This document is a summary translation of the Japanese language original version. In the event of any discrepancy, errors
and/or omissions, the Japanese language version shall prevail.

Summary of Consolidated Financial Statements (Japanese Standards)
for the Third Quarter of the Year Ending December 31st, 2016 (Q3 2016YTD)
November 11, 2016
Listed Company Name:

Coca-Cola East Japan Co., Ltd.

Listed Stock Exchange:

Security Code:

2580

URL:

http://www.ccej.co.jp

Name:

Calin Dragan

Name:

Johan Rolf

Representative:

Title

Contact:

Title

Representative Director,
President
Senior Executive Officer
Finance Function

Scheduled date of submission of quarterlyTEL:
03 (5575) 3859

Schedule date of start ofNovember 11, 2016

report:Tokyo Stock Exchange

Not Applicabledividend payment:

Preparation of supplementary documents for quarter results:

Yes

Quarterly earnings results presentation/conference:

Yes(Amounts of less than one million yen are rounded down)

1． Consolidated Financial Results for the Third Quarter Ending September 30, 2016 (January 1, 2016 – September 30, 2016)(1)
Consolidated Operating Results (YTD)(Percentages show year-on-year changes)
Net Income
Net Sales
Operating Income
Ordinary Income
Attributable to
Owner of Parent
Million Yen%

Million Yen%

Q3 2016 YTD
438,645
3.1
17,745130.8
Q3 2015 YTD
425,530
6.2
7,689
34.1
(Note) Comprehensive income: Q3 2016 YTD 9,493Million Yen (16.8%)

Net Income per Share
Q3 2016 YTD
Q3 2015 YTDMillion Yen%

Million Yen

Diluted Net Income per Share
Yen

Yen

87.82
33.47

87.65
33.43

.

(2)

Consolidated Financial Position
Total Assets

Net Assets

Million Yen

Equity Ratio

Million Yen%

236,554

62.1

Q3 2016 YTD
380,277
FY2015
371,771(Note) Shareholders’ equity: Q3 2016 : 235,993 million yen

230,945

62.0

FY2015 : 230,525 million yen

2．Dividends
End of Q1Yen

FY2015FY2016FY2016 (Forecast)－－

Dividend per Share
End of Q2
End of Q3
Yen

16.00
16.00

(Note) Revisions to the dividend forecast disclosed most recently

Yen%

17,522125.2
11,138 166.4
7,780
30.0
4,181 366.0
Q3 2015 YTD 8,126Million Yen (465.6%)

Year-end

Annual

Yen

yen

－

16.00

32.00

－

16.00

32.00

No

3．The Consolidated Earnings Forecasts for the Fiscal Year Ending on December 31st ,2016(Percentages show year-on-year changes)

Operating
IncomeNet Sales

Full-Year

Ordinary Income

Net Income
Attributable to
Owner of Parent

Million Yen%

Million Yen%

Million Yen%

Million Yen%

Yen

573,400

1.8

18,00066.8

17,80071.0

10,500

96.1

82.78

(Note) Revisions to the Earnings forecasts disclosed most recently

None

Notes:(1)
Changes in important subsidiaries during the nine-month period ended September 2016 (Changes
in specified subsidiaries accompanied by changes in the consolidation scope)(2)

Application of particular accounting treatments to the preparation of quarterly consolidated
financial statements(3)

Net Income
per Share

None

None

Changes in accounting policies, changes in accounting estimates, or restatement(i) Changes in accounting policies due to revisions of accounting standards, etc.

Yes(ii) Changes in accounting policies other than (i)None(iii) Changes in accounting estimatesYes(iv) Restatement

None

(4)
Number of Issued Shares (Common Shares)(i) Number of issued shares at the end of theQ3 2016
period (including treasury stocks)(ii) Number of treasury stocks at the end of
Q3 2016
the period(iii) Average number of the shares during theQ3 2016 YTD
period (accumulated period)

127,680,144 shares

FY 2015

127,680,144 shares

837,876 shares

FY 2015855,654 shares

126,836,652 shares

Q3 2015 YTD

124,918,547 shares*Statement regarding the status of the quarterly review
This summary of financial statements for the third quarter of the year ending December 31st, 2016 falls outside the quarterly
review procedures required by the Financial Instruments and Exchange Act. The review procedures of quarterly consolidated
financial statements required by the Financial Instruments and Exchange Act had not been completed as of the time when
this summary was disclosed.
*Explanation regarding the appropriate use of earnings forecasts and other special notes
Although the statements in this summary are prepared based on various information available to the Company and certain
assumptions considered reasonable by the Company, actual results may differ significantly due to various factors. For detailsof assumptions for earnings forecasts and notes on the use of earnings forecasts, please see “Qualitative information on the
consolidated earnings forecasts,” page 5 of the attached material of the summary.

Contents of the Attached Materials

1. Qualitative information on results for the third quarter of the year ending December 31, 2016 ..........................2(1) Qualitative information on the consolidated operating results .........................................................................2(2) Qualitative information on the consolidated financial positions .......................................................................5(3) Qualitative information on the consolidated earnings forecast ........................................................................5
2. Matters relating to summary information (notes) ...................................................................................................5(1) Change in important subsidiaries during the nine-month period ended September 30, 2016 ......................5(2) Application of special accounting treatments for preparation of quarterly consolidated financial statements..................................................................................................................................................................................5(3) Changes in accounting policies, changes in accounting estimate, or restatement ........................................5(4) Additional information ........................................................................................................................................6
3. Consolidated financial statements..........................................................................................................................7(1) Consolidated Balance Sheets ...........................................................................................................................7(2) Consolidated Profit and Loss Statement and Comprehensive Profit and Loss Statement............................9(Consolidated Profit and Loss Statement) .........................................................................................................9(Consolidated Comprehensive Profit and Loss Statement) ........................................................................... 10(3) Notes to quarterly consolidated financial statements.................................................................................... 10(Notes for assumption for going concern) ....................................................................................................... 10(Notes for significant changes in the amount of shareholders’ equity) .......................................................... 10(Segment information and others) ................................................................................................................... 10

1

1. Qualitative information on results for the third quarter of the year ending December 31,
2016(1) Qualitative information on the consolidated operating results
The consolidated financial results of Coca-Cola East Japan Co., Ltd. (“CCEJ” or the “Company”) for the third
quarter of the year ending on December 31, 2016, are as follows.
In addition to this qualitative information section, please also see the earnings conference material posted on
our Company IR website (http://investor.ccej.co.jp), which will be used for the earnings telephone conference
and webcast on Monday, November 14, 2016 at 1:30 p.m. (JST).
YTD Q3 Highlight・Year-to-date volume grew by 6% year-on-year. Excluding the impact of Sendai Coca-Cola Bottling Co.,
Ltd. (“Sendai”) integrated from April 1, 2015, volume grew 3%. Market share momentum continued
with both volume and value share growth.

・Year-to-date revenue grew by 3% year-on-year, driven by continued good performance of newly
launched products, volume growth, and the benefit of the integration of Sendai.

・

Significant year-to-date operating income growth -- over two times prior year period-- mainly driven bycontinuous synergy capture from supply chain efficiencies and volume growth.

・Agreed proposed business integration with Coca-Cola West Co., Ltd. to create the third largest global
Coca-Cola bottler in terms of revenue, “Coca-Cola Bottlers Japan Inc.” expected to be establishedeffective April 1, 2017.

Operating Review
Total nonalcoholic ready-to-drink (NARTD) beverage industry volumes were generally positive in the year-todate period. Year-to-date total BAPC (Bottler Actual Physical Cases) sales volume of CCEJ grew 6% year-onyear, led by continued good performance of newly launched products as well as the integration of Sendai.
Volume excluding the integration impact (assuming previous year term volume includes Sendai) was positive
3% year-to-date.
Year-to-date volume grew across all channels, driven by growth across core beverage categories such as
sparkling beverages, non-sugar tea, coffee and waters. Volume grew in all sales channels as follows: Drug &Discounter channel +18%, Convenience Store channel +8%, Supermarket channel +5%, Eating & Drinking
channel +4% and Vending channel +1%.
Sparkling beverage volume grew +4% year-to-date, led by growth of trademark Coca-Cola, Coca-Cola Zeroand Fanta. Non-sugar tea volume grew +6%. Water grew +19%, led by continued good performance of ourportfolio of water brands, including new product launches of the more premium, smaller package size I LOHAS
water and growth of 2L Mori-no-Mizu Dayori brand. Coffee volume continued to grow, up 10%, mainly driven bycustomer-exclusive branded products and Georgia The Premium series. Juice volume grew +5%. Sports drinks
volume was negative 6%, reflecting overall category performance weakness.
Year-to-date channel and category performance were also driven by the Sendai integration.
Third quarter (July to September, Q3), total BAPC sales volume of CCEJ grew 1% year-on-year, along withimproving profitability through execution of RGM (Revenue Growth Management) and PTC (Price, Terms andConditions).

2

Volume performance by channel was led by the Drug & Discounter channel (+10%) driven by the growth of
sparkling beverages, non-sugar tea and water. Supermarket channel and Convenience Store channel volume
grew 2% and 3%, respectively. Vending channel volume declined 3% as growth in sparkling and water wasoffset by a decrease of coffee and non-sugar tea, however vending profitability has improved supported bycontinuous rollout of vending exclusive products, etc.. Eating & Drinking channel volume was even.
In terms of Q3 beverage category volume performance, sparkling beverage volume grew 3% led by growth of
trademark Coca-Cola, Fanta and Canada Dry. Non-sugar tea volume was even and renewed Sokenbichabrand performed well, up 6%. Water grew +13% led by continued good performance of premium I LOHAS
water, including Momo (Peach) and Cider, and 2L Mori-no-Mizu Dayori brand. Coffee volume grew 2%
supported by growth in supermarket, drug & discounter and convenience store channels. Juice was even as
growth in supermarket and convenience store channels offset a decline in the eating & drinking channel. Sports
drinks volume was negative 8% reflecting overall category performance weakness.
We have a solid marketing and innovation calendar planned for the fourth quarter onward together with ourpartners at Coca-Cola (Japan) Company Limited.
In the vending channel, we have launched “Raising the temperature by two degrees in vending machine”
campaign, raising the temperature setting of hot beverages by two degrees (Celsius) to provide warmer hot
beverages to consumers during the colder winter months. This campaign received a favorable reception fromconsumers last year and we have decided to set it as a winter season standard (“TEIBAN”) this winter.
Together with this, we also launched a new campaign for Georgia coffee, “Warming Japan, this year, too”, byoffering complimentary drink tickets to consumers through the “Coke On” smartphone app.
We will also continue the global advertising campaign for Coca-Cola, “Taste the Feeling”. As part of this yearlong campaign, we have launched the “Coca-Cola Winter Campaign” for Christmas and the New Year holiday
season and introduced unique ribbon bottles for Coca-Cola and Coca-Cola Zero which are wrapped in a labelthat can be changed into a festive bow.
Also, we have been continuously working to improve profitability with a segmented approach to grow volume
and revenue across channels. Specifically in important vending channel, we have continued to deploy vending
initiatives such as launching vending-exclusive products and installing “Coke ON” enabled vending machines.
In addition, we continue to focus on stabilizing profitability of this important channel by re-deploying or removing
unprofitable machines, prioritizing indoor machine placements and identifying and capturing cost-saving
opportunities.

3

Financial Review
Reported Results
Year-To-Date 2016 (January to September)
In Million JPY

2015

2016

% Change

Net Sales

425,530

438,645+3.1

Operating Income

7,689

17,745+130.8Net Income Attributable to

4,181

11,138+166.42015

2016% Change

Volume** (BAPC, in thousand)

230,587

243,952+5.8

Net Sales

425,530

438,645

+3.1

8,719

18,793+115.52015

2016% Change

Volume** (BAPC, in thousand)

90,787

92,093+1.4

Net Sales

163,480

163,117

-0.2

6,078

12,211+100.9Owner of Parent
Comparable* Results
Year-To-Date 2016 (January to September)
In Million JPY, except volume

Operating Income
Q3 2016 (July to September)
In Million JPY, except volume

Operating Income* Comparable: Presentation of results after excluding exceptional items such as charges, gains, etc. which are viewed bymanagement as non-recurring items impacting only the current period or the comparable period, but not both. These
comparability adjustments should be viewed in addition to, and not as an alternative for, the Company's reported results
prepared in accordance with JGAAP.
** Previous year volume shown above may be slightly different from what we shared in the previous year, as part of theimplementation and standardization for the new ERP system, CokeOne+.

Year-to-date reported revenue was JPY 438,645 million (positive 3% compared to the prior year period), mainly
attributable to volume growth as well as the integration of Sendai as of April 1, 2015. Q3 revenue declined
slightly due to a decrease in sales of finished products to other Coca-Cola bottlers in Japan.
Year-to-date reported operating income grew significantly to JPY 17,745 million (positive 131% compared to theprior year period), driven by gross profit increase reflecting continuous synergy capture from supply chain
efficiency, volume growth, etc. Additionally, growth of advertisement & sales promotion expenses, salescommissions, etc. due to volume growth partially offset by lower labor expenses, etc. resulted in a moderateincrease of sales, general & administrative expenses. Q3 comparable operating income grew 101%.
We reported year-to-date net income of JPY 11,138 million (positive 166% compared to the prior year period),
due to the increase in operating income, decrease of extraordinary loss, etc.

4(2) Qualitative information on the consolidated financial positions
Assets at the end of this quarter were JPY 380,277 million, an increase of JPY 8,506 million from the end of theprevious fiscal year. This is mainly attributable due to an increase of account receivable-trade reflecting growth
in revenue, increase of raw material and supplies, increase of noncurrent asset by acquiring the land andbuilding of our Tama manufacturing plant, etc.
Liabilities at the end of this quarter were JPY 143,723 million, an increase of JPY 2,898 million from the end of
previous fiscal year. This is mainly due to an increase of short-term loans payable, long-term loans payable etc.,
partially offset by decrease of other current liabilities and non-current liabilities due to the decrease of leaseobligations, etc.
Net assets at the end of this quarter were JPY 236,554 million, an increase of JPY 5,608 million. This is due toincrease of net income partially offsets by a payment of interim dividends, etc.
(3) Qualitative information on the consolidated earnings forecast
On September 9, 2016, the Company revised the forecast for the fiscal year ending December 2016, issued on
February 12, 2016. Also, we have reached an agreement with Coca-Cola West Co., Ltd. for the proposedbusiness integration expected to be effective in April 1, 2017 through a combination of a share exchange andabsorption-type company split. For details, please see “Announcement Regarding Proposed Integration andShare Exchange Agreement between Coca-Cola West Co., Ltd. and Coca-Cola East Japan Co., Ltd., and Shiftto Holding Company Structure through Company Split, Change of Trade Name and Partial Amendment of
Articles of Incorporation of Coca-Cola West Co., Ltd.“ dated September 30, 2016.
If further disclosure concerning this matter shall be required and/or any impact to the forecast of this fiscal year
expected, we will disclose accordingly.

2. Matters relating to summary information (notes)(1) Change in important subsidiaries during the nine-month period ended September 30, 2016
None(2) Application of special accounting treatments for preparation of quarterly consolidated financial statements
None(3) Changes in accounting policies, changes in accounting estimate, or restatement
Changes in accounting policies(Application of accounting standards regarding business combinations)
From the first quarter of the fiscal year ending on December 31, 2016, the Company has applied the “AccountingStandard for Business Combination” (Accounting Standards Board of Japan Statement No.21, Sept. 13, 2013), the“Accounting Standard for Consolidated Financial Statements” (Accounting Standards Board of Japan Statement
No.22, Sept. 13, 2013), and the “Revised Accounting Standard for Business Divestures” (Accounting Standards Boardof Japan Statement No.7, Sept. 13, 2013.), etc. Accordingly, the accounting method have been changed to record thedifferences arising from changes in the Company’s ownership interest in subsidiary, when control continues, as capitalsurplus, and to record the acquisition-related costs as expenses in the fiscal year in which they are incurred.

5

Furthermore, for the business combinations carried out on or after January 1, 2016, accounting method has beenchanged to reflect the adjustments to the acquisition cost allocation arising from finalization of provisional accounting
treatment in the quarterly consolidated financial statements of the period in which the business combination occurred.
In addition, presentation of net income and other related items was changed, and the presentation of “minority
interests” was changed to “non-controlling interests.” In order to reflect these changes, the quarterly consolidated
financial statements for the third quarter of the previous fiscal year and the consolidated financial statements for theprevious fiscal year have been reclassified.
The Accounting Standard for Business Combination etc. have been applied prospectively from the beginning of thefirst quarter in accordance with the transitional treatment set forth in Article 58-2 (4) of the Accounting Standard forBusiness Combination, Article 44-5 (4) of the Accounting Standard for Consolidation, and Article 57-4 (4) of the
Accounting Standard for Business Divestures.
There was no impact on the quarterly consolidated financial statements for the third quarter of this fiscal year.

Changes in accounting estimates(Change of useful lives of fixed assets)
The useful lives of machinery and equipment used for production purposes had been previously defined as 10 years.
Triggered by events such as the development of systematic maintenance policy for the machinery and equipment as
CCEJ group, and the progress of internalization of maintenance activities, as well as the commencement of a new
production structure for the entire CCEJ group after the legal entity integration of Sendai Coca-Cola Bottling Co., Ltd.
effective January, 2016, we revisited the physical durability and lifecycle of production machinery, etc. As a result,from the first quarter of the fiscal year ending on December 31, 2016, we have prospectively changed the useful lives
to a range of 7 to 20 years, which more accurately reflects the economical useful lives.
As a result of this change, gross profit, operating income, ordinary income increased by JPY1,360 million, andquarterly income before income taxes increased by JPY1,359 million, respectively.

(4) Additional information(Modification of the amount of deferred tax assets and deferred tax liabilities due to changes of corporate tax
rate)
The “Law Revising a Portion of the Income Tax Law” (2016, Law No. 15) and “Law Revising a Portion of Local Tax” (2016,
Law No. 13) were promulgated on March 31, 2016, which amends corporate tax rate, etc. from the consolidated fiscal year
starting on April 1, 2016 onwards. Consequently, the effective statutory tax rates to be used for the calculation of deferred tax
assets and deferred tax liabilities shall be as follows, according to the periods for the settlement of temporary differences:
33.0% up to December 31, 2016
30.8% from January 1, 2017 to December 31, 2018
30.6% from January 1, 2019 onwards
As a result of these tax rate changes, deferred tax assets (the amount after subtracting deferred tax liabilities) decreasedby 126 million yen, Income Taxes-Deferred increased by 95 million yen, while Valuation Difference on Available-for-Sale
Securities increased by 32 million yen, respectively. Remeasurements of defined benefit plans decreased by 63 million yen.

6

3. Consolidated financial statements(1) Consolidated Balance Sheets(MM yen)

FY2015Q3 2016 YTD

AssetsCurrent assets
Cash and deposits

21,57814,556

Notes and accounts receivable-trade44,56547,858

Short-term investment securities

301－

Merchandise and finished products

34,35932,298－82Work in process
Raw materials and supplies

3,377

8,745

Others23,22723,456(67)(78)

127,343

126,918

Buildings and structures, net

45,86145,294

Machinery, equipment and vehicles,net

37,652

42,786

Sale equipment, net

66,112

66,682

Land

50,88363,153

Other, net

9,808

2,616

210,318

220,533

8,361

8,939

25,97324,114

Allowance for doubtful accounts
Current assets
Noncurrent assets
Property, plant and equipment

Property, plant and equipment
Intangible assets
Investments and other assets
Other
Allowance for doubtful accounts

(225)

(228)

Investments and other assets

25,74823,885

244,428

253,359

371,771

380,277

Accounts payable-trade29,14926,925

Short-term loans payable

5,160

9,000

－

14,000Current portion of long-term loans payable

1,234

1,946

Income taxes payable

1,100

4,212

Provision for bonuses

1,364

3,477

Provision for directors' bonuses

37

73

Provision for environmental measures－

45

Provision for early termination

963

910

Noncurrent assets
AssetsLiabilities
Current liabilities

Current portion of bonds payable

Asset retirement obligations

33

28

Other

43,62433,462Current liabilities

82,66894,081

Bonds payable

30,00016,000Long-term loans payable

2,520

13,740335

276

Noncurrent liabilities

Provision for environmental measures
Provision for early termination

1,392

793

Net defined benefit liability

17,597

17,180776

777

Asset retirement obligations
Other

5,533

873

Noncurrent liabilities

58,15649,642140,825

143,723

Liabilities

7

Consolidated Balance Sheets(MM yen)
FY2015Q3 2016 YTD

Net assets
Shareholders' equity
Capital stock

6,499

6,499

Capital surplus

157,313

157,323

Retained earnings

68,45475,534

Treasury stock(1,178)(1,154)

Shareholders' equity

231,089

238,203

Valuation difference on available-for-sale securities

2,151

1,388

Deferred gains or losses on hedges

(463)

(947)

(2,251)(2,651)

Total accumulated other comprehensive income(564)(2,209)Stock acquisition rights

420

560

Net assets

230,945

236,554

Liabilities and net assets

371,771

380,277

Accumulated other comprehensive income

Remeasurements of defined benefit plans8(2) Consolidated Profit and Loss Statement and Comprehensive Profit and Loss Statement(Consolidated Profit and Loss Statement)(MM yen)Q3 2015 YTD

Q3 2016 YTD

Net sales

425,530

438,645

Cost of sales

227,997229,807

Gross profit

197,532

208,837

Selling, general and administrative expenses

189,843

191,092

7,689

17,745Interest income

74

48

Dividends income

102

85

Share of profit of entities accounted for using equity method

126

139

Rent income

263

264

Gain on sales of valuable wastes

232

324

Other

197

184

996

1,047

Operating income
Non-operating income

Non-operating income
Non-operating expenses
Interest expenses

334

103

Loss on sales and retirement of noncurrent assets

407

1,007

Rent Expenses

28

54

Other

135

104

Non-operating expenses

905

1,270

7,780

17,522Gain on sales of investment securities－

222

Gain on bargain purchase

84－

Gain on sales of noncurrent assets

95Ordinary lncome
Extraordinary income

Others357

2

Extraordinary income

452

230

Extraordinary loss
Loss on sales and retirement of noncurrent assets

987

54

Lease contract cancellation penalty

175

341

Impairment loss

8

4

Restructuring cost

668

111

Others489

115

Extraordinary loss

2,329

627

Income before income taxes

5,903

17,125

Income taxes-current

1,044

6,577

Income taxes-deferred

677

(590)

Income taxes

1,721

5,986

Net income

4,181

11,138Net income attributable to owners of parent

4,181

11,1389

(Consolidated Comprehensive Profit and Loss Statement)(MM yen)Q3 2015 YTD

Q3 2016 YTD

4,181

11,138

387

(762)

4,259

(399)

(702)

(483)

Other comprehensive income

3,945(1,645)

Quarterly comprehensive income

8,126

9,493

8,126

9,493

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans
Share of other comprehensive income of associates accounted for using
equity method

Quarterly comprehensive income attributable to owners of parent(3) Notes to quarterly consolidated financial statements(Notes for assumption for going concern)
None(Notes for significant changes in the amount of shareholders’ equity)
None(Segment information and others)(Segment information)
Q3 2015 YTD (January 1 to September 30, 2015)
The Group has sole segment of beverage business, thus the description by each reporting segment is omitted.
Q3 2016 YTD (January 1 to September 30, 2016)
The Group has sole segment of beverage business, thus the description by each reporting segment is omitted.

10