption·················································································································(6) Basis of Presenting the Consolidated Financial Statements·······························································································(7) Accounting Standards, etc. that are not applied·················································································································(8) Changes in presentation·····················································································································································(9) Notes to Consolidated Financial Statements······················································································································(Notes to the Consolidated Balance Sheets) ····················································································································(Notes to Consolidated Statements of Income) ···············································································································(Notes to the Consolidated Statements of Comprehensive Income)················································································(Notes to the Consolidated Statements of Changes in Net Assets) ··················································································(Notes to the Consolidated Statements of Cash Flows)···································································································(Notes to Lease Contracts) ··············································································································································(Notes to Business Combinations, etc.)···························································································································(Segment Information) ····················································································································································(Per Share Information)···················································································································································(Significant Subsequent Events)······································································································································

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1. Analysis of Operating Results and Financial Position(1) Analysis of Consolidated Operating Results

During the consolidated fiscal year under review, or fiscal 2013 ended February 28, 2014, the Lawson
Group (hereinafter, the “Group”) implemented measures to reinforce its social infrastructure function thatprovides essential items and services at the local level with the aim of realizing the Group’s corporate
philosophy of “Creating Happiness and Harmony in our Communities.” Based on its analysis of purchasedata retrieved from the multi-partner loyalty program, Ponta, the Group focused on customer relationshipmanagement (CRM) and supply chain management (SCM) in order to offer a merchandise assortmentthat meets the specific needs of customers in each neighborhood.
Operating results by business segment were as follows:(Domestic Convenience Store Business)[Merchandising Strategies]
On the merchandise front, we strengthened our evening and nighttime merchandise assortment
throughout the year by expanding our lineup of ready-made meals, including carbohydrate-based foods
such as lunch boxes, rice balls and sandwiches, and over-the-counter fast foods, in order to enhancesatisfaction of customers visiting our stores, especially in and after evening hours.
In our mainstay rice category, our Furusato-no-umai! line offering lunch boxes and rice balls wastremendously popular for its high-value-added products using ingredients specific to different regions
across Japan. We also strengthened our merchandise assortment of fresh foods centered on pre-cut
vegetables and processed foods that tend to be purchased in combination with fresh foods.
In the over-the-counter fast foods category, new products such as “Genkotsumenchi” (fried minced meatballs) and “Ohgon-Chicken” (tender and juicy fried chicken with a golden crispy crust) were highly
received, achieving robust sales. In addition, we expanded the number of stores equipped with MACHI
café, an in-store café first launched in fiscal 2011 offering freshly ground and brewed coffee, to 7,776 asof the end of the fiscal year under review, successfully increasing profitability while deepening
communication with customers and improving customer service. We have also steadily installed anin-store kitchen facility Machikado Chubo in more stores, aiming to offer freshly prepared dishes such as“Katsu sandwiches.” The number of stores with Machikado Chubo has reached 2,076 as of the end of the
fiscal year under review, and they are becoming increasingly popular among customers. In the dessert
category, we launched pancakes and waffle-cone ice cream products under our UCHI café SWEETS
brand, as well as the Frozen Sweets series frozen cupped dessert served by thawing in the microwave
oven, all of which were extremely popular.
In May 2013, we strengthened product development with the aim of not only responding to customers’
health concerns, but also promoting health. Of note, bran1 bread, a low-carbohydrate product we began to
fully promote this fiscal year ended February 2014, has been well-received by many customers who arehealth conscious or need to limit their intake of carbohydrates. We have also expanded our merchandise
assortment of pre-cut vegetables made with vegetables produced based on the Nakashima Farming
Method2, one of the most prominent mineral farming methods in Japan. By thus highlighting
health-consciousness in our products and in-store presentation, we have boosted Lawson’s corporate
brand image as a health-promoting convenience store. Furthermore, we have been implementing rigorous
initiatives to manage the health condition of our employees since last year as part of our corporate drive
to promote good health. Our focus on health will be further strengthened as an approach adopted
throughout the entire Lawson chain including franchised stores.
As of the end of February 2014, we are now operating 15 Lawson Farms. The farms were establishedwith the aim of supplying the Group’s stores with fruits and vegetables as fresh food products on a stablebasis as well as providing produce for use as ingredients in LAWSON’s original products. In sales
promotions, we implemented a point-reward campaign targeting Ponta members to encourage purchasing
with the aim of increasing the rate of repeat visits.
Total Ponta members reached 60 million as of the end of February 2014, including members that joined
through other participating companies. The sales ratio of Ponta members reached approximately 49%.
*1

Bran: The external layer of wheat. Contains abundant nutrition including dietary fiber, iron, calcium,magnesium, zinc, and copper. The food is noted for its low level of carbohydrate.
*2
Nakashima Farming Method: A cultivation method that supplies appropriate nutrients in accordancewith the growth status of crops and the nutritional balance of the soil (mineral balance). Uses techniques
for developing healthy soil based on diagnosis of soil conditions in conjunction with techniques to control
2the growth process of crops to maintain healthy growth. In August 2013, Lawson, Inc. acquired a 70%
stake in Eisai Co., Ltd. (currently, Seikaken Inc.), which owns soil condition diagnosis techniques andmanufactures and supplies soil fertilizers that optimize mineral balance in soil and crops.
[Store Operations]
In store operations, we continued to reinforce adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic
items with high demand; and (3) keeping our stores and communities clean, in addition to expanding ourlineup of health-conscious products that are safe, reliable, and delicious. Notably, with the increasing
number of stores equipped with MACHI café, store employees are more capable of offering products andservices in a caring manner through better communication with customers. We strived to further improve
the quality of stores by clarifying the customer service goals to be pursued by store employees andfostering leaders among them.
In store operations, by using the store-by-store analysis reports formulated based on Ponta members’ data,
which we started distributing to franchised stores in March, we encouraged sharing of initiatives andknowledge among all stores and continued striving to achieve merchandise assortment and store features
tailored to each store.
Furthermore, we have also continued implementing measures to streamline our order placement
procedures and reduce lost opportunities. Going forward, we will further push forward with our efforts toachieve merchandise assortment that suits customers visiting each store by leveraging Ponta members’
data and implementing shelf allocation tailored to the locational characteristics of each store.
[Store Development and Store Format Strategy]
In opening new stores, the Group prioritized profitability based on its proprietary return-on-investment(ROI)-focused store development standard. As a result, the total number of stores operated by the Groupreached 11,337 as of the end of the fiscal year under review. With regard to store format strategy, in
addition to LAWSON and NATURAL LAWSON, we opened our first LAWSON MART store in
February 2014. Developed based on LAWSON STORE 100, LAWSON MART is a convenience store
tailored more closely to each locality. We will make maximum use of these store formats and promote astore format strategy that responds specifically to the needs of customers in each neighborhood.
As of February 1, 2014, Lawson, Inc. (the “Company”) acquired Ninety-nine Plus, Inc., along with its
store-related assets including its franchise agreements with LAWSON STORE 100 fresh foods
convenience stores. As a result, the Group centralized all Lawson chain store administrative functions,
including store asset management and franchise promotion, thus enabling it to further advance its
efficient area-targeted strategies tailored more closely to the needs of local customers. As of the same day,the operational functions of Ninety-nine Plus, Inc., including store management and product development,
were succeeded by Lawson Mart, Inc. based on an absorption-type company split. The functions thatwere succeeded will be further enhanced going forward.
In an effort to reinforce stores that cater to healthcare needs, we increased the number of Pharmacy
LAWSON (pharmaceutical convenience stores), a store format that integrates drug-dispensing
pharmacies operated by Qol Co., Ltd. with LAWSON and NATURAL LAWSON, to 36, and the numberof stores offering over-the-counter pharmaceuticals to 87 as of the end of February 2014.
In May 2013, Lawson, Inc. established Lawson Minamikyushu, Inc. with the aim of reinforcing store
operations in Kagoshima Prefecture. The number of Lawson chain stores operated in Kagoshima
Prefecture by Lawson Minamikyushu reached 82 as of the end of February 2014. Lawson Kumamoto, Inc.
was also established in May 2013, with the number of Lawson chain stores operated in Kumamoto
Prefecture by the company climbing to 24 as of the end of February 2014. Lawson Kumamoto, Inc. isscheduled to be merged into Lawson, Inc., effective March 1, 2014. The number of Lawson chain storesoperated in Okinawa Prefecture by Lawson Okinawa, Inc. as of the end of February 2014 totaled 163.

3

[Change in the Total Number of Stores]
Total stores as of

Change during

Total stores as ofFebruary 28, 2013

fiscal year

February 28, 2014

LAWSON

9,642

388

10,030NATURAL LAWSON

110

(5)

105

LAWSONMART／

1,224

(22)

1,202

10,976361

11,337LAWSON STORE100
Total[Number of LAWSON stores by prefecture (February 28, 2014)]
Prefecture
Hokkaido

Numberof stores
595

AomoriPrefecture
Tokyo

Numberof stores
1,552

Prefecture
Nara

Numberof stores
99

199

Kanagawa

826

Wakayama

114

Akita

179

Shizuoka

213

Osaka

1,006

Iwate

160

Yamanashi

101

Hyogo

611

Miyagi215

Nagano149

Okayama

Yamagata

69

Aichi

535

Fukushima

93

Gifu

Niigata122

Tochigi

Numberof stores
411

Prefecture
Fukuoka
Saga

62

Nagasaki

100

Oita

157

138

Kumamoto

108

Hiroshima

167

Miyazaki

95

141

Yamaguchi

118

Kagoshima

120

Mie

106

Tottori

105

Total(domestic)

134

Ishikawa

100

Shimane

110

Gunma

89

Toyama182

Kagawa113

Saitama

488

Fukui

104

Ehime

176

Chiba

451

Kyoto

268

Tokushima

115

Ibaraki

134

Shiga

140

Kochi

67

11,337[Net Sales at All LAWSON Stores in the Convenience Store Business]
Fiscal period

Product group
Processed foods
Fast foods
Daily
delivered foods
Nonfood products
Total

Previous fiscal year
March 1, 2012
to February 28, 2013
Sales
Percentage of
total (%)
(Millions of yen)
1,063,120
55.8

Current fiscal year
March 1, 2013
to February 28, 2014
Sales
Percentage of
total (%)
(Millions of yen)
1,060,455
54.7

YOY percentagechange(%)
99.7

372,706

19.6

408,672

21.1

109.6

271,92014.3

275,437

14.2

101.3

196,506

10.3

192,726

10.0

98.1

1,904,254

100.0

1,937,292

100.0

101.7

(Other Businesses)
In addition to domestic convenience store business, the Group is involved in Overseas business,
Entertainment & Home Convenience business, Financial services-related business, and other businesses.
With regards to Overseas business, the Group’s operating companies, shown in the following table,
opened stores in Shanghai, Chongqing, Dalian, and Beijing in the People’s Republic of China.
In the People’s Republic of China, the Group’s operating companies shown on the following table haveopened stores in Shanghai, Chongqing, Dalian, and Beijing. In May 2013, we established Beijing
Lawson, Inc. which opened two stores in August. In Indonesia, PT MIDI UTAMA INDONESIA Tbk, in
4which Lawson Asia Pacific Holdings Ptd. Ltd. (hereinafter, “LAP”), our Asian umbrella subsidiary in
Singapore, holds a 30% stake, operates Lawson stores.
In Thailand, Saha Lawson Co., Ltd. (hereinafter, “Saha Lawson”), a joint venture between LAP and the
SAHA Group, Thailand’s leading distributor of consumer goods, operates stores under the store brand of
LAWSON108.
[Distribution of LAWSON Brand Stores Overseas by Region]
CompanyCountry/region

Number of stores(As of February
28, 2013)
305

Changeduring fiscal
year
(16)

Number of stores(As of February
28, 2014)
289

Shanghai Hualian Lawson, Inc.

Shanghai, China

Chongqing Lawson, Inc.

Chongqing, China

49

28

77

Dalian Lawson, Inc.

Dalian, China

8

10

18

Beijing Lawson, Inc.

Beijing, China

-

5

5

Saha Lawson Co., Ltd.

Bangkok, Thailand

-

29

29

PT MIDI UTAMA INDONESIA Tbk

Capital City ofJakarta and its
suburbs, Indonesia
Hawaii, U.S.A.

83

(22)

61

2

2

4

447

36

483

Lawson USA Hawaii, Inc.
Total

In the Group’s Entertainment & Home Convenience business, Lawson HMV Entertainment, Inc. posted
a solid performance led by an increase in ticket sales of concerts, events and leisure activities. Revenue
from the entire Group’s ticketing services continued to secure top position in the ticketing industry. The
number of HMV stores that sell music CDs and DVDs totaled 50 as of the end of February 2014. The
Group also promoted its regular food delivery service through Smart Kitchen, Inc., and undertook
collaborative initiatives with Daichi Wo Mamoru Kai, Co., Ltd. and Radishbo-ya Co., Ltd. throughcapital/business alliances.
Lawson ATM Networks, Inc., which operates a Financial services-related business, posted a solid
performance owing to an increase in the number of ATMs installed, along with a rise in the number oftransactions. We started providing financial services for 7 new banks as their business partner, bringing
the total number of our financial institution partners to 65 nationwide, including online banks, and thenumber of ATMs installed nationwide to 10,118 (up 446 year on year) as of the end of February 2014.
Environmental and Social Contribution Activities

The Company’s Social Contribution Division promoted environmental protection and social
contribution activities, working together with franchise store owners and Group employees.
In response to the launch of the Feed-in Tariff Scheme for Renewable Energy, a measure taken by thegovernment against global warming, we started introducing solar power generation systems at our storesin October 2012 as our own initiative to tackle domestic energy issues. The systems have been installed
at a total of 1,581 stores as of the end of February 2014. Also, in February 2014, we opened a
next-generation pilot convenience store in Moriguchi-shi, Osaka, jointly with Panasonic Corporation. By
harnessing Panasonic’s technologies, the store aims to reduce its electricity consumption by 50% fromthe fiscal 2010 level, provide convenient services based on ICT, and propose health-oriented products
and services. In addition, the Group introduced refrigerator/freezer systems using CO2 refrigerant, which
has high heat transfer efficiency and uses less electricity, at 136 stores by the end of February 2014. As aresult, these stores not only consumed less electricity, but also achieved a 50% reduction in annual CO2
emissions per store compared with stores that adopted conventional systems using alternatives tochlorofluorocarbons (CFCs). In recognition of these energy-saving and energy-generating initiatives that
contribute to reducing CO2 emissions, the Group received Japan’s 2013 Minister of the Environment
Award for the Promotion of Measures to Cope with Global Warming, its second consecutive award. We
will strive to make improvements by verifying the outcome at these stores, and apply our accumulated
5

expertise and knowhow to Lawson stores nationwide. Furthermore, as part of our initiative to reduce
environmental impact on the entire supply chain, we started calculating CO2 emissions at each stage ofthe supply chain ranging from procurement of ingredients to disposal of merchandise. We will endeavor
to save energy and resources not only at LAWSON stores but also throughout the entire supply chain.
In our efforts to undertake social contribution activities at our stores, we have been hosting the
LAWSON Green Fund, a donation project active since 1992; the Support for Dreams Fund, ascholarship program for students in three Tohoku prefectures that were affected by the 2011 Great East
Japan Earthquake; and the TOMODACHI Fund, which aims to support education of students in Tohoku
mainly through a US-Japan exchange endeavor. For all these initiatives, we launched a group-wide
fund-raising activity named Happiness in Communities in June 2013.
Starting from the fiscal year under review, the Group has combined its Annual Report and Corporate
Citizenship Report to issue the Lawson Integrated Report 2013 in September 2013, which incorporates
both financial and non-financial information for all stakeholders.
As a member of society, the Group will continue to make unified group-wide efforts to implement
initiatives that aim to address social and environmental issues together with its customers and business
partners.
(2) Profit and Loss
In terms of operating results for the fiscal year under review, gross operating revenue decreased year on
year by ¥2,197 million to ¥485,247 million (down 0.5%). This was attributable to a decrease of ¥24,782
million in net sales despite an increase of ¥22,584 million in operating revenue, resulting from anincrease in the number of franchised stores and a decrease in the number of Company-operated stores.
Although cost of sales fell ¥18,247 million owing to a decrease in the number of Company-operated
stores, selling, general and administrative expenses climbed ¥14,169 million to ¥290,483 million (up5.1%) due to increases in rents and depreciation. As a result, operating income grew ¥1,880 million to¥68,126 million (up 2.8%), ordinary income rose ¥2,954 million to ¥68,880 million (up 4.5%), and net
income increased ¥4,782 million to ¥37,965 million (up 14.4%).
(3) Outlook for Fiscal 2014
Outlook for the next fiscal year

Total operating revenues
Operating income
Ordinary income
Net income

2014 2Q (accumulated)¥Million
YoY, %
252,000
101.5
37,900106.4
37,200104.7
19,400101.8

2014 fiscal year
¥Million
YoY, %
498,000
102.6
75,000110.1
73,900107.3
38,900102.5

Change in depreciation method of Property, store and equipment.
For the depreciation method for property, store and equipment (exclude lease assets), Lawson, Inc. andits domestic consolidated subsidiaries adopt straight-line method instead of declining-balance methodfrom next consolidated fiscal year. Based on this change, operating income and ordinary income are
expected to increase by 2,300 million yen during the first half and by 5,000 million yen for the whole ofnext consolidated fiscal year respectively.
(4) Analysis of Financial Position(i) Total assets, Total liabilities, Total net assets analysis
Total assets increased by ¥41,183 million year on year to ¥620,992 million, mainly due to a ¥24,297
million increase in property, plant and equipment.
Total liabilities stood at ¥370,494 million, a year-on-year increase of ¥20,867 million, mainly owing to a
¥16,556 million rise in short- and long-term lease obligations.
Net assets increased by ¥20,315 million year on year to ¥250,497 million. This was primarily due to anincrease of ¥16,987 million in retained earnings.
(ii) Cash flow analysis
Net cash from operating activities amounted to ¥81,503 million, ¥3,685 million lower year on
year, due to an increase of ¥12,473 million in deposits received and a decrease of ¥5,715 million inaccounts receivable—other.
6

Investing activities used net cash totaling ¥47,924 million, ¥6,272 million higher year on year, mainly due
to a ¥3,699 million increase in proceeds from withdrawal of time deposits.
Financing activities used net cash totaling ¥39,650 million, ¥7,670 million higher year on year, mainlyreflecting a ¥3,708 million increase in repayments of lease obligations.
(Reference) Trends in cash flow indicators
Fiscal 2011
Shareholders’ equity ratio (%)
Shareholders’ equity ratio on
market value basis (%)
Interest-bearing debt/cash flow
ratio (years)
Interest coverage ratio (times)

Fiscal 2012

Fiscal 2013

39.7

39.1

39.5

78.3

118.7

113.6

0.6

0.7

1.0

76.9

69.6

63.2

(Note) Shareholders’ equity ratio: Shareholders’ equity/Total assets
Shareholders’ equity ratio on market value basis: Market capitalization/Total assets
Interest-bearing debt/cash flow ratio: Interest-bearing debts/Cash flow provided by operating activities
Interest coverage ratio: Cash flow provided by operating activities/Interest expense
1. All indices are calculated using consolidated financial figures.
2. Market capitalization is calculated as closing share price at the end of period x the number of shares
outstanding at the end of period (excluding treasury stock)
3. The figure for net cash provided by operating activities in the consolidated statements of cash flows isused as cash flow provided by operating activities. Interest-bearing debts refer to the sum for all
liabilities in the consolidated balance sheets on which interest is paid. The figure for interest paid in the
consolidated statements of cash flows is used as interest expense.

7

2. Management Policy(1) Basic Management Policy(i) Corporate Philosophy and Code of Conduct
The Group’s corporate philosophy of “Creating Happiness and Harmony in Our Communities” reflects its
belief that its social significance derives from relationships with all its stakeholders. Under this concept,
the Group has established a Code of Conduct based on three principles governing its day-to-day corporate
activities:
1) Act with utmost consideration for others,
2) Challenges with innovative ideas and actions, and
3) Have a strong will to attain the objectives.
(ii) Vision
The Group is taking various steps to realize “Happiness and Harmony in Our Communities.” Central tothis effort is the idea of serving as the “Neighborhood Hot Station” (Machi No Hotto Station in Japanese),a nickname for the Group’s stores, which embodies the Group’s vision of making the stores a place where
customers can relax (hotto suru in Japanese) by offering “hot” new merchandise, information, andservices that take into account local preferences. Furthermore, the Group also pursues its vision ofhelping customers lead healthy lifestyles through its products and services, as well as enabling all
franchise store owners and Group employees to continue their business activities while maintaining theirhealth.
(2) Performance Indicators (Target)
From the perspective of medium-and-long-term management strategy, the Group believes that investingin businesses with high return on investment (ROI) will maximize efficiency in the use of shareholders’equity, which will in turn enhance shareholder value. The Group regards return on equity (ROE) as thebest measure of optimal utilization of shareholders’ equity. Accordingly, the Group is targeting an ROEof 20% on a consolidated basis over the medium term.
(3) Medium-and-Long-Term Management Strategies
The business environment facing convenience stores is defined by several factors, including: population
decline arising from Japan’s declining birthrate and aging society; deflation; and stronger environmental
awareness. Never before has the convenience store industry experienced such an environment. Against
this backdrop, the Group recognizes the following as priority issues ahead. The Group believes that its
core business strategies must address these priority issues.
(4) Priority Issues of the GroupThe Group is promoting the following management measures with the aim of realizing its corporate
philosophy of “Creating Happiness and Harmony in Our Communities.”(i) Strengthen measures to promote healthIn response to changes in social structure brought about by an aging population and declining birthrates, the Group will aim to offer convenience stores that support the lives of customers by expanding
their assortment of health-related products and sales of pharmaceuticals.
(ii) Reinforce offerings of fresh foods at stores located in residential areas
The need to enjoy home-cooked meals is high among customers in the neighborhoods of stores inresidential areas. To meet such needs, the Group will focus on creating stores that offer an extensive
assortment of fruits and vegetables and other fresh foods packaged in small portions, daily delivered
foods, and frozen foods. We will strive to expand our senior and homemaker customer bases throughthis initiative.
(iii) Develop overseas business
The Group will offer customers the luxury of convenience store shopping from the comfort of theirown homes. To start with, we will establish a full-fledged home delivery network based on our
Smart Kitchen delivery service to meet the needs of busy homemakers and elderly people.
(iv) Provide home delivery service to offer customers more convenience
The Group will offer customers the luxury of convenience store shopping from the comfort of theirown homes by expanding its home convenience service including home delivery and online shopping.

8

(v) Promote internal control systems and address operating risks
In order to ensure business continuity, it is imperative to foster the Group’s internal control in its entirety
and address operating risks. In addition, we believe that taking a proactive approach to corporate
governance will lead to enhancing corporate value. We will therefore continue to focus on promotinginternal control and addressing operating risks.
(5) Other Important Managerial Matters(i) Improving New Merchandise Development Capabilities
While strengthening its ability to develop safe and reliable original merchandise, the Group willproactively develop merchandise suited to regional preferences by focusing on such aspects as taste andprice. We will also rebuild our value chain spanning from merchandise development to procurement ofingredients, production, and logistics and leverage the Ponta card data to best effect. In this process, theGroup aims to raise its original added value and develop merchandise that garners a strong customer
response.
(ii) Improving Store Operation Capabilities
With the aim of creating stores tailored to local customers in each neighborhood, we will promotemerchandise assortments from the customers’ perspective by continuing to utilize Ponta card data.
In addition, by increasing our use of the core IT system, we will strive to improve ordering precision inorder to reduce sales opportunity losses and product disposal losses(iii) Reinforcing Store-Development Capabilities
With a view to creating stores that achieve high ROI, we will prioritize customer convenience andprofitability for both franchise store owners and headquarters in opening new stores by following theGroup’s proprietary store development standard focused on ROI.
(iv) Tailoring Store Formats to Suit Local Characteristics
Conscious that market needs are becoming increasingly complex and diversified, the Group provides
store formats that offer retail spaces and merchandise assortments to suit the location. As for the Group’s
store development strategy, regular LAWSON stores will be opened to target customers seeking new
merchandise, famous brand goods, and convenient services; and NATURAL LAWSON stores will be
opened to target customers seeking beauty, health, and amenity. LAWSON STORE 100 stores will be
opened to target customers seeking perishables packaged in small quantities and easy-to-understand,standardized prices.
(v) Enhancing Convenience by Opening Stores in Special Locations and Expanding Financial Services
Through tie-ups with other corporations, the Group will open stores in special locations (captivecommercial spaces providing high profitability due to the absence of competing stores). In its financial
services, the Group will aim to increase convenience for customers by expanding the Ponta card
programs and offering various services via the “Loppi” multimedia terminals and in-store ATMs. In
addition, we are striving to enhance convenience by expanding our infrastructure for electronic payment(e.g., Suica).
(vi) Reviewing the Franchise Package to Promote Co-existence and Co-prosperity for Franchise Store
Owners and Headquarters
In our endeavor to address changes occurring in the retail industry, we will promote co-existence and coprosperity for both franchise store owners and headquarters by increasing earnings on a stable andongoing basis through the Group’s proprietary initiatives, such as expanding the customer base andreducing opportunity loss, and by revising franchise agreements.
(vii) Accelerating Business Reform through Capital and Business Alliances
The Group continues to effectively respond to the rapidly changing social environment and the needs ofcustomers through capital and business alliances that enable it to improve profitability for both franchise
store owners and the Group by seeking maximum benefit and efficiency from the alliances.

93. Consolidated Financial Statements(1) Consolidated Balance Sheets (Unaudited)
As of February 28, 2013 and February 28, 2014
(Millions of yen)
AssetsCurrent assets:
Cash and deposits
Accounts receivable—due from franchised stores
Merchandise
Prepaid expenses
Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful accounts
Total
Noncurrent assets:
Property and store equipment:
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Vehicles, tools, furniture and fixtures
Accumulated depreciation
Vehicles, tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Subtotal
Intangible assets:
Software
Software in progress
Goodwill
Other
Subtotal
Investments and other assets:
Investment securities
Long-term loans receivable
Long-term prepaid expenses
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Subtotal
Total
Total assets

10

February 28, 2013

February 28, 2014

84,77025,3748,963
8,793
46,008
4,656
3,011(1,281)
180,296

76,76332,186
9,596
10,71654,193
4,481
10,240(2,393)
195,784

242,934(124,562)
118,372
67,399(52,637)
14,761
8,295
96,251(30,452)
65,7991,910
209,138

265,952(137,117)
128,865
65,944(53,861)
12,083
8,773
126,056(45,289)
80,767
2,977
233,436

22,255
1,659
9,683
491
34,08914,902
3,360
9,719
497
28,48010,09834,5809,130
86,10916,215
1,368(1,217)

12,82133,7278,260
86,15021,6271,669(965)

156,285
399,513579,809163,291425,208
620,992

Consolidated Balance Sheets (Unaudited)—Continued(Millions of yen)
Liabilities
Current liabilities
Accounts payable—trade
Accounts payable—trade for franchised stores
Accounts payable—due to franchised stores
Short-term loans payable
Lease obligations
Accounts payable—other
Income taxes payable
Deposits received
Provision for bonuses
Provision for point card certificates
Other
Total
Noncurrent liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for retirement benefits to executive officers and auditors
Long-term guarantee deposited
Asset retirement obligations
Other
Total
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

11

February 28, 2013

February 28, 2014

11,16976,0181,403
1,431
14,48926,105
14,47487,529
2,544
215
4,412
239,794

9,726
79,444
1,405
680
16,58529,344
14,33087,585
2,372
132
5,100
246,706

148
47,207
9,898
332
34,804
16,682758
109,833
349,627－
61,666
11,082408
32,252
17,874
502
123,788
370,494

58,50647,718
121,154(1,593)
225,785

58,50647,741138,141(1,556)
242,832

78
(567)
1,179
690
427
3,279
230,181579,809

(93)
(567)
3,118
2,456
557
4,650
250,497
620,992

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)
Consolidated Statements of Income (Unaudited)
For the fiscal year ended February 28, 2013 and February 28, 2014
(Millions of yen)
Gross operating revenue
Net sales
Cost of sales
Gross profit
Operating revenue
Income from franchised stores
Other
Operating revenue
Operating gross profit
Selling, general and administrative expenses
Advertising expenses
Supplies expenses
Executive officers and auditors' compensations
Employees' salaries and allowances
Employees' bonuses
Provision for bonuses
Retirement benefit expenses
Provision for retirement benefits to executive officers and auditors
Legal and employee benefits expenses
Provision of allowance for doubtful accounts
Traveling and transportation expenses
Utilities expenses
Taxes and dues
Rents
Repair expenses
Rent expenses
Depreciation
Amortization of goodwill
Other
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Compensation income
Equity in earnings of affiliates
Other
Non-operating income
Non-operating expenses
Interest expense
Loss on cancel of lease contracts
Other
Non-operating expenses
Ordinary income

12

February 28, 2013
487,445
192,942
144,885
48,056

February 28, 2014
485,247
168,159
126,637
41,521230,00264,500294,503
342,560

242,078
75,009317,088358,610

16,6074,740
448
45,658
2,250
2,544
2,078
86
6,921
(14)
2,319
3,794
2,977
84,578
6,829
5,913
34,0301,056
53,493276,313
66,246

17,734
4,054
578
44,279
2,339
2,367
2,192
89
7,142
(114)
2,559
3,879
3,286
89,4847,907
4,493
37,871927
59,409290,483
68,126

756
161
394
898
2,211

860
794
393
1,147
3,195

1,231
534
765
2,531
65,926

1,294
570
577
2,442
68,880Consolidated Statements of Income (Unaudited)—Continued(Millions of yen)February 28, 2013
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Gain on bargain purchase
Compensation income
Other
Extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Impairment loss
Other
Extraordinary loss
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Income taxes
Income before minority interests
Minority interests in income
Net income

13

February 28, 2014

0
145
153
71
10
381

51
403
－
－
11
466

1,641
2,929
2,146
6,717
59,58925,345748
26,09433,494311
33,182

2,648
5,744
1,168
9,560
59,78526,758(5,136)
21,622
38,163
197
37,965

Consolidated Statements of Comprehensive Income (Unaudited)
For the fiscal year ended February 28, 2013 and February 28, 2014
(Millions of yen)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of associates accounted forusing equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toowners of the parent
minority interests

14

February 28, 201333,494

February 28, 2014
38,163

89
1,926
(639)

(171)
2,655
(839)

1,377
34,871

1,643
39,80734,553318

39,73274

(3) Consolidated Statements of Changes in Net Assets
Consolidated fiscal year ended February 2013 (From March 1, 2012 to February 28, 2013)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders' equity

58,50647,707

107,249(1,627)

211,835

Balance at beginning of current period
Changes of items during period
Dividends from surplus(19,278)(19,278)

Net income

33,182

33,182

Purchase of treasury stock

(7)

(7)

Disposal of treasury stock

0

0

0

Exercise of subscription rights toshares(Issuance of treasury shares)

11

41

52

Net changes of items other thanshareholders' equity－

11

13,90433

13,95058,50647,718

121,154(1,593)

225,785

Total changes of items during period
Balance at end of current period(Millions of yen)
Accumulated other comprehensive income

Balance at beginning of current
periodValuationdifference on
available-forsale securities

Revaluation
reserve for land

(11)

(567)

Foreign currency Total accumulatedtranslation
other comprehensive
adjustment
income
(101)

(680)

Subscription
Minority Total net
rights tointerests
assetsshares442

3,064

214,662

Changes of items during period
Dividends from surplus(19,278)

Net income

33,182

Purchase of treasury stock(7)

Disposal of treasury stock0

Exercise of subscription rights toshares(Issuance of treasury shares)

52

Net changes of items other thanshareholders' equity

89

Total changes of items during
period89

Balance at end of current period

78

1,280

1,370

(15)

214

1,569

－

1,280

1,370

(15)

214

15,519

(567)

1,179

690

427

3,279

230,18115

Consolidated fiscal year ended February 2014 (From March 1, 2013 to February 28, 2014)(Millions of yen)
Shareholders’ equity

Balance at beginning of current period

Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders' equity

58,50647,718

121,154(1,593)

225,785

Changes of items during period
Dividends from surplus(20,978)(20,978)

Net income

37,96537,965Purchase of treasury stock

(11)

(11)

Disposal of treasury stock

0

0

0

Exercise of subscription rights to shares(Issuance of treasury shares)

22

48

70

Net changes of items other thanshareholders' equity－

22

16,98737

17,04758,50647,741138,141(1,556)

242,832

Total changes of items during period
Balance at end of current period(Millions of yen)
Accumulated other comprehensive income
Subscription
Valuation
Minority Total net
Foreign currency Total accumulated
rights todifference on
Revaluationinterests
assetstranslation
other comprehensive
sharesavailable-for-sale reserve for land
adjustment
incomesecurities
Balance at beginning of current
period

78

(567)

1,179

690

427

3,279

230,181

Changes of items during period
Dividends from surplus(20,978)

Net income

37,965Purchase of treasury stock(11)

Disposal of treasury stock0

Exercise of subscription rights toshares(Issuance of treasury shares)

70

Net changes of items other thanshareholders' equity(171)

Total changes of items during
period(171)

Balance at end of current period

(93)

1,938

1,766

130

1,371

3,268

－

1,938

1,766

130

1,371

20,315

(567)

3,118

2,456

557

4,650

250,49716

(4) Consolidated Statements of Cash Flows (Unaudited)
For the fiscal year ended February 28, 2013 and February 28, 2014
(Millions of yen)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Increase (decrease) in provision for retirement benefits
Increase (decrease) in allowance for doubtful accounts
Equity in (earnings) losses of affiliates
Interest income
Interest expenses
Loss (gain) on sales of investment securities
Loss on retirement of noncurrent assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Decrease (increase) in accounts receivable-other
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in deposits received
Increase (decrease) in guarantee deposits received
Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Decrease (increase) in short-term loans receivable
Decrease (increase)in long-term loans receivable, net
Proceeds from purchase of investments in subsidiaries resulting inchange in scope of consolidation
Purchase of stocks of subsidiaries and affiliates
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Other
Net cash used in investing activities

17

February 28, 2013

February 28, 2014

59,58943,886
2,929
1,153(13,510)
(8)
(756)
1,231
(145)
1,641
(5,781)(861)(13,322)(1,203)8,592
1,109
12,524(935)
15,576
111,888750(1,224)(26,224)
85,18859,78547,888
5,744
1,184
564
(119)
(860)
1,294
(403)
2,648
(6,648)(211)(7,607)
65
2,907
2,595
50
(2,558)2,570
108,889860(1,290)(26,956)
81,503(23,900)
22,300(37)(2,441)480(22,000)
26,000(4,145)(1,999)1,733(1,327)(37,263)(5,658)(2,705)(3,642)(54,196)(4,051)(34,857)(5,499)(2,373)(730)(47,924)

Consolidated Statements of Cash Flows (Unaudited)—Continued(Millions of yen)February 28, 2013

February 28, 2014

Net cash provided by (used in) financing activities
Repayments of lease obligations
Cash dividends paid
Other
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(13,769)(19,278)
1,067(31,979)
83(903)
73,670(17,477)(20,978)(1,194)(39,650)
2,064(4,006)
72,766

Cash and cash equivalents at end of period

72,76668,75918

(5) Notes Concerning Going Concern Assumption
None(6) Basis of Presenting the Consolidated Financial Statements
1. Scope of consolidation(i) Consolidated subsidiaries: 12(Japan)Lawson HMV Entertainment, Inc.
Lawson ATM Networks, Inc.
BestPractice Inc.
Smart Kitchen, Inc.
SCI, Inc.
Lawson Mart, Inc(Overseas)
Chongqing Lawson, Inc.
Shanghai Hualian Lawson, Inc.
Dalian Lawson, Inc.
Lawson (China) Holdings, Inc.
Lawson Asia Pacific Holdings Pte. Ltd.
Saha Lawson, Co., Ltd.
Among companies mentioned above, Lawson Mart, Inc., which was established during the fiscal year
under review, has been included in the scope of consolidation. Saha Lawson, Co., Ltd. has also been
included in the scope of consolidation as a result of its increased financial materiality following its
placement under the substantial control of Lawson Asia Pacific Holdings Pte. Ltd., the Company’s
wholly-owned subsidiary.
Ninety-nine Plus, Inc. was excluded from the scope of consolidation, because it was dissolved after anabsorption-type merger with the Company on February 1, 2014, with the Company as the surviving
company.
(ii) Non-consolidated subsidiaries(Japan)LAWSONWILL, Inc.
HATS UNLIMITED CO., LTD.
Food Marketing Japan, Inc.
Lawson Minami Kyushu, Inc.
Lawson Kumamoto, Inc.
Seikaken, Inc.
(Overseas)
Lawson USA Hawaii, Inc.
Shanghai Le Song Trading Co., Ltd.
Hangzhou Lawson, Inc.
Beijing Lawson, Inc.
(Reasons for exclusion from the scope of consolidation)
The above non-consolidated subsidiaries have been excluded from the scope of consolidation because
they are all small in scale and their total assets, net sales, net income (corresponding to equity interest)
and retained earnings (corresponding to equity interest), etc. have no material influence on the
consolidated financial statements.
2. Application of the equity method(i) Affiliated companies to which the equity method is applied: 2(Japan)Lawson Okinawa, Inc.
(Overseas)
PT MIDI UTAMA INDONESIA Tbk(ii) The Company excluded from the scope of the equity method affiliate non-consolidated subsidiaries
LAWSONWILL, Inc., HATS UNLIMITED CO., LTD., Food Marketing Japan, Inc., Lawon
Minamikyushu, Inc. Lawson Kumamoto, Inc., Seikaken Inc., Lawson USA Hawaii, Inc., Shang Hai Le
Song Trading Co.,Ltd., Hangzhou Lawson, Inc., Beijing Lawson, Inc. and affiliated companies Herushiru,
19Inc., Double Culture Partners Co., Ltd., Daichi Wo Mamoru Kai, Co., Ltd., Shang Hai Gong Hui Trading
Co.,Ltd.), Lawson Farm and others because net income/loss (corresponding to equity interest) andretained earnings (corresponding to equity interest) of these non-consolidated subsidiaries and affiliatedcompanies have minimal influence on the consolidated financial statements and are negligible even inaggregate.
(iii) The balance sheet date of PT MIDI UTAMA INDONESIA Tbk is December 31. In order to prepare
for the consolidated financial statements, temporary financial statements based on the latest quarterly
financial statements are used and significant transactions which occur between the latest quarterly balance
sheet date and the consolidated balance sheet date are adjusted as required for consolidation.
3. Closing day for settlement of accounts of consolidated subsidiaries
The balance sheet date of Chongqing Lawson, Inc., Shanghai Hualian Lawson, Inc., Dalian Lawson, Inc.,
Lawson (China) Holdings, Inc. and Saha Lawson, Co., Ltd. is December 31. In order to prepare for the
consolidated financial statements, temporary financial statements based on the latest quarterly financial
statements are used and significant transactions which occur between the latest quarterly balance sheet
date and the consolidated balance sheet date are adjusted as required for consolidation. The fiscal year
end date for other consolidated subsidiaries corresponds with the consolidated balance sheet date.
4. Summary of Significant Accounting Policies(i) Valuation basis and method for important assets
Securities:
Held-to-maturity debt securities: Carried at amortized cost.
Available-for-sale securities:
Securities whose market value is readily determinable: Reported at market value, with unrealized
gains and losses, net of applicable taxes, reported in a separate component of net assets. The cost of
securities sold is determined based on the moving-average method.
Other: Stated at cost determined by the moving-average method.
Inventories:
About the product, have adopted the retail cost method.
(For balance sheet is determined by the method according to the book value write-down based on the
reduction of profitability)
Certain consolidated subsidiaries have adopted the gross-average cost method. (For balance sheet isdetermined by the method according to the book value write-down based on the reduction of
profitability)(ii) Depreciation method of depreciable assets
Property and store equipment (except for lease assets):
Depreciation is mainly computed by the declining-balance method at rates based on the estimateduseful lives of the assets. The range of useful lives is from 10 to 34 years for buildings and from 5
to 8 years for furniture, fixtures and equipment.
Intangible assets (except for lease assets):
Amortization of intangible assets is computed by the straight-line method.
Software costs of software for internal use are amortized by the straight-line method over 5 years,
which is the internal useful life.
Lease assets:
Previously, these leases were accounted for as rental transactions. Furthermore, in terms of thedepreciation method for leased assets related to finance leases that do not transfer ownership ofleased property, the Company applies the straight-line method using the lease term as the useful life
and a residual value of zero.
However, the Company has continued to treat as rental transactions finance leases that do nottransfer ownership of leased property and that commenced before the first fiscal year in which the
new accounting standard was applied.
Long-term prepaid expense:
Amortization of long-term prepaid expense is computed by the straight-line method.
(iii) Accounting standard for important reserves
Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at an amount of possible losses from uncollectable
receivables based on the actual rate of losses from bad debt for ordinary receivables, and on
estimated recoverability for specific doubtful receivables.
20

Provision for bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on theestimated amounts.
Provision for point card certificates:
The Company provides, to MY LAWSON POINT holders and LAWSON PASS holders whenpurchasing goods, an entitlement to certain points that the holder can redeem for a discount on
subsequent purchases from LAWSON stores.
Provision for retirement benefits:
Allowance for employees’ retirement benefits is provided at the amount accrued based on the
projected benefit obligations and plan assets at the balance sheet date. Prior service cost is mainly
amortized, starting the fiscal year incurred, on a straight-line basis over a certain period (10 years)
within an average remaining service period of employees. Actuarial differences will be mainly
amortized from the following fiscal year on a straight-line basis over a certain period (10 years)
within an average remaining service period of employees at the time of their occurrence.
Provision for retirement benefits to executive officers and auditors
Allowance for retirement benefits to executive officers of the Company, and to directors andcorporate auditors of the certain consolidated subsidiary are calculated to state the liability at 100%of the amount that would be required if all corporate auditors, executive officers and directors
resigned their services with the Company at the balance sheet date.
(iv) Foreign currency transactions and foreign currency financial statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies
are translated into Japanese yen at the exchange rates at the balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated statements of income.
The balance sheet accounts as well as revenue and expense accounts of foreign affiliated companies
are translated into Japanese yen at the current exchange rate as of the balance sheet date except forshareholders’ equity, which is translated at the historical rate. Differences arising from suchtranslation are shown as “foreign currency translation adjustments” in a separate component of net
assets.
(v) Amortization of Goodwill
Concerning goodwill, the amount is amortized on a straight-line basis over a maximum of 20 years,
depending on the reason for the occurrence of goodwill.
(vi) Cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents in the consolidated statements of cash flows include cash on hand,demand deposits and short-term investments due within 3 months from the acquired date, which areeasily convertible into cash with little risk of value fluctuation.
(vii) Other significant items related to the preparation of consolidated financial statements
Accounting for consumption tax:
Consumption tax and local consumption tax are accounted for using the tax exclusion method.
(Changes in accounting policies that are difficult to differentiate from changes in accounting estimation)
Pursuant to an amendment in the Corporation Tax Act, the Company and its domestic consolidated
subsidiaries have changed their depreciation method with respect to properties and store equipment
acquired on and after March 1, 2013, starting from the first quarter of the consolidated fiscal 2013 underreview. The impact of this change on operating income, ordinary income, and income before income
taxes and minority interests for the consolidated fiscal year is minimal.

21

(7) Accounting Standards, etc. that are not applied
Accounting Standard for Retirement Benefits (ASBJ Statement NO. 26, on May 17, 2012) and
Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance NO. 25, on May 17, 2012)
1. Outline(i) Treatment on consolidated balance sheets
Unrecognized actuarial differences and unrecognized prior service costs will be recorded in the “Netassets” section (accumulated other comprehensive income) after adjusting income tax effect and theamount that shows the reserve will be recorded as liabilities (or assets).
(ii) Treatment on consolidated statements of income and consolidated statements of comprehensive
incomeAmong actuarial differences and prior service cost arising during the period, the portion that is not
expensed will be recorded after including in other comprehensive income.
Among unrecognized actuarial differences and unrecognized prior service costs that are recorded inaccumulated other comprehensive income, the portion that is expense for the fiscal year under review will
be adjusted with other comprehensive income (reclassification adjustment).
2. Scheduled application date
The application will start from the end of a fiscal year that commences after April 1, 2013.
3. Influence from the application of the relevant Accounting Standards
Influence on the financial statements in its preparation is under evaluation.
• Revised Accounting Standard for Business Combinations (ASBJ Statement No.21 of September 13,
2013)• Revised Accounting Standard for Consolidated Financial Statements (ASBJ Statement No.22 ofSeptember 13, 2013)• Revised Accounting Standard for Business Divestitures (ASBJ Statement No.7 of September 13, 2013)• Revised Accounting Standard for Earnings Per Share (ASBJ Statement No.2 of September 13, 2013)• Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures (ASBJ Guidance No.10 of September 13, 2013)• Revised Guidance on Accounting Standard for Earnings Per Share (ASBJ Guidance No.4 of September
13, 2013)
1. Outline
The above Revised Accounting Standards mainly concern revisions to: (1) accounting treatment ofchanges in equity of a parent company in a subsidiary due to additional acquisition of shares or othertransactions while the parent company continues to hold a controlling interest; (2) accounting treatmentof acquisition-related costs; (3) the presentation of “net income” and the name of item from “minority
interest” to “non-controlling interest”; and (4) provisional accounting treatment.
2. Scheduled application date
The Revised Accounting Standards will be applied starting from the beginning of the fiscal year ending
February 28, 2017.
3. Influence of application of the relevant Accounting Standards
The level of influence was under evaluation at the time the financial statements for the current period
were being prepared.
(8) Changes in presentation(Consolidated Balance Sheets)
In the “Current liabilities” section, “Asset retirement obligations” were presented separately in theprevious fiscal year. Due to a decline in financial materiality, “Asset retirement obligations” are now
presented in “Other.” To reflect this change in method of presentation, the consolidated financial
statements for the previous fiscal year have been reclassified.
As a result, in the “Current liabilities” section, the 108 million yen that had previously been presented as“Asset retirement obligations” in the Consolidated Balance Sheets for the previous fiscal year is now
included in “Other.”22

(Consolidated Statements of Income)In the “Selling, general and administrative expenses” section, “Provision of allowance for doubtful
accounts” was included in “Other” in the previous fiscal year. Due to an increase in financial materiality,“Provision of allowance for doubtful accounts” is now separately presented. To reflect this change inmethod of presentation, the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, in the “Selling, general and administrative expenses” section, the “(14 million yen)” that had
previously been presented as “Other” in the Consolidated Statements of Income for the previous fiscal
year is now presented as “Provision of allowance for doubtful accounts.”
In the “Non-operating income” section, “Compensation income” was included in “Other” in the previous
fiscal year. Due to an increase in financial materiality, “Compensation income” is now separately
presented. To reflect this change in method of presentation, the consolidated financial statements for theprevious fiscal year have been reclassified.
As a result, in the “Non-operating income” section, the 161 million yen that had previously been included
in “Other” in the Consolidated Statements of Income for the previous fiscal year is now separately
presented as “Compensation income.”
In the “Non-operating income” section, “Penalty income” was presented separately in the previous fiscal
year. Due to a decline in financial materiality, “Penalty income” is now presented in “Other.” To reflect
this change in method of presentation, the consolidated financial statements for the previous fiscal year
have been reclassified.
As a result, in the “Non-operating income” section, the 265 million yen that had previously beenpresented as “Penalty income” in the Consolidated Statements of Income for the previous fiscal year is
now included in “Other.”In the “Extraordinary income” section, “Gain on sales of non-current assets” was included in “Other” inthe previous fiscal year. Due to an increase in financial materiality, “Gain on sales of non-current assets”
is now separately presented. To reflect this change in method of presentation, the consolidated financial
statements for the previous fiscal year have been reclassified.
As a result, in the “Extraordinary income” section, the 0 million yen that had previously been presented
as “Other” in the Consolidated Statements of Income for the previous fiscal year is now presented as“Gain on sales of non-current assets.”
In the “Extraordinary loss” section, “Provision of allowance for doubtful accounts” was presented
separately in the previous fiscal year. Due to a decline in financial materiality, “Provision of allowancefor doubtful accounts” is now included in “Other.” To reflect this change in method of presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Extraordinary loss” section, the 1,127 million yen that had previously been presented
as “Provision of allowance for doubtful accounts” is now included in “Other.”(Consolidated Statements of Cash Flows)
In the “Cash flow from operating activities” section, “Loss (Gain) on sales of investment securities” wasincluded in “Other” in the previous fiscal year. Due to an increase in financial materiality, “Loss (Gain)on sales of investment securities” is now separately presented. To reflect this change in method ofpresentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from operating activities” section, the “(145 million yen)” that had
previously been included in “Other” in the Consolidated Statements of Cash Flows for the previous fiscal
year is now separately presented as “Loss (Gain) on sales of investment securities.”
In the “Cash flow from operating activities” section, “Other Gains and Losses” was presented separately
in the previous fiscal year. Due to a decline in financial materiality, “Decrease (increase) in claims
provable in bankruptcy, claims provable in rehabilitation” is now included in “Other.” To reflect thischange in method of presentation, the consolidated financial statements for the previous fiscal year havebeen reclassified.
As a result, in the “Cash flow from operating activities” section, the 863 million yen that had previously
been presented as “Other Gains and Losses” in the Consolidated Statements of Cash Flows for theprevious fiscal year is now included in “Other.”In the “Cash flow from operating activities” section, “Decrease (increase) in claims provable inbankruptcy, claims provable in rehabilitation” was presented separately in the previous fiscal year. Due to23

a decline in financial materiality, “Decrease (increase) in claims provable in bankruptcy, claims provablein rehabilitation” is now included in “Other.” To reflect this change in method of presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from operating activities” section, the 14,546 million yen that had
previously been presented as “Decrease (increase) in claims provable in bankruptcy, claims provable inrehabilitation” in the Consolidated Statements of Cash Flows for the previous fiscal year is now included
in “Other.”In the “Cash flow from operating activities” section, “Increase (decrease) in accrued consumption taxes”
was included in “Other” in the previous fiscal year. Due to an increase in financial materiality, “Increase(decrease) in accrued consumption taxes” is now separately presented. To reflect this change in methodof presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from operating activities” section, the 1,109 million yen that had previously
been presented as “Other” in the Consolidated Statements of Cash Flows for the previous fiscal year is
now separately presented as “Increase (decrease) in accrued consumption taxes.”
In the “Cash flow from investing activities” section, “Decrease (increase) in short-term loans receivable”
was included in “Other” in the previous fiscal year. Due to an increase in financial materiality, “Decrease(increase) in short-term loans receivable” is now separately presented. To reflect this change in method ofpresentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, the “(37 million yen)” that had
previously been presented in “Other” in the Consolidated Statements of Cash Flows for the previous
fiscal year is now separately presented as “Decrease (increase) in short-term loans receivable.”In the “Cash flow from investing activities” section, “Purchase of investment securities” was presented
separately in the previous fiscal year. Due to a decline in financial materiality, “Purchase of investment
securities” is now included in “Other.” To reflect this change in method of presentation, the consolidated
financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, the “(2,053 million yen)” that had
previously been presented as “Purchase of investment securities” in the Consolidated Statements of Cash
Flows for the previous fiscal year is now included in “Other.”In the “Cash flow from investing activities” section, “Proceeds from purchase of shares of subsidiaries
resulting in change in scope of consolidation” was included in “Other” in the previous fiscal year. Due toan increase in financial materiality, “Proceeds from purchase of shares of subsidiaries resulting in change
in scope of consolidation” is now separately presented. To reflect this change in method of presentation,
the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, the 480 million yen that had previously
been presented in “Other” in the Consolidated Statements of Cash Flows for the previous fiscal year is
now separately presented as “Proceeds from purchase of shares of subsidiaries resulting in change inscope of consolidation.”In the “Cash flow from investing activities” section, “Change in Guarantee Deposits” was presented
separately in the previous fiscal year. Due to a decline in financial materiality, “Purchase of investment
securities” is now included in “Other.” To reflect this change in method of presentation, the consolidated
financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, the “(2,429 million yen)” that had
previously been presented as “Change in Guarantee Deposits” in the Consolidated Statements of Cash
Flows for the previous fiscal year is now included in “Other.”(9) Notes to Consolidated Financial Statements(Notes to the Consolidated Balance Sheets)*1. Investment in non-consolidated subsidiaries and affiliated companies
As of February 28, 2012
As of February 28, 2013
Investments in securities (stock)¥7,407 million¥10,544 million
Investment amount for jointly-controlled¥93 million―
companies
Other (other equity investments)¥38 million¥436 million*2. Accounts receivable due from franchised stores, accounts payable due to franchised
stores—the amounts of credits and debts incurred for the deal with franchised stores.
24

*3. Accounts payable-trade for franchised stores—the amounts payable to vendors formerchandise purchased by franchised stores.
*4. Long-term guarantee deposited—the amounts received from mainly franchised stores.
*5. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning
Revaluation of Land (Law No. 34, March 31, 1998). The resulting revaluation difference
has been included in net assets as land revaluation difference.
Revaluation method:
The value of land is determined based on the road-based prices adjusted reasonably as
stipulated in Article 2, Item 4 of the Ordinance Implementing the Law Concerning
Revaluation of Land (Government Ordinance No. 119, March 31, 1998) and the assessedvalue as stipulated in Article 2, Item 5 of the same Ordinance.
Date of revaluation: February 28, 2002
As of February 28, 2012
The difference between book value andmarket value of the revalued land as ofbalance sheet date.

As of February 28, 2013¥307 million¥319 million(Notes to Consolidated Statements of Income)*1 Net sales, cost of goods sold, operating gross profit—the amounts from mainly company
operated stores.
*2 Distribution of loss on disposal of fixed assets(Millions of yen)
From March 1, 2012 to February 28, 2013

Buildings and structures
Furniture, fixtures and equipment
Leased property
Software
Other

From March 1, 2013 to February 28, 2014

1,156
239
162
82
0

*3 Impairment loss
The Group recognized an impairment loss mainly for each stores as the smallest category
bear cash flows.
The carrying amount of those assets was written down to the recoverable amount. The
Group recognized impairment loss as special losses on following assets due to a decline invalue of the related asset categories due mainly to a continuous operating losses.
From March 1, 2012 to February 2, 2013
Category
Million of
Location
Assetsyen
by useBuildings and structures;Tokyo furniture, fixtures and equipment;
420
and others
Buildings and structures;StoresOsaka furniture, fixtures and equipment;472
and others
Buildings and structures;
Others furniture, fixtures and equipment;
2,009
and others―
Software25
Others―Others
1
Total
―
―
2,929
25

1,653
425
328
240
―

Category by fixed assets
Buildings and structures
Furniture, fixtures and equipment
Lease assets
Software
Other(Millions of yen)
1,923
204
758
25
17

Recoverable value of the assets of the Group is the higher amount of net selling priceor value in use. Not selling price of land was calculated based on appraised value by
real estate appraiser or contract price, and the value in use was calculated bydiscounting estimated future cash flows to which the 4.0% discount rate was mainly
applied.
From March 1, 2013 to February 28, 2014
Category
Million of
Location
Assetsby useyen
Buildings and structures;Tokyo furniture, fixtures and equipment;729
and others
Buildings and structures;StoresOsaka furniture, fixtures and equipment;598
and others
Buildings and structures;
Others furniture, fixtures and equipment;
2,565
and others
Buildings and structures;―
furniture, fixtures and equipment;607
and others
Others―Software
1,236―
Others
7
Total
―
―
5,744
Category by fixed assets
Buildings and structures
Furniture, fixtures and equipment
Leased property
Software
Other(Millions of yen)
2,868
359
1,251
1,236
29

Recoverable value of the assets of the Group is the higher amount of net selling priceor value in use. Not selling price of land was calculated based on appraised value by
real estate appraiser or contract price, and the value in use was calculated bydiscounting estimated future cash flows to which the 4.3% discount rate was mainly
applied.

26

(Notes to the Consolidated Statements of Comprehensive Income)* Reclassification adjustments to gain or loss and income tax relating to other comprehensive
income(Millions of yen)
As of February 28, 2013 As of February 28, 2014
Valuation difference on available-for-sale securities
Gain or loss arising during the period
143
(263)
Reclassification adjustments to profit or loss
(1)
(8)
Amount before income tax effect
142
(272)
Income tax effect(52)
100
Valuation difference on available-for-sale securities
89(171)
Foreign currency translation adjustment:
Gain or loss arising during the period
1,926
2,655
Share of other comprehensive income of associates accounted
for using equity method:Gain or loss arising during the period
(639)
(839)
Total other comprehensive income
1,377
1,643
(Notes to the Consolidated Statements of Changes in Net Assets)
Previous period (From March 1, 2012 to February 28, 2013)
1. Number of shares of outstanding stock and treasury stock
Number of shares at
Increase during the Decrease during the Number of shares atthe beginning of theperiodperiodthe end of the period
period(thousand shares)(thousand shares)(thousand shares)(thousand shares)
Outstanding stock
Common stock
100,300——
100,300
Treasury stock
Common stock(*)
416
1
10
406
(*) The 1,000 share increase in treasury stock resulted from the purchase of stock of less than one
share unit.
The 10,000 share decrease in treasury stock resulted from the 10,000 share decrease due toexercise of a right for stock acquisition and the 0 thousand share decrease due to requests for
additional purchase of stock of less than one share unit.
2. Stock acquisition rights and treasury stock acquisition rights
Class and number of shares
Balance at
subject to stock acquisition rights
end of theTerms of stock
current
Number (shares)
Classificationacquisition rights
periodBeginning Increase Decrease End of theClass(Millionsof theduring the during theperiodof yen)periodperiodperiodSubmitting
Stock acquisition
company
rights (ordinary
—
—
—
—
—
427
(Parent
stock options)company)
Total

—

—

—

—

—

427

3. Dividend
1) Dividend payment
Date of resolution

Class ofsharesAmounts ofdividend payment(Millions of yen)

Dividend
per shares(yen)

Date recorded for
dividend

Effective date

The General meetingof shareholders(May 29, 2012)

Common
stock

9,289

93

As of February 29,
2012

As of May 30,
2012

Directors’ meeting(October 3, 2012)

Common
stock

9,988

100

As of August 31,
2012

As of
November 9,
2012

27

2) Dividends for which effective date is after balance sheet date of year-ended, among dividends
attributed in the current period
Amounts of
Date
Class of Reserve of
Dividend per
Effective
Date of resolution
dividend payment
recorded forsharesdividend
shares (yen)date(Millions of yen)
dividend
The General
As ofmeeting ofCommon Retained
As of May
9,989
100
Februaryshareholders
stock
earnings
22, 2013
28, 2013(May 21, 2013)
Current period (From March 1, 2013 to February 28, 2014)
1. Number of shares of outstanding stock and treasury stock
Number of shares at
Increase during
Decrease during Number of shares atthe beginning of thethe period
the period
the end of the period
period(thousand shares)(thousand shares)(thousand shares)(thousand shares)
Outstanding stock
Common stock
100,300——
100,300
Treasury stock
Common stock (*)
406
1
12
395
(*) The 1,000 share increase in treasury stock resulted from the purchase of stock of less than one
share unit.
The 12,000 share decrease in treasury stock resulted from the 12,000 share decrease due toexercise of a right for stock acquisition and the 0 thousand share decrease due to requests for
additional purchase of stock of less than one share unit.
2. Subscription rights to shares and Treasury subscription rights to sharesClass and number of shares
Balance at
subject to stock acquisition rights
end of the
Number (shares)
Terms of stock
current
Classificationacquisition rights
periodBeginning
Increase
Decrease
End
of
the
Class
(Millionsof theduring the during theperiodof yen)periodperiodperiodSubmitting
Stock acquisition
company
rights (ordinary
—
—
—
—
—
557
(Parent
stock options)company)
Total

—

—

—

—

—

557

3. Dividend
1) Dividend payment
Date of resolution
The General
meeting ofshareholders(May 21, 2013)
Directors’ meeting(October 8, 2013)

Class ofsharesAmounts ofdividend payment(Millions of yen)

Dividend
per shares(yen)

Date recorded for
dividend

Effective dateCommon
stock

9,989

100

As of
February 28, 2013

As of May 22,
2013

Commonstock

10,988110

As ofAugust 31, 2013

As of November
11, 2013

2) Dividends for which effective date is after balance sheet date of year-ended, among dividends
attributed in the current period
Amounts of
Date
Class of Reserve of
Dividend per
Effective
Date of resolution
dividend payment
recorded forsharesdividend
shares (yen)date(Millions of yen)
dividend
The General
As ofmeeting ofCommon Retained
As of May
10,989110Februaryshareholders
stock
earnings
28, 2014
28, 2014(May 27, 2014)
28

(Notes to the Consolidated Statements of Cash Flows)*1 Relations between the year-end balance of cash and cash equivalents and the accounts listed
in the consolidated balance sheets(Millions of yen)
From March 1, 2012
From March 1, 2013
to February 28, 2013
to February 28, 2014
Cash and deposits
84,77076,763Time deposits, etc., for which the deposit period exceeds(12,004)(8,004)three months
Cash and cash equivalents
72,76668,759*2. Breakdown of assets and liabilities of a newly consolidated subsidiary acquired through purchaseof shares in this consolidated fiscal year.
The following is a breakdown of assets and liabilities at the time Saha Lawson Co., Ltd. was newly
consolidated through purchase of shares, and the difference between the cost of purchase of Saha
Lawson shares and proceeds from the purchase.
(Millions of yen)
Current assets
3,224
Fixed assets
698
Goodwill
8
Current liabilities
1,525
Minority interests
1,223
Additional purchase cost of shares of
the newly consolidated subsidiary

1,183

Purchase cost made up to acquisition

111

Cash and cash equivalents of the
newly consolidated subsidiary

2,804

Difference: Proceeds from thepurchase of shares of the newly
consolidated subsidiary

1,733*3 Description of significant non-fund transactions
Assets and liabilities related to finance lease transactions

Assets and liabilities related to finance lease transactions

From March 1, 2012
to February 28, 2013
24,945(Millions of yen)
From March 1, 2013
to February 28, 2014
32,291(Notes to Lease Contracts)
1. Finance lease transactions (lessees)
Non-ownership-transferred finance lease transactions(i) Details of leased assets
Mainly store furniture (including fixtures and fittings) used in the convenience store business(ii) Depreciation method for leased assets
As stated in the Basis of Presentation of the Consolidated Financial Statements under “4. Accounting
standards (2) Depreciation methods for important depreciable assets.”
With regard to non-ownership-transferred finance lease transactions whose effective date of leasetransaction precedes February 28, 2009, the Company applies the accounting method that it uses toaccount for ordinary lease transactions. Details of the transaction are summarized below.

291) The assumed data as to acquisition cost, accumulated depreciation and net leased property(Millions of yen)
As of February 28, 2013
Accumulated
depreciation

Acquisition cost

Accumulated
impairment loss

Leased property

Furniture, fixturesand equipment

21,03516,006

662

4,366

Total

21,03516,006662

4,366(Millions of yen)
As of February 28, 2014
Accumulated
depreciation

Acquisition cost

Accumulated
impairment loss

Leased property

Furniture, fixturesand equipment

13,772

11,490

672

1,609

Total

13,772

11,490672

1,6092) Obligations under finance leases(Millions of yen)
As of February 28, 2013

As of February 28, 2014

Obligations under finance leases
Due within one year

2,950

1,793

Due after one year

2,474

629

Total

5,425

2,422

Allowance for impairment loss on
leased property

533

374

3) Lease payments, depreciation expense, interest expense and impairment loss
(Millions of yen)
From March 1, 2013
to February 28, 2014

From March 1, 2012
to February 28, 2013
Lease payments

4,374

3,016

187

177

4,077

2,661

Interest expense

215

103

Impairment loss

69

32

Transfer from allowance for
impairment loss on leased property
Depreciation expense4) Computation method of depreciation expense
Depreciation expense is computed by the straight-line method, assuming the lease period as theuseful life and no residual value.
5) Computation method of amount equivalent to interest
The difference between the total lease contract amount and the acquisition cost is regarded as an
amount equivalent to interest, and shall be allocated over the lease term based on the interest method.

30

2. Operating lease contracts
Obligations under non-cancellable operating leases(Millions of yen)
As of February 28, 2013

As of February 28, 2014

Due within one year

976

913

Due after one year

1,688

1,295

Total

2,664

2,208

(Notes to Business Combinations, etc.)
Common control transactions, etc.
1. Absorption-type company split of Ninety-nine Plus, Inc. with Lawson Mart, Inc. as the successor
company(1) Outline of transaction(i) Name of the absorbed business and its outline
Name of business: A part of fresh foods convenience store businessBusiness outline: Store operation, merchandising function and product supply, etc. of "LAWSON MART"and "LAWSON STORE100".
(ii) Date of business combination
February 1, 2014(iii) Legal form of business combination
Absorption-type company split with Ninety-nine Plus, Inc. as the split company and Lawson Mart, Inc. as
the successor company (spin-off type)(iv) Name of company after the business combination
Lawson Mart, Inc.
(v) Other matters concerning the transaction
The operational functions of Ninety-nine Plus, Inc., including store management and productdevelopment, were succeeded by Lawson Mart, Inc., and will be further enhanced to lead the Group’s
fresh foods business.
(2) Outline of the accounting process applied
The business combination was processed as a common control transaction pursuant to the AccountingStandard for Business Combinations (ASBJ Statement No.21 of December 26, 2008) and Revised
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures (ASBJ Guidance No.10 of December 26, 2008).
2. Absorption-type merger between Ninety-nine Plus, Inc. and the Company(1) Outline of transaction(i) Name of the merged company and its line of business
Name of the business combination: Lawson, Inc.
Business outline: convenience store business
Name of combined company: Ninety-nine Plus, Inc.
Business outline: Fresh foods convenience store business(ii) Date of business combination
February 1, 2014(iii) Legal form of business combination
Absorption-type merger with Lawson, Inc. as the surviving company(iv) Name of company after the business combination
Lawson, Inc.
(v) Other matters concerning the transaction
By allowing the Company to acquire store-related assets including the franchise agreements of LAWSONSTORE 100 and centralizing all Lawson chain store administrative functions including store asset
management and franchise promotion, the business combination aims to enable the Group to implement
efficient area-targeted strategies.
(2) Outline of the accounting process applied
The business combination was processed as a common control transaction pursuant to the AccountingStandard for Business Combinations (ASBJ Statement No.21 of December 26, 2008) and Revised
Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures (ASBJ Guidance No.10 of December 26, 2008).
31

(Segment Information)i) Outline of reporting segments
The Company’s financial information is provided separately by reporting segment and is subject toregular review by the board of directors with regard to the allocation of managerial resources andperformance evaluation. The Group’s primary business is the operation of convenience stores,
which is undertaken by the incorporation of related businesses.
Therefore, the Group has made the convenience store unit its main reporting segment, based on
consideration of financial characteristics and the nature of the services provided.
Lawson. Inc. operates a franchise system as well as undertaking the direct management of stores inJapan as the parent company of LAWSON, NATURAL LAWSON, LAWSON STORE 100 andother chains. SCI, Inc. performs the increase in efficiency and optimization of the whole process asa subsidiary which manages the process from supply to sale synthetically.
ii) Computation method of the amount of sales, profit and loss, assets and liabilities, and other items byreporting segment
The segment accounting policies are the same as those described in the “Basis of Presenting theConsolidated Financial Statements.” Segment profit is based on operating income. Internal earnings
and transfers between segments are based on market value.
iii) Information related to the amount of sales, profit and loss by segmentfrom March 1, 2012, to February 28, 2013

Gross operating
revenue
Sales to externalcustomers
Internal sales ortransfers
betweensegments
Total
Segment profit
Segment asset
Other
depriciation
Goodwill
depreciation
Invest foraffiliates
Increase of
fixed assets

Total(Millions of yen)Amount posted on theConsolidated profit andloss statement (Note 2)

Convenience
Store business

Others(Note 1)

Adjusted
amount416,935

70,509487,445－

487,445

2,159

2,493

4,652

(4,652)－

419,094
61,335562,237

73,003
4,872
69,759492,098
66,208631,996(4,652)
38(52,186)

487,445
66,246
579,809

40,050
670

2,779
419

42,830
1,090

－
(34)

42,830
1,056

2,181

4,227

6,409

－

6,409

40,194

2,727

42,922－

42,922(Note)
1. The “others” category refers to business segments that do not fall under the main reporting segment
and includes Entertainment & Home Convenience segment and Overseas segment.
2. The segment profit is adjusted against the operating profits consolidated.

32

from March 1, 2013, to February 28, 2014
Domestic
Convenience
Store business

Others(Note 1)

Total

Adjusted
amount(Millions of yen)Amount posted on theConsolidated profit andloss statement (Note 2)

Gross operating
revenue
Sales to external
408,018
77,229
485,247－
customers
Internal sales or
2,305
2,505
4,810
(4,810)transfers
betweensegments
Total
410,323
79,735490,058(4,810)
Segment profit
63,2994,782
68,08145
Segment asset
601,709
81,047682,756(61,763)
Other
depriciation
44,0082,953
46,961－
Goodwill
419
542
961
(34)
depreciation
Invest for
2,295
3,875
6,171
－
affiliates
Increase of
37,1703,185
40,356－
fixed assets(Note)
1. The “others” category refers to business segments that do not fall under the main reporting segment
andincludes the Entertainment & Home Convenience segment and Overseas segment.
2. The segment profit is adjusted against the operating profits consolidated.
(Related information)
Previous consolidated fiscal year (March 1, 2012 to February 28, 2013)
1. Information by Product and Service
Since similar information is described in the segment information, this information is omitted.
2. Information by Area
(1) Net sales
Since sales to external customers in Japan exceed 90% of net sales on the consolidated statements ofincome,This information is omitted.
(2) Property, plant and store equipment
Since property, plant and equipment in Japan exceed 90% of property, plant and equipment on the
consolida-ted balance sheet, this information is omitted.
(3) Information by Major Customer
Information about major customers has been omitted since there are no external customers whoconstituted more than 10% of net sales on the consolidated statement of income.
Consolidated fiscal year under review (March 1, 2013 to February 28, 2014)
1. Information by Product and Service
Since similar information is described in the segment information, this information is omitted.

33

485,247－

485,247
68,126620,992
46,961927
6,171
40,356

(Information on impairment loss in noncurrent assets by reported segment)
Previous consolidated fiscal year (March 1, 2012 to February 28, 2013)
ConvenienceStorebusiness
Impairment
loss

Others

Total

149

2,779

(Millions of yen)
Total

Adjusted
amount

－

2,929

2,929

Consolidated fiscal year under review (March 1, 2013 to February 28, 2014)
ConvenienceStorebusiness
Impairment
loss

Others

5,837

Total

457

(Millions of yen)
Total

Adjusted
amount

6,294

(550)

5,744

(Information on amortization of goodwill and amortized balance by reported segment)
Previous consolidated fiscal year (March 1, 2012 to February 28, 2013)(Millions of yen)
Convenience
Others
Total
Adjusted
Total
Store businessamountBalance at endof fiscal year
under review

6,995

3,272

10,268

(584)

9,683

Consolidated fiscal year under review (March 1, 2013 to February 28, 2014)
Convenience
Store business
Balance at endof fiscal year
under review

6,027

Others

Total

3,692

9,719

(Information on gain on negative goodwill by reported segment)
Previous consolidated fiscal year (March 1, 2012 to February 28, 2013)
Not applicable.
Consolidated fiscal year under review (March 1, 2013 to February 28, 2014)
Not applicable.

34(Millions of yen)
Total

Adjusted
amount―9,719

(Per Share Information)
Previous fiscal year
(March 1, 2012 to February 28, 2013)
Net assets per share
Net income per share
Net income per share after full
dilution

Fiscal year under review(March 1, 2013 to February 28, 2014)

2,267.17 yen
332.20 yen
331.69 yen

Net assets per share
Net income per share
Net income per share after full
dilution

2,455.25 yen
380.04 yen
379.35 yen(Note) The basis for the calculation of net income per share and net income per share after full dilution
is as follows:
Previous fiscal year
Fiscal year under review
Item(March 1, 2012 to(March 1, 2013 to
February 28, 2013)
February 28, 2014)
Net income per share
Net income (million yen)Amount not attributable to common
stockholders (million yen)
Net income attributable to common stock(million yen)
Average number of common stock during the
fiscal year (thousand shares)

33,18237,965－－33,18237,96599,88799,898

－

－

152

181

(152)

(181)

Net income per share after full dilution
Net income adjustment value (million yen)
Increase in number of outstanding commonshares (thousand shares)(Stock acquisition rights）(thousand
shares)Summary of issuable shares not included in thecomputation of net income per share after full
dilution, since these securities are not dilutive.

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