〔Delayed〕The original disclosure in Japanese was released on February 14, 2014 at 15:00 (GMT+9)

February 14, 2014

Best Bridal Inc.
Consolidated Earnings Report for the Fiscal Year ended December 31, 2013
(Japanese GAAP)
Stock listing: Tokyo Stock Exchange (First Section)
Securities code: 2418
URL: http://www.bestbridal.co.jp/english/
Representative: Masayuki Tsukada, President and CEO
Information contact: Keiji Ishihara, Director
Tel: +81-3-5464-0081
Scheduled dates:
Annual general meeting of shareholders:March 28, 2014
Filing of statutory year-end financial report:
March 28, 2014
Dividend payout:
March 31, 2014
Supplementary materials to year-end financial results available: Yes
Year-end earnings presentation held: Yes (targeted at institutional investors and analysts)(Amounts rounded down to the nearest million yen)

1. Consolidated Performance for the Fiscal Year ended December 31, 2013
(January 1, 2013 – December 31, 2013)(1) Consolidated Operating Results
Net sales
million yen(Percentages indicate year-on-year changes)%

Operating income
million yen%

Ordinary income
million yen%

Net income
million yen%

Year ended
47,426
6.6
6,856
5.2
7,129
7.9
4,236
29.6
December 31, 2013
Year ended
44,494
6.6
6,519
1.9
6,610
6.2
3,270
22.5
December 31, 2012
Note: Comprehensive income: Year ended December 31, 2013:
4,465 million yen (28.3 %)Year ended December 31, 2012:
3,479 million yen (31.1%)
Diluted net income
Ordinary income
Operating income
Net income per
Return on equity
share
per share
to total assets
to net sales
yen
yen
%
%
%
Year ended
86.62
83.75
18.6
13.9
14.5
December 31, 2013
Year ended
66.79
16.9
13.8
14.7
December 31, 2012
Reference: Investment gains/losses on equity-method: Year ended December 31, 2013
- million yen
Year ended December 31, 2012: 3 million yen
Note: Effective July 1, 2013, the Company conducted a 1:200 common stock split. Net income per share was calculated assumingthat the stock split was effected at the beginning of the fiscal year ended December 31, 2012.

(2) Consolidated Financial Position

December 31, 2013

Total assets
million yen
53,968

Net assets
million yen
24,66848,381
20,815
December 31, 2012
Reference: Total equity: December 31, 2013: 24,668 million yen
December 31, 2012: 20,815 million yen
Total equity=Shareholders’ equity plus total accumulated other comprehensive income.

1

45.7

Net assets per shareyen
505.2143.0

425.15Equity ratio%

Note: Effective July 1, 2013, the Company conducted a 1:200 common stock split. Net assets per share wascalculated assuming that the stock split was effected at the beginning of the fiscal year ended December 31, 2012.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
million yen
Year ended
December 31, 2013
Year ended
December 31, 2012

Cash and cash
equivalents at end of
periodmillion yen

Cash flows fromfinancing activities

Cash flows frominvesting activities
million yen

million yen

6,022(5,457)

1,897

13,7585,223(2,409)(2,198)

11,205

2. Dividends
Dividend per share
Total
dividends
End-Q1yen

End-Q2yen

End-Q3yen

Year-endyen

Annual totalyen

Rate of total
Dividend
dividend to
payout ratio
net assets(consolidated)(consolidated)%%

million yen
Year ended
1,000.00
1,000.00
2,000.00
489
15.0
December 31, 2012
Year ended
1,000.00
5.00
488
11.5
December 31, 2013
Year ending
5.00
10.00
December 31, 2014
5.00
(Forecast)
Notes: 1. Effective July 1, 2013, the Company conducted a 1:200 common stock split. The per share dividend forthe fiscal year ended December 31, 2012 shows the amount of the actual dividend distributed before thestock split. The dividend payout ratio (consolidated) and the rate of total dividend to net assets(consolidated) for the fiscal year ended December 31, 2013 reflect the stock split.
2. Without adjusting for the stock split, the year-end per share dividend for the fiscal year ended December
31, 2013 would be 1,000 yen, which would result in an annual dividend of 2,000 yen.

3. Earnings Forecast for the Fiscal Year ending December 31, 2014
(January 1, 2014 – December 31, 2014)(Percentages indicate year-on-year changes)
Net sales
million yen

Operating income
million yen%

Ordinary income
million yen%%
Six months ending
23,1604.0
1,600(38.4)
1,600(40.4)
June 30, 2014
Year ending
52,650
11.0
7,250
5.7
7,250
1.7
December 31, 2014
Note: As announced on February 14, 2014, the Company will move to a holding company structure on July 1, 2014.
Forecasts of net income and net income per share for the fiscal year ending December 31, 2014 are therefore notpresented herein because these are difficult to be reliably estimated at this point.

*Notes(1) Changes affecting the consolidation status of significant subsidiaries during the period: Yes
Newly consolidated: Best Global, Inc.
Note: For details, please refer to "(5) Notes to the Financial Statements (Basis for Preparationof Consolidated Financial Statements)" in section "3. Consolidated Financial Statements"
on page 22 in the accompanying materials.
2

2.5
2.2

(2) Changes in accounting policy, changes in accounting estimates, and retrospective
restatement
1) Changes in accordance with amendments to accounting standards, etc.: Yes
2) Changes other than noted in 1) above: None
3) Changes in accounting estimates: Yes
4) Retrospective restatement: None
Note: This relates to “Changes in accounting policies that are difficult to distinguish fromchanges in accounting estimates” and “Notes to changes in accounting estimates"
stipulated in Article 14-7 and Article 14-6, respectively, of the Ordinance on Terminology,
Forms and Preparation of Consolidated Financial Statements. For details, please referto "(5) Notes to the Financial Statements (Changes in Accounting Policy) and (Changes
in Accounting Estimates)” in section “3. Consolidated Financial Statements” on page 25
in the accompanying materials.
(3) Shares issued (common stock)1) Number of shares issued at end of period (including
treasury stock)2) Number of shares held in treasury at end of period

3) Average number of shares outstanding during the period

December 31, 2013

December 31, 2012

48,960,000

48,960,000

131,512-

Year ended

Year ended

December 31, 2013

December 31, 2012

48,916,035

48,960,000

Effective July 1, 2013, the Company conducted a 1:200 common stock split. The number of shares issued at
end of period (common stock) was calculated assuming that the stock split was effected at the beginning of the
fiscal year ended December 31, 2012.

* Audit Status
As of this report publication, an audit of the consolidated financial statements in accordance with Japan’s
Financial Instruments and Exchange Act is underway.
*Appropriate Use of Earnings Forecast and Other Important Information(Cautionary note on forward-looking statements)
The above forecasts are based on information available as of this report’s publication. Actual
results may differ from forecasts due to changes in the business environment. For theassumptions underlying the forecasts herein and other notice on the use of earnings forecasts,
please refer to “(1) Operating Results” in “1. Review of Consolidated Financial Results” on page 5in the accompanying materials.
(Presentation handout materials)
The Company has scheduled an earnings presentation targeted at institutional investors andanalysts on February 18, 2014.
The presentation handout materials will be posted on the Company's website immediately after the
event.

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Accompanying Material – Contents
1. Review of Consolidated Financial Results(1) Operating Results(2) Financial Condition(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2013, and Dividend
Forecast for Fiscal 2014(4) Business and Other Risks
2. Management Policy(1) Basic Management Policy(2) Management Goals and Indicators(3) Medium-to Long-term Management Strategy(4) Issues to Address
3. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income(3) Consolidated Statements of Changes in Net Assets(4) Consolidated Statements of Cash flows(5) Notes to the Financial Statements(Note on the Going-concern Assumption)(Basis for Preparation of Consolidated Financial Statements)(Changes in Accounting Policy)(Changes in Accounting Estimates)(Segment and Other Information)(Per Share Information)(Significant Subsequent Events)
4. Other Information(1) Changes in Officers(2) Weddings Held, Orders Received, and Sales Volume

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5
7
7
11
11
11
11
12
14
14
16
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22
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28
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1. Review of Consolidated Financial Results(1) Operating Results
1) Results for Fiscal 2013
In the fiscal year ended December 31, 2013, the Japanese economy showed signs of aself-sustaining recovery owing to yen depreciation, a rebound in stock prices, and an upturn inpersonal consumption fueled by the government’s economic stimulus measures and the
Bank of Japan’s monetary easing policy. Overall, however, the economic outlook remained
uncertain due to rising electric power and raw materials costs, as well as concerns about apossible downturn in overseas economies.
Regarding the bridal market in which the Best Bridal Group operates, the number of
weddings in Japan in 2013 was estimated at 663,000 (compared with 668,869 in 2012; both
figures from the Ministry of Health, Labour and Welfare). Although Japan’s declining birthrate
is gradually having a discernible impact, the size of Japan’s wedding market remains
generally firm due to the moderate rise in wedding expenditures.
In this environment, the Best Bridal Group endeavored to increase sales and profitability bycontinually creating new value in the bridal market through high-quality, appealing outlets andhigh value-added services, and by accurately responding to customers’ more individualized
and diversifying needs.
As a result of the above factors, the Group posted net sales of ¥47,426 million in the fiscal
year, an increase of 6.6% over the previous fiscal year. Operating income totaled ¥6,856
million, a year-on-year increase of 5.2%, ordinary income amounted to ¥7,129 million, up
7.9% year on year, and net income totaled ¥4,236 million, up 29.6% year on year.
Results for each business segment were as follows.
a. Domestic operations
The completion of renovations at Hotel InterContinental Tokyo Bay and the successful start ofsuch new businesses as budget weddings and family weddings contributed to higher sales in
the Group’s domestic operations in the year. The sales increase was also supported bysteady growth in the number of weddings held at existing outlets.
As a result, net sales in the domestic business totaled ¥44,531 million, a year-on-yearincrease of 7.0%, and segment income totaled ¥8,108 million, up 5.9% year on year.
b. Overseas operations
The number of weddings held and orders placed in the year was largely unchanged versus
the previous fiscal year despite a moderate recovery in overall market conditions.
As a result, net sales in the overseas business totaled ¥2,894 million, a year-on-yearincrease of 1.2%, while segment income declined 68.2% year on year to ¥69 million.
2) Earnings Forecast for Fiscal Year Ending December 31, 2014
Regarding the economic environment in which the Best Bridal Group operates, the economic
outlook is expected to remain uncertain despite the benefits of economic stimulus measuresand a moderate improvement in corporate earnings in Japan.
The Best Bridal Group will actively develop competitive products and strive to continuallycreate new value. The Group will also aim to strengthen its cost-competitiveness andenhance profitability through efficient outlet development and the cultivation of its humanresources.
The order backlog at the end of the fiscal year under review (December 31, 2013) was
7,217, a decline of 5.3% compared with the previous fiscal year. For the fiscal year ending
December 31, 2014, the Group forecasts consolidated net sales of ¥52,650 million, operating
income of ¥7,250 million, and ordinary income of ¥7,250 million.
(2) Financial Condition
1) Assets, Liabilities, and Net Assets
5Total assets at the end of the fiscal year (December 31, 2013) amounted to ¥53,968 million, an
increase of ¥5,586 million from the end of the previous fiscal year (December 31, 2012). This
was largely the result of increases of ¥5,000 million in marketable securities, ¥2,101 in othercurrent assets stemming from advance payments for business acquisition, ¥1,106 million in
investments securities, which outweighed a decline of ¥2,447 million in cash and deposits.
Liabilities at the end of year totaled ¥29,300 million, an increase of ¥1,733 million comparedwith the end of the previous fiscal year. This was mainly due to the ¥5,000 million issuance of
convertible bonds, which outweighed the net decrease of ¥2,364 million in debt and bonds.
Net assets at the end of the year totaled ¥24,668 million, an increase of ¥3,853 million fromthe end of the previous fiscal year. This was mainly due to the booking of ¥4,236 million in net
income for the year, which outweighed ¥88 million in acquisition of treasury stock and ¥489
million in dividends paid from retained earnings.
2) Cash flow
Cash and cash equivalents (“cash”) at the end of the fiscal year increased by ¥2,553 million
from the end of the previous fiscal year to ¥13,758 million. Cash flows and factors behindchanges in the cash flows are explained below.
(Operating cash flow)
Cash provided by operating activities during the fiscal year totaled ¥6,022 million, an increase of
15.3% from the previous fiscal year. Among the main factors were ¥7,132 million in income
before income taxes and minority interest and ¥2,653 million in depreciation expenses, the sumof which was partially offset by ¥3,409 million in income taxes paid.
(Investing cash flow)
Cash used in investing activities totaled ¥5,457 million, an increase of 126.5% from the same
period a year ago. This was mainly the result of outflows of ¥1,938 million for the purchase of
tangible assets, ¥1,710 million for advance payments for business acquisition, ¥918 million forthe purchase of investment securities, and ¥509 million in lease and guarantee deposits.
(Financing cash flow)
Cash provided by financing activities in the fiscal year totaled ¥1,897 million, compared with
¥2,198 million in cash used in the previous fiscal year. This was mainly attributable to inflows
from the issuance of ¥4,966 million in convertible bonds, which was partially offset by a net
decrease of ¥2,478 million in debt and bonds, ¥489 million for the payment of dividends, and¥90 million for the acquisition of treasury stock.
The following are changes in cash flow indices for consolidated results.
FY2010FY2011FY2012FY2013Equity ratio (%)

38.7

37.6

43.0

45.7

Equity ratio based on market value (%)

46.1

36.1

39.9

60.2

Cash flow to interest-bearing debt (years)

2.5

3.5

3.2

3.2

Interest coverage ratio (times)

19.6

14.9

16.7

23.4

Notes:
Equity ratio: Equity/Total assets
Equity ratio based on market value: Market valuation/Total assets
Cash flow to interest-bearing debt: Interest-bearing debt/Operating cash flow
Interest coverage ratio: Operating cash flow/Interest expenses
1. All indicators are calculated based on consolidated figures.
2. The figure for operating cash flow is taken from the consolidated statements of cash
flows. Interest-bearing debt includes all liabilities recorded on the consolidated balance6sheets on which interest is paid. The figure for interest expenses is taken from theconsolidated statements of cash flows.
(3) Basic Policy on Profit Distribution, Dividends for Fiscal 2013, and Dividend Forecast for
Fiscal 2014
Best Bridal (“the Company”) considers the return of profits to shareholders to be an importantmanagement issue. The Company uses profits to strengthen the management base, andreturns profits to shareholders in a flexible manner based on the annual operating results after
making a comprehensive analysis of the financial condition and profit levels, and ensuring
ample internal reserves.
With regard to dividends for fiscal 2013, the Company conducted a 1:200 common stock split
on July 1, 2013. When calculating the dividend on a pre-split basis, the dividend is equivalent to¥1,000 per share. The Company paid an interim dividend of ¥1,000 per share in August 2013,
and therefore the annual per-share dividend is ¥1,005 (equivalent to an annual dividend of¥2,000 per share prior to the stock split).
The Company plans to make an annual dividend payment of ¥10 per share (including aninterim payment of ¥5 a share) for the year ending December 31, 2014.
(4) Business and Other Risks
The following is information regarding risk factors to the business operations of the Best Bridal
Group. The information includes items that are not necessarily risk factors, but which areincluded proactively from an information disclosure perspective as important to making
investment decisions and understanding the Group’s business activities.
Forward-looking statements contained herein are based on the Company’s best judgment asof the end of fiscal 2013. The Company strives to prevent the emergence of risks and respondto risks when they materialize.
1) Special characteristics of the businessa. Services
The Best Bridal Group aims to provide the latest wedding styles based on services highly
responsive to the interests and tastes of its customers. The Group continually makes a
meticulous analysis of contemporary needs and fashion trends and creates highlysophisticated services based on the accumulated know-how inside the Group and among
partner companies, including dining and other services delivered by chefs and service staff
specially assigned to each facility.
In the event that the Group’s services are unable to respond to current needs and fashion
trends, secure partner companies or chefs which meet the requirements of the Group, or
provide sufficient services to customers, the Group’s operating results may be affected.
b. Human resources
In order to expand its business scope and diversify its business operations, the Group is
actively recruiting recent university graduates as well as establishing training systems toenhance the abilities of staff in the sales and administrative departments. In the event that
the Group cannot acquire the number of employees needed to expand its business, theGroup’s competitiveness may decline or the scope of business expansion may be
restricted, and the Group’s operating results may be affected.
2) Market in which the Group operates
According to statistics from the Ministry of Health, Labour and Welfare, Japan’s population of
marriageable age adults is gradually declining. If the overall size of the bridal market shrinks inthe future, the Group’s operating results may be affected.
The Group plans to increase demand for its guest houses and weddings by being
recognized for its new wedding styles and expanding market share as its recognition rises. In
the event that existing hotels or ceremony hall operators become attracted to the growth ofthe market and enter the guest house and wedding market with original services, competition
7

with other companies may arise on account of the new market entrants, and the Group’s
operating results may be affected.
3) Operating results and financial conditiona. Seasonal changes in operating results
The Group’s net sales increase with the construction of new facilities as well as during theprime wedding seasons in Japan, which are April–June and October–December (the secondand fourth quarters of the fiscal year).
Quarterly results for the fiscal year ended December 31, 2013

Net sales
Operating
IncomeFirst Quarter

Second Quarter

Third Quarter

Fourth Quarter(year-on-year % change)(year-on-year % change)(year-on-year % change)(year-on-year % change)

million yen
9,687(20.4%)
560(8.2%)

million yen
12,577(26.5%)
2,036(29.7%)

million yen
10,679(22.5%)
764(11.1%)

million yen
14,481(30.6%)
3,494(51.0%)

b. Heavy reliance on debt
The Best Bridal Group procures loans from financial institutions as investment capital to build
new guesthouses and to pay for construction costs, deposits, guarantees and other expenses
incurred. Consequently, the ratio of interest-bearing debt to total assets is high. The balance ofinterest-bearing debt as of December 31, 2012 was ¥16,647 million, and it rose to ¥19,273
million as of December 31, 2013. The ratio of interest-bearing debt to total assets stood at
34.4% as of December 31, 2012 and rose to 35.7% as of December 31, 2013, reflecting theGroup’s heavy reliance on debt. The ratio of interest expenses to net sales was 0.7% in theyear ended December 31, 2012 and 0.5% in the year ended December 31, 2013.
In the event that the financial situation changes significantly and interest rates rise, theGroup’s operating results may be affected.
Additionally, some of the Group’s loans have financial covenants attached. In the event thata lender enforces a covenant and demands settlement due to a conflict, the Group may beforced to forfeit profits and repay the loan in full.
c. Overseas conditions
The Best Bridal Group offers overseas wedding services, mainly to Japanese customers, inthe United States and Indonesia (Bali). As of December 31, 2013, in Hawaii the Group directly
operated five wedding chapels and had exclusive usage rights to two churches, while in Bali
the Group directly operated two wedding chapels. Wedding plans for each of these markets
are sold through five sales salons in Japan and one in Hawaii, making a total of six sales
salons. Changes in political or economic situations in these overseas regions, including actsof war, terrorism, or major natural disasters, could cause cancellations and may affect theGroup’s operating results.
Local companies Best Bridal Hawaii, Inc. and PT. Tirtha Bridal provide wedding services
based on orders from the sales salons and also arrange weddings for local customers.
Additionally, Best Bridal Korea Inc. is constructing guest houses and has signed lease
contracts with Marizin Inc. as part of its plans to enter the Korean bridal market. In the eventthat these businesses do not perform according to the Company’s forecasts, the Group’s
operating results may be affected.
d. Foreign exchange rate volatility
The Company has liabilities denominated in foreign currencies, including outstanding loans to
subsidiaries, as well as outstanding loans denominated in foreign currencies. Consequently,
8significant changes in foreign exchange rates change may affect the Group’s financial
condition and operating results.
e. Food safety
The Best Bridal Group operates restaurants in its ceremony halls and hotels which are subject
to Food Sanitation Laws. To avoid the possibility of business suspension due to foodpoisoning or any other hygiene-related issue, the Group appoints sanitary managers to its
outlets and restaurants and continually takes other measures to consistently maintain thehighest levels of food safety and quality. In the event, however, of a major food quality
problem which goes beyond the scope of the Group’s measures, the Group’s operating
results may be affected.
4) Continuity of management personnel
Masayuki Tsukada is the president and CEO of Best Bridal Inc. He performs an important rolein the performance of business activities by making decisions on management policies andstrategy. The Company mitigates management risks through the use of management
committees, the delegation of management responsibilities, and the strengthening of humanresources in each business area, to ensure that business operation and performance are notoverly reliant on Masayuki Tsukada. If, however, an unforeseen event precluded Masayuki
Tsukada from performing his duties, the promotion of the Group’s business activities and theGroup’s business results may be affected.
5) Laws and regulations
In Japan, the Best Bridal Group is subject to various regulations on the construction andrenovation of its guest houses, including the Building Standards Act, the Fire Service Act, andthe Sewerage Act. In addition, the Group is subject to wastewater emission, noise emission,and other local ordinances pertaining to the building structure and construction location. When
the Group constructs or renovates its facilities, it hires a licensed architect or construction
company to verify the structure. Additionally, verifications are made directly by the Company’smarketing department and the fire department. Despite these measures, infringements of theabove regulations could delay construction plans or interfere with operations, and the Group’s
operating results may be affected.
The Group registers its overseas salons in accordance with the Travel Agency Act (typeone business activities). In the event that the Group contravenes this Act and is unable torenew its registration or has its registration revoked, the Group’s operating results may beaffected.
The Group operates its hotels in accordance with the Inns and Hotels Act. In addition,
beauty services offered prior to wedding ceremonies are subject to the Act on Specified
Commercial Transactions.
6) Capital investment and new construction
a. Current guest houses
Facility name
No. of guest houses
Facility name
No. of guest houses

Nihonbashi Shirogane

1

2

Yokohama Osaka Sendai Hoshigaoka Shinurayasu Omiya Aoyama Ichigaya

4

5

3

2

5

8

3

1

Shinsaibashi Marunouchi Yagoto Kamogawa Chiba Akasaka Odaiba Nagoya Minato Iseyama

2

1

4

3

2

1

1

3

7

As of December 31, 2013, the Best Bridal Group operated 19 outlets (58 guest houses) inside
Japan. All of the facilities were planned internally by the Company’s design and construction
department.

9

In the future, the Group will continue to launch new guest houses, mainly in the Tokyo
metropolitan, Kansai, and Chukyo regions, after meticulous market analysis, facility planning,and site selection.
The Group renovates existing guest houses on a three-year renewal cycle as it seeks tosustain a stable customer acquisition rate by maintaining the facilities’ newness andhigh-quality design.
In the event, however, that the Group is unable to acquire real estate (primarily land)
suitable for facilities construction or employ necessary operations staff, or fails to receive
customer support for new or existing facilities, the Group’s operating results may be affected.
Additionally, in the event that the Group recognizes an impairment stemming from asignificant decline in the real prices of the Group’s property caused by changes in market
trends or the business environment, the Group’s operating results and financial condition may
be affected.
b. Outlet development
The Group typically signs lease contracts to secure sites needed for its directly operated
outlets and pays deposits and guarantees as well as upfront interior and exterior design
expenses. Human resources, rental and other running costs are incurred after outlet opening.
The payment of deposits and guarantees, as well as related upfront expenses, increases witheach new outlet. The Group may be required to pay a penalty in the event that it closes anoutlet prior to the planned period of operation. Additionally, the Group may be unable torecover a portion or all of its deposits and guarantees in the event that a lessor goes bankrupt.
With regard to securing sites for future outlets, in order to raise the assurance of outlet
planning and promote guest house construction, the Group will maintain a policy of using landacquisition and securitization as an option to leasing. The Group will continue to prioritize
management efficiency and avoid the deterioration of its financial condition in planning newoutlets, but the acquisition of land may affect the financial condition.
As an original outlet design, the Group also maintains large-scale sites containing multiple
guest houses. The construction of multiple guest houses within a single site enables theGroup to better serve the diverse needs and tastes of customers by offering an array ofconcepts to a large number of occupants. The Group’s policy is to continue to focus on thedevelopment of large-scale outlets. However, the development of large-scale outlets requires
suitable sites which the group may not be able to secure. If, as a consequence, the Group isunable to carry out its development plans, the Group’s operating results may be affected.
c. Special-purpose company
The Best Bridal Group utilizes the Shirogane office as a special-purpose company (Shirogane
SPC Co., Ltd.). The Company invests in an anonymous partnership in connection with the
SPC and has used the Practical Solution on Application of Control Criteria and Influence
Criteria to Investment Associations (ASBJ Practical Issues Task Force No. 20, September 8,2006) to determine whether or not the Company has control and influence over the SPC. The
executive authority for the anonymous partnership is the SPC, and the Company does nothave any direct voting rights or other authority which would give it control over the SPC. Since
it is clear that the Company cannot make decisions over financial, operating, or business
policies, the anonymous partnership operated by Shirogane SPC Co., Ltd. does not qualify asa subsidiary and is excluded from the consolidated results.
The Company recognizes the issues surrounding special purpose companies, which havebeen the subject of international debate. Namely, in recent years transactions involving
special purpose companies have surged and become more complex and diversified, raisingconcerns that the Company could cause interested parties to make incorrect judgments
regarding business combinations. In the event that the Company’s scope of consolidation
changes in the future based on the announcement of new accounting standards or practicalsolutions, the Group’s operating results and financial condition may be affected.

10The anonymous partnership operated by Shirogane SPC Co., Ltd. had trust beneficiaryrights of ¥2,758 million as of December 31, 2013, and loans from financial institutions totaling¥2,044 million.
7) Management of customer information
The Best Bridal Group gathers personal information on many customers through its order
receipt activities. The Group takes measures to maintain the confidentiality of this personal
information and mitigate the risk of information leaks, including storing the information inlocked cabinets and using passwords to secure electronic information. If, however, an
unforeseen incident caused the leakage of personal information, society’s trust in the Groupwould decline, and the Group’s operating results may be affected.
2. Management Policy(1) Basic Management Policy
Best Bridal strives to create gathering places which leave an everlasting memory on guests byoffering the finest professional hospitality services. Based on this corporate philosophy, theCompany provides high-quality services and high value-added facilities by accurately
understanding the ever-changing needs of customers. Going forward, the Best Bridal Group willcontinue to pursue the creation of new value in the market in which our Group operates, seeking
to achieve sustainable growth for the Group and enhancing corporate value.
The Group has five basic strategies to accomplish its basic management policy.
1. Outlet development strategy: Develop guest houses and hotels, primarily in the Tokyo
metropolitan, Kansai, and Chukyo regions, which are geared towards the unique characteristics
of each market.
2. Product development capabilities: Develop competitive products with high added value,
aiming to provide customers with highly satisfying products and services.
3. Proposal and sales capabilities: Accurately understand the needs—the “dreams”—of
customers and enhance proposal and sales capabilities to realize these dreams.
4. Enhanced profitability: Rationalize management and enhance the efficiency of business
operations in order to achieve high profitability.
5. Fund procurement: Procure funding with a priority on funding costs and with a view tomaintaining a sound financial condition, enhancing capital efficiency, and carefully consideringstock price dilution.
(2) Management Goals and Indicators
The Best Bridal Group aims to remain a corporate entity capable of stable and continuous
growth. To enhance corporate value, the Group will strive to strengthen its financial condition
while increasing its equity ratio, an important index measuring improvement in comprehensive
profitability.
(3) Medium- to Long-term Management Strategy
1) Product strategy
Based on meticulous analysis of contemporary needs and fashion trends, the Company
continually provides high value-added products to customers in its mainstay bridal business,
as well as in the hotel business.
In the Company’s guest house and wedding services, the bridal couples become the lordsof the manor, acting as party hosts to their many guests. Bridal customers have their own
personal dreams and hopes, and the Company establishes a structure to provide
sophisticated services highly responsive to the interests and tastes of its customers by
combining the accumulated know-how inside the Company with its many partner companies.
Additionally, in the dining and other service areas, the Company appoints chefs and otherspecialized staff to each outlet in order to maintain the highest levels of service quality.
11

At the Hotel InterContinental Tokyo Bay, which the Group operates, the strategy of using
conventional cost reductions to improve profitability has been replaced with transformational
management reform which is generating significant improvements in profitability through newinvestments.
2) Outlet development strategy
The Company aims to create high-quality, authentic facilities. The domestic network
comprises 19 facilities and the Hotel InterContinental Tokyo Bay. The continued growth of theCompany depends on facility planning, site selection, and building selection based on
meticulous marketing analysis, as well as the efficient outlet development. The Company isfocusing its outlet development on the Tokyo metropolitan, Kansai, and Chukyo regions,which offer strong future growth potential. Existing guest houses are renovated on athree-year renewal cycle in order to sustain a stable customer acquisition rate by maintaining
the facilities’ newness and high-quality design.
3) Sales strategy
The Company does not conduct door-to-door selling, but rather uses its sales staff to provide
face-to-face sales to customers visiting facilities.
Sales staff greet customers visiting guest houses and sales salons and provide them witha tour of the facilities in addition to using pamphlets and sales materials. Having customers
actually experience the attraction of the facilities first-hand leads to positive sales results. In
proposing new wedding styles, sales personnel utilize their know-how and experience to earncustomers’ trust and satisfaction and successfully complete sales. The Company will establish
a training system to enhance the proposal capabilities of staff and nurture employees witheven higher skills.
For marketing and advertising, the Company relies heavily on paid advertisements in
wedding magazines and other print media. To beat the competition in winning orders, it iscritical to create more appealing advertisements. The Company aims to create highly
appealing advertisements by featuring photographs that maximize the attractions of thedesign and service content of its facilities. The Company also actively solicits customers overthe Internet through its websites featuring its facilities and service offerings.
Sales success rates and other sales results from each facility are compiled and analyzed
weekly. Domestic business managers consult with managers and staff at guest houses thatshow signs of declining success rates, and provide them with guidance on how to improvetheir success rates.
For overseas wedding services, the Company is strengthening the overseas wedding
salons in Japan (five outlets) and sales channels in order to enhance the ability of salons todraw customers and achieve high success rates.
(4) Issues to Address
Regarding the economic environment in which the Best Bridal Group operates, the Japanese
economy is expected to return to growth based on such government initiatives as the change inmonetary policy and economic stimulus measures. Overall, however, the future economic
outlook remains unpredictable since the global economic changes are expected to continue.
In this environment, the Best Bridal Group must continue to provide meticulous products andservices, develop highly competitive and attractive guest houses and hotels, and continuallycreate high value-added services, all responsive to customer needs, which are expected to
become increasingly individualized and diverse in the future.
In addition, in order to further enhance its superior market position and corporate value, theCompany must enhance and improve its advertising strategies, which will lead to a stronger
brand, as well as strengthen business capabilities in fields offering synergy with the bridal
business while developing new business fields, with a positive eye toward the rollout of ourservice in overseas markets. At the same time, the Company must strengthen its financial
condition, through cost-cutting and other measures, and secure and foster talented human12resources. These initiatives will support the development of a comprehensive hospitality
company.
1) Guest house development
The Company operates 19 outlets in Japan. Since the development of highly competitive
guest houses is a core competency, the Company plans to diversify its outlet development
strategy and promote more efficient development.
2) Hotel development
The Best Bridal Group operates the Hotel InterContinental Tokyo Bay. In order to enhanceearnings power, the Group plans to actively develop new properties in and outside Japan.
3) Securing and fostering human resources
The Company considers the strengthening of its wedding presentation capabilities to be aneffective way to bolster customer service and differentiate its services from competitors. To
this end, the Company will continue to create systems to raise the motivation of its employees
while building a structure to support their medium- to long-term nurturing of employees.

133. Consolidated Financial Statements(1) Consolidated Balance Sheets

AssetsCurrent assets
Cash and deposits
Accounts receivable - tradeMarketable securities
Merchandise
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful receivables
Total current assets
Fixed assets
Tangible assets
Buildings and structures, net
Accumulated depreciation
Buildings and structures, net
LandConstruction in progress
Other
Accumulated depreciation
Other, net
Total tangible assets
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Total investments and other assets
Total fixed assets
Deferred assets
Bond issuance costs
Total deferred assets
Total assets

14

December 31, 2012

(millions of yen)
December 31, 2013

AmountAmount11,314
333
39
327
364
824
(48)
13,154

8,866
476
5,000
3
373
291
2,925
(41)
17,89528,310(12,062)
16,247
4,760
175
3,837
(2,796)1,040
22,22429,340(13,998)
15,342
4,757
138
4,418
(3,195)
1,222
21,460

1,042
231
1,273

962
191
1,153

2,481
5,827
1,961
1,426
11,69735,195

3,588
6,299
2,061
1,453
13,40236,01632
32
48,38156
56
53,968

December 31, 2012
Amount(millions of yen)
December 31, 2013
AmountLiabilities
Current liabilities
Accounts payable - trade
Current portion of long-term debt
Current portion of bonds
Income taxes payable
Advances received
Provision for loss on cancellation of rental contract
Other
Total current liabilities

2,157
3,191
612
2,237
942
52
2,527
11,722

2,189
2,709
484
1,786
968
2,231
10,370

Fixed liabilities
Bonds
Convertible bonds
Long-term debt
Provision for employees’ retirement benefits
Provision for directors’ retirement benefits
Provision for loss on cancellation of rental contract
Asset retirement obligations
Other
Total fixed liabilities
Total liabilities

1,590
11,230
268
594
100
1,068
992
15,84427,566

1,106
5,000
9,960
282
636
1,083
861
18,92929,300472
634
19,72920,836472
634
23,443(88)
24,461

41

88

13

46

(76)
(21)
20,81548,38171
206
24,66853,968

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

15

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Gain on investments in silent partnership
Foreign exchange gains
Gain on valuation of derivatives
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Reversal of provision for loss on cancellation of rental
contract
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Shop closing expenses
Impairment loss
Total extraordinary loss
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Net income

16

Year ended
December 31, 2012
Amount44,49428,955
15,5399,020
6,519(millions of yen)
Year ended
December 31, 2013
Amount47,42630,646
16,780
9,923
6,856

56
3
108
78
25
138
410

64
72
122
117
117
41
537

308
11
319
6,610

252
11
263
7,129

0

0

-

45

0

45

104
181
286
6,324
3,325
(270)
3,054
3,270
3,270

36
6
42
7,132
2,958
(62)
2,895
4,236
4,236

Consolidated Statements of Comprehensive Income

Income before minority interests
Other comprehensive income
Net unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments
Share of other comprehensive income of affiliates
accounted for under the equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of theparentComprehensive income attributable to minority
interests

17

Year ended
December 31, 2012
Amount3,270(millions of yen)
Year ended
December 31, 2013
Amount
4,236

72

46

21

33

86

131

27

16

208
3,479

228
4,465

3,479

4,465

-

-

(3) Consolidated Statements of Changes in Net Assets
Year ended December 31, 2012 (January 1 to December 31, 2012)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Changes during term
Cash dividends
Net income

Retainedearnings

Treasury stock

16,949-Total
shareholders’equity18,056

(489)

(489)

3,270

3,270

Purchase of treasury stock--

Decrease due to shareexchange--

Change of scope of equity-

method-Net changes in items other-than shareholder's equity
Total changes during term
Balance at end of term

472

634

2,780

-

2,780

19,729-20,836

Accumulated other comprehensive income
Deferred gain
Total
Net unrealized(loss) on
Foreign currency
accumulated
gain onderivatives undertranslation
otheravailable-for-salehedge
adjustments
comprehensiv
securities
accounting
e income
Balance at beginning ofterm
Changes during term
Cash dividends

(31)

(8)

(190)

(230)

Total net
assets17,825(489)

Net income

3,270

Purchase of treasury

-

stock
Decrease due to shareexchange
Change of scope of-equity method
Net changes in items
other than shareholder's

72

21

114

208

208

Total changes during term

72

21

114

208

2,989

Balance at end of term

41

13

(76)

(21)

20,815equity18

Year ended December 31, 2013 (January 1 to December 31, 2013)(millions of yen)
Shareholders’ equity

Balance at beginning of term

Capital stock

Capital surplus

472

634

Changes during term
Cash dividends
Net income

Retainedearnings

Treasury stock

19,729
(489)

(489)

4,236

4,236

Purchase of treasury stock
Decrease due to shareexchange
Change of scope of equity

-

(90)

(90)

2

2

(34)

methodTotal
shareholders’equity20,836(34)

Net changes in items other-than shareholder's equity
Total changes during term
Balance at end of term

Balance at beginning of term

472

634

3,713

(88)

3,624

23,443(88)

24,461

Accumulated other comprehensive income
Deferred gain
Total
Net unrealized
Foreign(loss) on
accumulated
gain oncurrency
derivatives
otheravailable-for-saletranslation
under hedge
comprehensive
securities
adjustments
accounting
income
41
13
(76)
(21)

Changes during term
Cash dividends

Total net
assets20,815(489)

Net income

4,236

Purchase of treasury stock(90)

Decrease due to shareexchange
Change of scope of equity

2(34)

methodNet changes in items other

46

33

148

228

228

Total changes during term

46

33

148

228

3,853

Balance at end of term

88

46

71

206

24,668than shareholder's equity

19(4) Consolidated Statements of Cash flows(millions of yen)

Year ended
Year ended
December 31, 2012 December 31, 2013
AmountCash flows from operating activities
Income before income taxes and minority interests
Depreciation and amortization
Amortization of goodwill
Amortization of bond issuance costs
Loss on disposal of tangible assets(Gain) loss on sales of fixed assets(Gain) loss on valuation of derivatives(Gain) loss on investments in silent partnership
Foreign exchange (gain) loss
Impairment loss
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in provision for employees’ retirement
benefits
Increase (decrease) in provision for directors’ retirement
benefits
Increase (decrease) in provision for loss on cancellation ofrental contract
Interest and dividend income
Interest expenses(Increase) decrease in notes and accounts receivable trade(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in advances received
Increase (decrease) in other liabilities
Other- net
Sub totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities

20

Amount

6,324
2,521
83
9
55
(0)
(25)
(108)
(89)
181

7,132
2,653
84
10
32
(0)
(117)
(122)
(54)
-

16

(7)

49

14

220

41

(52)

(97)

(59)
308

(137)
252

(55)

(131)

(7)
187
(347)
(503)
83
8,792
46
(312)
(3,302)
5,223

(10)
25
25
(147)
124
9,569
119
(256)
(3,409)6,022

Year ended
Year ended
December 31, 2012 December 31, 2013
AmountCash flows from investing activities
Purchase of tangible assets
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Loans receivableCollection of loans receivable
Lease and guarantee deposits
Collection of lease and guarantee deposits
Advance payments for business acquisition
Other- net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term debt
Repayments of long-term debt
Payments for redemption of bonds
Proceeds from issuance of convertible bonds
Purchase of treasury stock
Dividends paid to shareholders
Other – net
Net cash provided by (used in) financing activities
Foreign currency translation adjustments on cash andcash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

21

Amount(2,172)
(95)
(416)
332
(85)
200
(221)
60
(12)
(2,409)(1,938)
(30)
(918)
38
(304)
0
(509)
2
(1,710)(87)(5,457)2,450(3,509)
(640)
(489)
(9 )
(2,198)1,500(3,366)
(612)
4,966
(90)
(489)
(9)
1,897

58

89

673
10,532
11,205

2,553
11,205
13,758(5) Notes to the Financial Statements(Note on the Going-concern Assumption)
Not applicable(Basis for Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 7
Name of consolidated subsidiaries:
Best Planning Inc.
Best Bridal Hawaii, Inc.
Acqua Grazie, Inc.
Best Bridal Korea Inc.
PT. Tirtha Bridal
Hospitality Network Corporation
Best Global, Inc.
Among the above-listed subsidiaries, Best Global, Inc. has been added to the scope of
consolidation because it was newly established in the fiscal year ended December 31,
2013.
(2) Name of principal non-consolidated subsidiaries:
Non-consolidated subsidiaries
Life Create Bank, Inc.
Best Bridal Singapore Pte.Ltd.
Ecpark Pte.Ltd.
(Reason for excluding these subsidiaries from consolidation)
These subsidiaries have been excluded from consolidation, because they are small in size
and their total assets, net sales, net income/loss for the year ended December 31, 2013
(amounts proportionate to the Company’s equity interest),and retained earnings (amountproportionate to the Company’s equity interest) have no significant impact on the
consolidated financial statements.
2. Application of equity method(1) Number of equity method affiliates:
Not applicable
Marizin Inc., which was the Company's equity-method affiliate in the fiscal year ended
December 31, 2012, has been excluded from the scope of equity method in the fiscal year
ended December 31, 2013 because of its diminishing importance.
(2) The equity method is not applied to some non-consolidated subsidiaries (Life Create Bank,
Inc., Best Bridal Singapore Pte.Ltd., Ecpark Pte.Ltd.) and an affiliate (Marizin Inc.) because
they are of minor importance in terms of the bearing of net income/loss (amounts
proportionate to the Company’s equity interest) and retained earnings (amount proportionate
to the Company’s equity interest) on the consolidated financial statements for the fiscal year
ended December 31, 2013, and in terms of their position within the whole Best Bridal Group.
3. Accounting period of consolidated subsidiaries
22Consolidated subsidiaries have the same accounting period as the parent company.
4. Accounting standards(1) Valuation of principal assets
1) Securities
Securities held to maturity:
Amortized cost method (straight-line method)
Available-for-sale securities:
For which market quotations are available:
These securities are recorded at fair value based on market quotations, etc. on the
consolidated balance sheet date. (Unrealized holding gains and losses are recorded as a
net amount in net assets accordingly. The cost of securities sold is calculated with themoving average method.)
For which market quotations are not readily available:
Calculated using the moving average cost method.
With respect to investments in silent partnership, the Company uses a method whereby itrecords the net amount of the percentage interest held based on the most recent statementof accounts that the Company is able to obtain as of the day stipulated in the partnershipagreement on which the latest statement of accounts is reported.
2) Derivatives
Recorded at fair value.
3) Inventory
Merchandise:
Cost determined by identified cost method (The balance sheet amounts are calculated by
way of write-down of book value to reflect reduced profitability.)
Raw materials and supplies:
Cost determined by last purchase cost method (The balance sheet amounts are calculated
by way of write-down of book value to reflect reduced profitability.)(2) Depreciation/amortization of material depreciable/amortizable assets
1) Tangible assets (excluding lease assets)
Declining balance method
Buildings (excluding leasehold improvements) acquired by some consolidated subsidiaries
on or after April 1, 1998, however, are depreciated with the straight-line method.
Buildings and structures held by the Company on leased land based on fixed term landlease agreements are depreciated by the straight-line method over the period equal to theremaining period of the fixed term land lease right with a residual value of nil.
2) Intangible assets (excluding lease assets)
Straight-line method
Software obtained for internal use is amortized over its estimated useful life (five years.)
3) Lease assets
The straight-line method is used with the lease period as the useful life and a residual value ofnil.
Leased assets under finance leases other than those that transfer the ownership of theleased assets to the lessee and which constitute lease transactions entered into on or before
December 31, 2008, are accounted for in the same manner as operating leases.
23

(3) Accounting standards for principal reserves and allowances
1) Allowance for doubtful receivables
To cover possible losses from bad debts, the Company records an allowance for doubtfulreceivables in the uncollectible amount estimated based on historical default rates for general
receivables and based on analysis of debtors’ financial positions for specific doubtfulreceivables.
2) Provision for employees’ retirement benefits
To prepare for the payment of employees’ retirement benefits, a provision is recorded for theperiod based on projected benefit obligations and the estimated value of pension plan assets
at the end of the fiscal year. Prior service costs incurred at some of the foreign consolidated
subsidiaries are expensed using the straight-line method over a certain number of years,
which is not to exceed the estimated average remaining service life of the plan participants atthe time of incurrence. Actuarial gains and losses are expensed on a straight-line basis
starting from the year immediately following the year when they were incurred over a certain
number of years, which is not to exceed the expected average remaining service life of theplan participants at the time of incurrence.
3) Provision for directors’ retirement benefits
To prepare for the payment of directors’ retirement benefits, the necessary amount is charged
based on year-end provision calculated using the in-house regulations.
(4) Standards for translating significant assets or liabilities denominated in foreign currencies into
Japanese yen
Foreign currency denominated claims and obligations are translated into Japanese yen at the
spot rate prevailing on the consolidated balance sheet dates. Currency translation losses orgains are recorded on the income statement as such. The assets and liabilities of foreignsubsidiaries are also translated into Japanese yen at the spot rate prevailing on the
consolidated balance sheet date, and revenues and expenses are translated into Japanese
yen at the average rate over the period. Any translation losses or gains are recorded in the
net assets under the account “Foreign currency translation adjustments.”(5) Accounting for significant hedges
1) Hedge accounting
Deferred hedge accounting is applied. The company applies special treatment to interest-rate
swap agreements that meet the criteria for such special treatment.
2) Hedging instruments and hedged transactions
Hedging instruments:
Interest rate swap, foreign exchange forward contracts
Hedged transactions:
Foreign currency-denominated claims and obligations, foreign
currency-denominated-forecasted transactions, debts
3) Hedging policy
The Company uses derivative transactions for the purpose of hedging foreign exchange risks
and interest rate risks to meet the Company’s actual needs. It is the Company's policy not toengage in derivative transactions for speculative purposes.
4) Method for evaluating effectiveness of hedges
24

The effectiveness of hedges is assessed by measuring the high correlation between changes
in market values or cash flows of hedge instruments and changes in market values or cash
flows of the hedged items.
(6) Amortization method and period for goodwill
Goodwill is equally amortized over the period of the future economic benefits for each
investment.
(7) Scope of cash and cash equivalents in the consolidated statements of cash flows
Cash on hand, bank deposits able to be withdrawn on demand, and short-term investmentswith maturities of three months or less at the date of acquisition and that are readily
convertible to cash and represent a minor risk of fluctuation in value.
(8) Other important matters for preparation of consolidated financial statements
Consumption taxes:
Transactions are recorded exclusive of consumption taxes.
(Changes in Accounting Policy)(Changes in accounting policies that are difficult to distinguish from changes in accounting
estimates)
In accordance with the revision of the Corporation Tax Act of Japan, effective the fiscal year
ended December 31, 2013, the depreciation method applied for tangible assets acquired on orafter January 1, 2013, by the Company and its domestic subsidiaries, has been changed toreflect the revision to the Act. The impact of this change on operating income, ordinary income
and income before income taxes and minority interests is minor.
(Changes in Accounting Estimates)(Changes in estimated restitution cost)
In accordance with the completion of refurbishment of some buildings used under the lease
contract, the Best Bridal Group has reduced in the fiscal year ended December 31, 2013 theestimated restitution cost expected to arise in the future.
As a consequence, operating income, ordinary income, and income before income taxes
and minority interests for the fiscal year ended December 31, 2013, were each ¥29 million
higher compared with what they would have been under the previous accounting method.

25

(Segment and Other Information)
Segment Information
1. Overview of reportable segment
The Best Bridal Group’s reportable segments are components of the Group about which
separate financial information is available. These segments are subject to periodic examinations
to enable the Company’s board of directors to decide how to allocate resources and assess
performance.
The Group’s operations are classified into two reportable segments: the domestic operations
segment that provides services such as planning and operation related to wedding ceremonies
and banquets in Japan and the overseas operations segment that conducts weddings abroad.
Domestic operations comprises store management in Japan and sales to customers, provisionof food and drink at wedding banquets, dress rental and beauty care services, as well as the
management of hotel weddings/banquet and provision of hotel accommodation services.
Overseas operations consist mainly of management of wedding venues and operation of
weddings and banquet in Hawaii and Bali Indonesia, for customers who booked through theGroup’s sales salons in Japan. The segment also subleases wedding facilities to an affiliate inSouth Korea.
2. Calculation of net sales, income/loss, assets, liabilities, and other items by reportable segment
Accounting methods applied in reportable segment by industry largely corresponding to thosepresented under “Basis for Preparation of Consolidated Financial Statements.”
Reportable segment income is based on operating income.
Intersegment sales or transfers are based on market price.
3. Net sales, income/loss, assets, liabilities, and other items by reportable segment
Year ended December 31, 2012 (January 1 to December 31, 2012)(millions of yen)
Reportable segment

Amount recorded on
consolidated financial

Domestic

Overseas

operations

operations

41,633

2,861

Total

Adjustments

statements(note 1)

(note 2)

Net sales
Sales to outside customers
Inter-segment sales and transfers

44,494-44,494

6

0

7

(7)

-

Total

41,6402,861

44,502(7)

44,494

Segment income

7,653

218

7,871

(1,352)

6,519

Segment assets

33,491

2,671

36,163

12,21848,381

Depreciation/amortization

2,382

102

2,484

37

2,521

Amortization of goodwill

81

2

83

-

83

-

166

166

-

166

1,951

504

2,455

45

2,501

Other items

Investment in equity method
affiliates
Increase(decrease) in tangible andintangible assets

26Notes: 1. Details of adjustments are as follows:(1) The minus 1,352 million yen adjustment for segment income includes 15 million yen elimination ofinter-segment sales and minus 1,368 million yen of unallocated corporate expenses. The main
component of these unallocated corporate expenses is SG&A expenses that are not attributable toreportable segments.
(2) The 12,218 million yen adjustment for segment assets comprises unallocated corporate assets.
Unallocated corporate assets consist mainly of cash and deposits held by the Company which are not
attributable to reportable segments.
(3) The 37 million yen adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The 45 million yen adjustment for increase (decrease) in tangible and intangible assets comprises
investments in unallocated corporate assets.
2. Segment income is adjusted to correspond with operating income reported on the consolidated statements
of income for the corresponding period.

Year ended December 31, 2013 (January 1 to December 31, 2013)(millions of yen)
Reportable segment

Amount recorded on
consolidated financial

Domestic

Overseas

operations

operations

44,531

2,894

47,426-47,426

5

0

5

(5)

-

Total

44,5372,895

47,432(5)

47,426

Segment income

8,108

69

8,177

(1,321)

6,856

Segment assets

35,1693,248

38,417

15,55053,968Depreciation/amortization

2,505

120

2,625

28

2,653

Amortization of goodwill

84

-

84

-

84

-

-

-

-

-

1,715

27

1,742

15

1,758

Total

Adjustments

statements(note 1)

(note 2)

Net sales
Sales to outside customers
Inter-segment sales and transfers

Other items

Investment in equity method
affiliates
Increase(decrease) in tangible andintangible assets
Notes: 1. Details of adjustments are as follows:(1) The minus 1,321 million yen adjustment for segment income includes 15 million yen elimination ofinter-segment sales and minus 1,337 million yen of unallocated corporate expenses. The main
component of these unallocated corporate expenses is SG&A expenses that are not attributable toreportable segments.
(2) The 15,550 million yen adjustment for segment assets comprises unallocated corporate assets.
Unallocated corporate assets consist mainly of cash and deposits held by the Company which are not
attributable to reportable segments.
(3) The 28 million yen adjustment for depreciation/amortization comprises depreciation/amortization for
unallocated corporate assets.
(4) The 15 million yen adjustment for increase(decrease) in tangible and intangible assets comprises

27

investments in unallocated corporate assets.
2. Segment income is adjusted to correspond with operating income reported on the consolidated statements
of income for the corresponding period.

(Per Share Information)
Year ended December 31, 2012
Net assets per share
Net income per share
Diluted net income per share
Notes:

Year ended December 31, 2013

425.15 yen
66.79 yen-

Net assets per share
Net income per share
Diluted net income per share505.21 yen
86.62 yen
83.75 yen

1. Diluted net income per share for the fiscal year ended December 31, 2012 is not presented because there
were no potentially dilutive securities．
2. Effective July 1, 2013, the Company conducted a 1:200 common stock split. Net assets per share, net
income per share, and diluted net income per share were calculated assuming that the stock split was
effected at the beginning of the fiscal year ended December 31, 2012.
3. Calculation base for net income per share are as follows.

Year ended
December 31, 2012

Year ended
December 31, 2013

3,270

4,236

-

-

3,270

4,236

48,960,000

48,916,035

-

-

-

1,672,133--

Net income per share
Net income (millions of yen)Amount not attributable to common
stockholders (millions of yen)
Net income attributable to common stock(millions of yen)
Average number of shares outstanding during
the term (shares)
Diluted net income per share
Adjustment to net income (millions of yen)
Increase in the number of common stock(shares)
Residual securities that are not dilutive and notincluded in the calculation for diluted net income
per share(Significant Subsequent Events)
Transition to a holding company system
The Company resolved at the meeting of the board of directors held on February 14, 2014
to move to a holding company structure on July 1, 2014 by way of a company split in which
the Company will be split and its business will be succeeded by a wholly-owned subsidiary,
Best Bridal Inc. Successor Preparatory Company (the corporate name is scheduled to bechanged to Best Bridal Inc. on July 1, 2014; hereafter "Successor Company"), andexecuted an absorption-type company split agreement with the Successor Company (theabsorption-type company split shall be hereafter referred to "Company Split") on the sameday. The effective date for the Company Split shall be July 1, 2014.
In accordance with the Company Split, the Company shall be a holding company andrenamed to Tsukada Global Holding Inc. on July 1, 2014. While its business will be revised28

to be in line with the transition to a holding company structure, its stock will remain listed.
The Company Split and the amendments to the Articles of Incorporation (changes ofcorporate name and business purpose) are subject to approval at the annual meeting ofshareholders scheduled on March 28, 2014.
The impact of the Company Split on consolidated business results is expected to beminor.

29

4. Other Information(1) Changes in Officers
Not applicable(2) Weddings Held, Orders Received, and Sales volume
1) Number of weddings held
Year ended December 31, 2012

Year ended December 31, 2013

Number of weddings held (cases)

Number of weddings held (cases)

Domestic operations

9,543

10,039Overseas operations

2,974

2,932

Total

12,517

12,971

Year ended December 31, 2012

Year ended December 31, 2013

Segment

2) Orders received

Segment

Orders received

Order backlog

Orders received

Order backlog(cases)(cases)(cases)(cases)Domestic operations

10,277

6,196

9,583

5,740

Overseas operations

2,942

1,422

2,987

1,477

Total

13,2197,618

12,5707,2173) Sales volume
Segment

Year ended December 31, 2012

Year ended December 31, 2013

million yen

million yen

Domestic operations

41,63344,531

Overseas operations

2,861

2,894

Total

44,49447,426

Notes: 1. Inter-segment transactions have been eliminated from the amounts shown above.
2. The above amounts do not include consumption tax.

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