Flash Report on the Consolidated Result
for the First Half Ended February 28, 2015
October 7, 2014
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange (First Section)
Code No.: 2651
(URL http://www.lawson.co.jp/company/ir/index.html)
Company Representative: Genichi Tamatsuka, Representative Director, President and CEO
Contact: Yutaka Yoshitake, Executive Vice President and CFO
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly earnings report: October 8, 2014
Scheduled date for payment of dividend: November 10, 2014
Supplementary Documents quarterly results: Yes
Presentation of quarterly results: Yes (For institutional investors and analysts)
Note: Amounts below one million yen are truncated
1. Consolidated Performance for the current first half of the current period (from March 1, 2014, to August 31, 2014)(1) Consolidated operating results (accumulated)
Note: Percentages for total operating revenues, operating income, ordinary income and net income show increase(decrease) compared to the same period of previous year.
Gross operating revenue
Operating income
Ordinary income¥ Million%¥ Million%¥ Million%st
Current 1 Half
241,930(2.5)
40,01912.3
39,616
11.5
Previous 1st Half
248,197(0.3)
35,624
3.1
35,533
3.7
Net incomestCurrent 1 Half
Previous 1st Half

¥ Million
21,88919,047

Note: Comprehensive income:

%
14.9
6.6

Current 1st Half:
Previous 1st Half:

Net income per share

Fully diluted profit per share¥
219.15190.67¥218.73190.32

21,662 million yen
20,373 million yen(6.3%)(16.1%)(2) Consolidated financial position

Current 1st Half
Previous fiscal year
Reference: Shareholders’ equity:

Total assets¥ Million
722,321620,992

Net assets¥ Million
262,436
250,497

Current 1st Half:
Previous fiscal year:

Shareholders’ equity ratio
%
35.5
39.5

255,037 million yen
245,289 million yen

2. Dividends status2013 fiscal year

1Q
¥
－

1H
¥
110.002014 fiscal year－

120.00

Annual dividends per share
3Q
Year-end dividend¥¥－
110.002014 fiscal year (forecast)
Note: Revision of forecast for dividends in the first half: None－

120.00Total¥
220.00240.003. Forecast Consolidated Performance for 2014 fiscal year （from March 1, 2014 to February 28, 2015）
Note: Percentages for total operating revenues, operating income, ordinary income and net income show increase(decrease) from previous year.
Gross operating revenue
Operating income
Ordinary income
Net income
2014 fiscal year

¥ Million
487,000%
0.4¥ Million
75,000%
10.1¥ Million
73,900%
7.3¥ Million
38,900%2.5

Reference: Forecast net profit per share for the 2014 fiscal year: 389.33 yen
Note: Revision of forecasts for consolidated performance during the first half: Yes
4. Notes(1) Change in important subsidiaries during this quarterly consolidated period (Changes in certain specified
subsidiaries resulting in revised scope of consolidation): None
Added: None
Excluded: None
(2) Adoptions of special accounting methods in presentation of quarterly financial statements: None
(3) Changes in accounting policies, changes in accounting estimates, retrospective restatements
1. Changes of accounting policies associated with revision in accounting standards: None
2. Other changes: Yes
3. Changes in accounting estimates: Yes
4. Retrospective restatements: None
(4) Number of issued shares:i) The number of the stocks issued in the end of term
August, 2014: 100,300,000
February, 2014:ii) The number of treasury shares in the end of term
August, 2014:
386,124
February, 2014:iii) Average number of shares during the term
August, 2014:
99,879,873
August, 2013:

100,300,000
395,953
99,895,181

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 were being performed.
Note: Terms of use for financial forecasts, and other special notes
Forward-looking statements presented in this material such as financial forecasts are based on currently available
information and certain presumptions deemed to be reasonable as of the date of announcement. They are not intended toguarantee the Company’s achievement. Actual results may differ significantly from these forecasts due to many factors. For
preconditions of these financial forecasts and notes concerning their use, please refer to “1. Qualitative Information

Regarding Quarterly Financial Results, (3) Explanation Regarding Forward-looking Information Such As Forecast
Consolidated Performance” on page 7.

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first half of fiscal 2014, six months from March 1 to August 31, 2014, the Lawson Group(hereinafter, the “Group”) continuously implemented measures to reinforce its social infrastructure functionthat provides essential items and services at the local level with the aim of realizing the Group’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 relationshipmanagement (CRM)*1 and supply chain management (SCM)*2 in order to offer a merchandise assortment thatmeets the specific needs of customers in each neighborhood.
*1

CRM: A marketing management method for providing merchandise and services that meet the specificneeds of customers.
*2

SCM: A business administration method for comprehensively managing all stages of business, fromprocurement to sales, to streamline and optimize the entire business process.
As a result, for the first half of fiscal 2014 on a consolidated basis, due to an increase in the number offranchised stores and a decrease in the number of company-operated stores, although operating revenue
increased by ¥5,272 million, net sales decreased by ¥11,539 million, and gross operating revenue decreased to¥241,930 million down 2.5% year on year from corresponding period of the previous fiscal year. In accordancewith this, cost of sales also decreased by ¥8,359 million. Selling, general, and administrative expenses
decreased by ¥2,302 million to ¥143,818 million down 1.6% year on year due to a decrease of depreciation, etc.
As a result, operating income increased by ¥4,394 million, up 12.3% year on year, to ¥40,019 million.
Ordinary income increased by ¥4,083 million up 11.5% year on year, to ¥39,616 million. Net income
increased by ¥2,841 million, up 14.9% year on year, to ¥21,889 million.

Operating results by business segment are as follows.

(Domestic Convenience Store Business)[Merchandising and Service Strategies]
On the merchandise front, we strengthened merchandise assortment throughout the year by expanding ourlineup of ready-made meals, including carbohydrate-based foods such as lunch boxes, rice balls andsandwiches, and over-the-counter fast foods, in order to enhance satisfaction of customers visiting our stores.
In our mainstay rice category, as high-value-added products using ingredients specific to different regions
across Japan, our Furusato-no-umai! line offering lunch boxes and rice balls has continued its deployment andbecome a strong sales.
In the over-the-counter fast foods category, we launched “Genkotsu Croquette” made with Hokkaido-produced
Kitaakari potatoes. Based on a new production method, the croquette is made by shaping half-mashed andlumpy potatoes into balls. The new product became a hit item following “Genkotsumenchi” (fried mincedmeat balls). Furthermore, a new flavor was added to our “Karaage-kun” fried chicken, our mainstay item,
which was well received, helping the category achieve robust sales. We proceeded with the installation of our-1-

in-store kitchen facility Machikado Chubo, where such items as “Thick Pork Katsu Sandwiches” and“Machikado Chubo Curry” are cooked. The number of stores equipped with the facility reached 2,666 as of theend of August 2014.Furthermore, we further expanded the number of stores equipped with MACHI café, anin-store café offering freshly ground and brewed coffee, to 9,368 stores as of the end of August 2014,
following a sharp increase last year.
The UCHI Café Frappe frozen drink series, served by thawing in the microwave oven, was offered in mango,
chocolate, cream soda, and other flavors. The dessert with a new twist became a hit product of the summer
season. In the dessert and bakery category, our Pure Series simple dessert made with a minimum number ofcarefully selected ingredients to bring out their inherent flavors continued to be popular among customers.
In addition to bran bread*3 for carbohydrate-conscious consumers, the Group also started selling its
NATURAL LAWSON brand original confectionery featuring reduced amounts of carbohydrate, calories, andsalt content. Moreover, as a health station, we are also continuing to reinforce our lineup of health-oriented
products that are safe, reliable, and delicious, including pre-cut vegetables made with vegetables produced
based on the Nakashima Farming Method*4, one of the most prominent mineral farming methods in Japan. The
number of Lawson Farms, in which Lawson, Inc. (hereinafter, the “Company”) invests with the aim of stably
supplying high-quality fresh foods, has increased to 19 nationwide. Based on these initiatives, we will further
boost Lawson’s corporate brand image as a health-promoting company.
In addition to the strengthening of these product line-up, we are increasing our lineup of gift cards*5 offered at
our stores. Among them, Variable Cards launched ahead of other convenience chains, whose value can be
specified at purchase, is especially popular.
*3

Bran: The external layer of wheat. Contains abundant nutrition including dietary fiber, iron, calcium,magnesium, zinc, and copper. The food is noted for its low level of carbohydrate.
*4 Nakashima Farming Method: A cultivation method that supplies appropriate nutrients in accordance with thegrowth status of crops and the nutritional balance of the soil (mineral balance). Uses techniques for developing
healthy soil based on diagnosis of soil conditions in conjunction with techniques to control the growth processof crops to maintain healthy growth.
*5

Gift cards: Collective term for prepaid cards that can be used for online transactions.

[Breakdown of Sales by Merchandise Category at Chain Stores in Domestic Convenience Store Business]
Fiscal period

Product group

Previous 1st Half

Current 1st Half

March 1, 2013

March 1, 2014

to August 31, 2013

to August 31, 2014

Sales

Percentage of

Sales

Percentage of(Millions of yen)

total (%)

(Millions of yen)

total (%)

Processed foods

546,51355.2

531,655

53.7

Fast foods

206,41620.9

215,721

21.8

Daily delivered foods

140,769

14.2

145,841

14.8

Nonfood products

96,087

9.7

96,2309.7

989,787

100.0

989,449

100.0

Total

-2-

As for sales promotions, we continued to strengthen the point-reward campaign targeting Ponta members toencourage purchasing with the aim of increasing the rate of repeat visits by promoting campaigns such as
rewarding double points for credit card transactions*6, etc. Total number of Ponta members reached 65 million
as of the end of August 2014, including members that joined through other participating companies. The sales
ratio of Ponta members reached approximately 50%.
*6 Exclusively applicable in cases where a specific credit card has been registered and used for a transaction.

[Store Operations]
In store operations, we continued to reinforce adherence to the Three Essential Practices, which emphasizes(1) serving customers courteously; (2) offering a merchandise assortment focused on basic items with highdemand; and (3) keeping our stores and communities clean, in addition to expanding our lineup of
health-conscious products. Notably, with the increasing number of stores equipped with MACHI café, store
employees are more capable of offering products and services in a caring manner through better
communication with customers. We strived to further improve the quality of stores by clarifying the customer
service goals to be pursued by store employees and fostering leaders among them.
We will continue to promote merchandise assortments that best suit customers in each neighborhood byleveraging store-by-store analysis reports on Ponta members’ purchase data, shelf allocation tailored to thelocational characteristics of each store, and sharing of best practices presented at monthly area-based meetings
where we discuss area strategies with franchise store owners.

[Store Development and Store Format Strategy]
In opening new stores, the Group prioritized profitability based on its proprietary return on investment(ROI)-focused store development standard. With regard to store format strategy, we increased the number of
LAWSON MART stores, which were developed based on LAWSON STORE100, to 25 as of the end of August
2014. Since the deregulation of pharmaceutical sales in 2009, the Group has been striving to expand thenumber of stores offering over-the-counter (OTC) pharmaceuticals by proactively hiring and fostering
registered drug sellers. As part of this initiative, the Group started opening healthcare-oriented LAWSON
stores through partnerships with Drug Hikari, a drug store chain in Kyoto Prefecture, MIZ pharmacy chain in
Saga Prefecture, and the Mik Japan drug store chain in Osaka Prefecture. With the addition of healthcare items
including OTC pharmaceuticals, cosmetics, and daily necessities, the stores offer a merchandise assortment ofaround 5,000 items, twice as many as conventional LAWSON stores. Furthermore, the number of Pharmacy
LAWSON stores equipped with drug-dispensing pharmacies, which are operated in partnership with Qol Co.,
Ltd., a major pharmacy chain operator, reached 40 as of the end of August 2014. Through such initiatives, theGroup will continue to respond to changes in customer needs resulting from the aging of the population and anincrease in the number of working women.
As a result, the total number of LAWSON, NATURAL LAWSON, and LAWSON MART (including
LAWSON STORE100) stores opened and closed during the first half of the fiscal year (six months) underreview stood at 498 and 204 stores, respectively, with the total number of stores in Japan reaching 11,615 as of-3-the end of August 2014.

[Change in the Total Number of Domestic Stores]
Total stores as of

Change during

Total stores as ofFebruary 28, 2014

fiscal year

August 31, 2014

LAWSON

10,108221

10,329

107

2

109

1,202

(25)

1,177

11,417

198

11,615

NATURAL LAWSONLAWSON STORE100/
LAWSON MART
Total
Note: Small stores are included in this figure.

[Number of LAWSON stores by prefecture (As of August 31, 2014)]
Prefecture

Number ofstoresPrefecture

Number ofstoresPrefecture

Numberof stores

Prefecture

Numberof stores

Hokkaido

614

Ibaraki

145

Kyoto

326

Ehime

181

Aomori

205

Tokyo

1,571

Shiga

154

Tokushima

124

Akita

182

Kanagawa

839

Nara

131

Kochi

67

Iwate

163

Shizuoka214

Wakayama

121

Fukuoka429

Miyagi

220

Yamanashi

107

Osaka

1,019

Saga

65

Yamagata

74

Nagano

150

Hyogo

622

Nagasaki

103

Fukushima

101

Aichi

559

Okayama

141

Oita

163

Niigata

130

Gifu

148

Hiroshima

174

Kumamoto

137

Tochigi

134

Mie

108

Yamaguchi

120

Miyazaki

100

Gunma

90

Ishikawa

102

Tottori

108

Total(domestic)

Saitama496

Toyama185

Shimane

113

Chiba

456

Fukui

106

Kagawa118

11,615

Note: Small stores are included in this figure.
In addition to the above, Lawson Minamikyushu, Inc. operates 202 Lawson chain stores in Kagoshima
Prefecture and Lawson Okinawa, Inc. operates 170 Lawson chain stores in Okinawa Prefecture as of the end of
August 2014.

-4-

(Other Businesses)
In addition to domestic convenience store business, the Group is involved in overseas business, Entertainment& Home Convenience business, financial services-related business, and other businesses.
With regards to overseas business, the Group’s operating companies, 4 companies shown in the following
table, opened stores in Shanghai, Chongqing, Dalian, and Beijing in the People’s Republic of China.
In the People’s Republic of China, the Group’s operating companies shown on the following table haveopened stores in Shanghai, Chongqing, Dalian, and Beijing. In Indonesia, PT MIDI UTAMA INDONESIA
Tbk, in which Lawson Asia Pacific Holdings Ptd. Ltd. (hereinafter, “LAP”), our Asian umbrella subsidiary in
Singapore, holds a 30% stake, operates Lawson stores.In Thailand, Saha Lawson Co., Ltd., a joint venture
between LAP and the SAHA Group, Thailand’s leading distributor of consumer goods, operates stores under
the store brand of LAWSON108 and 108SHOP. In addition, in Hawaii in the United States, Lawson USA
Hawaii, Inc. operates LAWSON stores. Furthermore, in an effort to advance into the Philippines, we concluded
an agreement to invest in PG Lawson Company, Inc. established by Puregold Price Club, Inc. (hereinafter,“PPCI”), a leading retailer in the Philippines. We will continue expand Lawson stores in Manila.
[Distribution of LAWSON Brand Stores Overseas by Region]

CompanyCountry/region

Total stores

ChangeTotal stores

As of February

duringAs of August28, 2014

fiscal year

31, 2014

Shanghai Hualian Lawson, Inc.

Shanghai, China

289

21

310

Chongqing Lawson, Inc.

Chongqing, China

77

11

88

Dalian Lawson, Inc.

Dalian, China

18

6

24

Beijing Lawson, Inc.

Beijing, China

5

4

9

Saha Lawson Co., Ltd.

Bangkok, Thailand

29

3

32

PT MIDI UTAMA INDONESIA

Capital City of Jakarta andTbk

its suburbs, Indonesia

61

(3)

58

Lawson USA Hawaii, Inc.

Hawaii, U.S.A.

4

－

4

483

42

525

Total

Note: Saha Lawson Co., Ltd. operates 190 108SHOP brand stores as of the end of August 2014 in addition to
the above LAWSON108 stores. PT MIDI UTAMA INDONESIA Tbk operates 749 stores other than
LAWSON brand stores.

-5-With regards to Entertainment & Home Convenience business,

Lawson HMV Entertainment, which forms

the core of entertainment related business, posted a solid performance led by an increase in ticket sales ofleisure activities, etc and continued to secure top position in the ticketing industry. The number of HMV storesthat sell music CDs and DVDs totaled 52 as of the end of August 2014. On August 28, 2014, Lawson HMVEntertainment, Inc. acquired all shares in United Entertainment Holdings Co., Ltd., the holding company ofUnited Cinemas Co., Ltd. (UC), through a subsidiary established for this purpose. By integrating UC, the thirdlargest movie theater operator in Japan, which operates 331 screens at 36 locations nationwide (including
affiliated sites), the Group is looking to expand its ticketing services in order to offer a wider range of products
and services that respond to customers’ expectations. In addition, we will also strive to strengthen our existing
business by such initiatives as promotional campaigns implemented in partnership with movie content
providers. The Group aims to reinforce its earnings base for its entertainment-related business bydisseminating movie information to Ponta members and LAWSON store customers on a timely basis.
Furthermore, the regular food delivery service operated by Smart Kitchen, Inc., the Company’s consolidated
subsidiary, was succeeded by the Company effective July 1, 2014, and newly launched as Lawson Fresh online
food delivery service. Approximately 16,000 items are offered through this service, including farm fresh andhigh quality produce procured from Daichi Wo Mamoru Kai and Radishbo-ya, Lawson’s signature
health-conscious products such as the 10-minute cooking kits and bran bread managed by NATURALLAWSON, and over 500 pharmaceutical products (second and third class).

Lawson ATM Networks, Inc., which operates a financial services-related business, posted a solid performanceowing to an increase in the number of ATMs installed, along with a rise in the number of transactions. We
started providing new financial services for Tomato Bank in April, Kansai Urban Bank in May, Saikyo BankJapan Net Bank in July, Aichi Bank in August bringing the total number of our financial institution partners to
68 nationwide, including online banks, and the number of ATMs installed nationwide to 10,465 (up 347 year
on year) as of the end of August 2014.

(2) Explanation Regarding Consolidated Financial Position(i) Assets, liabilities and net assets position at the end of the first half of fiscal year 2014
As of August 31, 2014, total current assets stood at ¥261,090 million yen, climbing ¥65,306 million fromFebruary 28, 2014, the end of the previous fiscal year. This reflected an increase of ¥48,199 million in cash anddeposits mainly due to the end of the first half under review falling on a bank holiday, and a rise of ¥11,024
million in accounts receivable-other because of an increase in transaction volume at subsidiary companies.
Non-current assets grew ¥36,022 million from February 28, 2014 to ¥461,230 million, mainly owing to anincrease of ¥17,716 million in property and store equipment resulting from opening of new stores.
Consequently, total assets climbed ¥101,328 million from the end of the previous fiscal year to ¥722,321
million.
As of August 31, 2014, total current liabilities increased ¥70,736 million from the end of the previous fiscal
year to ¥317,443 million, mainly reflecting an increase of ¥24,812 million in deposits received, an increase of¥24,532 million in accounts payable-trade owing to a rise in the number of stores and total procurement value-6-

across the entire chain, as well as a growth of ¥14,041 million in accounts payable-other owing to the end of
the first half under review falling on a bank holiday. Non-current liabilities stood at ¥142,441 million, growing¥18,653 million from February 28, 2014, mainly owing to lease obligations growing ¥8,884 million due toopening of new stores, and to an increase of ¥8,425 million in long-term loans payable due to purchase of
consolidated subsidiaries. Consequently, total liabilities increased ¥89,390 million from the end of the previous
fiscal year to ¥459,885 million.
As of August 31, total net assets stood at ¥262,436 million, climbing ¥11,938 million from February 28, 2014.
This was mainly due to an increase resulting from first half net income of ¥21,889 million, a decrease resulting
from payment of ¥10,989 million in dividends, and a growth of ¥10,291 million in retained earnings.
Consequently, shareholders’ equity ratio amounted to 35.3%, down from 39.5% as of the end of the previous
fiscal year.
(ii) Cash flows during the first half of fiscal year 2014
Cash and cash equivalents at August 31, 2014 were ¥113,759 million, up ¥44,999 million compared with
February 28, 2014.
Operating activities provided net cash of ¥92,127 million, an increase of ¥30,382 million from thecorresponding period of the previous fiscal year, mainly due to a rise in deposits received.
Investing activities used net cash of ¥38,287 million, an increase of ¥8,445 million from the corresponding
period of the previous fiscal year, mainly due to an increase in purchase of investments in subsidiaries
resulting in change in scope of consolidation.
Financing activities used net cash of ¥8,606 million, a decrease of ¥10,860 million from the corresponding
period of the previous fiscal year, mainly due to an increase in long-term loans payable.

(3) Explanation Regarding Forward-looking Information Such As Forecast Consolidated Performance
We have amended the gross operating revenue forecast for the 2014 fiscal year.
The business forecasts and future prospects in this document are made based on currently available
information and contain potential risks and uncertainties. As such, actual business results may significantly
differ from those expressed or implied in the forecasts due to changes in various factors.

-7-

2．Matters Related To Summary Information (Notes)(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries resulting inrevised scope of consolidation): Not Applicable(2) Adoptions of accounting methods particular to presentation of quarterly financial statements:
Not Applicable(3) Changes in accounting policies, changes in accounting estimation, retrospective restatement(Changes in accounting policies that are difficult to differentiate from changes in accounting estimation)
Lawson, Inc. and its domestic consolidated subsidiaries had previously adopted the declining-balancemethod as the depreciation method for property, store and equipment (excluding lease assets). Starting fromthe first quarter of the consolidated fiscal year under review, however, the depreciation method was changed tothe straight-line method.
Under the Lawson Group’s policy of placing emphasis on existing stores, the Group adopted a strategy ofenhancing their competitiveness through such initiatives as capitalizing on membership card data, and started
restructuring of group businesses. Accordingly with this opportunity, the depreciation method for property,
store and equipment was reviewed. As a result, it was considered appropriate to allocate equal amounts ofdepreciation (straight-line method) because the number of customers is expected to remain at the current leveleven if store assets age with the passage of time, and the degree of facility usage, a major factor that reduces
economic value, is proportionate to the number of customers.
Based on this change, operating income, ordinary income, and income before income taxes and minority
interests for the first half of the consolidated fiscal year under review have increased respectively by ¥4,368
million compared with the figures based on the conventional declining-balance method.

-8-

3. Consolidated Financial Statements(1) Consolidated Balance Sheet
As of February 28, 2014 and August 31, 2014
(Millions of yen)

AssetsCurrent assets:
Cash and deposits
Accounts receivable－due from franchised stores
Merchandise
Accounts receivable－other
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current 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
Lease assets
Accumulated depreciation
Lease assets, net
OthersTotal property and store equipment
Intangible assets:
Software
Goodwill
Other
Total intangible assets
Investments and other assets:Long-term loans receivable
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

-9-

As of
February 28, 2014

As ofAugust 31, 2014

76,76332,186
9,596
54,193
4,481
20,956(2,393)
195,784

124,963
30,927
11,74965,217
4,727
25,752(2,247)
261,090

265,952(137,117)
128,835
65,944(53,861)
12,083126,056(45,289)
80,767
11,751
233,436

292,333(152,655)
139,678
70,626(57,921)
12,704
139,637(52,874)
86,763
12,006251,152

18,2629,719
497
28,48016,915
18,902532
36,35033,727
86,15021,62722,751(965)

35,90590,034
21,54527,423(1,181)

163,291425,208
620,992

173,727
461,230
722,321

(Millions of yen)

Liabilities
Current liabilities:
Accounts payable－trade
Accounts payable－due to franchised stores
Short-term loans payable
Lease obligations
Accounts payable－other
Income taxes payable
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities:
Lease obligations
Long-term loans payable
Provision for retirement benefits
Provision for retirement benefits to executive officers and audits& supervisory board members
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities
Revaluation reserve for land
Foreign currency translation adjustment
Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets- 10 -

As of
February 28, 2014

As ofAugust 31, 2014

89,171
1,405
680
16,58529,344
14,33087,585
2,372
5,232
246,706

113,703
1,661
2,390
17,73943,385
14,558112,397
2,176
9,430
317,443

61,666－
11,082408

70,551
8,425
11,709400

17,87432,755
123,788
370,494

20,01831,337
142,441
459,885

58,50647,741138,141(1,556)
242,832

58,50647,765
148,432(1,630)253,074

(93)
(567)
3,118
2,456
557
4,650
250,497
620,992

(89)
(567)
2,619
1,962
450
6,948
262,436
722,321

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
For the First Half of the fiscal year (From March 1, 2014 to August 31, 2014)(Millions of yen)

Gross operating revenue
Net sales
Cost of sales
Gross profit
Operating revenue:
Income from franchised stores
Other
Total operating revenue
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Penalty income
Other
Total non-operating income
Non-operating expenses:
Interest expense
Loss on cancel of lease contracts
Other
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on sales of investment securities
Gain on change in equity
Total extraordinary income
Extraordinary losses:
Loss on retirement of non-current assets
Impairment loss
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Income taxes
Income before minority interests
Minority interests in income
Net income- 11 -

From March 1,2013
to August 31, 2013
248,197
88,28666,451
21,834

From March 1,2014
to August 31, 2014
241,930
76,74658,092
18,653

123,424
36,486
159,910
181,745
146,120
35,624

127,272
37,911
165,183
183,837
143,818
40,019

406
45
822
1,274

389
402
479
1,270

649
404
311
1,366
35,533

679
543
450
1,673
39,616

－
－
－

369
756
1,126

1,241
1,815
399
3,456
32,077
13,414(424)
12,99019,08739
19,047

1,390
2,526
36
3,953
36,78914,098527
14,62622,163274
21,889

Consolidated Statement of Comprehensive Income
For the First Half of the fiscal year (From March 1, 2014 to August 31, 2014)(Millions of yen)
From March 1,2013
to August 31, 2013

From March 1,2014
to August 31, 2014

19,08722,163

Valuation difference on available-for-sale securities

(248)

4

Foreign currency translation adjustment

1,497

(468)

37

(37)

1,286

(500)

20,373

21,662

Owners of the parent

20,392

21,394

Minority interests

(18)

267

Income before minority interests
Other comprehensive income

Share of other comprehensive income of associates accounted
for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to- 12 -

(3) Consolidated Statement of Cash Flows
For the First Half of the fiscal year (From March 1, 2014 to August 31, 2014)(Millions of yen)
From March 1,2013
to August 31, 2013

From March 1,2014
to August 31, 2014

Net cash provided by (used in) operating activities:
Income before income taxes

32,07736,789Depreciation and amortization

22,80919,902

Impairment loss

1,815

2,526

Increase (decrease) in provision for retirement benefits

604

434

Increase (decrease) in allowance for doubtful accounts

268

(34)

Interest income

(406)

(389)

Interest expenses

649

679

Loss on retirement of noncurrent assets

1,241

1,390

Decrease (increase) in notes and accounts receivable-trade(1,645)

1,040

Decrease (increase) in accounts receivable-other(10,748)(11,465)

Increase (decrease) in notes and accounts payable-trade19,966

22,817

Increase (decrease) in accounts payable-other

11,343

13,657

Increase (decrease) in deposits received(2,904)

24,421

Increase (decrease) in guarantee deposits received(1,485)(1,317)

Other

2,347

(4,581)

Subtotal

75,932

105,870

Interest income received

405

394

Interest expenses paid

(642)

(674)

(13,950)(13,462)

61,744

92,127

Payments into time deposits(14,000)(11,200)

Proceeds from withdrawal of time deposits

12,0008,000

Purchase of stocks of subsidiaries and affiliates(3,155)(634)－(10,914)Purchase of property, plant and equipment(16,984)(18,713)Purchase of intangible assets(2,240)(2,378)Purchase of long-term prepaid expenses(1,447)(2,915)

Other(4,013)

470(29,841)(38,287)

Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:

Purchase of investments in subsidiaries resulting in change in scopeof consolidation

Net cash provided by (used in) investing activities- 13 -

Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable(1,443)

1,710

Proceeds from long-term loans payable

－

9,000

Proceeds from stock issuance to minority shareholders

－

2,000

Repayments of lease obligations(8,194)(10,080)

Cash dividends paid

(9,989)(10,989)

160

(246)

(19,467)(8,606)

Effect of exchange rate change on cash and cash equivalents

1,079

(234)

Net increase (decrease) in cash and cash equivalents

13,51544,999Cash and cash equivalents at beginning of period

72,76668,759Cash and cash equivalents at end of period

86,281

113,759

Other
Net cash provided by (used in) financing activities- 14 -

(4) Notes to consolidated financial statements(Notes Concerning Going Concern Assumption)
Not Applicable.

(Notes to Significant Changes in the amount of Shareholders’ Equity)
Not Applicable.

- 15 -