Flash Report on the Consolidated Financial Results
for the Fiscal Year Ended February 28, 2019
April 11, 2019
Listed Company Name: Lawson, Inc.
Tokyo Stock Exchange (First Section)
Code No.: 2651
(URL http://www.lawson.jp/en/ir)
Company Representative: Sadanobu Takemasu, President and CEO, Representative Director,
Chairman of the Board
Contact: Tomoki Takanishi, Deputy Senior Vice President, Financial Administration Division Director
Tel.: +81-3-5435-2773
Scheduled date for the ordinary general meeting of shareholders: May 21, 2019
Scheduled date for submission of annual securities report: May 22, 2019
Scheduled date for payment of dividend: May 22, 2019
Supplementary materials for annual financial results: Yes
Holding of presentation of annual results: Yes (for institutional investors and analysts)(Amounts less than one million yen are truncated)
1. Consolidated operating results for 2018 fiscal year (from March 1, 2018 to February 28, 2019)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the previous fiscal year.

For the fiscal year ended
February 28, 2019
February 28, 2018
Note: Comprehensive income:For the fiscal year ended
February 28, 2019
February 28, 2018

Gross operating
revenue

Operating income

Millionsof yen700,647
657,324

Millionsof yen60,781
65,820%
6.6
4.1

Millionsof yen(7.7) 57,700(10.8) 65,141%

Fiscal year ended February 28, 2019
Fiscal year ended February 28, 2018

Profitattributable toowners of parent
Millions%%of yen(11.4) 25,585(4.6)(10.8) 26,828(26.3)

Ordinary income

26,173 million yen
28,908 million yen

Profit per
share

Diluted profit
per share

Return on
equityRatio of ordinary
income to total
assetsYen
255.71
268.16

Yen
255.59268.02

%
9.3
9.7

%
5.1
7.4

(9.5)%(18.7)%

Ratio ofoperating income togross operating
revenue%
8.7
10.0

Reference: Share of profit of entities accounted for using equity method:
Fiscal year ended February 28, 2019
320 million yen
Fiscal year ended February 28, 2018
693 million yen(2) Consolidated financial position
Shareholders’
Net assets per
Total assets
Net assets
equity ratio
share
As of
Millions of yen
Millions of yen%
Yen
February 28, 2019

1,342,490

281,98220.6

2,763.54

February 28, 2018

900,256

281,44630.6

2,755.06

Reference: Shareholders’ equity:

As of February 28, 2019
As of February 28, 2018276,514 million yen
275,658 million yen

(3) Consolidated cash flows

For the fiscal year ended
February 28, 2019
February 28, 2018

Net cash providedby (used in)operating activities
Millions of yen
128,594
113,938

Net cash providedby (used in)investing activities
Millions of yen(81,017)(91,209)

Net cash providedby (used in)financing activities
Millions of yen
277,937(61,238)

Cash and cash
equivalents at
end of period
Millions of yen
354,236
30,1202. Dividends
Annual dividends per share
1Q

1H

3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

2017 fiscal year－

127.50－127.502018 fiscal year
2019 fiscal year
(forecast)－

127.50

－

－

75.00

－

Total
dividends
for the year

Payoutratio

Ratio ofdividends toshareholders’equity%%255.00Millions ofyen
25,514

95.1

9.3

127.50

255.0025,514

99.7

9.2

75.00

150.0083.4

3. Forecast of consolidated operating results for 2019 fiscal year (from March 1, 2019 to February 29, 2020)
Note: Percentages represent increases (decreases) compared with the previous fiscal year.

1H of 2019 fiscal year
2019 fiscal year

Gross operating
revenue
Millions%of yen365,000
3.7
727,000
3.8

Profit attributable Profit per
to owners of parent share
Millions%%Yenof yen(9.1)
15,500 (13.6) 154.90(5.5)
18,000 (29.6) 179.89

Operating income

Ordinary income

Millionsof yen33,50060,800Millionsof yen30,50054,500

%
(2.9)
0.0

4. Notes(1) Change in significant subsidiaries during the fiscal year (Changes in certain specified subsidiaries resulting
in changes in scope of consolidation): None
Added: None

Excluded: None

(2) Changes in accounting policies, changes in accounting estimates or restatements
1. Changes in accounting policies associated with revision in accounting standards: Yes
2. Changes in accounting policies other than 1. above: None
3. Changes in accounting estimates: None
4. Retrospective restatements: None
(3) Number of shares outstanding (common stock)
1. Number of shares outstanding at the end of year (including treasury shares)
As of February 28, 2019:100,300,000
As of February 28, 2018:

100,300,000

2. Number of treasury shares at the end of year
As of February 28, 2019
241,897

As of February 28, 2018:244,849

3. Average number of shares during the year
As of February 28, 2019:
100,057,042

As of February 28, 2018:

100,044,721

Note: The Flash Report on the Consolidated Financial Results is not subject to audit.
Note: Descriptions on appropriate use of financial performance forecasts and other special notes
Forward-looking statements presented herein such as financial forecasts are based on currently available
information and certain presumptions deemed to be reasonable as of the date of announcement. The
achievement of said forecasts cannot be guaranteed. Actual results may be materially different from those in
the forecast as a result of various factors. For preconditions of these financial forecasts and notes concerning
their use, please refer to “1.Overview of Operating Results, (4) Future Outlook” on page 10.

Contents

1. Overview of Operating Results ..............................................................................................................

2(1) Overview of Operating Results for the Fiscal Year under Review ..................................................

2(2) Profit and Loss .................................................................................................................................

8(3) Overview of Financial Position for the Fiscal Year under Review ..................................................

8(4) Future Outlook .................................................................................................................................

10

2. Basic Approach to Selection of Accounting Standards ..........................................................................

10

3. Consolidated Financial Statements and Main Notes ..............................................................................

11(1) Consolidated Balance Sheet .............................................................................................................

11(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ..........

13

Consolidated Statement of Income ...................................................................................................

13

Consolidated Statement of Comprehensive Income .........................................................................

14(3) Consolidated Statement of Changes in Equity .................................................................................

15(4) Consolidated Statement of Cash Flows ............................................................................................

17(5) Notes to Consolidated Financial Statements ....................................................................................

19(Going Concern Assumption) ...........................................................................................................

19(Accounting Policies for the Preparation of Consolidated Financial Statements) ............................

19(Changes in Accounting Policies ) .............................................................................................................................

23(Unapplied Accounting Standards, etc.) .................................................................................................................

23(Changes in Presentation) .................................................................................................................

24(Additional Information) ..................................................................................................................

25(Notes to Consolidated Balance Sheet) ............................................................................................

26(Notes to Consolidated Statement of Income) ..................................................................................

27(Notes to Consolidated Statement of Comprehensive Income) ........................................................

30(Notes to Consolidated Statement of Changes in Equity) ................................................................

31(Notes to Consolidated Statement of Cash Flows) ...........................................................................

33(Segment Information) .....................................................................................................................

34(Per Share Information) ....................................................................................................................

40

1

1. Overview of Operating Results(1) Overview of Operating Results for the Fiscal Year under Review
During the fiscal year under review, or fiscal 2018 ended February 28, 2019, we have advanced andaccelerated our “1000-Day Action Plan,” which is in its final fiscal year, and focused our business activities onbuilding Lawson’s next-generation convenience store model. Changes in community needs resulting from anaging population and the prevalence of the nuclear family, among others, are serving as a tailwind for theconvenience store industry. Given such a business environment, we implemented a variety of measures in order
to continue fulfilling our customers’ needs in everyday life by serving as an essential part of their communities.
Such measures included evolving our business model as a manufacturing retailer targeting small catchment
areas, raising our store productivity by making maximum use of digital technology, and taking on the challengeof launching a banking business.
Furthermore, we also focused on improving our group-wide internal control system and addressing operating
risks based on the 2018 Basic Policy for Improvement of Internal Control Systems. We will continue promotinginternal control going forward.

(Domestic Convenience Store Business)
In our convenience store business, we offered everyday ready-made dishes including bento lunchboxes, riceballs, deep-fried items, salads and soups at LAWSON stores. In our effort to reinforce our store capacity by
expanding our merchandise assortment offered in the evening and nighttime hours, we restructured our system
across the entire supply chain from June by changing the order placement deadline and truck delivery times. In
addition, with the aim of facilitating cash register operations and achieving higher cash-handling efficiency atstores, we completed the introduction of new point-of-sale (POS) cash registers (for sales information
management) equipped with an automatic change dispenser function at all our stores nationwide.
[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. Furthermore, we also actively promoted
our stores by strengthening our product lineup and improving franchise support and operations. Beginning inNovember 2018, we also added a service in which customers can earn and redeem Ponta points when they use
Apple Pay at any LAWSON store nationwide. Ponta has become Japan’s first multi-partner loyalty card service
to allow points to be saved and redeemed simply by using Apple Pay via iPhone or Apple Watch. This service
eliminates the need for customers to present their Ponta card or launch their app as well as the need for store
staff to scan the barcodes on the Ponta cards presented, leading to improved customer convenience and store
operation productivity. Furthermore, we launched a pilot project on Lawson Smartphone Cash Register, ourmobile self-service payment service option based on a dedicated app, which allows customers to purchase items
wherever they are within LAWSON stores.

2

[Merchandising and Service Strategies]
On the merchandise side, we revamped our basic onigiri rice ball range by improving ingredients andproduction methods including adopting a new variety of rice and a new kind of laver, which was well-received
by customers. In addition, our “Akuma-no-onigiri” (meaning “devil’s rice ball”) line also became a huge hit,pushing up sales. Our “Korega” lunchbox series made with rigorously selected ingredients and production
methods also enjoyed ongoing popularity. Furthermore, sales of our microwavable hot noodle series revampedwith new soup and noodles were also robust.
In the counter fast food range, we strengthened our assortment of ready-made dishes offered during theevening and nighttime hours by expanding our lineup of packed dishes composed mainly of items that can gostraight to the dinner table. In addition, our long-selling “Karaage-kun” chicken nuggets that crossed the 3billion-unit mark in cumulative sales continued to record robust sales.
In the dessert range, we continued offering the “Uchi Café SWEETS X GODIVA” series produced incollaboration with Godiva with well-selected ingredients and a special production method, which remained
popular especially among female customers.
On our sales promotion side, while strengthening our merchandise assortment offered during the evening
and nighttime hours, we also rolled out a special evening sales campaign, which offered a 20-yen discountwhen two applicable counter food items were purchased on weekday evenings. In addition, effective measures
to attract customers were launched, including a speed lottery capitalizing on our strength in the entertainment
field.

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

Product group
Processed foods

Previous fiscal year
From March 1, 2017
to February 28, 2018
Sales
Percentage(Millions of yen)of total (%)
1,138,966
52.7

Current fiscal year
From March 1, 2018
to February 28, 2019
Sales
Percentage(Millions of yen) of total (%)
1,202,619
52.6

YoY (%)

105.6

Fast foods

509,415

23.6

544,530

23.8

106.9

Daily delivered foods

314,48114.5

329,545

14.4

104.8

Nonfood products

197,8219.2

208,612

9.2

105.5

2,160,684

100.0

2,285,308

100.0

105.8

Total

(Note) These figures include stores operated by both Lawson, Inc. and Lawson Sanin, Inc.

[Store Development]
In opening new stores, the Group continued to focus on developing profitable stores.
Regarding the entire Lawson Group, the total number of LAWSON, NATURAL LAWSON, and LAWSONSTORE100 stores opened and closed during the current fiscal year stood at 1,067 and 400 stores, respectively,
with the total number of stores reaching 14,659 as of the end of February 2019 *1
With regard to our partnership initiatives with other chain retailers in Japan, as in the previous fiscal year,
we remodeled THREE F stores operated by Three F Co., Ltd. into LAWSON THREE F stores, and SAVE ON

3stores operated by Save On Corp. into LAWSON stores.
During the fiscal year under review, we remodeled 67 THREE F stores and 195 SAVE ON stores into
LAWSON THREE F stores and LAWSON stores, respectively, completing the brand transition.
In an effort to establish convenience store models catered to an aging population and rising healthconsciousness, we are building partnerships with dispensing pharmacy and drug store chains to operate
healthcare-oriented LAWSON stores that offer over-the-counter pharmaceuticals and prescription drugs, aswell as a wider assortment of cosmetics and daily necessities than conventional LAWSON stores. The numberof stores offering non-prescription drugs has reached 206 stores (includes 47 pharmacy LAWSON stores
equipped with drug-dispensing pharmacies) as of the end of February 2019. Moreover, the number of stores
offering nursing care consultation services has reached 20 as of the end of February 2019. Furthermore, wehave also been expanding our chain of “in-hospital LAWSON stores,” which feature strengthened focus on
medical, sanitary, nursing and rehabilitation supplies in addition to merchandise and services offered at standard
convenience stores. The number of such stores has reached 307 as of the end of February 2019. Building on
our expertise developed through operation of in-hospital LAWSON stores, we will continue to support the livesof all people interacting with hospitals.
With respect to LAWSON STORE100, we will continue to offer 100-yen items (excluding tax) by scaling
down product portions to respond to a diverse range of customer needs.
*1 The numbers of store openings and closings and total number of stores in Japan include stores operatedby Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equity-method affiliates, Lawson Kochi, Inc.,
Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.
[Change in the Total Number of Domestic Stores]
Total stores as ofFebruary 28, 2018

Change during
fiscal year

Total stores as ofFebruary 28, 2019

13,044670

13,714

NATURAL LAWSON

143

(4)

139

LAWSON STORE100

805

1

806

13,992667

14,659LAWSON

Total

4

[Number of LAWSON stores by prefecture (February 28, 2019)]
Prefecture

Numberof stores

Hokkaido

670

Ibaraki

223

Kyoto

336

Ehime

219

Aomori

262

Tokyo

1,748

Shiga

159

Tokushima

138

Akita

190

Kanagawa

1,121

Nara

140

Kochi

140

Iwate

179

Shizuoka

282

Wakayama

152

Fukuoka523

Miyagi252

Yamanashi

136

Osaka

1,151

Saga

75

Yamagata

112

Nagano

175

Hyogo

687

Nagasaki

109

Fukushima

158

Aichi

730

Okayama

202

Oita

188

Niigata

230

Gifu

180

Hiroshima

234

Kumamoto

157

Tochigi

201

Mie

141

Yamaguchi

117

Miyazaki

107

Gunma

254

Ishikawa

102

Tottori

143

Kagoshima

197

Saitama702

Toyama194

Shimane148

Okinawa

233

Chiba

616

Fukui

113

Kagawa133

Total(domestic)

14,659Prefecture

Numberof stores

Prefecture

Numberof stores

Prefecture

Numberof stores(Note) These figures include stores operated by Lawson, Inc., subsidiary Lawson Sanin, Inc. and three equitymethod affiliates, Lawson Kochi, Inc., Lawson Minamikyushu, Inc. and Lawson Okinawa, Inc.

[Other]As Lawson’s “last-one-mile solution,” we started offering the LAWSON FRESH PICK service (colloquiallyshortened to “Loppick”) in March 2018. Loppick enables customers to reserve products on a dedicated smartphone
app by 8 a.m. and receive them in the evening on the same day at their designated LAWSON store. By leveraging
our existing store and logistics network, the service offers customers the freedom of not having to wait at homefor delivery and allows them to pick up their purchased items when they want in the evening. Loppick has become
available at around 1,600 stores as of the end of February 2019. Furthermore, in December 2018, we launched“Fresh Karaage-kun Cooking Machine,” a pilot experiment, which employs digital technology to deep-fry chicken
nuggets in one fifth of the usually required time in order to offer freshly fried products to customers. We will look
into customers’ needs for freshly fried products and consider introducing this equipment at LAWSON stores.
As a result, Domestic Convenience Store Business posted gross operating revenue of 468,692 million yen (up5.9% from previous fiscal year) and segment profit of 48,262 million yen (down 10.0% from previous fiscal year).

(Seijo Ishii Business)
At Seijo Ishii stores, a high-end supermarket chain offering quality foods, we took on new challenges such as
opening stores where freshly prepared hot meals and desserts are served to order. The number of directly operated
Seijo Ishii stores including the new type of store reached 146 as of the end of February 2019. Sales were solid andits well-selected products have remained popular among customers. By continuing to leverage the company’s
strengths including its product development expertise, know-how acquired as a manufacturing retailer, andretailing techniques, we will endeavor to enhance the brand capacity of Seijo Ishii.

5As a result, Seijo Ishii Business posted gross operating revenue of 86,672 million yen (up 5.8% from previous
fiscal year) and segment profit of 7,413 million yen (up 8.2% from previous fiscal year).
(Entertainment-related Business)
With regard to our Entertainment-related Business, the ticketing business of Lawson Entertainment, Inc.,
which forms the core of the business, continued to secure top-class transaction value in the ticketing industry.
HMV, which distributes music CDs, DVDs and books, also operates the HMV Record Shop specializing inanalog records. As of the end of February 2019, the number of HMV stores totaled 56 including the HMV Record
Shop. In November 2018, United Cinemas Co., Ltd., an operator of cinema complexes, introduced in Fukuoka
Prefecture a cutting-edge attraction theater system known as 4DX, which offers an immersive viewing
experience. In addition, United Cinemas also opened Kyushu’s first cinema theater employing ScreenX, which
provides a three-dimensional movie projection system using not only the front screen but also the walls on bothsides. As of the end of February 2019, United Cinemas operates cinema theaters at 41 sites, offering 367 screens
nationwide including those operated on commission.
As a result, Entertainment-related Business posted gross operating revenue of 78,070 million yen (up 3.6%
from previous fiscal year) and segment profit of 4,499 million yen (up 16.8% from previous fiscal year).
(Financial Services Business) *2
With respect to our Financial Services Business, Lawson Bank, Inc. acquired its banking license on August
10, 2018 and started providing banking services to customers on October 15. With the aim of building
awareness of the bank, we have been running TV and online commercials, implementing promotional
campaigns in which ATM users receive discount coupons for “Karaage-kun” fried chicken, “MACHI Café”
and “Uchi Café SWEETS,” and started offering ordinary savings account and fixed deposit account services.
In addition, we issued the LAWSON Ponta Plus credit card, which allows cardholders to collect Ponta points
when using their cards at LAWSON stores and other outlets. In our ATM business, the foundation of ourbanking business, we expanded our network of financial institution partners, while working to install ATMs atlocations other than LAWSON stores, including New Chitose Airport and Tokyo Metro stations. As of the endof February 2019, the number of ATMs installed nationwide reached 13,459 (up 726 from previous fiscal year),with each ATM used 48.9 times a day on average. The total number of our financial institution partners
increased to 111 nationwide (up 21 from previous fiscal year), including online banks. *3,*4*2 Starting from the third quarter ended November 30, 2018, our Financial Services Business, which had
been included in the Other Business, has been reclassified as a separate reportable segment due to its
increased significance.
*3 JA Bank and JF Marine Bank are classified as separate financial institutions.
*4 Lawson Bank Preparatory Company, Inc. changed its name to Lawson Bank, Inc., effective July 2, 2018.
As a result, Financial Services Business posted gross operating revenue of 30,572 million yen (up 11.8% from6

previous fiscal year) and segment profit of 2,223 million yen (down 48.0% from previous fiscal year).
(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the Overseas Business.
With regards to Overseas Business, the Group’s operating companies opened LAWSON stores in the People’s
Republic of China, Thailand, Indonesia, the Philippines, and the United States of America (Hawaii).
In the People’s Republic of China, after being the first Japanese convenience store operator to advance into
Shanghai, we made inroads into Chongqing, Dalian, Beijing, Wuhan, and Nanjing. The number of LAWSON
stores in the entire country reached 2,007 as of the end of February 2019.

[Distribution of LAWSON Brand Stores Overseas by Region]
Number of stores(As of February 28,
2018)

Changeduring fiscal
year

Number of stores(As of February 28,
2019)

865

362

1,227

China Chongqing

165

33

198

China Dalian

122

24

146

China Beijing

73

35

108

China

Wuhan

198

110

308

China

Hefei

－

20

20

Thailand

101

19

120

Indonesia

37

5

42

Philippines

33

6

39

2

－

2

1,596

614

2,210

Country/Region
China

Shanghai and surrounding area

United States of America

HawaiiTotal

As a result, Other Business posted gross operating revenue of 45,404 million yen (up 19.2% from previous
fiscal year) and segment loss of 1,618 million yen (down 42.4% from previous fiscal year).

[Environmental and Social Contribution Activities]
As part of our initiative to reduce our environmental impact, we will endeavor to save energy and resources
as well as promote waste reduction not only at LAWSON stores but also throughout the entire supply chain.
In particular, we promoted the introduction of a state-of-the-art energy-saving chlorofluorocarbon-free (CO2refrigerant) refrigerator/freezer system with the aim of reducing electricity consumption at our stores andpreventing global warming. As of the end of February 2019, the system had been installed in approximately
3,400 stores, approximately 700 stores more than a year earlier. Compared to conventional equipment used inour stores, the new system can reduce electricity consumption per store by around 12%. By putting into practicaluse an energy-saving package model centered on this system, the Group will aim to achieve its target of using
20% less electricity per store by fiscal 2020 compared to the fiscal 2010 level.

7In our efforts to save natural resources, we are striving to use less plastic by producing and distributing
reusable shopping bags, introducing biomass plastic, promoting recycling, and remodeling product containers.
Our Natural Lawson stores are advancing their initiative to adopt plastic shopping bags produced partly with
polyethylene made from sugarcane. We are also rigorously proceeding with various other measures to reduce
the use of plastic, which is currently a global issue. For example, we are conducting a monitoring survey on theuse of paper straws jointly with Yamanashi Prefecture, as well as an experiment and examination on replacing
plastic cups with paper cups for serving freshly brewed iced coffee at MACHI café.
With regard to reducing waste, we are recycling waste food and cooking oil from stores, which are being
reused as feed and fertilizer, and biodiesel fuel, respectively.
As part of our social contribution activities, we established a scholarship program for children from singleparent families in 2017 to support their education. In fiscal 2018, 400 selected recipients received scholarshipfunds. In addition, money was also raised for victims of the heavy rain disaster in July, Typhoon Jebi, and the
Hokkaido Eastern Iburi Earthquake.
On March 1, 2019, we established the SDGs Committee. As a member of society, we will continue to makegroup-wide unified efforts together with our franchised stores, customers and business partners to address socialand environmental issues toward the goal of achieving the SDGs.

(2) Profit and Loss
In terms of operating results for the fiscal year, gross operating revenue increased to 700,647 million yen (up6.6% from previous fiscal year), operating income totaled 60,781 million yen (down 7.7% from previous fiscal
year), and ordinary income amounted to 57,700 million yen (down 11.4% from previous fiscal year). Profit
attributable to owners of parent was 25,585 million yen (down 4.6% from previous fiscal year).

(3) Overview of Financial Position for the Fiscal Year under Review① Total assets, total liabilities, total net assets analysis

Current assets increased by 392,138 million yen from the end of the previous fiscal year to 623,998 million
yen, mainly reflecting an increase of 324,115 million yen in cash and deposits. Non-current assets increased
by 50,095 million yen from the end of the previous fiscal year to 718,491 million yen, mainly reflecting an
increase of 32,364 million yen in property and store equipment and an increase of 11,256 million yen in
investments and other assets such as guarantee deposits. Consequently, total assets increased by 442,234
million yen from the end of the previous fiscal year to 1,342,490 million yen.
Current liabilities increased by 219,300 million yen from the end of the previous fiscal year to 598,522
million yen, mainly reflecting an increase of 90,260 million yen in short-term loans payable and an increaseof 49,425 million yen in current portion of long-term loans payable. Non-current liabilities increased by
222,398 million yen from the end of the previous fiscal year to 461,985 million yen, mainly reflecting an
increase of 204,530 million yen in long-term loans payable. Consequently, total liabilities increased by
441,698 million yen from the end of the previous fiscal year to 1,060,507 million yen.
Net assets increased by 535 million yen from the end of the previous fiscal year to 281,982 million yen,mainly reflecting an increase of 1,264 million yen in valuation difference on available-for-sale securities and8

a decrease of 664 million yen in foreign currency translation adjustment. Consequently, shareholders’ equity
ratio was 20.6%, down from 30.6% as of the end of the previous fiscal year.
② Cash flows during fiscal year 2018

Cash and cash equivalents at February 28, 2019 increased by 324,115 million yen from the end of theprevious fiscal year to 354,236 million yen.
Net cash provided by operating activities was 128,594 million yen, an increase of 14,656 million yen fromthe previous fiscal year, mainly because of an increase in accounts payable-other, a decrease in notes andaccounts receivable-trade and an increase in deposits received.
Net cash used in investing activities was (81,017) million yen, a decrease of 10,191 million yen from theprevious fiscal year, because of a decrease in payments for transfer of business and an increase of proceedsfrom sales of investment securities.
Net cash provided by financing activities was 277,937 million yen, an increase of 339,176 million yen
from the previous fiscal year, because of an increase in proceeds from long-term loans payable and net
increase in short-term loans payable.
(Reference) Trends in cash flow indicators
2016 fiscal year2017 fiscal year2018 fiscal year

Shareholders’ equity ratio (%)

31.7

30.6

20.6

Shareholders’ equity ratio on market value basis (%)

89.4

77.7

50.3

Interest-bearing debt/cash flow ratio (years)

2.2

2.1

4.7

Interest coverage ratio (times)

51.9

55.5

46.4

(Note)

Shareholders’ equity ratio: Shareholders’ equity/Total assets
Shareholders’ equity ratio on market value basis: Market capitalization/Total assets
Interest-bearing debt/cash flow ratio: Interest-bearing debt/Cash flow provided by operating activities
Interest coverage ratio: Cash flow provided by operating activities/Interest expense

1. All indices are calculated using consolidated financial figures.
2. Market capitalization is calculated by multiply closing share price at the end of fiscal year with the numberof shares outstanding at the end of fiscal year (excluding treasury shares)
3. The figure for net cash provided by operating activities in the consolidated statements of cash flows isused as cash flow provided by operating activities. Interest-bearing debt refers to the sum of all liabilities
in the consolidated balance sheets on which interest is paid. The figure for interest paid in the consolidated
statements of cash flows is used as interest expense.

9(4) Future Outlook
Outlook for the next fiscal year (2019 fiscal year ending February 29, 2020)
1H of 2019 fiscal year
Forecast (Millions of yen) YoY (%)

2019 fiscal year
Forecast (Millions of yen) YoY (%)

Gross operating revenue

365,000

103.7

727,000

103.8

Operating income

33,50097.1

60,800100.0

Ordinary income
Profit attributable toowners of parent

30,50090.9

54,50094.5

15,50086.4

18,00070.4

2. Basic Approach to Selection of Accounting Standards
The Group applies Japanese generally accepted accounting principles, and it has no plan to apply
International Financial Reporting Standards (IFRS) for the time being. The Group intends to respond
appropriately to the application of the IFRS by considering the situation prevailing in Japan and overseas.

10

3. Consolidated Financial Statements and Main Notes(1) Consolidated Balance Sheet
As of February 28, 2018 and February 28, 2019
(Millions of yen)

AssetsCurrent assets:
Cash and deposits
Accounts receivable-due from franchised stores
Lease receivables
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, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Other, net
Total property and store equipment
Intangible assets:
Software
Goodwill
Trademark right
Other
Total intangible assets
Investments and other assets:
Investment securities
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

11

Previous fiscal year
As of
February 28, 2018

Current fiscal year
As of
February 28, 201930,124
46,59916,426
18,913
82,6333,411
33,779(28)
231,860

354,240
47,17919,12020,862120,969
4,394
57,355(124)623,998

197,979
16,355
9,582
123,940
1,800
277
349,935

207,755
16,056
9,052
146,8802,223
331
382,300

41,602
47,947
10,074573
100,197

49,791
46,836
9,468
576
106,672

27,27147,425
100,686
24,406
19,568(1,095)
218,262
668,395
900,256

31,14044,024
107,034
26,76021,395(835)
229,519
718,491
1,342,490

(Millions of yen)

Liabilities
Current liabilities:
Accounts payable-trade
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
Deferred tax liabilities
Provision for retirement benefits to executive officers
and audit and 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
Non-controlling interests
Total net assets
Total liabilities and net assets

12Previous fiscal year
As of
February 28, 2018

Current fiscal year
As of
February 28, 2019

118,174
36,340575
33,06360,7416,880
109,629
3,767
10,051
379,222

123,408
126,600
50,00038,750101,995
6,683
131,804
4,263
15,015598,52255,469113,6172,616

260,000
131,441
711

271

300

13,781
29,062
24,767
239,587
618,809

15,125
31,102
23,303461,985
1,060,507

58,506
46,689166,124(1,040)270,280

58,506
46,984
166,187(1,028)
270,649

2,084
(575)
4,595
(726)
5,377
195
5,593
281,446
900,256

3,349
(566)
3,930
(848)
5,865
215
5,251
281,982
1,342,490

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
For the fiscal years ended February 28, 2018 and February 28, 2019
(Millions of yen)

Gross operating revenue
Net sales
Cost of sales
Gross profit
Operating revenue:
Income from franchised stores
Other operating revenue
Total operating revenue
Operating gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Share of profit of entities accounted for using equity
methodCompensation income
Other
Total non-operating income
Non-operating expenses:
Interest expenses
Loss on cancellation of leases
Loss on disaster
Other
Total non-operating expenses
Ordinary income
Extraordinary income:Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses:
Loss on sales of non-current assets
Loss on retirement of non-current assets
Impairment loss
Other
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

13

Previous fiscal year
From March 1, 2017
to February 28, 2018657,324
264,734
181,374
83,360Current fiscal year
From March 1, 2018
to February 28, 2019
700,647
288,579
198,040
90,539289,232
103,357
392,589475,950
410,129
65,820302,136
109,931
412,067
502,607441,825
60,781

799
112

714
319

693

320

897
1,331
3,835

382
1,720
3,456

2,099
1,304
－
1,110
4,514
65,141

2,768
1,655
817
1,296
6,538
57,700

－
302
302

738
－
738

368
3,115
17,533836
21,853
43,59014,1902,538
16,72926,861
32
26,828224
4,141
13,891
303
18,561
39,87618,328(4,015)
14,31325,562(22)
25,585

Consolidated Statement of Comprehensive Income
For the fiscal years ended February 28, 2018 and February 28, 2019
(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

14

Previous fiscal year
From March 1, 2017
to February 28, 2018
26,861

Current fiscal year
From March 1, 2018
to February 28, 201925,562

1,809
36
201
2,047
28,908

1,264
(673)
19
610
26,713

28,82483

26,204(31)

(3) Consolidated Statement of Changes in Equity
Previous fiscal year ended February 28, 2018 (From March 1, 2017 to February 28, 2018)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

58,50649,083

165,162(1,210)271,541

Balance at beginning of current period
Changes of items during period
Change in ownership interest of parent due
to transactions with non-controllingshareholders(2,454)

Dividends of surplus(2,454)(25,258)(25,258)

(564)

(564)

26,82826,828Change of scope of consolidation
Profit attributable to owners of parent
Purchase of treasury shares
Disposal of treasury shares

0

(3)

(3)

0

0

Capital increase of consolidated
subsidiaries－

Increase by corporate division－Tax effect adjustment on change in equity
of prior period－

Reversal of revaluation reserve for land

(42)

Exercise of subscription rights to shares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity

(42)

60

Total changes of items during period
Balance at end of current period

172

233

－

(2,393)962

169(1,261)58,506

46,689166,124(1,040)270,280(Millions of yen)
Accumulated other comprehensive income
Valuation difference on
Revaluation
available-for-salereserve for land
securities

Balance at beginning of current
period274(618)

Foreign currency Remeasurements Total accumulatedtranslationof defined benefit other comprehensive
incomeadjustment
plans

4,610

(927)

3,338

Subscription
NonTotal net
rights tocontrolling
assetssharesinterests
314

10,800285,995

Changes of items during period
Change in ownership interest ofparent due to transactions with
non-controlling shareholders(2,454)

Dividends of surplus(25,258)

Change of scope of consolidation(564)

Profit attributable to owners ofparent26,828Purchase of treasury shares(3)

Disposal of treasury shares

0

Capital increase of consolidated
subsidiaries－

Increase by corporate division－Tax effect adjustment on change
in equity of prior period
Reversal of revaluation reserve for
land
Exercise of subscription rights toshares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity
Total changes of items during
period－Balance at end of current period

(42)
233
1,809

42

(15)

201

2,038

(119)

(5,207)(3,288)

1,809

42

(15)

201

2,038

(119)

(5,207)(4,549)

2,084

(575)

4,595

(726)

5,377

195

5,593

281,44615

Current fiscal year ended February 28, 2019 (From March 1, 2018 to February 28, 2019)(Millions of yen)
Shareholders’ equity
Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

58,506

46,689166,124(1,040)270,280

Balance at beginning of current period
Changes of items during period
Change in ownership interest of parent due
to transactions with non-controllingshareholders－

Dividends of surplus(25,514)

Change of scope of consolidation
Profit attributable to owners of parent(25,514)(0)(0)

25,58525,585Purchase of treasury shares

(1)

(1)

0

0

Disposal of treasury shares

0

Capital increase of consolidated
subsidiaries

(4)

(4)

Increase by corporate division

70

70

Tax effect adjustment on change in equity
of prior period

224

224

Reversal of revaluation reserve for land

(8)

Exercise of subscription rights to shares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity(8)

4

Total changes of items during period
Balance at end of current period

13

17

－

294

62

12

369

58,506

46,984

166,187(1,028)

270,649(Millions of yen)
Accumulated other comprehensive income
Valuation difference on
Revaluation
available-for-salereserve for land
securities

Balance at beginning of current
period

2,084

(575)

Foreign currency Remeasurements Total accumulatedtranslationof defined benefit other comprehensive
incomeadjustment
plans

4,595

(726)

5,377

Subscription
NonTotal net
rights tocontrolling
assetssharesinterests
195

5,593

281,446

Changes of items during period
Change in ownership interest ofparent due to transactions with
non-controlling shareholders－

Dividends of surplus(25,514)

Change of scope of consolidation(0)

Profit attributable to owners ofparent25,585Purchase of treasury shares(1)

Disposal of treasury shares

0

Capital increase of consolidated
subsidiaries(4)

Increase by corporate division70

Tax effect adjustment on change
in equity of prior period
Reversal of revaluation reserve for
land
Exercise of subscription rights toshares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity
Total changes of items during
periodBalance at end of current period

224
(8)
17
1,264

8

(664)

(121)

487

20

(341)

166

1,264

8

(664)

(121)

487

20

(341)

535

3,349

(566)

3,930

(848)

5,865

215

5,251

281,98216

(4) Consolidated Statement of Cash Flows
For the fiscal years ended February 28, 2018 and February 28, 2019
(Millions of yen)Previous fiscal year
From March 1, 2017
to February 28, 2018
Net cash provided by (used in) operating activities:
Profit before income taxes
Depreciation and amortization
Impairment loss
Interest income
Interest expenses
Loss on retirement of non-current 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
Increase (decrease) in net defined benefit liability
Net decrease (increase) in call loans for banking business
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:
Purchase of property and store equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Payments of long-term loans receivableCollection of long-term loans receivable
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of long-term prepaid expenses
Payments for transfer of business
Other
Net cash provided by (used in) investing activities

17

Current fiscal year
From March 1, 2018
to February 28, 2019

43,59058,601
17,533
(799)
2,099
3,115
(6,574)(4,100)
7,103
428
6,468
781
－
5,278
133,526750(2,051)(18,286)
113,938

39,876
66,844
13,891
(714)
2,768
4,141
(2,707)(38,404)
5,752
41,10922,179876(20,000)
13,785
149,400
671(2,771)(18,706)
128,594(41,536)(18,533)(1,126)665(3,920)(8,580)5,133(24,579)
22,115(9,229)(11,009)(605)(91,209)(43,284)(18,060)(5,756)
7,157(3,597)(7,388)5,110(24,239)
18,428(5,752)(2,730)(904)(81,017)(Millions of yen)Previous fiscal year
From March 1, 2017
to February 28, 2018
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of lease obligations
Cash dividends paid
Payments from changes in ownership interests in subsidiaries that
do not result in change in scope of consolidation
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

18

Current fiscal year
From March 1, 2018
to February 28, 2019

5,160－
(1,234)(32,096)(25,258)

90,260260,000(6,044)(40,682)(25,514)(7,799)－(10)(61,238)173(38,336)
67,692(80)
277,937(1,409)324,105
30,120765

1030,120354,236(5) Notes to Consolidated Financial Statements(Going Concern Assumption)
Not Applicable.
(Accounting Policies for the Preparation of Consolidated Financial Statements)
1. Scope of consolidation(1) Number of consolidated subsidiaries: 21(Domestic)
Lawson Entertainment, Inc.
BestPractice, Inc.
SCI, Inc.
Lawson Store100, Inc.
Lawson HMV Entertainment United Cinemas Holdings, Inc.
United Entertainment Holdings Co., Ltd.
United Cinemas Co., Ltd.
SEIJO ISHII CO., LTD.
Lawson Sanin, Inc.
Lawson Bank, Inc.
Lawson urbanworks, Inc.
(Foreign)

Chongqing Lawson, Inc.
Shanghai Lawson, Inc.
Dalian Lawson, Inc.
Lawson (China) Holdings, Inc.
Saha Lawson Co., Ltd.
Shanghai Le Song Trading Co., Ltd.
Shang Hai Gong Hui Trading Co., Ltd.
Zhejiang Lawson, Inc.
Beijing Lawson, Inc.
BEIJING LUOSONG Co., Ltd.
Of the above subsidiaries, Lawson urbanworks, Inc. was included in the scope of consolidated
subsidiaries from the fiscal year under review due to its increased significance as a subsidiary.
On June 1, 2018, Lawson HMV Entertainment, Inc. changed its corporate name to Lawson
Entertainment, Inc.
On July 2, 2018, Lawson Bank Preparatory Company, Inc. changed its corporate name to Lawson Bank,Inc.
Lawson ATM Networks, Inc. was excluded from the scope of consolidation since its liquidation wascompleted as of February 25, 2019.
(2) Names of nonconsolidated subsidiaries and others(Domestic)
LAWSONWILL, Inc.
HATS UNLIMITED CO., LTD.
Food Marketing Japan, Inc.
Seikaken, Inc.
Lawson Syuhan, Inc.
TOKYO EUROPE TRADE CO., LTD.
SG Lawson, Inc.
Lawson Travel, Inc.
Lawson Digital Innovation Inc.
(Foreign)

Lawson USA Hawaii, Inc.
Jiangsu Lawson, Inc.
PG Lawson Company, Inc.

19

(Reasons for exclusion from the scope of consolidation)
The above nonconsolidated subsidiaries have been excluded from the scope of consolidation because
they are all small in scale and their total assets, net sales, profit or loss (corresponding to equity interest)
and retained earnings (corresponding to equity interest) and others have no material influence on the
consolidated financial statements.
2. Application of the equity method(1) Equity-method associates: 3(Domestic)
Lawson Okinawa, Inc.
Lawson Minamikyushu, Inc.
Lawson Kochi, Inc.
(2) Nonconsolidated subsidiaries excluded from the scope of the equity-method application(LAWSONWILL, Inc., HATS UNLIMITED CO., LTD., Food Marketing Japan, Inc., Seikaken, Inc.,
Lawson Syuhan, Inc., TOKYO EUROPE TRADE CO., LTD., SG Lawson, Inc., Lawson Travel, Inc.,
Lawson Digital Innovation Inc., Lawson USA Hawaii, Inc., Jiangsu Lawson, Inc. and PG Lawson
Company, Inc.) and entities excluded from the scope of the equity-method application (Double Culture
Partners Co., Ltd., Loyalty Marketing, Inc., Lawson Staff, Inc., AUGUSARENA CORPORATION., LTF
Co., Ltd., StageAround TOKYO Production Committee, Jiangyin Hualian Guzhitian Food Co., Ltd.,POPLAR Co.,Ltd., New Designed by Tokyo Ltd., Lawson Farm Chiba and others) were excluded fromthe scope of the equity-method application because their profit or loss (corresponding to equity interest)
and retained earnings (corresponding to equity interest) of these entities are not significant either
individually or in aggregate to the consolidated financial statements.
3. Fiscal year end of the consolidated subsidiaries
The balance sheet date of Chongqing Lawson, Inc., Shanghai Lawson, Inc., Dalian Lawson, Inc., Lawson(China) Holdings, Inc., Saha Lawson Co., Ltd., Shanghai Le Song Trading Co., Ltd., Shang Hai Gong Hui
Trading Co., Ltd., Zhejiang Lawson, Inc., Beijing Lawson, Inc. and BEIJING LUOSONG Co., Ltd. is
December 31. In order to prepare the consolidated financial statements, the Company used these companies’
financial information prepared as of such balance sheet date and significant transactions which occur between
the balance sheet date and the consolidated balance sheet date are adjusted as required for consolidation.
The balance sheet date of Lawson Bank, Inc. is March 31. In formulating the consolidated financial
statements, the Company used this subsidiary’s provisional settlement of accounts as of the consolidatedbalance sheet date.
The fiscal year end date for the other consolidated subsidiaries corresponds with the consolidated balance
sheet date.

20

4. Summary of Significant Accounting Policies(1) Valuation basis and method for significant assets① Securities:
Marketable securities and investments in securities:
Available-for-sale securities:
Securities whose market value is readily determinable:
Recorded at market value with net unrealized gains and losses as a separate component of net
assets. The cost of securities sold is determined based on the moving-average method.
Other:
Stated at cost determined by the moving-average method.
② Inventories:

Merchandise:Stated at cost determined mainly by the retail method (the book value in the balance sheet is written
down based on the decline in profitability).
(2) Depreciation method of depreciable significant assets① Property and store equipment (except for leased assets):
Mainly computed by the straight-line method.
The ranges of useful lives are from 10 to 34 years for buildings and structures and from 5 to 8 years
for tools, furniture and fixtures.
② Intangible assets (except for leased assets):
Computed by the straight-line method.
Costs of software for internal use are amortized by the straight-line method over 5 years, which isthe estimated useful life. Furthermore, for right of trademark, amortization is mainly computed using
the straight-line method over 20 years.
③ Leased assets:
Leased assets related to finance leases that do not transfer ownership of leased property
The Company applies the straight-line method using the lease term as the useful life and a residual
value of zero.
(3) Accounting standard for significant reserves① Allowance for doubtful accounts:
Allowance for doubtful accounts is provided at the amount of possible losses from uncollectible
receivables based on the actual rate of losses from bad debt for ordinary receivables and on estimatedrecoverability for specific doubtful receivables.
② Provision for bonuses:
Provision for bonuses is provided for payments of employees’ bonuses based on the estimated amounts.
③ Provision for retirement benefits to executive officers and audit & supervisory board members:
Provision for retirement benefits to executive officers of the Company and audit & supervisory board
members of consolidated subsidiaries is recorded under internal regulations.
(4) Accounting method for retirement benefits① Period attributable method of estimated amount of retirement benefits
In calculating retirement benefit obligation, in order to attribute estimated amount of retirement benefits
in the period up to the end of the current fiscal year, it is based on the benefit formula basis.
② Cost treatment method of actuarial difference and prior service cost
Prior service cost is amortized starting the fiscal year incurred mainly on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Actuarial differences are mainly amortized from the following fiscal year on a straight-line basis over acertain period (10 years) within an average remaining service period of employees at the time of theirrecognition.
Certain consolidated subsidiaries apply the simplified method to estimate the amount required forvoluntary resignations at the end of the fiscal year as the retirement benefit liability in order to calculate
net defined benefit liability and retirement benefit expenses.

21

(5) Significant foreign currency transactions and foreign currency financial statements
All short-term and long-term monetary receivables and payables denominated in foreign currencies aretranslated into Japanese yen at the exchange rates at the consolidated balance sheet date. The foreignexchange gains and losses from translation are recognized in the consolidated statement of income. The
consolidated balance sheet accounts as well as revenue and expense accounts of foreign subsidiaries andaffiliated companies are translated into Japanese yen at the current exchange rate as of the consolidatedbalance sheet date except for shareholders’ equity, which is translated at the historical rate. Differences
arising from such translation are shown as “foreign currency translation adjustments” and “noncontrolling interests,” a separate component of net assets.
(6) Amortization method and period of goodwill
Goodwill is amortized on a straight-line basis over the relevant years, depending on the reason for theoccurrence of goodwill, with a maximum of 20 years.
(7) Cash and cash equivalents in the consolidated statement of cash flows
Cash and cash equivalents in the consolidated statement of cash flows include cash on hand, demand
deposits and short-term investments due within three months of the acquisition date, which are easily
convertible into cash with little risk of value fluctuation.
(8) Other significant items related to the preparation of consolidated financial statements
Accounting for consumption tax:
Consumption tax and local consumption tax are accounted for using the tax exclusion method.

22

(Changes in Accounting Policies)
The Company’s foreign consolidated subsidiaries have applied International Financial ReportingStandard 15 (IFRS 15) “Revenue from Contracts with Customers” from the first quarter of the fiscal year
ended February 28, 2019.
The impact of the application of IFRS 15 on the Company’s consolidated financial statements isimmaterial.
(Unapplied Accounting Standards, etc.)(The Company and its domestic consolidated subsidiaries)
・“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28; February 16, 2018)
・“Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26;
February 16, 2018)(1) Outline
The accounting treatment for future taxable temporary differences relating to shares of subsidiaries, etc.
on non-consolidated financial statements was revised, and the accounting treatment concerning therecoverability of deferred tax assets at companies that fall under (Category 1) has been clarified.
(2) Scheduled date of application
The Company plans to adopt the accounting standards, etc. from the beginning of the fiscal year ending
February 29, 2020.
(3) Impact of the application of the accounting standards, etc.
The impact was being evaluated at the time of preparation of these consolidated financial statements.
・“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29; March 30, 2018)
・“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.
30; March 30, 2018)(1) Outline
This is a comprehensive accounting standard on revenue recognition. Revenue is recognized by applying
the following five steps:
Step 1: Identify the contracts with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in the contract.
Step 5: Recognized revenue when as the entity satisfies a performance obligation.
(2) Scheduled date of application
The Company plans to adopt the accounting standards, etc. from the beginning of the fiscal year ending
February 28, 2023.
(3) Impact of the application of the accounting standards, etc.
The impact was being evaluated at the time of preparation of these consolidated financial statements.
(Foreign consolidated subsidiaries)
・“Leases” (IFRS 16)(1) Outline
This accounting standard requires lessees to recognize assets and liabilities for all leases, in principle.
(2) Scheduled date of application
The Company plans to adopt the accounting standards, etc. from the beginning of the fiscal year ending
February 29, 2020.
(3) Impact of the application of the accounting standards, etc.
The impact was being evaluated at the time of preparation of these consolidated financial statements.

23

(Changes in Presentation)(Consolidated Statement of Income)In the “Non-operating income” section, “Dividend income” was included in “Other” in the previous fiscal
year. Due to an increase in financial materiality, “Dividend income” is now separately presented. To reflect
this change in method of presentation, the Consolidated Statement of Income for the previous fiscal year has
been reclassified.
As a result, in the “Non-operating income” section, 112 million yen that was presented as “Other” in theConsolidated Statement of Income for the previous fiscal year is now included in “Dividend income.”(Consolidated Statement of Cash Flows)
In the “Cash flows from investing activities” section, “Purchase of investment securities” was included in“Other” in the previous fiscal year. Due to an increase in financial materiality, “Purchase of investment
securities” is now separately presented. To reflect this change in method of presentation, the consolidated
financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flows from investing activities” section, (1,126) million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as“Purchase of investment securities.”
In the “Cash flows from investing activities” section, “Proceeds from sales of investment securities” wasincluded in “Other” in the previous fiscal year. Due to an increase in financial materiality, “Proceeds fromsales of investment securities” is now separately presented. To reflect this change in method of presentation,
the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flows from investing activities” section, 665 million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as“Proceeds from sales of investment securities.”
In the “Cash flows from investing activities” section, “Payments of long-term loans receivable” and“Collection of long-term loans receivable” were included in “Decrease (increase) in long-term loans
receivable - net” in the previous fiscal year. In order to enhance the clarity of the consolidated financial
statements from the current fiscal year, “Payments of long-term loans receivable” and “Collection of longterm loans receivable” are now separately presented.
As a result, in the “Cash flow from investing activities” section, (3,447) million yen that was presented as“Decrease (increase) in long-term loans receivable – net” in the Consolidated Statement of Cash Flows forthe previous fiscal year is now presented as (8,580) million yen of “Payments of long-term loans receivable”
and 5,133 million yen of “Collection of long-term loans receivable.”In the “Cash flows from investing activities” section, “Payments for guarantee deposits” and “Proceedsfrom collection of guarantee deposits” were included in “Other” in the previous fiscal year. In order to enhance
the clarity of the consolidated financial statements from the current fiscal year, “Payments for guarantee
deposits” and “Proceeds from collection of guarantee deposits” are now separately presented.
As a result, in the “Cash flows from investing activities” section, (2,464) million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as (24,579)
million yen of “Payments for guarantee deposits” and 22,115 million yen of “Proceeds from collection ofguarantee deposits.”
In the “Cash flow from financing activities” section, “Repayments of long-term loans payable” wasincluded in “Other” in the previous fiscal year. Due to an increase in financial materiality, “Repayments oflong-term loans payable” is now separately presented. To reflect this change in method of presentation, theconsolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from financing activities” section, (1,234) million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as“Repayments of long-term loans payable.”24

(Additional Information)(Introduction of Consolidated Taxation System)
The Company and certain consolidated subsidiaries applied for approval for the consolidated taxation
system during the current fiscal year, and they expect to adopt the consolidated taxation system beginningfrom the following fiscal year. Therefore, the corresponding accounting for the current fiscal year assumes
such adoption of the consolidated taxation system in accordance with “Practical Solution on Tentative
Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part 1)” (ASBJ PITF No. 5;
December 28, 2015) and “Practical Solution on Tentative Treatment of Tax Effect Accounting Under
Consolidated Taxation System (Part 2)” (ASBJ PITF No. 7; March 14, 2016).

25

(Notes to Consolidated Balance Sheet)*1. Accumulated depreciation of property and store equipment

Accumulated depreciation

Previous fiscal year
As of February 28, 2018317,966(Millions of yen)
Current fiscal year
As of February 28, 2019342,857

Previous fiscal year
As of February 28, 2018
13,895(1,060)192
1,276(1,226)(Millions of yen)
Current fiscal year
As of February 28, 201917,591
(980)
207
705
(584)

*2. Investments in associates

Investment securities (stocks)(Investment amount for jointly-controlled companies)
Investment securities (bonds)
Other (other equity investments)(Investment amount for jointly-controlled companies)*3. Revaluation of land used for businessLand used for business was revalued on the basis prescribed by the Law Concerning Revaluation ofLand (Law No. 34, March 31, 1998). The resulting revaluation difference has been included in net assets
as “Revaluation reserve for land.”
Revaluation method:
The value of land is determined based on the notified prices adjusted reasonably as stipulated in Article
2, Item 4 of the Ordinance Implementing the Law Concerning Revaluation of Land (Government
Ordinance No. 119, March 31, 1998) and the assessed value as stipulated in Article 2, Item 5 of the same
Ordinance.
Date of revaluation: February 28, 2002
(Millions of yen)Previous fiscal year
Current fiscal year
As of February 28, 2018
As of February 28, 2019
Difference between book value and market value of177
151
the revalued land as of balance sheet date
*4. Pledged assets and secured liabilities
Assets pledged as collateral and liabilities collateralized are as follows.
Previous fiscal year
As of February 28, 2018
4,212

Cash and deposits(Millions of yen)
Current fiscal year
As of February 28, 20194

In addition to the above, shares of consolidated subsidiaries pledged as collateral are as follows.
(Millions of yen)Previous fiscal year
Current fiscal year
As of February 28, 2018
As of February 28, 2019
Shares of consolidated subsidiaries
16,614―(Amount before elimination)

26

Secured liabilities are as follows
Previous fiscal year
As of February 28, 2018

(Millions of yen)
Current fiscal year
As of February 28, 2019

Current portion of long-terms loans payable
Long-term loans payable

575
5,469

―
―

Total

6,044

―

*5. Overdraft and loan commitment agreements

The Company and its consolidated subsidiaries have entered into overdraft and loan commitment
agreements to ensure efficient funding of working capital.
The unutilized balances of loans under these overdraft and loan commitment agreements as ofthe end of the fiscal year are as follows.
Previous fiscal year
As of February 28, 2018

(Millions of yen)
Current fiscal year
As of February 28, 2019

Total overdraft limit and loan commitment
Amount utilized

91,000―220,000
79,800Unutilized balance

91,000140,200(Notes to Consolidated Statement of Income)*1 Major components of selling, general and administrative expenses are as follows.

Employees' salaries and allowances
Provision for bonuses
Retirement benefit expenses
Rents
Depreciation

Previous fiscal year
From March 1, 2017
to February 28, 201857,214
3,173
2,537
124,387
58,499(Millions of yen)
Current fiscal year
From March 1, 2018
to February 28, 2019
61,0783,437
2,632
132,739
66,735Previous fiscal year
From March 1, 2017
to February 28, 2018
343
12
12
0
368

(Millions of yen)
Current fiscal year
From March 1, 2018
to February 28, 2019
149
72
－
2
224

*2 Breakdown of loss on sales of non-current assets

Buildings and structures
Tools, furniture and fixtures
Land
OthersTotal

27

*3 Breakdown of loss on retirement of non-current assets
Previous fiscal year
From March 1, 2017
to February 28, 2018
2,254
193
458
207
0
3,115

Buildings and structures
Tools, furniture and fixtures
Leased assets
Software
Others
Total(Millions of yen)
Current fiscal year
From March 1, 2018
to February 28, 2019
3,367
154
586
28
4
4,141

*4 Impairment loss
The Company and its consolidated subsidiaries (collectively, the “Group”) identify each store as thesmallest cash generating unit.
The carrying value of asset groups whose profitability has significantly decreased was written down to therecoverable amount, with the difference recognized as impairment loss under extraordinary losses.
Previous fiscal year (From March 1, 2017 to February 28, 2018)
Category by use
Stores

Other
Total

(Millions of yen)
Impairment loss

Location

AssetsTokyo

Buildings; tools, furniture and fixtures; and others

1,306

Osaka

"

1,390

Others
―

"

8,720

Land

70

―

Software

6,033―

Goodwill

12――

17,533Category by non-current assets
Buildings and structures
5,967 million yen
Tools, furniture and fixtures
811
"
Land
183
"
Leased assets
4,485
"
"
Software
6,033"
Goodwill
12
Other
40
"
The recoverable amount of the asset groups is the higher of net selling price or value in use. The net selling
price of land was calculated based on the value appraised by a real estate appraiser or contract price, and thevalue in use was calculated by discounting estimated future cash flows mainly using a discount rate of 4.4%.

28

Current fiscal year (From March 1, 2018 to February 28, 2019)
Category by use
Stores

Other
Total

(Millions of yen)
Impairment loss

Location

AssetsTokyo

Buildings; tools, furniture and fixtures; and others

1,590

Osaka

"

1,505

Others"

10,240

―

Land

50

―

Software503―

Goodwill

1――

13,891Category by non-current assets
Buildings and structures
Tools, furniture and fixtures
Land
Leased assets
Software
Goodwill
Other

7,981
587
50
4,693
503
1
74

million yen
"
"
"
"
"
"

The recoverable amount of the asset groups is the higher of net selling price or value in use. The net selling
price of land was calculated based on the value appraised by a real estate appraiser or contract price, and thevalue in use was calculated by discounting estimated future cash flows mainly using a discount rate of 3.6%.

29

(Notes to Consolidated Statement of Comprehensive Income)* The components of other comprehensive income for the years ended February 28, 2018 and February 28,
2019 were as follows:(Millions of yen)Previous fiscal year
Current fiscal year
From March 1, 2017
From March 1, 2018
to February 28, 2018
to February 28, 2019
Valuation difference on availablefor-sale securities
Gain or loss arising during the
2,568
2,473
periodReclassification adjustments to30(675)
profit or loss
Amount before income tax
2,599
1,797
effectIncome tax effect
(789)
(532)
Valuation difference on
1,809
1,264
available-for-sale securities
Foreign currency translation
adjustment
Gain or loss arising during the36(673)
periodForeign currency translation
36(673)
adjustment
Remeasurements of defined benefit
plans
Gain or loss arising during the85(177)
periodReclassification adjustments to207
202
profit or loss
Amount before income tax
293
25
effectIncome tax effect(92)(6)
Remeasurements of defined201
19
benefit plans
Total other comprehensive
2,047
610
income30

(Notes to Consolidated Statement of Changes in Equity)
Previous fiscal year (From March 1, 2017 to February 28, 2018)
1. Number of shares of outstanding stock and treasury shares
Number of shares at
Increase during
Decrease during
Number of shares atthe beginning of thethe period
the period
the end of the period
period(thousands of shares) (thousands of shares) (thousands of shares)(thousands of shares)
Outstanding stock
Common stock
100,300－－
100,300
Treasury shares
Common stock (*)
285
0
40
244
(*) The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one shareunit.
The decrease in treasury shares of 40 thousand shares resulted from decreases of 40 thousand shares dueto the exercise of stock option rights and 0 thousand shares due to requests for additional purchases ofstock of less than one share unit.
2. Subscription rights to shares and treasury subscription rights to sharesClass and number of shares
Balance at
subject to stock acquisition rights
end of the
Number (shares)
Terms of stock
current
Classificationacquisition rights
periodBeginning
Increase
Decrease End of theClass(Millionsof theduring the during theperiodof yen)periodperiodperiodStock acquisitionrights (ordinary stock
options)

Issuing company(Parent company)

Total

－

－

－

－

－

195

－

－

－

－

－

195

3. Dividend
1) Dividend payment
Date of resolution
The General meetingof shareholders(May 30, 2017)
Directors’ meeting(October 11, 2017)Class ofsharesDividend payment(millions of yen)

Dividend pershare (yen)Record date

Effective dateCommonstock

12,501125.00February 28, 2017

May 31, 2017

Commonstock

12,757127.50August 31, 2017

November 10, 20172) Dividends for which the record date is in the current fiscal year and the effective date is after the fiscal year-end
Date of resolution

Class ofshares

Source ofdividend

Dividend payment(millions of yen)

Dividend pershare (yen)Record date

Effectivedate

The General
meeting ofshareholders(May 22, 2018)

Commonstock

Retainedearnings

12,757127.50February 28,
2018

May 23,201831

Current fiscal year (From March 1, 2018 to February 28, 2019)
1. Number of shares of outstanding stock and treasury shares
Number of shares at
Increase during
Decrease during
Number of shares atthe beginning of thethe period
the period
the end of the period
period(thousands of shares) (thousands of shares) (thousands of shares)(thousands of shares)
Outstanding stock
Common stock
100,300－－
100,300
Treasury shares
Common stock (*)
244
0
3
241
(*) The increase in treasury shares of 0 thousand shares resulted from purchases of stock of less than one shareunit.
The decrease in treasury shares of 3 thousand shares resulted from decreases of 3 thousand shares due tothe exercise of stock option rights and 0 thousand shares due to requests for additional purchases of stockof less than one share unit.
2. Subscription rights to shares and treasury subscription rights to sharesClass and number of shares
Balance at
subject to stock acquisition rights
end of the
Number (shares)
Terms of stock
current
Classificationacquisition rights
periodBeginning
Increase
Decrease End of theClass(Millionsof theduring the during theperiodof yen)periodperiodperiodStock acquisitionrights (ordinary stock
options)

Issuing company(Parent company)

Total

－

－

－

－

－

215

－

－

－

－

－

215

3. Dividend
1) Dividend payment
Date of resolution
The General meetingof shareholders(May 22, 2018)
Directors’ meeting(October 11, 2018)

Class ofsharesDividend payment(millions of yen)

Dividend pershare (yen)Record date

Effective dateCommonstock

12,757127.50February 28, 2018

May 23, 2018

Commonstock

12,757127.50August 31, 2018

November 9, 2018

2) Dividends for which the record date is in the current fiscal year and the effective date is after the fiscal year-end
Plan for resolution is as follows.
Date of resolution

Class ofshares

Source ofdividend

Dividend payment(millions of yen)

Dividend pershare (yen)Record date

Effectivedate

The General
meeting ofshareholders(May 21, 2019)

Commonstock

Retainedearnings

12,757127.50February 28,
2019

May 22,2019

32

(Notes to Consolidated Statement of Cash Flows)*1. Reconciliation between the year-end balance of cash and cash equivalents and cash and deposits in the
consolidated balance sheet(Millions of yen)Previous fiscal year
Current fiscal year
From March 1, 2017
From March 1, 2018
to February 28, 2018
to February 28, 2019
Cash and deposits
30,124354,240
Time deposits for which the deposit period(4)(4)
exceeds three months
Cash and cash equivalents
30,120354,236*2. Major breakdown of assets acquired and liabilities assumed as a result of acquiring businesses inconsideration for cash or cash equivalents
Previous fiscal year (From March 1, 2017 to February 28, 2018)
A major breakdown of the increase in assets and liabilities as a result of the Company partially acquiring
the convenience store business of Three F Co., Ltd. is as follows.
Non-current assets
5,308 million yen
Goodwill

5,688"

Payments for transfer of business

10,996"

Current fiscal year (From March 1, 2018 to February 28, 2019)
Description is omitted due to its immateriality.
3. Description of significant non-cash transactions
1) Assets and liabilities related to finance lease transactions are as follows.
(Millions of yen)Previous fiscal year
From March 1, 2017
to February 28, 2018

Current fiscal year
From March 1, 2018
to February 28, 201947,054

58,842

Assets and liabilities related to finance leasetransactions2) Significant asset retirement obligations are as follows.

(Millions of yen)Previous fiscal year
From March 1, 2017
to February 28, 2018

Current fiscal year
From March 1, 2018
to February 28, 2019

2,492

2,385

Significant asset retirement obligations

33

(Segment Information)
1. Outline of reportable segments
The Company’s financial information is provided separately by reportable segment and is subject to regularreview by the board of directors with regard to the allocation of managerial resources and performance
evaluation.
The Group operates primary businesses Domestic Convenience Store Business, Seijo Ishii Business,
Entertainment-related Business and Financial Services Business while incorporating other related businesses.
Therefore, the Group has made the Domestic Convenience Store Business, Seijo Ishii Business,
Entertainment-related Business and Financial Services Business units its main reportable segments, based on
consideration of financial characteristics and the nature of the services provided.
Regarding Domestic Convenience Store Business, Lawson, Inc. operates a franchise system as well as
undertaking the direct management of stores in Japan as the parent company of LAWSON, NATURALLAWSON, and LAWSON STORE100. Lawson Sanin, Inc. undertakes the direct management of LAWSON
stores in the Sanin area. Lawson urbanworks, Inc. undertakes the direct management of LAWSON stores
mainly in Tokyo and Chiba prefectures. Lawson Store100, Inc. undertakes the direct management of
LAWSON STORE100 stores. SCI, Inc., a functional subsidiary which comprehensively manages the processfrom procurement to sale, aims to improve the efficiency of the entire process.
Regarding Seijo Ishii Business, SEIJO ISHII CO., LTD. operates SEIJO ISHII supermarkets.
Regarding Entertainment-related Business, Lawson Entertainment, Inc. conducts the management and salesof concert tickets at LAWSON stores and others, music and video software products at HMV stores and others.
In addition, United Cinemas Co., Ltd. operates multiplex movie theatres.
Regarding Financial Services Business, Lawson Bank, Inc. carries out a banking business.
Due to its increased importance, Financial Services Business, which was included in Others, has beenclassified as a separate reporting segment from the current fiscal year. Segment information for the previous
fiscal year stated in “3. Information on net sales, and profit or loss by reportable segment” reflects this change
in segment classification.

2. Computation method of the amount of net sales, profit or loss, assets and liabilities, and other items byreportable segment
The segment accounting policies are the same as those described in the “Accounting Policies for the
Preparation of Consolidated Financial Statements.” Segment profit is based on operating income.
Intersegment revenue and transfers are based on market value.

34

3. Information on net sales, and profit or loss by reportable segment
Previous fiscal year (From March 1, 2017 to February 28, 2018)(Millions of yen)
Reportable segment
Others(Note 1)

Total

Adjustments(Note 2)

Total
(Note 3)

Domestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Financial
Services
Business

437,216

81,95773,967

27,18636,997657,324－

657,324

5,467

－

1,413

154

1,104

8,140

(8,140)－

Total

442,684

81,95775,38027,341

38,101

665,465(8,140)657,324

Segment profit

53,648

6,854

3,853

4,275

(2,811)

65,820－65,820

Segment assets

834,643

60,457

63,84550,432

20,0891,029,469(129,213)

900,256

Depreciation

46,161

1,798

2,300

3,170

1,333

54,763－54,763

Amortizationof goodwill
Investments inassociates
Increase in
non-current
assets

1,839

1,437

501

－

59

3,837

－

3,837

5,145

－

－

－

－

5,145

－

5,145

49,156

1,060

1,242

5,945

2,665

60,070－60,070Gross operating
revenue
Sales toexternalcustomers
Internal sales
or transfers
betweensegments

Other(Notes)1. The business segments within the “Others” category that do not fall under the main reportable segments,
include Overseas Business operated by Shanghai Lawson, Inc. and others.
2. Adjustments to segment assets are due to the elimination of intra-segment transactions.
3. Segment profit (loss) corresponds to consolidated operating income.

35

Current fiscal year (From March 1, 2018 to February 28, 2019)(Millions of yen)
Reportable segment
Others(Note 1)

Total

Adjustments(Note 2)

Total
(Note 3)

Domestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Financial
Services
Business462,632

86,672

76,66130,35544,324

700,647－

700,647

6,059

－

1,408

216

1,080

8,765

(8,765)－

Total

468,692

86,672

78,07030,57245,404

709,412(8,765)

700,647

Segment profit

48,262

7,413

4,499

2,223

(1,618)60,781－60,781

Segment assets

893,711

66,42170,354386,266

25,236

1,441,989(99,499)

1,342,490

52,265

1,843

2,245

4,594

1,480

62,429－62,429

2,417

1,437

501

－

59

4,415

－

4,415

5,008

－

－

－

－

5,008

－

5,008

47,106

688

1,332

8,493

3,724

61,344－

61,344Gross operating
revenue
Sales toexternalcustomers
Internal sales
or transfers
betweensegments

Other
Depreciation
Amortizationof goodwill
Investments inassociates
Increase in
non-current
assets(Notes)1. The business segments within the “Others” category that do not fall under the main reportable segments,
include Overseas Business operated by Shanghai Lawson, Inc. and others.
2. Adjustments to segment assets are due to the elimination of intra-segment transactions.
3. Segment profit (loss) corresponds to consolidated operating income.

36

(Related information)
Previous fiscal year (From March 1, 2017 to February 28, 2018)
1. Information by product and service
Since similar information is disclosed in segment information, this information is omitted.
2. Information by geographical area
(1) Net sales
Since sales to external customers in Japan exceed 90% of net sales on the consolidated statement ofincome, this information is omitted.
(2) Property and store equipment
Since property and store equipment in Japan exceed 90% of property and store equipment on the
consolidated balance sheet, this information is omitted.
3. Information by major customer
Information about major customers has been omitted since there are no external customers whoconstituted more than 10% of net sales on the consolidated statement of income.
Current fiscal year (From March 1, 2018 to February 28, 2019)
1. Information by product and service
Since similar information is disclosed in the segment information, this information is omitted.
2. Information by geographical area
(1) Net sales
Since sales to external customers in Japan exceed 90% of net sales on the consolidated statement ofincome, this information is omitted.
(2) Property and store equipment
Since property and store equipment in Japan exceed 90% of property and store equipment on the
consolidated balance sheet, this information is omitted.
3. Information by major customer
Information about major customers has been omitted since there are no external customers whoconstituted more than 10% of net sales on the consolidated statement of income.

37

(Information on impairment loss on non-current assets by reportable segment)
Previous fiscal year (From March 1, 2017 to February 28, 2018)
The Group identifies each store as the smallest cash generating unit.
Regarding asset groups whose profitability from operating activities has continuously been negative, the bookvalue of such assets has been written down to the recoverable amount, with the difference recorded as
impairment loss under extraordinary losses.
The amount of impairment loss recorded for each reportable segment is as follows.
(Millions of yen)
Reportable segment

Impairment
loss

Domestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Financial
Services
Business

16,85487

149－

Others

Total

Adjustments

Total

441

17,533－

17,533Current fiscal year (From March 1, 2018 to February 28, 2019)
The Group identifies each store as the smallest cash generating unit.
Regarding asset groups whose profitability from operating activities has continuously been negative, the bookvalue of such assets has been written down to the recoverable amount, with the difference recorded as
impairment loss under extraordinary losses.
The amount of impairment loss recorded for each reportable segment is as follows.
(Millions of yen)
Reportable segment

Impairment
loss

Domestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Financial
Services
Business

13,274－50－

Others

Total

Adjustments

Total

567

13,891－

13,891(Information on amortization of goodwill and amortized balance by reportable segment)
Previous fiscal year (From March 1, 2017 to February 28, 2018)(Millions of yen)
Reportable segment
OthersDomestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Total

Adjustments

Total

Financial
Services
Business

Balance at
end of
15,15923,8338,188765 47,947
47,947－－fiscal year
Note: Regarding amortization of goodwill, this information is omitted since similar information is disclosed insegment information.

38

Current fiscal year (From March 1, 2018 to February 28, 2019)(Millions of yen)
Reportable segment
OthersDomestic
Convenience
Store Business

Seijo Ishii
Business

Entertainment-related
Business

Total

Adjustments

Total

Financial
Services
Business

Balance at
end of
16,09822,395
7,686
655 46,836
46,836－－fiscal year
Note: Regarding amortization of goodwill, this information is omitted since similar information is disclosed insegment information.

(Information on gain on negative goodwill by reportable segment)
Previous fiscal year (From March 1, 2017 to February 28, 2018)
Not applicable.
Current fiscal year (From March 1, 2018 to February 28, 2019)
Not applicable.

39

(Per Share Information)
Previous fiscal year
From March 1, 2017 to
February 28, 2018

Current fiscal year
From March 1, 2018 to
February 28, 20192,755.06 yen

2,763.54 yen

Profit per share

268.16 yen

255.71 yen

Diluted profit per share

268.02 yen

255.59 yen

Net assets per share

Note: The basis for the calculation of profit per share and diluted profit per share is as follows:
Previous fiscal year
From March 1, 2017 to
February 28, 2018

Item

Current fiscal year
From March 1, 2018 to
February 28, 2019

Profit per share
Profit attributable to owners of parent (millions of yen)

26,82825,585－－

Profit attributable to common stock (millions of yen)

26,82825,585

Average number of common stock during the fiscal
year (thousands of shares)

100,044

100,057

－

－

53

47

(53)

(47)

－

－

Amount not attributable to common shareholders(millions of yen)

Diluted profit per share
Profit attributable to owners of parent adjustment(millions of yen)
Increase in number of outstanding common shares(thousands of shares)(Subscription rights to shares) (thousands of shares)
Summary of issuable shares not included in thecomputation of diluted profit per share, since thesesecurities are not dilutive.

40