-Creating a happy tomorrow for everyone-

2012

ANNUAL REVIEWTable of Contents

Company Proﬁle(As of December 31, 2012)

Consolidated Financial Data:
Trends in Key Financial Indices2

To Our Shareholders

3

Creating More Corporate Value

5

The New Coca-Cola West Group

5

Business Model Transformation

6

Company name:Coca-Cola West Co., Ltd.

Head ofﬁce:

7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650,
Japan

Establishment:

December 20, 1960

Overview of Sales Results

7

Paid-in capital:

15,231 million yen

Soft Drink Market in Japan

7

Fiscal term:

DecemberTrade Marketing

8

Sales Activities by Channel

9

Number of employees: 7,877(consolidated)
Primary business:

Manufacturing and sales of Coca-Cola andother soft drinks

WebsiteSales Activities by Brand

11

Sales Activities by Packaging

14

Corporate Social Responsibility Activities

http://www.ccwest.co.jp/english/

15

Initiatives through Our Business Activities as
a Community-Oriented Company

15

Quality Control Initiatives

16

Global Environmental Protection Activities

17

Local Community Contribution Activities,
Local Environment Improvement Activities

19

Financial Information

21

Analysis of Operating Results

21

Segment Information

22

Consolidated Balance Sheets

23

Consolidated Statements of Income andConsolidated Statements of Comprehensive Income

25

Consolidated Statements of Changes inShareholders' Equity

26

Consolidated Statements of Cash Flows

27

Other Information

28

Risk Information

28

Corporate Governance29

Top Management

34

Dividend Policy and Shareholder Reward
Points System

35

Stock Information

36

Coca-Cola System in Japan

37

Notes
If a need to revise any part of this report arises, the revision will be posted on the "Investor Relations" page on the company website. The content of the revision will be found under "Annual
Review" of "Financial Results Information."

1
Annual Review 2012

2008

2009

2010

2011

2012

Net Revenues (million yen)
Growth Rate in Net Revenues (%)

395,556(3.4)

369,698(6.5)

375,764
1.6

399,7176.4

386,637(3.3)

Operating Income (million yen)
Operating Income / Net Revenues (%)

10,521
2.7

2,242
0.6

12,003
3.2

16,4694.1

13,463
3.5

Recurring Income (million yen)
Recurring Income / Net Revenues (%)

11,048
2.8

2,085
0.6

12,6593.4

16,0444.0

13,845
3.6

2,402(10,446)

12,982

14,013

12,186

0.6

(2.8)

3.5

3.5

3.2

Net Income (Loss) (million yen)
Return on Sales (%)

129
0.0

(7,594)
(2.1)

7,582
2.0

6,997
1.8

6,031
1.6

Comprehensive Income (million yen)

−

−

−

5,605

7,326

Net Income (Loss) per Share (yen)1.25(75.96)

75.84

69.99

60.33

Return on Equity (%)

0.1

(3.3)

3.4

3.1

2.6

Return on Assets (%)

3.7

0.7

3.8

4.7

4.1

Total Assets (million yen)

277,696326,818

346,032

342,560

337,348

Net Assets (million yen)

234,521

222,816

226,267

227,864

231,056

84.4

68.2

65.3

66.4

68.4

2,345.03

2,227.96

2,260.03

2,275.55

2,307.44

0.8

0.7

0.7

0.6

0.6

Price Earnings Ratio (PER) (times)*

1,549.5(21.6)

19.4

19.1

22.1

Cash Flow from Operating Activities (million yen)

16,18028,74731,732

39,96026,324

Cash Flow from Investing Activities (million yen)

2,153

(23,447)(49,203)(34,050)(14,243)

Cash Flow from Financing Activities (million yen)

(31,486)

43,297(16,316)(8,780)(7,149)Cash and Cash Equivalents at End of Fiscal Year (million yen)

22,412

71,22137,43434,56439,495

Dividend Payout Ratio (Consolidated) (%)

3,440.0

−

52.7

58.6

68.0

Dividend per Share (yen)(Interim Dividend Amount per Share) (yen)43.00(21.00)42.00(21.00)40.00(20.00)41.00(20.00)41.00(20.00)Interest Coverage Ratio (times)*

462.7

97.2

35.4

58.1

41.8

Depreciation (million yen)

21,741

21,90022,405

21,371

20,64318,032

25,201

16,524

21,201

20,031

10,359
(57%)

8,760
(35%)

7,604
(46%)

9,518
(45%)

8,704
(43%)

Income (Loss) before Income Taxes, Minority Interests
and Other Adjustments (million yen)
Income (Loss) before Income Taxes, Minority Interests
and Other Adjustments / Net Revenues (%)

Equity Ratio (%)
Net Assets per Share (yen)1

Price Book Value Ratio (PBR) (times)*2

3

Capital Expenditure (million yen)
Capital Expenditure for Vending Machines (million yen)
(Share of Capital Expenditure for Vending Machines)*1

Price Book Value Ratio (PBR) = Market Value at End of Period ÷ Equity per Share*2

Price Earnings Ratio (PER) = Market Value at End of Period ÷ Net Income per Share*3

Interest Coverage Ratio = Operating Cash Flow ÷ Interest Paid

2
Annual Review 2012

Consolidated Financial Data: Trends in Key Financial Indices

Consolidated Financial Data: Trends in Key Financial IndicesTo Our Shareholders
To Our Shareholders

We are deeply grateful to all of our shareholders and investors

consumers. Also, in the Nagasaki and Osaka areas, we launched
a new logistics network aimed at creating a low-cost supply

for their continued support.
This report presents information on our business conditions

structure through the construction of optimal logistics processes.
Through our ongoing promotion of corporate socialand performance for the year ended December 2012.

responsibility (CSR) efforts, we continued to conduct activities that
contribute to our local communities, such as social welfare support

Overview of Business Results for the Fiscal Year 2012
The soft drink business experienced positive growth in 2012
due to the rebound from the effects of the Great East Japanand sports activity support, and activities that promote community
environmental efforts, such as forestry preservation activities.

Earthquake in the previous year and the effects of a hot summer

In spite of these efforts, our consolidated performance for theseason. Nonetheless, the business environment facing soft drink

period ended December 2012 reﬂects the challenging businesscompanies is growing ever tougher, as sales competition

environment; from the previous year, net revenues fell ¥13,079

continues to be ﬁerce and store prices continue to fall as anmillion to ¥386,637 million (down 3.3%), operating income felloutcome of ongoing deﬂationary conditions in the economy and a¥3,005 million to ¥13,463 million (down 18.3%), recurring

focus on saving among consumers.

income fell ¥2,198 million to ¥13,845 million (down 13.7%), andThe year 2012 was the second of the "three years to grow with

net income fell ¥965 million to ¥6,031 million (down 13.8%).

breakthrough" outlined in the Mid-Term Management Plan
2011-2013, which were stipulated as the ﬁrst phase of theManagement Policy for Period Ending December 2013

Long-Term Management Framework 2020. Given the business

Projections indicate that the business environment facing theconditions described above, we have been (1) steadily

entire Coca-Cola West Group will continue to be challenging due

implementing consumer-oriented strategies in the markets toto low consumption and falling product prices in the soft drink

achieve the sustainable growth of proﬁts and sales

industry, ongoing yen depreciation, as well as increases in thevolume/market share, and (2) carrying out "8 Initiatives of

prices of raw ingredients and materials.

Business Model Transformation" to establish a business

Given this management environment, in 2013, the ﬁnal year offoundation from mid- and long-term perspectives. In doing so, we

our current Mid-Term Management Plan 2011-2013, Coca-Colastrove to achieve our business goals, to continue to achieveWest will focus its management policy on (1) being committed to

growth long into the future, and to promote the construction ofhitting our chain store channel revenue target, vending channel

business foundations that will increase our earning capacity.

VPM (sales volume per vending machine) target and net vending

First, on the sales side, we aimed to increase sales volumes

machine placement target, and (2) successfully completing theand market share as we increased net revenues and proﬁts. In

full rollout of Logistics Process Transformation and Service Modeleach of our sales channels, we made distinctions in the products

Optimization to establish a solid business foundation. Throughand sales methods used in speciﬁc retail locations, andthese endeavors we are striving to create business foundations

implemented sales activities that were carefully tailored to thethat will allow us to continue growing and expanding our earning

buying habits and needs of consumers.

capacity long into the future.

In the ﬁeld of supply chain management (SCM), we strove to

Minami Kyushu Coca-Cola Bottling Co., Ltd. became our wholly

reduce costs by improving productivity and efﬁciency, andowned subsidiary as of April 1, 2013. This will help maximize ourintroduced new technologies and made upgrades to oursynergies and establish our competitive advantage, allowing bothproduction lines in order to better meet the diversiﬁed needs ofcompanies to increase their corporate value.

3
Annual Review 2012

To Our Shareholders

Dividends
We issue dividends with the stable and continued distribution ofdividends to shareholders as our top priority. Taking the

Corporate Philosophy

company's performance this period and the businessWe will contribute to the happy lifestyle of all ourenvironment facing us going forward into comprehensive

stakeholders and contribute toconsideration, the dividend for the period ended December 2012

the development of a sustainable society
by providing value and refreshment

was set at ¥21 per share. This puts the annual dividend, which

through our beverage portfolio

includes the interim dividend, at ¥41 per share.
As we work toward attaining these goals, we would like to seek
further support and understanding from all shareholders andinvestors.

In the business ﬁeld primarily for drinks, we will continue to discover newneeds of consumers, as well as the provision of safe and securehigh-quality products and services. In addition, our corporate philosophy
expresses that we will offer products and services that enjoy new values
through uninterrupted innovations; thereby,
we contribute to the physical and mental wellbeing (that is, "happiness")for people to lead a forward-looking life, such as taste, fun, health, andcomfort, in the diverse lifestyle of our consumers, andwe deﬁnitely keep in mind contribution to environmental preservationand coexistence with local communities in our business activities, andbased on these efforts, we contribute to development of a sustainable
society.

West Vision
To be the most respected company by all key
stakeholders, encompassing consumers, customers,
shareholders, employees and the community!
Coca-Cola West vision statement describes where we want to be in theyear 2020 in a bid to reach the goal of becoming a company that will gain
special patronage from our shareholders, our consumers, local
communities, and our own employees.

Corporate Message-Creating a happy tomorrow for everyone-

Tamio Yoshimatsu
Representative Director & President

The corporate message "Creating a happy tomorrow for everyone"
expresses our sincere desire to provide happiness to all of our
stakeholders.

4
Annual Review 2012

Special Feature

lue
a
V
e
t
a
r
o
p
r
o
C
e
r
Creating Mo
The New Coca-Cola West GroupThe addition of the Minami Kyushu Coca-Cola Bottling Co., Ltd. as a wholly owned subsidiary (as of April 1, 2013)
will expand the sales territory of the Coca-Cola West Group to 18 prefectures across western Japan.
Since 1999, we have merged with three bottlers, and have been striving to improve our corporate value. Working in cooperation with our strategic
partners, The Coca-Cola Company and Coca-Cola (Japan) Co., Ltd., we have played a leading role in reforming the Coca-Cola business in Japan.
The new Coca-Cola West Group, which includes the Minami Kyushu Coca-Cola Bottling Co., Ltd., will continue working to further strengthen the Coca-Colabusiness in western Japan.

Made Minami Kyushu Coca-Cola
Bottling Co., Ltd. a wholly owned
subsidiary (as of April 1).

Our History(details of mergers, etc.)

2009Entered into a capital and business alliance with Minami Kyushu
Coca-Cola Bottling Co., Ltd. (Minami Kyushu CCBC)▶ Made a 20-percent investment in Minami Kyushu CCBC andmade it an equity-method afﬁliate.

2007

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

2006
2001

2013

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

Integrated the management of Kinki Coca-Cola Bottling Co., Ltd.
(Kinki CCBC)▶ Joint stock holdings company Coca-Cola West Holdings Co.,
Ltd. (CCWH) was established.

1999
Made Mikasa Coca-Cola Bottling Co., Ltd.
(Mikasa CCBC) a subsidiary.

1960

Sales territory
41,493,000[Population] 33%
Nationwide
127,515,000

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

(2012)■ Kita Kyushu Coca-Cola Bottling Co., Ltd.
■ Sanyo Coca-Cola Bottling Co., Ltd.

■ Coca-Cola West Group■ Kinki Coca-Cola Bottling Co., Ltd.

●Coca-Cola West Co., Ltd.

■ Mikasa Coca-Cola Bottling Co., Ltd.

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

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

In and before 1998

As of April 1, 20135
Annual Review 2012

Business Model Transformation
To be a company that will continue growing over the long term, we are striving to implement Business Model
Transformation aimed at integrating our procurement, manufacturing, logistics, and sales activities from a
consumer-oriented perspective.
Procurement

Manufacturing

Logistics

Service Model Optimization(Sales Activity Initiatives)
To offer the best possible service to each and every one of our customers, we are
implementing quantitative and qualitative sales improvements. In 2012, wedeveloped sales activities based on a new model in the Osaka area.
We divided our customers into groups based on business pattern and size andimplemented sales activities deemed to be optimal for each group. We did this toimprove both our services and the productivity of our sales activities. We used IT tools
to increase the number of customers we can visit per day and the sales activity hours
in stores, and thus expanded the points of contact with our customers.
We also undertook new efforts to build and strengthen relationships with ourcustomers by developing sales activities carefully tailored to their needs. For
example, we began using our Contact Center, which has the primary function oftaking orders and handling machine repair requests, to make regular contact with
them.

Logistics Process Transformation(Logistics Initiatives)
We are striving to build a new logistics network structure so that we can improve
our logistics services while minimizing costs. In 2012, we established new logistics
networks in the Nagasaki and Osaka areas, which are currently on trial to verify theireffectiveness with a view to creating the foundations needed for expanding our
networks to our entire coverage area.
By concentrating inventory previously stored at each sales warehouse at our newly
created Distribution Centers, and thus managing those products centrally, we areable to reduce inventory and improve product freshness. We also shifted to a more
efﬁcient, ﬂexible logistics system through shipment planning using advanced IT tools.
Moving forward, we will strive to improve the service we offer to consumers byefforts such as trial implementation of a system for collecting vending machine sales
information online, which will help keep vending machines well stocked and meet
consumer needs more accurately.

6
Annual Review 2012

Sales
activities

Consumers
Customers

Overview of Sales Results
Overview of Sales Results

Soft Drink Market in Japan

Soft Drink Market Trends
The production volume of soft drinks hit the highest level ever in 2012, making this the third consecutive year of continued market growth. By productcategory, increases from the previous year were reported in carbonated beverages, coffee beverages, tea beverages and mineral water. Over the past 20
years, the Japanese soft drink market has grown about 1.7 times in size.
(Unit: 1,000 kl)

Production Volume of Soft Drinks

Composition Ratio byCategory for 2012

19,76620,00017% OtherSports and
8% functional drinks
14% Mineral water

16,167
15,00011,506
10,00028% Tea beverages
15% Coffee beverages

5,000

18% Carbonated beverages*
0
1993

2002

*Starting in 2012, beer-ﬂavored
carbonated beverages and otheralcohol-free beverages are excluded.

2012

Source: Statistical Report on Soft Drinks, Japan Soft Drink Association, a General Incorporated Association(Data for the year 2012 is preliminary.)

Overview of Our Sales Territory
Our company has secured the number one spot in the soft drink industry, and is number one in market share in many of the major categories, including
carbonated beverages and canned coffee.

Over-the-Counter Sales
Market Share for 2012(excluding vending
machines)

Coca-Cola
West

22.4%

Source: Store Audit, Intage, Inc.

Installed Outdoor
Vending Machine
Share for 2012

Coca-Cola
West

30.8%

Source: Survey of Vending Machines, Intage, Inc.
(survey period from May 2012 to June 2012)

Over-the-Counter Sales Market Share by Category for 2012 (excluding vending machines)
Carbonated beverages

Coca-Cola
West

40.7%

Canned coffee

Blend tea

Coca-Cola
West

36.9%

Source: MBI conducted by Intage, Inc.

7
Annual Review 2012Sports andfunctional drinks

Coca-ColaWest

Coca-Cola
West

54.0%

47.3%

We operate our business activities in the market by establishing sales divisions by sales territory under the "Trade
Marketing*" method, a marketing technique based on consumers’ purchasing behaviors.
*Trade Marketing: A brand marketing expansion method at sales sites. Its purpose is to build sales site strategy for increasing the volume and value of purchased items through customer- and consumer-related knowledge management.
In order to deliver increased sales volume and value, trade marketing supports sales teams with well-designed fundamental enhancement plans.

Approach for Trade Marketing
Our efforts for differentiation and diversiﬁcation of sales methods (including brands, packages, sizes, and prices) according to businesscategories or sales sites lead to the provision of products suitable to consumers’ drinking preferences. By deploying detailed marketing operations
from a consumer-oriented viewpoint, we are seeking to increase sales volume and proﬁts and expand our market share.
In vending, we will pursue vending machines that are attractive to consumers and select products depending on characteristics of the locationand the season along with thorough price strategies. Through these efforts, we will increase sales volume per vending machine. In terms of chain
store, we will attend reliably to consumers’ needs by differentiating and diversifying our assortment (in terms of category, size, and price) according
to particular business conditions and sales sites. In retail stores and food service, we will strengthen relationships with our customers by proposing
products and sales methods that suit their business environments, thereby improving our service to them.

Consumer

Chugoku
Sales Division

Vending

KyushuSales Division

Key AccountSales Division

Purchase information

Purchase information

Kansai
Sales Division

Liquor shops/
Food retailers/
Restaurants/etc.

Supermarkets/
Convenience stores

Vending machines

Retail Store/Food Service

Chain Store

Marketing based on purchase behavior of consumers

Coca-Cola West Co., Ltd.
Feedback ofmarketing information

Consumer-oriented formulationof brand strategy

Coca-Cola (Japan) Co., Ltd.
Point of Sales
Vending Machines

Summer
type

Supermarkets

Wintertype

Assortment of products varied according to the season.

Development of sales locations according to consumers’ drinking preferences.

8
Annual Review 2012

Overview of Sales Results

Trade MarketingOverview of Sales Results

Sales Activities by Channel

We have about 300,000 customers in our sales territory. We are working on developing specialized systems for the
speciﬁc sales formats (channels) in which each customer operates, conducting various activities in collaboration withthose customers, and improving consumer satisfaction.
●Sales Volume by Channel(Unit: 1,000 cases, %)

2011

2012

Percentagechange■Vending

54,20551,796(4.4)■Supermarket

50,09951,290+2.4■Convenience Store

20,312

21,080+3.8■Retail Store

13,166

12,556(4.6)■Food Service

19,302

19,828+2.7■Other30,69030,264

(1.4)

Total

187,773

186,814(0.5)■Composition of Sales Figures in 2012
Other
16.2%

Vending
27.7%

Food Service
10.6%
Retail Store
6.7%
Convenience Store
11.3%

Supermarket
27.5%

24h

Chain Store (Supermarkets, Convenience Stores, etc.)

In the chain store channel we maintain our presence in supermarkets, convenience stores, and other
outlets, designing product selections to suit store conditions and consumer needs and conducting
campaigns that are linked with speciﬁc seasons or topical events.
In 2012, we installed sales equipment such as coolers and racks in supermarkets, and enriched ourselection of small-container products. During special events, we made every effort to create sales
spaces that would appeal to consumers, such as large-scale product displays that tied in with theLondon Olympics. As a result, our supermarket sales volume for 2012 was up over the previous year.

Retail Store/Food Service
In the retail store/food service channel, we conduct sales through retailers, restaurants, and bars.
We install sales equipment suitable to each customer's ﬁeld of business, including soda fountains,regular coffee machines, and coolers, so as to offer consumers a full variety of beverages.
In 2012, we proposed sales methods tailored to each customer's business style, hence working to
improve the services we provide to both customers and consumers. Examples included the sale of sets
combining small containers of Ayataka or Sokenbicha with lunch boxes in retail locations andall-you-can-drink programs at restaurants through the use of soda fountains.

9
Annual Review 2012

Overview of Sales Results

Vending (Vending Machines)
Through the vending channel, we deliver products directly to
consumers through vending machines.
In 2012, we strove to improve the value our vending machines offer
to consumers by introducing new and redesigned products and by conducting the Happy Can
campaign, through which pin-back buttons and other prizes were distributed with vending machinepurchases. We have also been conducting activities aimed at achieving optimal product selections for
speciﬁc machine locations. For example, we are stocking machines in ofﬁces with screw-top cans andPET bottle products that are resealable and easily portable, and loading machines in schools withhydrating sports drinks.
In 2013, we conduct activities including the strengthening of new market exploration activities atindoor locations such as ofﬁces and hospitals, with the goal of increasing our total vending machine
numbers. We plan to install 6,400 of our new Peak Shift Vending Machines*1 over the course of theyear and achieve a net increase in our number of vending machines while responding to the needs ofcustomers and consumers.
Furthermore, through collection and analysis of sales information, we will pour our efforts into thedevelopment of promotions that make the best use of optimal product lineups and installation
locations. In these and other ways, we strive to ensure that our vending machines provide optimal
support for consumers’ daily lives.
*1

Peak Shift Vending Machines
Peak Shift Vending Machines are machines that, in the daytime during the summer, use no electricity forcooling and cut power consumption by 95%, while continuing to supply cold products for as many as 16 hours.
These machines shift the consumption of electricity used for cooling from the daytime hours when power
demand generally peaks to the nighttime hours when demand is relatively less.
We also improved the insulation and airtightness of our vending machines compared to previous models. This
has not only enhanced product cooling efﬁciency, especially during high-temperature seasons, but reduced theconsumption of electricity used for heating by increasing product heating efﬁciency during winter, thus allowing
electricity consumption to be reduced throughout the year.
Peak Shift
Vending Machines

Six Achievements of Our Peak Shift Vending Machines
1

16

hours

2

Higher energy efﬁciency than aheat pump (amount ofelectricity consumed)85. times

Offers 8.5 times the energy savings of heat pumpvending machines, even in the winter.*2

3

-95 %

Keep products
cold for 16 hours

Can supply chilled products even if the coolingsystem is shut off for 16 hours during the daytime insummer.

4

Cuts daytime
summer electricity
consumption

Cuts electricity consumption by 95%.

5

25

%

Shortercooling times

Because of the high cooling efﬁciency, theamount of cooling time needed after restocking
is cut by 25%.*2

No machine noise
when the coolingsystem is off0

Absolutely quiet during the day.

6

Reducesannual electricity
consumption

10%

or
more

Reduces electricity consumption by 10% or more
not only during the summer peak usage period, but
year round.*2*2 Compared to average for same category machines manufactured in 2012; according to survey conducted by Coca-Cola (Japan) Co., Ltd.

10
Annual Review 2012

Overview of Sales Results

Sales Activities by Brand

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

Coca-Cola

Coca-Cola ZeroI LOHASCore
Ayataka

8 brands

Fanta

Aquarius

Georgia
Sokenbicha●Sales Volume by Brand(Unit: 1,000 cases, %)Percentagechange■Composition of Sales Figures in 2012

2012

■ Coca-Cola

13,962

12,882(7.7)■ Coca-Cola Zero

6,509

5,945

(8.7)

■ Fanta

8,424

7,304

(13.3)■ Georgia

39,17638,984(0.5)■ Sokenbicha

12,34810,446(15.4)■ Aquarius

19,99918,769(6.1)■ Ayataka

8,298

10,192+22.8

I LOHAS
4.4%■ I LOHAS

6,889

8,295

+20.4

Ayataka
5.5%■ Other

72,16873,997

+2.5

Total

187,773

186,814(0.5)

Core 8 brands

2011

11
Annual Review 2012

Coca-Cola
6.9%
Coca-Cola Zero
3.2%
Fanta
3.9%

Other
39.6%

Georgia
20.9%

Sokenbicha
5.6%
Aquarius
10.0%Core 8 brands

60.4%

In 2012, taking full advantage of The Coca-Cola Company's status as a Worldwide Olympic Partner, we sold Coca-Cola and
Coca-Cola Zero in limited-edition original packaging for the London Olympic Games. To mark the 5th anniversary of Coca-Cola Zerosales, we conducted campaigns well suited to our brand image, including a tie-up with the latest James Bond movie.
Since its launch in 2007, sales volume for Coca-Cola Zero has continued to grow steadily, and in 2012, total sales for Coca-Colaand Coca-Cola Zero were up 29.2% from 2007.

Sales Volume for Coca-Cola and Coca-Cola Zero
Coca-Cola Zero
Coca-Cola

James Bond
movie tie-up(Unit: 1,000 cases)

25,000+29.2%

20,00015,00018,827

14,572

10,000
5,000

0
2007

2012

Market launch of Coca-Cola Zero

Packaging for the London Olympic Games

Georgia
In 2012, we took steps to revitalize our branding and strengthen sales by redesigning the packaging of our Emerald Mountain Blend
Series and our European Series, two core product lines that account for about 60% of our Georgia brand sales volume. The 2012 sales
volume for these core products rose 11.9% over the previous year.
Furthermore, we strove to increase sales by conducting a nationwide campaign around our custom-designed courier bag and a
Happy Can campaign at vending machines, where Georgia products account for a large share of total sales. At supermarkets andconvenience stores, we are strengthening our lineup of products that better satisfy consumer needs, with such efforts as theintroduction of new slim PET bottles designed for easier portability.
Emerald Mountain Blend
Series redesign

Sales Volume for Georgia Core Product Lines
Emerald Mountain Blend Series
European Series(Unit: 1,000 cases)

30,000Happy Can campaign+11.9%

25,00023,802

21,28020,00015,00010,0005,000

Slim PET bottles

European Series
redesign

0
2011

12
Annual Review 2012

2012

Overview of Sales Results

Coca-Cola / Coca-Cola Zero

Overview of Sales Results

Ayataka
Made from tea leaves produced in carefully selected growing regions across Japan, Ayataka is distinctive for its "genuine ﬂavor andinherent cloudiness of classic Japanese green tea that tastes fresh-poured from the pot." In 2012, we deployed a Nationwide Ayataka
Taste Test campaign to highlight the product's appeal, encouraging consumers to compare the taste of this tea to other green teas. We
made an all-out effort to place this tea in the optimal sales locations in supermarkets and other stores, displaying it alongside everyday
side dishes and typical Japanese-style confections.
As a result of these activities, sales volume for Ayataka in 2012 rose 22.8% over the previous year.
Sales Volume for Ayataka(Unit: 1,000 cases)

12,000+22.8%

10,192

10,000
8,298

8,000
6,000
4,000
Nationwide Ayataka Taste Test campaign

0
2011

2012

I LOHAS
In 2012, we conducted a program to donate a portion of sales revenues to Local Water support projects for the preservation ofregional water resources. We also launched new packaging in the form of a 340 ml PET bottle and bolstered sales efforts primarily atconvenience stores. In addition, we strengthened our product lineup with the addition of I LOHAS RINGO, a ﬂavored water made using
extract from apples produced in Nagano Prefecture.
As a result of these activities, sales volume for I LOHAS in 2012 rose 20.4% over the previous year.
Sales Volume for I LOHAS
10,0008,000+20.4%(Unit: 1,000 cases)

8,295

6,889

6,000
4,000
Local Water support project0
2011

340 ml PET bottle

I LOHAS RINGO

2012

2012

ducts
o
r
P
New
Taiyo-no Matecha

Schweppes British Lemon Tonic

Made using 100% mate tea leaves, Taiyo-no Matecha isa much loved tea in South America. While raisingconsumer awareness via TV commercials, we establishedlarge product displays at
supermarkets and sales
locations near premium
meat sections.

13
Annual Review 2012

This reduced-calorie beverage offers the real fruit
taste of 3% fruit juice content. Focusing onconvenience stores and supermarkets, we worked
to expand sales forthis product as astaple carbonatedbeverage.

Coca-Cola West has developed various packaging (both in terms of capacity and container) for each product it sells. We
provide products that meet consumer needs by developing the optimal packaging for each category of customer and sales
venue.

●Main Packaging Formats
Small-sized PET bottle

Medium-sized PET bottle

Large-sized PET bottle

Can

Syrup, Powder●Sales Volume by Packaging
2011

2012

Percentagechange(less than 1,000 ml)

41,52445,403+9.3■ Medium-sized (less than 1,500 ml)

1,138

1,318

+15.8

■ Large-sized

35,55036,497+2.7■ Small-sized

P
E
T(Unit: 1,000 cases, %)Subtotal(1,500 ml or more)

78,212

83,218

+6.4

■ Can

55,98051,765(7.5)■ Other

12,744

12,292(3.5)■ Syrup, Powder

40,83739,539

(3.2)

Total

187,773

186,814(0.5)

14Annual Review 2012

■Composition of Sales Figures in 2012

Syrup,
Powder21.2%

Small-sized
PET bottle
24.3%

Other
6.6%

Medium-sized
PET bottle
0.7%

Can
27.7%

Large-sized
PET bottle
19.5%

Overview of Sales Results

Sales Activities by Packaging

Corporate Social Responsibility Activities

Corporate Social Responsibility Activities
Initiatives through Our Business Activities as a Community-Oriented Company

Through our vending machine business, which is a major sales channel for the company, we are striving to contributeto the development of local communities and to facilitate the creation of communities where residents can enjoy safety
and peace of mind.
Community-Support Vending Machines that support local communities
We engage in activities that support local communities through our vending machines. When consumers purchase soft drinks from these vending
machines, a portion of the sales revenues is used to support social projects, events, and sports organizations within the community. This allows us to work
together with our customers and consumers in supporting local communities. As of the end of 2012, 4,049 of these vending machines were in service.
■Scheme for the Support of Local Activities through Community-Support Vending Machines

Purchase at Community-Support Vending Machines

Support for Welfare

Support for Town Development

A portion of the sales revenue is donated to activity funds.

Support for Tourism

Cancer Eradication Campaign
Support Vending Machine

Takahashi-shi Town Development Karatsu Tourism Support
Support Vending Machine
Vending Machine

Other examples• Japanese Red Cross• Orange Ribbon Campaign• Child Abuse Prevention
Campaign

Other examples• Tachiarai-machi Town
Development• Unnan-shi Town Development• Nakazaki-cho Town
Development

Other examples• Shimonoseki Tourism• Tsuyama City Tourist Agency• Awaji Island Festival

Support for Environment

Support for Professional Sports

Fukuoka City Greenery Association
Support Vending Machine

Gamba Osaka Support
Vending Machine

Other examples• Daisy Coral Environmental
Preservation and Survey• Settsu City Environment• Toyooka City Oriental Stork

Other examples• Avispa Fukuoka• Fagiano Okayama• Ange Violet Hiroshima

Disaster-Response Vending Machines to provide relief during emergencies
In the event that supply lines are severely disrupted by earthquakes or other disasters, Disaster-Response Vending Machines can be set to provide free
soft drinks to residents in disaster-stricken areas by remote control from local administrative ofﬁces via telecommunications network. These machines arealso outﬁtted with digital displays that provide real-time information such as emergency evacuation sites and maps. As of December 31, 2012, we haveinstalled a total of 499 Disaster-Response Vending Machines to contribute to the safety of local residents.
■Scheme of Disaster-Response Vending Machines

Disaster strikes

Municipalities

Free drink supply

Delivery of disaster
information messages◆Disaster Information◆

Disaster-Response
Vending Machine

15
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In order to provide safe, secure, and fresh products, we strive to maintain thoroughgoing quality management in every
aspect of our business until our products are in consumers’ hands.
We have established a stringent quality control structure under the "KORE*1" management system, a system uniquely formulated by the Coca-Cola
System as a global standard. Starting with obtaining international standard certiﬁcation (ISO9001*2, FSSC22000*3, OHSAS18001*4, ISO14001*5) at our
manufacturing plants, we carry out quality control in warehouses, in logistics facilities, at outlet stores, and other sales channels so that we can ensure thehigh quality of our products at the point of consumption.
*1

KORE: Coca-Cola Operating Requirements
ISO9001: Quality Management System*3
FSSC22000: Food Safety Management System*4
OHSAS18001: Occupational Health and Safety Assessment Series*5
ISO14001: Environmental Management Systems*2

Manufacturing

Logistics

We produce reliable
beverages for
consumers to enjoy
drinking.

We punctually and promptly
deliver safe, secure andhigh-quality products.

(Storage / Transportation)

Sales
We work day in day out to offer
fresh and tasty beverages.

Supermarket

PlantsWarehouses

1
16
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Stores,Vending machines

Consumers

MaintenanceHygiene Control

We treat breakdowns ofvending machines as ahighest priority.

We practice reliable
quality control to"secure food safety."

Corporate Social Responsibility Activities

Quality Control Initiatives

Corporate Social Responsibility Activities

Global Environmental Protection Activities

Initiative for Energy Usage Reduction – Our Global Warming Initiative –Because we want to leave a habitable global environment for future generations, we are striving to reduce our energy usage
and greenhouse gas emissions, which cause global warming. In 2012 our vending machine initiatives continued, and we wereable to reduce our greenhouse gas emissions by 5% from the previous year, for a total of reduction of 28% from 2004 levels.
(Unit: 1,000 t-CO2)■Greenhouse Gas Emissions (CO2)
Vending Machines
Others28% below
2004 levels

600
548
400

337

411

427

390

229

219

199

212

198

192

191

2004
Reference year

2010

2011

2012

200

0

Vending Machine Initiatives
We are promoting the introduction of more non-Freon Environmentally Friendly Vending Machinesthat have a low global warming effect. We are striving to reduce electricity consumption by promoting
the use of machines that efﬁciently heat products using the heat pump method and machines
equipped with solar panels and LED lighting. As of the end of 2012, as part of our efforts to prevent
global warming, we had placed about 64,000 Environmentally Friendly Vending Machines using
natural coolants in service.
Also, we have been continuing with the installation of Peak Shift Vending Machines since the startof 2013, which reduce daytime electricity consumption by 95%.

■Number of Environmentally Friendly Vending
Machines in Service(Unit: Number)Heat-pump method non-Freon type
Non-Freon type

63,89760,00046,00940,00029,32720,0001,145
059,79842,43328,182
3,576
2010

4,099
2011

2012

Other Initiatives
Transportation

Manufacturing

We are improving the efﬁciency of our shipping activities by using large
vehicles to transport products between plants and warehouses, and areworking to cut down on vehicle fuel consumption by promoting the use ofcompact vehicles for sales activities, such as visits to our customers.
Furthermore, in 2012 we pushed forward with the adoption of eco-cars
that are friendlier to the environment, such as hybrid and electric vehicles.
A total of 100 eco-cars were introduced.

In the manufacturing processes used at our plants, we are shifting to
the use of natural gas, which offers lower CO2 emissions than heavy oil,and introducing co-generation systems.**Co-generation system: A system that generates power using a gas engine, uses the waste heat created in the
power generation process to create hot water or steam, and then simultaneously
supplies both electricity and heat.

■Number of Eco-Cars(Unit: Number)Hybrid cars
Natural gas cars
Electric cars

357

300

257
197

200

277

OfﬁcesIn our ofﬁces, we are making efforts to be pro-environment andconsiderate of local communities by, for example, switching to LED
lighting, promoting seasonally appropriate work attire, and periodicallyshutting off air-conditioners during summer.

191
140

100
0

3

54
2010

18

48
2011

47
33
2012

17
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To fulﬁll our social responsibility as a company that uses water as an irreplaceable key ingredient in our products, we areengaged in efforts to reduce our water use, recycle water, and protect local water resources.

Reduction of Water Consumption

Water Recycling

We strive to make effective use of water in our manufacturing
processes. Our water use in 2012 was down 4% from the previous year
on a primary unit* basis to 5.5 L/L.
*Primary unit: water needed to create 1 liter of a product.

■Water Usage and Primary Unit
Used amountPrimary unit

(per 1,000 m3)

9,000
8,000

6.1
7,616

5.7

5.5

(L/L)

7

■Plant Water Treatment Flow Chart

6
5

7,479
6,932

7,000

We carefully collect the water used during the manufacturing process
and recycle it by using it for rinsing and cooling purposes. We control thequality of wastewater we release into the river system, ensuring that itmeets company standards that are even more stringent than what isrequired by law, and thus are reducing the burden our activities place on theenvironment.

Well water,
tap water,industrial water

4
3

6,000

Primarytreatment

Secondarytreatment

2

5,000

1

0

0

2010

2011

2012

Used forrinsing,cooling

Wastewater
processing

Used inproducts
Rivers,seweragesystemCollection,
treatment,
reuse

Local Water Resource Protection
As a company that strives to be a good partner for local communities,
we work with local residents on forest preservation activities at the foreststhat provide water resources to our six plants, and in so doing are striving
to protect these water-producing regions.

Waste Recycling Initiatives
We encourage the effective use of resources by actively promoting the collection and recycling of empty containers and therecycling of waste produced as a result of our business activities.
At the Kita Kyushu Sawayaka Recycling Center, which began operations in 2003, collected containers are sorted into steel cans, aluminum cans, PET
bottles, and glass bottles for efﬁcient recycling. Even our vending machines are subject to waste processing. At the end of their life cycle, they aredisassembled and sorted into their component parts so that they can be recycled into steel materials and other items.
In addition to trying to reduce waste generated by our manufacturing process, we also work to sort and recycle any waste produced. We recycle morethan 99% of all our waste products, converting spent coffee grounds and■Volume and Recycling Rate of Waste from Production Plants in 2012tea leaves into organic fertilizer and combustion aids, and turning paper
VolumeRecycling
Generated
Waste Type
Recycling Usage
waste into cardboard and recycled paper.
Rate(tons)
Coffee grounds
Tea leaves
SlurryWaste plastic
Glass
MetalsKita Kyushu Sawayaka Recycling Center

Paper
Waste oil
Other
Total

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22,299100.00%10,069100.00%5,396

100.00%940

99.66%

181

99.96%

416

98.52%

11

99.17%

1,008

100.00%632

99.81%

40,95299.974%

Organic fertilizer,
combustion aids
Recycled plastic fuelRecycled cullet
Recycled iron and steel,aluminum cans
Cardboard, recycled paper
Recycled oil
Base course material, etc.

Corporate Social Responsibility Activities

Water Resource Protection Activities

Corporate Social Responsibility Activities

Local Community Contribution Activities, Local Environment Improvement Activities

With the consent of our shareholders, we use
surplus ﬁnancial resources to fund activities that
contribute to local communities and promote thelocal environment.
The activities we supported in 2012 are described
below.

Resolutions of the general meeting of shareholders
Appropriation of funding retained earnings■ Dividends■ Reserve fund

• Reserves for contribution to local communities• Reserves for environmental protection of local communities■ Retained earnings at beginning

Local Community Contribution Activities
Under our basic stance, "with local communities," we encourage the healthy development of youth and also encourage closer
communication with communities. Our four major supporting activities are social welfare, sports activities, cultural andeducational activities, and major regional events.

Donation of Educational Materials
to Special-Needs Schools
We have been donating information equipment(computers and peripherals) to special-needs schools
since 1993 to help mentally and physically disabledstudents gain self-reliance.
In 2012, we donated teaching tools to 15 schools inour sales territory.

Donation of Unicycles to Elementary Schools

Hockey Clinic

With our wish for children as leaders of the next
generation to grow healthily and to acquire
cooperativeness and patience through sport activities, wehave been donating unicycles to public elementary
schools since 1994. Unicycles are appreciated for theirrole in helping develop the nervous system and improve
reﬂexes and are included in the curriculum guidelines
established by the Ministry of Education, Culture, Sports,
Science and Technology as instructional tools that can beused for teaching children.
We donated 1,000 unicycles to 100 schools in oursales territory in 2012.

Our company hockey team members provide hockey
instruction to a wide range of age groups, from young
children to university students, to help them improve theirhockey skills. By holding clinics not only for students, butalso for instructors, we are able to convey the importanceof basic skills and safe ways to compete in the sport.
In 2012, hockey clinics were held in Osaka andHiroshima Prefectures.

Classical Music Concerts

Family Musicals

Ichimura Shizenjuku-Kyushu

To create an afﬂuent society (cultivation of spiritualhuman resources), we have been sponsoring Coca-Cola
West Classic Concerts for local residents to enjoy live
performances of the ﬁnest classical music since 1989.
In 2012, we held the Wiener Ring Ensemble New
Year's Concert in Fukuoka, the London SymphonyOrchestra Brass Quintet Concert in Hiroshima, and theHans-Jörg Schellenberger & Camerata Salzburg Concert
in Osaka. These masterful performances were a real treat
for the local residents who had the pleasure of attending.

Held during summer break since 1994, Coca-Cola
West Family Musicals foster family ties by providing aplace where children and parents alike can enjoy musicalperformances together.
In 2012, we arranged performances of Kiri no muko
no fushigina machi, a long-popular fantasy which was theoriginal basis for the animated movie Spirited Away, atthree locations in Fukuoka, Hiroshima and Osaka
Prefectures. We invited local residents to come out andenjoy the performances with their families.

This school has been supporting healthy development
and growth of children under the basic ideal of "Learnenergy to live from the earth" since it was established in
2003. The year 2012 marked the 10th anniversary of its
foundation. Through farming activities and communal life,
the program offers children some opportunities to learn
moral principles and promotes independence andcreativity.

1199
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Corporate Social Responsibility Activities

Local Environment Improvement Activities
We recognize global environmental protection as a crucially important issue, and therefore, we contribute to the developmentof sustainable society with the slogan of "Sawayaka for people and the environment (ﬁne people and pleasant environment)."
2012

Sawayaka
Shizen-no-Mori
Area Map

Conservation Activities at "Sawayaka Shizen-no-Mori"
We have designated the forests that provide water resources to our six plants as "Sawayaka
Shizen-no-Mori" and we work with local governments in each area to conduct forest preservation
activities that help protect those water resources.
In 2012, as many as 425 community residents, including our employees and their family
members, participated in activities at the Sawayaka Shizen-no-Mori in the prefectures of Shiga,
Kyoto, Hyogo, Tottori, Hiroshima, and Saga. Through pruning and trimming activities, we worked
to protect the forest and strove to promote environmental education among children.

Tosu
Sawayaka
Shizen-no-Mori(17 ha)Tottori Sawayaka
Shizen-no-Mori(5 ha)

Hiroshima
Sawayaka
Shizen-no-Mori(7 ha)

Hyogo
Sawayaka
Shizen-no-Mori(10 ha)Kyoto Sawayaka
Shizen-no-Mori(12 ha)Shiga
Sawayaka
Shizen-no-Mori(11 ha)Environmental Instructor Trainings

Environment Classes at Schools

Local Community Cleanup Activities

We hold Environmental Instructor Trainings forelementary school teachers who teach young children
and help raise environmental awareness in theclassroom.
In 2012, we contributed to environmental education inelementary schools by holding lectures, hands-on
lessons, and workshops on developmental lessons inscience education for a total of 84 teachers from theprefectures of Fukuoka, Okayama, and Hyogo.

We hold Environment Classes at Schools to help
children better understand the importance of theenvironment in which we live.
In 2012, expert instructors visited elementary schools
in Fukuoka and Okayama Prefectures where they held
hands-on, practical lessons on the environment. In Kyoto
Prefecture, we held hands-on lessons in tree growth,from the cultivation of seedlings to the planting of trees,at local forested parks throughout the year.

To facilitate communication between our employees
and local residents, our employees actively participate incleanup activities sponsored by the local governments of
the areas where our business establishments arelocated.
In 2012, as many as 1,200 employees and theirfamily members participated in activities conducted at 26
locations within our sales territory, contributing to thebeautiﬁcation of those communities.

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Financial Information
Financial Information

Analysis of Operating Results

Outline of Business Results for Fiscal 2012

Operating Results■ Net Revenues
In the Soft Drink Business, net revenues fell ¥13,359 million from theprevious year, to ¥350,110 million (a 3.7% year-on-year (YoY) decrease) due
mainly to changes in the sales mix associated with a heightened consumer
interest in saving money. In the Health Food Business, on the other hand, net
revenues rose ¥1,738 million from the previous year to reach ¥36,527 million (a5.0% YoY increase) due mainly to favorable sales conditions for skin careproducts. Our consolidated net revenues fell ¥13,079 million to ¥386,637
million (a 3.3% YoY decrease).
■ Operating Income
In the Soft Drink Business, efforts were made to cut costs by increasing
productivity, but operating income nonetheless fell ¥3,413 million to ¥8,061
million (a 29.7% YoY decrease) due mainly to the effects of decreased net
revenues and high prices on raw ingredients and materials. The Health FoodBusiness, meanwhile, was a major driver of increased sales, with operating
income in that business increasing ¥413 million over the previous year to¥5,402 million (an 8.3% YoY increase). As a result, consolidated operating
income fell ¥3,005 million to ¥13,463 million (an 18.3% YoY decrease).
■ Recurring Income / Net Income
Recurring income dropped ¥2,198 million to ¥13,845 million (a 13.7% YoYdecrease) largely as a result of the decline in operating income. Net income
dropped ¥965 million to ¥6,031 million (a 13.8% YoY decrease) largely as aresult of the decline in recurring income.

Financial Position
Our equity ratio for the current period was 68.4%, indicating that thecompany remains in sound ﬁnancial standing.

previous period). This was largely due to amortization of goodwill.
Our liabilities at the end of the current period fell ¥8,403 million from theprevious period to ¥106,292 million (a 7.3% decrease from the end of theprevious period). This was primarily due to a decrease in our accounts payable
and scheduled payments on our long-term loans payable.
■ Net Assets
Net assets as of the end of the current period increased by ¥3,191 million, or
1.4%, from the end of the previous period, to ¥231,056 million. This is mainly
attributable to net income for the current period.
■ Consolidated Cash FlowsNet Cash Provided by Operating Activities
Net cash provided by operating activities was positive ¥26,324 million(positive ¥39,960 million in the year-ago period). Expenditures of working
capital caused by changes in inventory assets and accounts payable increased¥10,811 million, and income taxes paid increased ¥1,488 million. As a result,net cash provided by operating activities fell from the previous year by ¥13,636
million.
Net Cash Provided by/Used in Investing Activities
Net cash provided by/used in investing activities was negative ¥14,243
million (negative ¥34,050 million in the year-ago period). In the current period,
due mainly to revenues of ¥31,843 million from the redemption of marketablesecurities, the net cash provided by/used in investing activities increased¥19,806 million from the previous year.
Net Cash Provided by/Used in Financing Activities
Net cash provided by/used in ﬁnancing activities was negative ¥7,149
million (negative ¥8,780 million in the year-ago period). Due to expenses for the
repayment of lease obligations falling, net cash provided/used by ﬁnancing
activities for the current period increased ¥1,630 million from the previous
period.

■ Assets and Liabilities
Our total assets at the end of the current period fell ¥5,211 million from theprevious period to ¥337,348 million (a 1.5% decrease from the end of the■ Net Revenues■ Operating Income■ Net Income(Unit: million yen)

400,000

399,717395,556
369,698

375,764

386,637(Unit: million yen)

20,000(Unit: million yen)

8,000

7,582
6,997

16,469

6,031

6,000
300,000

15,00013,463
12,0034,000

10,521200,000

10,0002,000

100,000

129

5,000

0
2,242

0
2009

2010

2011

2012

((7,594)
7,594)(10,000)

0
2008

2008

2009

2010

21
Annual Review 2012

2011

2012

2008

2009

2010

2011

2012

Financial Information

Segment Information

Business Results by Business Segment■ Soft Drink Business
Following our product strategy, we continued to concentrate our investments in our eight core brands and strengthened our sales to increase revenues. Pursuant toour channel strategy, we worked to install coolers, racks, and other sales equipment in chain stores (such as supermarkets) and to display our products in the mannerbest suited to the sales location, all in an effort to increase sales of small-container products suitable for immediate consumption. In our vending (vending machine)
channel, we introduced new and redesigned products tailored to each season and selected product lineups based on the characteristics of the vending machine
location, thus striving to make our vending machines more appealing to consumers.
Based on our strategic partnership with The Coca-Cola Company and Coca-Cola (Japan) Co., Ltd., we strengthened our joint marketing efforts and developed various
initiatives tied to the continued growth of the Coca-Cola business.
In the ﬁeld of supply chain management (SCM), we worked to provide products and packages that meet our consumers' diverse needs and achieve cost reductions
through improved productivity by making capital investments in upgrades to our production lines and the introduction of new technologies.
As a result of these efforts, our net revenues in this business for the period ended December 2012 were ¥350,110 million with operating income of ¥8,061 million.
■ Health Food BusinessIn the Health Food Business, we are moving forward with our subsidiary Q'sai Co., Ltd. and its ﬁve subsidiaries.
Our product strategy this year was to strengthen sales of our core health care products, including Kale Powder, Hyaluronan Collagen, and Peptide Ace (food for speciﬁed
health uses), and our Basic Skin Care brand. We also strove to increase sales by introducing a new product to our health care product offerings, Glucosamine Z. In our key
sales channel, the mail order channel, we made efforts to reach out to consumers and maintain our existing base by bolstering the content of mail order television
programming and investing in advertisements designed for efﬁciently drawing in consumers.
As a result of these efforts, our net revenues in this business for the period ended December 2012 were ¥36,527 million with operating income of ¥5,402 million.

(Unit: million yen)

2011Soft Drink
Business

Net revenues*1

Segment income

2012

Health FoodBusiness

Other
Businesses*2¥363,469¥34,788¥1,458¥399,717¥350,110¥36,527¥386,637¥11,475¥4,989¥5¥16,469¥8,061¥5,402¥13,463

Soft Drink
Business

Total

Health FoodBusiness

Total(Unit: 1,000 U.S. dollars)*3

2012

2011

Net revenues*1

Segment income

Total

Soft Drink
Business$16,817$4,608,221$4,036,320$421,112$4,457,433$58$189,874$92,941$62,281$155,222

Health FoodBusiness

Other
Businesses*2$4,190,335$401,068$132,297$57,519

Soft Drink
Business

Health FoodBusiness

*1

Total

Segment income concurs with operating income in the consolidated statements of income.
*2
We sold all the shares we owned in Chugoku Piano Transport Co., Ltd, which previously made up our "Other Businesses" segment, as of January 31, 2012 and divested that company from our consolidated businessusing the sale date of January 1, 2012. Starting with the ﬁscal year ended December 2012, we will only be reporting on our two remaining business segments, the Soft Drink Business and Health Food Business.
*3
Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

Net Revenues
Composition Ratio for 2012

Operating Income
Composition Ratio for 2012

9.4%

■ Soft Drink Business■ Health Food Business

90.6%

22
Annual Review 2012

40.1%
59.9%

■ Soft Drink Business■ Health Food BusinessFinancial Information

Consolidated Balance Sheets (As of December 31)(Unit: million yen)

(Unit: 1,000 U.S. dollars)*

2010

2011

2012

2012

Cash and Deposits¥24,208¥25,208¥22,157$255,449

Trade Notes and Accounts Receivable

23,50725,33523,472

270,611

Marketable Securities

15,737

26,73830,702353,965

Merchandise and Finished Goods

22,355

21,95424,226279,298

231

464

472

5,442

Raw Materials and Supplies

1,396

1,450

1,662

19,164

Deferred Tax Assets (Current Portion)

2,722

4,373

3,885

44,798

Other

13,823

14,177

14,245

164,236

(186)

(504)

(414)

(4,778)103,796

119,197

120,411

1,388,189

Buildings and Structures, net

34,992

33,52532,259371,915

Machinery, Equipment, Vehicles, net

20,155

20,49718,487

213,136

Sales Equipment, net

21,20920,82020,727238,959

Land

53,982

52,77452,208601,892

Leased Assets, net

2,066

963

652

7,526

AssetsCurrent Assets:

Work in Process

Allowance for Doubtful Accounts
Total Current Assets
Fixed Assets:
Property, Plant and Equipment

7

395

2,245

25,886

1,528

1,241

1,173

13,529133,943

130,218

127,754

1,472,847

Goodwill

50,17247,47444,723515,603

Software, etc.

4,282

4,723

5,190

59,841

Total Intangible Assets

54,45452,19849,914575,444

Investment Securities

26,69024,58325,738296,728

Deferred Tax Assets

9,571

4,321

2,206

25,441

Advanced Payments for Retirement Expenses

10,934

5,827

4,729

54,523

Other

7,201

6,788

7,070

81,512

Construction in Progress
Other, net
Total Property, Plant and Equipment
Intangible Assets:

Investments and Other Assets:

Allowance for Doubtful Accounts

(560)

(574)

(476)

(5,491)

Total Investments and Other Assets

53,83840,94639,268452,714

Total Fixed Assets

242,236

223,362

216,9372,501,007

Total Assets¥346,032¥342,560¥337,348$3,889,196*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

23
Annual Review 2012

(Unit: 1,000 U.S. dollars)*

2011

2012

2012

¥14,615¥18,657¥14,502$167,193

Current Portion of Long-Term Loans Payable

2,567

2,542

2,517

29,028

Lease Obligations

1,031

461

403

4,649

Liabilities
Current Liabilities:
Trade Notes and Accounts Payable

Accrued Income Taxes

1,616

2,750

3,006

34,665

Other Accounts Payable

15,55815,656

14,630168,670

Provision for Sales Promotion Expenses

169

160

173

2,002

7,854

6,350

5,753

66,331

43,41546,57940,988472,541

Bonds Payable

50,00050,00050,000576,435

Long-Term Loans Payable

12,816

10,273

7,755

89,414

Lease Obligations

1,231

778

452

5,218

Deferred Tax Liabilities

3,620

2,319

2,624

30,261

Allowance for Employees' Retirement Beneﬁts

5,622

1,018

947

10,920

Provision for Directors' Retirement Beneﬁts

102

117

130

1,502

Other
Total Current Liabilities
Long-Term Liabilities:

Negative Goodwill
Other

207

−

−

−

2,748

3,609

3,393

39,117

Total Long-Term Liabilities

76,34968,11665,303752,870

Total Liabilities

119,765

114,695

106,292

1,225,411

Common Stock

15,231

15,231

15,231

175,605

Capital Surplus

109,072

109,072

109,072

1,257,460

Retained Earnings

127,657

130,655

132,587

1,528,561

Treasury Stock(25,761)(25,764)(25,765)(297,045)

226,199

229,195

231,125

2,664,582(255)(1,703)(449)(5,185)

Total Other Accumulated Comprehensive Income(255)(1,703)(449)(5,185)

Minority Interests

324

373

380

4,387

Net Assets
Shareholders' Equity:

Total Shareholders' Equity
Other Accumulated Comprehensive Income
Net Unrealized Gain (Loss) on Other Marketable Securities

Total Net Assets

226,267

227,864

231,056

2,663,784

Total Liabilities and Net Assets¥346,032¥342,560¥337,348$3,889,196*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

24
Annual Review 2012

Financial Information(Unit: million yen)

2010

Financial Information

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (January 1 to December 31)(Consolidated Statements of Income)(Unit: million yen)

2010
Net Revenues¥375,764
Cost of Goods Sold
203,307
Gross Proﬁt
172,456
Selling, General and Administrative Expenses
160,452
Operating Income
12,003
Non-Operating Income
2,009Interest Income
122
Dividends
263
Amortization of Negative Goodwill
414
Equity in Earnings of Afﬁliates
806
Other Non-Operating Income
401
Non-Operating Expenses
1,352Interest Expenses
708
Loss on Disposal of Property, Plant and Equipment
371
Other Non-Operating Expenses
273
Recurring Income
12,659Extraordinary Income
371
Gain on Sales of Property, Plant and Equipment
218
Gain on Sales of Investment Securities—
Subsidiary Income
118
Gain on Transfer of Business
34
Extraordinary Losses
48
Impairment Loss—
Loss from Disaster—
Loss on Disposal of Property, Plant and Equipment—
Loss on Sales of Shares of Subsidiaries—
Write-down of Investment Securities
48
Write-down of Golf Club Memberships—
Loss on Disposal of Inventories—
Expense for Provision for Power Saving—
Losses Due to Provision for Quality Problems—
Loss on Adjustment for Changes of Accounting Standard for Asset Retirement Obligations—
Income before Income Taxes, Minority Interests and Other Adjustments
12,982
Income Taxes
1,881
Income Tax Deferred
3,488
Total Income Taxes
5,369
Income before Minority Interests—
Minority Interests
30
Net Income¥7,582(Unit: 1,000 U.S. dollars)*

2011

2012

2012

¥399,717
204,472
195,244
178,775
16,469
1,272
70
284
207
139
569
1,698
685
629
382
16,044
431
382
49
—
—
2,462
—
43
715
85
31
16
490
352
—
726
14,013
3,878
3,082
6,960
7,052
55
¥6,997¥386,637
195,842
190,795
177,331
13,463
1,492
85
271
—
631
503
1,110
626
303
181
13,845
64
—
64
—
—
1,723
183
39
—
—
317
10
—
—
1,173
—
12,186
3,895
2,218
6,113
6,072
41
¥6,031$4,457,433
2,257,810
2,199,622
2,044,400
155,222
17,207
985
3,129
—
7,282
5,809
12,807
7,217
3,500
2,090
159,622
742
—
742
—
—
19,872
2,116
453
—
—
3,654
115
—
—
13,531—
140,492
44,90725,57470,48270,010475$69,534*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

(Consolidated Statements of Comprehensive Income)(Unit: million yen)

Income before Minority Interests
Other Comprehensive Income
Net Unrealized Gain (Loss) on Other Marketable Securities
Share of Other Comprehensive Income of Associates Accounted for Using Equity Method
Total Other Comprehensive Income
Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the Parent Company
Comprehensive Income Attributable to Minority Interests(Unit: 1,000 U.S. dollars)*

2010

2011

2012

2012

—

¥7,052¥6,072$70,010————(1,455)8(1,447)¥5,605

1,245
8
1,253
¥7,326

14,35892
14,451$84,461

—
—

5,549
55

7,284
41

83,986475*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

25
Annual Review 2012

(Unit: million yen)

Other Accumulated
Comprehensive Income

Shareholders' Equity
CommonStock
Balance as ofJanuary 1, 2012

CapitalSurplusRetained
Earnings

Total
Shareholders'EquityTreasuryStock

Net Unrealized
Total Other
Gain (Loss) on Accumulated
Other
Comprehensive
Marketable
IncomeSecurities

Minority
Interests

Total Net
Assets¥15,231¥109,072¥130,655¥(25,764)¥229,195¥(1,703)¥(1,703)¥373¥227,864

Distribution of Dividends——(4,098)—(4,098)———(4,098)Net Income

—

—

6,031

—

6,031

—

—

—

6,031

Acquisition ofTreasury Stock

—

—

—

(2)

(2)

—

—

—

(2)

Cancellation ofTreasury Stock

—

—

(0)

0

0

—

—

—

0

Net Changes in Items Other thanShareholders'Equity during the
Fiscal Year

—

—

—

—

—

1,253

1,253

7

1,260

Total Changes during
the Fiscal Year

—

—

1,932

(1)

1,930

1,253

1,253

7

3,191

¥15,231¥109,072¥132,587¥(25,765)¥231,125¥(449)¥(449)¥380¥231,056

Changes during theConsolidated Fiscal Year 2012

Balance as ofDecember 31, 2012

(Unit: 1,000 U.S. dollars)*

Other Accumulated
Comprehensive Income

Shareholders' Equity

Net Unrealized
Total Other
Gain (Loss) on Accumulated
Other
Comprehensive
Marketable
IncomeSecurities

Minority
Interests

Total Net
AssetsCapitalSurplusRetained
Earnings

Treasury
Stock

Total
Shareholders'Equity$175,605$1,257,460$1,506,284$(297,027)$2,642,322$(19,636)$(19,636)$4,300$2,626,987

Distribution of Dividends——(47,254)—(47,254)———(47,254)

Net Income——

69,534—69,534———69,534

Acquisition ofTreasury Stock

—

—

—

(26)

(26)

—

—

—

(26)

Cancellation ofTreasury Stock

—

—

(3)

8

5

—

—

—

5

Net Changes in Items Other thanShareholders'Equity during the
Fiscal Year

—

—

—

—

—

14,451

14,451

86

14,537

Total Changes during
the Fiscal Year——

22,276(17)

22,25914,451

14,451

86

36,797$175,605$1,257,460$1,528,561$297,045$2,664,582$(5,185)$(5,185)$4,387$2,663,784

CommonStock
Balance as ofJanuary 1, 2012
Changes during theConsolidated Fiscal Year 2012

Balance as ofDecember 31, 2012

*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

26
Annual Review 2012

Financial Information

Consolidated Statements of Changes in Shareholders' Equity (January 1 to December 31)

Financial Information

Consolidated Statements of Cash Flows (January 1 to December 31)(Unit: million yen)

Cash Flows from Operating Activities:
Income before Income Taxes, Minority Interests and Other Adjustments
Depreciation and Amortization
Impairment Gains
Amortization of Goodwill
Amortization of Negative Goodwill
Increase (Decrease) in Provision for Directors' Retirement Beneﬁts
Increase (Decrease) in Liabilities for Retirement Beneﬁts
Decrease (Increase) in Advance Payments for Retirement Expenses
Interest and Dividend Income
Interest Expenses
Equity in Losses (Earnings) of Afﬁliates
Loss (Gain) on Sales of Marketable and Investment Securities
Loss on Sales of Shares of Subsidiaries
Write-down of Marketable and Investment Securities
Loss (Gain) on Sales of Fixed Assets
Loss on Disposal of Fixed Assets
Decrease (Increase) in Accounts Receivable
Decrease (Increase) in Inventories
Decrease (Increase) in Other Assets
Increase (Decrease) in Accounts Payable
Increase (Decrease) in Other Liabilities
Loss on Adjustment for Changes of Accounting Standard for Asset Retirement Obligations
Other
Sub-totalInterest and Dividends Received
Interest Paid
Income Taxes Paid
Income Taxes Refunded
Net Cash provided by Operating Activities
Cash Flows from Investing Activities:
Acquisition of Marketable and Investment Securities
Proceeds from Sales of Marketable Securitas and Investment Securities
Acquisition of Fixed Assets
Proceeds from Sales of Fixed Assets
Acquisition of Shares of Subsidiaries with Change in Scope of Consolidation
Expenses for Sale of Shares of Subsidiaries with Change in Scope of Consolidation
Proceeds from the Sale of Shares of Subsidiaries with Changes in Scope of Consolidation
Acquisition of Shares of Afﬁliates
Proceeds from Transfer of BusinessLong-Term Loans
Proceeds from Collection of Long-Term Loans
Increase in Time Deposits
Proceeds from Refund of Time Deposits
Other
Net Cash Provided by (Used in) Investing Activities
Cash Flows from Financing Activities:
Proceeds from Long-Term Loans Payable
Expenses for Repayment of Long-Term Loans
Expenses for Repayment of Lease Obligations
Expenses for Acquisition of Treasury Stock
Proceeds from Sales of Treasury Stock
Dividends Paid
Dividends Paid to Minority Interests
Net Cash Provided by (Used in) Financing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

(Unit: 1,000 U.S. dollars)*

2010

2011

2012

2012

¥12,982
22,405
—
844
(414)
(3)
(94)
671
(385)
708
(806)
—
—
48
(234)
327
100
2,446
1,083
(3,138)(2,544)—
153
34,149394(897)(2,094)181
31,732¥14,013
21,371
—
2,697
(207)
15
(4,601)
5,106
(355)
685
(139)
(49)
85
31
(404)
1,299
(1,834)
112
(560)
4,052
336
726
228
42,612351(687)(2,746)431
39,960¥12,186
20,643
183
2,643
—
13
(63)
1,098
(356)
626
(631)
(64)
—
317
6
246
1,764
(2,491)225(4,154)(1,746)—366
30,811360(630)(4,235)17
26,324$140,492
237,992
2,116
30,475—151(730)
12,663(4,115)7,217(7,282)
(742)
—
3,654
78
2,842
20,346(28,718)
2,593(47,900)(20,137)—4,220
355,217
4,161(7,265)(48,831)200
303,483(2,230)2,105(15,250)
1,176(35,366)
—
—
(153)
628
(243)
295
(484)
320
—
(49,203)(19,302)4,649(21,890)
2,429
—
(21)
—
—
—
(360)
474
(334)
315
(10)
(34,050)(26,319)
31,843(20,134)
512
—
—
553
—
—
(914)
595
(1,865)1,480
6(14,243)(303,434)
367,112(232,129)
5,908
—
—
6,378
—
—
(10,543)
6,862(21,503)
17,07071(164,207)

15,000(25,613)(1,568)(3)
0(4,098)(33)(16,316)(33,787)
71,221¥37,434—(2,567)(2,204)(3)
0(3,998)(6)(8,780)(2,870)37,434¥34,564—(2,542)(472)(2)
0(4,098)(33)(7,149)4,930
34,564¥39,495—(29,316)(5,448)(26)
5(47,254)(388)(82,429)
56,846398,481$455,328*Amounts in U.S. dollars are presented for the purpose of convenience only. Exchange rate of 86.74 yen against the U.S. dollar (as of December 31, 2012; amounts less than one unit are truncated) is used for conversion.

27
Annual Review 2012

Other Information

Financial information and other data discussed in this annual review

competition, there is the possibility that goodwill associated with ourare subject to a variety of risks. Those risks, deemed most likely to have abusiness in the health food industry could be impaired and could impact

signiﬁcant impact on potential investment decisions, are presented below.

ﬁnancial performance.

The Coca-Cola West Group is fully aware of the possibility of these risks
and thus works to avoid them or effectively deal with them should they(5) Impact of Economic Conditions

arise.

a. Trends in personal consumption

Forward-looking statements herein reﬂect the judgment ofSales of soft drinks are closely linked to trends in personal
consumption. Accordingly, a sudden decline in personal consumption due

management as of March 27, 2013.

to worsened economic conditions or price reductions of the company's(1) Business Agreements with The Coca-Cola Company of the United

products resulting from prolonged deﬂation could adversely affect theoperating results of the group.

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

b. Fluctuations in asset value(2) Quality Assurance

assets owned by the Coca-Cola West Group, as well as in pension assets

Fluctuations in the value of land, marketable securities, and other
Beverages are the core product of the Coca-Cola West Group. The

held in its deﬁned-beneﬁt company pension fund, could potentially impact

group makes every effort to raise employee awareness regarding quality

its operating results and ﬁnancial position. Marketable securities with aand implements programs aimed at preventing incidents concerning

fair value, for example, are subject to changes in fair market value inquality in order to offer its consumers high-quality and reliable beverages.

capital markets, since that is how they are valued.

Nevertheless, in the event of an incident related to product quality, thecompany's brand image could be tarnished, irrespective of whether or not
it was actually at fault. As such, an incident of this nature could adversely(6) Public Regulations
The group's business relating to the manufacturing and marketing ofbeverages and food is subject to a number of regulations in Japan,

affect the operating results of the group.

including the Act Against Unjustiﬁable Premiums and Misleading(3) The Soft Drink Industry

Representations, and the Food Sanitation Law. The group fully complies

a. Impact of market ﬂuctuations

with these and all other regulations in its commitment to providing safe

Sales of soft drinks, the group's core products, are readily inﬂuenced byand reliable products. Accordingly, tougher regulations, for example, mightchanges in consumers' preferences. In a beverage market of this kind, theincur new compliance costs, which could potentially affect the operatinggroup strives to continuously offer appealing products and services.

results of the Coca-Cola West Group.

Nevertheless, failure to amply forecast market changes could potentiallyaffect its operating results.

(7) Management of Personal Informationb. Impact of weather-related factors

information. In handling this information, it works on a uniﬁed basis to

The Coca-Cola West Group holds large volumes of personal
Weather conditions tend to have an effect on the sales of soft drinks.

formulate and adhere to related guidelines and implement ongoing

Cool summers or warm winters, for example, often have a signiﬁcanttraining and educational activities. However, an external leak of personal

impact on consumer demand. Although the group makes every effort toinformation could lead to a deterioration of trust in the Coca-Cola Westminimize the inﬂuence of weather-related factors on sales, it offers noGroup and potentially impact its operating results.

guarantee that it can completely eliminate the effect of such factors.
(8) Impact of Disasters
The Coca-Cola West Group has a system in place to minimize the(4) Health Food Related Industry
The market of health food, which our group is supplying for, is expected

effects of power outages, as well as other problems that could affect its

to grow due to Japan's aging population. However, the competition in thisbusiness operations. Typhoons, earthquakes and other natural disasters,

market has been keen because many companies, including medium andhowever, could create conditions that overwhelm this system. Conditions

small companies, are entering into the market. If our company'sof this magnitude could potentially impact the operating results andcompetitiveness were lessened relatively along with increasing market

ﬁnancial position of the group.

28
Annual Review 2012

Other Information

Risk Information

Other Information

Corporate Governance(1) Fundamental Stance on Corporate GovernanceCoca-Cola West's fundamental stance on corporate governance is to maximize "shareholders' value" by improving management efﬁciency andtransparency.
Coca-Cola West adopted the Audit & Supervisory Board system in accordance with its separation of decision-making and supervisory functions from theexecution of operations of the corporation. In March 1999, we restructured the Board of Directors and adopted the corporate executive ofﬁcer system. In April
2007, this system was extended to the Coca-Cola West Group executive ofﬁcer system in order to increase the efﬁciency of management and to accelerate
its decision-making process to cope with the swift changes to the external and internal business environment. In addition, in March 2006, the terms of
directors were reduced from two years to one year. This effectively highlights the management responsibilities of directors for each ﬁscal year and establishes
an agile management structure capable of responding to a rapidly changing business environment.
In July 2006, we established the Management Advisory Committee, which advises the Board of Directors. This committee solicits advice from prominentindustrial and academic experts to achieve the objectives of improvement of management in both efﬁciency and transparency, which consequently enhanceshareholders' value. The committee is responsible for advising on the following important issues: (i) Important corporate group strategies; (ii) Selection of
appropriate candidates as members of the Board of Directors as well as the Audit & Supervisory Board; and (iii) Executive compensation and rewards.
(2) Contents of the Articles of Incorporationa. Number of directors
Coca-Cola West's articles of incorporation stipulate that there shall be a maximum of 15 directors.
b. Requirements for electing directors
The company's articles of incorporation stipulate that the election of directors shall be by a majority vote, in which at least one-third of the shareholders
with voting rights are present. Resolution for the election of directors shall not be made by cumulative voting.
c. Acquisition of treasury stocks
The company's articles of incorporation stipulate that the company may repurchase its own shares on the market by a resolution of the Board of Directors
in which shareholders' approval is not necessary, pursuant to the provisions of Article 165, Paragraph 2 of the Company Law. The Board of Directors has beenauthorized to repurchase company shares, allowing it to increase capital efﬁciency and to execute a ﬂexible policy of capital structure to cope with thechanging business environment.
d. Determination of interim dividends
The company's articles of incorporation stipulate that the company may, by a resolution of the Board of Directors in which shareholders' approval is notnecessary, determine interim dividends, as prescribed by Article 454, Paragraph 5 of the Company Law. The Board of Directors has been authorized todetermine interim dividends so that proﬁts can be returned to shareholders when deemed appropriate.
e. Special resolutions of the General Meeting of Shareholders
The company's articles of incorporation stipulate that special resolutions of a general meeting of shareholders, pursuant to Article 309, Paragraph 2 of theCompany Law, shall be adopted by an afﬁrmative vote of at least two-thirds, in which a minimum of one-third of voting shareholders is present. This is to ease
the general meetings of shareholders by enabling a quorum to pass special resolutions.
f. Business execution and management supervision
We established the monitoring system with the members of the Board of Directors and the Audit & Supervisory Board to fully supervise the performance ofexecutive ofﬁcers' business operations. The members of the Board of Directors and the Audit & Supervisory Board also participate in an importantmanagement meeting, consisting of executive ofﬁcers. When questions arise during the course of business execution, we consult with attorneys, CPAs andother specialists whose advice is used in determining the best way to proceed.
(3) Current Situation of the Internal Control System
At a meeting held on July 1, 2006, the Board of Directors resolved to strengthen internal control systems for the purpose of ensuring that Coca-Cola Westand its group companies conduct business appropriately. In addition, at the Board of Directors meetings held on February 7, 2008, and on February 7, 2012,
certain aspects of these systems were reviewed as follows:a. Systems for ensuring that the duties of the members of the Board of Directors and employees comply with laws and the company's articles ofincorporation
Internal rules concerning compliance systems and a code of conduct have been established to encourage ofﬁcers and all employees of Coca-Cola West andits group companies to observe laws and ordinances as well as the company's articles of incorporation, and to act in line with accepted social norms. They
were especially intended to establish a systematically ﬁrm policy against any involvement whatsoever with organized crime and other anti-social forces.
Further, a department responsible for CSR has been established at Coca-Cola West to unify compliance efforts across the group and conduct educational
activities for ofﬁcers and employees to implement thorough compliance systems. The department in charge of internal audits shall examine the level ofcooperation with the department in charge of CSR and the status of compliance across the group, and then regularly report compliance and other important
activities related to the internal control system to the Board of Directors and the Audit & Supervisory Board. In addition, an internal whistleblower hotline will
be set up as a means for ofﬁcers or employees to directly provide information on any conduct that may violate laws and ordinances.
b. Preservation of information material related to performance of directors' duties and responsibilities
In accordance with established rules for preservation and document management, documents and electronic ﬁles containing information of theperformance of directors' duties are to be recorded and stored, thereby allowing members of the Board of Directors and the Audit & Supervisory Board toaccess such documents and ﬁles at any given time.

29
Annual Review 2012

(4) Risk Management System
Coca-Cola West has established the Coca-Cola West Group Risk Management Committee. The objectives of this body are to prevent the various risks faced by the company
and to minimize damage in the event of a crisis by enabling a swift and appropriate response. The group ensures that its management principles comply with all laws andordinances and follow the norms of society with integrity, thereby gaining the trust of all of its stakeholders and fulﬁlling the Corporate Philosophy. This is enshrined in its Codeof Conduct, which is designed to encourage a compliance mindset among all group corporate ofﬁcers and employees.
(5) Internal Audits, Audit by Audit & Supervisory Board, and Financial Audit Systema. Organization of internal audits and audit by Audit & Supervisory Board, personnel and procedures, coordination among internal audit, audit byAudit & Supervisory Board, and ﬁnancial/accounting audit.
Coca-Cola West aims to comply with corporate rules and regulations, conduct appropriate corporate activities, implement operational management, protect the company's
assets and maintain soundness of its ﬁnancial situation. In order to achieve these goals, we established the Audit Ofﬁce (6 members) as the Internal Audit Department, which
directly reports to the president.
Members of the Audit & Supervisory Board attend meetings of the Board of Directors, management, and other important meetings, consisting of executive ofﬁcers. They also
meet representative directors on a regular basis and examine the results of audits performed by the Audit Ofﬁce. Through the foregoing activities, the members of the Audit &Supervisory Board monitor the executive actions of members of the Board of Directors and executive ofﬁcers in accordance with relevant laws, regulations, the company's
articles of incorporation, and internal auditing standards.
The Audit Ofﬁce conducts preliminary discussions with the Audit & Supervisory Board concerning its auditing policy and plans for each ﬁscal year.
The Audit & Supervisory Board and the Audit Ofﬁce also receive reports about the results of audits as needed. In addition, at the beginning of the ﬁscal year, the company's
independent auditor provides the Audit & Supervisory Board with an explanation of its audit plans, and as needed, supplies information and reports to the board during theinterim audit or year-end audit.
b. Proﬁle of independent auditor and related personnel
Coca-Cola West has appointed KPMG AZSA & Co. as its independent auditor. The names of the ﬁrm's certiﬁed public accountants (engagement and management partners)that audit the company's ﬁnancial statements are listed as follows.
Name of CPA Who Carried Out Duties

Experience

Designated Liability Partner

Takaki Okano

4 years

Designated Liability Partner

Junichi Adachi

5 years

Designated Liability Partner

Akihisa Sada

1 year

The auditing team has 14 CPAs and 8 other members.

30
Annual Review 2012

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

Other Information(6) Outside Directors and Audit & Supervisory Board Members (Outside)
Presently, two of eleven members of Coca-Cola West's Board of Directors and three of ﬁve members of its Audit & Supervisory Board are from outside of
the group.
a. Proﬁle, name and qualiﬁcation to be elected as an outside director or outside member of the Audit & Supervisory Board
Role

OutsideDirector

OutsideDirector

Audit &
Supervisory
Board
Member(Outside)

Audit &
Supervisory
Board
Member(Outside)

Audit &
Supervisory
Board
Member(Outside)

Name

Shiro Kondo

Vikas Tiku

Zenji Miura

Kazushige Higuchi

Tomoko Ogami

Relationship with Our Company

Background to Appointment

Shiro Kondo is Representative Director andChairman of Ricoh Company, Ltd., which isclassiﬁed as an "other related company."

Shiro Kondo is Representative Director and Chairman of Ricoh Company, Ltd. and has been appointed toserve as an outside director so that Coca-Cola West can take advantage of his wealth of experience as acorporate manager of that ﬁrm.
Ricoh Company, Ltd. is a major shareholder in Coca-Cola West (whose stake amounts to 16.8% in termsof voting rights), but we are engaged in a different business from that of the Ricoh Group. There are sometransactions between our corporate groups, in the form of, for example, sales of soft drinks from our company
and system maintenance services provided by the Ricoh Group, but because the value of those transactions
is quite small, the independent business activities of Coca-Cola West would not be impeded in any way by the
Ricoh Group.
We have a close relationship with Ricoh in terms of both human and capital resources, but Mr. Kondo is
the only one of our 11 directors who is concurrently serving as a director of Ricoh, giving him less than amajority position on our Board of Directors. He makes decisions related to the company's activities andmanagement directions, and executes operations based on our company's decisions.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by Ricoh and that Mr. Kondo is not a person who would wield undue inﬂuence over our management team.
Given the fact that his concurrent service as a director of Ricoh therefore does not inﬂuence theindependence of Coca-Cola West with respect to Ricoh, and that there is no concern regarding a conﬂict ofinterest with our general shareholders, we have appointed Mr. Kondo to the position of independent director.

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

Vikas Tiku is Representative Director, Executive Vice President and CFO of CCJC and has been appointed
to serve as an outside director so that Coca-Cola West can further strengthen its strategic partnerships with
The Coca-Cola Company and CCJC.
Although CCJC is a major business partner with the special interests outlined at left, Mr. Tiku is the only
one of our 11 directors who is concurrently serving as a director of CCJC, giving him less than a majority
position on our Board of Directors. He makes decisions related to the company's activities and management
directions, and executes operations based on our company's decisions.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by CCJC and that Mr. Tiku is not a person who would wield undue inﬂuence over our management team.
We therefore deem that Mr. Tiku's concurrent service as a director of CCJC does not inﬂuence theindependence of Coca-Cola West with respect to CCJC, and that there is no concern regarding a conﬂict ofinterest with our general shareholders.

Zenji Miura is Representative Director,
President, and Chief Executive Ofﬁcer of Ricoh
Company, Ltd., which is classiﬁed as an "otherrelated company."

Zenji Miura has a long professional career in ﬁnance and accounting at Ricoh. He has been appointed as
an outside member of the Audit & Supervisory Board so that Coca-Cola West can put his wealth of experience
to work in its auditing responsibilities.
Ricoh Company, Ltd. is a major shareholder in Coca-Cola West (a 16.8% stake in terms of voting rights),
but we are engaged in a different business from that of the Ricoh Group. There are some transactions
between our corporate groups, in the form of, for example, sales of soft drinks from our company and system
maintenance services provided by the Ricoh Group, but because the value of those transactions is quite small,the independent business activities of Coca-Cola West would not be impeded in any way by the Ricoh Group.
We have a close relationship with Ricoh in terms of both human and capital resources, and one of thedirectors of Ricoh is serving as our director. However, he is the only one of our 11 directors who is concurrently
serving as a director of Ricoh, giving him less than a majority position on our Board of Directors, and his
appointment was made at our request. He makes decisions related to the company's activities andmanagement directions, and executes operations based on our company's decisions.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by Ricoh and that Mr. Miura is not a person who would wield undue inﬂuence over our management team.
Given that his concurrent service as a director of Ricoh therefore does not inﬂuence the independence ofCoca-Cola West with respect to Ricoh, and that there is no concern regarding a conﬂict of interest with ourgeneral shareholders, we have appointed Mr. Miura to the position of independent director.

Kazushige Higuchi is Deputy President of The
Nishi-Nippon City Bank, Ltd.
Our company has a business relationship withthe bank, with which we have transactions such as
fund deposits.

−

Kazushige Higuchi has a long professional career at The Nishi-Nippon City Bank, a major ﬁnancial
institution. He has been appointed as an outside member of the Audit & Supervisory Board so that Coca-Cola
West can put his wealth of experience to work in its auditing responsibilities.
Although our company has a business relationship with The Nishi-Nippon City Bank, including funddeposits, none of our 11 directors concurrently serve as directors of The Nishi-Nippon City Bank. Mr. Higuchi
makes decisions related to the company's activities and management directions, and executes operations
based on our company's decisions.
Consequently, we have concluded that there is no concern that our company might be unduly inﬂuenced
by The Nishi-Nippon City Bank and that Mr. Higuchi is not a person who would wield undue inﬂuence over ourmanagement team.
We therefore deem that Mr. Higuchi's concurrent service as a director of The Nishi-Nippon City Bank does
not inﬂuence the independence of Coca-Cola West with respect to The Nishi-Nippon City Bank, and that there
is no concern regarding a conﬂict of interest with our general shareholders.
Tomoko Ogami has many years of experience as an attorney and has been appointed to serve as an
outside member of the Audit & Supervisory Board so that she can apply that experience to the auditing ofCoca-Cola West.
Because Ms. Ogami does not have any particular vested interests in this company, we have concluded
that she is not a person who would wield undue inﬂuence over our management team and that there is noconcern regarding a conﬂict of interest with our general shareholders.

31
Annual Review 2012

(7) Corporate Governance System and Reasons to Adopt the System Described
Our company adopted the following Corporate Governance System under the belief that it enables improvements in the efﬁciency and transparency ofmanagement.

General Meeting of Shareholders
Election/Dismissal

Election/Dismissal

Election/Dismissal

Board of Directors

ReportingManagement Advisory Committee

Reporting

AdviceAppointment/Monitoring
Exchange
Opinions

Representative Directors
ReportingGroup Company Presidents' Meeting

Audit Ofﬁce

Coordination

Group Corporate Ofﬁcer
Auditing

Auditing

Group Risk Management Committee

Reporting
Auditing
Coordination

32
Annual Review 2012

DivisionsGroup
Companies

Compliance and Corporate
Risk Management

Audit & Supervisory Board

Auditing

Department
for CSR

Financial/Accounting Auditor

Management Meeting

Other Informationb. Standards and guidelines regarding the independence of outside directors and outside members of the Audit & Supervisory Board
Standards and guidelines for establishing the independence of outside directors and outside members of the Audit & Supervisory Board have not been
explicitly stipulated, but optimal candidates are appointed by the Board of Directors based on an evaluation of their management positions at other ﬁrms, theirperformance, and their expert knowledge.
c. Role and responsibilities of outside directors and outside members of the Audit & Supervisory Board for corporate governanceOutside members make up the majority of the Audit & Supervisory Board and establish a monitoring system for the directors' execution of operation. Also,
experienced outside directors provide appropriate advice from a third party point of view.
d. Supervision, audit and internal audits conducted by outside directors or outside members of the Audit & Supervisory Board, coordination
between audit by the Audit & Supervisory Board and ﬁnancial/accounting audit, and relationship with Internal Control Division
Outside directors and outside members of the Audit & Supervisory Board receive reports regarding audits, internal audits, ﬁnancial/accounting audits andinternal control, and make comments at the Board of Directors' meeting and the Audit & Supervisory Board's meeting.
e. Summary of limitation of liability contract
Our company has set up a clause of limitation of liability of outside directors and outside members of the Audit & Supervisory Board in the articles ofincorporation in order for them to perform their expected roles sufﬁciently and to enable us to appoint high-quality independent persons.
Two outside directors and three outside members of the Audit & Supervisory Board entered into agreements with our company with regard to limited
liabilities due to negligence of duties, based on Article 427, Paragraph 1 of the Company Law. The limit of liabilities is the minimum amount determined bylaw.
f. Supporting staff for outside directors and outside members of the Audit & Supervisory Board
The staff of the Administration Department and the staff (assistant employees) of the Audit Ofﬁce support outside directors and outside members of the
Audit & Supervisory Board, respectively.

Other Information(8) Directors' and Audit & Supervisory Board Members' Remunerationa. Aggregate amounts of remuneration according to roles of directors and members of the Audit & Supervisory Board, aggregate amounts
according to type of remuneration, and number of directors and members of the Audit & Supervisory Board to be compensated
Audit & Supervisory Board Members

Directors
Number ofMembers
Remuneration and others basedon resolution of generalshareholders' meeting

Total of Remuneration (million yen)
Number of
Base
Other
Members
Remuneration(millionyen)(million yen)

Total

Total of Remuneration (million yen)
Number of
Base
Other
Members
Remuneration(millionyen)(million yen)

Total of Remuneration (million yen)
Base
Other
Remuneration(million yen) (million yen)

13

375

375

–

7

52

52

–

20

428

428

–

Internal

10

361

361

–

3

42

42

–

13

403

403

–

External

3

14

14

–

4

10

10

–

7

25

25

–

Note: 1. The remuneration ﬁgures shown above include the remuneration paid to three directors, including one outside director, and one outside member of the Audit & Supervisory Board who retired at the adjournmentof the 54th General Shareholders' Meeting held on March 22, 2012, and one director who resigned as of December 31, 2012.
2. On January 1, 2009, we acquired and took over Kinki Coca-Cola Bottling Co., Ltd. At the 48th General Meeting of Shareholders held on March 23, 2007, it was decided that a severance payment would be
issued in conjunction with the elimination of the directors' retirement beneﬁt system. Pursuant to this decision, ¥60 million was paid upon retirement to the three directors who were in ofﬁce at the adjournmentof that General Meeting of Shareholders, and ¥14 million was paid to the one director who retired at the end of that ﬁscal year. Their retirement beneﬁt payments are not included in the ﬁgures above.

b. Signiﬁcant items in the salaries of the company's internal ofﬁcers
None.
c. Contents of (i) the determination of the amount of remuneration of directors and members of the Audit & Supervisory Board(ii) the calculation methods to determine the amount, and the decision-making method of determination for the foregoing items.
The aggregate amounts of remuneration for directors and members of the Audit & Supervisory Board were resolved at the 51st General Shareholders'Meeting held on March 24, 2009 to be a maximum of ¥500 million annually (for outside directors, a maximum of ¥50 million annually) and a maximum ¥100
million annually, respectively. The amount of remuneration for individual directors and individual members of the Audit & Supervisory Board is determinedwithin the aggregate determined ranges as follows:
Directors
The amount of remuneration for each director is determined by the representative directors who are authorized by the Board of Directors after
consideration of the results from the Management Advisory Committee consisting of outside directors and outside experienced experts.
The remuneration consists of (i) a ﬁxed amount portion which reﬂects the responsibilities as directors and contribution to the company's performanceand (ii) a variable portion which reﬂects the company's business performance.
Audit & Supervisory Board Members
The amount of remuneration for each member of the Audit & Supervisory Board is determined in consultation with each respective member.
(9) Securities Investmentsa. Excluding trade purpose securities, number of companies invested in and amount of invested common stocks on balance sheet
Number of companies invested in: 135, amount of invested common stocks: ¥8,809 million
b. Excluding trade purpose securities and referring to companies listed on the stock market, number of companies invested in,stockholding classiﬁcation, amount of invested common stocks on balance sheet and purpose of stockholding
Designated investment stocks(As of December 31, 2012)
Name of Company
Invested in
Ricoh Leasing Company, Ltd.
Royal Holdings Co. Ltd.

Number of
Shares502,000

Amount Shownon Balance Sheet(million yen)

Purpose of
Stockholding

1,093

Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.

962,440960

Nishi-Nippon Railroad Co., Ltd.

2,000,000

684

The Nishi-Nippon City Bank, Ltd.

3,024,811

644

San-Ai Oil Co., Ltd.

1,308,125

469

Izumi Co., Ltd.

231,000

419

Mitsubishi Heavy Industries, Ltd.

900,000

373

Kyushu Leasing Service Co., Ltd.

2,000,000

370

Fuji Co., Ltd.

195,366

354

Mitsubishi UFJ Financial Group, Inc.

522,420

240

Zenrin Co., Ltd.

183,414

204

Okuwa Co., Ltd.

171,192

186

AEON Kyushu Co., Ltd.

114,400

180

F&A Aqua Holdings, Inc.

203,400

180

Plenus Company Limited

115,261

161

Name of Company
Invested inWest Japan Railway Company

Number of
Shares
42,000

Amount Shownon Balance Sheet(million yen)

142

Toyo Seikan Kaisha, Ltd.

97,460112

Nishikawa Rubber Co., Ltd.

99,44592

Kansai Super Market Ltd.

113,200

80

Yamaguchi Financial Group, Inc.

100,000

76

Isetan Mitsukoshi Holdings Ltd.

87,01573

Izumiya Co., Ltd.

161,72871

AEON Co., Ltd.

65,856

65

284

61

Fujio Food System Co., Ltd.
Poplar. Co., Ltd.

110,430

59

Sumitomo Mitsui Trust Holdings, Inc.

182,898

55

The San-in Godo Bank, Ltd.

72,45043

Central Japan Railway Company

5,100

35

Nihon Yamamura Glass Co., Ltd.

187,000

34

Marukyu Co., Ltd.

41,82934

Purpose of
Stockholding
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.
Maintain favorable relationshipwith the company invested in.

c. Common stock for trade purposes in the current ﬁscal year and also dividends received, capital gain/loss and evaluation gain/loss from
common stocks for trade purposes in the current ﬁscal year
None.

33
Annual Review 2012

Other Information

Top Management (As of April 1, 2013)

Directors

Representative Director &Chairman

Representative Director &President

Director &Executive Vice President

Director &Executive Corporate Ofﬁcer

Director &Executive Corporate Ofﬁcer

Director

Norio Sueyoshi

Tamio Yoshimatsu

Nobuo Shibata

Jiro Wakasa

Yoshinori Nakamura

Hideharu Takemori

Responsible for
Administration & SCM

General Manager,
Commercial Headquarters

General Manager,
Business Transformation Ofﬁce,
Responsible for
Career Development Ofﬁce

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

Outside Director

Outside Director

Director &Senior Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Director &Senior Corporate Ofﬁcer

Toshio Fukami

Shigeki Okamoto

Yoshiki Fujiwara

Shiro Kondo*

Vikas Tiku

General Manager,
Kyushu Sales Division

General Manager,
Chugoku Sales Division

General Manager,
Kansai Sales Division

Representative Director &Chairman,
Ricoh Company, Ltd.

Representative Director,
Executive Vice President & CFO,
Coca-Cola (Japan) Co., Ltd.

Audit & Supervisory Board Members

Management Advisory Committee

MemberIsao Kubota

President,
The Nishi-Nippon City Bank, Ltd.

MemberTsuguo Nagao

Chairman,
Nishi-Nippon Railroad, Co., Ltd.

MemberKazuhiko Enomoto

Representative Director & Chairman,
Fukuoka Jisho Co., Ltd.

MemberMasayoshi Nuki

Chairperson,
Kyushu Electric Power Co., Inc.

Deputy President,
The Nishi-Nippon City Bank, Ltd.

MemberSusumu Ishihara

Representative Director & Chairman,
Kyushu Railway Company

Attorney,
Kunitake Synthesis Law Ofﬁce

MemberTakashi Matsuzaki

Attorney,
Tokunaga, Matsuzaki & Saito Law Ofﬁce

Audit & Supervisory
Board Member

Hiroyoshi Miyaki

Standing

Audit & Supervisory
Board Member

Tadanori Taguchi

Standing

Audit & Supervisory
Board Member (Outside)

Zenji Miura*

Representative Director,
President & Chief Executive Ofﬁcer,
Ricoh Company, Ltd.

Audit & Supervisory
Board Member (Outside)

Kazushige Higuchi

Audit & Supervisory
Board Member (Outside)

Tomoko Ogami*As for Director Shiro Kondo and Audit & Supervisory Board Member Zenji Miura, our company submitted notices to Tokyo Stock Exchange Inc., Osaka Securities Exchange Co., Ltd. and Fukuoka Stock Exchange, withwhich our company is listed, as "Independent Director." The qualiﬁcation for "Independent Director" is determined by criteria and rules set by each security exchange company.

34
Annual Review 2012

Other Information

Dividend Policy and Shareholder Reward Points System

Dividend

Coca-Cola West places the ultimate priority on the stable and continued payment of dividends to shareholders and pays dividends
semiannually, interim and year-end, after fully deliberating on the company's business performance and retained earnings and thefuture business environment.
Dividend per share(Unit: yen)

50

40

30.0

30
25.0
20

32.0

32.0

1999

2000

34.0

34.0

2001

2002

40.0

40.0

2004

2005

42.0

43.0

2006

2007

43.0

42.0

40.0

41.0

41.0

2010

2011

2012

36.0

27.0

20.0
17.5

10

0
1994

1995

1996

1997

1998

2003

2008

2009

Shareholder Reward Points System

We provide "Shareholder Reward Points" in late August of the year and late March of the following year to shareholders with 100 or
more shares as of June 30 and December 31, respectively. Shareholders can choose to exchange their Reward Points (one point=¥60),
with assorted Coca-Cola products or to use them as donations to our social contribution activities, etc., via the shareholder hospitality
portal on the Coca-Cola West website or from product catalogs.

Awarding Criteria
Effective Date

Number of Shares Held

Details

100 to 500 shares

30 Reward Points

500 to 1,000 shares

40 Reward Points

1,000 to 5,000 shares

60 Reward Points

5,000 or more shares

120 Reward Points

June 30

100 to 500 shares

30 Reward Points

500 to 1,000 shares

40 Reward Points

1,000 to 5,000 shares

60 Reward Points

5,000 or more shares

120 Reward Points

December 31

Time of Award

Late August of the year

Late March of the following year

Options for Reward Points (examples)

Coca-Cola product selection

Bath towel with
Coca-Cola West logo

35
Annual Review 2012

Insulated bag with
Coca-Cola West logo

Donation to
Ichimura Shizenjuku-Kyushu

Stock Code: 2579

Other Information

Stock Information (As of December 31, 2012)

Major Shareholders

Authorized Shares: 270,000 thousand

Number of
Shares Held
(1,000 shares)

Shareholding
Ratio (%)

Ricoh Company, Ltd. ............................................................................................

16,792

16.8

The New Technology Development Foundation .......................................................

5,294

5.3

Japan Trustee Services Bank, Ltd. (Trust Account) ..................................................

4,833

4.8

Coca-Cola Holdings West Japan, Inc. ....................................................................

4,074

4.1

Mitsubishi Heavy Industries Food & Packaging Machinery Co., Ltd. .........................

3,912

3.9

The Nishi-Nippon City Bank, Ltd. ...........................................................................

3,703

3.7

The Master Trust Bank of Japan, Ltd. (Trust Account) ..............................................

3,246

3.2

MCA Holdings Co., Ltd. ........................................................................................

2,191

2.2

Toyo Seikan Kaisha, Ltd. .......................................................................................

1,427

1.4

Showa Denko Gas Products Co., Ltd. ....................................................................

1,414

1.4

Shareholder

Outstanding Shares: 111,125 thousand
Number of Shareholders: 42,462
Number of Shares per Trading Unit: 100
Stock Exchange Listings:
Tokyo Stock Exchange (First Section)
Osaka Securities Exchange (First Section)
Fukuoka Stock Exchange

Note: 11,155 thousand shares of treasury stock are not shown in the table above and are excluded from the calculation of shareholding ratios.

Number of Shares Held and Percentage ofShares Held by Shareholder Category

Stock Price and Stock Trading Volume

Number of Shares Held
Shareholders (1,000 shares)

Financial Institutes ...................

75

22,093

Securities Companies...............

33

976

Other Domestic Corporations ....

502

39,203Foreign Corporations................

327

22,780Individuals and Others.............. 41,524

14,9161

11,155

Stock Price(yen)

Stock Trading
Volume(1,000 shares)

15,000
Nikkei Index (Close)

12,000

9,000

6,000

Treasury Stock.........................

3,000
CCW Stock Price

Total............................................ 42,462

111,125

CCW Stock Trading Volume

2,500

2,000

Composition of Shareholders

1,500

1,000
Treasury Stock
10.0%
Individuals
and Others
13.4%

Foreign
Corporations
20.5%

Financial
Institutes
19.9%

9,000
500

6,000
3,000

0

Securities
Companies
0.9%
Other Domestic
Corporations
35.3%

12,0000

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 (month)2010

Stock Price atYear End (yen)

2011

2012

2008

2009

2010

2011

2012

1,945

1,639

1,471

1,335

1,333

Credit Rating Information

Japan Credit Rating Agency, Ltd. (JCR)
Long-term senior debt
Rating and Investment Information, Inc. (R&I)
Long-term senior debt

2008

2009

2010

2011

2012

AA−

AA−

AA−

AA−

AA−

A+

A+

A+

A+

A+

36
Annual Review 2012

Other Information

Coca-Cola System in Japan (as of April 1, 2013)

The Coca-Cola System in Japan consists of Coca-Cola (Japan) Co., Ltd. and the regional bottling companies andtheir afﬁliates. While Coca-Cola (Japan) Co., Ltd. is responsible for planning and developing new products, producing
syrup concentrate and advertising, the regional bottling companies and their afﬁliates are responsible for producing
and selling beverages in their respective regions throughout Japan.
Roles of Coca-Cola (Japan) Co., Ltd. and Bottlers
Coca-Cola (Japan) Co., Ltd.

Planning

ResearchandDevelopment

Productionof Syrup
Concentrates

Bottlers

Product
Manufacturing

Product
Distribution

Sales

CollectionofContainers

Recyclingof
Containers

Sales Territories of 12 Bottlers

Coca-Cola West Group•Coca-Cola West Co., Ltd.
Fukuoka/Osaka/Shiga/Nara/

Wakayama/Kyoto/Hyogo/Okayama/
Tottori/Hiroshima/Shimane/
Yamaguchi/Saga/Nagasaki•Minami Kyushu Coca-Cola Bottling Co., Ltd.
Kumamoto/Kagoshima/Miyazaki/Oita

Shikoku Coca-Cola Bottling Co., Ltd.
Okinawa Coca-Cola Bottling Co., Ltd.
Coca-Cola Central Japan Co., Ltd.
Tokyo Coca-Cola Bottling Co., Ltd.
Mikuni Coca-Cola Bottling Co., Ltd.
Tone Coca-Cola Bottling Co., Ltd.
Hokuriku Coca-Cola Bottling Co., Ltd.
Sendai Coca-Cola Bottling Co., Ltd.
Michinoku Coca-Cola Bottling Co., Ltd.
Hokkaido Coca-Cola Bottling Co., Ltd.

37
Annual Review 2012

Other Information

Investment
Investment• Figures show the percentage investment by Coca-Cola West Co., Ltd., ﬁgures in brackets indicate the total percentage investment by the Coca-Cola West Group.

(5)

Joint ventures between
TCCC/CCJC and bottlers
Coca-Cola Business
Service Co., Ltd.
(CCBSC)(6)100%
The Coca-Cola
Company(TCCC)

Coca-Cola Tokyo Research& Development Co., Ltd.
(CCTR&D)(4)
Coca-Cola Customer
Marketing Co., Ltd.
(CCCMC)
(7)

(2)

100%

15.0%
(21.1%)

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

Coca-Cola West Group
Coca-Cola
4.1%
West Co., Ltd.
(1)
(CCW)
100%
Minami Kyushu
Coca-Cola BottlingCo., Ltd.
Coca-Cola
Central Japan
Co., Ltd.

20.1%(23.7%)

Mikuni Coca-Cola
Bottling Co., Ltd.
Tokyo Coca-Cola
Bottling Co., Ltd.

(3)FV Corporation
Co., Ltd.
(FVC)(1) Coca-Cola West Co., Ltd. (CCW)In July 2006, Coca-Cola West Japan Co., Ltd. (CCWJ) and Kinki
Coca-Cola Bottling Co., Ltd. (Kinki CCBC) merged their management toestablish a joint holding company, Coca-Cola West Holdings Co., Ltd.
(CCWH). On January 1, 2009, CCWH, CCWJ, Kinki CCBC and Mikasa
Coca-Cola Bottling Co., Ltd. merged to establish Coca-Cola West Co., Ltd.
In April 2013, Minami Kyushu Coca-Cola Bottling Co., Ltd. became awholly owned subsidiary of CCW.

(8)

21.7%
(25.9%)

Tone Coca-Cola
Bottling Co., Ltd.
6 other Coca-Colabottling companies(6) Coca-Cola Business Service Co., Ltd. (CCBSC)
Established in June 1999 as a joint venture between The Coca-Cola
Company and all of its bottling companies in Japan. Its responsibilities are(i) procurement of raw materials and supplies for the Coca-Cola System inJapan, (ii) business consulting to the Coca-Cola organization in Japan, (iii)
development of IT systems and maintenance and operation of those IT
systems.

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

(7) Coca-Cola Customer Marketing Co., Ltd. (CCCMC)
Established in January 2007 as a joint venture between Coca-Cola(Japan) Co., Ltd. and all of the bottling companies in Japan. Its
responsibilities are (i) business negotiation with leading retail stores suchas nationwide convenience stores and supermarkets, and (ii) creating
proposals for sales promotion and storefront activities.

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

(8) FV Corporation Co., Ltd. (FVC)
Established in May 2001 as a joint venture between Coca-Cola (Japan)
Co., Ltd. and all of the bottling companies. Its responsibilities are to carryout the marketing of the vending machine business to corporations
operating in a wide range of territories. It also handles products other thanCoca-Cola products.

(4) Coca-Cola Tokyo Research & Development Co., Ltd. (CCTR&D)
Established in January 1993 as a wholly owned subsidiary of The
Coca-Cola Company. It has been carrying out product development andtechnical support since January 1995 in response to the needs of the
Asian region.
(5) Coca-Cola Bottling Companies (CCBC)
There are 12 bottling companies in Japan. They produce and distribute
Coca-Cola products in their respective territories.

38
Annual Review 2012

-Creating a happy tomorrow for everyone-

7-9-66 Hakozaki, Higashi-ku, Fukuoka 812-8650, Japan
Planning Department Tel: +81-92-641-8774
http://www.ccwest.co.jp/english/