Flash Report on the Consolidated Result
for the First Half Ended February 29, 2012
October 13, 2011
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: October 14, 2011
Scheduled date for payment of dividend: November 10, 2011
Supplementary Documents quarterly results: Yes
Presentation of quarterly results: Yes
1. Consolidated Performance for the First Half of the Current Period (from March 1, 2011, to August 31, 2011)(1) Consolidated operating results
Note: Amounts below one million yen are truncated.
Total operating revenues¥ Million%
Current 1st Half
240,020
8.5
Previous 1st Half
221,205(2.4)
Net profit¥ Million
8,960
12,288Current 1st Half
Previous 1st Half%
(27.1)(22.6)

Operating profit¥ Million%
32,5698.0
30,1480.0

Recurring profit¥ Million%
32,601
9.8
29,690(0.3)

Net income per share¥
89.72
123.44

Fully diluted income per share¥
89.61
123.31(2) Consolidated financial position
Capital adequacy
ratio¥ Million%
207,68138.2
208,466
42.7
February, 2011 203,479 million

Total assets

Net assets¥ Million
At August 31, 2011
533,209
Last fiscal year
476,036
Notes: Equity Capital August, 2011 203,934 million

Net assets per share¥
2,042.06
2,037.50

2. Dividends status
Annual dividends per share
1Q

2Q

¥
―

Year-end
dividend¥
85.00¥
170.00―93.00

180.00

3Q¥¥
2010 fiscal year
85.00―
2011 fiscal year
87.00
2011 fiscal year
(Forecast)
Notes: Revision of forecast for dividends in the First Half: Yes

1

Total

3. Forecast Consolidated Performance for 2011 fiscal year （from March 1, 2011, to February 29, 2012）
Total operating revenues
Operating profit
Recurring profit
Net profit¥ Million%¥ Million%¥ Million%¥ Million%
2011 fiscal year
473,000
7.2
61,50010.7
60,40010.6
23,500(7.4)
Reference: Forecast net profit per share for the 2011 fiscal year: 235.31yen
Note: Revision of forecasts for consolidated performance during the First Half: None
4. Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting inrevised scope of consolidation): None
(Note) This indicates any changes in specified subsidiaries during the second quarter resulting from a revisionof the scope of consolidation.
(2) Adoptions of simplified accounting methods or special accounting methods in presentation of quarterly
financial statements: Yes(Note) This indicates whether any simplified accounting methods or special accounting methods were adopted
in preparation of the quarterly financial statements.
(3) Changes in accounting principles, procedures, presentation methods, etc., pertaining to preparation of
consolidated financial statements (Those to be stated as significant accounting policies)
1. Changes associated with revision in accounting standards: Yes
2. Other changes: None
(Note) This indicates whether there were any changes in the accounting principles, procedures, presentation
methods, etc. pertaining to the preparation of the consolidated financial statements as stated under Changes inSignificant Accounting Policies for the Presentation of the Quarterly Financial Statements.
(4) Number of issued shares:i) The number of the stocks issued in the end of term
August, 2011: 100,300,000 February, 2011: 100,300,000ii) The number of treasury shares in the end of term
August, 2011: 433,460
February, 2011: 433,040
iii) Average number of shares during the term
August, 2011: 99,866,694 August, 2010: 99,545,827
Note: Disclosure of progress of quarterly review procedures
At the time of disclosure of this quarterly flash report, review procedures for quarterly earnings reports based on
the Financial Instruments and Exchange Act had been completed.
Note: The above-mentioned forecast is based on the information, which is able to get hand at present, andincluding a potential risk and uncertainty. Therefore, actual achievements may differ from these forecasts due tomany factors.

2

1．Review of Operations(1) Overview of Consolidated Operating Results
During the first six months of fiscal 2011, the period from March 1 to August 31, 2011, the Japanese
economy saw a temporary decline in corporate production activities and a drop in consumer spending due
to the impact of the Great East Japan Earthquake, which occurred in March. Sales remained strong in theconvenience store industry, however, mainly owing to good weather after mid-June in addition to therecovery of the supply chain.
In this business environment, the LAWSON Group (the “Company”) focused on achieving a speedy
recovery of stores and the product supply chain in the disaster-affected areas with the aim of realizing theGroup’s corporate philosophy of “Happiness and Harmony in Our Community.” With these efforts, wewere appreciated by customers as a convenience store chain with a nationwide network as well as social
infrastructure that provides essential items at the local level.

The Company also executed measures to improve customer satisfaction in convenience store operations
and other businesses. Net sales from existing stores during the first six months of fiscal 2011 increased
6.4% on a consolidated basis from the corresponding period of the previous fiscal year.
As a result, in terms of consolidated financial results for the first six months of fiscal 2011, total operating
revenues were ¥240,020 million (up 8.5% year on year) and operating profit was ¥32,569million (up8.0% year on year). Recurring profit came to ¥32,601 million (up 9.8% year on year).
Net profit decreased ¥3,327 million from the corresponding period of the previous fiscal year to ¥8,960
million (down 27.1% year on year).
(Domestic and Overseas Convenience Store Operations)
On the merchandise front, we developed menus catering to customer’ needs by using high-quality
ingredients.
In the rice dishes category, we released new chilled lunch boxes named “Lawson-Tei,” incorporating thepreferences of female customers—who have traditionally proven reluctant to purchase convenience store
lunch boxes—with respect to color in addition to taste and texture.
In the dessert category, sales remained strong, primarily backed by the outstanding performance of ouroriginal Uchi Café SWEETS products, which also benefited from the effect of our media-mix
promotional activities, etc.
In addition, we continued to promote our strategies to expand our customer segments by appealing tohousewives and elderly customers by operating fresh food LAWSON stores (hybrid stores), which arebasically existing LAWSON stores with a stronger assortment of fresh foods and daily delivered foods.
The number of fresh food LAWSON stores was 3,086 as of August 31, 2011. These stores sell fresh
vegetables produced at “LAWSON Farms,” the entities funded and established by the Company.
Sales by product group throughout all Lawson Group stores3

Fiscal period

Previous 1st Half

Current 1st Half

March 1, 2010 to August 31, March 1, 2011 to August 31,
2010

Product group

2011

Sales

Percentage of

Sales

Percentage of(Millions of

Total (%)

(Millions of

Total (%)

yen)

yen)

Processed foods

446,82053.3

507,535

55.4

Fast foods

160,234

19.1

172,570

18.8

Daily delivered foods

132,82115.9

140,708

15.4

Nonfood products

98,012

11.7

95,382

10.4

837,889

100.0

916,197

100.0

Total

In terms of sales promotions, the Company executed campaigns with high investment efficiency,
including the Spring Rilakkuma Fair, Hello Kitty Fair and the Second K-ON!! Fair. These promotions
were popular with customers.
With regard to services, total membership in the multi-partner loyalty program Ponta that the Company
joined in March 2010 reached 34.86 million as of August 31, 2011, including members joining throughother participating companies. LAWSON provided appealing point services to Ponta members while
expanding the membership.
To improve store operations, we offered guidance to stores on how to improve accuracy in orderplacement from the customer’s perspective by utilizing our backbone IT system, PRiSM. In addition, weused data collected from the Ponta card members to create merchandise assortments that matched thecustomer needs specific to each store. We will continue to work toward creating stores that fully satisfy
customers’ desires to purchase “whatever they want, whenever and wherever they need.”[Change in Total Number of Domestic Stores]
LAWSON
Total stores as ofFebruary 28, 2011
Change during fiscal
year
Total stores as ofAugust 31, 2011

(Stores)
NATURALLAWSON

8,686

90

LAWSONSTORE100
1,077

Total

173

1

50

224

8,859

91

1,127

10,077

9,853(Note) The total number of LAWSON stores as of August 31, 2011 includes 70 stores operated by LAWSON Toyama, theCompany’s consolidated subsidiary4

Number of Domestic stores by prefecture (As of August 31, 2011)
Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores

Hokkaido

552

Saitama

404

Gifu

124

Tottori

91

Saga

62

Aomori

169

Chiba

355

Shizuoka

186

Shimane91

Nagasaki

89

Iwate

154

Tokyo

1,324

Aichi

485

Okayama124

Kumamoto

96

Miyagi

184

Kanagawa

710

Mie

97

Hiroshima

146

Oita

141

Akita

154

Niigata

103

Shiga

126

Yamaguchi

111

Miyazaki80

Yamagata

62

Toyama

181

Kyoto

257

Tokushima

102

Kagoshima

106

Fukushima

94

Ishikawa

90

Osaka

979

Kagawa98

Total

Ibaraki

112

Fukui

99

Hyogo

562

Ehime

154

Tochigi

110

Yamanashi

78

Nara

96

Kochi

58

Gunma

68

Nagano134

Wakayama

113

Fukuoka

366

10,077The Company’s consolidated subsidiary Ninety-nine Plus Inc., which operates a chain of fresh foodconvenience stores LAWSON STORE100, continued to promote store openings and franchise expansion.
LAWSON Okinawa, the Company’s equity-method affiliate, was operating 144 stores in Okinawa
Prefecture as of August 31, 2011.
CHONGQING LAWSON CO., LTD., the Company’s consolidated subsidiary, was operating 20 stores inChongqing, China as of August 31, 2011.
In addition, the Company established LAWSON ASIA PACIFIC HOLDINGS PTE. LTD., a consolidated
subsidiary, to control the Company’s subsidiaries and affiliates that operate convenience stores outside
Japan (excluding stores in China) in Singapore on May 16, 2011.
SHANGHAI HUALIAN LAWSON CO., LTD., the Company’s Chinese equity-method affiliate, wasoperating 303 stores in Shanghai, China, as of August 31, 2011.
(Other Businesses)
In addition to convenience store operations, the Company is involved in entertainment/e-commerce,
financial services, and other businesses.
The Company’s consolidated subsidiaries LAWSON ENTERMEDIA, INC. and HMV Japan K.K., which
operate entertainment/e-commerce-related businesses, have shown a steady recovery at a pace exceeding
our original expectations, despite the negative impacts of the Great East Japan Earthquake, such as
voluntary cancellation and postponement of some concerts and delaying of new CD/DVD releases, etc.
The two companies merged as of September 1, 2011 with the aim of maximizing synergistic effects in theentertainment/e-commerce business in the future.
In addition, we will promote collaboration between Yahoo! JAPAN’s network service and LAWSON
stores, leveraging the alliance with Yahoo JAPAN Corporation, which began in June 2011. Furthermore,5

we will focus on reinforcing the e-commerce business by providing price comparison and productseafunctions of Venture Republic Inc., with which the Company entered into a capital and businessalliance in January 2011.
LAWSON ATM Networks, Inc., which operates a financial services-related business, has been working toincrease the number of transactions in response to the increased number of ATMs installed nationwide in
LAWSON stores. As of August 31, 2011, the number of ATMs installed nationwide reached 8,717.

2. Qualitative Information Regarding Changes in Other Consolidated Financial
Indicators(1) Financial Position at the First Half end
Total Assets, Total Liabilities and Net Assets at First Half-End
At August 31, 2011, total assets stood at ¥533,209 million, an increase of ¥57,172 million from February 28,
2011. This mainly reflected a ¥19,553 million increase in cash and bank deposits because of an increase in billsettlement transactions and other factors.
Total liabilities increased ¥57,957 million from February 28, 2011 to ¥325,527 million at August 31, 2011. This
mainly reflected a ¥20,161 million increase in accounts payable trade and other factors.
Net assets stood at ¥207,681 million, down ¥785 million from February 28, 2011. This is primarily due to thedecrease of minority interesting by ¥1,240 million, although increase of ¥471 million in retained earnings.
(2) Cash Flows During First Half
Cash and cash equivalents at August 31, 2011 were ¥93,864 million, up ¥26,152 million compared with
February 28, 2011.
Operating activities provided net cash of ¥67,891 million, an increase of ¥4,444 million from the corresponding
period of the previous first half, mainly due to increase in deposits received.
Investing activities used net cash of ¥28,499 million, an increase of ¥15,833 million from the corresponding
period of the previous first half, mainly due to an increase in purchase of stocks of subsidiaries and affiliates.
Financing activities used net cash of ¥13,284 million, a decrease of ¥2,873 million over the corresponding
period of the previous first half, mainly due to a decrease in purchase of treasury stock.

3. Other(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting
in revised scope of consolidation): None
(2) Adoptions of simplified accounting methods and accounting methods particular to presentation ofquarterly financial statements:① Adoption of simplified accounting methods:Yes
Regarding property and store equipment to which the declining-balance method is applied, theamount of depreciation is calculated by apportioning depreciation equally during the period.
② Accounting methods particular to presentation of quarterly financial statements: None6

4. Consolidated Financial Statements etc.
(1)Consolidated Balance Sheets (Unaudited)（Millions of yen）

As of August 31, 2011 and February 28, 2011
August 31, 2011

February 28, 2011

Cash and bank deposits

94,36974,816

Accounts receivable—due from franchised stores

15,046

16,159Marketable securities

9,998

2,999

Merchandise inventories

7,605

7,011

Accounts receivable—other34,45629,285

Deferred tax assets

4,713

4,943

Other

11,004

9,891

Allowance for doubtful accounts

(102)

(97)

177,091

145,009

209,615

192,865

Accumulated depreciation(106,378)(96,463)

Buildings and structures-net

103,237

96,401

Vehicles, tools, furniture and fixtures

62,78961,156(49,672)(47,914)

13,116

13,241

69,73458,311

Accumulated depreciation(13,370)(9,120)

Other-net

56,36349,190172,717

158,833

Software27,652

27,901

Goodwill

8,739

7,717

Other

539

477

Subtotal

36,93236,096Long-term loans receivable

31,64831,825

Lease deposits

82,92881,654

Deferred tax assets

17,917

13,253Claims provable in bankruptcy, claims provable in rehabilitation and other

15,18015,372

Other

14,805

10,037

Allowance for doubtful accounts(16,012)(16,047)

Subtotal

146,468

136,096

Total

356,117331,026

Total assets

533,209

476,036

Current assets:

Total
Fixed assets:
Property and store equipment
Buildings and structures

Accumulated depreciation
Vehicles, tools, furniture and fixtures-net
Other

Subtotal
Intangible fixed assets;

Investments and Other;7

（Millions of yen）
August 31, 2011

February 28, 2011

101,560

81,398

Accounts payable— due to franchised stores

1,880

1,179

Income taxes payable

11,336

10,673

Deposits received

78,62862,340Accrued employees’ bonuses

2,985

3,768

981

1,287

33,842

31,947231,214

192,595

8,147

7,529

260

234

Deposits received from franchisees and lessees

36,31837,139Asset retirement obligations

14,507-

Other

35,07830,070Total

94,312

74,974

Total Liabilities

325,527

267,570

Common stock

58,50658,506

Capital surplus

47,696

47,696

Retained earnings

100,080

99,608Treasury stock(1,695)(1,693)

Total Owners’ equity

204,587

204,117

Net unrealized gain on available-for-sale securities

(21)

(4)

Land revaluation difference

(634)

(634)

3

1

Valuation and translation adjustments

(653)

(638)

Stock acquisition rights

405

405

Minority interests

3,341

4,581

Total net assets

207,681

208,466

Total Liabilities and net assets

533,209

476,036

Current liabilities:
Accounts payable —trade

Provision for use of points granted
Other
Total
Long-term Liabilities;
Allowance for employees’ retirement benefits
Allowance for retirement benefits to executive officers and corporate auditors

Owners’ equity;

Valuation and translation adjustments;

Foreign currency translation adjustments8(2) Consolidated Statements of Income(Unaudited)
For the second quarter of the fiscal year ending August 31, 2010 and 2011 (March 1, 2011-August 31, 2011)（Millions of yen）
August 31, 2010

August 31, 2011

Total operating revenues

221,205

240,020

Net sales

96,973

104,882

72,04478,722

24,92926,159Franchise commission from franchised stores

98,637108,217

Other

25,59526,920Operating revenues

124,232

135,138

Operating gross profit

149,161

161,298

119,012

128,728

30,14832,569Non – operating income;

921

1,165

Interest received

337

326

Equity in earnings of affiliates

116

128

Compensation income

172

-

Other

295

710

1,380

1,133

Interest expense

461

541

Loss on cancellation of store lease

717

211

Other

201

380

29,69032,601-

237

Gain on sales of noncurrent assets-

53

Gain on negative goodwill

-

184

7,555

15,688Loss on retirement of noncurrent assets

1,748

1,295

Loss on sales of noncurrent assets

1,258

-

Loss on impairment of long-lived assets

4,193

2,574

Loss on disaster

-

3,392

Loss on adjustment for changes of accounting standard

-

8,292

355

132

22,134

17,150

Cost of goods sold
Gross Profit

Selling, general and administrative expenses
Operating profit
Non – operating income and expenses;

Non – operating expenses;

Recurring profit
Special gains and losses;
Special gains;

Special losses;

for asset retirement obligations
Other
Income before income taxes and minority interests9Income taxes;

9,402

7,719

Income taxes - current

6,206

11,075

Deferred income taxes

3,195(3,355)

Income before minority interests

-

9,431

Minority interests in net income

443

470

12,2888,960

Net profit

10

(3)Consolidated Statements of Cash Flows(Unaudited)
For the second quarter of the fiscal year ending August 31, 2010 and 2011 (March 1, 2011-August 31, 2011)(Millions of yen)August 31, 2010

August 31, 2011

Income before income taxes

22,134

17,150Depreciation of fixed assets

15,74017,907

Increase in provision for allowance for retirement benefits to employees

547

617

Interest received

(337)

(326)

Interest expense

461

541

Loss on impairment of long-lived assets

4,193

2,574

Loss on retirement of noncurrent assets

1,125

1,295

Loss on disaster

-

3,392

Loss on adjustment for changes of accounting standard for

-

8,292

169

(348)

Decrease in accounts receivable due from franchised stores

8,234

1,115

Increase in accounts receivable-other(4,074)(3,452)

Increase in accounts payable—trade and due to franchised stores

21,111

19,523

Increase in accounts payable—other(6,801)

198

Increase in deposits received

8,966

16,280Decrease in lease deposits from franchisee and lessees

(421)

(976)

Other-net

2,397(3,139)Subtotal

73,44880,648Interest income received

340

325

Interest expenses paid

(460)

(539)

(9,882)(10,068)-(2,473)63,44667,891

Payments into time deposits(8,500)(10,100)

Proceeds from withdrawal of time deposits

9,500

9,700

Proceeds from redemption of marketable securities

1,500

-

Payment for acquisition of property and store equipment(10,755)(12,919)

Payment for acquisition of intangible fixed assets(4,389)(3,744)-(5,743)455--(3,415)(475)(2,276)(12,665)(28,499)

Operating activities;

asset retirement obligations
Other-net

Income taxes paid
Payments for loss on disasterNet cash flows provided by operating activities
Investing activities;

Purchase of stocks of subsidiaries and affiliates
Proceeds from purchase of investments in subsidiaries resulting inchange in scope of consolidation
Payments for transfer of business
Other – net
Net cash used in investing activities
11Financing activities;
Repayments of lease obligations(4,675)(4,762)

Cash dividends paid

(7,933)(8,488)Purchase of treasury stock(3,506)

-

(42)

(32)

(16,157)(13,284)

-

(5)

Other
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase in cash and cash equivalents

34,622

26,102

Cash and cash equivalents, beginning of year

54,84367,712-

49

89,46593,864

Increase (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period12(4) Notes to Going Concern
Not Applicable.

(5) Segment Information[Business segment information](From March 1, 2010 to August 31, 2010)
The Company operates mainly the franchised store business and total operating revenue, operating income andtotal assets of the franchised store business account for more than 90% of the respective consolidated totals at all
segments for current second Quarter, therefore information by industry segment is omitted.

[Geographic segment information](From March 1, 2010 to August 31, 2010)
Because net sales in Japan account for more than 90% of total net sales, LAWSON has omitted geographicalsegment information.

[Overseas sales](From March 1, 2010 to August 31, 2010)
Overseas sales account for less than 10% of consolidated sales at all segments for current second Quarter, therefore
overseas sales information is omitted.

[Segment Information]i) Outline of reporting segments
The Company’s financial information is provided separately by reporting segment and is subject to regular review
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 the incorporation ofrelated businesses.
Therefore, the Group has made the convenience store unit its main reporting segment, based on consideration offinancial characteristics and the nature of the services provided.
LAWSON, 99plus 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.

13ii) Information related to the amount of sales, profit and loss by segment
Consolidated performance for the current second quarter period (from March 1, 2011, to August 31,
2011)( Millions of yen)Amount posted on theConvenience
store business

Others (Note 1)

Total

Adjusted amountquarterly consolidated
profit and loss statement(Note 2)

Total operating
revenues
Sales toexternal

208,41231,608240,020-

240,020

1,067

944

2,011

(2,011)

Total

209,479

32,553242,032(2,011)240,020

Segment profit

30,2442,324

32,569-32,569customers
Internal sales
or transfers
between-segments(Note) 1. The “other” 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 of the quarterly consolidated profit and loss
statement.

iii)Information related to impairment loss or goodwill of fixed assets by reporting segment
Consolidated performance for the current second quarter period (from March 1, 2011, to August 31, 2011)(Significant impairment losses related to fixed assets)
The Group defines a store as the primary basic unit and the smallest unit that generates cash flow. For asset groups
that have continuously generated losses from their sales activities, their book value has been reduced to arecoverable amount and such amount has been posted as impairment loss under extraordinary losses.
The amount posted for the convenience store segment is 2,573 million yen.
(Significant change in the amount of goodwill)In the convenience store segment, the amount of goodwill for this 2nd quarter consolidated fiscal period increased
by 1,589 millions of yen because of taking over business.
(Additional Information)
Effective from this second quarter consolidated fiscal period, the "Accounting Standards for Disclosure of
Segment Information, Etc." (ASBJ Statement No. 17, March 27,2009) and the "Guidance for Application of the
Accounting Standards for Disclosure of Segment Information, Etc."(ASBJ Guidance No. 20, March 21, 2008)
shall apply hereto.

(6) Notes to Significant Changes in Shareholders’ Equity
Not Applicable14