Flash Report on the Consolidated Result
for the year Ended February 28, 2013
April 10, 2013
Listed Company Name: Lawson, Inc.
Code No.: 2651
(URL http://www.lawson.co.jp/company/ir/index.html)
Company Representative: Takeshi Niinami, Representative Director, President & CEO
Contact:Tomoki Takanishi , Financial & Accounting Office General Manager
Tel.: (03) 5435-2773
Scheduled date for submission of quarterly earnings report: May 21, 2013
Scheduled date for payment of dividend: May 22, 2013
Scheduled date for submission of annual report: May 22, 2013
Supplementary Documents quarterly results: Yes
Presentation of quarterly results: Yes (for institutional investors and analysts)
1. Consolidated Performance for the 2012 fiscal year (from March 1, 2012, to February 28, 2013)(1) Consolidated operating results
Notes: ①Amounts below one million yen are truncated.
Notes: ②Percentages for total operating revenues, operating income, recurring profit and net profit show increase(decrease) from previous year.
Total operating revenues
Operating profit
Recurring profit¥ Million%¥ Million%¥ Million%
2012 fiscal year
487,445
1.8
66,246
7.2
65,926
6.8
2011 fiscal year
478,957
8.5
61,76911.2
61,72813.1

Net profit

2012 fiscal year
2011 fiscal year

¥ Million
33,182
24,885

%
33.3
(2.0)

Notes: Comprehensive income:2012 fiscal year: 34,871 million(36.2%)
Equity in net income of affiliates:2012 fiscal year:
394 million

Net profit per
share

Fully
dilutedprofit pershare¥
332.20249.17¥331.69248.80

Ratio of
Return on recurring
equityprofit tototal assets
%
15.2
12.0

%
11.9
12.3

Ratio ofoperatingprofit tototal
operatingrevenues
%
13.6
12.9

2011 fiscal year: 25,603 million( (1.9%))
2011 fiscal year:

380 million(2) Consolidated financial position2012 fiscal year
2011 fiscal year
Notes: Capital adequacy:
2012 fiscal year:

Total assets

Net assets¥ Million
579,809531,453¥ Million
230,181214,662

226,475 million

2011 fiscal year:

shareholder's equity
ratio
%
39.1
39.7
211,154 million

Net assets per share¥
2,267.17
2,114.00

(3) Consolidated cash flows2012 fiscal year
2011 fiscal year

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities¥ Million
85,18886,356¥ Million(54,196)(52,912)¥ Million(31,979)(27,544)

Cash and cash
equivalents at theend of the year
¥ Million
72,76673,6702. Dividends status
Annual dividends per share2011 fiscal year
2012 fiscal year
2013 fiscal year
(Forecast)

1Q

2Q

3Q

¥
―

¥
87

¥
―

Year-end
dividend
¥
93

―

100

―

100

200

―

105

―

105

210

Total
¥
180

Total
dividends
for theyear¥ Million
17,977
19,978―

Payout
ratio
%
72.2
60.2
58.4

Ratio ofdividends toshareholders’ equity
%
8.7
9.1
―

3. Forecast Consolidated Performance for 2013 fiscal year（from March 1, 2013 to February 28, 2014）
Total operating revenues
Operating profit
Recurring profit
Net profit¥ Million%¥ Million%¥ Million%¥ Million%
2013 2Q
257,000
3.2
35,5002.7
34,6001.0
17,300(3.1)(accumulated)
516,000
5.9
70,0005.7
68,4003.8
35,9008.2
2013 fiscal year
Reference: Forecast net profit per share for the 2013 half year: 173.18yen
Forecast net profit per share for the 2013 fiscal year: 359.38yen
4. Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting in revised
scope of consolidation): Yes
Lawson (China) Holdings, Inc.

(2) Changes in accounting policies, changes in accounting estimation, retrospective restatement
1. Changes of accounting policies associated with revision in accounting standards: None
2. Other changes: None
3. Changes in accounting estimation: None
4. Retrospective restatement: None
(3) Number of issued shares:i) The number of the stocks issued in the end of term
February, 2013: 100,300,000
February, 2012:ii) The number of treasury shares in the end of term
February, 2013: 406,853
February, 2012:iii) Average number of shares during the term
February, 2013: 99,887,245
February, 2012:

100,300,000
416,166
99,871,558

Note: Disclosure of progress of review procedures
At the time of disclosure of this fiscal flash report, review procedures for fiscal earnings reports based on the
Financial Instruments and Exchange Act had not been completed.
Note: The above-mentioned forecast is based on the information, which is able to get hand at present, and including a
potential risk and uncertainty. Therefore, actual achievements may differ from these forecasts due to many factors. In
addition, please refer to 4th page of appending data about matters, such as precondition of the above-mentioned
forecast.

Table of Contents
1. Analysis of Operating Results and Financial Position·············································································································(1) Analysis of Consolidated Operating Results ·····················································································································(2) Profit and Loss···································································································································································(3) Outlook for Fiscal 2013 ·····················································································································································(4) Analysis of Financial Position ···········································································································································
2. Management Policy·································································································································································(1) Basic Management Policy ·················································································································································(2) Performance Indicators (Target) ········································································································································(3) Medium-and-Long-Term Management Strategies·············································································································(4) Priority Issues of the Group ···············································································································································(5) Other Important Managerial Matters ·································································································································
3. Consolidated Financial Statements··········································································································································(1) Consolidated Balance Sheets (Unaudited) ·······················································································································(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)·····················
Consolidated Statements of Income (Unaudited) ············································································································
Consolidated Statements of Comprehensive Income (Unaudited) ····················································································(3) Consolidated Statements of Changes in Net Assets (Unaudited)·······················································································(4) Consolidated Statements of Cash Flows (Unaudited)········································································································(5) Notes Concerning Going Concern Assumption·················································································································(6) Basis of Presenting the Consolidated Financial Statements·······························································································(7) Accounting Standards, etc. that are not applied·················································································································(8) Changes in presentation·····················································································································································(9) Additional information ······················································································································································(10) Notes to Consolidated Financial Statements····················································································································(Notes to the Consolidated Balance Sheets) ····················································································································(Notes to Consolidated Statements of Income) ···············································································································(Notes to the Consolidated Statements of Comprehensive Income)················································································(Notes to the Consolidated Statements of Changes in Net Assets) ··················································································(Notes to the Consolidated Statements of Cash Flows)···································································································(Notes to Lease Contracts) ··············································································································································(Segment Information) ····················································································································································(Per Share Information)···················································································································································(Significant Subsequent Events)······································································································································

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1. Analysis of Operating Results and Financial Position(1) Analysis of Consolidated Operating Results
During the consolidated fiscal year under review, or fiscal 2012 ended February 28, 2013, the LAWSONGroup (hereinafter, “the Group”) implemented measures to enhance its function as a form of social
infrastructure that provides essential items and services at the local level with the aim of realizing theGroup’s corporate philosophy of “Creating Happiness and Harmony in our Communities.” Based on its
analysis of purchase data retrieved from the multi-partner loyalty program, Ponta, the Group focused on
customer relationship management (CRM)*1 and supply chain management (SCM)*2 in order to offer amerchandise assortment that meets the specific needs of customers in each neighborhood.
*1 CRM: A marketing management method for providing merchandise and services that meet the specific needs ofcustomers.
*2 SCM: A business administration method for comprehensively managing all stages of business, from procurement
to sales, to streamline and optimize the entire business process.

Operating results by business segment are as follows.
(Convenience Store Operations)[Merchandising Strategies]
On the merchandising front, we upheld the expansion of our perishable food offerings as an important
strategic agenda. In October 2012, we launched our Fresh Foods Convenience Store Declaration tostrengthen our lineup of pre-cut vegetables and other fresh food items. We also strived to offer a wider
range of seasonings and other home cooking supplies that meet growing consumer demand for at-homedining.
As of the end of February 2013, we are now operating nine Lawson Farms. The farms were establishedwith the aim of supplying the Group’s stores with vegetables and fruits on a stable basis as well as
providing produce for use as ingredients in LAWSON’s original products.
In the rice category, the high-value-added Furusato-no-umai! line released under the Onigiri-ya range
was tremendously popular thanks to its high-quality ingredients. To offer products with even higher
added value, the line will be expanded to include lunch boxes.
We have expanded our cooked-in-store fast food product range by increasing our lineup of deep-fried
foods, including with the addition of Torikara fried chicken in June 2012.
The number of stores equipped with MACHI café, which offers casual but authentic drip coffee,
increased to 2,860. Thanks to coffee sales, we have been able to deepen our interaction with customers.
In the dessert category, we launched Ankoya, a new Japanese dessert line from the Uchi Café SWEETS
brand. Ankoya was developed to meet customer needs for smaller Japanese desserts with subdued
sweetness. The intrinsic flavor of adzuki beans and the refreshing and reserved sweetness proved
appealing to a wide range of customers.
In sales promotions, the Group, which has know-how in the entertainment field, executed a joint
promotional campaign with the Aeon Group, which operates a diverse range of retail outlets, including
AEON general merchandise stores and MINISTOP convenience stores. The business alliance wasformed with the aim of leveraging synergies to create superior contents and appealing to a wider rangeof customers, especially families.
In addition, we implemented region-specific promotional campaigns such as the Hokkaido Gourmet Fair,
Chiba Promotional Campaign, Shinshu Seasonal Travel Campaign, and Kumamoto Yokamon Fair tomarket merchandise from each region.
[Store Operations]
In store operations, we continued to reinforce adherence to our Triple Emphasis policy, whichemphasizes (1) sincere customer service; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping the store and local areas clean, in addition to ensuring that products
are safe, reliable, healthy, and delicious.
Notably, in tandem with the increase in the number of stores with MACHI café, we strived tocomprehensively improve the quality of stores by clarifying the customer service goals to be pursued bystore employees and fostering leaders among them.
Total Ponta members exceeded 50 million as of the end of February 2013, accounting for 45% of total
sales. Based on customer base analysis using Ponta membership purchase data, we strived to improveaccuracy in order placement, develop new products, focus on measures to promote customer visits in theevening and at night, and reduce sales opportunity loss.

-2-

[Store Development]
In opening new stores, the Group strictly adhered to its proprietary return-on-investment (ROI)-focusedstore development standard to prioritize profitability.
Regarding store format strategy, we promoted store openings to meet the needs of customers specific toeach neighborhood by leveraging the LAWSON, NATURAL LAWSON, and LAWSON STORE 100
store formats to better advantage.
In an effort to reinforce stores that cater to healthcare needs, we increased the number of stores offering
over-the-counter pharmaceuticals to 72 (up 31), and the number of Pharmacy LAWSON(pharmaceutical convenience stores), a store format that integrates drug-dispensing pharmacies operated
by Qol Co., Ltd. with LAWSON and NATURAL LAWSON, to 30 (up 23), as of the end of February
2013. In August 2012, Lawson, Inc. (hereinafter, “the Company”) acquired 5% of the total number ofshares issued by Qol Co., Ltd., forming a capital alliance.
[Change in Total Number of Stores](Stores)
NATURALLAWSONLAWSON
Total stores as ofFebruary 29, 2012
Change during fiscal
year
Total stores as ofFebruary 28, 2013

LAWSON STORE
100

Total

9,038

100

1,172

10,310

604

10

52

666

9,642

110

1,224

10,976[Number of LAWSON stores by prefecture (February 28, 2013)]
Prefecture
Hokkaido
AomoriNumberof stores
576

Prefecture
Tokyo

Numberof stores
1,549

Prefecture
Nara

Numberof stores
100
118

Prefecture
Fukuoka
Saga

Numberof stores
393

186

Kanagawa

799

Wakayama

65

Akita

168

Shizuoka

205

Osaka

1,004

Nagasaki

92

Iwate

159

Yamanashi

91

Hyogo

593

Oita

148

Miyagi200

Nagano141

Okayama131

Kumamoto

103

Yamagata

66

Aichi

513

Hiroshima

155

Miyazaki89

Fukushima

91

Gifu

131

Yamaguchi

114

Kagoshima

114

Niigata

114

Mie

104

Tottori98

Total(domestic)

Tochigi

125

Ishikawa

99

Shimane101

Shanghai

305

Gunma

80

Toyama191

Kagawa104

Zhongqing

49

Saitama

462

Fukui

102

Ehime

168

Dalian

8

Chiba

437

Kyoto

266

Tokushima

108

Total(foreign)

Ibaraki

124

Shiga

135

Kochi

64

10,976362(Overseas Operations)
In the People’s Republic of China, the Company established Lawson (China) Holdings, Inc. (hereinafter,“Lawson China”) in Shanghai in May 2012 as a holding company that controls business investment,
trademark licensing management, and administrative management functions within China. The
Company’s subsidiaries in Shanghai, Chongqing, and Dalian will be placed under the control of Lawson
China to ensure efficient management. As of the end of February 2013, Shanghai Hualian Lawson, Inc.
in Shanghai operated a total of 305 LAWSON stores (down nine year on year), Chongqing Lawson, Inc.
in Chongqing, 49 stores (up 11 year on year), and Dalian Lawson, Inc. in Dalian, eight stores (up five
year on year).
In Indonesia, PT MIDI UTAMA INDONESIA Tbk (hereinafter, “MIDI”), in which Lawson Asia
Pacific Holdings Pte. Ltd. (hereinafter, “LAP”), the Company’s subsidiary in Singapore, holds a 30%
stake, operates LAWSON stores. As of the end of February 2013, MIDI operated 574 stores following
its own store format and 83 LAWSON stores (up 68 year on year) in Jakarta and its outskirts as well as-3-

on the island of Bali.
In the United States, Lawson USA Hawaii, Inc., the Company’s US subsidiary in Hawaii, launched its
first LAWSON store in Honolulu in July 2012. As of the end of February 2013, two LAWSON stores
were operating in Hawaii—one in the Sheraton Waikiki Hotel and the other in Moana Surfrider—both
attracting customers from around the world in addition to Japanese customers.
In Thailand, in November 2012, we established Saha Lawson Co., Ltd., a joint venture between LAP
and the SAHA Group, Thailand’s leading distributor of consumer goods, in preparation for opening
stores in the country in fiscal 2013.
[Net Sales at All LAWSON Stores in the Convenience Store Business]
Fiscal period

Product group
Processed foods
Fast foods
Daily
delivered foods
Nonfood products
Total

Previous fiscal year
March 1, 2011
to February 29, 2012
Sales
Percentage of(Millions of yen)
total (%)
1,022,619
56.0

Current fiscal year
March 1, 2012
to February 28, 2013
Sales
Percentage of(Millions of yen)
total (%)
1,064,13355.8

YOY percentagechange(%)
104.1

345,42418.9

373,385

19.6

108.1

263,179

14.4

272,312

14.3

103.5

194,58610.7

196,716

10.3

101.1

1,825,809

100.0

1,906,547

100.0

104.4

(Other Businesses)
In addition to convenience store operations and overseas operations, the Group is involved in theentertainment/home delivery business, financial services, and other businesses.
In the Group’s entertainment/home delivery business, the Company’s subsidiary, Lawson HMVEntertainment, Inc., successfully organized large-scale concerts by popular musicians, along with otherevents. As a result, revenues from the Group’s ticketing services for fiscal 2012 exceeded ¥100 billion, arecord high, which secured the Group a top-tier position in the ticketing industry.
In January 2013, Smart Kitchen, Inc., a joint venture with Yahoo JAPAN Corp., launched an online fooddelivery service targeting busy homemakers. By consolidating the Group’s merchandise procurement
capacity—well-proven by the popularity of NATURAL LAWSON among working women—and its
know-how in original product development with Yahoo’s expertise in creating and operating high-traffic
websites, Smart Kitchen offers via smartphone and tablet an easy-to-use and convenient online shopping
service, delivering proprietary food ingredient sets that can be cooked in no time by following simple
directions. Moreover, the assortment of items available is as large as that of a large-scale supermarket.
Lawson ATM Networks, Inc., which operates a financial-services-related business, posted a solid
performance owing to an increase in the number of ATMs installed in LAWSON and other stores, alongwith a rise in the number of transactions. We started providing financial services for eight new banks as
their business partner, bringing the total number of our financial institution partners to 58 nationwide,
including online banks, and the number of ATMs installed nationwide to 9,672 (up 670 year on year) asof the end of February 2013.
[Environmental and Social Contribution Activities]
The Company’s Environment and Social Contribution Division promoted environmental protection andsocial contribution activities, working together with franchise store owners and Group employees.
In response to the launch of the Feed-in Tariff Scheme for Renewable Energy, a measure taken by thegovernment against global warming, we started introducing solar power generation systems at our storesin October 2012 as our own initiative to tackle domestic energy issues. The systems will be installed at a
total of 2,000 stores by the end of fiscal 2013.
In December 2012, we opened a cutting-edge energy-saving pilot store in Ebina-shi, Kanagawa
Prefecture. Based on joint research with the Institute of Industrial Science of the University of Tokyo,
the pilot store harnesses renewable energy such as solar power and geo-heat to reduce electricity
consumption by about 30% compared with the fiscal 2010 level.
In our efforts to undertake social contribution activities at stores, we have been hosting the LAWSONGreen Fund, a donation project active since 1992; the Support For Dreams Fund, a scholarship program-4-

for senior high school students affected by the 2011 Great East Japan Earthquake; and a donation
campaign for regions hit by heavy rains in northern Kyushu. These initiatives have raised a combined
total of ¥502 million in fiscal 2012.
With a view to functioning as a lifeline to the community under all circumstances, the Group strives toimprove its management system to ensure that its stores are kept open or restored to operation as soon as
possible during or subsequent to a disaster. This enhancement is based on our hands-on experience in
coping with various disasters since the Great Hanshin-Awaji Earthquake. When the Great East Japan
Earthquake struck, the Group endeavored to continue operations in disaster-hit areas and promptly
resumed operations in areas struck by the tsunami by setting up temporary stores. In addition, we helped
these areas in their own restoration efforts, proactively sharing our experiences with the public.
In recognition of such activities, the Group received the Business Continuity Advancement Organization(BCAO) Award, which is presented to organizations that have contributed to the dissemination andpractical execution of the business continuity concept in Japan.
The Group also received Japan’s 2012 Minister of the Environment Award for the Promotion of
Measures to Cope with Global Warming in recognition of its significant contribution to preventing
global warming by adopting environmentally friendly materials for its packaging. This was the thirdtime the Group was given the award, following presentations in 2004 and 2009.
(2) Profit and Loss
In terms of operating results for the consolidated fiscal year under review, total operating revenues
increased year on year by ¥8,487 million to ¥487,445 million (up 1.8%) as a result of new store
openings and efforts to expand customer bases comprising homemakers and seniors. Operating income
grew ¥4,476 million to ¥66,246 million (up 7.2%) and ordinary income climbed ¥4,198 million to¥65,926 million (up 6.8%). Net income rose ¥8,297 million to ¥33,182 million (up 33.3%) owing to adecrease of ¥10,784 million in extraordinary loss resulting mainly from the absence of a loss on
adjustment for changes of accounting standard for asset retirement obligations and loss from disaster
caused by the Great East Japan Earthquake posted in the previous fiscal year.
(3) Outlook for Fiscal 2013
Outlook for the next fiscal year

Total operating revenues
Operating profit
Recurring profit
Net profit

2013 2Q (accumulated)¥Million
YoY, %
257,000
103.2
35,500102.7
34,600101.0
17,30096.9

2013 fiscal year
¥Million
YoY, %
516,000
105.9
70,000105.7
68,400103.8
35,900108.2(4) Analysis of Financial Position(i) Total assets, Total liabilities, Total net assets analysis
Total assets increased by ¥48,356 million year on year to ¥579,809 million, mainly due to a ¥25,303
million increase in net property and store equipment.
Total liabilities stood at ¥349,627 million, a year-on-year increase of ¥32,836 million, mainly owing to a
¥12,524 million rise in deposits received.
Net assets increased by ¥15,519 million year on year to ¥230,181 million. This was primarily due to anincrease of ¥13,904 million in retained earnings.
(ii) Cash flow analysis
Net cash provided by operating activities amounted to ¥85,188 million, ¥1,168 million lower year on
year, due to an increase of ¥13,303 million in income before income taxes and minority interests and adecrease of ¥11,877 million in accounts receivable—other.
Investing activities used net cash of ¥54,196 million, ¥1,283 million higher year on year, mainly due to a¥8,396 million increase in purchase of property and store equipment.
Financing activities used net cash of ¥31,979 million, ¥4,434 million higher year on year, mainlyreflecting a ¥3,386 million increase in repayments of lease obligations.

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(Reference) Trends in cash flow indicators
Fiscal 2010
Shareholders’ equity ratio (%)
Shareholders’ equity ratio on
market value basis (%)
Interest-bearing debt/cash flow
ratio (years)
Interest coverage ratio (times)

Fiscal 2011

Fiscal 2012

42.7

39.7

39.1

84.4

78.3

118.7

0.5

0.6

0.7

73.5

76.9

69.6

(Note) Shareholders’ equity ratio: Shareholders’ equity/Total assets
Shareholders’ equity ratio on market value basis: Market capitalization/Total assets
Interest-bearing debt/cash flow ratio: Interest-bearing debts/Cash flow provided by operating activities
Interest coverage ratio: Cash flow provided by operating activities/Interest expense
1. All indices are calculated using consolidated financial figures.
2. Market capitalization is calculated as closing share price at the end of period x the number of shares
outstanding at the end of period (excluding treasury stock)
3. The figure for net cash provided by operating activities in the consolidated statements of cash flows isused as cash flow provided by operating activities. Interest-bearing debts refer to the sum for all
liabilities in the consolidated balance sheets on which interest is paid. The figure for interest paid in the
consolidated statements of cash flows is used as interest expense.

-6-2. Management Policy(1) Basic Management Policy(i) Corporate Philosophy and Code of Conduct
The Group’s corporate philosophy of “Creating Happiness and Harmony in Our Communities” reflects its belief thatits social significance derives from relationships with all its stakeholders. Under this concept, the Group has
established a Code of Conduct based on three principles governing its day-to-day corporate activities:
1) Act with utmost consideration for others,2) Tackle challenges with innovative ideas and actions, and
3) See objectives through to the very end.
(ii) Vision
The Group is taking various steps to realize “Happiness and Harmony in Our Communities.” Central to this effort is
the idea of serving as the “Neighborhood Hot Station” (Machi No Hotto Station in Japanese), a nickname for theGroup’s stores, which embodies the Group’s vision of making the stores a place where customers can relax (hottosuru in Japanese) by offering “hot” new merchandise, information, and services that take into account local
preferences.
(2) Performance Indicators (Target)
From the perspective of medium-and-long-term management strategy, the Group believes that investing in businesses
with high return on investment (ROI) will maximize efficiency in the use of shareholders’ equity, which will in turnenhance shareholder value. The Group regards return on equity (ROE) as the best measure of optimal utilization ofshareholders’ equity. Accordingly, the Group is targeting an ROE of 20% on a consolidated basis over the mediumterm.
(3) Medium-and-Long-Term Management Strategies
The business environment facing convenience stores is defined by several factors, including: population decline
arising from Japan’s declining birthrate and aging society; deflation; and stronger environmental awareness. Neverbefore has the convenience store industry experienced such an environment. Against this backdrop, the Group
recognizes the following as priority issues ahead. The Group believes that its core business strategies must addressthese priority issues.
(4) Priority Issues of the GroupThe Group is promoting the following management measures with the aim of realizing its corporate philosophy of“Creating Happiness and Harmony in Our Communities.”(i) Develop merchandise assortments that meet customer needs
In an effort to create stores that meet the needs of customers from the local neighborhood, the Group will continue to
use the Ponta data to develop customer-centric merchandise assortments. We will place special focus on offering
evening and nighttime merchandise assortments that differentiate our stores from others, as well as healthy and highquality fresh food. We will also strive to serve customers with utmost sincerity and reinforce fast food sales.
(ii) Develop overseas business
The Group will strive to understand potential customer needs in each country and region overseas and will establish
business models tailored to each locality. Not being bound by Japanese-style business models or store formats, wewill pursue the hospitable customer service that is a signature feature of Japanese convenience stores while respecting
local cultures with a view to promoting pleasant shopping experiences.
(iii) Provide home delivery service to offer customers more convenience
The Group will offer customers the luxury of convenience store shopping from the comfort of their own homes. To
start with, we will establish a full-fledged home delivery network based on our Smart Kitchen delivery service tomeet the needs of busy homemakers and elderly people.
(iv) Promote internal control systems and address operating risks
In order to ensure business continuity, it is imperative to foster the Group’s internal control in its entirety and address
operating risks. In addition, we believe that taking a proactive approach to corporate governance will lead toenhancing corporate value. We will therefore continue to focus on promoting internal control and addressing
operating risks.
(5) Other Important Managerial Matters(i) Improving New Merchandise Development Capabilities
While strengthening its ability to develop safe and reliable original merchandise, the Group will proactively develop-7-

merchandise suited to regional preferences by focusing on such aspects as taste and price. We will also rebuild ourvalue chain spanning from merchandise development to procurement of ingredients, production, and logistics andleverage the Ponta card data to best effect. In this process, the Group aims to raise its original added value anddevelop merchandise that garners a strong customer response.
(ii) Improving Store Operation Capabilities
With the aim of creating stores tailored to local customers in each neighborhood, we will promote merchandise
assortments from the customers’ perspective by continuing to utilize Ponta card data.
In addition, by increasing our use of the core IT system, we will strive to improve ordering precision in order toreduce sales opportunity losses and product disposal losses. This series of operational reform initiatives is dubbed
PRiSM within the Group.
(iii) Reinforcing Store-Development Capabilities
With a view to creating stores that achieve high ROI, we will prioritize customer convenience and profitability forboth franchise store owners and headquarters in opening new stores by following the Group’s proprietary store
development standard focused on ROI.
(iv) Tailoring Store Formats to Suit Local Characteristics
Conscious that market needs are becoming increasingly complex and diversified, the Group provides store formats
that offer retail spaces and merchandise assortments to suit the location. As for the Group’s store development
strategy, regular LAWSON stores will be opened to target customers seeking new merchandise, famous brand goods,
and convenient services; and NATURAL LAWSON stores will be opened to target customers seeking beauty, health,and amenity. LAWSON STORE 100 stores will be opened to target customers seeking perishables packaged in small
quantities and easy-to-understand, standardized prices.
(v) Enhancing Convenience by Opening Stores in Special Locations and Expanding Financial Services
Through tie-ups with other corporations, the Group will open stores in special locations (captive commercial spaces
providing high profitability due to the absence of competing stores). In its financial services, the Group will aim toincrease convenience for customers by expanding the Ponta card programs and offering various services via the“Loppi” multimedia terminals and in-store ATMs. In addition, we are striving to enhance convenience by expanding
our infrastructure for electronic payment (e.g., Suica).
(vi) Reviewing the Franchise Package to Promote Co-existence and Co-prosperity for Franchise Store Owners andHeadquarters
In our endeavor to address changes occurring in the retail industry, we will promote co-existence and co-prosperity
for both franchise store owners and headquarters by increasing earnings on a stable and ongoing basis through theGroup’s proprietary initiatives, such as expanding the customer base and reducing opportunity loss, and by revisingfranchise agreements.
(vii) Accelerating Business Reform through Capital and Business Alliances
The Group continues to effectively respond to the rapidly changing social environment and the needs of customers
through capital and business alliances that enable it to improve profitability for both franchise store owners and theGroup by seeking maximum benefit and efficiency from the alliances.

-8-3. Consolidated Financial Statements(1) Consolidated Balance Sheets (Unaudited)
As of February 29, 2012 and February 28, 2013
(Millions of yen)
AssetsCurrent assets
Cash and bank deposits
Accounts receivable—due from franchised stores
Marketable securities
Merchandise inventories
Prepaid expenses
Accounts receivable—other
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and store equipment
Buildings and structures
Accumulated depreciation
Buildings and structures—net
Vehicles, tools, furniture and fixtures
Accumulated depreciation
Vehicles, tools, furniture and fixtures—net
Land
Lease assets
Accumulated depreciation
Lease assets—net
Construction in progress
Subtotal
Intangible fixed assets
Software
Software in progress
Goodwill
Other
Subtotal
Investments and other
Investments in Securities
Long-term loans receivable
Long-term prepaid expenses
Lease deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Subtotal
Total fixed assets
Total assets-9-February 29, 2012

February 28, 2013

79,074
19,521
4,999
8,075
8,110
32,645
4,800
3,080
(149)
160,157

84,77025,374
－
8,963
8,793
46,008
4,656
3,011(1,281)
180,296

219,536(112,475)
107,061
63,563(49,549)
14,013
6,815
72,538(18,400)
54,137
1,806
183,835

242,934(124,562)
118,372
67,399(52,637)
14,761
8,295
96,251(30,452)
65,7991,910
209,138

19,288
8,263
10,871
553
38,97722,255
1,659
9,683
491
34,0897,702
32,138
7,988
83,665
16,87015,968(15,851)

10,09834,5809,130
86,10916,215
1,368(1,217)

148,483
371,295
531,453

156,285
399,513579,809

Consolidated Balance Sheets (Unaudited)—Continued(Millions of yen)
Liabilities
Current liabilities
Accounts payable—trade
Accounts payable—trade for franchised stores
Accounts payable—due to franchised stores
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable—other
Income taxes payable
Deposits received
Accrued employees’ bonuses
Provision for use of points granted
Asset retirement obligations
Other
Total current liabilities
Long-term liabilities
Long-term loans payable
Long-term lease obligations
Allowance for employees’ retirement benefits
Allowance for retirement benefits to executive officers andcorporate auditors
Deposits received from franchisees and lessees
Asset retirement obligations
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain on available-for-sale securities
Land revaluation difference
Foreign currency translation adjustments
Total accumulated other comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets- 10 -

February 29, 2012

February 28, 2013

13,761
74,501
1,390－
500
11,223
17,541
15,30575,004
3,204
701
101
4,743
217,978

11,16976,018
1,403
1,431
－
14,48926,105
14,47487,529
2,544
215
108
4,304
239,794－
37,902
8,745
308

148
47,207
9,898
332

35,735
15,161
958
98,812
316,791

34,804
16,682758
109,833
349,627

58,50647,707
107,249(1,627)
211,835

58,50647,718
121,154(1,593)
225,785

(11)
(567)
(101)
(680)
442
3,064
214,662
531,453

78
(567)
1,179
690
427
3,279
230,181579,809(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income (Unaudited)
Consolidated Statements of Income (Unaudited)
For the fiscal year ended February 29, 2012 and February 28, 2013
(Millions of yen)
Total operating revenues
Net sales
Cost of goods sold
Gross profit on sales
Operating revenues
Franchise commission from franchised stores
Other
Operating revenues
Operating gross profit
Selling, general and administrative expenses
Advertising expenses
Supplies expenses
Directors’ compensations
Employees’ salaries and allowances
Employees’ bonuses
Provision for bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Legal and employee benefits expenses
Traveling and transportation expenses
Utilities expenses
Taxes and dues
Rents
Repair expenses
Rent expenses
Depreciation
Amortization of goodwill
Other
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest received
Compensation income for damage
Equity in earnings of affiliates
Other
Non-operating income
Non-operating expenses
Interest expense
Loss on cancellation of store lease
Other
Non-operating expenses
Recurring profit- 11 -

February 29, 2012
478,957
208,063
156,245
51,817

February 28, 2013
487,445
192,942
144,885
48,056

215,573
55,320270,893322,711230,00264,500294,503
342,560

14,146
4,363
553
45,399
2,665
3,880
1,884
88
6,413
2,238
3,661
2,784
78,4836,456
8,204
28,998948
49,767
260,941
61,76916,6074,740
448
45,658
2,250
2,544
2,078
86
6,921
2,319
3,794
2,977
84,578
6,829
5,913
34,0301,056
53,479276,313
66,246

672
44
380
1,169
2,268

756
265
394
794
2,211

1,122
661
526
2,309
61,728

1,231
534
765
2,531
65,926

Consolidated Statements of Income (Unaudited)—Continued(Millions of yen)February 29, 2012
Extraordinary gains
Gain on step acquisitions
Gain on sales of investment securities
Gain on negative goodwill
Compensation income
Other
Extraordinary gains
Extraordinary losses
Loss on disposal of fixed assets
Loss on impairment of long-lived assets
Provision of allowance for doubtful accounts
Loss on disaster
Impropriety-related loss
Other
Extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Deferred income taxes
Income taxes
Income before minority interests
Minority interests in income
Net profit- 12 -

February 28, 2013

1,570
－
291
－
197
2,059

－
145
153
71
11
381

2,068
3,318
－
3,460
8,292
361
17,502
46,28522,963(2,321)
20,64125,643758
24,885

1,641
2,929
1,127
－
－
1,018
6,717
59,58925,345748
26,09433,494311
33,182

Consolidated Statements of Comprehensive Income (Unaudited)
For the fiscal year ended February 28, 2013
(Millions of yen)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Land valuation difference
Foreign currency translation adjustment
Share of other comprehensive income of associates accounted forusing equity
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests- 13 -

February 29, 2012
25,643February 28, 201333,494

(6)
67
(116)
16

89
－
1,926
(639)

(39)
25,603

1,377
34,871

24,843760

34,553318

(3) Consolidated Statements of Changes in Net Assets (Unaudited)(Millions of yen)
Shareholders’ equity
Common stock and preferred stock
Capital stock
Changes during the current period
Total changes during the current period
Balance at the end of the current period
Capital surplus
Capital stock
Changes during the current period
Disposal of treasury stock
Exercise of subscription rights to shares(Issuarance of treasury stock)Total changes during the current period
Balance at the end of the current period
Retained earnings
Capital stock
Changes during the current period
Cash dividends paid
Net income
Reversal of land revaluation differences, net of tax
Total changes during the current period
Balance at the end of the current period
Treasury stock
Capital stock
Changes during the current period
Purchase of treasury stock
Disposal of treasury stock
Exercise of subscription rights to shares(Issuarance of treasury stock)Total changes during the current period
Balance at the end of the current period
Total shareholders’ equity
Capital stock
Changes during the current period
Cash dividends paid
Net profit
Purchase of treasury stock
Disposal of treasury stock
Exercise of subscription rights to shares(Issuarance of treasury stock)
Reversal of land revaluation differences, net of tax
Total changes during the current period
Balance at the end of the current period- 14 -

February 29, 2012

February 28, 2013

58,50658,506－58,506－58,506

47,69647,707

－
10

0
11

10
47,707

11
47,71899,608107,249(17,177)
24,885(67)
7,640
107,249(19,278)
33,182－
13,904
121,154(1,693)(1,627)

(3)
－
69

(7)
0
41

65
(1,627)33(1,593)204,117

211,835(17,177)
24,885(3)－
80(19,278)
33,182
(7)
0
52

(67)
7,717
211,835－
13,950225,785

Consolidated Statements of Changes in Net Assets (Unaudited)—Continued(Millions of yen)February 29, 2012
Accumulated other comprehensive income
Unrealized holding gains on securities, net of tax
Capital stock
Changes during the current period
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period
Land revaluation difference, net of tax
Capital stock
Changes during the current period
Reversal of land revaluation difference, net of tax
Total changes during the current period
Balance at the end of the current period
Foreign currency translation adjustments
Capital stock
Changes during the current period
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period
Total accumulated other comprehensive income
Capital stock
Changes during the current period
Reversal of land revaluation difference, net of tax
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period
Stock acquisition rights
Capital stock
Changes during the current period
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period
Minority interests
Capital stock
Changes during the current period
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period- 15 -

February 28, 2013

(4)

(11)

(6)
(6)
(11)

89
89
78

(634)

(567)

67
67
(567)

－
－
(567)

1

(101)

(102)
(102)
(101)

1,280
1,280
1,179

(638)

(680)

67
(109)
(42)
(680)

－
1,370
1,370
690

405

442

37
37
442

(15)
(15)
427

4,581

3,064

(1,516)(1,516)
3,064

214
214
3,279

Consolidated Statements of Changes in Net Assets (Unaudited)—Continued(Millions of yen)
Total net assets
Capital stock
Changes during the current period
Cash dividends paid
Net profit
Purchase of treasury stock
Disposal of treasury stock
Exercise of subscription rights to shares(Issuarance of treasury stock)
Net changes of items other than shareholders’ equity
Total changes during the current period
Balance at the end of the current period- 16 -

February 29, 2012

February 28, 2013

208,466

214,662(17,177)
24,885(3)－
80(19,278)
33,182(7)
052(1,588)6,195
214,662

1,569
15,519230,181(4) Consolidated Statements of Cash Flows (Unaudited)
For the fiscal year ended February 29, 2012 and February 28, 2013
(Millions of yen)
Operating activities
Income before income taxes
Depreciation of property and store equipment
Loss from disposal of fixed assets
Loss on impairment of long-lived assets
Loss on adjustment for changes of accounting standard for asset
retirement obligations
Loss on disaster
Gain on step acquisitions
Increase in provision for allowance for retirement benefits to employees
Increase in allowance for doubtful accounts
Equity in earnings (losses) of an affiliates
Interest received
Interest expense
Other – net
Decrease (increase) in accounts receivable due from franchised stores
Decrease (increase) in merchandise inventories
Decrease (increase) in accounts receivable—other
Decrease (increase) in claims provable in bankruptcy, claims
provable in rehabilitation
Increase (decrease) in accounts payable—trade and due tofranchised stores
Increase (decrease) in accounts payable—other
Increase (decrease) in deposits received
Increase (decrease) in lease deposits from franchisee and lessees
Other—net
SubtotalInterest received
Interest expenses paid
Income taxes paid
Loss on disaster paid
Net cash provided by operating activities
Investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Increase (decrease) in long-term loans receivable—net
Purchase of investment securities
Purchase of stocks of subsidiaries and affiliates
Purchase of investments in subsidiaries resulting in change in scopeof consolidation
Payments for transfer of business
Payment for acquisition of property and store equipment
Payment for acquisition of intangible fixed assets
Increase (decrease) in lease deposit—net
Increase (decrease) in long-term prepaid expenses
Other—net
Net cash used in investing activities- 17 -

February 29, 2012

February 28, 2013

46,28537,845
2,064
3,318
8,292

59,58943,886
1,641
2,929
－

3,460
(1,570)
1,215
(384)
(290)
(672)
1,122
407
(1,348)(920)(1,444)
236

－
－
1,153
(13,510)
(8)
(756)
1,231
717
(5,781)(861)(13,322)
14,546

3,053(1,203)(1,341)
12,656(1,596)(1,804)
108,583673(1,122)(18,405)(3,372)86,356

8,592
12,524(935)
1,455
111,888750(1,224)(26,224)－
85,188(20,404)
20,104(297)(75)(6,335)(982)(23,900)
22,300(2,441)(2,053)(1,327)－(3,415)(28,866)(7,449)(1,932)(3,511)
253(52,912)－(37,263)(5,658)(2,429)(2,705)
1,284(54,196)

Consolidated Statements of Cash Flows (Unaudited)—Continued(Millions of yen)
Financing activities
Repayments of lease obligations
Cash dividends paid
Other—net
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Increase (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period- 18 -

February 29, 2012

February 28, 2013(10,382)(17,177)14(27,544)8
5,908
67,712
49(13,769)(19,278)
1,067(31,979)
83(903)
73,670－73,67072,766

(5) Notes Concerning Going Concern Assumption
None(6) Basis of Presenting the Consolidated Financial Statements
1. Scope of consolidation(i) Consolidated subsidiaries: 11(Japan)Lawson HMV Entertainment, Inc.
Lawson ATM Networks, Inc.
BestPractice Inc.
Ninety-nine Plus, Inc.
Smart Kitchen, Inc.
SCI, Inc.
(Overseas)
Chongqing Lawson, Inc.
Shanghai Hualian Lawson, Inc.
Dalian Lawson, Inc.
Lawson Asia Pacific Holdings Pte. Ltd.
Lawson (China) Holdings, Inc.
Among companies mentioned above, Smart Kitchen, Inc., SCI, Inc. and Lawson (China) Holdings, Inc., whichwere established on the fiscal year under review, have been included in the scope of consolidation.
Lawson Toyama, Inc. was excluded from the scope of consolidation, because it was dissolved after merging with
Lawson, Inc. on December 1, 2012. In addition, Cross Ocean Media, Inc. was excluded from the scope of
consolidation, because its liquidation was completed of on November 27, 2012.
(ii) Non-consolidated subsidiaries(Japan)Natural Lawson Direct, LLP
LAWSONWILL, Inc.
HATS UNLIMITED CO., LTD.
(Overseas)
Lawson USA Hawaii, Inc.
Shanghai Lesong Trading Co., Ltd.
Hangzhou Lawson Department store Co., Ltd.
(Reasons for excluding from the scope of consolidation)
The above non-consolidated subsidiaries are excluded from the scope of consolidation, because their total assets,
net sales, net income and retained earnings, etc. are negligible and do not interfere with reasonable judgment on
the corporate group’s financial condition and business results.
2. Application of the equity method(i) Affiliated companies to which the equity method is applied: 2(Japan)Lawson Okinawa, Inc.
(Other)PT MIDI UTAMA INDONESIA Tbk
Venture Republic Inc., which had been an equity method affiliate in the previous fiscal year, was excluded fromthe scope of the equity method affiliate, because the Company sold all equities in Venture Republic Inc. it owned.
(ii) The Company excluded non-consolidated subsidiaries (Natural Lawson Direct, LLP, LAWSONWILL, Inc.,HATS UNLIMITED CO., LTD., Lawson USA Hawaii, Inc., Shanghai Lawson Trading Co., Ltd. and Hangzhou
Lawson Department Co., Ltd.) and affiliated companies (KOBE HOT DELI CO., LTD., Herushiru, Inc., Double
Culture Partners Co., Ltd., Lawson Farm Chiba, Inc. and Lawson Farm Kagoshima, Inc., Lawson Farm Tokachi,Inc., Lawson Farm Oita, Inc., Lawson Farm Oita Bungoono, Inc., Lawson Farm Tottori, Inc., Lawson Farm
Hiroshima Jinsekikogen-cho, Inc., Lawson Farm Miyazaki, Inc., Lawson Farm Ehime, Inc. and Saha-Lawson, Co.,
Ltd.) from the scope of the equity method affiliate, because net income/loss (corresponding to equity interest) andretained earnings (corresponding to equity interest) of these non-consolidated subsidiaries and affiliatedcompanies do not significantly influence the consolidated financial statements and are negligibly insignificant.

- 19 -

(iii) The balance sheet date of PT MIDI UTAMA INDONESIA Tbk is December 31. In order to prepare for the
consolidated financial statements, temporary financial statements based on the latest quarterly financial statements
are used and significant transactions which occur between the latest quarterly balance sheet date and theconsolidated balance sheet date are adjusted as required for consolidation.
3. Closing day for settlement of accounts of consolidated subsidiaries
The balance sheet date of Chongqing Lawson, Inc., Shanghai Hualian Lawson, Inc., Dalian Lawson, Inc. and
Lawson (China) Holdings, Inc. is December 31. In order to prepare for the consolidated financial statements,
temporary financial statements based on the latest quarterly financial statements are used and significant
transactions which occur between the latest quarterly balance sheet date and the consolidated balance sheet dateare adjusted as required for consolidation. The fiscal year end date for other consolidated subsidiaries correspondswith the consolidated balance sheet date.
4. Summary of Significant Accounting Policies(i) Valuation basis and method for important assets
Marketable securities and investments in securities:
Held-to-maturity debt securities: Carried at amortized cost.
Available-for-sale securities:
Securities whose market value is readily determinable: Reported at market value, with unrealized gains andlosses, net of applicable taxes, reported in a separate component of net assets. The cost of securities sold isdetermined based on the moving-average method.
Other: Stated at cost determined by the moving-average method.
Inventories:
About the product, have adopted the retail cost method.
(For balance sheet is determined by the method according to the book value write-down based on the reductionof profitability)
Certain consolidated subsidiaries have adopted the cost method individually. (For balance sheet is determinedby the method according to the book value write-down based on the reduction of profitability)(ii) Depreciation method of depreciable assets
Property and store equipment (except for lease assets):
Depreciation is mainly computed by the declining-balance method at rates based on the estimated useful
lives of the assets. The range of useful lives is from 10 to 34 years for buildings and from 5 to 8 years forfurniture, fixtures and equipment.
Intangible fixed assets (except for lease assets):
Amortization of intangible assets is computed by the straight-line method.
Software costs of software for internal use are amortized by the straight-line method over 5 years, which is
the internal useful life.
Lease assets:
Previously, these leases were accounted for as rental transactions. Furthermore, in terms of the depreciation
method for leased assets related to finance leases that do not transfer ownership of leased property, theCompany applies the straight-line method using the lease term as the useful life and a residual value of zero.
However, the Company has continued to treat as rental transactions finance leases that do not transfer
ownership of leased property and that commenced before the first fiscal year in which the new accounting
standard was applied.
Long-term prepaid expense:
Amortization of long-term prepaid expense is computed by the straight-line method.
(iii) Accounting standard for important reserves
Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at an amount of possible losses from uncollectable receivables
based on the actual rate of losses from bad debt for ordinary receivables, and on estimated recoverability forspecific doubtful receivables.
Accrued employees’ bonuses:
Accrued employees’ bonuses are provided for payments of employees’ bonuses based on the estimatedamounts.
Provision for use of points granted:
The Company provides, to MY LAWSON POINT holders and LAWSON PASS holders when purchasing
goods, an entitlement to certain points that the holder can redeem for a discount on subsequent purchasesfrom LAWSON stores.

- 20 -

Allowance for employees’ retirement benefits:
Allowance for employees’ retirement benefits is provided at the amount accrued based on the projected
benefit obligations and plan assets at the balance sheet date. Actuarial differences will be mainly amortizedfrom the following fiscal year on a straight-line basis over a certain period (10 years) within an averageremaining service period of employees at the time of their occurrence. Prior service cost is mainly amortized,
starting the fiscal year incurred, on a straight-line basis over a certain period (10 years) within an averageremaining service period of employees.
Allowance for retirement benefits to directors and corporate auditors:
Allowance for retirement benefits to executive officers of the Company, and to directors and corporate
auditors of the certain consolidated subsidiary are calculated to state the liability at 100% of the amount thatwould be required if all corporate auditors, executive officers and directors resigned their services with theCompany at the balance sheet date.
(iv) Foreign currency transactions and foreign currency financial statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies are translated
into Japanese yen at the exchange rates at the balance sheet date. The foreign exchange gains and losses fromtranslation are recognized in the consolidated statements of income. The balance sheet accounts as well as revenue
and expense accounts of foreign affiliated companies are translated into Japanese yen at the current exchange rate
as of the balance sheet date except for shareholders’ equity, which is translated at the historical rate. Differences
arising from such translation are shown as “foreign currency translation adjustments” in a separate component of
net assets.
(v) Amortization of Goodwill
Concerning goodwill, the amount is amortized on a straight-line basis over a maximum of 20 years, depending on
the reason for the occurrence of goodwill.
(vi) Cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents in the consolidated statements of cash flows include cash on hand, demand deposits
and short-term investments due within 3 months from the acquired date, which are easily convertible into cashwith little risk of value fluctuation.
(vii) Other significant items related to the preparation of consolidated financial statements
Accounting for consumption tax:
Consumption tax is accounted for using the tax exclusion method.
(7) Accounting Standards, etc. that are not applied
Accounting Standard for Retirement Benefits (on May 17, 2012) and Guidance on Accounting Standard for
Retirement Benefits (ASBJ Guidance NO. 25, on May 17, 2012)
1. Outline(i) Treatment on consolidated balance sheets
Unrecognized actuarial differences and unrecognized prior service costs will be recorded in the “Net assets”
section (accumulated other comprehensive income) after adjusting income tax effect and the amount that shows
the reserve will be recorded as liabilities (or assets).
(ii) Treatment on consolidated statements of income and consolidated statements of comprehensive income
Among actuarial differences and prior service cost arising during the period, the portion that is not expensed will
be recorded after including in other comprehensive income.
Among unrecognized actuarial differences and unrecognized prior service costs that are recorded in accumulated
other comprehensive income, the portion that is expense for the fiscal year under review will be adjusted withother comprehensive income (reclassification adjustment).
2. Scheduled application date
The application will start from the end of a fiscal year that commences after April 1, 2013.
3. Influence from the application of the relevant Accounting Standards
Influence on the financial statements in its preparation is under evaluation.
(8) Changes in presentation(Consolidated Balance Sheets)
In “Investments and other” section, “Claims provable in bankruptcy, claims provable in rehabilitation and other”- 21 -

were presented separately in the previous fiscal year. Due to a decline in financial materiality, “Claims provable inbankruptcy, claims provable in rehabilitation and other” are now presented in “Other.” To reflect this change inmethod of presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in “Investments and other” section, the 15,136 million yen that had previously been presented as“Claims provable in bankruptcy, claims provable in rehabilitation and other” in the Consolidated Balance Sheets
for the previous fiscal year is now included in “Other.”In “Current liabilities” section, “Consumption taxes payable” were presented separately in the previous fiscal year.
Due to a decline in financial materiality, “Consumption taxes payable” are now presented in “Other.” To reflect
this change in method of presentation, the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, in “Current liabilities” section, the 1,508 million yen that had previously been presented as“Consumption taxes payable” in the Consolidated Balance Sheets for the previous fiscal year is now included in“Other.”In “Current liabilities” section, “Accrued expenses” were presented separately in the previous fiscal year. Due to a
decline in financial materiality, “Accrued expenses” are now presented in “Other.” To reflect this change inmethod of presentation, the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in “Current liabilities” section, the 2,912 million yen that had previously been presented as “Accrued
expenses” in the Consolidated Balance Sheets for the previous fiscal year is now included in “Other.”In “Long-term liabilities” section, “Accumulated impairment loss on long-term leased assets” was presented
separately in the previous fiscal year. Due to a decline in financial materiality, “Accumulated impairment loss on
long-term leased assets” is now presented in “Other.” To reflect this change in method of presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, in “Long-term liabilities” section, the 679 million yen that had previously been presented as“Accumulated impairment loss on long-term leased assets” in the Consolidated Balance Sheets for the previous
fiscal year is now included in “Other.”(Consolidated Statements of Income)In “Selling, general and administrative expenses” section, “Provision of allowance for doubtful accounts” waspresented separately in the previous fiscal year. Due to a decline in financial materiality, “Provision of allowancefor doubtful accounts” is now presented in “Other.” To reflect this change in method of presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, in “Selling, general and administrative expenses” section, the 8 million yen that had previously beenpresented as “Provision of allowance for doubtful accounts” in the Consolidated Statements of Income for theprevious fiscal year is now included in “Other.”In “Non-operating income” section, “Compensation income for damage” was included in “Other” in the previous
fiscal year. Due to an increase in financial materiality, “Compensation income for damage” is now separately
presented. To reflect this change in method of presentation, the consolidated financial statements for the previous
fiscal year have been reclassified.
As a result, in “Non-operating income” section, the 44 million yen that had previously been included in “Other” in
the Consolidated Statements of Income for the previous fiscal year is now separately presented as “Compensation
income for damage.”
In “Non-operating income” section, “Compensation income for removal” was presented separately in the previous
fiscal year. Due to a decline in financial materiality, “Compensation income for removal” is now presented in“Other.” To reflect this change in method of presentation, the consolidated financial statements for the previous
fiscal year have been reclassified.
As a result, in “Non-operating income” section, the 446 million yen that had previously been presented as“Compensation income for removal” in the Consolidated Statements of Income for the previous fiscal year is now
included in “Other.”In “Extraordinary loss” section, “Loss on sales of noncurrent assets” was presented separately in the previous
fiscal year. Due to a decline in financial materiality, “Loss on sales of noncurrent assets” is now presented in“Other.” To reflect this change in method of presentation, the consolidated financial statements for the previous
fiscal year have been reclassified.
As a result, in “Extraordinary loss” section, the 40 million yen that had previously been presented as “Loss on
sales of noncurrent assets” in the Consolidated Statements of Income for the previous fiscal year is now included- 22 -

in “Other.”(Consolidated Statements of Cash Flows)
In “Net cash used in investing activities” section, “Purchase of investment securities” was included in “Other” inthe previous fiscal year. Due to an increase in financial materiality, “Purchase of investment securities” is now
separately presented. To reflect this change in method of presentation, the consolidated financial statements forthe previous fiscal year have been reclassified.
As a result, in “Net cash used in investing activities” section, the (75 million yen) that had previously been
included in “Other” in the Consolidated Statements of Cash Flows for the previous fiscal year is now separately
presented as “Purchase of investment securities.”(9) Additional information
For the accounting changes and error corrections made after the beginning of the fiscal year under review, theCompany has adopted the Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Statement
No. 24 of December 4, 2009) and the “Guidance on Accounting Standard for Accounting Changes and Error
Corrections” (ASBJ Guidance No. 24 of December 4, 2009).
(10) Notes to Consolidated Financial Statements(Notes to the Consolidated Balance Sheets)*1. Investment in non-consolidated subsidiaries and affiliated companies
Investments in securities (stock)
Investment amount for jointly-controlled
companies
Other (other equity investments)

As of February 29, 2012
¥7,175 million

As of February 28, 2013
¥7,407 million¥100 million¥93 million¥96 million¥38 million*2. Accounts receivable due from franchised stores, accounts payable due to franchised stores—theamounts of credits and debts incurred for the deal with franchised stores.
*3. Accounts payable-trade for franchised stores—the amounts payable to vendors for merchandisepurchased by franchised stores.
*4. Deposits received from franchise and lessees—the amounts received from mainly franchised stores.
*5. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation ofLand (Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net
assets as land revaluation difference.
Revaluation method:
The value of land is determined based on the road-based prices adjusted reasonably as stipulated in
Article 2, Item 4 of the Ordinance Implementing the Law Concerning Revaluation of Land
(Government Ordinance No. 119, March 31, 1998) and the assessed value as stipulated in Article 2,
Item 5 of the same Ordinance.
Date of revaluation: February 28, 2002

As of February 29, 2012
The difference between book value andmarket value of the revalued land as ofbalance sheet date.

¥287 million- 23 -

As of February 28, 2013¥307 million

(Notes to Consolidated Statements of Income)*1 Net sales, cost of goods sold, operating gross profit—the amounts from mainly company operated
stores.
*2 Distribution of loss on disposal of fixed assets(Millions of yen)
From March 1, 2011 to February 29, 2012
Buildings and structures
1,422
Furniture, fixtures and equipment
541
Leased property
100
Software2
Other
1

From March 1, 2012 to February 28, 2013
1,156
239
162
82
0

*3 Loss on impairment of long-lived assets
The Group recognized an impairment loss mainly for each stores as the smallest category bear cash
flows.
The carrying amount of those assets was written down to the recoverable amount. The Group
recognized impairment loss as special losses on following assets due to a decline in value of therelated asset categories due mainly to a continuous operating losses.
From March 1, 2011 to February 29, 2012
Category
by useLocation
Tokyo

StoresOsaka
Others

Total―

Million ofyen

AssetsBuildings and structures; furniture,
fixtures and equipment; and others
Buildings and structures; furniture,
fixtures and equipment; and others
Buildings and structures; furniture,
fixtures and equipment; and others―

Category by fixed assets

546
557
2,213
3,318

(Millions of yen)

Buildings and structures
Furniture, fixtures and equipment
Leased property
Land
Other

2,101
251
673
155
136

Recoverable value of the assets of the Group is the higher amount of net selling price or value
in use. Not selling price of land was calculated based on appraised value by real estate appraiser
or contract price, and the value in use was calculated by discounting estimated future cash
flows to which the 4.3% discount rate was mainly applied.
From March 1, 2012 to February 28, 2013
Category
by useLocation
Tokyo

StoresOsaka
OthersOthers
Total

―
―
―

AssetsBuildings and structures; furniture,
fixtures and equipment; and others
Buildings and structures; furniture,
fixtures and equipment; and others
Buildings and structures; furniture,
fixtures and equipment; and others
Software
Others―- 24 -

Million of
yen
420
472
2,009
25
1
2,929

Category by fixed assets
Buildings and structures
Furniture, fixtures and equipment
Leased property
SoftwareOther

1,923mil
204mil758mil25mil
17mil

Recoverable value of the assets of the Group is the higher amount of net selling price or value
in use. Not selling price of land was calculated based on appraised value by real estate appraiser
or contract price, and the value in use was calculated by discounting estimated future cash
flows to which the 4.0% discount rate was mainly applied.
*4 Loss on disaster
Loss on disaster is attributable to the Great East Japan Earthquake. The breakdown is as follows:
From March 1, 2011 to February 29, 2012
Loss of franchise support
Loss of fixed assets
Other
Total

1,793 mil
644 mil
1,023 mil
3,460 mil(Notes to the Consolidated Statements of Comprehensive Income)For the fiscal year ended February 28, 2013
* Reclassification adjustments to gain or loss and income tax relating to other comprehensive income(Millions of yen)
Valuation difference on available-for-sale securities
Gain or loss arising during the period
143
Reclassification adjustments to profit or loss
(1)
Amount before income tax effect142
Income tax effect(52)
Valuation difference on available-for-sale securities
89
Foreign currency translation adjustment:
Gain or loss arising during the period
1,926
Share of other comprehensive income of associates accounted forusing equity method:Gain or loss arising during the period(639)
Total other comprehensive income
1,377(Notes to the Consolidated Statements of Changes in Net Assets)
Previous period (From March 1, 2011 to February 29, 2012)
1. Number of shares of outstanding stock and treasury stock

Outstanding stock
Common stock
Treasury stock
Common stock(*)

Number of shares atthe beginning of theperiod(thousand shares)

Increase during theperiod(thousand shares)

Decrease during theperiod(thousand shares)

Number of shares atthe end of the period(thousand shares)

100,300——

100,300

433

0

17

416

(*) The 0 thousand shares increase in treasury stock resulted from the 0 thousand shares increase due to purchase of stock lessthan one share unit.
The 17,000 share decrease in treasury stock resulted from the 17,000 share decrease due to exercise of a right for stockacquisition and the 0 thousand shares decrease due to requests for additional purchase of stock less than one share unit.

- 25 -

2. Stock acquisition rights and treasury stock acquisition rights

Terms of stockacquisition rights

Classification

Submitting
company(Parent
company)

Class and number of sharessubject to stock acquisition rights
Number (shares)
Beginning Increase
Decreaseof theduring the during theperiodperiodperiodClass

End of theperiodBalance at
end of thecurrent
period(Millionsof yen)Stock acquisitionrights (ordinary stock
options)

—

—

—

—

—

442

Total

—

—

—

—

—

442

3. Dividend
1) Dividend payment
Class ofsharesDate of resolution
The General meeting ofshareholders(May 24, 2011)
Directors’ meeting(October 13, 2011)

Amounts of dividend
Dividend per
payment
shares (yen)(Millions of yen)

Date recorded for
dividend

Effective dateCommon
stock

8,488

85

As of February 28,
2011

As of May 25,
2011

Common
stock

8,688

87

As of August 31,
2011

As of November
10, 2011

2) Dividends for which effective date is after balance sheet date of year-ended, among dividends attributed in thecurrent period
Date of resolution

Class ofsharesReserve ofdividend

Amounts ofdividend payment(Millions of yen)

Dividend pershares (yen)Daterecorded for
dividend

Effectivedate

The General
meeting ofshareholders(May 29, 2012)

Commonstock

Retainedearnings

9,289

93

As of
February 29,
2012

As of May30, 2012

Current period (From March 1, 2012 to February 28, 2013)
1. Number of shares of outstanding stock and treasury stock
Number of shares atthe beginning of theperiod(thousand shares)
Outstanding stock
Common stock
Treasury stock
Common stock (*)

Increase during
the period(thousand shares)

Decrease during
the period(thousand shares)

Number of shares atthe end of the period(thousand shares)

100,300——

100,300

416

1

10

406

(*) The 1 thousand shares increase in treasury stock resulted from the purchase of stock less than one share unit.
The 10,000 share decrease in treasury stock resulted from the 10,000 share decrease due to exercise of a right for stockacquisition and the 0 thousand shares decrease due to requests for additional purchase of stock less than one share unit.

- 26 -

2. Stock acquisition rights and treasury stock acquisition rights

Terms of stockacquisition rights

Classification

Submitting
company(Parent
company)

Class

Class and number of sharessubject to stock acquisition rights
Number (shares)
Beginning
Increase
Decreaseof theduring the during theperiodperiodperiodEnd of theperiodBalance at
end of thecurrent
period(Millionsof yen)Stock acquisitionrights (ordinary stock
options)

—

—

—

—

—

427

Total

—

—

—

—

—

427

3. Dividend
1) Dividend payment
Date of resolution
The General meetingof shareholders(May 29, 2012)
Directors’ meeting(October 3, 2012)

Class ofsharesAmounts of dividend
Dividend per
payment
shares (yen)(Millions of yen)

Date recorded for
dividend

Effective dateCommon
stock

9,289

93

As of
February 29, 2012

As of May 30,
2012

Common
stock

9,988

100

As of
August 31, 2012

As of November
9, 20122) Dividends for which effective date is after balance sheet date of year-ended, among dividends attributed in thecurrent period
The Company plans to propose the resolution as follows.
Date of resolution

Class ofsharesReserve ofdividend

Amounts ofdividend payment(Millions of yen)

Dividend pershares (yen)Daterecorded for
dividend

Effectivedate

The General
meeting ofshareholders(May 21, 2013)

Commonstock

Retainedearnings

9,989

100

As of
February 28,
2013

As of May22, 2013- 27 -

(Notes to the Consolidated Statements of Cash Flows)*1 Relations between the year-end balance of cash and cash equivalents and the accounts listed in the
consolidated balance sheets(Millions of yen)

Cash and bank deposits
Marketable securities
Time deposits, etc., for which the deposit period exceeds
three months
Cash and cash equivalents

From March 1, 2011
to February 29, 2012
79,0744,999

From March 1, 2012
to February 28, 2013
84,770—(10,404)(12,004)

73,67072,766*2 Description of significant non-fund transactions
Assets and liabilities related to finance lease transactions(Millions of yen)

Assets and liabilities related to finance lease transactions- 28 -

From March 1, 2011
to February 29, 2012
21,969From March 1, 2012
to February 28, 2013
24,945(Notes to Lease Contracts)
1. Finance lease transactions (lessees)
Non-ownership-transferred finance lease transactions(i) Details of leased assets
Mainly store furniture (including fixtures and fittings) used in the convenience store business(ii) Depreciation method for leased assets
As stated in the Basis of Presentation of the Consolidated Financial Statements under “4. Accounting standards(2) Depreciation methods for important depreciable assets.”
With regard to non-ownership-transferred finance lease transactions whose effective date of lease transaction
precedes February 28, 2009, the Company applies the accounting method that it uses to account for ordinary
lease transactions. Details of the transaction are summarized below.
1) The assumed data as to acquisition cost, accumulated depreciation and net leased property(Millions of yen)
As of February 29, 2012
Acquisition cost

Accumulated
depreciation

Accumulated
impairment loss

Leased property

Furniture, fixtures andequipment

30,18121,057

754

8,368

Total

30,18121,057754

8,368(Millions of yen)
As of February 28, 2013
Acquisition cost

Accumulated
depreciation

Accumulated
impairment loss

Leased property

Furniture, fixtures andequipment

21,03516,006

662

4,366

Total

21,03516,006662

4,3662) Obligations under finance leases(Millions of yen)
As of February 29, 2012

As of February 28, 2013

Obligations under finance leases
Due within one year

4,324

2,950

Due after one year

5,411

2,474

Total

9,735

5,425

667

533

Allowance for impairment loss on
leased property- 29 -

3) Lease payments, depreciation expense, interest expense and impairment loss
(Millions of yen)
From March 1, 2011
to February 29, 2012
Lease payments

From March 1, 2012
to February 28, 2013
6,940

4,374

444

187

6,627

4,077

Interest expense

389

215

Impairment loss

388

69

Transfer from allowance for
impairment loss on leased property
Depreciation expense4) Computation method of depreciation expense
Depreciation expense is computed by the straight-line method, assuming the lease period as the useful life andno residual value.
5) Computation method of interest expense
The difference between the total lease contract amount and the acquisition cost is assumed to be interest, andinterest expense is computed by the interest method.
2. Operating lease contracts
Obligations under non-cancellable operating leases(Millions of yen)
As of February 29, 2012

As of February 28, 2013

Due within one year

910

976

Due after one year

1,526

1,688

2,437

2,664

Total

- 30 -

(Segment Information)i) Outline of reporting segments
The Company’s financial information is provided separately by reporting segment and is subject to regularreview by the board of directors with regard to the allocation of managerial resources and performance
evaluation.The Group’s primary business is the operation of convenience stores, which is undertaken by theincorporation of related businesses.
Therefore, the Group has made the convenience store unit its main reporting segment, based on
consideration of financial characteristics and the nature of the services provided.
Lawson, Inc., Ninety-nine Plus, Inc. and Lawson Toyama running the LAWSON, NATURAL LAWSON,LAWSON STORE 100 and other chains, the convenience store unit operates a franchise system as well as
undertaking the direct management of stores in Japan. SCI, Inc. performs the increase in efficiency andoptimization of the whole process as a subsidiary which manages the process from supply to sale
synthetically.
ii) Information related to the amount of sales, profit and loss by segmentfrom March 1, 2011, to February 29, 2012
(Millions of yen)
Convenience
Store businessTotal operating
revenues
Sales to externalcustomers
Internal sales ortransfers between
segments
Total
Segment profit
Segment asset
Other
depriciation
Goodwill
depreciation
Invest foraffiliates
Increase of
fixed assets

Others(Note 1)

Total

Adjusted
amountAmount posted on theConsolidated profit andloss statement (Note 2)

413,899

65,057478,957－

478,957

1,975

2,129

4,105

(4,105)－415,875
57,371
520,992

67,187
4,445
46,607

483,062
61,816
567,599(4,105)(46)(36,146)

478,957
61,769531,453

34,376
676

2,520
306

36,896983－(34)

36,896
948

2,786

4,241

7,027

－

7,027

35,2881,027

36,315－36,315(Note)
1. The “others” category refers to business segments that do not fall under the main reporting segment andincludes the entertainment/e-commerce segment and overseas segment.
2. The segment profit is adjusted against the operating profits consolidated.

- 31 -

from March 1, 2012, to February 28, 2013
(Millions of yen)
Convenience
Store business

Others(Note 1)

Total

Adjusted
amountAmount posted on theConsolidated profit andloss statement (Note 2)

Total operating
revenues
Sales to external
416,935
70,509487,445－
customers
Internal sales or
2,159
2,493
4,652
(4,652)transfers between
segments
Total
419,094
73,003492,098(4,652)
Segment profit
61,335
4,872
66,20838
Segment asset
562,237
69,759631,996(52,186)
Other
depriciation
40,0502,779
42,830－Goodwill
670
419
1,090
(34)
depreciation
Invest for
2,181
4,227
6,409
－
affiliates
Increase of40,194
2,727
42,922－
fixed assets(Note)
1. The “others” category refers to business segments that do not fall under the main reporting segment andincludes the entertainment/home delivery segment and overseas segment.
2. The segment profit is adjusted against the operating profits consolidated.

487,445－

487,445
66,246
579,80942,8301,056
6,409
42,922(Related information)
Previous consolidated fiscal year (March 1, 2011 to February 29, 2012)
1. Information by Product and Service
Since similar information is described in the segment information, this information is omitted.
2. Information by Area
(1) Net sales
Since sales to external customers in Japan exceed 90% of net sales on the consolidated statements of income,This information is omitted.
(2) Property, plant and equipment
Since property, plant and equipment in Japan exceed 90% of property, plant and equipment on the consolidated balance sheet, this information is omitted.
(3) Information by Major Customer
Information about major customers for the year ended February 29, 2012, has been omitted since there are no
external customers who constituted more than 10% of net sales on the consolidated statement of income.
Consolidated fiscal year under review (March 1, 2012 to February 28, 2013)
1. Information by Product and Service
Since similar information is described in the segment information, this information is omitted.
2. Information by Area
(1) Net sales
Since sales to external customers in Japan exceed 90% of net sales on the consolidated statements of income,This information is omitted.
(2) Property, plant and equipment
Since property, plant and equipment in Japan exceed 90% of property, plant and equipment on the consolidated balance sheet, this information is omitted.
- 32 -

(3) Information by Major Customer
Information about major customers for the year ended February 28, 2013, has been omitted since there are no
external customers who constituted more than 10% of net sales on the consolidated statement of income.
(Information on impairment loss in noncurrent assets by reported segment)
Previous consolidated fiscal year (March 1, 2011 to February 29, 2012)(Millions of yen)
Convenience
Store businessImpairment loss

Others

3,276

Total

42

Adjusted
amount

Total

－

3,318

3,318

Consolidated fiscal year under review (March 1, 2012 to February 28, 2013)(Millions of yen)
Convenience
Store businessImpairment loss

Others

2,779

Total

149

Adjusted
amount

Total

－

2,929

2,929

(Information on amortization of goodwill and amortized balance by reported segment)
Previous consolidated fiscal year (March 1, 2011 to February 29, 2012)(Millions of yen)
Convenience
Store business

Balance at endof fiscal year
under review

Others

7,666

Total

3,842

Adjusted
amount11,491

Total

10,871(619)

Consolidated fiscal year under review (March 1, 2012 to February 28, 2013)(Millions of yen)
Convenience
Store business

Balance at endof fiscal year
under review

6,995

Others

Total

3,272

Adjusted
amount10,268(Information on gain on negative goodwill by reported segment)
Previous consolidated fiscal year (March 1, 2011 to February 29, 2012)
Not applicable.
Consolidated fiscal year under review (March 1, 2012 to February 28, 2013)
Not applicable.

- 33 -

Total

(584)

9,683

(Per Share Information)
Previous fiscal year
(March 1, 2011 to February 29, 2012)
Net assets per share
Net income per share
Net income per share after full
dilution

Fiscal year under review(March 1, 2012 to February 28, 2013)

2,114.00 yen
249.17 yen
248.80 yen

Net assets per share
Net income per share
Net income per share after full
dilution

2,267.17 yen
332.20 yen
331.69 yen(Note) The basis for the calculation of net income per share and net income per share after full dilution is as follows:
Previous fiscal year
Fiscal year under review
Item(March 1, 2011 to(March 1, 2012 toFebruary 29, 2012)
February 28, 2013)
Net income per share
Net income (million yen)

24,88533,182－－

24,88533,182

99,871

99,887

Net income adjustment value (million yen)－－

Increase in number of outstanding commonshares (thousand shares)

149

152

(149)

(152)

Amount not attributable to common
stockholders (million yen)
Net income attributable to common stock(million yen)
Average number of common stock during the
fiscal year (thousand shares)
Net income per share after full dilution(Stock acquisition rights）(thousand shares)
Summary of issuable shares not included in thecomputation of net income per share after full
dilution, since these securities are not dilutive.

(Stock acquisition rights)
Date of resolution by the Board of
Directors: January 16, 2009
(Stock acquisition rights: 360)

(Significant Subsequent Events)
Not applicable- 34 -

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