Summary of Financial Results
for the Second Quarter of Fiscal Year Ending January 2015
[Japanese Standards] (Consolidated)
September 1, 2014
Name of Listed Company: Pigeon Corporation (Stock code: 7956)
Listing: First Section, Tokyo Stock Exchange
Website: www.pigeon.co.jp
Representative: Shigeru Yamashita (President and COO)
Contact person: Tsutomu Matsunaga (Managing Officer, Corporate Planning & Administration Division)/ Tel: +81-3-3661-4188
Scheduled Filing Date of Quarterly Report: September 5, 2014
Preparation of Any Additional Explanatory Materials for Quarterly Financial Results: Yes
Scheduled Commencement Date of Dividend Payments: October 6, 2014
Holding of Any Briefing Session for Quarterly Financial Results: Yes (For analysts and institutional investors)

1. Consolidated Business Performance for the First Half of Fiscal Year Ending
January 31, 2015 (February 1 to July 31, 2014)(1) Consolidated operating results (cumulative)(Millions of yen, rounded down, % figures denote year-on-year change)

Net Sales
2Q ended July 31, 2014
2Q ended July 31, 2013
(Note) Comprehensive income:

39,229Operating Income

7.1%

5,985

36,62117.3%
2Q ended July 31, 2014
2Q ended July 31, 2013

Ordinary Income

24.3%

5,957

4,814
49.3%
5,161
¥2,701 million (47.9% negative)¥5,184 million (141.9%)

Net Income per Share (¥)

Diluted Net Income Per
Share (¥)

102.00-2Q ended July 31, 2014

Net Income

15.4%

4,074

30.5%

58.0%

3,121

63.3%

2Q ended July 31, 2013
77.98
(Note) Our Group carried out a 2-for-1 stock split with respect to its common stock, effective as of August 1, 2013. The figures forquarterly net income per share are calculated on the assumption that this stock split had been conducted at the beginning of theprevious fiscal year.

(2) Consolidated Financial Position
Total Assets
As of July 31, 2014
As of January 31, 2014
(Reference) Shareholders' Equity:

Net Assets

63,29557,955
2Q ended July 31, 2014
FY ended January 31, 2014

Equity Ratio (%)

39,951

61.7

39,981¥39,079 million¥39,124 million

67.5

2. Cash Dividends
Annual Dividends (¥)
1Q-end2Q-end3Q-endYear-end

FY ended Jan. 31, 2014
66.00
55.00
FY ending Jan. 31, 2015
45.00
FY ending Jan. 31, 2015
45.00
(Forecast)(Note) Changes in dividend forecasts to the most recent announcement: None
Our Group carried out a 2-for-1 stock split with respect to its common stock, effective as of August 1, 2013.

Total

90.00

3. Consolidated Business Performance Forecasts for the Fiscal Year Ending January 31, 2015
(February 1, 2014 to January 31, 2015)
Net Sales
Millions of Yen

Operating Income% Millions of Yen(% figures denote year-on-year change from the previous term)
Net Income per
Ordinary Income
Net Income
Share% Millions of Yen

Full year
84,5009.1
11,60011.9
11,800(Note) Revision of forecasts to the most recent announcement: None

% Millions of Yen

7.3

7,300

%

4.5

Yen

182.38Notes(1) Changes in major subsidiaries (or changes in specific subsidiaries that affect the scope of consolidation) during theperiod under review: NoneNew:
－ (Company name: － ), Excluded: － (Company name: － )(2) Application of any accounting procedures specific to preparation of quarterly consolidated financial statements:
None(3) Changes in accounting policies, changes in accounting-based estimates, and restatements
1) Changes in accounting policies associated with revision of accounting standards: None
2) Changes in accounting policies other than the above 1): Yes
3) Changes in accounting-based estimates: None
4) Restatements: None
(Note) Depreciation method has been changed from the consolidated first quarter of this fiscal year and thischange is applicable to “Changes in the Method for Determining Depreciation of Tangible Fixed Assets.” Forfurther information, please refer to “(3) Changes in Accounting Policies, Changes in Accounting-based
Estimates, and Restatements” in “2. Items Regarding Summary Information (Notes)” on page 5.
(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the term-end (including treasury stock)
2Q ended July 31, 2014: 40,551,162 shares
FY ended January 31, 2014: 40,551,162 shares
2) Number of treasury stock for the period-end
2Q ended July 31, 2014: 629,820 shares
FY ended January 31, 2014: 525,652 shares
3) Number of average shares outstanding during the period (quarter accumulation)
2Q ended July 31, 2014: 39,943,465 shares
2Q ended July 31, 2013: 40,026,390 shares* Indication regarding the situation of quarterly review procedures
Financial results for this first quarter is not the subject of a quarterly review procedure based on the Financial
Instruments and Exchange Act, and at the point in time when these financial results were disclosed, review proceduresfor quarterly financial statements based on the Financial Instruments and Exchange Act had not been completed.
* Cautionary Statement regarding Performance Forecasts
The forecasts and future projections stated in this report have been prepared on the basis of the information andassumption that shall be reasonable as of the date of announcement of this summary information, and the actual results
could differ significantly from forecast figures depending on a variety of factors.
See the section “(3) Qualitative Information Regarding Consolidated Performance Forecasts” in “1. Qualitative
Information Regarding the Financial Results for the Current Quarter” on page 4 regarding the relevant matters for theabove forecast for the business performance.

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

Table of Contents of the Appendix
1. Qualitative Information Regarding the Financial Results for the Current Quarter.......................... 2(1) Qualitative Information Regarding Consolidated Operating Results.......................................... 2(2) Qualitative Information Regarding Consolidated Financial Position ......................................... 4(3) Qualitative Information Regarding Consolidated Performance Forecasts .................................. 4
2. Issues Regarding Summary Information (Notes)............................................................................. 5(1) Significant Changes in Subsidiaries During the Period Under Review ..................................... .6(2) Application of Any Accounting Procedures for Specific to Preparation of Quarterly
Consolidated Financial Statements ............................................................................................ .6(3) Changes in Accounting Policies, Changes in Accounting-based Estimates,
and Restatements......................................................................................................................... 6
3. Quarterly Consolidated Financial Statement ................................................................................... 8(1) Quarterly Consolidated Balance Sheets ...................................................................................... 8(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statement ofComprehensive Income ............................................................................................................ 10
Quarterly Consolidated Statements of Income(Scope of Consolidation of Second Quarter) .......................................................................... 10
Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of Second Quarter) ........................................................................... 11(3) Quarterly Consolidated Statements of Cash Flows ................................................................... 12(4) Notes Regarding Going Concern Assumption .......................................................................... 14(5) Notes Regarding Substantial Changes in Shareholders’ Equity ............................................... 14(6) Segment Information ................................................................................................................. 14-1-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

1. Qualitative Information Regarding the Financial Results for the Current Quarter(1) Qualitative Information Regarding Operating Results
During the consolidated six-month period under review, Japan's economy continued to remain on a
gradual recovery path, where improvement in corporate earnings was achieved thanks to economic
and financial measures implemented by the government. Also personal consumption, which wereaffected by the consumption tax hike this April, has gradually been recovering. Overseas, theincreased uncertainty over the future due to a slowdown in emerging economies including China
and the political instability affecting Europe continued to put downward pressure on the Japanese
economy.
Amid such economic circumstances, our Group has issued its fifth medium-term business plan (forthe period between the fiscal year ending January 2015 and the fiscal year ending January 2017),
and has put up the following slogan, “Pursuing world class business excellence, think globally, plan
agilely, and implement locally”. Thus, our Group have made a fresh start in this first year for theplan to be implemented. Also, as its business policy, our Group aims at expanding its business andimproving management quality by providing the following "Vision 2016".
< Vision 2016 >i) Strengthening brand power (Global Number One manufacturer of baby and child careproducts)ii) Reinforcing the management system toward a sustainable growth of our Group's businessiii) Improving management quality by focusing on cash flowiv) Fostering our Group's global personnel, establishing human resources systems and promoting
its employees' activitiesv) Further enhancing corporate value
During the consolidated six-month period under review, we have been developing the abovebusiness policies and strategies for each of our business and function. As a result, net sales
amounted to ¥39,229 million (up 7.1% YOY), due to factors including healthy business expansionin our overseas operations centered on China. Regarding earnings, operating income rose to ¥5,985
million (up 24.3% YOY), ordinary income recorded ¥5,957 million (up 15.4% YOY), and net
income was ¥4,074 million (up 30.5% YOY), which means each significantly exceeded theprevious corresponding result. This was due to a reduction of approximately 1.0 percentage points
in the sales cost ratio from the previous same period, as a result of increased sales and efficientutilization of production bases accompanying business expansion.
So far, "Domestic Baby and Mother Care Business", "Child-rearing Support Services", "HealthCare and Nursing Care Business" and "Overseas Business" have been identified as our Group's
reporting segments. However, from the first quarter of the current fiscal year, we separated ourChina Business from the "Overseas Business", which is why there is now a total of five reporting
segments. Each segment is outlined below.
The following comparisons with the prior year quarter have been made with figures for the prioryear quarter reclassified into the segmentation after such change.
Domestic Baby and Mother Care BusinessNet sales of the segment amounted ¥12,391 million (down 0.7% YOY). Segment profits increasedto ¥2,029 million (up 24.7% YOY). This resulted also from a decrease in selling, general andadministrative expenses due to reviewing marketing expenses.
In this segment, we have released products such as a reversible stroller "Mahalo laule’a" (inFebruary) designed to ensure the comfort of the baby, an Electric Breast Pump "First Class", which
provides a comfortable breastfeeding routine while reducing frustrations of any mother willing to-2-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

breastfeed her baby, and also "Pigeon's Skin Care Products" (in March) formulated withmoisturizing ingredients close to those found in baby's vernix. Moreover, during the period underreview, we have held a number of events planned as a part of our direct communications program
such as our "breast feeding seminar" for women expecting to give birth in the near future and"Working Women Meetings for Pregnancy Training" for those who are preparing for pregnancy,
organized for 17 times. A total of approximately 870 women have participated. Furthermore, ourCompany has staged a total of 5 seminars for health care professionals, addressing the theme ofbreastfeeding while parenting. A total of approximately 500 women have participated. Our
Company has conducted a renewal of its top page, making good progress in providing to its
customers a more easily accessible “Pigeon Info”—a word-of-mouth community portal that
supports women during pregnancy, in childbirth, and those raising children.
Child-rearing Support Services
Net sales of the segment amounted to ¥3,364 million (up 2.3% YOY). Although there has been an
increase in cost for recruitment due to current shortage of nursery teachers, the segment profits roseto ¥96 million (up 19.2% YOY), as gross profit improved. We have launched two in-company
child-care facilities and while improving the service quality, our Group is steadily promoting sales.
Furthermore, since April we have implemented a mathematical experience program in Preschool
Educational Facilities, called "Math Program", with much favorable feedback.
Health Care and Nursing Care BusinessNet sales of the segment amounted to ¥3,521 million (up 2.1% YOY), while competition in themarket of consumables continued to intensify. Efforts have been made toward the effective use of
selling, general and administrative expenses, while segment profits increased to ¥212 million (up5.0% YOY).
In February, we launched in this segment "Recoup KARURU", a new baby underwear which
maintains conventional products' properties in absorption of liquids, and still it is more comfortable
and has improved its functionality in urine leakage absorption. Our Group will continue to focus onmarketing products through intensive research on priority categories and to ensure sales activities
focusing on facility routes are carried out considerately.
Overseas BusinessNet sales of the segment amounted to ¥10,522 million (up 11.5% YOY). Segment profits increasedto ¥2,261 million (up 14.5% YOY). In India, we are continuing to actively expand sales andmarketing activities with a view to establish our brand on the market. In the future we intend tofurther strengthen the sales/distribution system and also to tune up the product supply organization.
Full-scale sales of nursing bottles were launched this January in North America, and we are making
efforts to further expand our product categories and consolidate our organizational structure.
Furthermore, our Company has established this March in Brazil a new consolidated subsidiary
under the name of PIGEON PRODUTOS INFANTIS LTDA., for the purpose of conducting local
market research for entering new markets.
China BusinessNet sales of the segment amounted to ¥10,951 million (up 20.6% YOY). Although the selling,
general and administrative expenses increased as a result of marketing activities conducted alongwith an active expansion of the business, the segment profits increased to ¥3,303 million (up 26.2%
YOY). This segment recorded an increase in net sales and segment profits from the previous same
period, assisted by the effects of a steady growth in product categories such as nursing bottles andnipples, due to continuous reinforcement of marketing and sales promotion activities. Furthermore,sales of disposable diapers for babies released July 2013 require more time than expected to enter
the market. However, despite initial forecast drop, we aim to steadily expand these sales, as we willcontinue to implement effective marketing initiatives.
-3-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

Other Businesses
Net sales of the segment amounted to ¥654 million (up 18.8% YOY), as OEM product orders
increased. The segment profits increased to ¥86 million (up 35.9% YOY).

(2) Qualitative Information Regarding Consolidated Financial Position
1) Assets
As of July 31, 2014, our Group recorded total assets of ¥63,295 million, up ¥5,340 million from theprevious consolidated fiscal year ended January 31, 2014. Current assets went up to ¥5,078 million,
while fixed assets increased to ¥262 million.
The major factors boosting current assets were: a ¥2,838 million increase in cash and deposits, a¥1,686 million increase in notes and accounts receivable, and another increase of ¥451 million inmerchandise and finished goods.
Despite a decrease of ¥242 million in buildings and structures, fixed assets increased mainly due toan increase of ¥152 million in machinery, equipment and vehicles, and of ¥370 million inconstruction in progress as included in other tangible fixed assets.
2) Liabilities
As of July 31, 2014, our Group recorded total liabilities of ¥23,343 million, up ¥5,369 million fromthe previous consolidated fiscal year ended January 31, 2014. Current liabilities went up to ¥418
million, while fixed liabilities increased to ¥4,951 million.
Despite a decrease of ¥160 million in income taxes payable, current liabilities increased mainly due
to an increase of ¥136 million in short-term borrowings, and of ¥282 million in accrued
consumption taxes as included in other current liabilities.
The major factor boosting fixed liabilities was a ¥4,968 million increase in long-term borrowings.
3) Net Assets
As of July 31, 2014, our Group recorded total net assets of ¥39,951 million, down ¥29 million fromthe previous consolidated fiscal year ended January 31, 2014.
Despite an increase of ¥1,873 million in retained earnings, net assets diminished mainly due to adecrease of ¥1,433 million in foreign currency translation adjustment, and of ¥485 million intreasury stock.

(3) Qualitative Information Regarding Consolidated Performance Forecasts
For the "Fifth Medium-Term Business Plan (for the period between fiscal year ending January 2015
and fiscal year ending January 2017)", our Group has put up the following slogan, “Pursuing worldclass business excellence, think globally, plan agilely, and implement locally.” We will further
develop and enhance our business operating system, while pursuing in the improvement ofmanagement quality and steadily implementing the measures grounded on the newly formulated
strategies for each business segment and the functional strategy that serves as the foundation thereof.
Especially concerning the overseas business which our Group positions as a growing field, we willcontinue to expand and enrich business in the existing markets concentrated in China and North
America. Moreover, we will continue to aim for further growth in our business performancethrough actively pursuing new markets. Since the following “Vision 2016” and “Business andFunctional Strategies” was established, all our efforts combine to accomplish our goals as a meansof expanding our corporate business and improving our management quality. In this consolidated
fiscal year, the first year of our fifth medium-term business plan, we will strive to ensurecompletion of our plans.
-4-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

"Vision 2016"i) Strengthening brand power (Global Number One manufacturer of baby and child careproducts)ii) Reinforcing the management system toward a sustainable growth of our Group's businessiii) Improving management quality by focusing on cash flowiv) Fostering our Group's global personnel, establishing human resources systems and promoting
our employees' activitiesv) Further enhancing corporate value■ Summary of Business and Functional Strategies<Overseas Business>
・Key markets: Cultivation and deep penetration of markets in the prioritized countries fromtheir market potential, including a medium-to-long-term perspective・Key categories: Focusing our efforts on the categories that can make the most of Pigeon's"strengths" (nursing bottles and nipples, breast pump, pacifiers, skin care products, andnursing pads)
・Activities in hospitals: Synergy between horizontal deployment of a model for activities in
hospitals and strengthening brand power
1) Chinese market- Business expansion
・Growth of existing categories and in new products such as disposable diapers- Strengthening our operating base・Capital investment in line with business expansion
・Cost containment and stable supply benefits of automation in the production lines
・Further strengthening of our organizational system in line with business expansion2) U.S. and European markets- Enhancement of our brand power in breastfeeding corporate support
・Feeding device: Introducing the nursing bottle "NaturalWave" in the European and theUnited States markets
・Strengthening our total support to child care scene in terms of "Expressing breast milk →Storing → Feeding"・Reinforcement of activities in hospitals- Business expansion in Central and South America and cultivation of new markets
3) Asian and the Near and Middle Eastern markets- Growth centered on five key categories (nursing bottles and nipples, breast pump, pacifiers,
skin care products, and breast pads)- Further strengthening of Pigeon's products and accelerating their market penetration- India: Operating plants for local production and bolstering marketing functions<Domestic Business>
Our Group aims to develop business growth in the existing fields and to improve profitability, by
improving the profitability of current businesses and achieving solid growth for large-scalebusinesses in the segment of Baby and Mother Care, but also by reinforcing the management
system focused on nursing care facility routes, and marketing products with a competitive
advantage in the segment of Health Care and Nursing Care.
1) Domestic Baby and Mother Care Business- Improving profitability of current businesses- Establishing a large merchandise business and considering entering in new categories
2) Health Care and Nursing Care Business- Reinforcing sales in nursing care facility routes-5-Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

- Achieving growth in both facilities and existing routes by marketing products withcompetitive advantage- Further enhancing nursing care service quality
3) Child-rearing Support Services- Further improving child-rearing quality and achieving a steady business growth- Fostering human resources to ensure a high quality child-rearing<Functional Strategies>
1) Research and Development- Enrich researches on "Baby Theories" and improve our product development capabilities bymeans of a consistent customer orientation.
- Establish and strengthen a structure for global business development by reviewing functions
related to research, planning and development
2) Quality Control- Reinforce quality control functions of each production site
- Establish the PIGEON PRODUCTIVE MANAGEMENT (PPM) system
3) Production, Procurement and Logistics- Reduce costs by implementing an efficient production, procurement and logistics system- Establish a Global Supply Chain Management system.
4) Global Human Resources System- Foster individuals capable of playing an active role in global society and establish suchhuman resources system, while meeting the further expansion of our business overseas.
5) Global Headquarters- Reinforce the Corporate Center`s functions
・Strengthen planning and promotion functions of our Group strategies
・Strengthen functions toward compliance and fulfillment of our corporate social
responsibility
Consolidated performance forecasts for our Group remain unchanged from the forecasts announced
on March 3, 2014.

2. Issues Regarding Summary Information (Notes)(1) Significant Changes in Subsidiaries During the Period Under Review
Not applicable.
(2) Application of Any Accounting Procedures Specific to Preparation of Quarterly
Consolidated Financial Statements
Not applicable.
(3) Changes in Accounting Policies, Changes in Accounting-based Estimates, andRestatements
Changes in accounting policies(Changes in the Method for Determining Depreciation of Tangible Fixed Assets)
Our Group and its consolidated subsidiaries previously used the declining-balance method for
depreciation and amortization of property, plant and equipment (straight-line method had been
applied to buildings, excluding facilities attached to buildings, acquired after April 1, 1998), buteffective from this consolidated fiscal year, the straight-line method has been applied to all tangible
fixed assets.
In our Group’s fifth medium-term business plan, effective from this current consolidated fiscal year,-6-Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

taking into consideration our Group’s further global business development going forward and thesubstantial growth in corporate earnings expected overseas, the change in method was madefollowing a review of the investment effect of tangible fixed assets from the perspective ofintegrating Group accounting policies and properly adjusting periodic income, as it has been
motivated by changes in our Group’s capital investment circumstances. Consequently, property,
plant and equipment held by our Group and its consolidated subsidiaries generally are subject tosteady operation over their expected lifetime. In addition, as we can expect also from our Group’s
product lines to generate stable profits, the change has been implemented because, firstly, it isreasonable, from a cost distribution point of view, to adopt the straight-line method as adepreciation method for the tangible fixed assets, and secondly, the economic conditions should be
more appropriately reflected by doing so.
As a result of this change, operating income, ordinary income, and net income before income taxes
all increased by ¥74,775 thousand compared with the results under the previous method.

-7-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Thousands of yen)
At January 31, 2014

At July 31, 2014ASSETS
I. Current Assets:
Cash and deposits
Notes and accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other current assets
Allowance for doubtful accounts
Total Current Assets
II. Fixed Assets:
1. Tangible Fixed Assets:
Buildings and structures, net
Land
Other tangible fixed assets, net
Total Tangible Fixed Assets
2. Intangible Fixed Assets:
Goodwill
Other intangible fixed assets
Total Intangible Fixed Assets
3. Investments and Other Assets:
Other
Allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets
LIABILITIES
I. Current Liabilities:
Notes and accounts payable - trade
Short-term borrowings
Current portion of long-term loans payable
Income taxes payable
Accrued bonuses to employees
Reversal of reserve for returned products
Other current liabilities
Total Current Liabilities
II. Fixed Liabilities:
Long-term borrowings
Provision for employees' retirement benefits
Provision for directors and corporate
auditors' retirement benefits
Other fixed liabilities
Total Fixed Liabilities
Total Liabilities-8-

13,102,606

15,940,657

12,569,111
5,350,773
281,547
2,420,080
1,670,255(30,988)
35,363,386

14,255,678
5,802,711
302,225
2,388,272
1,808,707(56,822)40,441,430

6,238,559
6,080,256
6,704,646
19,023,463

5,996,477
6,066,086
7,365,881
19,428,446

441,108
1,000,222
1,441,331

346,514959,722
1,306,236

2,170,610(43,424)
2,127,185
22,591,980
57,955,367

2,162,885(43,399)
2,119,486
22,854,169
63,295,599

4,518,251395,2121,004,953
1,155,862
782,653
57,3184,904,682
12,818,934

4,561,156
532,140
1,000,000
995,441
746,724
59,346
5,342,330
13,237,138

2,011,503
287,276

6,980,472
291,332

323,894

327,996

2,532,144
5,154,818
17,973,753

2,506,699
10,106,499
23,343,638

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

(Thousands of yen)
At January 31, 2014

At July 31, 2014

NET ASSETS
I. Shareholders’ Equity:
Capital stock

5,199,597

5,199,597

Capital surplus

5,180,246

5,180,246

Retained earnings

26,929,960

28,803,023

Treasury stock(455,960)(941,028)

Total Shareholders’ Equity

36,853,843

38,241,838

30,52030,2542,240,472

806,975

2,270,992

837,230

856,777

872,893

39,981,614

39,951,961

57,955,367

63,295,599

II. Accumulated Other Comprehensive Income:
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Accumulated Other
Comprehensive Income
III. Minority Interests
Total Net Assets
Total Liabilities, Minority Interests and Net
Assets-9-

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statement ofComprehensive Income
Quarterly Consolidated Statements of Income(Scope of Consolidation of Second Quarter)(Thousands of yen)Six months ended July 31, Six months ended July 31,
2013
2014
Net Sales
II. Cost of Sales
Gross profit
Reversal of reserve for returned products
Transfer to reserve for returned products
Adjusted gross profit
III. Selling, General and Administrative
Expenses
Operating Income
IV. Non-operating Income:Interest income
Equity in earnings of non-consolidated
subsidiaries and affiliates
Foreign exchange gains
Other
Total Non-operating Income
V. Non-operating Expenses:
Interest expenses
Sales discounts
Foreign exchange losses
Other fixed liabilities
Total Non-operating Expenses
Ordinary Income
VI. Extraordinary Income:Gain on sales of property
Total Extraordinary Income
VII. Extraordinary Loss:
Loss on sales of property
Loss on disposal of property
Total Extraordinary Loss
Income before Income Taxes
Income taxes - current
Income taxes - deferred
Total Corporate Income Tax
Income before minority interests
Minority interests in income (loss)
Net Income- 10 -

36,621,704
20,436,099
16,185,604
49,32970,60816,164,326

39,229,251
21,524,123
17,705,128
56,59459,577
17,702,145

11,350,276

11,716,300

4,814,050

5,985,845

51,136

83,93833,092

1,955

263,418
151,774
499,420

97,683
183,577

10,814
123,496
17,303
151,615
5,161,855

30,245
134,261
29,774
17,245211,526
5,957,896

3,064
3,064

1,432
1,432

68
15,413
15,481
5,149,438
1,585,470
355,718
1,941,189
3,208,248
86,963
3,121,285

1,778
20,731
22,5105,936,818
1,749,125
29,346
1,778,471
4,158,346
83,881
4,074,465

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

Quarterly Consolidated Statement of Comprehensive Income(Scope of Consolidation of Second Quarter)(Thousands of yen)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total Other Comprehensive Income
Quarterly comprehensive income(Breakdown)
Quarterly comprehensive income on parent
company
Quarterly comprehensive income on minority
interests- 11 -Six Months ended July
31, 2013

Six Months ended July
31, 2014

3,208,248

4,158,346

11,206(265)

1,964,907
1,976,114
5,184,363(1,456,569)(1,456,835)
2,701,511

5,021,012

2,640,702

163,350

60,808

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015(3) Quarterly Consolidated Statements of Cash Flows(Thousands of yen)
Six Months ended July
31, 2013
I. Cash Flow from Operating Activities
Income before Income Taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in accrued bonuses to
employees
Increase (decrease) in provision for employees'
retirement benefits
Increase (decrease) in provision for directors andcorporate auditors' retirement benefits
Interest and dividend income
Share of (gain) loss of entities accounted for using
equity method
Interest expenses
Loss (gain) on sales of property
Loss on disposal of property
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Increase (decrease) in accounts payable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in claims provable inbankruptcy/rehabilitation
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net Cash Provided by Operating Activities
II. Cash Flows from Investing Activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchase of intangible assets
Purchase of investment securities
Purchase of insurance funds
Proceeds from cancellation of insurance funds
Payments of loans receivableCollection of loans receivable
Payments for lease deposits
Collection of lease deposits
Other
Net Cash Used in Investing Activities- 12 -Six Months ended July
31, 2014

5,149,438
831,236
100,9885,936,818
887,064
87,442

2,809

27,263

137,835(30,855)(1,668)

6,193(77,997)

4,101(52,787)(85,137)(33,092)(1,955)

10,814(2,996)
15,41330,245346
20,731(1,397,712)(2,134,689)(712,211)(661,290)

347,571

262,972

170,521(252,434)

55,636334,1588

20(676,527)
3,559,210
46,661(2,238)(1,792,696)
1,810,936(324,786)
4,414,282
73,331(5,518)(1,885,828)
2,596,266(2,310,039)(1,607,232)

5,668

2,216

(62,755)(298)(3,168)33,746(931)
563(6,572)
11,137(27,781)(2,360,431)(89,594)(329)(3,168)(865)
1,117(31,058)
14,923233(1,713,756)

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015

(Thousands of yen)
Six Months ended July
31, 2013
III. Cash Flows from Financing Activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Payment of cash dividends
Cash dividends paid to minority shareholders
Purchase of treasury stock
Other
Net Cash Used in Financing Activities
IV. Effect of Exchange Rate Change on Cash andCash Equivalents
V. Net Increase (Decrease) in Cash and Cash
Equivalents
VI. Cash and Cash Equivalents at Beginning of
PeriodVII. Cash and Cash Equivalents at End of Period- 13 -Six Months ended July
31, 2014

2,890,470(3,866,540)
737,044(14,984)(1,418,897)(46,581)(4,004)(7,524)(1,731,018)

1,153,675(1,000,000)
5,000,000(4,860)(2,198,754)(44,693)(485,068)(5,898)2,414,399

792,725(458,859)(1,487,788)

2,838,050

10,574,326

13,102,606

9,086,537

15,940,657

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015(4) Notes Regarding Going Concern Assumptions
Not applicable.
(5) Notes Regarding Substantial Changes in Shareholders’ Equity
Not applicable.
(6) Segment Information
Six Months ended July 31, 2013
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Thousands of yen)
Reporting Segment
Domestic
Health Care
Child-rearing
Baby andand Nursing Overseas
SupportBusiness
Mother Care
Care
Services
Business
Business
Net Sales
Net sales toexternalcustomers
Internal
sales
betweensegments,
or exchange
Total
Segment
profitChina
Business

Total

8,987,836 36,070,868

Other
Businesses(Note 1)

Adjustments(Note 2)

AmountAccounted
on
Quarterly
Consolidated Statementof Income(Note 3)-36,621,704

1,664,588(1,664,588)

-

Total

12,476,737

3,289,330

3,449,546

7,867,418---

1,570,725

12,476,737

3,289,330

3,449,546

9,438,143

9,081,699 37,735,457

550,835 38,286,293(1,664,588)

36,621,704

1,628,138

80,807202,294

1,975,261

2,618,654

63,958(1,755,064)

4,814,050

93,863

1,664,588

6,505,156

550,835 36,621,704-

6,569,114(Notes)1. The “Other Businesses” classification refers to businesses not included in the reporting segments, which are mainly our Group’s
production subsidiaries manufacturing, and those selling products to companies outside our Group.
2. The negative amount of ¥1,755,064 thousand from adjustments in segment profits includes ¥72,947 thousand in elimination ofintersegment transactions, and a negative ¥1,828,012 thousand in non-allocable operating expenses. Non-distributable operating
expenses are mainly administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statements of income.

1. Six Months ended July 31, 2014
Information Regarding Net Sales and Profit (Loss) in Each Reporting Segment(Thousands of yen)

Adjustments(Note 2)

AmountAccounted
on
Quarterly
Consolidated Statementof Income(Note 3)-39,229,251

2,177,091(2,177,091)-

654,177 41,406,342(2,177,091)

39,229,251

86,923(2,004,726)

5,985,845

Reporting Segment
Domestic
Health Care
Child-rearing
Baby andand Nursing Overseas
SupportBusiness
Mother Care
Care
Services
Business
Business
Net Sales
Net sales toexternalcustomers
Internal
sales
betweensegments,
or exchange
Total
Segment
profit12,391,921-

12,391,921
2,029,703

China
Business

Total

3,364,614 3,521,826 8,647,332 10,649,378 38,575,074-- 1,874,772

302,318

2,177,091

3,364,614 3,521,826 10,522,105 10,951,697 40,752,165
96,301

212,313 2,261,681

3,303,648

7,903,647

Other
Busines
ses
(Note
1)

Total

654,177 39,229,251-

7,990,571(Notes)1. The “Other Businesses” classification refers to business not included in the reporting segments, which are mainly our Group’s
production subsidiaries manufacturing, and those selling products to companies outside our Group.
2. The negative amount of ¥2,004,726 thousand from adjustments in segment profits includes ¥51,290 thousand in elimination ofintersegment transactions, and ¥2,056,016 thousand in non-allocable operating expenses. Non-allocable operating expenses are- 14 -

Pigeon Corporation (7956) Summary of Financial Results for the Second Quarter of Fiscal Year Ending January 2015
mainly administrative costs of our Group.
3. Segment profits are adjusted to operating income in the quarterly consolidated statements of income.
2. Matters concerning Changes in the Reporting Segments
Starting with the first quarter of the consolidated current term, our Group made changes in its business classification, reorganizing its
business in five reporting segments - "Domestic Baby and Mother Care Business", "Child-rearing Support Services", "Health Careand Nursing Care Business", "Overseas Business", and "China Business" - as the latter, included before in the Overseas Businesssegment, had increased in importance.
In addition, please note that, the reporting segments disclosed in the same period of the previous fiscal year differ as they wereprepared pursuant to the reporting segment classification subsequent to the changes and reflected in this consolidate first-half year
financial report.
3. Changes in the Method for Determining Depreciation of Tangible Fixed Assets
As stated in the “Changes in Accounting Policies” (page 5), our Group and its consolidated subsidiaries have switched to thestraight-line method from the depreciation method for a part of its tangible fixed assets, effective from the first quarter-end of theconsolidated current term.
The impact of this change on segment profits rose to ¥42,810 thousand in "Domestic Baby and Mother Care Business", ¥1,840
thousand in "Child-rearing Support Services", ¥7,409 thousand in "Health Care and Nursing Care Business", ¥7,180 thousand in"Overseas Business", and ¥4,066 thousand in "Other Businesses". Also, the amount of not-allocable operating expenses recorded anincrease of ¥11,468 thousand.

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