Coca-Cola West Japan Company, Limited

Annual Review 2005
Year ended December 31, 2005

Contents
01

Consolidated Financial Highlights

02

To Our Shareholders and Other Investors

04

The Creation of Coca-Cola West Holdings:
Aiming to Enhance Corporate Value

06

A Sales Framework Tuned to Consumer and Customer Needs
06

Vending Machine Channel

07
08

Chain Store Channel
Convenience Store andGeneral Retail Channel
Food Service Channel

09

10

CCWJ’s Core Brands

12

Market Information

16

Corporate Social Responsibility—Contributing to Society
16
18

20

Financial Section
20
22
24
25
26
27
31

32
33
34
36
37
38

Contributions to Regional Society
Environmental Activities

Operating Performance
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Financial Data
Six-year Summary

Risk Information
Stock Information / Credit Rating Information
Corporate GovernanceCorporate Data / Management
Group Companies
Coca-Cola System in Japan

Forward-looking Statements
This annual review contains statements regarding theCompany’s future plans, strategies, projected performance andoutlook. These forward-looking statements are not historicalfacts, but represent management’s opinions and beliefs basedon information available at the time of writing. Readers are
cautioned that any number of risks and factors beyond theCompany’s control could cause actual results to differ materiallyfrom those projected by management. These include, but are
not limited to, economic trends, intensifying competition in thesoft drink industry, market supply and demand, and changes intaxation and other applicable laws and regulations.

Coca-Cola, Sprite, Fanta, Qoo, Georgia, Emblem, Aquarius, Sokenbicha, Morino Mizu Dayori, Hajime
and their Japanese-character counterparts are all trademarks of The Coca-Cola Company.

Consolidated Financial Highlights(Millions of yen)
Fiscal year:

2004

2005

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 253,248¥ 245,874

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16,86011,830Recurring income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,065

12,256

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,564

7,305

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

207,216

208,711

Shareholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

167,036

173,608(Yen)

Per share data:
Net income per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 108.80

Shareholders’ equity per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,149.99

2,228.79

Dividend per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40.00

40.00

Net revenues

Operating income

Net income(Millions of yen)

(Millions of yen)

(Millions of yen)

250,000

253,248247,737
245,874
240,825
226,111

19,63820,00010,000

¥

9,380
8,564

16,860

16,634 16,704

93.42

200,000

8,000
15,000

7,305

7,086
11,830150,000

6,000

10,000100,000

4,000

5,000
50,000

2,000

0

0

01

02

03

04

05

1,420

0

01

02

03

04

05

01

02

03

04

05

Coca-Cola West Japan Company, Limited• 01 •To Our Shareholders and Other Investors

Operating Results
In fiscal 2005, the year ended December 31, 2005, theJapanese economy experienced a moderate recovery thanks
to an improving job market and rising capital investment on
the back of stronger corporate earnings. However, the outlook
was clouded by factors impacting on consumer spending suchas consistently high oil prices, which pushed up prices for
petroleum-related consumer products, and a higher tax burden
due to the end of temporary tax cuts.
The Japanese soft drink industry achieved year-on-year
market growth, driven primarily by demand for mineral waterand Japanese tea products. However, the operating environment became increasingly challenging due to falling retail prices,
the rising cost of new product launches and other factors.
Against this backdrop, the Coca-Cola West Japan
Company, Limited (CCWJ) Group continued to work toward
the targets in its Reform From Within medium-term
management plan, launched in 2003. Fiscal 2005, the final
year of the plan, was positioned as a year for achieving
significant progress, and the whole Group worked closely ona range of activities to achieve this objective.
Despite these efforts, however, CCWJ reported
consolidated net revenues of ¥245,874 million, down 2.9%
from the previous year. Operating income fell 29.8% year on
year to ¥11,830 million, and recurring income declined
28.2% to ¥12,256 million. Net income also dropped, falling
14.7% year on year to ¥7,305 million.

• 02 • Coca-Cola West Japan Company, Limited

Completing Reform From Within and Laying Out the
Next Medium-term Management Plan
On the sales front, we strengthened our core brands, effectively
launched new products and used other marketing activities
to boost sales and market share. In parallel, we aggressively
promoted our products using strategies specifically tailoredto each sales channel. Other initiatives included realigningsales sites to build a more effective marketing framework,
linking vending machines with IT systems to increase sales,and promoting initiatives to ensure consumers and customers
enjoy the benefit of even fresher products.
In terms of production, supply and demand, we worked
hand-in-hand with Coca-Cola National Beverage Co., Ltd.
(CCNBC) to raise productivity and pare back costs. CCNBC,
which began full-scale operations in January 2005, is
responsible for optimizing supply chain management (SCM)
in the nationwide Coca-Cola system. Meanwhile, with a view
to boosting corporate value by reinforcing our business base,we have decided to integrate operational management with
Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC) througha new joint holding company, Coca-Cola West Holdings Co.,
Ltd. (CCWHD). The new company will be established on
July 1, 2006. This step was taken to ensure sustained growthby building a firmer management base. Supported by thestrengths of both companies, CCWHD will offer services
that are even more focused on consumers and customers,
striving to build a more competitive position in themarketplace. As a strategic partner of Coca-Cola (Japan)
Co., Ltd. (CCJC), CCWHD will play a leading role in transforming the Coca-Cola system in Japan, working to win
the trust of all its stakeholders—consumers, customers,
shareholders and employees.

Moving Into the Second Stage of Reform From Within
Forecasts predict a gentle economic recovery in Japan basedon an improving job market and rising capital investment on
the back of stronger corporate earnings. However, consumer
spending is expected to present continued challenges due touncertainty about the future such as surging oil prices and arising tax burden. With no prospects of significant growth in
the market going forward, the soft drink industry in Japan
will grapple with an increasingly tough business climatecharacterized by intensifying competition.
Based on this outlook, and aiming to boost its corporate
value and deliver further growth and progress, the CCWJ
Group has formulated its next three-year medium-termbusiness plan and the associated fundamental management
policy, Reform From Within II GET No. 1.

Guided by the fundamental policy in the new management plan, CCWJ will work to strengthen the Coca-Colabusiness in Japan by delivering powerful Group-oriented
management that draws on the respective roles andcapabilities of each Group company.

Dividends
In return for the loyal support of our shareholders, we havedeclared a year-end dividend of ¥20 per share. The full-year
dividend, including the interim dividend, is thus ¥40 per share.
I hope we can count on the continued support and understanding of shareholders and other investors going forward.
April 2006

Representative Director& Chairman

Representative Director,
President & CEO

Masamitsu Sakurai

Norio Sueyoshi

Coca-Cola West Japan Company, Limited• 03 •

The Creation of Coca-Cola West Holdings:
Aiming to Enhance Corporate Value
Aiming to boost corporate value by reinforcing our business base, we concluded an agreement with
Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC) to integrate operational management through a
new joint holding company, Coca-Cola West Holdings Co., Ltd. (CCWHD). This new company
will be established on July 1, 2006.
Background to Management Integration
In recent years, CCWJ has been faced by far-reaching changes
in the soft drink industry characterized by diversifying
consumer needs, evolving sales channels and intensifying
competition in the marketplace. Despite these challenges,
CCWJ has built a firm presence and track record as a leading
company in its sales territory. Aiming to continue growing
and developing our business well into the future, we have
implemented a range of initiatives ahead of other Coca-Colabottlers. This has helped us to play a leading role in the
Coca-Cola system in Japan.
In order to reinforce our competitiveness in a rapidlychanging operating environment, we have worked closely with
Kinki CCBC since 2000 in procurement, production, logistics
and a number of other fields through the Joint Project. From

2002, we have also jointly run Mikasa Coca-Cola BottlingCo., Ltd. with Kinki CCBC. These moves resulted in one of
the closest partnerships of Coca-Cola bottlers anywhere in Japan.
Subsequently, following the announcement of a closer businesstie-up with Kinki CCBC in December 2005, we worked with
our partner to examine further cooperation from theperspective of enhancing customer service, strengthening
supply chains, upgrading and expanding business systems andboosting consumer satisfaction.
As a result of this process, we decided that the best roadforward was to integrate the operational expertise of bothcompanies and work closely on raising corporate value by
integrating operational management under a joint holding
company structure.

The Road to Integration
January 1999: Sanyo Coca-Cola Bottling Co., Ltd. and Kita Kyushu Coca-Cola BottlingCo., Ltd. announce merger
July 1999:
Coca-Cola West Japan Company, Limited (CCWJ) established; Japan’s firstand only Coca-Cola Anchor Bottler and the eleventh worldwide
August 2000: CCWJ and Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC)
begin a cooperative business project
April 2001:
Mikasa Coca-Cola Bottling Co., Ltd.
Kinki Coca-Cola Bottling Co., Ltd.
becomes a CCWJ subsidiary
February 2006: CCWJ and Kinki CCBC announce
management integration
July 2006:
Coca-Cola West Holdings Co., Ltd.
(CCWHD) established (planned)

Coca-Cola West Japan
Company, Limited

Mikasa Coca-Cola Bottling Co., Ltd.

• 04 • Coca-Cola West Japan Company, Limited

CCWHD’s Fundamental Policy
CCWHD will play a leading role in transforming the Coca-Colasystem in Japan as a strategic partner of Coca-Cola (Japan)
Co., Ltd. (CCJC). CCWHD will work with CCJC in a
number of specific areas including: establishing a fully
integrated marketing process covering strategy formulation
through market launch, supporting product development andtest marketing, pioneering various initiatives related to sales
and marketing, building fundamental IT infrastructure,promoting personnel exchange, and participating in corporate
branding activities.
At the same time, CCWHD will work to build a company
worthy of the trust of key stakeholders—consumers,
customers and shareholders. CCWHD will also inherit andremain committed to the strong relationships that CCWJ
and Kinki CCBC have built up over the years with local
communities. Drawing on these links, CCWHD will work
to play its part in the creation of a prosperous society as agood corporate citizen focused on communities.
CCWHD will also strive to create a dynamic, rewarding
workplace that gives employees the opportunities to realize
their goals. By offering all our employees—each with theirown unique abilities, hopes and dreams—the chance to growand develop in a working environment with even greater scaleand reach, we will play a leading role in the transformation of
the Coca-Cola system in Japan as a company capable of
attracting and utilizing the best people.

Overview of the CCWHD GroupThe CCWHD Group’s sales territory will cover five prefectures in the Chugoku region (Hiroshima, Okayama,
Yamaguchi, Tottori and Shimane), three prefectures in thenorthern Kyushu region (Fukuoka, Saga and Nagasaki), andsix prefectures in the Kansai region (Osaka, Hyogo, Kyoto,
Nara, Shiga and Wakayama). Together, these regions
represent a vast consumer market with around one third ofJapan’s total population. The new CCWHD Group will haveconsolidated net revenues of roughly ¥427 billion and a total
workforce of approximately 8,400 employees. Accounting
for more than 27% of sales in the Coca-Cola system in Japan,

CCWHD will be expected to play a leading role in the system.
By forging even stronger links with The Coca-Cola Company
and CCJC, CCWHD will help to drive forward the strategic
growth and structural transformation of the Coca-Cola system.
Guided by the concept espoused by CCWJ, that we canbuild a better company by realizing lower cost operations,even just for one yen less, and by selling one more bottle,
even just for one more yen of profit, CCWHD will strive toraise its corporate value as a company committed to returning
profits to shareholders, employees and local communities.

Coca-Cola West Holdings Co., Ltd. (CCWHD)(100%)
Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC)

Corporate
Outline(100%)
Coca-Cola West Japan Company, Limited (CCWJ)

Company Name:
Coca-Cola West Holdings Co., Ltd.
Business Activities: Production and sale of Coca-Cola and other soft drinks; management of Group companies, etc.
Head Office:Fukuoka; head office functions also located in Osaka
Senior Management Team:
Representative
Director & CEO: Norio Sueyoshi
Representative
Director & COO: Masakazu Morito
Directors: Tadatsugu Harada, Kouichi Morii, Tamio Yoshimatsu,
Masamitsu Sakurai, Naomichi Asano, Masahiko Uotani
Corporate Auditors: Yasumasa Niimi, Hiroshi Kanda, Tatsuo Hirakawa,
Isanari Ohuchida, Yukiko Kyokane
Fiscal Year-end:
December 31
Capital:¥15,231 million
Stock Market Listings: Tokyo Stock Exchange, Osaka Securities Exchange, Fukuoka Stock Exchange
Sales Volume*:
190 million cases
Net Revenues*:¥427.0 billion
No. of Employees*: 8,400* Sales volume, net revenues and the number of employees are totals of consolidated figures for CCWJ and Kinki CCBC for fiscal 2005.

Coca-Cola West Japan Company, Limited• 05 •

A Sales Framework Tuned to Consumer and Customer Needs

Vending Machine
ChannelThe vending machine channel, one of CCWJ’s
core operations, is an extensive network forproviding products to consumers.

Sales Volume (Thousand cases)
40,00030,00028,64929,611

0405

20,00010,0000

Fiscal 2005 Review
This channel contributes to top- and bottom-line performance as a
key source of earnings for the CCWJ Group. Sales volume during
the year totaled 29,611,000 cases, an increase of 3.4% comparedto fiscal 2004, representing 33.9% of CCWJ’s total sales volume,
up 1.0 percentage point from a year earlier. As of December 31,
2005, CCWJ operated a total of 137,926 vending machines, anincrease of 1,741 year on year. The Group’s share of the outdoor
vending machine market slipped 1.2 percentage points to 50.3%.
Initiatives and Results
In fiscal 2005, CCWJ strategically channeled its management
resources into energizing existing major sales accounts. Thisapproach helped to boost sales overall.
In order to systematically cultivate highly targeted customer
segments, CCWJ established a specialist market development
organization. This underpinned efforts to effectively and aggressively seek and develop desirable indoor vending machine locations.
The Company also continued its IT-focused vending machine
initiatives. The main thrust of these initiatives was to attract andretain new users by offering more interesting ways to buy soft drinks
by leveraging the specific capabilities of IT-enabled vending
machines. Examples included cashless purchasing systems, purchasepoint programs and email advertising shots. As of December 31,
2005, CCWJ operated around 4,000 IT-enabled vending machines.
This figure rises to roughly 16,000 units when online networkenabled vending machines are included. The marketing data thatcan be gleaned from these vending machines helped CCWJ to• 06 • Coca-Cola West Japan Company, Limited

enhance the quality of its operations by identifying and theneliminating empty or inactive columns. As a result, sales per vending
machine rose compared to a year earlier.
Policies for Fiscal 2006 and Beyond
As a pillar of sales and earnings for the CCWJ Group, theCompany’s goal for this channel is to attain greater vending
machine business growth through expansion and efficiency. Hence,
the fundamental policy for this channel is to boost sales andearnings by enhancing the value of each vending machine fromthe perspective of consumers and customers.
Guided by this policy, the basic strategy for fiscal 2006 is toreinforce market development by drawing on the combined
strengths of the Group. Specifically, the Company will channel
its management resources into the indoor vending machine market,
which holds significant potential because of CCWJ’s relatively
weak presence. In 2006, we will increase the number of development personnel in this area by 58% and significantly boost thelevel of investment in vending machines.
Moreover, as part of efforts to create vending machines that sellmore products by modifying marketing approaches, CCWJ will
enhance column management using data gleaned from IT-enabledvending machines to boost sales per machine and increase theefficiency of operations.
Other initiatives will include the “vertical expansion” ofdesirable vending machine locations and steps to boost sales atexisting locations.

Chain Store Channel
Supermarket-oriented operations are home toconsiderable consumer needs. This is helping
to make the chain store channel one of
CCWJ’s fastest growing sales channels.

Sales Volume (Thousand cases)
20,00016,737

17,35904

05

15,00010,0005,000
0Fiscal 2005 Review
The chain store channel saw sales volume rise 3.7% year on year to
17,359,000 cases. This represented 19.9% of CCWJ’s total sales
volume, 0.7 of a percentage point higher than the 19.2% recordedin the previous year. CCWJ has made steady progress in this businessarea, with sales volume for fiscal 2005 roughly 27% higher thanthat achieved in 2000. In terms of profit, however, this channel’scontribution to gross profit has remained almost unchanged due toprices that are trending downward in response to powerful priceoriented needs in the marketplace.
Initiatives and Results
A key strategy in this channel in fiscal 2005 was the promotion of
Revenue Growth Management (RGM). RGM involves joining forces
with customers to deliver stronger earnings through sustained sales
increases by offering greater value to consumers.
Through the implementation of Ten-Round 10, a specific initiative
for promoting RGM that aims to vertically and horizontally expand
retail space by 10%, CCWJ has achieved a steady increase in sales
area for its products.
Policies for Fiscal 2006 and Beyond
CCWJ is aiming to expand operations and increase efficiency in the
chain store channel. Specifically, the Company will use its head officemerchandising skills and market execution capabilities to satisfy thediverse needs of consumers and customers, and draw on the Group’s
total sales capabilities to enhance competitiveness and forge a uniqueposition in the marketplace.

To achieve this objective, CCWJ has positioned the structuralreform of its chain store business as its basic strategy in this field
for fiscal 2006. The Company will continue to pursue its RGM
approach in line with this strategy.
In order to transform the quality of its sales methods, CCWJ willroll out an upgraded version of Ten-Round 10. Called Ten-Round 102,
this new initiative will target further qualitative and quantitative
improvements in retail spaces. Key approaches will include applying
and modifying the CBPPP (see note 1) strategy from a consumer
perspective, reinforcing customer management, and boosting
individual and organizational capabilities.
The CBPPP strategy involves formulating and introducing
optimum product lineups, price ranges, and sale promotions for
specific retail formats. These formats will be identified and segmented
based on consumer rationale for store visits.
In reinforcing customer management, CCWJ will build stronger
relationships with customers by optimally allocating management
resources to customers based on parameters such as sales volume,
growth potential, and sales area.
Finally, in terms of boosting individual and organizational capabilities, the Company will establish mechanisms designed around KBI (seenote 2) to ensure CCWJ acquires industry-leading head officemerchandising skills and market execution capabilities. The ultimate
goal is to build individual and organizational capabilities on a par withor better than competitors.
Notes 1): Channel, Brand, Package, Price, Promotion
2): Key Business Indicators: Daily employee activities and performance expressedin numerical terms (effective performance indicators)

Coca-Cola West Japan Company, Limited• 07 •

Convenience Store andGeneral Retail Channel
This channel encompasses sales to convenience stores, drug stores, food retailers andliquor stores.

Sales Volume (Thousand cases)
30,00024,184

23,6360405

20,00010,0000

Fiscal 2005 Review
Sales volume in the convenience store and general retail channel
was 23,636,000 cases, down 2.3% from fiscal 2004. Sales volume
as a ratio of total sales dipped 0.7 of a percentage point to 27.1%.
Recently, this channel has seen growth in sales at convenience
stores, but contraction at general retail stores.
Initiatives and Results
Focusing on two key strategies in the past year—bolstering segment
sales and identifying sales opportunities—CCWJ implemented
marketing activities that emphasized greater selectivity and focus.
In the general retail sector, despite a shrinking market, CCWJ isseeing a rise in sales volume per store thanks to the steady implementation of measures tailored to each customer, such as sales promotions
for different business formats and initiatives to tap potential sales at
emerging high-volume retailers.
Meanwhile, in the convenience store sector, where direct sales
negotiations with individual stores in leading nationwide chains is
not possible, CCWJ has enlisted the cooperation of Coca-Cola
National Sales Co., Ltd. to talk with regional headquarters. For chains
where individual stores handle such discussions, CCWJ has carriedout aggressive proposal-based sales and merchandizing activities,
resulting in an increase in both sales volume and market share.

• 08 • Coca-Cola West Japan Company, Limited

Policies for Fiscal 2006 and Beyond
In the general retail sector, CCWJ will work to sustain earnings byplacing emphasis on existing customers in order to offset the impactof a shrinking market. In the convenience store sector, the objective
will be to boost sales and earnings by offering a wider range of
products to accommodate the changing preferences of consumers.
In fiscal 2006, the fundamental policy for this channel will be tomaintain sales and earnings by enhancing CCWJ’s ability to provide
products focused on consumers and customers.
In line with this policy, the basic strategies will be to strengthen
segment-oriented marketing along business format lines, channel
management resources into highly targeted sales activities, andrebuild the sales framework.
In segment-oriented marketing, the Company will work to boost
sales by enhancing its proposal-based sales activities targeting highvolume retailers and business formats with significant sales potential. This will be supported by efforts to cultivate new customers
such as hotels, restaurants, and cafés. In the case of low-volume
customers that are experiencing a decline in sales, CCWJ’s approach
will be to pursue low-cost operations. The Company will also rebuild
its sales framework by realigning its network of sales branches,
upgrading training for each employee occupation and taking othersteps. The aims here will be to boost the effectiveness of sales
representative visits, reinforce product distribution andsimultaneously enhance the efficiency of operations.

Food Service Channel
The food service channel’s core operations
encompass the sale of soft drink syrup to fast
food chains, cinemas, sports facilities, casual
dining restaurants and theme parks.

Sales Volume (Thousand cases)
10,000
8,000

7,753

7,862

04

05

6,000
4,000
2,000
0

Fiscal 2005 Review
Sales volume in the food service channel rose 1.4% year on year to7,862,000 cases. Consequently, sales volume as a ratio of total sales
edged up 0.1 of a percentage point from 8.9% in fiscal 2004 to
9.0% in the year under review.
Initiatives and Results
Guided by its key strategy of enhancing market activities from theperspective of consumers, CCWJ worked to capture new markets
and uncover potential sales at existing customers during fiscal 2005.
Capturing new markets involved attracting new customers withestimated annual sales in excess of 600 cases, developing the hot
beverage market by rolling out machines for regular coffee andpowdered beverages, and taking a more assertive stance in winningbusiness from competitors. At the same time, CCWJ introduced
key programs that primarily targeted regional and local food service
chains in an effort to find unrealized sales opportunities at existingoutlets. As a result of these efforts, sales volume per store rose, andsales and earnings increased thanks to price revisions. The strategy
of enhancing market activities from the perspective of consumers
also paid dividends with a customer satisfaction survey (see note)giving CCWJ the top place in categories such as marketing, productlineup, quality control and customer support.

Policies for Fiscal 2006 and Beyond
CCWJ’s mission in the food service channel is to create more
opportunities for consumers to come into contact with its
products. By offering Coca-Cola products to families and otherconsumers at these points of contact in food retailing environments, the Company will be able to increase sales and earnings.
In fiscal 2006, the fundamental policy in this channel
will be to expand sales and earnings by building a leading
reputation for reliability in the industry based on consumerand customer-oriented activities.
In line with this policy, key strategies will be to use customer
management to strengthen relationships with existing stores, win
more hot beverage business centered on regular coffee, and boost
productivity by improving the performance of unprofitablecustomer accounts.
Strengthening relationships with existing stores will involve
focusing sales activities on stores with real potential for sales andearnings by enhancing proposal-based sales that target highly
profitable, high-growth customers. To win more business in the
hot beverage category, CCWJ will use the introduction of advanced
coffee machines to develop relationships with new stores. And
improving the performance of unprofitable customer accounts will
mean modifying earnings structures by revising contracts, using oldmachines more effectively and taking other steps.

Note): Survey carried out by J.D. Power Asia Pacific, Inc. between May and June 2005 in
CCWJ’s sales regions.

Coca-Cola West Japan Company, Limited• 09 •CCWJ’s Core Brands

CCWJ is striving at every level to strengthen
its five core brands.

Georgia

Home Market Share (2005)

Cola* OTC market (excluding vending machines)

All Japan
CCWJ

79 %

Launched by CCWJ in 1975 and now a byword forcanned coffee, Georgia was the first product to be
sold nationwide. Georgia accounts for more than 30%
of CCWJ’s sales volume and commands a market
share in Japan of 46%. In CCWJ’s operating area,
Georgia’s commanding market share is even higher,
at 65%. In 2005, CCWJ ran an advertising campaign
commemorating three decades of Georgia coffee under
the slogan, “We Are Georgian!” In the coming year,
the goal will be to ensure Georgia’s enduring market
position with a new advertising campaign titled, “LetDreams and GEORGIA take your heart.”

Source: Intage Inc. of Japan Store Audit (2005)

Coca-Cola
Accounting for around 10% of CCWJ’s sales volume,
Coca-Cola has a market share in Japan of 78%. In
CCWJ’s operating area, Coca-Cola has a dominantmarket share of 79%. In 2005, the Company rolled
out a new advertising campaign titled, “Coca-Cola isfor moments of connection.” The campaign featured
the first original theme song for the Japanese market
in six years, helping it to attract media attention andcreate added impact. In 2006, centered around the
Coca-Cola 120 Anniversary Plan, CCWJ will aim tofurther boost sales volume and market share using
initiatives such as a new advertising campaign withthe slogan, “Coke Please!”• 10 • Coca-Cola West Japan Company, Limited

Home Market Share (2005)

Canned coffee* OTC market (excluding vending machines)

All Japan
CCWJ

65 %
Source: Intage Inc. of Japan Store Audit (2005)

Aquarius

Home Market Share (2005)

Blended tea* OTC market (excluding vending machines)

All Japan
CCWJ

84 %

Developed in Japan and growing in stature as a
global brand, Aquarius is Japan’s most-loved sports
drink. Aquarius’ market share in Japan is 50% witha dominant 54% market share in CCWJ’s operating area. In 2005, CCWJ rolled out a new bottle
design and a sales campaign with the slogan,“Sports Science Has Evolved, Aquarius.” Together
with the launch of a new product called Aquarius
active diet, this helped to drive an increase in sales.
In 2006, CCWJ will work to boost sales volume
and market share based on greater brand value,with specific initiatives such as new productlaunches supporting efforts to enhance Aquarius’
competitive edge.

Source: Intage Inc. of Japan Store Audit (2005)

Sokenbicha
Underpinned by the motto, “For refreshment,
health and beauty,” Sokenbicha is a tea for healthand beauty-conscious people. CCWJ was firstin pioneering Sokenbicha for its own target
region prior to the product’s nationwide launch.
Sokenbicha now has a market share of 83%
nationwide, and an impressive 84% share in
CCWJ’s own operating area. Even today,
Sokenbicha remains synonymous with blended
tea in Japan. In 2005, CCWJ launched anadvertising campaign under the banner, “The
SokenBeauty Within.” In the coming year, thegoal will be to build an even firmer market
position for Sokenbicha with the roll out of a
new campaign titled, “Power My Beauty,” and arobust yet refined natural fit bottle.

Home Market Share (2005)

Green tea
* OTC market (excluding vending machines)

All Japan
CCWJ

14 %
Source: Intage Inc. of Japan Store Audit (2005)

Home Market Share (2005)

Sports drinks* OTC market (excluding vending machines)

All Japan
CCWJ

54 %
Source: Intage Inc. of Japan Store Audit (2005)

HajimeWith Hajime, CCWJ’s aim was to develop a
product that even tea planters—who understandthe real taste of green tea—could enjoy at home.
Hajime, which currently has a nationwide market
share of 11% and a 14% share of the market in
CCWJ’s operating area, is aiming for the top
position in the rapidly growing green tea market
in Japan. In 2005, CCWJ positioned Hajime asa strategic new product and backed this up witha large-scale advertising campaign. In the year
ahead, the Company will work to upgrade theproduct by focusing on greater refreshment.
Other efforts will aim to boost brand power andincrease the ranks of Hajime fans.

Coca-Cola West Japan Company, Limited• 11 •

Market Information
Trends in the Japanese Soft Drink Market
In 2005, the soft drink market as a whole experienced strong growth

Other categories contracted or grew at a rate lower than theof around 2.0% thanks to good weather at the start of the year andmarket overall. Recent trends in the soft drink market in Japanthe second consecutive year of record-breaking summer temperatures.

include rapid expansion in the non-sugar tea market, which covers

By soft drink category, Japanese green tea, mineral water andJapanese green tea and other products. This product category grew

vegetable juice posted particularly strong growth, while sales of coffee

to become the largest in the market in 2004. The mineral waterand black tea beat the overall market growth rate.

market is also showing strong expansion.

Market Information for CCWJ Sales Territory
1. Trends in Target Markets

and Nagasaki). According to 2005 population statistics and

CCWJ’s sales territory encompasses five prefectures in the Chugoku

the Basic Resident Register, Japan’s population totaled

region (Hiroshima, Okayama, Yamaguchi, Shimane and Tottori)

127,757,000, of which 15,070,000 people lived in CCWJ sales

and three prefectures in the northern Kyushu region (Fukuoka, Saga

territory, representing 11.8% of the country’s total population.

Population trends in Japan

Per capita consumption(Population, 1,000s)(Bottles)15,127 15,118 15,116 15,105 15,070
15,000160,000

200

190

186
169

126,285 126,479 126,688 126,824 127,757

172

185

167

189
173

192
176

150

120,000
10,000100

80,0005,000

50

40,0000

001
All Japan

02

03

CCWJ

Source: Basic Resident Register• 12 • Coca-Cola West Japan Company, Limited

04

05

0

01
All Japan

02
CCWJ

03

04

05

The population in CCWJ sales territory has remained at the

3. Vending Machine Installation

15-million level for the past few years. CCWJ accounts for 13.2%

The number of CCWJ vending machines installed in the marketof the combined sales volume of all Coca-Cola bottlers in Japan.

was 137,926 units at the end of 2005, an increase of 1,741 from

Annual per capita consumption of soft drinks nationwide, assum-

2004. The Company’s share of the outdoor vending machine market

ing one bottle equals 237ml, currently stands at 176 bottles. In

was 50.3%, still an exceptionally high figure compared to competi-

CCWJ sales territory, the figure is 192 bottles, representing thetors. However, CCWJ’s share of the indoor market (see note)highest figure in recent years.

declined 1.7 percentage points to 26.8%. This drop was primarily
the result of a review of vending machine locations emphasizing

2. Market Share in Sales Territory

profitability, including steps to remove units with low sales.

(OTC market excluding vending machines)
In 2005, CCWJ’s market share dipped 0.7 of a percentage point

Note: Total share of markets in six key cities (Fukuoka, Kitakyushu, Nagasaki, Hiroshima,
Okayama and Matsue). Source: ACNielsen Corporation Japan, Open Market
Vending Machine Survey, conducted annually in June.

year on year to 27.8%. By area, CCWJ’s market share was 29.2%
in Kyushu and 26.5% in Chugoku. CCWJ has also built thefollowing market positions in different business formats: grocery
stores, 55.6%; liquor stores, 36.0%; supermarkets, 25.6%; andconvenience stores, 24.8%.

Production volume of soft drinks(Total industry)Market share in CCWJ sales
territory

Number of vending machines/
Share(1,000kl)

OTC market (excluding vending
machines)(Machines/%)(%)

20,00040

33.9

17,174 17,846
15,859 16,167 16,162

52.3

52.9

52.6

51.5

32.6
30.5

15,00060

250,000

28.5

30

50.3
50

200,000

27.8
40
150,000

10,000137,984 137,427 135,152 136,185 137,926

20

30
100,000
20

5,000

10
50,000

0

0

01

02

03

04

05

CarbonatedCoffeeTea
Others

10

0

01

02

03

04

05

Source: ACNielsen Corporation Japan Store
Audit (2000–2001)
Intage Inc. of Japan Store Audit (2005)

0

01

02

03

04

Number of vending machines

05
Share

Source: ACNielsen Corporation Japan Store
Audit (2005)

Source: Japan Soft Drinks Association(Annual Statistic Report on Soft
Drinks FY2005)

Coca-Cola West Japan Company, Limited• 13 •

Sales Volume in CCWJ Sales Territory
By brand, Coca-Cola accounted for 52.4% of the 15,018,000

Sales Volume by Product Category
The CCWJ Group’s beverages are broadly divided into threecases of carbonated beverages sold in fiscal 2005. In non-carbonatedcategories: carbonated beverages, mainly the Coca-Cola and Fanta

beverages, Georgia coffee beverages accounted for 26,323,000 cases,

brands; non-carbonated beverages, primarily coffee, tea and sports

or 46.1%, of total cases sold, followed by the sports drink Aquarius,

drinks; and other.

blended tea Sokenbicha, and Hajime, a Japanese green tea. Buoyed

Total sales volume in fiscal 2005 increased by 221,000 cases,by growing demand for green tea and mineral water in Japan, sales

or 0.3%, to 87,316,000 cases. Sales volume of carbonated beveragesof Hajime jumped 26.7% year on year to 5,761,000 cases, anddeclined by 648,000 cases, or 4.1%, to 15,018,000 cases, while

Morino Mizu Dayori, a mineral water product, surged 21.3% tothe sales volume of non-carbonated beverages grew by 1,421,000

2,495,000 cases. Despite a contracting market overall, Aquarius

cases, or 2.6%, to 57,103,000 cases.

also posted a substantial increase in sales volume of 20.5% to
8,799,000 cases thanks to the launch of a new product called
Aquarius active diet.

Sales by category(Thousand cases)
100,000

88,17888,45086,02587,09687,316

2001

2002

2003

2004

2005

8,967
4,251
2,346
15,56427,543
7,181
6,925
3,669
2,064
2,328
1,948
5,001
56,65916,22788,450

8,484
3,991
2,799
15,274
27,041
6,275
6,638
4,360
1,977
2,260
2,010
4,456
55,017
15,73486,025

8,581
4,440
2,645
15,66626,483
7,299
7,567
4,546
2,144
1,951
2,057
3,635
55,682
15,74887,096

7,867
4,044
3,107
15,01826,323
8,799
6,372
5,761
2,655
1,600
2,495
3,098
57,103
15,19587,31680,00060,000CarbonatedNon-carbonatedOther

40,00020,00009,403
Carbonated Coca-Cola
Fanta
4,077
Other
2,798
Total
16,278Georgia
26,998
Noncarbonated Aquarius
6,656
Sokenbicha
6,759
Marocha/Hajime (Japanese teas)
4,065
Kochakaden
2,523
Qoo and HI-C
2,490
Morino Mizu Dayori (Mineral water) 1,777
Other
4,229
Total
55,497
Other
16,403
Total
88,178• 14 • Coca-Cola West Japan Company, Limited

Sales Volume by Package

Sales Volume by Channel

Sales of PET bottle products increased by 1,821,000 cases, or 6.2%,

Four of CCWJ’s five sales channels reported higher sales volume

from the 29,372,000 cases achieved in fiscal 2004, reachingcompared to a year earlier (increases in brackets). Vending machine

31,193,000 cases in the year under review. In particular, 1,000ml

channel: 29,611,000 cases (3.4%); chain store channel: 17,359,000

PET bottles and PET bottles of 350ml or less saw significant

cases (3.7%); convenience store channel: 10,102,000 cases (2.1%);

year-on-year increases in sales volume, rising 76.8% and 16.3%,

and the food service channel: 7,862,000 cases (1.4%). Sales volume

respectively. Meanwhile, sales of cans declined by 823,000 cases,in the general retail channel declined 5.3% year on year.

or 2.4%, to 33,118,000 cases, and compared to the 6,330,000

These figures illustrate recent trends, with falling sales in thecases sold in fiscal 2004, sales of bottle-cans fell by 205,000 cases

general retail channel and rising sales in all other sales channels.

to 6,125,000 cases.

The CCWJ Group’s policy going forward will be to increase sales

Recent packaging trends show an ongoing shift away from cansvolume by focusing on the vending machine and chain store channels.

to PET bottles. CCWJ’s policy will continue to be to boost sales
volume of PET bottles as a core packaging format.

Sales by package

Sales by channel(Thousand cases)(Thousand cases)

100,000

100,000

88,178 88,450

86,025 87,096 87,316

80,00080,00060,00060,00040,00040,00020,00020,000088,178 88,450

86,025 87,096 87,316

01

03

0

01
Returnable bottles
Large PET bottles
Other

02

03

04

One-way bottles
Cans
Post mix

05
Small PET bottles
Bottle-cans

Vending machines
Retail stores
Food service

02

04

05

Supermarkets
Convenience stores
Other

Note: Post mix refers mainly to diluted drinks sold in paper
cup-dispensing vending machines.

Coca-Cola West Japan Company, Limited• 15 •

Corporate Social Responsibility—Contributing to Society
Committed to being a good corporate citizen, the CCWJ Group always thinks and acts from a social
standpoint. Consequently, CCWJ is involved in a range of activities that contribute to local communities
and the environment. CCWJ allocates a fixed portion of earnings every year to fund these ongoing
activities with the understanding and support of shareholders.

Contributions to Regional Society
Fundamental
StanceTogether With Society
CCWJ’s support for the healthy development of youth and its efforts to promote closer
communication with target regions consists of four elements: support for community welfare,sponsorship of sports activities, patronage of cultural events and educational programs,
and support of regional events.

● Operation of the
Ichimura Nature Schoolin Kyushu
Founded on the fundamental philosophy that learningfrom the land helps to fostera zest for life, this facility uses
plant cultivation and cooperative living to help children
develop into well-balanced,
mature young people.

● Coca-Cola West Japan
Family MusicalThis musical hosted during summer
vacation caters to parents andchildren, with members of the local
community chosen by randomdraw to attend.

● Sawayaka ClassicalConcertMembers of the local community
are drawn from entries and invited
to attend this high-quality, fullfledged classical music event.

Cultural and
Educational
Activities● Sawayaka Concert
Hosted during summer vacation
for parents and their children, thisentertaining concert brings
together local orchestras andnotable guest singers.

● Japan Expo Kitakyushu 2001

• 16 • Coca-Cola West Japan Company, Limited● Japan Expo Yamaguchi 2001

● The 60th National Sports
Festival, Okayama Prefecture

● Donation of educational
materials to special schools
CCWJ donates PCs and othereducational materials to special
state schools with the hope ofhelping children at these schools
lead independent lives.

Social
WelfareServices● Sawayaka Rugby Clinic
Members of the CCWJ Rugby Team teach thefundamentals of the game to elementary, junior highand senior high school students.

● Coca-Cola West Japan Youth
Soccer Tournament

Contributions toRegional SocietySportsActivities

Representative teams drawn fromprefectures in CCWJ’s operating areatake part in this tournament held at the
Sawayaka Sports Plaza.

● Donation of unicycles toelementary schools
CCWJ donates unicycles to public
elementary schools to help children
hone their sense of balance.

Other

Regional
Events● Japan Inter-High School
Sports Meet● Japan Youth Soccer
Tournament● H.I.H. Prince Takamado
Trophy All Japan InterMiddle School English
Oratorical Contest
Coca-Cola West Japan Company, Limited• 17 •

Environmental Activities
Basic
Philosophy

ActionPlan

An Industry Leader on Environmental Issues
CCWJ recognizes the debt of gratitude it owes to its customers and regional communities, which
it repays through efforts to beautify and preserve the environment and recycle resources. All employees
throughout the CCWJ Group take responsibility for the environment in their workplaces andcontribute to building a comfortable and abundant society.
● Offer clean, safe products and services● Promote more efficient energy use to help prevent global warming● Use water effectively to conserve this precious resource● Work to reduce and recycle waste to help realize a recycling-oriented society● Take steps to procure highly recyclable and environmentally friendly materials● Vigorously develop regional environmental activities● Educate employees through training and promotional programs to raise

environmental awarenessFight Against
GlobalWarming● Plan to reduce greenhousegases formulated(Natural gas cogeneration system)

Through the effective operation of anenvironmental management system
certified to the international ISO 14001
standard, and the Coca-Cola system’s
own “eKO” environmental management
system, CCWJ employees are working
on a daily basis in conjunction with company initiatives to reduce emissions ofgreenhouse gases, seen as one of thecauses of global warming. Comparedto levels in 2000, CCWJ is aiming to
reduce emission volume by 20%, or
45% per unit of output, by 2007.

ProcuringGreen
Products● Purchase of Green
Products
In accordance with Green
Purchasing Procedures,
CCWJ actively buys goods
with a low environmental
impact in pursuit of its environmental conservation andrecycling objectives.

• 18 • Coca-Cola West Japan Company, Limited● Introduction of
Eco-vehicles
CCWJ is promoting the “EcoDrive” concept by proactively
adding hybrid and natural
gas-powered vehicles to itsdelivery and sales fleet.

● Operation of the Kitakyushu
Sawayaka Recycling Center

Creating a
Recycling
Society

In 2003, construction of theKitakyushu Sawayaka Recycling
Center was completed in the
Ecotown area of Kitakyushu City.
This center collects and recycles
empty cans, glass bottles and PET
bottles from sites in Fukuoka andSaga prefectures. The facility
recycles approximately 9,000 tonsof empty containers annually.

● School Biotope Operations
CCWJ assists children in joining with teachers, parents, guardians and members of thelocal community to build wildlife refuges byhand. These refuges are designed by thechildren themselves. CCWJ provides environmental education tools so that children
can learn about the splendor and importance of the natural environment.

Supporting
Environmental
Education

Environmental
Activities● Coca-Cola Ecology School
Under the guidance of environmental
education instructors, and with the trees,
insects and other wildlife in the countrysideas the textbook, CCWJ holds environmental education classes that provide important
experiences for coexisting with nature.

● School Tree Planting
This program, with the theme,“Let’s create an oak forest,” aims
to foster an appreciation and loveof nature in children by inviting them
to become the “foster parents” ofseedlings grown from acorns.
Students then get the experienceof replanting the tree on the local
mountainside when it has growninto a larger sapling.

Cleaning Up
Local
Communities● Coca-Cola Clean Day
With the aim of self-enlightenment on environmental issues
for each and every employee of
the Group, CCWJ runs its Clean
Day activities on the 8th of every
month in regional communities.

Coca-Cola West Japan Company, Limited• 19 •

FINANCIAL SECTION

Operating Performance

Overview of Fiscal 2005 Operating Results

Dividends
The dividend per share for fiscal 2005 was ¥40, representing a

Net Revenues

dividend payout ratio of 39.3%.

Consolidated net revenues declined ¥7,373 million, or 2.9%, to¥245,874 million. Despite higher sales volume in the Group’s

Operating Results by Segment

operating area, this was primarily the result of changes in the

Manufacturing and Marketing of Beverages & Foods

composition of the product lineup that impacted on sales in

In terms of brand strategy, the segment rolled out a range of newmonetary terms, and lower sales to other Coca-Cola bottlers insales campaigns and promotions for core brands. Specific initiatives

Japan due to changes to transaction methods associated with theincluded a complete redesign of packaging for Georgia coffee

start of full-scale operations at Coca-Cola National Beverage Co.,

products and the launch of new products Georgia Grande, Hajime

Ltd. (CCNBC) (see note).

and Aquarius Active Diet. The segment’s strategy in the vending
machine sales channel involved creating product lineups tailored toNote): CCNBC was established in April 2003 through joint investment
by The Coca-Cola Company and Coca-Cola bottlers in Japan tobuild a nationwide supply chain management (SCM) structure for
the Coca-Cola Group in Japan. Since starting operations in October
2003, the company has been responsible for all nationwide production and supply/demand plans and operational coordination.
CCNBC also supplies products to each bottler.

specific vending machine locations, and increasing the number ofunits in the network. In the chain store sales channel, the segment
worked to effectively launch products with more easy-to-use packaging and create more appealing retail spaces by implementing highly
targeted marketing activities and other initiatives. The segment also
realigned its network of sales sites to create a more powerful

Operating Income

marketing structure focused on consumers and customers. This was

Operating income declined ¥5,029 million, or 29.8%, to ¥11,830

supported by efforts to increase product freshness and boost

million. This mainly reflected a drop in gross profit due to changes

inventory management efficiency with the introduction of a productin the composition of the product lineup, as well as the absence ofcontrol system that employs handheld computer terminals.

the amortization of past service obligations related to changes in

In terms of production and supply, the Company worked closely

the retirement benefits system in fiscal 2003, which boosted

with CCNBC, which started full-scale operations in January 2005,

operating income in the previous fiscal year.

to increase productivity and pare back costs.
Despite the above efforts, the Manufacturing and Marketing of

Recurring Income

Beverages & Foods segment reported a 3.8% decline in revenues to

Recurring income dropped ¥4,809 million, or 28.2%, to¥239,791 million before the elimination of intersegment transac-¥12,256 million.

tions. Operating income dropped 24.3% to ¥16,440 million.

Net Income

Other Businesses

Compared to fiscal 2004, net income fell ¥1,259 million, or 14.7%,

This segment, which includes distribution and vending machine-to ¥7,305 million. This was despite a significant increase inrelated operations, generated revenues before the elimination of

extraordinary income such as a lump-sum amortization of actuarial

intersegment transactions of ¥19,359 million, up 0.6%, mainly

difference accompanying return of a trust for retirement benefits.

due to ongoing efforts to enhance service quality. Operating income

As a result, net income per share declined by ¥15.38 to ¥93.42.

declined 28.9% to ¥504 million.

• 20 • Coca-Cola West Japan Company, Limited

Financial Position

Investing activities used net cash of ¥15,256 million, an
increase of 4.6% year on year. This was mainly attributable toCompared to the end of the previous fiscal year, total assets

cash used for the acquisition of fixed assets. In the previous year,

increased ¥1,495 million, or 0.7%, to ¥208,711 million. Current

investing activities generated significant cash inflows from theassets declined ¥8,867 million, or 14.9%. This mainly reflecteddissolution of a bond investment trust. In the year under review,a decrease in inventories due to the transfer of products at facto-a similar level of cash was generated by proceeds from sales ofries and warehouses to CCNBC as this company began full-scale

fixed assets in real estate-related operations.

operations. Total fixed assets rose ¥10,362 million, or 7.0%,

Financing activities used net cash of ¥2,901 million, 58.5%

primarily attributable to an increase in investment securities dueless than a year earlier. This decline mainly reflected the absence ofto the purchase of bonds and other actions.

major repurchases of treasury stock carried out in fiscal 2004 as

Total current liabilities decreased ¥6,671 million, or 27.3%,

part of the Company’s capital strategy.

compared with a year ago, principally due to a drop in trade notes
and accounts payable related to changes in product payment terms
as CCNBC began full-scale operations. In the year under review,
CCWJ paid off all the Group’s remaining short-term borrowings.
Total long-term liabilities, meanwhile, increased ¥1,562 million,or 13.8%, compared to the previous fiscal year-end.
Shareholders’ equity increased ¥6,572 million, or 3.9%, to¥173,608 million. As a result, the shareholders’ equity ratio rose
2.6 percentage points from 80.6% to 83.2%, while equity per share
increased approximately 4.0% from ¥2,149.99 to ¥2,228.79.

Cash Flows
Cash and cash equivalents at end of year stood at ¥20,238 million, adrop of ¥1,549 million, or 7.1%, compared to a year earlier.

Cash flows(Millions of yen)
40,00030,00024,763Operating activities provided net cash of ¥16,607 million, down
22.8% year on year. This chiefly reflected a drop in trade notes
and accounts payable related to changes in payment terms for

20,88520,00021,502
18,423

16,607

10,000products purchased from CCNBC, which began full-scale
operations, and a decline in income before income taxes, minority

0interests and other adjustments.
–10,000(15,007) (17,615)–20,000(3,126)(20,852)(14,592) (15,256)(2,901)(6,991)(5,566)–30,000(11,107)–40,000

01

02

03

04

05

From operating activities
From investing activities
From financing activities

Coca-Cola West Japan Company, Limited• 21 •

Consolidated Balance Sheets(As of December 31, 2003, 2004 and 2005)(Millions of yen)
2003

2004

2005

ASSETS
Current assets:
Cash and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade notes and accounts receivable . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥ 15,295
13,175
7,141
12,570
841
8,227
(118)

¥ 15,524
13,6698,923
12,762
812
7,930
(81)

¥ 13,101
11,994
7,706
7,169
728
10,040(67)

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57,13459,54050,673Fixed assets:
Property, plant and equipment:
Buildings and structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery, equipment and vehicles . . . . . . . . . . . . . . . . . . . . . . . .
Sales equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . .

18,852
14,674
17,74034,722
44947

18,55914,252
17,19634,38993
1,344

18,856
13,981
15,25334,369425
1,398

Total property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . .

86,982

85,83784,285Intangible assets:
Goodwill on consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118
2,599

34
2,808

–
2,925

Total intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,718

2,843

2,925

Investments and other assets:
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced payments for retirement expenses . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . .

40,636569
13,3063,097(264)

47,369
890
7,749
3,265
(279)

60,348
862
6,746
3,111
(241)

Total investments and other assets . . . . . . . . . . . . . . . . . . . . . . .

57,34458,99570,826

Total fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147,045

147,676

158,038

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥204,180¥207,216¥208,711• 22 • Coca-Cola West Japan Company, Limited

(Millions of yen)
2003

LIABILITIESCurrent liabilities:
Trade notes and accounts payable . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes payable for equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥

2004

8,950
203
2,924
5,426
667
5,681

¥

7,891
203
3,743
7,125
96
5,390

2005

¥

2,809
–
2,166
7,787
183
4,833

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23,85324,451

17,780Long-term liabilities:
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for employees’ retirement benefits . . . . . . . . . . . . . . . . .
Liabilities for directors’ and corporate auditors’ retirement benefits . .
Goodwill on consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,880
3,394
323
–
996

6,911
3,146
345
–
963

9,785
2,768
206
48
120

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,595

11,366

12,929Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34,44935,81730,709MINORITY INTERESTS
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,276

4,362

4,394

SHAREHOLDERS’ EQUITY
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized gains on other marketable securities . . . . . . . . . . .
Treasury stock (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,23135,399122,372411(7,960)15,23135,400127,849449(11,895)

15,23135,399131,982
2,437(11,442)

Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

165,454

167,036

173,608

Total liabilities, minority interests and shareholders’ equity . . . . .

¥204,180¥207,216¥208,711

Coca-Cola West Japan Company, Limited• 23 •

Consolidated Statements of Income(Years ended December 31, 2003, 2004 and 2005)(Millions of yen)
2003

2004

2005

Net revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥240,825
132,995¥253,248
139,675¥245,874
138,351

Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107,829

113,572

107,523

Selling, general and administrative expenses . . . . . . . . . . . . . . . . .

88,191

96,712

95,693Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,63816,86011,830Non-operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property rental income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,100
254
35
59
294
456

1,090
273
37
44
294
440

1,183
339
160
36
224
422

Non-operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposal of property, plant and equipment . . . . . . . . . . . . . .
Property rental costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

843
22
441
188
191

884
8
463
135
276

758
–
362
95
300

Recurring income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19,895

17,065

12,256Extraordinary income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sales of property, plant and equipment . . . . . . . . . . . . . . . . .
Gain on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from government assistance grants . . . . . . . . . . . . . . . . . .
Compensation for expropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of actuarial difference from return oftrust for retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231
231
–
–
–

158
71
86
–
–

2,045
117
53
62
121

–

–

1,689

Extraordinary losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of property, plant and equipment . . . . . . . . . . . . . . . . .
Impairment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Water damage losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from typhoon damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss from earthquake damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sales of investment securities . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposals of property, plant and equipment . . . . . . . . . . . . . .
Compensation for retirement of fixed assets . . . . . . . . . . . . . . . . . . . .
Write-down of investment securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-down of golf club memberships . . . . . . . . . . . . . . . . . . . . . . . .
Expense for restructuring of subsidiaries . . . . . . . . . . . . . . . . . . . . . .
Expense for realignment of sales structure of subsidiaries . . . . . . . . .
Expense for change of subsidiary name . . . . . . . . . . . . . . . . . . . . . . .
Product disposal losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product valuation losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Flavoring problem countermeasure losses . . . . . . . . . . . . . . . . . . . . .
Quality problem countermeasure losses . . . . . . . . . . . . . . . . . . . . . . .
Expense for compatibility with new currency . . . . . . . . . . . . . . . . . . .
Lump-sum amortization of adjustments accompanying partial
reimbursement of trust for retirement benefits . . . . . . . . . . . . . . . . . .
Additional collection of liquor taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,141
45
–
43
–
–
31
17
–
97
189
753
–
–
269
112
113
466
–

2,564
161
505
–
168
–
–
88
–
40
55
–
383
–
–
–
–
–
583

2,100
66
208
–
–
61
–
11
372
93
–
–
–
33
–
–
–
–
1,103

–
–

576
–

–
149

17,985
3,768
5,532
(695)

14,659
5,310
707
76

12,201
3,222
1,632
40

Income before income taxes, minority interestsand other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• 24 • Coca-Cola West Japan Company, Limited

¥

9,380

¥

8,564

¥

7,305

Consolidated Statements of Shareholders’ Equity(Years ended December 31, 2003, 2004 and 2005)(Millions of yen)
2003

2004

2005

Capital surplus:
Capital surplus at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Differences from cancellation of treasury stock . . . . . . . . . . . . . . . . . .
Decrease in capital surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . .

¥ 35,399––––¥ 35,399
00––¥ 35,400––
00Capital surplus at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,39935,40035,399Retained earnings:
Retained earnings at beginning of year . . . . . . . . . . . . . . . . . . . . . .
Increase in retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease in retained earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bonus to directors and corporate auditors . . . . . . . . . . . . . . . . . . . . .
Loss on cancellation of treasury stock . . . . . . . . . . . . . . . . . . . . . . . .

115,771
9,380
9,380
2,779
2,738
41
–

122,372
8,564
8,564
3,087
3,057
30
–

127,849
7,305
7,305
3,173
3,106
38
27

Retained earnings at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . .

¥122,372¥127,849¥131,982

Coca-Cola West Japan Company, Limited• 25 •

Consolidated Statements of Cash Flows(Years ended December 31, 2003, 2004 and 2005)(Millions of yen)
2003

2004

2005

¥17,985
15,888–132¥14,659
14,927505
83¥12,201
13,860
208
83

(49)
(289)
(9,196)

21
(247)
5,556

(139)
(378)
1,002

–

(8,722)

–

–
(290)
22
(59)
62
97
(181)
353
(1,511)
(209)
(565)
1,163
939
(41)
194
24,445262(20)(4,516)(1,746)
18,423

–
(310)
8
(44)
38
40
112
460
(493)
(191)
68
(1,058)241(30)
72
25,697304(8)–(4,491)
21,502(4,644)
(500)
–
(36)
(32)
93
(38)
394
1,675
5,592
(2,001)(5,082)(1,020)(38)(84)
21,113480––(4,985)
16,607

Cash flows from investing activities:
Acquisition of marketable and investment securities . . . . . . . . . . . . . .
Proceeds from sales of marketable and investment securities . . . . . .
Acquisition of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in loans to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from collection of loans to affiliates . . . . . . . . . . . . . . . . . . .
Increase in time deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from refund of time deposits . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . .

(12,121)
3,118(14,575)
2,896
(192)
–
–
10
12
(20,852)(5,718)
5,682(15,049)
511
–
62
(100)
15
3
(14,592)(6,023)
3,030(15,642)
3,163
–
62
(0)
150
3
(15,256)

Cash flows from financing activities:
Decrease in short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayment of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Redemption of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for acquisition of treasury stock . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of treasury stock . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to minority interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . .

(180)
(130)
(2,154)(5,874)–(2,738)–(30)(11,107)–––(3,937)3(3,057)––(6,991)

–
(203)
–
(14)
439
(3,106)(15)–(2,901)

Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . .
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . .
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . .

(13,536)
35,406¥21,869(81)
21,869¥21,788(1,549)21,788¥20,238

Cash flows from operating activities:
Income before income taxes, minority interestsand other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-off of consolidation adjustment account . . . . . . . . . . . . . . . . . .
Increase (decrease) in liabilities for directors’
and corporate auditors’ retirement benefits . . . . . . . . . . . . . . . . . . .
Decrease in liabilities for retirement benefits . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in advanced payments for retirement expenses . . .
Increase in investment securities from partial
reimbursement of trust for retirement benefits . . . . . . . . . . . . . . . . . .
Increase in investment securities from returnof trust for retirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in losses (earnings) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on sales of marketable and investment securities . . . . . . .
Write-down of marketable and investment securities . . . . . . . . . . . . .
Gain (loss) on sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on disposals of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accounts receivable . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accounts payable . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of directors’ bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and dividends received . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses for lump-sum transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . .

• 26 • Coca-Cola West Japan Company, Limited

Financial Data

Operating income (Millions of yen)
Operating income/Net revenues (%)

Recurring income (Millions of yen)
Recurring income margin (%)

40,00010

40,000

10

8.3

8.2
7.4

8

30,00030,000

6.7

6.7

8

7.1

6.9

6.7

6

4.8

19,63820,00020,00016,86016,704

16,634

16,021

4

17,0056

5.0

19,895
17,065

4

12,256

11,83010,00010,000
2

0

2

0

0

01

02

■ Operating income

03

04

05

Net income (Millions of yen)
Return on sales (%)

03

04

05

Recurring income margin

Cost of goods sold (Millions of yen)
Cost of goods sold/Net revenues (%)
4

20,000250,000

54.9

55.2

135,989

132,995

54.2

55.2

56.3

139,675

138,351

60

3.4
3.0

2.9

15,00002■ Recurring income

Operating income/Net revenues

3.9

0

01

200,000
3
40
150,000

9,380

10,000122,504

2

8,564
7,305

7,086

100,000
20

5,000

1

0.6

50,0001,420
0■ Net income

0

0

01

02

03

04

05

0

01
■ Cost of goods sold

Return on sales

02

03

04

05

Cost of goods sold/Net revenues(Millions of yen)
2001

2002

2003

2004

2005

Operating income . . . . . . . . . . . . . . . . . . . . . . . .
Operating income/Net revenues (%) . . . . . . . . . . .

16,634
7.4

16,704
6.7

19,638
8.2

16,860
6.7

11,830
4.8

Recurring income . . . . . . . . . . . . . . . . . . . . . . . . .
Recurring income margin (%) . . . . . . . . . . . . . . . .

16,021
7.1

17,005
6.9

19,895
8.3

17,065
6.7

12,2565.0

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Return on sales (%) . . . . . . . . . . . . . . . . . . . . . . .

1,420
0.6

7,086
2.9

9,380
3.9

8,564
3.4

7,305
3.0

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold/Net revenues (%) . . . . . . . . . .

122,504
54.2

135,98954.9

132,995
55.2

139,675
55.2

138,351
56.3

Coca-Cola West Japan Company, Limited• 27 •

Total assets (Millions of yen)
Total assets turnover ratio (Times)

Total shareholders’ equity (Millions of yen)
Shareholders’ equity ratio (%)

400,000

1.5

1.2

1.2

1.2

1.2

400,000

1.2

100

77.5

300,000

81.0

80.7

83.2

80.6

80

300,000
1.0
60

202,713 204,070 204,180 207,216 208,711
200,000

200,000

157,129 164,658

165,454 167,036

173,608
40

0.5
100,000

100,000
20

0

0

0

01

02

■ Total assets

03

04

05

02

03

■ Total shareholders’ equity

Total assets turnover ratio

Inventories (Millions of yen)
Inventory turnover ratio (Times)

04

05

Shareholders’ equity ratio

Current assets (Millions of yen)
Current ratio (%)

30,000

25

20.1

0

01

400

200,000

24.7
19.7

19.3

20.0
20
150,000

282.5

285.0
256.3
239.5

20,000

300

243.5

15

12,776

12,361

12,570100,000

12,762200

72,348

10

70,142

10,00057,134
7,169

59,54050,67350,000100

50■ Inventories

0

0

01

02

03

04

05

0

01
■ Current assets

Inventory turnover ratio

02

03

04

05

Current ratio(Millions of yen)
2001

2002

2003

2004

2005

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets turnover ratio (Times) . . . . . . . . . . . .

202,7131.2

204,070
1.2

204,180
1.2

207,216
1.2

208,711
1.2

Total shareholders’ equity . . . . . . . . . . . . . . . . . .
Shareholders’ equity ratio (%) . . . . . . . . . . . . . . .

157,12977.5

164,658
80.7

165,45481.0

167,03680.6

173,608
83.2

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory turnover ratio (Times) . . . . . . . . . . . . . .

12,77620.1

12,361
19.7

12,57019.3

12,762
20.0

7,169
24.7

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current ratio (%) . . . . . . . . . . . . . . . . . . . . . . . . . .

72,348282.5

70,142
256.3

57,134239.5

59,540243.5

50,673285.0

Assets turnover ratio = Net revenues / The average of assets at the beginning and end of the fiscal period
Shareholders’ equity ratio = Shareholders’ equity / Total assets
Inventory turnover ratio = Net revenues / The average of inventory taken at the beginning and end of the fiscal period
Current ratio = Current assets / Current liabilities• 28 • Coca-Cola West Japan Company, Limited

Interest coverage ratio (Times)

Capital expenditures (Millions of yen)

25,0003,000

21,0272,402.0
20,0002,000
15,00015,611

16,19904

05

13,846
11,355

10,000
1,000

894.9

571.1

5,000

353.9
0

0

01

02

03

04

05

01

Depreciation and amortization (Millions of yen)

02

03

Return on equity (ROE) (%)
Return on assets (ROA) (%)

20,0005.7

6

5.2
15,39515,00015,888

4.4

14,927

4.3

13,86013,647

4.6

4

4.2
3.5

10,000

3.5

2
5,000

0.9
0.7
0

0

01

02

03

04

05

01

02

Return on equity (ROE)

03

04

05

Return on assets (ROA)(Millions of yen)
2001

2002

2003

2004

2005

Interest coverage ratio (Times) . . . . . . . . . . . . . . .

571.1

353.9

894.9

2,402.0–

Capital expenditures . . . . . . . . . . . . . . . . . . . . . .

11,35521,027

13,846

15,611

16,199Depreciation and amortization . . . . . . . . . . . . . . .

13,647

15,395

15,88814,927

13,860Return on equity (ROE) (%) . . . . . . . . . . . . . . . . .
Return on assets (ROA) (%) . . . . . . . . . . . . . . . . .

0.9
0.7

4.4
3.5

5.7
4.6

5.2
4.2

4.3
3.5

Interest coverage ratio = (Operating income + Interest income and Dividends) / Interest expense
Return on equity = Net income / The average of shareholders’ equity at the beginning and end of the fiscal period
Return on assets = Net income / The average of assets at the beginning and end of the fiscal period

Coca-Cola West Japan Company, Limited• 29 •

Net income per share (Yen)Price earnings ratio (PER) (Times)

Shareholders’ equity per share (Yen)Price book-value ratio (PBR) (Times)

150

150

1.5

5,000

133.6
1.2
116.25
100

1.2

1.2

4,000

108.80

1.0
93.42

0.9

100

85.49

1.0

3,000

2,000
50

2,089.94 2,149.99
1,950.07 2,009.39

2,228.79
0.5

50
1,000

29.5

17.62

24.2

18.1

20.8
0

0

0

01

02

03

■ Net income per share

04

05

0

01

02

03

■ Shareholders’ equity per share

Price earnings ratio (PER)

Cash flows per share (Yen)Price cash flow ratio (PCFR) (Times)

04

05

Price book-value ratio (PBR)

Dividend per share (Yen)

15

500

50

12.6
400

40

10.1
313.7
300

200

34.00

01

02

40.00

04

05

10

299.3

30

8.8 272.4

272.3

34.00

40.00
36.00

6.7

187.0

6.5

20
5

100

10

0

0

0

01
■ Cash flows per share

02

03

04

05

03

Price cash flow ratio (PCFR)

(Yen)
2001

2002

2003

2004

2005

Net income per share . . . . . . . . . . . . . . . . . . . . .
Price earnings ratio (PER) (Times) . . . . . . . . . . . . .

17.62
133.6

85.49
20.8

116.2518.1

108.80
24.2

93.42
29.5

Shareholders’ equity per share . . . . . . . . . . . . . . .
Price book-value ratio (PBR) (Times) . . . . . . . . . .

1,950.07
1.2

2,009.39
0.9

2,089.94
1.0

2,149.99
1.2

2,228.79
1.2

Cash flows per share . . . . . . . . . . . . . . . . . . . . . .
Price cash flow ratio (PCFR) (Times) . . . . . . . . . . .

187.0
12.6

272.3
6.5

313.7
6.7

299.3
8.8

272.4
10.1

Dividend per share . . . . . . . . . . . . . . . . . . . . . . . .

34.00

34.00

36.00

40.00

40.00

Net income per share = Net income / The average number of shares during the period
Price earnings ratio = Market value at the end of the period / Net income per share
Shareholders’ equity per share = Shareholders’ equity / The number of shares outstanding at the end of the period
Price book-value ratio = Market value at the end of the period / Shareholders’ equity per share
Cash flows per share = Cash flows / The average number of shares during the period
Price cash flow ratio = Market value at the end of the period / Cash flows per share• 30 • Coca-Cola West Japan Company, Limited

Six-year Summary(Millions of yen)
2000

2001

2002

2003

2004

2005

Net revenues . . . . . . . . . . . . . . . . . .

¥ 207,827¥ 226,111¥ 247,737¥ 240,825¥ 253,248¥245,874

Operating income . . . . . . . . . . . . . .

17,44916,634

16,704

19,63816,86011,830Recurring income . . . . . . . . . . . . . . .

18,516

16,021

17,00519,895

17,065

12,256

Recurring income margin (%) . . . . . .

8.9

7.1

6.9

8.3

6.7

5.0

Net income . . . . . . . . . . . . . . . . . . .

5,700

1,420

7,086

9,380

8,564

7,305

Net income per share (Yen) . . . . . . .

77.83

17.62

85.49

116.25108.8093.42

Return on sales (%) . . . . . . . . . . . . .

2.7

0.6

2.9

3.9

3.4

3.0

Total assets . . . . . . . . . . . . . . . . . . .

181,637

202,713204,070

204,180

207,216

208,711

Total shareholders’ equity . . . . . . . .

157,604

157,129

164,658

165,454

167,036

173,608

Shareholders’ equity ratio (%) . . . . .

86.8

77.5

80.7

81.0

80.6

83.2

Shareholders’ equity per share (Yen) . .

2,151.52

1,950.07

2,009.39

2,089.94

2,149.99

2,228.79

Return on equity (%) . . . . . . . . . . . .

3.7

0.9

4.4

5.7

5.2

4.3

Cash flows . . . . . . . . . . . . . . . . . . . .

20,175

15,06722,481

25,26823,491

21,165

Capital expenditures . . . . . . . . . . . .

14,634

11,35521,027

13,846

15,611

16,199Depreciation and amortization . . . . .

14,475

13,647

15,395

15,88814,927

13,860Coca-Cola West Japan Company, Limited• 31 •

Risk Information

Business results and other aspects of the Company’s operations
mentioned in this annual review are subject to a variety of risks.
Those risks deemed most likely to have a significant impact on
potential investment decisions are found below. The CCWJ Group
is fully aware of the possibility of these risks and thus works to
avoid them or deal effectively with them should they arise.
Statements herein regarding future events or assumptions reflect
the judgment of the CCWJ Group as of March 27, 2006.

 Impact of weather-related factors(1) Business agreements with The Coca-Cola Companyof the United States and Coca-Cola (Japan) Co., Ltd.

(5) Impact of economic conditions
 Trends in personal consumption

CCWJ and consolidated subsidiary Mikasa Coca-Cola Bottling Co.,
Ltd. conduct business activities based on a manufacturing licensing
agreement with The Coca-Cola Company, Coca-Cola (Japan) and
CCNBC, and a distribution licensing agreement with The Coca-Cola
Company and Coca-Cola (Japan).

Sales of beverages, the CCWJ Group’s core products, are closely
linked to trends in personal consumption. Current economic
conditions in Japan suggest that a rapid recovery in personal
consumption is unlikely. A sudden decline in personal consumption, however, could adversely affect the operating results of the
CCWJ Group.

(2) Business ties with CCNBC

CCWJ has an equity interest in CCNBC, a company established toconsolidate and oversee procurement, manufacturing and distribution operations nationwide for the Coca-Cola Group in Japan, andto build an optimal nationwide supply chain structure, thereby
reducing costs. CCNBC’s operations are conducted in partnershipwith CCWJ and other Coca-Cola bottlers across Japan. The future
progress and status of cost-cutting plans of CCNBC could
potentially impact the operating results of the CCWJ Group.
(3) Quality assurance

Beverages are the core product of the CCWJ Group. The Groupmakes every effort to raise employee awareness regarding quality
and implements programs aimed at preventing incidents concerning quality in order to offer its customers (consumers) high-quality
and reliable beverages. Nevertheless, in the event of an incident
related to product quality, the Company’s brand image could betarnished, irrespective of whether or not the CCWJ Group was
actually at fault. An incident of this nature could adversely affectthe operating results of the CCWJ Group.
(4) The soft drink industry
 Market competitiveness

Sales of beverages, the CCWJ Group’s core products, are readily
influenced by changes in customer (consumer) preference. In abeverage market of this kind, the CCWJ Group strives to continuously offer appealing products and services. Nevertheless, failure to
amply forecast market changes could potentially affect the operating results of the CCWJ Group.

• 32 • Coca-Cola West Japan Company, Limited

Weather conditions tend to have an effect on the sales of beverages, the CCWJ Group’s core products. Cool summers or warm
winters, for example, often have a significant impact on customer(consumer) demand. Although the CCWJ Group makes every effort
to minimize the influence of weather-related factors on sales, theGroup offers no guarantee that it can completely eliminate the effectof such factors.

 Fluctuations in asset value

Fluctuations in the value of land, marketable securities and otherassets owned by the CCWJ Group could potentially impact theGroup’s operating results and financial position. Marketable securities with a fair value, for example, are subject to changes in fairmarket value in capital markets because that is how they are valued.
(6) Public regulations

The CCWJ Group’s Manufacturing and Marketing of Beverages &Foods segment is subject to a number of regulations in Japan,
including the Act Against Unjustifiable Premiums and Misleading
Representations (Premiums and Representations Act) and the Food
Sanitation Law. The Group fully complies with these and all otherregulations in its commitment to providing safe and reliable products. Accordingly, tougher regulations, for example, might incur
new compliance costs, which could potentially affect the operating
results of the CCWJ Group.
(7) Management of personal information

The CCWJ Group holds large volumes of personal information.
In handling this information, the Group works on a unified basis
to formulate and adhere to related guidelines and implement ongoingtraining and educational activities. However, an external leak of
personal information could lead to a deterioration of trust in CCWJ
and potentially impact the operating results of the CCWJ Group.
(8) Impact of disasters

The CCWJ Group has a system in place to minimize the effects ofpower outages, as well as other scenarios for which assumptions
must be made, on its business operations. Typhoons, earthquakes
and other natural disasters, however, could trigger conditions thatexceed these assumptions. Conditions of this magnitude could
potentially impact the operating results and financial position of
the CCWJ Group.

Stock Information(As of December 31, 2005)

Authorized shares:
Outstanding shares:
Number of shareholders:

270,000,000
82,898,654
14,378Major shareholders:Number of shares held(Thousands)

Shareholders

Ricoh Company, Ltd.
The New Technology Development Foundation
Coca-Cola Holdings West Japan, Inc.
The Chase Manhattan Bank, NA London
The Nishi-Nippon City Bank, Ltd.
Mellon Bank Treaty Clients Omnibus
State Street Trust & Banking Co., Ltd.
Japan Trustee Services Bank, Ltd. (Trust account)Showa Tansan Co., Ltd.
Kazue Takakura

16,792
5,294
4,074
2,614
3,837
3,703
2,477
3,675
1,591
1,338

Percentage ofshares (%)

21.6
6.8
5.2
3.4
4.9
4.8
3.2
4.7
2.0
1.7

Note: The Company owns 5,025,000 shares of treasury stock. This shareholding is not shown in the table and has not been included in thecalculation of voting rights (percentage of shares).

Number of shares held and percentage of shares held by shareholder category:

Individuals
and others
10.3%

Foreigncorporations
29.9%

Treasury
stock
6.1%

Financial
institutions
15.6%
Securities
companies
0.8%

Number ofshareholders

Financial institutions
Securities companies
Other domestic corporations
Foreign corporations
Individuals and others
Treasury stock

Other domestic
corporations
37.3%<Composition of shareholders>PER (Times)
PBR (Times)
FY-end stock price (Yen)Dividend (Yen)
Payout ratio (%)
Dividend-on-equity
ratio (%)

Number ofshares (Thousands)

61
23
298
204
13,791
1

12,899661
30,93324,817
8,561
5,025

2001

2002

2003

2004

2005

133.6
1.2
2,355
34.00
108.9

20.8
0.9
1,775
34.00
52.1

18.1
1.0
2,100
36.00
28.3

24.2
1.2
2,630
40.00
37.7

29.5
1.2
2,755
40.00
39.3

1.8

1.7

1.8

1.9

1.8

2001

2002

2003

2004

2005

AA–

AA–

AA–

AA–

AA–

A+

A+

A+

A+

A+

Credit Rating Information
Japan Credit Rating Agency, Ltd.
Long-term credit rating
Rating and Investment Information, Inc.
Long-term credit rating

Coca-Cola West Japan Company, Limited• 33 •

Corporate Governance

CCWJ’s fundamental stance on corporate governance is to improve
management efficiency and transparency, while striving to maximize
shareholder value.

(1) Corporate Governance System
 Status of Related Internal Bodies• Corporate Auditor System or Company With
Committees System
CCWJ has adopted the Corporate Auditor system in accordancewith its decision to separate decision-making and management
oversight from business execution through a restructuring of theBoard of Directors and the adoption of the corporate executive
officer system in March 1999.
• Outside Directors and Corporate Auditors
At present, six of CCWJ’s ten directors and three of its fivecorporate auditors are from outside the Group.
• Overview of Committees
In 2001, the Company established executive Nomination andRemuneration committees. Acting in an advisory capacity to theBoard of Directors, these committees, comprising representativeand outside directors, bring greater transparency and fairness tothe selection of directors and corporate auditors, and ensure that
remuneration for directors is appropriate.
• Support for Outside Appointments
Outside directors are supported by the General Affairs
Department, while outside corporate auditors are supported by
the Audit Office.
• Business Execution and Management Oversight
Outside appointments comprise more than half the members ofboth the Board of Directors and the Board of Corporate Auditors. This gives CCWJ the capacity to sufficiently monitor
business execution by directors and also allows it to draw on
independent third-party advice from external experts appointed
as outside directors.
Directors and corporate auditors also fully monitor how
executives conduct business operations. This includes participating
in meetings of the executive committee, which is made up of
executive officers, as well as other key company meetings. Whenquestions arise during the course of business execution, CCWJ
consults attorneys, CPAs and other specialists for advice on
determining the best way to proceed.

• 34 • Coca-Cola West Japan Company, Limited

 Risk Management System

CCWJ has formulated a set of crisis management guidelines. These
guidelines, which executives and employees are made fully awareof, are designed to minimize damage in the event of a crisis bypreventing confusion within the Group and ensuring a rapid andappropriate response.
The CCWJ Group believes that compliance with all applicablelaws and regulations, and the spirit in which they are written, isfundamental to its business activities, as is the proper observance ofsocial norms and customary business practices. This belief isenshrined in a code of conduct created to encourage a compliancemindset among all CCWJ Group directors and employees.
 Audit System• Participating Personnel and Organizations
CCWJ aims to comply with corporate rules and regulations,carry out appropriate corporate activities and operational
management, and protect its assets. To help it achieve thesegoals, CCWJ has established an Audit Office within the Internal
Audit Department. The office has five staff and reports directly
to the president.
Corporate auditors attend meetings of the Board of Directors,
executive committee and other important company meetings. They
also meet representative directors on a regular basis and examine
the results of audits performed by the Audit Office. Using theseand other methods, corporate auditors monitor the executive
actions of directors and executive officers in accordance with
relevant laws and regulations, the Company’s own articles ofincorporation and internal auditing standards.
The Audit Office carries out prior discussions with corporate
auditors concerning its auditing policy and plans for each fiscal
year. Corporate auditors also receive reports about the results ofaudits as needed. In addition, at the start of the fiscal year, theCompany’s independent auditor provides the corporate auditorswith an explanation of its audit plans, and as needed, supplies
information and reports to the auditors during and at the end of
the audit process.

• Independent Auditor and Related Personnel
CCWJ has appointed KPMG AZSA & Co. as its independent
auditor. The names of the firm’s certified public accountants(engagement and management partners) that audit the Company’s
financial statements are listed below.
Name

Ken Komiyama

Auditing Experience

16 years

Tetsuzo Hamashima

1 yearMikihiro Himeno

6 years

In addition to the above, the auditing team includes two CPAs
and five assistant CPAs.
 Director and Corporate Auditor Remuneration

Remuneration paid to directors and corporate auditors for the year
under review was as follows.
Directors:¥ 83 million
Corporate auditors:¥ 48 million
Total:¥132 million

The Company also appropriated earnings to pay ¥31 million
in bonuses to directors, and with the approval of the annual general
meeting of shareholders, paid retirement benefits of ¥184 million
to directors and ¥12 million to auditors.
 Audit Fees

Fees paid to the Company’s independent auditor KPMG AZSA & Co.
for services relevant to the year under review were as follows.
Fees for services pursuant to Article 2-1of the Certified Public
Accountant Law:
¥33 million(2) Conflicts of Interest(3) Initiatives to Strengthen Corporate Governance
 Committee Activities

The Company’s Nomination and Remuneration committees
convened in January 2005 and 2006. The committees discussed
the following topics.
January 2005
• Nomination Committee: Examined director and corporate
auditor candidates.
• Remuneration Committee: Examined bonuses for directors,
retirement benefits for directors and corporate auditors, andremuneration and salaries for executives and other personnel.
Representative directors and outside directors attended
meetings of both committees.
January 2006
• Remuneration Committee: Examined bonuses for directors andremuneration and salaries for executives and other personnel.
One of the Company’s two representative directors and four of its
six outside directors attended this committee meeting.
 Other Initiatives

As part of efforts to fulfill its corporate social responsibilities, theCompany established a CSR Division in January 2005. Furthermore,in 2006, the Company decided to reduce the term of office fordirectors from two years to one. This move was taken to clarify
management responsibilities and create a more dynamic management
framework capable of responding rapidly to changes in the operating
environment. At the same time, after reviewing executive remuneration,
the Company abolished the retirement benefit system for directors
and corporate auditors.
Going forward, the Company will continue to take steps toenhance corporate governance in the CCWJ Group.

Three of the Company’s six outside directors are representatives ofcompanies that have business relationships with CCWJ. The
remaining three outside directors have no personal, financial,business or other conflicts of interest with the Company.
The Company’s three outside corporate auditors fulfill other rolesin their capacities as the representative of an affiliated company, therepresentative of a partner financial institution, and as legal counsel.

Coca-Cola West Japan Company, Limited• 35 •

Corporate Data
(As of December 31, 2005)● Company name: Coca-Cola West Japan Company, Limited● Head office:7-9-66 Hakozaki, Higashi-ku, Fukuoka, Japan● Established:

December 20, 1960

● Paid-in capital:¥15,231,000,000● Employees:

5,093 (Consolidated)● Principal
businesses:

Manufacture and sales of beverages,
mainly Coca-Cola, Sprite, Fanta, and Georgia● Stock exchange Tokyo Stock Exchange (First Section)
listings:
Osaka Securities Exchange (First Section)
Fukuoka Stock ExchangeManagement(As of April 1, 2006)

Directors
Representative Director

Masamitsu Sakurai

Representative Director
Director
Director
Director

Norio Sueyoshi
Tadatsugu Harada
Kouichi Morii
Masahiko Uotani

Director

Shingo Matsuo

Director

Kazuhiko Enomoto

Director
Director

Susumu Ishihara
Yuji Inoue

Director

Toshiaki Akahoshi

Chairman,
Representative Director andPresident,
Ricoh Company, Ltd.
***
President, Coca-Cola (Japan)
Company, Limited
President, Kyushu ElectricPower Co., Inc.
Chairman, Fukuoka Jisho Co., Ltd.
Chairman, Royal Holdings Co., Ltd.
President, Kyushu Railway Company
Group Corporate Officer,
Ricoh Company, Ltd.
President, Ricoh Leasing
Company, Ltd.
General Manager,
Ricoh Company, Ltd.,
Fukuoka BranchPresident, Ricoh Kyushu Co., Ltd.

Senior Corporate Officer Masami Nomiyama
Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Senior Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer
Corporate Officer

Market Development Division
Manager
Tatsuhiko Ike
Manager, Yamaguchi andKitakyushu Branch
Kazuaki Hisamatsu Manager, Office of Investor Relations
Katsuzou Tsugawa Chain Store Sales Division Manager
Shigejiro SatoBusiness Systems Division Manager
Naotake Tokieda
General Affairs Division Manager
Toshinori Seto
Manager, Partner Relationship Department
Yoshiaki Hamasaki Manager, Saga and Nagasaki Branch
Tadanori Taguchi
Manager, Financial Affairs Department
Takashi Himeno
Manager, Fukuoka Branch
Yoshiki Asahara
Manager, Hiroshima Branch
Hideyasu Ishibashi Manager, Okayama Branch
Yasunori Morishima Manager, Sanin BranchToshio FukamiMarketing Planning Division Manager
Yoshikazu Okazaki Food Service Sales Division Manager

Group Executive Officers

Note: *Executive Officer

Group Senior Corporate Officer Takeaki Sueyasu

Auditors

Group Senior Corporate Officer

Executive Corporate Auditor Yasumasa Niimi
Executive Corporate Auditor Ryuji Nakagawa
Auditor
Tatsuo Hirakawa

Group Senior Corporate Officer
Group Senior Corporate Officer

AuditorIsanari Ohuchida

AuditorTakashi Matsuzaki

Representative Director and Vice
President, Ricoh Company, Ltd.
Representative Senior Managing
Director, The Nishi-Nippon City
Bank, Ltd.
Attorney, Tokunaga,
Matsuzaki & Saito Law Office
Deputy Chairman, Japan
Federation of Bar Associations

Group Senior Corporate Officer
Group Senior Corporate Officer
Group Senior Corporate Officer
Group Senior Corporate Officer

Executive Officers
President & CEO
Norio Sueyoshi
Executive Vice President Tadatsugu Harada

Executive Vice President Kouichi Morii

Executive Corporate Officer Hijiri Morita
Senior Corporate Officer Shinji Oda
Senior Corporate Officer Mitsuo Isobe• 36 • Coca-Cola West Japan Company, Limited

Group Senior Corporate Officer
Assistant to President (Sales,
Business Systems and SCM),
and Chief Marketing Officer
Assistant to President (Public
Relations, CCWJ University, CSR,
General Affairs, Administration)
Administration Division Manager
CSR Division Manager
SCM Division Manager

Group Corporate Officer

Group Corporate Officer

President, Mikasa Coca-Cola
Bottling Co., Ltd.
Katsuyoshi Kawabe President, Coca-Cola West Japan
Logistics Co., Ltd.
Toshiki Miyake
President, Takamasamune Co., Ltd.
Nobuji Kihara
Director and Executive Corporate
Officer, Mikasa Coca-Cola
Bottling Co., Ltd.
Nobuo Shibata
President, Coca-Cola West Japan
Products Co., Ltd.
Junji Katsura
President, Coca-Cola West Japan
Vending Co., Ltd.
Yukio Sako
President, Nishinihon
Beverage Co., Ltd.
Takuo Shibata
Director and Senior Corporate
Officer, Coca-Cola West Japan
Products Co., Ltd.
Masayuki Yamasaki Managing Director and Plant
Manager, Daisen Beverage Co., Ltd.
Mikitoshi Hagihara Standard System Promotion
Manager, Coca-Cola Beverage
Service Co., Ltd.
Tsuneo Fukuda
Director and Corporate Officer,
Coca-Cola West Japan
Products Co., Ltd.

Group Companies(As of April 1, 2006)

NISHINIHON BEVERAGE CO., LTD.

NICHIBEI CO., LTD.

● Principal businesses: Beverage sales● Head office: 5-1-6 Hakozakifuto, Higashi-ku, Fukuoka● Paid-in capital: ¥100 million● Representative: Yukio Sako

● Principal businesses: Manufacture of processed foods● Head office: 6-9 Wakazakura, Fujinokimachi, Tosu
● Paid-in capital: ¥80 million● Representative: Akira Gohhara

COCA-COLA WEST JAPAN PRODUCTS CO., LTD.

TAKAMASAMUNE CO., LTD.

● Principal businesses: Beverage production● Head office: 1670-2 Nihonmatsu, Todorokimachi, Tosu
● Paid-in capital: ¥100 million● Representative: Nobuo Shibata● Principal businesses: Production and sale of alcoholic beverages● Head office: 297 Kuroda, Daizenjimachi, Kurume● Paid-in capital: ¥90 million● Representative: Toshiki Miyake

COCA-COLA WEST JAPAN VENDING CO., LTD.

WEST JAPAN SERVICE CO., LTD.

● Principal businesses: Vending machine operations● Head office: 7-9-66 Hakozaki, Higashi-ku, Fukuoka● Paid-in capital: ¥80 million● Representative: Junji Katsura● Principal businesses: Insurance, leasing, and realestate-related businesses● Head office: 7-9-66 Hakozaki, Higashi-ku, Fukuoka● Paid-in capital: ¥60 million● Representative: Yasunori Muraoka

COCA-COLA WEST JAPAN CUSTOMER SERVICE CO., LTD.*MIKASA COCA-COLA BOTTLING CO., LTD.

● Principal businesses: Vending machine-related businesses● Head office: 871 Taniyama, Koga, Fukuoka● Paid-in capital: ¥22 million● Representative: Masazumi Gotoh● Principal businesses: Beverage production and sales● Head office: 643 Kabata-machi, Tenri, Nara
● Paid-in capital: ¥4,159 million● Representative: Takeaki Sueyasu

COCA-COLA WEST JAPAN LOGISTICS CO., LTD.**MIKASA LOGISTICS CO., LTD.

● Principal businesses: Freight transport operations● Head office: 2-11-20 Higashisendamachi, Naka-ku, Hiroshima● Paid-in capital: ¥70 million● Representative: Katsuyoshi Kawabe● Principal businesses: Freight transport operations● Head office: 643 Kabata-machi, Tenri, Nara
● Paid-in capital: ¥50 million● Representative: Masao Kuroda*Name changed from Nishinihon Customer Service Co., Ltd.
on April 1, 2005.
**Name changed from Logicom Japan Co., Ltd. on April 1, 2005.

MIKASA SERVICE CO., LTD.
● Principal businesses: Vending machine-related businesses● Head office: 643 Kabata-machi, Tenri, Nara
● Paid-in capital: ¥90 million● Representative: Nobutsugu Nakajima

MIKASA BEVERAGE SERVICE CO., LTD.
● Principal businesses: Beverage sales● Head office: 643 Kabata-machi, Tenri, Nara
● Paid-in capital: ¥10 million● Representative: Hitoshi Tarutani

Coca-Cola West Japan Company, Limited• 37 •

Coca-Cola System in Japan

Japan’s Coca-Cola system consists of Coca-Cola (Japan) Co., Ltd.
and 14 bottling companies (bottlers) that manufactureand sell Coca-Cola products in the different regions of the country.
Coca-Cola (Japan) produces concentrates of Coca-Cola and other beverages.
Coca-Cola National Beverage Co., Ltd., which oversees procurement,
manufacturing and distribution on a national level, then supplies these concentrates
to the bottlers, which in turn use them to manufacture various products
under strict quality control in their respective plants. The bottlers distribute products
to their 466 sales centers throughout Japan, which ship the products directly
to nearly 1.2 million shops and other outlets by delivery trucks called “route trucks.”
In addition, approximately 980,000 vending machines are installed extensively
and efficiently all over the country for the convenience of consumers.
Thus, the unique Coca-Cola system can grow with the changing needs of
local industries and communities.

Hokkaido Coca-Cola Bottling Co., Ltd.

14 Bottlers(Dai Nippon Printing Co., Ltd.)
Hokkaido(As of January
2006)

Note: Major investor shownin parentheses

Mikuni Coca-Cola Bottling Co., Ltd.
(Mitsui & Co., Ltd.)
Saitama/Gunma/Niigata

Michinoku Coca-Cola Bottling Co., Ltd.

Hokuriku Coca-Cola Bottling Co., Ltd.

(Yamura family)
Iwate/Akita/Aomori(Wakatsuru Shoji)
Nagano/Toyama/Ishikawa/Fukui

Sendai Coca-Cola Bottling Co., Ltd.
(Kamei Corporation)
Miyagi/Fukushima/Yamagata

Mikasa Coca-Cola Bottling Co., Ltd.
(Coca-Cola West Japan Company, Limited)
Nara/Shiga/Wakayama

Tone Coca-Cola Bottling Co., Ltd.
(Kikkoman Corporation)
Chiba/Ibaraki/Tochigi

Kinki Coca-Cola Bottling Co., Ltd.
(Kirin Brewery Company, Limited)
Osaka/Hyogo/Kyoto

Tokyo Coca-Cola Bottling Co., Ltd.
(Marujin Corporation)Tokyo

Coca-Cola Central Japan Co., Ltd.
(Mitsubishi Corporation)
Kanagawa/Shizuoka/Yamanashi/Aichi/Gifu/Mie

Shikoku Coca-Cola Bottling Co., Ltd.
(Nippon Paper Group, Inc.)
Kagawa/Ehime/Kochi/Tokushima

Coca-Cola West Japan Company, Limited(Ricoh Company, Ltd.)
Hiroshima/Okayama/Yamaguchi/Shimane/Tottori/Fukuoka/
Saga/Nagasaki

Minami Kyushu Coca-Cola Bottling Co., Ltd.
(Satsuma Shuzo Co., Ltd.)
Kumamoto/Kagoshima/Oita/Miyazaki

Note: Coca-Cola West Japan Company, Limited (CCWJ) and Kinki Coca-Cola Bottling Co., Ltd. (Kinki CCBC)
will integrate operational management through a new joint holding company, Coca-Cola West Holdings
Co., Ltd. (CCWHD), to be established on July 1, 2006.

• 38 • Coca-Cola West Japan Company, Limited

Okinawa Coca-Cola Bottling Co., Ltd.
(Marujin Corporation)
OkinawaGroup Overview

Investment(100%)

Coca-Cola
Tokyo Research &Development
Company, Limited(CCTR&D)

Coca-Cola
National Beverages Co., Ltd.
(CCNBC)

6

4

The
Coca-Cola
Company(TCCC)

Coca-Cola
Beverage Services Co., Ltd.
(CCBSC)

5
Coca-Cola West Japan
Company, Limited(CCWJ)

(5%)

1

7

2

(100%)

Coca-Cola
National Sales Co., Ltd.
(CCNSC)

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

Coca-Cola Central
Japan Co., Ltd.
(CCCJ)(5%)

8

3

FV Corporation
(FVC)

9

Coca-Cola Bottling(12 companies)(CCBC)

Joint companies of
TCCC/CCJC and bottlers

 Coca-Cola West Japan Company, Limited (CCWJ)

 Coca-Cola National Beverages Co., Ltd. (CCNBC)

Established as Japan’s first anchor bottler in July 1999 with themerging of Sanyo and Kita-Kyushu Coca-Cola bottlingcompanies and equity participation by The Coca-Cola Company.

Established in April 2003 as a joint company of The Coca-Cola
Company and the bottlers to create an optimum national supply chain management (SCM) system for Japan’s Coca-Cola
Group. CCNBC started its operations in October the same year.
The company oversees the group’s joint procurement of raw
materials/ingredients, manufacturing on a national level, andsupply-demand planning and coordination, and supplies
products to the bottlers.

 The Coca-Cola Company (TCCC)
Established in 1919 in Atlanta, Georgia, in the United States.
TCCC holds the rights to license bottlers to manufacture anddistribute Cola-Cola products. Bottling contracts with bottlers
are entered into by TCCC or one of its subsidiaries.

 Coca-Cola Beverage Services Co., Ltd. (CCBSC) Coca-Cola (Japan) Co., Ltd. (CCJC)
Established in 1957 in Tokyo as “Nihon Inryo Kogyo K.K.,” awholly owned subsidiary of The Coca-Cola Company of the U.S.,
and then renamed in 1958 to Coca-Cola (Japan) Company,
Limited. CCJC is engaged in marketing, planning, andmanufacture and distribution of concentrates in Japan.

 Coca-Cola Tokyo Research& Development Company, Limited (CCTR&D)
Established in January 1993 as a wholly owned subsidiary of
The Coca-Cola Company of the U.S. Since January 1995, thecenter has been involved in product development and technicalsupport responding to needs in the Asian region.

 Coca-Cola Bottlers (CCBC)
In Japan, there are 14 bottlers, which manufacture and distribute products. Each bottler is responsible for different regions of
the country.

Established in June 1999 as a joint company of The Coca-Cola
Company and the bottlers and launched into business in
September the same year. In October 2003, procurement
operations were transferred to CCNBC. At this moment, CCBSC
is promoting reform of the information system for the Japan
Coca-Cola system.

 Coca-Cola National Sales Co., Ltd. (CCNSC)
Established in October 1995 as a joint venture of all the Japanesebottlers and Coca-Cola (Japan). CCNSC is responsible for sales
activities to national chain customers.

FV Corporation (FVC)
Established in May 2001 as a joint company of Coca-Cola (Japan)
and all the Japanese bottlers. Its functions include: sales toorganizations spread over wide areas in the vending machine
business and handling of products other than corporate products (those authorized by Coca-Cola (Japan)).
Coca-Cola West Japan Company, Limited• 39 •

Coca-Cola West Japan Company, Limited Annual Review 2005

Coca-Cola West Japan Company, Limited
7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, JapanTEL (092) 641-8591
http://www.ccwj.co.jp/

This annual review is printed on recycled paper.
Printed in Japan