-Creating a happy tomorrow for everyone-

2011

ANNUAL REVIEWTAble of contents

Consolidated Financial Data : Trends in Key Financial Index

2

To Our Shareholders

3Long-Term Management Framework 2020

5

Long-Term Management Framework 2020
Mid-Term Management Plan 2011-2013

5
6

Overview of Sales Results

7

Soft Drink Market in Japan
Trade Marketing
Overview of Sales Structure
Our Brand Lineup
		 Spotlight on Our Major Brands

7
8
9
11
12

Supply Chain Management Activities

14

Corporate Social Responsibility Activities

15-Creating a happy tomorrow for everyone-

Global Environmental Protection Activities
Quality Assurance
Business Activities Contributing to Local Communities
Together with Local Communities
Financial Information
Analysis of Operating Results
Segment Information
Consolidated Balance Sheets
Consolidated Statements of Income andConsolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows

Coca-Cola, GEORGIA, Aquarius, and Sokenbicha are registered trademarks of the
Coca-Cola Company.

15
17
18
19

21
21
22
23
25
26
27

Other Information

28

Risk Information
Corporate GovernanceTop Management
		 Dividend Policy and Shareholder Reward Points System
Stock Information
Coca-Cola System in Japan

28
29
34
35
36
37

2007

2008

2009

2010

2011

Net Revenues (Millions of Yen)
Growth Rate in Net Revenues (%)

409,52124.9

395,556(3.4)

369,698(6.5)

375,764
1.6

399,717
6.4

Operating Income (Millions of Yen)
Operating Income / Net Revenues (%)

16,056
3.9

10,521
2.7

2,242
0.6

12,003
3.2

16,4694.1

Recurring Income (Millions of Yen)
Recurring Income / Net Revenues (%)

17,493
4.3

11,048
2.8

2,085
0.6

12,6593.4

16,044
4.0

Income (Loss) before Income Taxes, minority interests and otheradjustments (Millions of Yen)
Income (Loss) before Income Taxes, minority interests and otheradjustments / Net Revenues (%)

14,254

2,402(10,446)

12,982

14,013

3.5

0.6

(2.8)

3.5

3.5

Net Income (Loss) (Millions of Yen)
Return on Sales (%)

9,375
2.3

129
0.0

(7,594)
(2.1)

7,582
2.0

6,997
1.8

−

−

−

−

5,605

88.29

1.25

(75.96)

75.84

69.99

Return on Equity (%)

3.7

0.1

(3.3)

3.4

3.1

Return on Assets (%)

5.6

3.7

0.7

3.8

4.7

Total Assets (Millions of Yen)

315,672

277,696326,818

346,032

342,560

Net Assets (Millions of Yen)

254,025

234,521

222,816

226,267

227,864

80.5

84.4

68.2

65.3

66.4

2,391.83

2,345.03

2,227.96

2,260.03

2,275.55

Price Book Value Ratio (PBR) (times)*1

1.0

0.8

0.7

0.7

0.6

Price Earnings Ratio (PER) (times)*2

28.0

1,549.5(21.6)

19.4

19.1

Cash Flow from Operating Activities (Millions of Yen)

33,00016,18028,74731,732

39,960Cash Flow from Investing Activities (Millions of Yen)

(23,306)

2,153(23,447)(49,203)(34,050)

Cash Flow from Financing Activities (Millions of Yen)

3,586

(31,486)

43,297(16,316)(8,780)Cash and Cash Equivalents at end of fiscal year (Millions of Yen)

35,564

22,412

71,22137,43434,56448.7

3,440.0

−

52.7

58.6

43.00
(21.00)43.00(21.00)42.00(21.00)40.00(20.00)41.00(20.00)Interest Coverage Ratio (times)*3(Operating Cash Flow / Interest Paid)

285.4

462.7

97.2

35.4

58.1

Depreciation (Millions of Yen)

22,533

21,741

21,90022,405

21,371

Capital Expenditure (Millions of Yen)

19,951

18,032

25,201

16,524

21,201

10,012(50%)

10,359
(57%)

8,760
(35%)

7,604
(46%)

9,518
(45%)

Comprehensive Income (Millions of Yen)
Net Income (Loss) per share (Yen)

Equity Ratio (%)
Net Assets per share (Yen)Dividend Payout Ratio (Consolidated) (%)
Dividend per Share (Yen)(Interim dividend amount per share) (Yen)

Capital Expenditure for Vending Machines (Millions of Yen)
(Share of Capital Expenditure for Vending Machine)*1 Price Book Value Ratio (PBR) = Market Value at the end of period ÷ Equity per share*2 Price Earnings Ratio (PER) = Market Value at the end of period ÷ Net Income per share*3 Interest Coverage Ratio=Operating Cash Flow ÷ Interest Paid

2
Annual Review 2011

Consolidated Financial Data : Trends in Key Financial Index

Consolidated Financial Data : Trends in Key Financial Index

To Our Sharehoders

To Our Shareholders

We would like to express our sincerest gratitude to shareholders

diate materials, as well as strengthening coordination between the
SCM department and the sales department so as to improve the ac-and investors for their continuing interest in the company.
Also, we feel deep sympathy for people in areas affected by the

curacy in supply and demand matching. The result of these efforts

Great East Japan Earthquake and other related parties, and sin-

has led to the stable supply of products, dramatically reducing SCM-

cerely hope that the disaster-stricken areas will recover as soon as

related expenses from the previous fiscal year.
In administrative and indirect departments, for the sake of costpossible.

reduction, we worked to advance structural reforms across the company, including a review of all business processes.

Overview of Business Results for the Fiscal Year 2011

Also, in order to deal with the problem of nationwide electricity

In 2011, partly because the rainy season ended earlier than usual,
sales volume in the soft drink industry was brisk during the summer,
the period of peak demand. As a result, sales in the overall market
were almost the same as 2010, when the summer was extremely
hot. However, retail prices have continued to fall due to budgetminded mentality of consumers, which primarily stemmed from theuncertain economic outlook. In addition, as competition among thesoft drink companies has been intensifying, business conditions surrounding the Group have been increasingly difficult.
Under such business conditions, in order to expand profits andsales volume/market share, and to establish a solid business foundation for future sustainable growth, we carried out various activities
in 2011, which is the first year of the phase of “Grow with breakthrough” in the Mid-Term Management Plan 2011-2013.
As for sales, with the aim of expanding sales volume and market
share, we mainly focused on conducting finely tuned sales activities
to meet diverse consumer needs in each sales channel. Specifically,
for the chain store channel (supermarket, etc.), we researched andanalyzed the purchase patterns of consumers in each retail store,
and we developed product lineups and promotion activities basedon the results of the analysis. For vending machines, we focused on
adjusting product lineups (brands, packages, and prices) according
to the features of the locations and seasonality. As a result, sales
volume increased from the previous fiscal year, led by our core 8
brands—Coca-Cola, Coca-Cola Zero, Fanta, Georgia, Sokenbicha,

shortage, we implemented various electricity saving measures aspart of the policies to control the total volume of energy usage of theGroup. These measures include suspending the cooling function ofvending machines on a rotational basis, always remembering to turnoff unnecessary lights, and introducing LED lights in the head office,factory offices, and other places.
As for Corporate Social Responsibility (CSR), we continued oureffort to contribute to local communities through continuous support for social welfare, sports activities, and cultural and educational
activities. We also continued to conduct local environment improvement activities, including forest conservation activities and cleanup
activities in cooperation with local communities.
As a result, in fiscal 2011, the consolidated net revenues increased ¥23,952 million, year-on-year, totaling ¥399,717 million(6.4% increase compared to the previous fiscal year). The operating
income increased ¥4,466 million, year-on-year, totaling ¥16,469
million (37.2% increase compared to the previous fiscal year), andthe recurring income increased ¥3,384 million, year-on-year, totaling ¥16,044 million (26.7% increase compared to the previous
fiscal year). The net income decreased ¥584 million, year-on-year,
resulting in ¥6,997 million (7.7% decrease compared to the previous fiscal year).
We achieved the results of increased operating income and recurring income compared to the previous fiscal year, making a goodstart in the Mid-Term Management Plan 2011-2013.

Aquarius, Ayataka, and I LOHAS, which account for approximately
60% of the total sales.
With regard to Supply Chain Management (SCM), for productivity

Fiscal 2012 Management Policies

improvement we engaged in capital investment, updating manu-

As for future prospects, business conditions surrounding thefacturing equipment and introducing new technologies. Also, weGroup are expected to remain difficult, marked by sluggish con-focused our efforts on reducing costs in procuring raw and interme-

sumption and declining product prices in the soft drink industry.

3
Annual Review 2011

year of the Mid-Term Management Plan 2011-2013, we will strive
to achieve business targets and build a foundation to continue todevelop in the future and enhance profitability, by way of: (1) steadily
implementing consumer-oriented strategies in the markets toachieve the sustainable growth of profits and sales volume/market
share; and (2) carrying out “8 Initiatives of Business Model Innovation” to establish a business foundation from mid- and long-term
perspectives.

Dividends
Our dividend payout policies are based on the principle of providing profit to shareholders consistently and continuously. As for thedividends for the fiscal year 2011, we took into consideration both
the results of operations for that term and also the future operational
environment. Using those data, we set the term-end dividend payout as ¥21 per share, and the annual payout, including the interim
payout, as ¥41 per share (increased by ¥1 from the previous fiscal
year).
As we work toward attaining these goals, we would like to seek further support and understanding from all shareholders and investors.

Net Revenues

Operating Income(Unit: Millions of Yen)

500,000

400,000

369,698

375,764

399,717(Unit: Millions of Yen)

18,00016,46915,00012,003

12,000300,000
9,000
200,000
6,000
100,000

3,000

2,242

0

0

2009

2010

2011

Recurring Income

2009

2010

2011

Net Income(Unit: Millions of Yen)

18,000(Unit: Millions of Yen)

10,00016,04415,000

7,582

8,000

6,997

12,65912,000

6,000

9,000

4,000

6,000

2,000

3,000

2,085

(10,000)

02009

Tamio Yoshimatsu
Representative Director & President

0

2010

2011

(7,594)

2009

2010

2011

4
Annual Review 2011

To Our Sharehoders

Under such business conditions, in 2012, which is the second

Long-Term Management Framework 2020

LONG - Term management framework 2020

Long-Term Management Framework 2020
With the aim of ensuring a significant leap forward
over a long period of time and an ongoing survival asa corporation, we have developed “Long-Term Management Framework 2020” for 10 years beginning in2011 as a guide focusing on the strategically planned
growth, efficiency improvement, and organization activities. Based on these three strategies, we are working on a variety of activities.
We divided the next 10 years until 2020 into thefollowing three phases to reliable transition towardachieving the 2020 targets: Three years to grow withbreakthrough, Three years to realize growth, and Four
years to actualize dreams & progress to the next level.

Phase Progression toward Long-term Management
Framework 2020

West VisionCorporate Philosophy

To be the most respected company by all
key shareholders, encompassing consumers,
customers, employees and the community!!

We will contribute to the happy lifestyleof all our stakeholders and contribute to
the development of a sustainable society
by providing value and refreshment
through our beverage portfolio.

Coca-Cola West vision statement describes where we want to be in the year
2020 in a bit to reach the goal of becoming a company that will gain special
patronage from our shareholders, our consumers, local communities, andour own employees.

In the business field primarily for drinks, we will continue to discover new

Corporate Message

needs of consumers, as well as the provision of safe and secure high-quality
products and services. In addition, our corporate philosophy expresses that

-Creating a happy tomorrow for everyone-

we will offer products and services that enjoy new values through uninterrupted innovations; thereby,● we contribute to the physical and mental wellbeing (that is, “happiness”)

for people to lead a forward-looking life, such as taste, fun, health, andcomfort, in the diverse lifestyle of our consumers, and● we definitely keep in mind contribution to environmental preservation andcoexistence with local communities in our business activities, and based on

The corporate message “Creating a happy tomorrow for everyone” expresses

these efforts, we contribute to development of a sustainable society.

our sincere desire to provide happiness to all of our stakeholders.

5
Annual Review 2011

We developed, as the first phase toward the Long-Term Management Framework 2020, the Mid-Term Management Plan 2011–2013 with placing the first three years beginning in 2011 as Growth with breakthroughs.
We will ensure implementation of the three basic strategies: Growth Strategy, Efficiency Strategy, and Structural Strategy. This is to expand sales and profit toward achieving the earnings projection in 2013 and bring“Happiness” to all of our stakeholders.

* Trade marketing: A brand marketing expansion method at sales sites. Its purpose is to build sales site strategy for the improvement in
number and in value of purchased items though consumer-related knowledge management. And in order to deliver sales
volume and value, trade marketing support sales forces with well-designed fundamental enhancement plans.

In 2011, coupled with an increase of profit, sales volume, and an expansion of market share, we were seeking to create a basis for growthand profit for the future. To this end, we were engaged in various activities in the area of sales and SCM (supply chain management) and madeinvestments. Through these efforts, operating income in the fiscal year ended December 2011 was more than projected, marking a good start
toward actualizing the 10-year Long-Term Management Framework.
In 2012, we will implement the reform of business model toward establishing a solid management basis from the mid- and long-term viewpoint. In addition, with the aim of attaining sustainable growth of profit, sales volume, and market share, we will enhance our ability in businessactivities in the market while increasing efficiency to cut down costs in SCM as well.

Business Model Innovation- Eight Initiatives In our every activity in the process until the delivery of products to consumers, we will create a consumer-oriented business modelby pushing forward a company-wide reform.
We will make clear an optimal service model that should be provided to each customer and vending machine and execute market
activities in line with each model. Along with measures, we will put into action eight initiatives in the reform of the business model,
including the reform of distribution process toward introducing more efficient vending machine business and consolidating inventories,
as well as the optimal allotment of manufacturing bases and the improvement of productivity in the manufacturing field.
These consumer-oriented initiatives will be interconnected and linked together, thereby maximizing effectiveness and efficiency andensuring a competitive edge. With these, we will further reduce costs.

6
Annual Review 2011

Long-Term Management Framework 2020

Mid-Term Management Plan 2011–2013

Overview of Sales Results
Overview of Sales Results

Soft Drink Market in Japan

Market Trends
In 2011, production volume of soft drinks exceeded that marked in 2010 when we experienced extremely hot weather and hit a record
high. By product category, production volume of carbonated beverages, coffee beverages, and mineral water all increased from the previous
year. The soft drink market has seen nearly 60% growth in the last 20 years.
Change of Production Volume of Soft Drinks

Source: Statistical Report on Soft Drinks, Japan Soft Drink Association, a General Incorporated Association (Data for the year 2011 is preliminary.)

Over-the-Counter Sales Market Share by Category for 2011(excluding vending machines)

Carbonated beverages

Canned coffee

Blend tea

Sports and functional drinks

No.1

No.1

No.1

No.1

Source: MBI conducted by Intage, Inc.

Over-the-Counter Sales Market Share for 2011

Outdoor Vending Machines Market Share for 2011

No.1

No.1

(excluding vending machines)

Source: Store Audit conducted by Intage, Inc.

Source: Survey of Vending Machines, Intage. Inc. (survey period from June 2011 to July 2011)7
Annual Review 2011

We operate our business activities in the market by establishing sales divisions by sales territory under the “Trade Marketing*,”a marketing technique based on consumers’ purchasing behaviors.
*Trade marketing: A brand marketing expansion method at sales sites. Its purpose is to build sales site strategy for the improvement in number and in value of purchased items though consumer-related		knowledge management. And in order to deliver sales volume and value, trade marketing support sales forces with well-designed fundamental enhancement plans.

Scheme of Trade marketing
Our efforts for differentiation and diversification of our sales methods (including brands, packages, sizes, and prices) according to businesscategories or sales sites encourage providing products suitable for our consumers’ drinking preferences. By deploying detailed marketing operations from a consumer-oriented viewpoint, we are seeking to increase sales volume and profits and expand our market share.
As for vending machines, we will pursue vending machines that are attractive to consumers and select products depending on characteristics of the location and the season along with thorough price strategies. Through these efforts, we will increase sales volume per vending
machine. In terms of chain stores, we will attend reliably to our consumers’ needs by differentiating and diversifying our assortment (sizes
and prices) according to particular business conditions and sales sites.

Point of Sales［Vending］

Summertype［Supermarket］

Wintertype

Assortment of products varied with the seasons

Sales sites expansion depending on consumers’ drinking preferences.

8
Annual Review 2011

Overview of Sales Results

Trade MarketingOverview of Sales Results

Overview of Sales Structure

The number of customers in our sales territory is about 300,000. We organize specialized systems per selling structure (channel) for
our customers, and perform a variety of cooperative activities with them. Thus these efforts result in enhancing our consumers’ satisfaction.

Chain store (Supermarket/Convenience stores, etc)
We analyze consumers’ behavioral intentions and purchase motives for each supermarket to provide the best product assortment available. We also support creating a comfortable shopping experience by proposing the most appropriate product—for example, small
bottles of Coca-Cola or Coca-Cola Zero placed in the pizza section and small bottles ofSokenbicha and Ayataka in the bento meal section. We also carry out seasonal and holiday
campaigns to strengthen sales, such as Aquarius for prevention of summer heat strokes
and large-sized Coca-Cola bottles for Christmas parties.

VENDINGAs of December 31, 2011, we have about 270,000 vending machines installed bothindoors and outdoors. We have been selecting products suited for the installed areas(outdoors, offices, factories, schools, etc.) and providing larger breadth of size and price,seeking more sales per machine. Additionally, seasonal products and campaigns are implemented to meet the needs of the consumers.
We are also actively introducing Cashless Vending Machines and Energy-Saving Vending
Machines with solar panels and LED lighting in order to cater to our customers’ and consumers’ environmentally conscious needs while improving levels of convenience.

Retail store, Food service
The retail store/food service channel represents retailers such as liquor stores and kiosks, and food service such as food courts, restaurants, and movie theaters.
We support creating enjoyable shopping spaces by proposing the most appropriate selling devices well suited for our customers’ preference and providing advertising materials
depending on the season or media tie-ups.
Additionally, for food courts and restaurants, we propose original set menus for eachfacility and support hygiene management of selling equipment, ensuring high-quality merchandise and services for the consumer.
We also put effort into new business transactions and propose table-top coolers for new
customers, striving for business expansions.

9
Annual Review 2011

Retail store
7.0%

コカ・コーラ

7.6%

Sales volume by Channel

コカ・コーラ ゼロ

その他

3.4%

35.2%

2011

Percentage change■ Vending

57,81754,205(6.2)%■ Supermarket

49,02650,099+2.2%■ Convenience store

19,46920,312+4.3%■ Retail store

12,978

13,166+1.4%■ Food service

18,69019,302+3.3%■ Other

25,941

30,690+18.3%

Total

183,921

187,773

+2.1%

ファンタ

4.8%

10.4%

(Unit: Thousand cases)

2010

12.3%

Composition of Sales Figures in 2011
7.2%
綾鷹

21.3%

10.8%

2.7%
Other
16.3%い･ろ･は･す /

爽健美茶

6.8%

ミナクア /
森の水だよりFood service
10.3%

ジョージア

アクエリアス
Vending

11.5%
28.9%

6.8%

Retail store
7.0%
Supermarket
26.7%

Convenience
store
10.8%

Sales volume by Package(Unit: Thousand cases)

2010

2011

Percentage change■ Small-sized (less than 1,021ml)

41,51942,661+2.8%

PET ■ Large-sized (more than 1,021ml)
Subtotal■ Can■ Other■ Syrup, Powder
Total

35,12335,550+1.2%

76,642

78,212+2.0%

54,93455,980+1.9%

14,63812,744(12.9)%

37,70840,837+8.3%

183,921

187,773+2.1%

Composition of Sales Figures in 2011
Syrup, Powder
21.7%

Small-sized
PET bottle
22.7%
コカ・コーラ

Other
6.8%

7.6%

35.2%
Can
29.8%

3.4%
Large-sized

12.3%

PET bottle
ファンタ

4.8%
18.9%

10.4%

ジョージア

7.2%
綾鷹

Major examples of packages

コカ・コーラ ゼロ

その他

21.3%

10.8%

2.7%

爽健美茶

6.8%

い･ろ･は･す /ミナクア /
森の水だよりアクエリアス

11.5%

6.8%

Small-sized PET bottle

Large-sized PET bottle

Can

Syrup, Powder
21.7%

Small-sized
PET bottle
22.7%

Other
6.8%

Can
29.8%

10
Annual Review 2011

Large-sized
PET bottle
18.9%

Overview of Sales Results

Supermarket
26.7%

Convenience
store
10.8%

Our investment and sales are centered on the core 8 brands—Coca-Cola, Coca-Cola Zero, Fanta, Georgia, Sokenbicha, Aquarius, Ayataka, and I LOHAS. We are also promoting Sprite, Huang, and Qoo to meet the diverse needs of consumers.

The core 8 brands
Coca-Cola

Coca-Cola Zero

Fanta

Georgia

Sokenbicha

Aquarius

Ayataka

I LOHAS

Other
16.3%
その他

Vending
28.9%

Food service
10.3%

12.3%
ベンディングフードサービス

OthersRetail store
7.0%

32.1%

10.4%
リテール

7.2%

Supermarket
26.7%

Convenience
store
10.8%

コンビニエンスストア

スーパーマーケット

10.8%

27.2%

Sales Volume by Brand(Unit: Thousand cases)

2010

The Core 8 Brands

Overview of Sales Results

Our Brand Lineup■ Coca-Cola

13,742■ Coca-Cola Zero

6,135

■ Fanta■ Georgia■ Others

Total

7.2%

■ Aquarius■ I LOHAS

12.3%
10.4%

■ Sokenbicha■ Ayataka

8,560

その他

35.2%

綾鷹

10.8%

38,297
12,284
20,7742011
13,962
コカ・コーラ

7.6%

6,509

コカ・コーラ ゼロ(1.6)%+2.3%

12,348+0.5%

19,999(3.7)%

8,298+71.7%

6,889+21.2%

72,168(2.0)%

187,773

+2.1%

ジョージア

21.3%

2.7%

4,833

爽健美茶

い･ろ･は･す /ミナクア /
森の水だより5,686

アクエリアス

6.8%

73,610183,921

+1.6%

8,424

ファンタ

6.8%

11.5%

Composition of Sales Figures in 2011

+6.1%

4.8% 39,176

3.4%

Composition of Sales Figures in 2011

Percentage change

Others
38.4%

12.3%

Coca-Cola
7.4%
Coca-Cola Zero
3.5%
Fanta
4.5%

10.4%

Georgia
20.9%

7.2%
10.8%

I LOHAS
3.7%

Sokenbicha
6.6%

Ayataka
4.4%

Aquarius
10.7%

The Core 8 Brands

61.6%

11
Annual Review 2011
シロップ、パウダーボトル

To commemorate the 125th anniversary of Coca-Cola, the revision of the“heritage” series has been released in 2011 in limited quantities. Additionally,
promotion activities combining Coca-Cola with various foods have been heldat supermarkets, striving for an expansion of consumer drinking opportunities. Various bottle packaging such as limited winter-designed PET bottles
and 2L PET bottles perfectly sized for parties have also been released to meetthe needs of the consumers.

Revision of the “Heritage” series

Winter Design

Coca-Cola
Progression of Sales volume“Coke & Meals” Campaign

The zero-calorie drink Coca-Cola Zero has made “zero sugar, zero preservatives, zero synthetic fragrances” a reality, having rapidly growing sales
owing to the increasing number of health-conscious consumers. In 2011, by
selling sets of Coca-Cola Zero combined withsnacks in venues such as supermarkets, wewere able to promote health awareness while
having a delicious bite at the same time.

Coca-Cola Zero
Progression of Sales volume"Coke Zero & Snacks” campaign

In 2011, we reinforced the product selection of the Georgia brand, by releasing new regional-limited products and “Wa-Style” showcasing new Japanese flavors for the fall and winter season, and iced coffee and iced café aulait products for the summer. Additionally, the consumer-participatory “Georgia
Ememan Battle” campaign, which featured four Emerald Mountain Blend
products where the consumers voted for the 1st place spot, garnered muchattention.

"Wa-Style"

Regional-limited Products“Georgia Ememan Battle”
Campaign

12
Annual Review 2011

Georgia
Progression of Sales volume

Overview of Sales Results

Spotlight on Our Major Brands

Overview of Sales Results

Spotlight on Our Major Brands

Ayataka, with its renewed design and freshly brewed richness and savory
taste, enables the consumer to have an authentic green tea experience. We havepromoted the product through TV spots, vending machine placement, and sample
tasting at supermarkets, earning support from a wide range of consumers andenhancing the visibility of Ayataka’s characteristics. Additionally, we have released
a new product “Maccha-Latte,” to good reviews.
Ayataka sales have steadily grown in the green tea market.

Ayataka
Progression of Sales volume

New Products“All-Japan Ayataka Test” TV Spot Series“Maccha-Latte”

Featured Products

Glacéau VitaminwaterThis stylish drink that enables vitamin and mineral intake
while obtaining fluids has five different types to choose fromaccording to one’s lifestyle and mood. We are reinforcing sales
with focus on supermarkets and drug stores.

Real Ukon
This first-ever carbonated turmeric drink has a pineapple taste
and no trace of the distinctive turmeric aroma—good news forthe consumers who have had a disliking for turmeric drinks. Ever
since its launch in October 2011, sales have been rising steadily
in convenience stores. We have also expanded sales focused on
the liquor section of supermarkets.

13
Annual Review 2011

New Label Design for 2011

In our activities for a stable product supply and reduction of SCM (supply chain management) cost and environmental burden,
we are undergoing a variety of activities in procurement, manufacturing, and logistics.
As for procurement, we have made bottles lighter and labels thinner, focusing on environmental considerations while reducing material cost.
In manufacturing, we have heightened the extraction rate of production lines and self-manufacturing average, cutting down costs. Additionally, reinforced communications between the SCM department and the sales department has lead to enhanced supply-demand accuracy, resulting in a reduction
in disposal products for 2011 compared to the previous year. By investing in renewed production lines and the introduction of the in-line blow molder* 1,
we are aiming for a medium-term manufacturing cost reduction while providing for our consumers’ diverse needs.
In the logistics field, we are continuing our installation of a stock-intensive “distribution center,” which will allow streamlined distribution from our logistic facilities to our consumers and customers, reducing distribution costs and allowing a long-term restructuring of the logistics process. In 2012, we will
start a new distribution network in Nagasaki and Osaka and validate the effects with a goal of full-scale expansion within our sales region.
*1 In-line blow molder: our own PET bottle-molding device

Plant
DaisenManufactured items
Mineral water

Package

Plant

PET bottle

Manufactured items
Carbonated drink, Sports drinks

Kyoto

Package
PET bottle

Carbonated drink, Coffee, Tea, Sports drinks, Fruit juice

Can

Carbonated drink, Sports drinks, Fruit juice, Lactic drink

Tank*2,BIB*2

CoffeeRoasting*2

Akashi Carbonated drink, Coffee, Tea, Sports drinks, Fruit juice

PET bottle*2 Articles for cup vending machines and for dispensers.

Plant
Hongo

Plant
KiyamaTosu

Manufactured items

Package

Carbonated drink, Coffee, Tea, Sports drinks, Fruit juice

PET bottle

Carbonated drink, Sports drinks, Fruit juice

Can

Carbonated drink

Tank*2

Carbonated drink, Fruit juice

BottleCarbonated drink, Sports drinks

PET bottle

Coffee, Tea
CoffeeManufactured items

Package

Carbonated drink, Coffee, Tea, Sports drinks, Fruit juice

PET bottle

Carbonated drink, Coffee, Tea, Sports drinks, Fruit juice

Can

Can
Roasting*2*2 Articles for cup vending machines and for dispensers.

Distribution Centers
14
Annual Review 2011

Supply Chain Management Activities

Supply Chain Management Activities

Corporate Social Responsibility Activities
Corporate Social Responsibility Activities

Global Environmental Protection Activities

Initiative for Energy Usage Reduction
Our Group is working as one toward our greenhouse gas reduction goal. As a result of activities in the Vending Machines
Department and the Transport Department, our Group’s CO2 emissions for 2011 decreased by 4% from the previous year,
showing a 25% decrease from 2004.
Efforts by Vending Machines Department
The Number of Environmentally friendly Vending
Machines

We are actively pursuing a more environmentally friendly vending
machine, by implementing LED lighting and natural refrigerant thathas less impact on the earth’s environment, and we have installed“solar-panel equipped vending machines” and “heat-pump*1 method
30,000non-freon type vending machines” withenhanced insulation and asystem that uses waste heat for warming.
20,000the installed numbers of
In our endeavors to stop global warming,
our environmentally conscious vending machines should reach ap10,000
proximately 46,000 machines by the endof 2011.
*1 The heat-pump method: a method that uses heat emitted from the machine during
the cooling process and uses
0 that heat instead of electricheaters to warm products efficiently.

■ Heat-pump method non-freon system■ Non-freon system(Unit: Number)

50,00046,009300■ Hybr■ Natu■ Elec40,000200

29,32730,00020,00017,583

10,00016,70342,433100

28,182

Vending machine outfittedwith solar panel

3,576

1,145

0 880

2009

0

2010

0

2011

200

Efforts by Transport Department
150

30,00020,00010,0000200

We are actively using larger vehicles
for more efficient distribution,
100
and implementing the Modal Shift*2 for transport between factories and50
warehouses. The Group as a whole promotes
eco-drivingsuch method
as idling■ Heat-pump
non-freon system■ Non-freon system(Unit: Number)stop, economical speed driving, and axel
offduringspeed
reduction.
0
50,00046,009Additionally, we have installed safety recorders in delivery vehicles to
40,000analyze and check driving conditions, and to improve fuel efficiency and29,32730,000
implement safe driving.
42,433
17,583Moreover, introduction of the zero CO2 emission
electric car and20,00028,182streamlined distribution have contributed to our10,000
goal of fuel-usage re16,703
duction.
3,576 Electric car
1,145
880

The Number of Eco-cars in Operation

300(Unit: Number)（単位：台）

257

191

0

140

134

100

0

2011

28,859

197

188

200

0

*2 Modal Shift: To change from truck transportation to railroad transportation2009 or shipping,2010
which is energy saving, low pollution, and more adapted for mass transport.

■ Hybrid cars
■ Natural gas cars
■ Electric cars

54

2009

48

54

3,820

2010

2011

3

17,58318

平成20年 平成21年

CO2 Emissions

平成22年
200

150

150

(Unit: CO2 Thousand tons)
100

50

0

100

■ Others■ Transport Department■ Vending Machines Department

25% below
2004 levels

600（単位：台）

135
400

77

427

17,583
127

72
200

0

337

2004
Base numbers

229

405

219

平成20年 平成21年

2010

2011

（単位：台）

平成22年

100
50

15

2013
Target200
150

Annual Review 2011

0

411

65
3,820

50

28,859548
126

26% below
2004 levels

0

134

140

191

134

We feel it is our social responsibility to pursue the efficient use ofwater, which is the base of our products and an invaluable resource.
In 2011, we have successfully reduced water usage at all of ourfactories, resulting in 7% or 5.7 L/L (Liters needed/Per product liter)
less water per primary unit*.

Water Usage
2010

2011

Percentage
ChangeUsed amount (per thousand m3 )

7,616

7,479

(2)%

Primary unit (L/L)

6.1

5.7

(7)%

* Primary unit: water needed to create 1 liter of a product.

Waste Recycling Activities
We have actively been collecting used bottles and cans and recycling industrial waste to promote beneficial use of
all resources.
Recycling of empty containers
For the effective use of our limited natural resources, we pursue collecting empty containers from vending machines disposal bins for recycling.
At the Kita Kyushu Sawayaka Recycling Center in the Kyushu region (in operation since 2003) we endeavor to recycle resources efficiently byseparating steel cans, aluminum cans, PET bottles, and Glass bottles. We recycled about 5,000 tons of empty containers in 2011.
Empty Containers Recycling Flow

Collection Box

Steel cans

Impurities
Equipments

Offices

Aluminum cans

Recycling Center

PET bottles

Aluminum cans
Aluminumproducts

Paper cups
Paper boxes

Grass bottles

Recyclable bottles
Pavement materials

Clothes
Plastic products

Toilet paper
Paper towels

トイレットペーパー
ペーパータオル

衣類
プラスチック製品

Appropriate
disposals

適正処理

Recycling of Retired Vending
Machines
スチール缶
PET bottles,

Othermaterials

再生びん

道路舗装材
All retired
Grassvending
bottles machines are recycled. In 2008 at Sawayaka Recycling Center, located in Retired Vending Machine Recycling Center inKita kyushuPaper
region,vending
machinescollected
from
Chugoku
and Kyushu regions were disassembled and sorted by materials to reuse ascup
Improvementof
efficiency and productivity●
iron, steel and
all
that.
Additionally,
weproperly
collectfreon
gasthat can cause ozone layer depletion and global warming.
Drink box
■ Realization of customer-origination SCM
Others■ Realization of low-cost supply system
Waste Recycling at Production Plants
Impurities■ Innovation in logistic process
Equipment
Improvedofefficiency
in management
andRateindirectdivisions■ recycling
At all of our plants, we promote sorting andindus- Volume
and Recyclingof Wastefrom Production Plants in 2011
Aluminum cans
Volume Generated Recycling Rate
proper labor
cost
trial waste in order to again achieve zero emissions(with a ofwaste
■ Realization
Waste
type
Recycling Usage(Tons)
recyclingAluminum
rate of wareover 99%). Coffee grounds and tea leaves, which
Coffee grounds
23,316100.00%Tea leaves
Organic fertilizer
10,123100.00%account for Clothes
the most important volume among other wastes, have
Grime
4,881
100.00%
Plastic
articlebeen 100%
recycledby transforming them into organic fertilizer
Waste plastic
887
99.87%
Recycled plastic fuel
Glass
311
99.98%
Recycled cullet
Recyclable bottles
or sub-combustible
materials.

Pavement materials
Toilet paper
Paper towel

MetalsPaper
Waste oil
Other
Total

Appropriate Disposal

16
Annual Review 2011

334
970
12
166
41,00099.80%
100.00%98.95%
99.83%
99.994%

Recycled iron and steel, aluminum Cans
Cardboard, Recycled paper
Recycled oil
Base course material

Corporate Social Responsibility Activities

Water Reduction Activities

Corporate Social Responsibility Activities

Quality Assurance

In order to provide safe, secure, and fresh products, we strive to maintain thoroughgoing quality management in every aspect of our business until our products are in our consumers’ hands.

Quality Assurance
We have established a stringent quality control structure under the “KORE” management system, a system uniquely formulated by CocaCola as a global standard. Starting with implementation of the International Standard (ISO9001*1, FSSC22000*2) at our manufacturing plants,
we carry out quality control in warehouses, in logistics facilities, at outlet stores, and other sales channels so our consumers are able to receivehigh-quality products.
*1 ISO9001: Quality Management System*2 FSSC22000: Food Safety Management System

PlantsDistribution

StoresWe produce reliable beverages for consumers to enjoy
drinking.

We punctually and promptly
deliver safe, secure and highquality products.

We are operating from day to
day to offer fresh and tasty
beverages.

PlantsDistribution

Offices

StoresVending machines

Consumers

Vending machines

MaintenanceHygiene Control

We operate daily activities
giving the highest priority tooffer fresh beverages to ourconsumers.

We treat breakdowns ofvending machines as ahighest priority.

We practice foolproof quality control to “Secure foodsafety”.

17
Annual Review 2011

To support local residents and communities, we have installed “Community Contribution Vending Machines.” These
include “Community-Support-Type Vending Machines” and “Disaster-Response Vending Machines,” by which we assist the development of local communities and safe and secure living conditions for its residents.
“Community-Support-Type Vending Machines” to support local communities
A portion of the sales revenue for the “Community-Support-Type Vending Machines” is returned to the local community to fund social contribution activities, civic events, and sports organizations. 3,561 machines have been installed as of December 31, 2011.
Scheme to support local activities through Community-Support-Type Vending Machines

Portion of sales revenues

Purchase at Community-Support-Type
Vending Machines

Support for welfere

Support for Town Development

Special Olympics Nippon (SON) Nara Shoudo Osaka supporting vending
region supporting vending machine machine
Other examples
Special Olympics Nippon Shiga Establishment preparation committee● SON Wakayama● SON Osaka●

Donations to Activity Funds

Support for Tourism

Support for Environment

Support for Professional Sports

Chikujo-cho tourism supporting
vending machine

Settsu-shi environmental-support
vending machine

INAC Kobe Leonessa supporting
vending machine

Other examples
Shiraishi-cho town development●
Unan-shi town development●
Taku-shi town development●

Other examples

Other examples

Awaji-island fiesta●
Shimonoseki tourism

Greening of Fukuoka-shi●
Environmental conservation andresearch for nihonawa coral●●

Other examples
Gamba Osaka●
Serezo Osaka●
Sanfrecce Hiroshima●
Avispa Fukuoka support●“Disaster-Response Vending Machines” to provide relief during emergencies
In the event that supply lines are severely disrupted by earthquakes or other disasters, “Disaster-Response Vending Machines” provide free
soft drinks to residents by remote control via personal computers from local administrative offices. These machines are also outfitted withdigital displays that can provide real-time information on emergency evacuation sites and maps. As of December 31, 2011, we have installeda total of 266 “Disaster-Response Vending Machines” to contribute to the safety of local residents.
Disaster-Response
Vending Machine

Scheme of Disaster-Response Vending Machines

Disaster Strike

Municipalities

Free Drink Supply

18
Annual Review 2011

Delivery of Disaster
Information Messages(Principal Municipalities in implementing)
Kyoto● Daisen-cho, Tottori● Yasugi-shi, Shimane● Okawa-shi, Fukuoka●

Corporate Social Responsibility Activities

Business Activities Contributing to Local Communities

Corporate Social Responsibility Activities

Together with Local Communities

The Group conducts various social activities as a corporate citizen together with local communities in our sales territory (14 prefectures).
We carry out continuous actions on approval of shareholders.

Resolutions of the general meeting of shareholders
Appropriation of funding retained earnings■ Dividend■ Reserve fund●●Reserves for local communities’ contribution
Reserves for local communities’ environmental protection■ Retained earnings at beginning

Local communities’ contribution activities
Under our basic stance, “With local communities”, we encourage the healthy development of youth and also encourage closer communication with communities. Our four major supporting activities are social welfare, sports activities, cultural and educational activities, andmajor regional events.

■ Donation of Educational Materials to■ Donation of Unicycles to Elementary Schools■ Rugby Clinic

With our wish for children as leaders of the next
generation to grow healthily and to acquire cooperativeness and patience through sport activities, wehave been donating unicycles to public elementary
schools since 1994. Unicycles are appreciated as
effective sporting equipment to develop the nervous
system and to improve reflex nerves. Unicycle-riding
is part of the Ministry of Education, Culture, Sports,
Science and Technology curriculum guidelines, andis considered one of the tools children can use andfor fun.
We donated 1,000 unicycles to 100 schools in oursales territory in 2011.

Our rugby club members provide guidance forhigh-school students to help improve their rugby
skills. This guidance is of help to them in understanding the safety of the game and the importanceof fundamentals by implementing a clinic with bothstudents and coaches.

■ Classical Music Concerts■ Family Musicals■ Ichimura Shizenjuku-Kyushu

To create an affluent society (cultivation of spiritualhuman resources), we have been sponsoring “Coca-Cola
West Classic Concert” for local residents since 1989
to enjoy live performances of the finest classical music.
In 2011, we held “Wiener Ring Ensemble New
Year Concert” in Fukuoka and “Franz Liszt Chamber
Orchestra & Hiroko Koda (Soprano)” in Osaka, where
masterful performances were offered and local residents we invited enjoyed the fantastic concerts.

During the summer holidays since 2000, we hold
“Coca-Cola West Family Musicals” as an activity tofoster the bond between parents and children wherechildren and their parents can enjoy musical performances.
In 2011, we held, at three locations, in Fukuoka
Prefecture, in Hiroshima Prefecture, and in Osaka
Prefecture, “Rudolf and Ippaiattena,” , which is basedon the children’s book read for nearly 25 years. We
invited local residents and their families had a pleasant time.

The school has been supporting healthy development and growth of children under the basic idealof “Learn energy to live from the earth” since it was
launched in 2003. Through farming activities andcommunal life, the program offers children some opportunities to learn moral principles and to promoteindependence and creativity.

Special-Needs Schools
We have been donating information equipment(computers and peripherals) to special-needs schools
since 1993 to help mentally and physically disabledstudents gain self-reliance. In 2011, we donatedteaching tools to 14 schools in our sales territory.

19
Annual Review 2011

Corporate Social Responsibility Activities

Local environment improvement activities
We recognize global environmental protection as one of the crucially important issues, and therefore, we contribute to the development of sustainable society with the slogan of “Sawayaka for people and the environment (Fine people and Pleasant environment).”■ Conservation Activities at “Sawayaka Shizen-no-Mori”■ Mt. Daisen “Environmental Class of Water”

With the aim of recharging irreplaceable clean water resource produced from forests, we have been conducting forest conservation activities at “Sawayaka Shizenno-Mori” since 2006, under co-management agreements with the communities inthe suburbs of our all plants.
In 2011, about 200 participants, including our employees and their families
together with local citizens, gathered to thin trees, to improve cutting, and to build
trails at 5 locations in Kyoto, in Hyogo, in Tottori, in Hiroshima, and in Saga.

As a corporation utilizing irreplaceable clean water, we hold an environmental class so that children can increase understanding of forest-produced
water and the global environment.
In 2011, 90 elementary school students from Kansai, Chugoku, and Kyushu
areas participated, as a place of activity with the Daisen factory, a factory forwater located in Mt. Daisen, which is the highest mountain in the Chugoku
Mountains, and at the foot of Mt. Daisen. The children had a valuable experience not perceivable in daily life by seeing the process of manufacturing thenatural mineral water “I LOHAS” and visiting facilities introducing the nature,
history, and culture of Mt. Daisen.

■ Support for Tree Planting Activities
We perform a tree-planting activity “Create an
Acorn Forest” as a part of environmental and educational support programs for local communities.
Through these programs, children and local residents
gained understanding of the importance of natureand environment conservation. At the same time, we
consider these activities could prevent global warming through an increase of greenhouse gas absorption.
We planted 440 new broadleaf trees, such as
quercus serrate and oak trees, according to the local
vegetation in 2011.

■ Summer School of Ecological	Experiences
We hold learning programs on natural environment
so that children as leaders of the next generation canunderstand the splendor and richness of nature withactual experiences.
In 2011, 30 elementary school children from
Fukuoka Prefecture and Saga Prefecture and 30
elementary school children from Kyoto participatedin a two-day, one-night program. Children learned
about relations between lives and forests as wellas the importance of the water-retaining function offorests with the help of expert instructors.

20
Annual Review 2011

■ Local Community Cleanup Activities
Our employees of each business establishment
proactively participate in Local Community Cleanup
Activities organized by each municipality, considering
them as occasions to communicate directly with local residents.
In 2011, about 650 employees and their families
took part, at 7 locations, in our sales territory, thereby
contributing to local beautification. We will continue
participating in these activities and strive to contribute to a community.

Financial Information

Financial Information

Analysis on Operating Results
Outline of Business Results of Fiscal 2011

Operating Results

prepaid pension costs and provision for retirement benefits, which had formerly
been recorded by each plan, were netted. This resulted in prepaid pension costs
and provision for retirement benefits decreasing by the same amount, which are
the main reasons for decreases in total assets and liabilities.

■ Net Revenues

In the soft drink business, although we faithfully engaged in finely tuned marketing activities according to the characteristics of each channel, net revenues
decreased slightly, due primarily to the effect of declining product prices. Meanwhile, we acquired the shares of Q’ SAI, CO., LTD. on October 1, 2010, and sincethen it and its five subsidiaries have been included in the scope of consolidation.
Consequently, the total net revenues of segments increased by ¥23,952 million,
or 6.4%, from the previous fiscal year, to ¥399,717 million.

■ Net Assets

Net Assets as of the end of the fiscal year increased by ¥1,597 million, or 0.7%,
from the end of the previous fiscal year, to ¥227,864 million. This is mainly attributable to net income for the fiscal year.
■ Consolidated Cash Flows■ Operating Income

Net Cash provided by Operating Activities
Net cash provided by operating activities resulted in a cash inflow of ¥39,960
million (25.9% increase compared to the previous fiscal year). Due primarily tothe impacts of an increase in income before income taxes, minority interests, andother adjustments and an increase in notes and accounts payable-trade in thesoft drink business, net cash provided by operating activities for the fiscal year
increased by ¥8,227 million from the previous fiscal year.

In addition to the aforementioned effect of newly consolidated companies, wereduced manufacturing costs through such methods as starting in-house PET
bottle production and improved productivity by reorganizing the personnel structure. Consequently, operating income increased by ¥4,466 million, or 37.2%,
from the previous fiscal year, to ¥16,469 million.
■ Recurring Income

Due primarily to an increase in operating income, recurring income increasedby ¥3,384 million, or 26.7%, from the previous fiscal year, to ¥16,044 million.

Net Cash provided by (used in) Investing Activities
Net cash provided by (used in) investing activities resulted in a cash outflow of¥34,050 million (compared to a cash outflow of ¥49,203 million for the previous
fiscal year). The acquisition of the shares of Q’ SAI, CO., LTD. in the previous fiscal year has a major impact on net cash provided by (used in) investing activities,
causing a difference of ¥15,153 million between the cash outflows of the fiscal
year and the previous fiscal year.

■ Net Income

Although recurring income increased, net income decreased by ¥584 million,
or 7.7%, from the previous fiscal year, to ¥6,997 million. This was mainly attributed to the recording of extraordinary losses in relation to adjustment for changesof accounting standard for asset retirement obligations, and the occurrence ofloss on retirement of noncurrent assets.

Net Cash provided by (used in) Financing Activities
Net cash provided by (used in) financing activities resulted in a cash outflow of¥8,780 million (compared to a cash outflow of ¥16,316 million for the previous
fiscal year). The partial repayment of long-term loans payable of Q’ SAI, CO., LTD.,the company’s consolidated subsidiary, at the time of refinancing has a major
impact on net cash provided by (used in) financing activities, causing a differenceof ¥7,535 million between the cash outflows of the fiscal year and the previous
fiscal year. As a result, cash and cash equivalents as of the end of the fiscal year
decreased by ¥2,870 million, or 7.7%, from the end of the previous fiscal year, to¥34,564 million.

Financial Position
Equity ratio as of the end of the fiscal year stood at 66.4%, so we deem that
we continue to maintain financial soundness.
■ Assets and Liabilities

Total assets as of the end of the fiscal year decreased by ¥3,471 million, or
1.0%, from the end of the previous fiscal year, to ¥342,560 million.
Total liabilities as of the end of the fiscal year decreased by ¥5,069 million, or4.2%, from the end of the previous fiscal year, to ¥114,695 million. Upon unification on January 1, 2011 of the retirement benefit plans of the company andconsolidated subsidiaries engaging in the soft drink business, which had been different among pre-merger companies (Coca-Cola West Japan Co., Ltd., Kinki CocaCola Bottling Co., Ltd., and Mikasa Coca-Cola Bottling Co., Ltd.), the amounts of

Net Revenues

Operating Income

Net Income(Unit: Millions of Yen)

400,000(Unit: Millions of Yen)

20,000500,000
409,521 395,556

369,698

375,764

16,46916,056

399,717

10,000(Unit: Millions of Yen)

9,375
7,582

8,000

15,000300,000

6,997

6,000

12,003
10,521

4,000

10,000200,000

2,000
5,000

100,000

2007

2008

2009

2010

2011

(7,594)(10,000)

0

0

129

0

2,242

2007

2008

2009

2010

21
Annual Review 2011

2011

2007

2008

2009

2010

2011

Business Results by Business Segment■ Soft Drink Business

As for product strategy, we concentrated our investment in core 8 brands and strengthened sales activities to expand sales. With regard to channel strategy,
we expanded sales by proactively using coolers or racks to raise the number of selling places in supermarkets, as well as by displaying small-package products
to increase immediate consumption opportunities. For vending channel (vending machines), we worked on the expansion of sales per machine by developing
product lineups and setting prices according to the features of the locations.
Moreover, based on a strategic partnership with the Coca-Cola Company and Coca-Cola (Japan) Co., Ltd., we have reinforced marketing cooperation andpromoted various efforts to achieve the sustainable growth of the Coca-Cola business.
With regard to SCM, we developed the supply system in line with business strategies to reduce unsellable products. Also, we engaged in capital investment
through such methods as updating manufacturing equipment and introducing new technologies, and achieved productivity improvement and the resultant cost
reduction.
As a result, in fiscal 2011 net revenues and operating income for the segment amounted to ¥363,469 million and ¥11,475 million, respectively.
■ Health Foods Business

The Group’s health foods business is conducted by Q’ SAI, CO., LTD., the company’s subsidiary, and its five subsidiaries.
As for product strategy, focusing on healthcare products “Hyaluronan collagen” and “Peptide ace (Food for Specified Health Uses)” and skin care products“Basic skin care,” we used advertising expenses, taking into account efficiency, to attract new consumers and encourage existing consumers to continue to use
our products. In addition, with the aim of expanding sales in the mail order channel, which is the main sales channel for the products, we changed the orderacceptance system to improve our capacity to meet consumer needs and focused on training telephone communicators, who function as contact points with
consumers.
As a result, in fiscal 2011 net revenues and operating income for the segment amounted to ¥34,788 million and ¥4,989 million, respectively.
■ Other Businesses

Other businesses formerly consisted of the transportation business (general cargo) and the food service business. However, for the purpose of the concentration of management resources of the Group, on November 18, 2011 we transferred all the shares of Akiyoshi Systems Co., Ltd., which engages in the foodservice business.
In fiscal 2011 net revenues and operating income for the segment amounted to ¥1,458 million and ¥5 million, respectively.

(Unit : Millions of Yen)

2010
Soft Drink Business Health Foods Business2011

Other Businesses

Total

Soft Drink Business Health Foods Business

Other Businesses

Total

Net revenues¥365,680¥8,378¥1,705¥375,764¥363,469¥34,788¥1,458¥399,717

Segment income*1¥10,809¥1,124¥69¥12,003¥11,475¥4,989¥5¥16,469(Unit : Thousands of U.S. Dollars)*2

2010Soft Drink Business Health Foods Business2011

Other Businesses

Total

Soft Drink Business Health Foods Business

Other Businesses

Total

Net revenues$4,745,394$108,730$22,128$4,876,253$4,716,709$451,449$18,930$5,187,089

Segment income*1$140,270$14,597$895$155,764$148,916$64,744$65$213,726*1 Segment income concurs with operating income in the consolidated statements of income.
*2 Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated) isused for conversion.

Net Revenues Composition Ratio for 2011

Operating Income Composition Ratio for 2011

0.4%

0.0%

8.7%
30.3%

■ Soft Drink Business■ Soft Drink Business■ Health Foods Business

90.9%■ Health Foods Business■ Other Businesses

69.7%

22
Annual Review 2011

■ Other Businesses

Financial Information

Segment Information

Consolidated Balance Sheets
Financial Information(As of December 31)(Unit: Millions of Yen)

(Unit: Thousands of U.S. Dollars)*

2009

2010

2011

2011

¥20,634¥24,208¥25,208$327,122

AssetsCurrent Assets:
Cash and Deposits
Trade Notes and Accounts Receivable

21,63023,50725,335

328,781Marketable Securities

51,335

15,737

26,738346,979

Merchandise and Finished Goods

22,861

22,355

21,954284,901

Work in Process
Raw Materials and Supplies

0

231

464

6,030

2,055

1,396

1,450

18,827

Deferred Tax Assets (Current Portion)

3,288

2,722

4,373

56,750Other

14,49013,823

14,177

183,976

(131)

(186)

(504)

(6,551)

136,164

103,796

119,197

1,546,818

Buildings and Structures, net

34,90734,992

33,525435,052

Machinery, Equipment, Vehicles, net

19,01020,155

20,497265,998

Allowance for Doubtful Accounts

Total Current Assets
Fixed Assets:
Property, Plant and Equipment

Sales Equipment, net

23,905

21,20920,820270,184

Land

53,00653,982

52,774

684,844

Leased Assets, net

4,605

2,066

963

12,504

Construction in Progress

385

7

395

5,135

1,801

1,528

1,241

16,107

137,622

133,943

130,218

1,689,827

Goodwill

2,112

50,17247,474

616,076

Software, etc

4,344

4,282

4,723

61,301

6,457

54,45452,198677,377

Investment Securities

27,65826,69024,583319,019

Deferred Tax Assets

728

9,571

4,321

56,075

Other, net

Total Property, Plant and Equipment
Intangible Assets:

Total Intangible Assets
Investments and Other Assets:

Advanced Payments for Retirement Expenses

11,606

10,934

5,827

75,626

Other

7,025

7,201

6,788

88,091

Allowance for Doubtful Accounts

(445)

(560)

(574)

(7,461)

Total Investments and Other Assets

46,57353,83840,946531,352

Total Fixed Assets

190,653242,236

223,362

2,898,557

Total Assets¥326,818¥346,032¥342,560$4,445,376* Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated)
is used for conversion.

23
Annual Review 2011

(Unit: Thousands of U.S. Dollars)*

2010

2011

2011

¥17,309¥14,615¥18,657$242,113

−

2,567

2,542

32,999

2,645

1,031

461

5,989

Liabilities
Current Liabilities:
Trade Notes and Accounts Payable
Current Portion of Long-Term Loans Payable
Lease Obligations
Accrued Income Taxes

783

1,616

2,750

35,687

Other Accounts Payable

13,925

15,55815,656203,171

−

169

160

2,082

Other

Provision for Sales Promotion Expenses

6,440

7,854

6,350

82,412

Total Current

41,10543,41546,579604,456

Long-Term Liabilities:
Bonds Payable
Long-Term Loans Payable

50,00050,00050,000648,845−

12,816

10,273

133,321

Lease Obligations

2,050

1,231

778

10,097

Deferred Tax Liabilities

1,536

3,620

2,319

30,098

Allowance for Employees’ Retirement Benefits

5,512

5,622

1,018

13,216

Liabilities for Directors’ and Corporate Auditors’

16

102

117

1,520

Negative Goodwill

622

207

−

−

Other

3,158

2,748

3,609

46,839Total Long-Term Liabilities

62,89776,34968,116883,939

Total Liabilities

104,002

119,765

114,695

1,488,396

15,231

197,664

15,231

15,231109,072

1,415,418

NET ASSETS

Shareholders’ Equity:
Common Stock
Capital Surplus
Retained Earnings

109,072

109,072

130,655

1,695,498

Treasury Stock

124,174

127,657(25,764)(334,339)

229,195

2,974,242

Total Shareholders’ Equity(25,759)(25,761)

222,718

226,199

23(255)(1,703)(22,102)

Minority Interests

23

(255)

(1,703)(22,102)

Total Net Assets

74

324

373

4,840

Total Liabilities and Net Assets

222,816

226,267

227,864

2,956,980

Total Liabilities and Net Assets¥326,818¥346,032¥342,560$4,445,376

Other Accumulated Comprehensive Income
Net unrealized gain(loss) on Other Marketable Securities
Total Other Accumulated Comprehensive Income* Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated)
is used for conversion.

24
Annual Review 2011

Financial Information(Unit: Millions of Yen)

2009Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Financial Information(From January 1 to December 31)(Unit: Thousands of U.S. Dollars)*(Unit: Millions of Yen)

Consolidated Statements of Income
Net Revenues
Cost of Goods Sold
Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

2009

2010

2011

2011

¥369,698
206,240
163,457
161,214
2,242
1,074

¥375,764
203,307
172,456
160,452
12,0032,009¥399,717
204,472
195,244
178,775
16,4691,272$5,187,089
2,653,417
2,533,672
2,319,945
213,726
16,511

97
251
360
−
364

122
263
414

70
284
207
139

914
3,695
2,692
1,814

569

7,394

1,231

1,352

1,698

22,036

316
298
74
260

685
629
−
−

8,901
8,169
−
−

282

708
371
−
−
273

382

4,965

2,085
197

12,659371

16,044431

208,201
5,602

−
12
165
19

218
−
118
34

382
49
−
−

4,960
642
−
−

12,72948

2,462

31,955

19
740
−
51
21
−
−

−
−
−
48
−
−
−

43
715
85

563
9,284
1,110

31
16
490
352

406
211
6,368
4,576

−

−

726

9,433

6,092
904
2,716

52

−
−
−
−
−
−
−

−
−
−
−
−
−
−

−
−
−
−
−
−
−

(10,446)

12,982

14,013

181,848

1,018(3,878)(2,859)−8¥(7,594)

1,881
3,488
5,369
−
30
¥7,582

3,878
3,082
6,960
7,052
55
¥6,99750,32439,99990,324
91,524722$90,802(Unit: Millions of Yen)

(Unit: Thousands of U.S. Dollars)*

2009

2010

2011

2011

−

−

¥7,052$91,524

Interest Income
Dividends
Amortization of Negative Goodwill
Equity in Earnings of Affiliates
Other Non-Operating Income

Non-Operating Expenses
Interest Expenses
Loss on Disposal of Property, Plant and Equipment
Equity in Loss of Affiliates
Expense for Bond Issuance
Other Non-Operating Expenses

Recurring Income
Extraordinary Income
Gain on Sales of Property, Plant and Equipment
Gain on Sales of Investment Securities
Subsidiary Income
Gain on Transfer of Business

Extraordinary Losses
Loss from Disaster
Loss on Disposal of Property, Plant and Equipment
Loss on Sales of Shares of Subsidiaries
Write-down of Investment Securities
Write-down of Golf Club Memberships
Loss on Disposal of Inventories
Expense for Provision for Power Saving
Loss on Adjustment for Changes of Accounting Standard for Asset
Retirement Obligations
Impairment Loss
Group Restructuring Expenses
Expense for Provision for Sales Equipment Installation
Head Office Relocation Expense
Early Retirement Bonuses
Employee Transfer Fees
Effect of Applying Lease Accounting Standards

362

617
1,150

Income (Loss) Before Income Taxes, Minority Interests and Other
Adjustments
Income Taxes
Income Tax Deferred
Total Income Taxes
Income before Minority Interests
Minority Interests
Net Income (Loss)

Consolidated Statements of Comprehensive Income
Income before Minority Interests
Other Comprehensive Income
Net Unrealized Gain (Loss) on Other Marketable Securities
Share of Other Comprehensive Income of Associates Accounted for
Using Equity Method
Total Other Comprehensive Income

806
401

−

−

(1,455)(18,891)

−

−

8

109

−
−

−
−

(1,447)(18,782)

Comprehensive Income

5,605

72,741(Breakdown)Comprehensive Income Attributable to Owners of the Parent Company
Comprehensive Income Attributable to Minority Interests

−
−

−
−

5,549
¥55

72,019$722* Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated)
is used for conversion.
25
Annual Review 2011

Consolidated Statements of Changes in Shareholders' Equity(Unit : Millions of Yen)

Other Accumulated
Comprehensive Income

Shareholders' Equity
Retained
Earnings

Treasury Stock

Total
Shareholders'EquityNet Unrealized
Gain (Loss) on
Other Marketable
Securities

Total Other
Accumulated
Comprehensive
IncomeMinority
Interests

Total
Net Assets

Common Stock

Capital Surplus¥15,231¥109,072¥127,657¥(25,761)¥226,199¥(255)¥(255)¥324¥226,267

Distribution of Dividends−−(3,998)−(3,998)−−−(3,998)Net Income

−

−

6,997

−

6,997

−

−

−

6,997

Acquisition of Treasury Stock

−

−

−

(3)

(3)

−

−

−

(3)

Cancellation of Treasury Stock

−

−

(0)

0

0

−

−

−

0

Net Changes in items other thanshareholders' equity during the
fiscal year.

−

−

−

−

−

(1,447)(1,447)48(1,398)

Total Changes during the Fiscal Year

−

−

2,997

(2)

2,995

(1,447)(1,447)48

1,597

Balance as of December 31, 2011¥15,231¥109,072¥130,655¥(25,764)¥229,195¥(1,703)¥(1,703)¥373¥227,864

Balance as of December 31, 2010
Changes during the Consolidated
Fiscal Year 2011

(Unit : Thousands of U.S. Dollars)*

Other Accumulated Comprehensive
IncomeShareholders' Equity
Retained
Earnings

Total
Shareholders'EquityNet Unrealized
Gain (Loss) on
Other Marketable
Securities

Total Other
Accumulated
Comprehensive
IncomeMinority
Interests

Total
Net Assets

Common Stock

Capital Surplus$197,664$1,415,418$1,656,594$(334,310)$2,935,366$(3,320)$(3,320)$4,206$2,936,252

Distribution of Dividends−−(51,893)−(51,893)−−−(51,893)

Net Income−−

90,802−90,802−−−90,802Acquisition of Treasury Stock

−

−

−

(39)

(39)

−

−

−

(39)

Cancellation of Treasury Stock

−

−

(3)

10

7

−

−

−

7

Net Changes in items other thanshareholders' equity during the
fiscal year.

−

−

−

−

−

(18,782)(18,782)634(18,148)

Total Changes during the Fiscal Year−−38,904(29)

38,875(18,782)(18,782)

634

20,727

Balance as of December 31, 2011

$197,664$1,415,418$1,695,498$(334,339)$2,974,242$(22,102 )$(22,102)$4,840$2,956,980

Balance as of December 31, 2010

Treasury Stock

Changes during the Consolidated
Fiscal Year 2011

* Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated)
is used for conversion.

26
Annual Review 2011

Financial Information(From January 1 to December 31)

Consolidated Statements of Cash Flows
Financial Information(Years Ended December 31)(Unit:Millions of Yen)

Cash Flows from Operating Activities:
Income (Loss) Before Income Taxes, Minority Interests and Other Adjustments
Depreciation and Amortization
Impairment Gains
Amortization of Goodwill
Amortization of Negative Goodwill
Increase (Decrease) in Liabilities for Directors’ and Corporate Auditors’ Retirement Benefits
Increase (Decrease) in Liabilities for Retirement Benefits
Decrease (Increase) in Advance Payments for Retirement Expenses
Interest and Dividend Income
Interest Expense
Equity in Earnings (Gain) of Affiliates
Loss (Gain) on Sales of Marketable and Investment Securities
Loss on Sales of Shares of Subsidiaries
Write-down of Marketable and Investment Securities
Loss (Gain) on Sales of Fixed Assets
Loss on Disposal of Fixed Assets
Decrease (Increase) in Accounts Receivable
Decrease (Increase) in Inventories
Decrease (Increase) in Other Assets
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Other Liabilities
Loss on Adjustment for Changes of Accounting Standard for Asset Retirement Obligations
Other
Sub-totalInterest and Dividends Received
Interest Paid
Income Taxes Paid
Income Taxes Refunds
Net Cash provided by Operating Activities
Cash Flows from Investing Activities:
Acquisition of Marketable and Investment Securities
Proceeds from Sales of Marketable Securitas and Investment Securities
Acquisition of Fixed Assets
Proceeds from Sales of Fixed Assets
Proceeds from Recovery of Investments
Acquisition of Share of Subsidiaries with Change in Scope of Consolidation
Expense for Acquisition of Subsidiaries with Change in Scope of Consolidation
Acquisition of Shares of Affiliates
Proceeds from Transfer of BusinessLong-Term Loans
Proceeds from Collection of Long-Term Loans
Increase in Time Deposits
Proceeds from Refund of Time Deposits
Other
Net Cash provided by (used in) Investing Activities
Cash Flows from Financing Activities:
Proceeds from Long-Term Loans Payable
Payment for Repayment of Long-term Loans
Proceeds from Issuance of Bonds
Expense for Repayment of Lease Obligations
Payments for Acquisition of Treasury Stock
Proceeds from Sales of Treasury Stock
Dividends Paid
Dividends Paid to Minority Interests
Net Cash provided by (used in) Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, at beginning of year
Increase in Cash and Cash Equivalents due to change in Scope of Consolidation
Cash and Cash Equivalents at end of year

(Unit:Thousands of U.S. Dollars)*

2009

2010

2011

2011

¥(10,446)¥12,982¥14,013$181,848

24,06922,405

21,371

277,334

6,092

−

−

−

−

844

2,697

35,003

(360)

(414)

(207)

(2,692)

9

(3)

15

196

107

(94)

(4,601)(59,718)

1,701

671

5,106

66,268(348)( 385)(355)(4,609)

316

708

685

8,901

74

(806)

(139)

(1,814)

(12)

−

( 49)

(642)

−

−

85

1,110

51

48

31

406

( 4)

(234)

(404)

( 5,244)

1,188

327

1,299

16,86942100(1,834)( 23,805)(12,159)

2,446

112

1,459

5,361

1,083

( 560)(7,267)

13,291(3,138)

4,052

52,592(432)(2,544)

336

4,371

−

−

726

9,433

216

153

228

2,970

28,75934,14942,612552,971

342

394

351

4,558

(295)

(897)

(687)

(8,927)(3,287)(2,094)(2,746)(35,643)

3,228

181

431

5,602

28,74731,732

39,960518,561(250,481)( 33)(2,230)(19,302)

1,895

2,105

4,649

60,340(24,613)(15,250)(21,890)(284,069)

579

1,176

2,429

31,530

2,042

−

−

−

(2,509)(35,366)

−

−

−

−

(21)

(283)

−

(153)

−

−

−

628

−

−

(1,086)

(243)

(360)

(4,672)

372

295

474

6,155

(191)

(484)

(334)

(4,343)

97

320

315

4,097

−

−

(10)

(138)

(23,447)(49,203)(34,050)(441,863)−

15,000

−

−

(194)

(25,613)(2,567)(33,324)50,000−−−(2,200)(1,568)(2,204)(28,604)

(5)

(3)

(3)

(39)

2

0

0

7

(4,299)(4,098)(3,998)(51,893)

(4)

(33)

(6)

(88)

43,297(16,316)(8,780)(113,943)

48,596(33,787)(2,870)(37,245)

22,412

71,22137,434

485,783

212

−

−

−

¥71,221¥37,434¥34,564$448,537* Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 77.06 yen against the U.S. dollar (as of December 31, 2011; amounts less than one unit are truncated)
is used for conversion.

27
Annual Review 2011

Other Information

Financial information and other data discussed in this annual
review, are subject to a variety of risks. Those risks, deemed most
likely to have a significant impact on potential investment decisions,are presented below. The Coca-Cola West Group is fully aware of thepossibility of these risks and thus works to avoid them or effectively
deal with them should they arise. Forward-looking statements hereinreflect the judgment of management as of March 23, 2012.

(5) Impact of Economic Conditions(1) Business Agreements with the Coca-Cola Company of
the United States and Coca-Cola (Japan) Co., Ltd.

2) Fluctuations in asset value
Fluctuations in the value of land, marketable securities, and otherassets owned by the Coca-Cola West Group, as well as in pension
assets held in its defined-benefit company pension fund, could potentially impact its operating results and financial position. Marketable securities with a fair value, for example, are subject to changes
in fair market value in capital markets, since that is how they arevalued.

Coca-Cola West conducts business activities based on a bottler
agreement with The Coca-Cola Company and Coca-Cola (Japan)
Co., Ltd.

(2) Quality Assurance
Beverages are the core product of the Coca-Cola West Group.
The Group makes every effort to raise employee awareness regarding quality and implements programs aimed at preventing incidents
concerning quality in order to offer its consumers high-quality andreliable beverages. Nevertheless, in the event of an incident related
to product quality, the Company’s brand image could be tarnished,irrespective of whether or not it was actually at fault. As such, anincident of this nature could adversely affect the operating results of
the Group.

(3) The Soft Drink Industry
1) Impact of market fluctuations
Sales of soft drinks, the Group’s core products, are readily influenced by changes in consumers’ preference. In a beverage marketof this kind, the Group strives to continuously offer appealing products and services. Nevertheless, failure to amply forecast market
changes could potentially affect its operating results.
2) Impact of weather-related factors
Weather conditions tend to have an effect on the sales of softdrinks. Cool summers or warm winters, for example, often havea significant impact on consumers demand. Although the Groupmakes every effort to minimize the influence of weather-related factors on sales, it offers no guarantee that it can completely eliminate
the effect of such factors.

(4) Health Food Related Industry
The market of health food, which our group is supplying for, is expected to grow due to our country’s growing aging population. However, the competition, in this market has been keen because many
companies, including medium and small companies, are entering
into the market. If our company’s competitiveness were lessened
relatively along with increasing market competition, there is the possibility that goodwill, associated with this health food industry, could
be impaired and could impact financial performance.

1) Trends in personal consumption
Sales of soft drinks are closely linked to trends in personal consumption. Accordingly, a sudden decline in personal consumption
due to worsened economic conditions or price reductions of theCompany’s products resulting from prolonged deflation could adversely affect the operating results of the Group.

(6) Public Regulations
The Group’s Manufacturing and Marketing of Beverages & Foodsegment is subject to a number of regulations in Japan, including
the Act Against Unjustifiable Premiums and Misleading Representations, and the Food Sanitation Law. The Group fully complies withthese and all other regulations in its commitment to providing safeand reliable products. Accordingly, tougher regulations, for example,
might incur new compliance costs, which could potentially affect theoperating results of the Coca-Cola West Group.

(7) Management of Personal Information
The Coca-Cola West Group holds large volumes of personal information. In handling this information, it works on a unified basis toformulate and adhere to related guidelines and implement ongoingtraining and educational activities. However, an external leak of personal information could lead to a deterioration of trust in the CocaCola West Group and potentially impact its operating results.

(8) Impact of Disasters
The Coca-Cola West Group has a system in place to minimize theeffects of power outages, as well as other problems that could affectits business operations. Typhoons, earthquakes and other natural
disasters, however, could create conditions that overwhelm thissystem. Conditions of this magnitude could potentially impact theoperating results and financial position of the Group.

28
Annual Review 2011

Other Information

Risk Information

Other Information

Corporate Governance(1) Fundamental Stance on Corporate GovernanceCoca-Cola West’s fundamental stance on corporate governance is to maximize “shareholders’ value” by improving management efficiency and transparency.
Coca-Cola West adopted the corporate auditor system in accordance with its separation of the decision making and supervisory function from theexecution of operations of the corporation. In March 1999, we restructured the Board of Directors and adopted the corporate executive officer system.
In April 2007, this system was extended to the Coca-Cola West Group executive officer system in order to increase the efficiency of management
and to accelerate its decision-making process to cope with the swift changes to the external and internal business environment. In addition, in March
2006, the terms of corporate directors were reduced from two years to one year. This effectively highlights the management responsibilities of directors
for each fiscal year and establishes an agile management structure capable of responding to a rapidly changing business environment.
In July 2006, we established the Management Advisory Committee, which advises the Board of Directors. This committee solicits advice from prominent industrial and academic experts to achieve the objectives of improvement of management in both efficiency and transparency, which consequently
enhance shareholders’ value. The committee is responsible for advising on the following important issues: (1) Important corporate group strategies, (2)selection of appropriate candidates as members of the Board of Directors as well as corporate auditors, and (3) executive compensation and rewards.

(2) Contents of the Articles of Incorporationa. Number of Directors
Coca-Cola West’s articles of incorporation stipulate that there shall be a maximum of 15 directors.
b. Requirements for Electing Directors
The company’s articles of incorporation stipulate that the election of directors shall be by a majority vote, in which at least one-third of the shareholders with voting rights are present. Resolution for the election of directors shall not be made by cumulative voting.
c. Acquisition of Treasury Stocks
The company’s articles of incorporation stipulate that the company may repurchase its own shares on the market by a resolution of the Board of
Directors in which shareholders’ approval is not necessary, pursuant to the provisions of Article 165, Paragraph 2 of the Company Law. The Board of
Directors has been authorized to repurchase the company shares, allowing it to increase capital efficiency and to establish a flexible policy of capital
structure to cope with the changing business environment.
d. Determination of Interim Dividends
The company’s articles of incorporation stipulate that the company may, by a resolution of the Board of Directors in which shareholders’ approval is
not necessary, determine interim dividends, as prescribed by Article 454, Paragraph 5 of the Company Law. The Board of Directors has been authorized
to determine interim dividends so that profits can be returned to shareholders when deemed appropriate.
e. Special Resolutions of the General Meeting of Shareholders
The Company’s articles of incorporation stipulate that special resolutions of a general meeting of shareholders, pursuant to Article 309, Paragraph 2of the Company Law, shall be adopted by an affirmative vote of at least two-thirds, in which a minimum of one-third of voting shareholders is present.
This is to ease the general meetings of shareholders by enabling a quorum to pass special resolutions.
f. Business Execution and Management Supervision
We established the monitoring system with the members of the Board of Directors and the Board of Corporate Auditors to fully supervise the performance of executive officers’ business operations. The members of the Board of Directors and the Board of Corporate Auditors also participate in an
important management meeting, consisting of executive officers. When questions arise during the course of business execution, we consult with attorneys, CPAs and other specialists, and this advice would be used to determine the best way to proceed.

(3) Current Situation of the Internal Control System

At a meeting held on July 1, 2006, the Board of Directors resolved to strengthen internal control systems for the purpose of ensuring that Coca-Cola
West and its Group companies conduct business appropriately. In addition, at the Board of Directors meetings held on February 7, 2008, and on February 7, 2012, certain aspects of these systems were reviewed as follows:a. Systems for ensuring that the duties of the members of Board of Directors and employees comply with laws and by laws.
Internal rules concerning compliance systems and a code of conduct have been established to encourage officers and all employees of Coca-Cola
West and its group companies to observe laws and ordinances as well as company rules, and to act in line with accepted social norms. They were especially intended to establish a systematically firm policy against any involvement whatsoever with organized crime and other anti-social forces. Further,a department responsible for CSR will be established at Coca-Cola West to unify compliance efforts across the group and conduct educational activities
for officers and employees to implement thorough compliance systems. The department in charge of internal audit shall examine the level of cooperation with the department in charge of CSR and the status of compliance across the group, and then regularly report compliance and other important activities related to the internal control system to the Board of Directors and the Board of Corporate Auditors. In addition, an internal whistleblower hotline
will be set up as a means for officers or employees to directly provide information on any conduct that may violate laws and ordinances.
b. Preservation of information material related to performance of directors’ duties and responsibilities
In accordance with established rules for preservation and document management, documents and electronic files containing information of the performance of directors’ duties are to be recorded and stored, thereby allowing members of the Board of Directors and the Board of Corporate Auditors toaccess such documents and files at any given time.

29
Annual Review 2011

(4) Risk Management System

Coca-Cola West has established the Coca-Cola West Group Risk Management Committee. The objective of this body is to minimize damage in theevent of a crisis by preventing confusion within the group and ensuring a swift and appropriate response. The group ensures that its management principles comply with all laws and ordinances and follow the norms of society, thereby gaining the trust of all of its stakeholders. This is enshrined in its
Code of Conduct, which is designed to encourage a compliance mindset among all group corporate officers and employees.

(5) Internal Audits, Corporate Auditors’ Audit, and Financial Audit Systema. Organization of Internal Audits and Corporate Auditor, Personnel and Procedures, Coordination among Internal Audit, Corporate Auditors’
Audit and Financial/accounting Audit.
Coca-Cola West aims to comply with corporate rules and regulations, conduct appropriate corporate activities, implement operational management,
protect the company’s assets and maintain soundness of its financial situation. In order to achieve these goals, we established the Audit Office (7 members) as the Internal Audit Department, which directly reports to the president.
The corporate auditors attend meetings of the Board of Directors, management, and other important meetings, consisting of executive officers. They
also meet representative directors on a regular basis and examine the results of audits performed by the Audit Office. Through foregoing activities, corporate auditors monitor the executive actions of members of the Board of Directors and executive officers in accordance with relevant laws, regulations,and the company’s bylaws and internal auditing standards.
The Audit Office conducts preliminary discussions with corporate auditors concerning its auditing policy and plans for each fiscal year.
Corporate auditors also receive reports about the results of audits as needed. In addition, at the beginning of the fiscal year, the company’s independent auditor provides the corporate auditors with an explanation of its audit plans, and as needed, supplies information and reports to the auditors during interim audit or the year-end audit.
b .Profile of Independent Auditors and Related Personnel
Coca-Cola West has appointed KPMG AZSA & Co. as its independent auditor. The names of the firm’s certified public accountants (engagement andmanagement partners) that audit the Company’s financial statements are listed as follows.
Name of CPA Who Carried Out Duties

Auditing

Experience

Designated Liability Partner

Tetsuzo Hamashima

7 years

Designated Liability Partner

Takaki Okano

3 years

Designated Liability Partner

Junichi Adachi

4 years

The auditing team has 10 CPAs and 15 other members.

30
Annual Review 2011

Other Informationc. Rules and other systems related to managing the risk of loss
The department in charge of CSR will examine risks across organizations and companies within the group, working with individual divisions that
handle unique risks associated with compliance, disasters, product quality, information security, the environment, etc., to create rules and guidelines,
conduct training, and produce and distribute manuals. The department will also promptly appoint employees to take charge of measures in order todeal with new risks that arise.
d. System for ensuring that directors perform their duties effectively
The Board of Directors determines the objectives of the group to be shared by corporate officers and employees. Representative directors determine
effective methods, such as the delegation of authorization, to set specific targets to reach the goals of the group companies and departments. This division of task ultimately leads to the achievement of the group’s objectives.
e. System for ensuring proper business conduct as a corporate group consisting of the company and its subsidiaries
A department responsible for internal controls of the entire group was established at Coca-Cola West. The effective system of the group, which
conducts deliberations related to the internal controls at Coca-Cola West and every group company, facilitates information sharing and communicates
instructions and requests, has also been established.
f. Arrangements for employees whose assistance is requested by the Board of Corporate Auditors, and independence of the employees
from directors
Coca-Cola West arranges assistant employees of Corporate Auditors. The assistant employees assist with the performance of the directors’ duties
under corporate auditors’ directives and do not receive directives of directors and other executives.
g. System for corporate officers and employees to report to corporate auditors
The members of the Board of Directors arrange a system for corporate officers and employees at Coca-Cola West and its group companies topromptly report to the Board of Corporate Auditors on legal matters, as well as on matters that have a significant impact on the group, such as the performance of internal auditing, and the status and details of reports from the internal whistleblower hotline. The reporting method, including the employment of the task of submitting and receiving reports and the time frame for reporting, will be determined through deliberations between members ofBoard of Directors and corporate auditors.
h. System for ensuring that other auditing by the Board of Corporate Auditors is conducted effectively
Regular meetings are organized for corporate auditors and a representative director to exchange views and opinions.

Other Information

Corporate Governance(6) Outside Directors and Outside Corporate Auditors

Presently, two of Coca-Cola West’s ten directors and three of its six corporate auditors are from outside of the group.

a. Profile, Name and Qualification to be elected as an Outside director and Outside corporate auditor.
Division

OutsideDirector

OutsideDirector

OutsideCorporate
AuditorOutsideCorporate
AuditorOutsideCorporate
AuditorName

Relationship with our Company

Background to Appointment

Vikas Tiku

Mr. Vikas Tiku is Representative Director, Executive
Vice President and CFO of Coca-Cola (Japan) Co.,
Ltd. (hereinafter, “CCJC.”)Our company and CCJC entered into an agreementwith respect to production and sales of Coca-Cola
and other products and usage of Coca-Cola trademarks. We purchase the original Coca-Cola syrup andother beverages from CCJC and also receive rebates
for sales promotion. CCJC is thus a special interest
company.

We appointed Mr. Vikas Tiku as the outside director in order for us to enhance the strategic partnership with The Coca-Cola Company and CCJC.
Although CCJC is a major business partner with the special interests outlined on theleft, Mr. Tiku is the only director who duly serves as member of the Board of Directors of
CCJC, which is less than the majority within our Board of Directors. His decision making
capabilities regarding the company’s activities, management directions, and execution ofoperations are based on our company’s decisions. Consequently, we concluded that (1) our
company’s independence from CCJC can be maintained, (2) Mr. Tiku is not a person who
has influence over our management team, and (3) there is little possibility of a conflict ofinterest with other shareholders.

Mr. Hideharu Takemori is Representative Director andPresident of Minami Kyushu Coca-Cola Bottling Co.,Ltd.
Minami Kyushu Coca-Cola Bottling has a business
relationship with our company. It purchases and sells
beverages, such as Coca-Cola, between our companies, and is an equity method affiliate. It is thus a
special interest company.

Our company entered into business and capital alliance with Minami Kyushu Coca-Cola
Bottling. In order for us to promote mutual understanding and strengthen our relationship,
we appointed Mr. Takemori as an outside director.
As Minami Kyushu Coca-Cola has a business relationship with our company and isan equity method affiliate, both companies are closely related in terms of personnel andcapital. However, the number of outside directors from Minami Kyushu Coca-Cola is only
two including Mr. Takemori, which is less than the majority within our Board of Directors.
His decision making capabilities regarding the company’s activities, management directions, and execution of operations are based on our company’s decisions. Consequently,
we concluded that (1) our company’s independence from Minami Kyushu Coca-Cola canbe maintained, (2) Mr. Takemori is not a person who has influence over our management
team, and (3) there is little possibility of a conflict of interest with other shareholders.

Mr. Zenji Miura is Representative Director and Deputy
President of Ricoh Company, Ltd.
Ricoh Company, Ltd. is classed as “other relatedcompanies”.

Mr. Zenji Miura has a long professional career in the area of finance and accounting at
Ricoh. We appointed him as outside corporate auditor as we believe that he would be able
to utilize his experience for the auditing of our company.
Ricoh is a major shareholder but we are engaged in a different industry to the Ricoh
group. We sell beverages to the Ricoh group and there is a business relationship in place
where the Ricoh group provides technical maintenance of our company systems. The scaleof the business relationship is very small and we believe that the Ricoh group is not in aposition where it can interrupt our independent business activities. One of the Ricoh directors is serving as our director, however there is only one director, which is less than the
majority within our Board of Directors, and that appointment is based on a request from ourcompany. Although both companies are closely related in terms of personnel and capital,
his decision making capabilities regarding the company’s activities, management directions, and execution of operations are based on our company’s decisions. Consequently,
we concluded that (1) our company’s independence from Ricoh Company, Ltd. can be
maintained, (2) Mr. Miura is not a person who has influence over our management team,and (3) there is little possibility of a conflict of interest with other shareholders. Thus weappointed Mr. Zenji Miura as an independent director.

Kazushige Higuchi

Mr. Kazushige Higuchi is Representative Director andVice President of The Nishi-Nippon City Bank, Ltd.
Our company has a business relationship with thebank, with which we have transactions such as funddeposits.

Mr. Kazushige Higuchi has a long professional career at The Nishi-Nippon City Bank.
We appointed him as an outside corporate auditor as we believe that he would be able toutilize his experience for the auditing of our company.
Although our company has a business relationship with The Nishi-Nippon City Bank,
including fund deposits, none of our directors are serving as directors for The Nishi-Nippon
City Bank. With this in mind, we concluded that (1) our company’s independence from The
Nishi-Nippon City Bank can be maintained, (2) Mr. Higuchi is not a person who has influence over our management team, and (3) there is little possibility of a conflict of interest
with other shareholders.

Yukiko Kyokane

Ms. Yukiko Kyokane is Attorney and Representative of
Kyokane Law Office.
There is no relationship between our company and
Kyokane Law Office.

We appointed Ms. Kyokane as outside corporate auditor as we believe that she would be
able to utilize her long career as an attorney for the auditing of our company.
Additionally, Ms. Kyokane has no special relationship with our management team. We
concluded that there is little possibility of a conflict of interest with other shareholders, andthus appointed Ms. Yukiko Kyokane as an independent director.

Hideharu Takemori

Zenji Miura

31
Annual Review 2011

(7) Corporate Governance System and Reasons to Adopt the System Described

Our company adopted the following Corporate Governance System because we believe that efficiency and transparency of the management improves the system.

32
Annual Review 2011

Other Informationb. Role and Responsibilities of Outside Director or Outside Corporate Auditor for Corporate GovernanceOutside corporate auditors make up the majority of the Board of Corporate Auditors and establish a monitoring system for the directors’ execution ofoperation. Also, experienced outside corporate auditors provide appropriate advice from the third party’s point of view.
c. Supervision, Audit and Internal Audit Conducted by Outside Director or Outside Corporate Auditor, Coordination between Corporate Auditors’ Audit and Financial/Accounting Audit, and the relationship with Internal Control Division.
Outside directors and Outside corporate auditors received reports regarding audits, internal audit, financial/accounting audit and internal control, andmade comments at the Board of Directors’ meeting and the Board of Corporate Auditors’ meeting.
d. Summary of Limitation of Liability Contract
Our company sets up a clause of limitation of liability of Outside directors and Outside Corporate auditors in our by laws in order for them to performtheir expected roles sufficiently and to enable us to appoint high quality independent persons.
One Outside director and three Outside Corporate auditors entered into agreement with our company with regard to limited liabilities due to negligence of duties, based on Article 427, Paragraph 1 of Corporate Law. The limit of liabilities is the minimum amount determined by law.
e. Supporting Staff for Outside Directors and Outside Corporate Auditors
The staff of the General Affairs Department and the staff (assistant employee) of the Audit Office support outside directors and outside corporate auditors, respectively.

Other Information

Corporate Governance(8) Directors and Corporate Auditors Remunerationa. Aggregate amounts of remuneration according to roles of directors and corporate auditors, aggregate amounts according to type of remuneration, and number of directors and corporate auditors to be compensatedDirectors
Number ofmembers(Number)
Remuneration and others
based on resolution of generalshareholders’ meeting

Auditors

Total of Remuneration (Millions of Yen)
Base Remuneration
other(Millions of Yen) (Millions of Yen)

Number ofmembers(Number)

Total

Total of Remuneration (Millions of Yen)
Base Remuneration
other(Millions of Yen) (Millions of Yen)

Number ofmembers(Number)

Total of Remuneration (Millions of Yen)
Base Remuneration
other(Millions of Yen) (Millions of Yen)

11

337

337

−

5

44

44

−

16

382

382

−

Internal

8

323

323

−

2

33

33

−

10

357

357

−

External

3

14

14

−

3

10

10

−

6

25

25

−

* The remuneration figures shown above include the remuneration paid to one outside director who retired at the adjournment of the 53rd General Shareholders’ Meeting held on March 24, 2011,
and one director who resigned as of December 31, 2011.

b. Significant items in the salaries of our company’s internal officers.
None
c. Contents of (1) the determination of the amount of remuneration of directors and corporate auditors (2) the calculation methods to determine the amount, and the decision making method of determination for the foregoing items.
The aggregate amounts of remuneration for directors and corporate auditors were resolved at the 51st General Shareholders’ Meeting held on
March 24, 2009 to be a maximum of ¥500 million annually (for Outside directors, a maximum of ¥50 million annually), and a maximum ¥100 million
annually, respectively. The amount of remuneration for individual directors and individual corporate auditors is determined within the aggregate determined ranges as follows:(Directors)
The amount of remuneration for each director is determined by the representative directors who are authorized by the Board of Directors after theconsideration of the results from the Management Advisory Committee consisting of Outside directors and outside experienced experts.
The remuneration consists of (1) a fixed amount portion which reflects the responsibilities as directors and contribution to the company’s performance and (2) a variable portion which reflects the company’s business performance.
(Auditors)
The amount of remuneration for each auditor is determined by the executive corporate auditor, after the consideration of the standard resolved by the
Board of Corporate Auditors.

(9) Securities Investmentsa.Excluding the Trade Purpose Securities, Number of Companies Invested and Amounts of Invested Common Stocks on the Balance Sheet
The number of companies invested: 137, the amounts of invested common stocks: ¥8,015 millionb.Excluding the Trade Purpose Securities and Referring to the Companies Listed in the Stock Market Number of Companies Invested, Stock
Holding Classification, Amounts of Invested Common Stocks on the Balance Sheet and Purpose of the Stockholding
Name of Companies Invested

Amounts
Number of shown on the
Balance SheetsharesPurpose of Stockholding

Name of Companies Invested(Millions of Yen)

962,440

884

Ricoh Leasing Company, LTD.

502,000

863

Nishi-Nippon Railroad, Co., Ltd.

2,000,000

736

THE NISHI-NIPPON CITY BANK, LTD.

3,024,811

668

SAN-AI OIL CO., LTD.

1,308,125

427

195,366

352

Kyusyu Leasing Service CO., LTD.

2,000,000

320

Mitsubishi Heavy Industries, Ltd.

900,000

295

IZUMI CO., LTD.

231,000

294

OKUWA CO., LTD

170,607200

Mitsubishi UFJ Financial Group, Inc.

522,420

170

AEON KYUSHU CO., LTD.

114,400

163

F&A Aqua Holdings, Ink

203,400

156

Plenus Company Limited

115,261144

West Japan Railway Company

42,000140Royal Holdings Co., Ltd.

FUJI CO., LTD.

Amounts
Number of shown on the
Balance SheetsharesPurpose of Stockholding(Millions of Yen)

Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.

183,414

126

TOYO SEIKAN KAISHA, Ltd.

97,460102

Kansai Super Market Ltd.

113,200

86

Yamaguchi Financial Group, Inc.

100,00073

ISETAN MITSUKOSHI HOLDINGS

87,01570

AEON Co., Ltd

65,49769

Nishikawa Rubber Co., Ltd.

99,445

68

Izumiya Co., Ltd.

151,308

61

POPLAR. CO., LTD.

104,947

49

284

42

ZENRIN CO., LTD.

Fujio Food System Co., Ltd.
THE SAN-IN GODO BANK, LTD.

72,45041

Sumitomo Mitsui Trust Holdings, Inc

182,898

41

Nihon Yamamura Grass Co., Ltd.

187,000

36

Marukyu Co., Ltd.

41,03334

51

33

Central Japan Railway Company

Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.
Maintain favorable relationship withthe companies invested.

c. Common stock for trade purpose in the previous and current fiscal years and also dividend received, capital gain/loss and evaluation
gain/loss of common stocks for the trade purpose in the current fiscal year.
None
33
Annual Review 2011

Top Management
Other Information(As of April 1, 2012)

Directors

Representative Director& Chairman

Norio Sueyoshi

Representative Director& President

Representative Director& Executive Vice President

Director& Executive Vice President

Director& Executive Corporate Officer

Tamio Yoshimatsu

Calin Dragan

Nobuo Shibata

Jiro Wakasa(& Department Manager of Career
Development Office)Value Chain(& General Manager of Business Model
Innovation Headquarters)

General Affairs(General Manager of SCM Headquarters)

Director& Executive Corporate Officer

Director& Executive Corporate Officer

Director

Outside Director

Outside Director

Sean Cunial

Yoshinori Nakamura

Masamitsu Sakurai

Vikas Tiku

Hideharu Takemori(General Manager of Commercial
Headquarters & Department Manager ofSales Academy Department)

President’s Office,
CSR & Finance

Chairman of the Board
Ricoh Company, Ltd.

Represetnative Director,
Executive Vice President and CFO
Coca-Cola (Japan) Co., Ltd.

Representative Director& President
Minami Kyushu Coca-Cola Bottling Co.,Ltd.

Auditors

Management Advisory Committee

Executive
Corporate Auditor

Tadatsugu HaradaStanding

Chairman

Masamitsu Sakurai

Chairman of the Board
Ricoh Company, Ltd.

Corporate Auditor

Tadamasa Amitsuka

Standing

MemberMasahiko Uotani

Representative Director & President
Brand Vision Co., Ltd.

Corporate Auditor

Hiroyoshi Miyaki

Standing

MemberShingo Matsuo

Honorary Adviser
Kyushu Electric Power Co., Inc.

OutsideCorporate Auditor

Zenji Miura*

Representative Director and
Deputy President
Ricoh Company, Ltd.

MemberIsao Kubota

Representative Director & President
THE NISHI-NIPPON CITY BANK, LTD.

OutsideCorporate Auditor

Kazushige Higuchi

Representative Director and Vice President,
The Nishi-Nippon City Bank, Ltd.

MemberKazuhiko Enomoto

Representative Director & Chairman
FUKUOKA JISHO CO.,LTD.

OutsideCorporate Auditor

Yukiko Kyokane*

Attorney
Representative of Kyokane Law OfficeMemberSusumu Ishihara

Representative Director & Chairman
Kyushu Railway Company

MemberTakashi Matsuzaki

Attorney
Tokunaga, Matsuzaki & Saito Law OfficeMember

Eiji Muto

Organization for Promoting
Urban Development

MemberKunio Ito

Professor
Hitotsubashi University* As for Corporate Auditor Zenji Miura and Yukiko Kyokane, our company submitted
notices to Tokyo Stock Exchange Group Inc., Osaka Securities Exchange Co., Ltd. andFukuoka Stock Exchange, which our company is listed in, as “External Corporate Auditor”. The qualification for “External Corporate Auditor” is determined by criteria andrules set by each security exchange company.

34
Annual Review 2011

Other Information

Dividend Policy and Shareholder Reward Points System

Dividend
Coca-Cola West places the ultimate priority on paying secure dividends to shareholders and pays dividends semiannually, interim
and year-end, after fully deliberating on the company’s business performance and retained earnings and the future business environment.
Dividend per share

Shareholder Reward Points System
We provide “Shareholder Reward Points” in early September of the year and late March of the following year to shareholders with
100 or more shares as of June 30 and December 31, respectively.
Shareholders can choose to exchange their Reward Points (one point=¥60), with assorted Coca-Cola products or to use them as
donation to our social contribution activities, etc.
Awarding Criteria
Effective Date

June 30

December 31

Number of Shares Owned

Details

Time of Award

100 to 499 shares

30 Reward Points

500 to 999 shares

40 Reward Points

1,000 to 4,999 shares

60 Reward Points

5,000 or above shares

120 Reward Points

100 to 499 shares

30 Reward Points

500 to 999 shares

40 Reward Points

1,000 to 4,999 shares

60 Reward Points

Above 5,000 shares

120 Reward Points

Early September of the year

Late March of the following year

Options for Reward Points (examples)

Coca-Cola Products

Bath Towel with
Coca-Cola West logo

35
Annual Review 2011

Insulated Bag with
Coca-Cola West logo

Donation to
Ichimura Shizenjuku-Kyushu

Stock Information
Stock Code : 2579

Major Shareholders

Authorized Shares : 270,000,000
Outstanding Shares : 111,125,000
Number of Shareholders : 36,885
Number of Shares per Trading Unit : 100
Stock Exchange Listings:
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Fukuoka Stock Exchange

Number of Shares Held andthe Percentage of Shares Heldby the Shareholder Category● Financial Institutes..................

Number of
Shareholders(Number)Number of
Shares Owned(Thousands)

66

20,783● Securities Companies..............

30

1,641

● Other Domestic Corporations...

506

39,122● Foreign Corporations...............

318

24,654● Individuals and Others............. 35,964

13,769● Treasury Stock........................

Number of Share Shareholding Ratio
Owned
(%)
(Thousands)

Shareholder

1

11,153

Total............................................ 36,885

111,125

Ricoh Company, Ltd. ....................................................................................... 16,792
The New Technology Development Foundation ......................................... 5,294
Japan Trustee Service Bank, Ltd. (Trust Account) .................................... 4,547
Coca-Cola Holdings West Japan, Inc. ........................................................... 4,074
Mitsubishi Heavy Industries Food & Packaging Machinery Co., Ltd......... 3,912
THE NISHI-NIPPON CITY BANK, LTD. .......................................................... 3,703
The Master Trust Bank of Japan, Ltd. (Trust Account) ............................. 3,129
MCA Holding CO., LTD.................................................................................................... 2,191
STATE STREET BANK AND TRUST COMPANY ........................................ 1,882
NORTHERN TRUST CO. (AVFC) SUB A/C AMERICAN CLIENTS ............. 1,506

16.8
5.3
4.5
4.1
3.9
3.7
3.1
2.2
1.9
1.5

Note:11,153 thousand shares of treasury stock are not shown in the table above and are excluded from the calculation of the shareholding ratios.

Stock Price and Trends in Stock Trading Volume

Composition of Shareholders

Treasury Stock
10.0%
Individuals
and Others
12.4%
Foreign
Corporations
22.2%

Financial Institutes
18.7%
Securities
Companies
1.5%
Other Domestic
Corporations
35.2%

Stock Price at year end
(Yen)

2007

2008

2009

2010

2011

2,475

1,945

1,639

1,471

1,335

Credit Rating Information
2007

2008

2009

2010

2011

Japan Credit Rating Agency, Ltd. (JCR) Long-term senior debt

AA–

AA–

AA–

AA–

AA–

Rating and Investment Information, Inc. (R&I) Long-term senior debt

A+

A+

A+

A+

A+

36
Annual Review 2011

Other Information(As of December 31, 2011)

Other Information

Coca-Cola System in Japan

We consolidated with three bottlers in and after 1999 and became the largest bottler in Japan with the sales territory in 14 prefectures in western Japan.
We are the largest bottler in sales in Japan and one of the leading publicly-listed bottlers in the world. As a strategic partner to the Coca-Cola Company
and Coca-Cola (Japan) Company Ltd., we collaborate with them beyond the bottler’s framework and conduct business activities such as product development and test marketing, thus leading the transformation of the entire Coca-Cola business in Japan.

Corporate History
1960

The company was established. (Nichibei Inryo Co., Ltd., and thereafter, the corporate name changed to Kita kyushu Coca-Cola Bottling Co., Ltd.)

1999

Merged with Sanyo Coca-Cola Bottling Co., Ltd. ▶ Trade name changed to Coca-Cola West Japan Co., Ltd. (CCWJ).

2001

Made Mikasa Coca-Cola Bottling Co., Ltd. (Mikasa CCBC) a subsidiary.

2007

Integrated the management of Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC) ▶ Joint stock holdings company Coca-Cola West Holdings Co., Ltd.
(CCWH) was established.
Entered into a capital and business alliance with Minami Kyushu Coca-Cola Bottling Co., Ltd. (Minami Kyushu CCBC) ▶ Made a 20-percent investment in Minami Kyushu CCBC and made it an equity-method affiliate.

2009

CCWH, CCWJ, Kinki CCBC, and Mikasa CCBC merged. ▶ Coca-Cola West was established.

2006

In and before 1998

In 2011■ Kita kyushu Coca-Cola Bottling Co., Ltd.

■ Coca-Cola West Co., Ltd.

■ Sanyo Coca-Cola Bottling Co., Ltd.

■ Minami Kyushu Coca-Cola Bottling Co., Ltd.

■ Kinki Coca-Cola Bottling Co., Ltd.

(Equity-method affiliate of Coca-Cola West)■ Mikasa Coca-Cola Bottling Co., Ltd.
■ Minami Kyushu Coca-Cola Bottling Co., Ltd.

Sales territory

35,525,000

28%[Population]
Nationwide

126,231,000
in 201137
Annual Review 2011

Role of Coca-Cola (Japan) Co., Ltd. and Bottlers

Coca-Cola (Japan) Co., Ltd.
Planning

Research andDevelopment

Productionof Syrup
Concentrates

Bottlers
Product
Manufacturing

Product
Distribution

Sales

Collectionof containers

Recyclingof containers

Sales Territories of 12 Bottlers(As of December 31, 2011)

Coca-Cola West Co., Ltd.
Fukuoka/Osaka/Shiga/Nara/Wakayama/
Kyoto/Hyogo/Okayama/Tottori/Hiroshima/
Shimane/Yamaguchi/Saga/Nagasaki
Minami Kyushu Coca-Cola Bottling Co., Ltd.
Shikoku Coca-Cola Bottling Co., Ltd.
Okinawa Coca-Cola Bottling Co., Ltd.
Coca-Cola Central Japan Co., Ltd.
Tokyo Coca-Cola Bottling Co., Ltd.
Mikuni Coca-Cola Bottling Co., Ltd.
Tone Coca-Cola Bottling Co., Ltd.
Hokuriku Coca-Cola Bottling Co., Ltd.
Sendai Coca-Cola Bottling Co., Ltd.
Michinoku Coca-Cola Bottling Co., Ltd.
Hokkaido Coca-Cola Bottling Co., Ltd.

38
Annual Review 2011

Other Information

The Coca-Cola System in Japan consists of Coca-Cola (Japan) Co., Ltd. and the regional bottling companies and their affiliates.
While Coca-Cola (Japan) Co., Ltd. is planning/developing new products, producing syrup concentrate and advertising, the regional bottling companies and their affiliates are producing and selling the beverage in their region throughout Japan.

Other Information

Coca-Cola System in Japan

Investment(As of December 31, 2011)

Note: Figures in brackets show the percentage of shares owned, corresponding to voting rights① Coca-Cola West Co., Ltd. (CCW)⑤ Coca-Cola Bottling Companies (CCBC)In July 2006, Coca-Cola West Japan Co., Ltd. (CCWJ) and Kinki
Coca-Cola Bottling Co., Ltd. (Kinki CCBC) merged their management
to establish a joint holding company, Coca-Cola West Holdings Co.,
Ltd. (CCWH), the largest bottling company in Japan. In March 2007,
CCWH entered into a financial alliance with Minami Kyushu CocaCola Bottling Co., Ltd. On January 1, 2009, CCWH, CCWJ, Kinki
CCBC and Mikasa Coca-Cola Bottling Co., Ltd. merged to establish
Coca-Cola West Co., Ltd.

There are 12 bottling companies in Japan. They are producing
and distributing Coca-Cola products in their respective territories.
⑥ Coca-Cola Business Service Co., Ltd. (CCBSC)

Established in June 1999 as a joint venture among The Coca-Cola
Company and all of its bottling companies. Its responsibilities are (1)procurement of raw materials and supplies for the Coca-Cola System inJapan, (2) business consulting to the Coca-Cola organization in Japan, (3)development of an information system and maintenance and operationof the information system.

② The Coca-Cola Company (TCCC)

Established in Atlanta Georgia in 1919. The Coca-Cola Company
holds the rights to grant licenses to bottling companies to produce
and sell Coca-Cola products. The Coca-Cola Company and its subsidiaries enter into licensing agreements with bottling companies.

⑦ Coca-Cola Customer Marketing Co., Ltd. (CCCMC)

Established in January 2007 as a joint venture with Coca-Cola(Japan) Co., Ltd. and all of its bottling companies. Its responsibilities
are (1) business negotiation with nationwide retail stores such as
convenience stores and supermarkets and (2) creating proposals forsales promotion and storefront activities.

③ Coca-Cola (Japan) Co., Ltd. (CCJC)

Established in 1957 in Tokyo as a wholly owned subsidiary of the
Coca-Cola Company under the name of Nippon Inryo Kogyou K.K.
The company name was changed to Coca-Cola (Japan) Co., Ltd. in
1958. It is responsible for marketing, planning, manufacturing anddistributing the syrup concentrate in Japan.

⑧ FV Corporation Co., Ltd. (FVC)

Established in May 2001 as a joint venture with Coca-Cola (Japan)
Co., Ltd. and all of its bottling companies. Its responsibilities are tocarry the marketing of the vending machine business to corporations operating in a wide range of territories. It also handles products
other than Coca-Cola products.

④C
 oca-Cola Tokyo Research & Development Co., Ltd.

(CCTR&D)
Established in January 1993 as a 100% subsidiary of the Coca-Cola
Company. It has been carrying out product development and technicalsupport since January 1995 in response to the needs of the Asian region.
39

Annual Review 2011

(As of December 31, 2011)

Company name : Coca-Cola West Co., Ltd.
Head office : 7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, Japan
Establishment : December 20, 1960
Paid-in capital : 15,231 million yen
Fiscal term : December
Number of employees (consolidated) : 8,105
Primary business : Manufacturing and sales of Coca-Cola
and other soft drinks

Web Site (http://www.ccwest.co.jp/english/)-Creating a happy tomorrow for everyone-l Notes
If a need to revise any part of this report arises, the revision will be posted on the “Investor Relations”
page on the company website. The content of the revision will be found under “Annual Review” of“Financial Results Information.”

7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, Japan
Investor Relations (President’s Office) Tel: +81-92-641-8774
http://www.ccwest.co.jp/english/
Printed in Japan