Flash Report on the Consolidated Result
for the First Half of the Fiscal Year Ended February 29, 2016
October 7, 2015
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: Tomoki Takanishi, Deputy Senior Vice President, Finance and Accounting Division Director
Tel.: +81-3-5435-2773
Scheduled date for submission of quarterly securities report: October 13, 2015
Scheduled date for payment of dividend: November 10, 2015
Supplementary documents quarterly results: Yes
Presentation of quarterly results: Yes (For institutional investors and analysts)(Amounts below one million yen are truncated)
1. Consolidated performance for the first half of the current period (from March 1, 2015, to August 31, 2015)(1) Consolidated operating results (accumulated)
Note: Percentages for gross operating revenue, operating income, ordinary income and net income show increase(decrease) compared to the corresponding period of previous year.
Gross operating revenue Operating income
Ordinary income
Net income¥ Million%¥ Million%¥ Million% ¥ Million%
Current 1st Half
289,338
19.6
42,044
5.1
40,7943.0
19,811(9.5)
Previous 1st Half
241,930(2.5)
40,019 12.3
39,616 11.5
21,889
14.9
Current 1st Half
21,516 million yen(0.7%)
Note: Comprehensive income:Previous 1st Half
21,662 million yen
6.3%

Current 1st Half
Previous 1st Half

Net income per share¥
198.11
219.15

Fully diluted profit per share¥
197.95218.73(2) Consolidated financial position

Current 1st Half
Previous fiscal year

Total assets¥ Million
829,194
764,614

Reference: Shareholders’ equity:

Net assets¥ Million
273,642
263,797
Current 1st Half
Previous fiscal year

Shareholders’ equity ratio
%
32.0
33.5

265,564 million yen
256,122 million yen

2. Dividends status2014 fiscal year
2015 fiscal year
2015 fiscal year (forecast)

1Q
¥
－
－

1H
¥
120.00122.50

Annual dividends per share
Year-end
3Q
dividend¥¥－
120.00Total¥
240.00122.50245.00－Note: Revision of forecast for dividends published in the most recent: None

3. Forecast consolidated performance for 2015 fiscal year （from March 1, 2015 to February 29, 2016）
Note: Percentages for gross operating revenue, operating income, ordinary income and net income show increase(decrease) compared to the corresponding period of previous year.
Gross operating
revenue

Operating income

Ordinary income¥ Million¥ Million¥ Million%%

Net income

Net profit
per share%¥ Million%¥

2015 fiscal year
579,000 16.3
71,0000.7
68,900(3.9)
Note: Revision of forecast for dividends published in the most recent: Yes

35,2007.7

352.004. 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: Yes
2. Other changes: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None
(4) Number of issued shares:
1. The number of the stocks issued in the end of term
August, 2015:
100,300,000
2. The number of treasury shares in the end of term
August, 2015:
301,681
3. Average number of shares during the term
August, 2015:
99,998,509

February, 2014:

100,300,000

February, 2014:

301,084

August, 2014:

99,879,873

Note: Implementation status of quarterly review proceduresThis flash report is exempt from quarterly review procedures under the Financial Instruments and ExchangeAct. As of the time of disclosure of this report, quarterly review procedures for the financial statements areincomplete.
Note: Descriptions on appropriate use of financial performance 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 to guarantee 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.

Contents of Attachments

2
1．Qualitative Information Regarding Quarterly Financial Results ························································(1) Explanation Regarding Consolidated Operating Results ······························································
2(2) Explanation Regarding Consolidated Financial Position ·····························································
7(3) Explanation Regarding Forward-looking Information Such As Forecast Consolidated Performance ··········
7
2．Matters Related To Summary Information (Notes) ································································

8(1) Change in important subsidiaries during the period (Changes in certain specified subsidiaries
8
resulting in revised scope of consolidation) ·················································································(2) Adoptions of accounting methods particular to presentation of quarterly financial statements ··················
8(3) Changes in accounting policies, changes in accounting estimation, retrospective restatement ··················
8
3. Consolidated Financial Statements ···························································································
9(1) Consolidated Balance Sheet ······························································································
9(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ····················
11
Consolidated Statements of Income ······················································································
11
Consolidated Statements of Comprehensive Income ································································12(3) Consolidated Statement of Cash Flows ················································································
13(4) Notes to consolidated financial statements ············································································
15(Notes Concerning Going Concern Assumption) ································································

15(Notes to Significant Changes in the amount of Shareholders’ Equity) ·············································
15

1

1．Qualitative Information Regarding Quarterly Financial Results(1) Explanation Regarding Consolidated Operating Results
During the first half of fiscal 2015, six months from March 1 to August 31, 2015, the Lawson Group(hereinafter, the “Group”) implemented business activities with the aim of realizing the Group’s corporate
philosophy of “Creating Happiness and Harmony in Our Communities.” In particular, we reinforced thefoundation of our convenience store business, for example, by enhancing our retail space, merchandise
assortment, and relationship with franchise store owners. In addition, while addressing changes in eachneighborhood such as an increase in the number of working women, the declining birth rate and the aging
population, we also focused on areas unique to Lawson, including over-the-counter fast food, health-oriented
products, home convenience, and entertainment.
Meanwhile, we also focused on promoting internal control and addressing operating risks across the entire
Group based on the 2015 Basic Policy for Improvement of Internal Control Systems. We will continue
promoting internal control across the board including companies that newly joined the Group.
As a result, for the first half of fiscal 2015 on a consolidated basis, gross operating revenue increased by¥4,748 million to ¥289,338 million (up 19.6% from last year), resulting from an increase of ¥33,173 million in
net sales resulting from acquiring United Cinemas Co., Ltd. and SEIJO ISHII CO., LTD. from second quarterand third quarter of previous fiscal year respectively, and an increase of ¥14,234 million in operating revenue
due to an increase in number of franchised stores. Operating income increased by ¥2,024 million to ¥42,044
million (up 5.1% from last year). Ordinary income increased by ¥1,177 million to ¥40,794 million (up 3.0%
from last year). Net income decreased by ¥2,078 million to ¥19,811 million (down 9.5% from last year) due toan increase of ¥2,585 million in extraordinary losses resulting from an increase of impairment loss.
Operating results by business segment were as follows:(Domestic Convenience Store Business)[Merchandising Strategies]
On the merchandise front, in June 2015, we launched 40 items under the following three themes incommemoration of the 40th anniversary of the opening of the first LAWSON store: “Premium Products” madewith specially selected ingredients and production methods; “Fun Products” that bring smiles to customers’
faces; and “Nostalgic Revivals” of popular products from the past. Furthermore, under “Honkide Oishii Project[delicious in earnest project]” launched in serious pursuit of palatability, we reviewed our product development
process and paid increased attention to ingredients, production methods and taste. The first item introduced
under the project, “Sockeye Salmon Lunchbox with Niigata Koshihikari Rice,” and the second items, “Niigata
Koshihikari Rice Ball Topped with Raw Salted Mature Cod Roe” and “Niigata Koshihikari Rice Ball Topped
with Fire-grilled Fatty Pork” were all received well by customers.
We have started selling “Doughnuts” over the counter in anticipation of encouraging purchases of“MACHI café” coffee since April 2015, and have expanded it in around 8,000 stores by the end of August.
Moreover, as a “Health Station in Town,” we also placed emphasis on selling health-oriented products. In
particular, the “Green Smoothie” sold under the NATURAL LAWSON brand and made with a full meal’s

2worth of vegetables, enjoyed great popularity among customers. In additional, there are currently 23 Lawson
Farms in which Lawson, Inc. holds equity stakes. The farms assume the role of supplying safe and fresh fruits
and vegetables to the Group’s stores and factories that produce LAWSON’s original products. The Group willcontinue to support the health of customers through such initiatives.
In addition to strengthen the above products, we are increasing our lineup of “Gift Cards*” offered at ourstores, which are received well.
For sales promotions, in July and August, we continuously implemented measures to attract customers
mainly to our mainstay category, including offering rice balls at “Rice Ball 100 Yen Sale,” which was started
from May.
*

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, 2014 to August 31, 2014

March 1, 2015 to August 31, 2015

Sales

Percentage of

Sales

Percentage of(Millions of yen)

total (%)

(Millions of yen)

total (%)

Processed foods

531,655

53.7

523,790

52.7

Fast foods

215,72121.8

233,479

23.5

Daily delivered foods

145,841

14.8

142,602

14.4

Nonfood products

96,2309.7

93,127

9.4

989,449

100.0

992,999

100.0

Total
[Store Operations]

In store operations, we continued to focus on reinforcing adherence to the Three Essential Practices, whichemphasizes (1) serving customers courteously; (2) offering a merchandise assortment focused on basic itemswith high demand; and (3) keeping our stores and communities clean, strengthened guidance to franchise store
owners and revised order placement methods as a way of reforming operations in order to create stores that
could grasp customers’ satisfactions and supports. In June 2015, we started phasing in a semi-automatedordering system for our ready-made meal category, with a plan to put the system in place at all stores by theend of February 2016. In addition to concluding a new franchise agreement with existing stores ahead ofschedule to offer enhanced support to franchise store owners, we strived to create retail spaces that stimulatepotential demand from customers and offer what they need at any time.
[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.
Furthermore, based on business alliance agreement between Lawson, Inc. and Metro Commerce Co., Ltd.,a group company of Tokyo Metro Co., Ltd., we transformed 2 Metro shops in Tokyo Metro stations into
Lawson Metro Akihabara store and Lawson Metro Akasakamitsuke store. We plan to transform 50 stores in the
future. From July, based on the part of the rights and obligations associated with the convenience store

3

business run by SAVE ON Co., Ltd. in Nagano prefecture succeeded by Lawson, Inc., part of SAVE ON stores
located in Nagano prefecture were transformed into LAWSON stores.
Furthermore, by building partnerships in local area, in addition of healthcare items including OTC
pharmaceuticals, cosmetics, and daily necessities, the stores offer a merchandise assortment of around 5,500
items, twice as many as conventional LAWSON stores. The number of stores offering non-prescription drugs
has reached 106 stores (included 37 Pharmacy LAWSON stores equipped with drug-dispensing pharmacies) asof the end of August 2015. Moreover, under a business alliance agreement entered into with Wisnet Co., Ltd.,
Lawson, Inc. has launched Wisnet-owned franchise LAWSON stores housing an office base for home nursing
care or a nursing care hub center equipped with a lounge space. In August 2015, the second LAWSON store
under this partnership was opened.
Regarding to LAWSON STORE100, we promoted to close unprofitable stores under the business
revitalization plan. During the first half of current fiscal year, 317 LAWSON STORE100 stores (included
stores which were transformed into LAWSON stores) were closed. With regard to the remaining 835 stores, we
increased the product composition ratio of 100-yen items (excluding tax) by scaling down product portions to
respond to customer needs for value, and strengthened our popular fruit and vegetable lineup. As a result, sales
at these stores gradually improved, with existing-store sales for the second quarter of fiscal 2015 exceeding
those for the same period of the previous fiscal year.
As a result, the total number of LAWSON, NATURAL LAWSON, and LAWSON STORE100 (including
LAWSON MART) stores opened and closed during current fiscal year stood at 461 and 556 stores, respectively,
with the total number of stores in Japan reaching 11,677 as of the end of August 2015.
[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2015
LAWSON

Change during
fiscal year

Total stores as ofAugust 31, 2015

10,63395

10,728

116

(2)

114

LAWSON STORE100／LAWSON MART

1,151

(316)

835

Total

11,900(223)

11,677

NATURAL LAWSON

Note: For change during fiscal year, it includes a decrease of 128 stores which were transferred into Lawson
Kochi, Inc. from Lawson, Inc. on April 1, 2015.

4

[Number of LAWSON stores by prefecture (As of August 31, 2015)]
Prefecture

Numberof stores

Hokkaido

626

Ibaraki

149

Kyoto

315

Ehime

208

Aomori

213

Tokyo

1,507

Shiga

155

Tokushima

133

Akita

184

Kanagawa

822

Nara

129

Fukuoka

437

Iwate

162

Shizuoka231

Wakayama

131

Saga

66

Miyagi212

Yamanashi

111

Osaka

1,003

Nagasaki

105

Yamagata

80

Nagano

167

Hyogo

631

Oita

166

Fukushima

104

Aichi

562

Okayama149

Kumamoto

138

Niigata

135

Gifu

154

Hiroshima

184

Miyazaki106

Tochigi

140

Mie

111

Yamaguchi

124

Total (domestic)

Gunma

99

Ishikawa

102

Tottori

114

Saitama

512

Toyama190

Shimane

120

Chiba

459

Fukui

106

Kagawa125

Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Number of stores

11,677

In addition to the above, Lawson Kochi, Inc. operates 135 LAWSON chain stores in Kochi prefecture,
Lawson Minamikyushu, Inc. operates 200 LAWSON chain stores in Kagoshima prefecture and Lawson
Okinawa, Inc. operates 183 LAWSON chain stores in Okinawa prefecture as of the end of August 2015.
(Other)With regards to our efforts in Home Convenience, in June 2015, Lawson, Inc. jointly established an
operating company with SG Holdings Co., Ltd., which owns Sagawa Express Co., Ltd. as the core operatingcompany, and started to offer delivery and order-taking service with LAWSON stores serving as hubs. In
addition, in partnership with Sagawa Express Co., Ltd., we launched a “Convenience Store Pick-up Service”
that enables customers to pick up items that they purchased online at LAWSON stores nationwide. The pick-up
service was also made available in July 2015 for merchandise bought at the “JINS Online Shop”, which sells
eyewear items, and in August 2015 at the “Dinos Online Shop”, which sells interior and clothing items.
Furthermore, starting in September 2015, the “Convenience Store Pick-up Service” will be available for items
purchased at “Rakuten Ichiba”, an Internet shopping mall. We will strive to enhance customer convenience byadditionally partnering with other companies to establish an “Open Platform” based on the networks of
LAWSON stores that offer a range of services encompassing ordering, collection, and home delivery.
(Seijo Ishii Business)
The number of directly operated Seijo Ishii stores, a high-end supermarket chain offering quality foods,
reached 110 as of the end of August 2015. Performance was strong, driven by sales of coconut oil and perilla
oil that became popular after their positive health effects were introduced on television and other media. We
will continue to enhance the brand image and corporate value of SEIJO ISHII Co., Ltd., while absorbing thecompany’s product development expertise, knowhow acquired as a manufacturing retailer, and sales methods,

5to strengthen our Domestic Convenience Store Business.
(Entertainment-related Business)
With regards to Entertainment-related Business, Lawson HMV Entertainment, which forms the core ofentertainment related business, posted a solid performance led by an increase in ticket sales and continued tosecure top position in the ticketing industry. The number of HMV stores that sell music CDs and DVDs totaled
53 as of the end of August 2015. Furthermore, United Cinemas Co., Ltd. operates a total of 37 sites with 333
screens (includes management contract) at its cinemas nationwide. We will strive to offer an even wider
selection of products and services to better respond to customer needs, for example, by expanding our ticketingbusiness.
(Other Business)
In addition to Domestic Convenience Store Business, Seijo Ishii Business, Entertainment-related Business,
the Group also involved in Overseas Business, Financial Services-related Business and other businesses.
With regards to overseas business, the Group’s operating companies opened LAWSON stores in the
People’s Republic of China (Shanghai, Chongqing, Dalian, and Beijing), Thailand, United States of America(Hawaii), Indonesia and Philippines.
[Distribution of LAWSON Brand Stores Overseas by Region]

Country/Region

Number of stores

Change during

Number of stores(As of February 28,

fiscal year

(As of August 31,

2015)

2015)

China

Shanghai and surrounding area

354

56

410

China

Chongqing

104

4

108

China

Dalian

30

9

39

China

Beijing19

4

23

Thailand

32

7

39

Indonesia

48

(11)

37

Philippines

－

9

9

3

－

3

590

78

668

United States of America

Hawaii

Total

Lawson ATM Networks, Inc., which operates a financial services-related business, continued contributing
to consolidated results owing to an increase in the number of ATMs installed. In this fiscal year 2015, we
strengthened partnership with new financial institution bringing the total number of our financial institution
partners to 79 nationwide (up 8 year on year), including online banks, and the number of ATMs installed
nationwide to 10,978 (up 211 year on year) as of the end of August 2015.

6

(2) Explanation Regarding Consolidated Financial Position(i) Assets, liabilities and net assets position at the end of the first half of fiscal year 2015
Total current assets stood at ¥263,997 million, climbed ¥40,354 million from February 28, 2015, the end of
the previous fiscal year. This reflected an increase of ¥35,515 million in cash and deposits, and a rise of¥12,421 million in accounts receivable-other. Non-current assets grew ¥24,225 million from February 28, 2015
to ¥565,196 million, mainly owing to an increase of ¥15,725 million in property and store equipment resulting
from opening of new stores. Consequently, total assets climbed ¥64,580 million from the end of the previous
fiscal year to ¥829,194 million.
Total current liabilities increased by ¥46,940 million from the end of the previous fiscal year to ¥348,009
million, mainly reflecting an increase of ¥20,989 million in account payable-trade, an increase of ¥12,745
million in deposits received and a rise of ¥12,518 million in accounts payable-other. Non-current liabilities
stood at ¥207,541 million, growing ¥7,794 million from February 28, 2015, mainly owing to an increase of¥8,667 million in lease obligations due to new store investments. Consequently, total liabilities increased by¥54,734 million from the end of the previous fiscal year to ¥555,551 million.
Total net assets stood at ¥273,642 million, increased by ¥9,845 million from February 28, 2015. This was
mainly due to an increase of ¥8,111 million in retained earnings resulting from such as net income of the firsthalf ¥19,811 million and a decrease resulting from payment of ¥11,999 million in dividends. Consequently,
shareholders’ equity ratio amounted to 32.0%, down from 33.5% as of the end of the previous fiscal year.
(ii) Cash flows during the first half of fiscal year 2015
Cash and cash equivalents at August 31, 2015 were ¥112,170 million, up ¥35,415 million compared with
February 28, 2015.
Operating activities provided net cash of ¥92,621 million, an increase of ¥493 million from thecorresponding period of the previous fiscal year, mainly due to an increase of operating income.
Investing activities used net cash of ¥33,262 million, a decrease of ¥5,024 million from the corresponding
period of the previous fiscal year, mainly due to a nonoccurrence of purchase of investments in subsidiaries
resulting in change in scope of consolidation.
Financing activities used net cash of ¥24,158 million, an increase of ¥15,551 million from thecorresponding period of the previous fiscal year, mainly due to a nonoccurrence of 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 2015 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)
The Company adopted “Accounting Standard for Retirement Benefits” (ASBJ Statement No. 26 issued on
May 17, 2012, hereinafter “Accounting Standard Retirement Benefits”) and “Guidance on AccountingStandard for Retirement Benefits” (ASBJ Guidance No. 25 issued on May 17, 2012, hereinafter “Guidance
Retirement Benefits”) from the first quarter of the consolidated fiscal year under review included stipulations
stated in the main clause of paragraph 35 of ASBJ Statement No. 26, and the main clause of paragraph 67 of
ASBJ Guidance No. 25. The Company reviewed the calculation method of retirement benefit liabilities andservice cost, changed the standard of payment period of retirement benefits estimated amounts from period
straight-line basis recorded to benefit formula basis. The method for calculating the discount rate was changed
from the method in which bond duration, a base used for calculating the discount rate, was decided based on
the number of years that approximates the average remaining service period of the employees, to the method inwhich multiple discount rates are calculated in accordance with the expected payment period of retirement
benefits.
The application of Accounting Standards for Retirement Benefits, etc. has followed the transitional
treatment stipulated in paragraph 37 of ASBJ Statement No. 26, and the impact due to change of calculation
method of retirement benefit liabilities and service cost was charged to Retained earnings at the beginning of
the first half of the consolidated fiscal year under review.
As a result, net defined benefit liability as of the beginning of the first half of the consolidated fiscal year
under review decreased ¥2,130 million, while retained earnings increased ¥1,411 million. The impact of thischange to operating income, ordinary income, and income before income taxes and minority interests for the
first half of the consolidated fiscal year under review is immaterial.

83. Consolidated Financial Statements(1) Consolidated Balance Sheet
As of February 28, 2015 and August 31, 2015
(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
Other
Accumulated depreciation
Other, net
Total property and store equipment
Intangible assets:
Software
Goodwill
Right of trademark
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

9Previous fiscal year
As of
February 28, 2015

Current 1st Half
As of
August 31, 2015

76,75837,052
17,04458,666
5,299
31,400(2,578)
223,642

112,274
29,604
16,93071,088
4,348
29,773(23)
263,997

313,867(160,491)
153,375
74,270(59,445)
14,825
154,932(63,270)
91,661
15,022(448)
14,574274,436

317,135(154,175)
162,959
73,493(58,091)
15,401
170,118(70,749)
99,36912,894(462)
12,431
290,162

18,80048,18911,989550
79,53024,352
47,845
11,686542
84,42637,232
93,20526,251
31,435(1,121)
187,004
540,971764,614

39,13392,906
22,91636,541(889)
190,608
565,196
829,194(Millions of yen)

Liabilities
Current liabilities:
Accounts payable-trade
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
Provision for bonuses
Other
Total current liabilities
Non-current liabilities:
Long-term loans payable
Lease obligations
Provision for retirement benefits to executive officers
and audits & supervisory board members
Net defined benefit liability
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
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Subscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

10Previous fiscal year
As of
February 28, 2015

Current 1st Half
As of
August 31, 2015

103,458
1,507
1,740
575
19,94843,51813,301
103,634
2,976
10,408301,069

124,448
2,354
1,840
575
22,39556,037
12,010116,379
3,227
8,742
348,00958,42576,174

58,137
84,841367

407

12,95821,53030,290199,746
500,816

11,11824,03229,004
207,541555,551

58,506
47,696
147,177(1,272)
252,10758,506
47,696
155,288(1,277)260,213

(393)
(566)
5,492
(518)
4,014
223
7,452
263,797764,614

514
(566)
5,903
(501)
5,350
307
7,771
273,642829,194

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
For the first half of the fiscal years ended February 28, 2015 and February 29, 2016
(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
Share of profit of entities accounted for using equity
methodOther
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- deferredtaxes-deferred
Income taxes
Income before minority interests
Minority interests in income
Net income

11

Previous 1st Half
From March 1,2014
to August 31, 2014
241,930
76,74658,092
18,653Current 1st Half
From March 1,2015
to August 31, 2015
289,338
109,920
75,411
34,508127,272
37,911
165,183
183,837
143,818
40,019132,278
47,139179,418
213,926
171,882
42,044

389
97
783
1,270

380
221
837
1,440

679
543
450
1,673
39,616

911
982
794
2,689
40,794

369
756
1,126

－
892
892

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

1,833
4,705
－
6,539
35,148
11,745
3,218
14,963
20,184373
19,811

Consolidated Statement of Comprehensive Income
For the first half of the fiscal years ended February 28, 2015 and February 29, 2016
(Millions of yen)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of the parent
Minority interests

12

Previous 1st Half
From March 1,2014
to August 31, 2014
22,163Current 1st Half
From March 1,2015
to August 31, 2015
20,184

4
(468)
－

908
407
16

(37)

－

(500)
21,662

1,332
21,516

21,394267

21,146369

(3) Consolidated Statement of Cash Flows
For the first half of the fiscal years ended February 28, 2015 and February 29, 2016
(Millions of yen)Previous 1st Half
From March 1,2014
to August 31, 2014
Net cash provided by (used in) operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Increase (decrease) in provision for retirement benefits
Increase (decrease) in net defined benefit liability
Interest income
Interest expenses
Loss on retirement of noncurrent assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in accounts receivable-other
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other
Increase (decrease) in deposits received
Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of investments in subsidiaries resulting in change in scopeof consolidation
Purchase of shares of subsidiaries and affiliates
Purchase of property and store equipment
Purchase of intangible assets
Purchase of long-term prepaid expenses
Other
Net cash provided by (used in) investing activities

13

Current 1st Half
From March 1,2015
to August 31, 2015

36,78919,902
2,526
434
－
(389)
679
1,390
1,040
(11,465)
22,817
13,657
24,421(5,934)35,14823,867
4,705－(1,840)
(380)
911
1,833
7,330
(15,704)
21,61010,906
12,745
4,520

105,870394(674)(13,462)

105,655363(927)(12,470)

92,127

92,621(11,200)
8,000(1,297)
1,197(10,914)－(634)(18,713)(2,378)(2,915)470(3,226)(16,719)(8,684)(723)(3,808)(38,287)(33,262)(Millions of yen)Previous 1st Half
From March 1,2014
to August 31, 2014
Net cash provided by (used in) financing activities:
Proceeds from long-term loans payable
Proceeds from share issuance to minority shareholders
Repayments of lease obligations
Cash dividends paid
Other
Net cash provided by (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 at beginning of period
Increase (decrease) in cash and cash equivalents resulting fromchange of scope of consolidation
Cash and cash equivalents at end of period

14

Current 1st Half
From March 1,2015
to August 31, 2015

9,000
2,000
(10,080)(10,989)
1,463－－(11,936)(11,999)(222)(8,606)(234)
44,99968,759(24,158)
71
35,27176,754－

144

113,759

112,170

(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