July 11, 2018

Company Name: Lawson, Inc.
Representative: Sadanobu Takemasu
President and CEO, Representative Director,
Chairman of the Board
Code No.: 2651 Tokyo Stock Exchange (First Section)
Contact: Tomoki Takanishi
Deputy Senior Vice President,
Finance and Accounting Division Director
Tel: +81-3-5435-2773(Revision/Revision of Numeric Data) Notice Concerning Partial Revision to Flash Report on
the Consolidated Financial Results and Summary of Financial Results for the Fiscal Year Ended
February 28, 2018

Lawson, Inc. hereby announces some revisions to its consolidated financial statements (Japanese standards)
and summary of financial results for the fiscal year ended February 28, 2018, which were released on April 11,
2018. The revised numeric data has also been transmitted.

・Reason for the revisions
Received dividends from consolidated subsidiaries were not included in the forecast of non-consolidated
operating results, and it was decided that it would be appropriate that a part of the dividends that was planned
to be posted as non-operating income is a collection of investment. Consequently, the forecast of
non-consolidated operating results for fiscal 2018 ending February 28, 2019 has been partially revised asfollows.
As the dividends are received from consolidated subsidiaries of Lawson, Inc., the revisions have no impact
on the forecast of consolidated operating results.

・Revisions[Consolidated Financial Statements (Japanese Standards) for the Fiscal Year Ended February 28, 2018]①Page 3 of Summary Information(Reference) Overview of Non-consolidated Operating Results
Forecast of non-consolidated operating results for the 2018 fiscal year from March 1, 2018 to February 28,
2019.
＜Before revisions＞
Ordinary income

ProfitProfit per share

Millions of yen%

Millions of yen%yen

1H of 2018 fiscal year

37,50021.1

29,00042.4

289.842018 fiscal year

67,50033.6

45,500134.3

454.74＜After revisions＞
Ordinary income

ProfitProfit per share

Millions of yen%

Millions of yen%yen

1H of 2018 fiscal year

30,000(3.1)

21,5005.6

214.882018 fiscal year

60,00018.8

38,00095.7

379.79②Page 10 (4) Future Outlook＜Before revisions＞
Forecast of non-consolidated operating results

1H of 2018 fiscal year

Ordinary income
Profit (attributableto owners of parent)

2018 fiscal year

Forecast

YoY

Forecast

YoY(Millions of yen)(%)

(Millions of yen)(%)

37,500121.1

67,500133.6

29,000142.4

45,500234.3＜After revisions＞
Forecast of non-consolidated operating results

1H of 2018 fiscal year

Ordinary income
Profit (attributableto owners of parent)

2018 fiscal year

Forecast

YoY

Forecast

YoY(Millions of yen)(%)

(Millions of yen)(%)

30,00096.9

60,000118.8

21,500105.6

38,000195.7

[Summary of Financial Results for the Fiscal Year Ended February 28, 2018]①P. 11 ■主な業績と予想 Results and forecasts for major financial indicators＜Before revisions＞
2018 年度(計画)/FY2018(Forecast)
第２四半期累計期間/1H

通期計画/Full year

2018.3.1 - 2018.8.31

2018.3.1 - 2019.2.28

金額/Amount

前年比/YoY

金額/Amount

前年比/YoY

37,500121.1%

67,500133.6%

29,000142.4%

45,500234.3%

経常利益 (百万円)
Ordinary income (millions ofyen)
当期純利益 (百万円)
Profit (millions of yen)
1 株当たり当期純利益 (円)Profit per share (yen)289.84454.74＜After revisions＞
2018 年度(計画)/FY2018(Forecast)
第 2 四半期累計期間/1H

通期計画/Full year

2018.3.1 - 2018.8.31

2018.3.1 - 2019.2.28

金額/Amount

前年比/YoY

金額/Amount

前年比/YoY

30,00096.9%

60,000118.8%

21,500105.6%

38,000195.7%

経常利益 (百万円)
Ordinary income (millions ofyen)
当期純利益 (百万円)
Profit (millions of yen)
1 株当たり当期純利益 (円)Profit per share (yen)214.88379.79

②P. 13 ■投融資の状況 Capital expenditure＜Before revisions＞
2018 年度計画
Forecasts / 2018.3.1 - 2019.2.28
百万円/Millions of yen
新店投資 New store investments

49,000

既存店投資 Existing store investments

8,000

システム関連投資 IT - related investments

12,000その他 Other

5,000

投資小計 Subtotal

74,000

出資・融資 Investments and advances

2,000

リース Leases

71,000

合計 Total

147,000＜After revisions＞
2018 年度計画
Forecasts / 2018.3.1 - 2019.2.28
百万円/Millions of yen
新店投資 New store investments

49,000

既存店投資 Existing store investments

8,000

システム関連投資 IT - related investments

12,000その他 Other

5,000

投資小計 Subtotal

74,000

出資・融資 Investments and advances-7,000

リース Leases

71,000

合計 Total

138,000

Flash Report on the Consolidated Financial Results
for the Fiscal Year Ended February 28, 2018
April 11, 2018
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, Finance and Accounting Division Director
Tel.: +81-3-5435-2773
Scheduled date for the ordinary general meeting of shareholders: May 22, 2018
Scheduled date for submission of annual securities report: May 23, 2018
Scheduled date for payment of dividend: May 23, 2018
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 2017 fiscal year (from March 1, 2017 to February 28, 2018)(1) Consolidated operating results (cumulative)
Note: Percentages represent increases (decreases) compared with the previous fiscal year.

For the fiscal year ended
February 28, 2018
February 28, 2017
Note: Comprehensive income:For the fiscal year ended
February 28, 2018
February 28, 2017

Gross operating
revenue

Operating income

Millionsof yen657,324
631,288

Millionsof yen65,82073,772%
4.1
8.2

Millionsof yen(10.8) 65,141
1.7
73,014%

Fiscal year ended February 28, 2018
Fiscal year ended February 28, 2017

Profitattributable toowners of parent
Millions%%of yen(10.8) 26,828(26.3)
4.9
36,400
16.0

Ordinary income

28,908 million yen
35,543 million yen

Profit per
share

Diluted profit
per share

Return on
equityRatio of ordinary
income to total
assetsYen
268.16363.96

Yen
268.02363.70

%
9.7
13.5

%
7.4
8.7

(18.7)%
7.9%

Ratio ofoperating income togross operating
revenue
%
10.0
11.7

Reference: Share of profit of entities accounted for using equity method:
Fiscal year ended February 28, 2018
693 million yen
Fiscal year ended February 28, 2017
602 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, 2018

900,256

281,44630.6

2,755.06

February 28, 2017866,577

285,995

31.7

2,748.39

Reference: Shareholders’ equity:

As of February 28, 2018
As of February 28, 2017

275,658 million yen
274,880 million yen

(3) Consolidated cash flows

For the fiscal year ended
February 28, 2018
February 28, 2017

Net cash providedby (used in)operating activities
Millions of yen
113,938
99,864

Net cash providedby (used in)investing activities
Millions of yen(91,209)(76,227)

Net cash providedby (used in)financing activities
Millions of yen(61,238)(25,638)

Cash and cash
equivalents at
end of period
Millions of yen
30,12067,692

2. Dividends
Annual dividends per share
1Q

1H

3Q

Year-end

Total

Yen

Yen

Yen

Yen

Yen

2016 fiscal year－

125.00－125.002017 fiscal year2018 fiscal year
(forecast)－

127.50－－127.50－Total
dividends
for the year

Payoutratio

Ratio ofdividends toshareholders’equity%%250.00Millions ofyen
25,00368.7

9.3

127.50

255.0025,514

95.1

9.3

127.50

255.0091.1

3. Forecast of consolidated operating results for 2018 fiscal year (from March 1, 2018 to February 28, 2019)
Note: Percentages represent increases (decreases) compared with the previous fiscal year.

1H of 2018 fiscal year2018 fiscal year

Gross operating
revenue
Millions%of yen360,000
9.3
732,000 11.4

Profit attributable Profit per
to owners of parent share
Millions%%Yenof yen(24.6)
17,000 (28.1) 169.90(12.5)
28,0004.4
279.84

Operating income

Ordinary income

Millionsof yen30,50060,000Millionsof yen29,00057,000%(21.7)(8.8)

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: None
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, 2018:
100,300,000
As of February 28, 2017:

100,300,000

2. Number of treasury shares at the end of year
As of February 28, 2018:244,849

As of February 28, 2017:

285,191

3. Average number of shares during the year
As of February 28, 2018:
100,044,721

As of February 28, 2017:

100,009,948

(Reference) Overview of Non-consolidated Operating Results
Forecast of non-consolidated operating results for 2018 fiscal year (from March 1, 2018 to February 28, 2019)
Note: Percentages represent increases (decreases) compared with the previous fiscal year.

1H of 2018 fiscal year2018 fiscal year

Gross operating
revenue
Millions%of yen201,000
6.3
401,000
7.5

Operating income

Ordinary income

Millionsof yen23,00044,500Millionsof yen37,50067,500%(26.2)(12.8)

%
21.1
33.6

Profit per
share

ProfitMillionsof yen29,00045,500

%

Yen

42.4
134.3

289.84454.74

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 ....................................................................................

18(Going Concern Assumption) ...........................................................................................................

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

18(Changes in Presentation) .................................................................................................................

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

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

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

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

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

29(Business Combinations, etc.) ..........................................................................................................

30(Segment Information) .....................................................................................................................

31(Per Share Information) ....................................................................................................................

37(Significant Subsequent Events) .......................................................................................................

381

1. Overview of Operating Results(1) Overview of Operating Results for the Fiscal Year under Review
During the fiscal year under review, or fiscal 2017 ended February 28, 2018, we have advanced andaccelerated our “1000-Day Action Plan”, which is in its second year, and focused our business activities onbuilding Lawson’s next-generation convenience store model. The convenience store industry is now
undergoing a period of drastic transformation. This is attributable to changes in community needs resulting
from an aging population and the prevalence of the nuclear family, among others, which have triggered a
reorganization of the industry. We have made efforts to evolve our business model as a manufacturing retailer
targeting small catchment areas and to raise our store productivity to an unprecedented level toward our ongoinggoal of fulfilling our customers’ needs in everyday life by serving as an essential part of their communities.
Furthermore, we also focused on addressing operating risks based on the 2017 Basic Policy for Improvementof Internal Control Systems. We will continue promoting internal control even more.

Operating results by business segment were as follows:(Domestic Convenience Store Business)
In our convenience store business, we expanded our merchandise assortment offered in the evening andnighttime hours, strengthened our mainstay products including counter fast food items, rice balls, and bento
boxed lunches, and revamped our lineup of healthy food items including bran bread *1 and salads. We alsoendeavored to enhance store productivity by such measures as introducing tablet terminals to be used by store
staff at LAWSON stores nationwide to further facilitate sales management of counter fast food items.
Furthermore, new point-of-sale (POS) cash registers (for sales information management) equipped with anautomatic change dispenser function have been introduced in phases with the aim of achieving higher cashhandling efficiency at stores, including expediting cash register transactions.
*1 Bran: The external layer of wheat. It contains abundant nutrition including dietary fiber, iron, calcium,magnesium, zinc, and copper. The food is noted for its low level of carbohydrates.

[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
not only existing stores but also new stores by strengthening our product lineup, and improving operations andfranchise support by headquarters.
Furthermore, in October 2017, we opened a laboratory at the Lawson Open Innovation Center to verify how
next-generation IT technologies can be put to practical use at our stores. A plan is underway to commence a
pilot trial of unmanned cash registers at several stores in the Tokyo metropolitan area by around spring of 2018with the aim of saving manpower during nighttime hours. We will continue harnessing diverse technologies tocreate a model for our next-generation convenience store.

2

[Merchandising and Service Strategies]
On the merchandise side, we strengthened our merchandise assortment under our “Lawson Select” brandfocused on daily delivered food and frozen food, as well as in our readymade dish lineup including salad items.
In our lineup of regular items including rice balls and bento boxed lunches, we revamped the entire lineup of“Onigiriya,” our original rice ball brand, which resulted in strong sales. In addition, our regular bento in our“Korega” (meaning, “This is”) bento series adopting new ingredients and production methods and our “Motto!
Yasai” (meaning, “More vegetables!”) series items proposing a healthier diet recorded robust sales andpopularity, demonstrated the success of our new initiatives.
In the dessert range, seven products were launched in five phases from the “Uchi Café SWEETS X GODIVA”
series produced in collaboration with Godiva with well-selected ingredients and a special production method,which remained popular especially among female customers.
In the counter fast food range, the savory “Deka Yakitori” (large grilled chicken) with enhanced aroma and“L-Chiki” (fried chicken) with increased volume remained popular. At our MACHI café, which serves freshly
brewed coffee in store, new coffee brewing machines are being introduced. The new machines can brew coffee
in approximately 25 seconds, shorter than the 40 seconds required by previous machines, allowing us to offer
an expanded selection of items on the menu. We are planning to replace around 14,000 machines with the newmodels to provide coffee of higher quality in a shorter period of time.
In addition to thus strengthening our merchandise lineup, we also enhanced our service offerings, one ofwhich is our “Gift Cards” *2, whose transaction value continued to remain solid.
On our sales promotion side, as our effort to increase the number of purchased items per customer, we rolled
out a promotional “Lawson Tokuichi!” campaign, where a 10% discount was offered on “Lawson Select”
chilled/frozen foods as well as some items offered in the counter cases. Furthermore, effective measures toattract customers were launched, including a “speed lottery” themed on “GENERATIONS from EXILE TRIBE,”
which demonstrated our strength in the entertainment field, and through the application of social media.
*2 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 year

Product group
Processed foods

Previous fiscal year
From March 1, 2016
to February 28, 2017
Sales
Percentage(Millions of yen)of total (%)
1,073,044
52.5

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

YoY (%)

106.1

Fast foods

481,267

23.6

509,415

23.6

105.8

Daily delivered foods

294,14114.4

314,481

14.5

106.9

Nonfood products

194,833

9.5

197,821

9.2

101.5

2,043,287

100.0

2,160,684

100.0

105.7

Total

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

3

[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 1,250 and 369 stores, respectively,
with the total number of stores in Japan reaching 13,992 as of the end of February 2018. *3
With regard to our partnership initiatives with other chain retailers in Japan, based on business integrationagreements, we are remodeling THREE F stores operated by Three F Co., Ltd. into LAWSON THREE F stores,
and SAVE ON stores operated by Save On Corp. into LAWSON stores.
With regard to THREE F stores, 195 stores were remodeled into LAWSON THREE F stores as of the end of
February 2018. The remodeling of THREE F stores into LAWSON THREE F stores will be continued in stages
in and after March 2018. Meanwhile, a total of 125 SAVE ON stores have been remodeled into LAWSON
stores as of the end of February 2018. The remodeling of SAVE ON stores into LAWSON stores will becompleted by the end of the next fiscal year ending February 2019.
Furthermore, by building partnerships with dispensing pharmacy and drug store chains, we offer not only
OTC pharmaceuticals, cosmetics, and daily necessities, but also offer a more numerous assortment ofmerchandise than conventional LAWSON stores. The number of stores offering non-prescription drugs hasreached 176 stores (includes 47 pharmacy LAWSON stores equipped with drug-dispensing pharmacies) as ofthe end of February 2018. Furthermore, the number of stores offering nursing care consultation services hasreached 16 as of the end of February 2018. We will continue to engage in establishing convenience store models
that address and deal with social changes such as the aging population and increased health awareness.
With respect to LAWSON STORE100, we will continue to increase the product composition ratio of 100yen items (excluding tax) by scaling down product portions to respond to customer needs for value.
*3 The numbers of store openings and closings and total number of stores in Japan include stores operated by 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, 2017

Change during
fiscal year

Total stores as ofFebruary 28, 201812,172872

13,044

NATURAL LAWSON

141

2

143

LAWSON STORE100

798

7

805

13,111881

13,992LAWSON

Total(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.

4

[Number of LAWSON stores by prefecture (February 28, 2018)]
Prefecture

Numberof stores

Hokkaido654

Ibaraki

210

Kyoto

338

Ehime

219

Aomori

246

Tokyo

1,687

Shiga

157

Tokushima

134

Akita

190

Kanagawa

1,061

Nara

138

Kochi

139

Iwate

172

Shizuoka

268

Wakayama

145

Fukuoka493

Miyagi

240

Yamanashi

128

Osaka

1,128

Saga

72

Yamagata

108

Nagano

176

Hyogo

677

Nagasaki

105

Fukushima

142

Aichi

683

Okayama

188

Oita

182

Niigata

159

Gifu

176

Hiroshima

211

Kumamoto

153

Tochigi

196

Mie

139

Yamaguchi

118

Miyazaki

106

Gunma

122

Ishikawa

103

Tottori

143

Kagoshima

194

Saitama674

Toyama190

Shimane146

Okinawa

224

Chiba

610

Fukui

114

Kagawa134

Total(domestic)

13,992Prefecture

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]We continued to work on enhancing customer convenience by additionally 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.
Led by the Japanese Ministry of Economy, Trade and Industry, Lawson, Inc. and other domestic convenience
store operators jointly issued the Declaration of Plan to Introduce 100 Billion Electronic Tags for Products inConvenience Stores. By using electronic tags, we aim to enhance store operating efficiency and continue torespond quickly to changing customer expectations.

As a result, Domestic Convenience Store Business posted gross operating revenue of 442,684 million yen(up 4.3% from previous fiscal year) and segment profit of 53,648 million yen (down 10.4% from previous fiscal
year.)

5

(Seijo Ishii Business)
The number of directly operated Seijo Ishii high-end supermarket chain stores offering quality foods reached
140 as of the end of February 2018, and sales were also strong. In September 2017, we opened our first“grocerant,” a new store format that combines a supermarket and a restaurant, in Chofu-shi, Tokyo. The
grocerant offers a selection of items on its menu, all of which use Seijo Ishii’s well-selected products in season,
attracting a broad range of customers. We remain committed to enhancing the brand image and corporate valueof Seijo Ishii, while absorbing the company’s product development expertise, know-how acquired as amanufacturing retailer, and sales methods, to strengthen our domestic convenience store business.

As a result, Seijo Ishii Business posted gross operating revenue of 81,957 million yen (down 4.5% fromprevious fiscal year) and segment profit of 6,854 million yen (down 0.8% from previous fiscal year).

(Entertainment-related Business)
With regards to our entertainment-related business, Lawson HMV Entertainment, Inc., which forms the coreof the business, continued to secure top-class ticket transaction value in the ticketing industry. HMV, whichsells music CDs and DVDs, also operates the HMV Record Shop specializing in second-hand analog records
and CDs. Including the HMV Record Shop, the number of HMV stores totaled 54 as of the end of February
2018. We will strive to offer an even wider selection of products and services to better respond to customer
needs by, for example, expanding the scope of our entertainment business. As of the end of February 2018,
United Cinemas Co., Ltd. operates cinemas at 40 sites, offering 351 screens nationwide including those
operated on commission.

As a result, Entertainment-related Business posted gross operating revenue of 75,380 million yen (up 3.4%
from previous fiscal year) and segment profit of 3,853 million yen (down 3.4% from previous fiscal year).

(Other Business)
In addition to the aforementioned businesses, the Group is also involved in the Overseas Business and the
Financial Services-related 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 1,423 as of the end of the fiscal year under review. Furthermore, we arescheduled to open our first store in Hefei, Anhui Province in spring 2018.

6

[Distribution of LAWSON Brand Stores Overseas by Region]
Country/Region

Number of stores(As of February 28,
2017)

Changeduring fiscal
year

Number of stores(As of February 28,
2018)

China

Shanghai and surrounding area

665

200

865

China

Chongqing

136

29

165

China

Dalian

82

40

122

China

Beijing

48

25

73

China

Wuhan

72

126

198

Thailand

85

16

101

Indonesia

36

1

37

Philippines

30

3

33

2

－

2

1,156

440

1,596

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. We strengthened partnerships
with new financial institutions bringing the total number of our financial institution partners to 90 nationwide(up 3 from previous fiscal year), including online banks, and the number of ATMs installed nationwide to
12,733 (up 821 from previous fiscal year) as of the end of February 2018.

As a result, Other Business posted gross operating revenue of 65,442 million yen (up 18.7% from previous
fiscal year) and segment profit of 1,464 million yen (down 51.2% from previous fiscal year).

Through Lawson Bank Preparatory Company, Inc. (hereafter, the “Preparatory Company”), founded in
November 2016, Lawson, Inc. has been preparing to establish a bank by leveraging its past experience infinancial services. In March 2018, the Preparatory Company decided to apply for preliminary screening by the
Financial Services Agency of Japan to obtain a banking license.
[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. As of theend of February 2018, the system had been installed in approximately 2,700 stores, approximately 700 stores
more than a year earlier. Compared to conventional equipment used in our stores, the new system can reduce
electricity consumption per store by around 12%. By putting into practical use 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. In January, we opened a pilot store focusing on environmental

7

friendliness that aims to become a “Smart Energy Store” in Tatebayashi-shi, Gunma. For this store, we use
cross laminated timber (CLT) made of Japanese cedar grown in Japan and other domestically produced woodfor the structure and interior to enhance the building’s heat insulation, reduce electricity consumption and saveenergy, and decrease CO2 emissions during the construction process.
With regard to reducing waste, we are making efforts to improve order-receiving accuracy by introducing asemi-automatic ordering system for ordering products. Moreover, we are recycling unsold food and waste
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 to support their education, and started accepting donations at stores in July 2017 through the“Happiness in Communities” fundraising boxes installed in all stores. Following a strict screening process, 400
recipients were selected and received their first installment of scholarship funds in December 2017. In addition,
money was also raised for victims of the heavy rain disaster in northern Kyushu.
As a member of society, we will continue to make unified group-wide efforts to implement initiatives that
aim to address social and environmental issues together with our franchised stores, customers and business
partners.

(2) Profit and Loss
In terms of operating results for the fiscal year, gross operating revenue increased to 657,324 million yen (up4.1% from previous fiscal year), operating income totaled 65,820 million yen (down 10.8% from previous fiscal
year), and ordinary income amounted to 65,141 million yen (down 10.8% from previous fiscal year). Profit
attributable to owners of parent was 26,828 million yen (down 26.3% 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 decreased by 17,418 million yen from the end of the previous fiscal year to 231,860 million
yen, mainly reflecting a decrease of 37,990 million yen in cash and deposits. Non-current assets increased by
51,096 million yen from the end of the previous fiscal year to 668,395 million yen, mainly reflecting an
increase of 25,424 million yen in property and store equipment and an increase of 20,274 million yen in
investments and other assets such as guarantee deposits. Consequently, total assets increased by 33,678
million yen from the end of the previous fiscal year to 900,256 million yen.
Current liabilities increased by 22,439 million yen from the end of the previous fiscal year to 379,222
million yen, mainly reflecting an increase of 7,339 million yen in accounts payable - trade, an increase of
6,472 million yen in deposits received and an increase of 5,050 million yen in lease obligations. Non-current
liabilities increased by 15,788 million yen from the end of the previous fiscal year to 239,587 million yen,mainly reflecting an increase of 13,634 million yen in lease obligations. Consequently, total liabilities
increased by 38,227 million yen from the end of the previous fiscal year to 618,809 million yen.
Net assets decreased by 4,549 million yen from the end of the previous fiscal year to 281,446 million yen,mainly reflecting a decrease of 5,207 million yen in non-controlling interests. Consequently, shareholders’equity ratio was 30.6%, down from 31.7% as of the end of the previous fiscal year.

8② Cash flows during fiscal year 2017

Cash and cash equivalents at February 28, 2018 decreased by 37,571 million yen from the end of theprevious fiscal year to 30,120 million yen.
Net cash provided by operating activities was 113,938 million yen, an increase of 14,074 million yen fromthe previous fiscal year, mainly because of an increase in notes and accounts payable-trade and an increasein accounts receivable-other.
Net cash used in investing activities was (91,209) million yen, a decrease of 14,982 million yen from theprevious fiscal year, because of increases in payments for transfer of business and purchases of long-term
prepaid expenses.
Net cash used in financing activities was (61,238) million yen, a decrease of 35,600 million yen from theprevious fiscal year, because of a decrease in net increase (decrease) in short-term loans payable.
(Reference) Trends in cash flow indicators
2015 fiscal year

2016 fiscal year2017 fiscal year

Shareholders’ equity ratio (%)

32.9

31.7

30.6

Shareholders’ equity ratio on market value basis (%)

108.3

89.4

77.7

Interest-bearing debt/cash flow ratio (years)

1.5

2.2

2.1

Interest coverage ratio (times)

57.5

51.9

55.5

(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 (2018 fiscal year ending February 28, 2019)
Forecast of consolidated operating results

Forecast of non-consolidated operating
results

1H of 2018 fiscal
year
Forecast
YoY(Millions(%)
of yen)Forecast(Millionsof yen)YoY(%)

1H of 2018 fiscal
year
Forecast
YoY(Millions(%)
of yen)Forecast(Millionsof yen)YoY(%)

Gross operating
revenue

360,000

109.3

732,000

111.4

201,000

106.3

401,000

107.5

Operating income

30,50078.3

60,00091.2

23,00073.8

44,50087.2

Ordinary income

29,00075.4

57,00087.5

37,500121.1

67,500133.6

Profit (attributableto owners of parent)

17,00071.9

28,000104.4

29,000142.4

45,500234.3

2018 fiscal year2018 fiscal year

Note: The ordinary income figures in the forecast of non-consolidated operating results for the first half and full
fiscal year include dividend incomes expected to be received from the consolidated subsidiaries of Lawson,
Inc. Accordingly, the figures exceed the corresponding ordinary income figures in the forecast of
consolidated operating results for the first half and full fiscal year.

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, 2017 and February 28, 2018
(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, 2017

Current fiscal year
As of
February 28, 2018

68,11539,982
12,33618,13078,363
3,907
28,493(50)
249,278

30,124
46,59916,426
18,913
82,6333,411
33,779(28)
231,860

183,747
18,581
9,701
110,472
1,742
265
324,510

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

37,56746,041
10,691499
94,80041,602
47,947
10,074573
100,197

22,28344,495
95,594
23,13813,444(968)
197,988617,299
866,577

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

(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, 2017

Current fiscal year
As of
February 28, 2018110,834
31,180575
28,012
59,734
9,876
103,156
3,427
9,985
356,783

118,174
36,340575
33,06360,7416,880
109,629
3,767
10,051
379,22256,70399,983957

55,469113,617
2,616

332

271

13,083
26,95825,779223,798
580,581

13,781
29,062
24,767
239,587
618,80958,50649,083
165,162(1,210)271,541

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

274
(618)
4,610
(927)
3,338
314
10,800285,995
866,577

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

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income
Consolidated Statement of Income
For the fiscal years ended February 28, 2017 and February 28, 2018
(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
Share of profit of entities accounted for using equity
methodCompensation income
Gain on valuation of derivatives
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 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, 2016
to February 28, 2017
631,288
254,169
174,255
79,914Current fiscal year
From March 1, 2017
to February 28, 2018657,324
264,734
181,374
83,360275,312
101,806
377,119457,033
383,260
73,772289,232
103,357
392,589475,950
410,129
65,820

725

799

602

693

524
409
1,820
4,081

897
－
1,444
3,835

1,919
1,274
772
873
4,839
73,014

2,099
1,304
－
1,110
4,514
65,141

－
－

302
302

294
3,554
9,535
1,174
14,55858,45618,9282,453
21,381
37,074674
36,400368
3,115
17,533836
21,853
43,59014,1902,538
16,72926,861
32
26,828

Consolidated Statement of Comprehensive Income
For the fiscal years ended February 28, 2017 and February 28, 2018
(Millions of yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Revaluation reserve for land
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, 2016
to February 28, 2017
37,074Current fiscal year
From March 1, 2017
to February 28, 2018
26,861

(527)
(52)
(928)
(22)
(1,530)35,543

1,809
－
36
201
2,047
28,90834,878664

28,82483

(3) Consolidated Statement of Changes in Equity
Previous fiscal year ended February 28, 2017 (From March 1, 2016 to February 28, 2017)(Millions of yen)
Shareholders’ equity

Balance at beginning of current period

Capital stock

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

58,506

47,697

154,608(1,280)259,532

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

1,387

1,387

Dividends of surplus(24,751)(24,751)

Change of scope of consolidation(1,130)(1,130)

Profit attributable to owners of parent

36,40036,400Purchase of treasury shares

(3)

(3)

Disposal of treasury shares－

Reversal of revaluation reserve for land

52

Exercise of subscription rights to shares(Delivery of treasury shares)

52

(0)

(17)

72

54

－

1,386

10,55369

12,00958,50649,083

165,162(1,210)271,541

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period(Millions of yen)
Accumulated other comprehensive income
Valuation difference on
Revaluation
available-for-salereserve for land
securities

Balance at beginning of current
period801(566)

Foreign currency Remeasurements Total accumulatedtranslationof defined benefit other comprehensive
incomeadjustment
plans

5,531

(906)

4,860

Subscription
NonTotal net
rights tocontrolling
assetssharesinterests
307

8,296

272,997

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

1,387

Dividends of surplus(24,751)

Change of scope of consolidation(1,130)

Profit attributable to owners ofparent36,400Purchase of treasury shares(3)

Disposal of treasury shares－

Reversal of revaluation reserve for
land
Exercise of subscription rights toshares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity

52
54
(527)

(52)

(920)

(21)

(1,521)

7

2,503

989

Total changes of items during
period

(527)

(52)

(920)

(21)

(1,521)7

2.503

12,998

Balance at end of current period

274

(618)

4,610

(927)

3,338

314

10,800285,995

15

Current 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

Reversal of revaluation reserve for land

(3)

(3)

0

0

(42)

Exercise of subscription rights to shares(Delivery of treasury shares)

(42)

60

172

233

Net changes of items other thanshareholders' equity
Total changes of items during period
Balance at end of current period－(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

Reversal of revaluation reserve for
land
Exercise of subscription rights toshares(Delivery of treasury shares)
Net changes of items other thanshareholders' equity

(42)
233
1,809

42

(15)

201

2,038

(119)

(5,207)(3,288)

Total changes of items during
period

1,809

42

(15)

201

2,038

(119)

(5,207)(4,549)Balance at end of current period

2,084

(575)

4,595

(726)

5,377

195

5,593

281,44616

(4) Consolidated Statement of Cash Flows
For the fiscal years ended February 28, 2017 and February 28, 2018
(Millions of yen)Previous fiscal year
From March 1, 2016
to February 28, 2017
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
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 shares of subsidiaries and associates
Decrease (increase) in long-term loans receivable - net
Purchase of long-term prepaid expenses
Payments for transfer of business
Other
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Net increase (decrease) in short-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

17

Current fiscal year
From March 1, 2017
to February 28, 2018

58,45656,199
9,535
(725)
1,919
3,554
(9,542)(10,746)(1,421)
2,724
1,243
747
7,329
119,273719(1,923)(18,204)
99,864

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(42,063)(18,892)(1,805)(3,917)(3,112)(4,435)(2,001)(76,227)(41,536)(18,533)(3,920)(3,283)(9,229)(11,009)(3,695)(91,209)

29,190(30,054)(24,751)

5,160(32,096)(25,258)(709)(7,799)686(25,638)(435)(2,436)
69,793(1,244)(61,238)173(38,336)
67,692335

765

67,69230,120(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 HMV Entertainment, Inc.
Lawson ATM Networks, 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 Preparatory Company, 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 Bank Preparatory Company, Inc. was included in the scope of
consolidated subsidiaries from the fiscal year under review due to its increased significance as a subsidiary.
(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.
Lawson Urban Works, Inc.
(Foreign)

Lawson USA Hawaii, Inc.

(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.

18

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 Urban Works, Inc. and Lawson USA Hawaii, Inc.) and entities
excluded from the scope of the equity-method application (Double Culture Partners Co., Ltd., Loyalty
Marketing, Inc., MC Retail Energy Co., Ltd., Lawson Staff, Inc., AUGUSARENA CORPORATION.,
Lawson System Labo LLP, LTF Co., Ltd., StageAround TOKYO Production Committee, Jiangsu Jiazhijia
Food Co., Ltd., Jiangyin Hualian Guzhitian Food Co., Ltd., PG Lawson Company, Inc., Lawson Farm
Chiba and others) were excluded from the scope of the equity-method application because their profit orloss (corresponding to equity interest) and retained earnings (corresponding to equity interest) of these
entities is 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 Preparatory Company, Inc. is March 31. In formulating theconsolidated financial statements, the Company used this subsidiary’s provisional settlement of accounts asof the consolidated balance sheet date.
The fiscal year end date for the other consolidated subsidiaries corresponds with the consolidated balance
sheet date.

19

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 Derivatives:
Accounted for using the market value method.
③ 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.

20

(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.
(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.

21

(Changes in Presentation)(Consolidated Statement of Cash Flows)
In the “Cash flow from investing activities” section, “Payments into time deposits” was presented
separately in the previous fiscal year. Due to a decline in financial materiality, “Payments into time deposits”
is now included in “Other.” To reflect this change in method of presentation, the consolidated financial
statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, (842) million yen that was presented as“Payments into time deposits” in the Consolidated Statement of Cash Flows for the previous fiscal year is
now included in “Other.”In the “Cash flow from investing activities” section, “Proceeds from withdrawal of time deposits” waspresented separately in the previous fiscal year. Due to a decline in financial materiality, “Proceeds fromwithdrawal of time deposits” is now included in “Other.” To reflect this change in method of presentation,
the consolidated financial statements for the previous fiscal year have been reclassified.
As a result, in the “Cash flow from investing activities” section, 1,763 million yen that was presented as“Proceeds from withdrawal of time deposits” in the Consolidated Statement of Cash Flows for the previous
fiscal year is now included in “Other.”In the “Cash flows from investing activities” section, “Payments for transfer of business” was included in“Other” in the previous fiscal year. Due to an increase in financial materiality, “Payments for transfer ofbusiness” 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, (4,435) million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as“Payments for transfer of business.”
In the “Cash flow from financing activities” section, “Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of consolidation” was included in “Other” in the previous
fiscal year. Due to an increase in financial materiality, “Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of consolidation” is now separately presented. To reflect thischange in method of presentation, the consolidated financial statements for the previous fiscal year have been
reclassified.
As a result, in the “Cash flow from financing activities” section, (709) million yen that was presented as“Other” in the Consolidated Statement of Cash Flows for the previous fiscal year is now presented as“Payments from changes in ownership interests in subsidiaries that do not result in change in scope of
consolidation.”22

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

Accumulated depreciation

Previous fiscal year
As of February 28, 2017294,350(Millions of yen)
Current fiscal year
As of February 28, 2018317,966

Previous fiscal year
As of February 28, 2017
13,502(1,042)
157
648
(648)

(Millions of yen)
Current fiscal year
As of February 28, 2018
13,895(1,060)192
1,276(1,226)*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, 2017
As of February 28, 2018
Difference between book value and market value of247
177
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, 2017
2,601

Cash and deposits(Millions of yen)
Current fiscal year
As of February 28, 2018
4,212

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, 2017
As of February 28, 2018
Shares of consolidated subsidiaries
16,614
16,614(Amount before elimination)

23

Secured liabilities are as follows
Previous fiscal year
As of February 28, 2017

(Millions of yen)
Current fiscal year
As of February 28, 2018

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

575
6,703

575
5,469

Total

7,278

6,044

(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, 2016
to February 28, 2017
53,173
2,956
2,303
115,926
55,516(Millions of yen)
Current fiscal year
From March 1, 2017
to February 28, 201857,214
3,173
2,537
124,387
58,499Previous fiscal year
From March 1, 2016
to February 28, 2017
294
0
－
0
294

(Millions of yen)
Current fiscal year
From March 1, 2017
to February 28, 2018
343
12
12
0
368

Previous fiscal year
From March 1, 2016
to February 28, 2017
2,493
238
798
22
1
3,554

(Millions of yen)
Current fiscal year
From March 1, 2017
to February 28, 2018
2,254
193
458
207
0
3,115

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

Buildings and structures
Tools, furniture and fixtures
Land
OthersTotal*3 Breakdown of loss on retirement of non-current assets

Buildings and structures
Tools, furniture and fixtures
Leased assets
Software
OthersTotal

24

*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, 2016 to February 28, 2017)
Category by use
Stores

Total(Millions of yen)
Impairment loss

Location

AssetsTokyo

Buildings; tools, furniture and fixtures; and others

1,702

Osaka

"

1,442

Others

"

6,390

―

―

9,535

Category by non-current assets
Buildings and structures
5,833 million yen
Tools, furniture and fixtures
529
"
Land
353
"
Leased assets
2,786
"
Other
32
"
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 4.3%.
Current 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
Tools, furniture and fixtures
Land
Leased assets
Software
Goodwill
Other

5,967
811
183
4,485
6,033
12
40

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 4.4%.

25

(Notes to Consolidated Statement of Comprehensive Income)* The components of other comprehensive income for the years ended February 28, 2017 and February 28,
2018 were as follows:(Millions of yen)Previous fiscal year
Current fiscal year
From March 1, 2016
From March 1, 2017
to February 28, 2017
to February 28, 2018
Valuation difference on availablefor-sale securities
Gain or loss arising during the(1,059)2,568
periodReclassification adjustments to244
30
profit or loss
Amount before income tax
(815)
2,599
effectIncome tax effect
287
(789)
Valuation difference on
(527)
1,809
available-for-sale securities
Revaluation reserve for land
Gain or loss arising during the(52)―
periodRevaluation reserve for land(52)―
Foreign currency translation
adjustment
Gain or loss arising during the(905)
36
periodReclassification adjustments to(23)―
profit or loss
Foreign currency translation(928)
36
adjustment
Remeasurements of defined benefit
plans
Gain or loss arising during the(150)
85
periodReclassification adjustments to148
207
profit or loss
Amount before income tax(2)293
effect(20)
Income tax effect(92)
Remeasurements of defined(22)
201
benefit plans
Total other comprehensive(1,530)2,047
income26

(Notes to Consolidated Statement of Changes in Equity)
Previous fiscal year (From March 1, 2016 to February 28, 2017)
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 (*)
301
0
17
285
(*) 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 17 thousand shares resulted from the exercise of stock options rights.
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
the
Class
(Millionsof theduring the during theperiodof yen)periodperiodperiodStock acquisitionrights (ordinary stock
options)

Issuing company(Parent company)

Total

－

－

－

－

－

314

－

－

－

－

－

314

3. Dividend
1) Dividend payment
Date of resolution
The General meetingof shareholders(May 24, 2016)
Directors’ meeting(October 12, 2016)

Class ofsharesDividend payment(millions of yen)

Dividend pershare (yen)Record date

Effective dateCommonstock

12,249122.50February 29, 2016

May 25, 2016

Commonstock

12,501125.00August 31, 2016

November 10, 2016

2) 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 30, 2017)

Commonstock

Retainedearnings

12,501125.00February 28,
2017

May 31,
201727

Current 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 right 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
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 22, 2018)

Commonstock

Retainedearnings

12,757127.50February 28,
2018

May 23,201828

(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, 2016
From March 1, 2017
to February 28, 2017
to February 28, 2018
Cash and deposits
68,11530,124
Time deposits for which the deposit period
(423)
(4)
exceeds three months
Cash and cash equivalents
67,69230,120*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, 2016 to February 28, 2017)
Description is omitted due to its immateriality.
Current 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"

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 1,2016
to February 28, 2017

Current fiscal year
From March 1,2017
to February 28, 2018

42,63647,054

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

(Millions of yen)Previous fiscal year
From March 1, 2016
to February 28, 2017

Current fiscal year
From March 1, 2017
to February 28, 2018

2,635

2,492

Significant asset retirement obligations

29

(Business Combinations, etc.)
Business combination due to acquisition(1) Outline of business combination① Name of the acquired company and business description
Name of company: Three F Co., Ltd. (hereinafter, “Three F”)
Business description: Convenience store business② Main reason for business combination
Under the terms of the business integration contract signed by the Company and Three F on April 13,
2016, the two companies established a new joint-venture LTF Co., Ltd., which started converting 89
THREE F stores operated in Chiba and Saitama Prefectures into “LAWSON THREE F” double-brandstores in September 2016. As the collaboration proved to be effective, the two companies decided to alsotransform THREE F stores in Tokyo and Kanagawa Prefecture, and part of Chiba Prefecture into
“LAWSON THREE F” double-brand stores. The business combination is a pre-arranged company split
designed to transfer a portion of the rights and obligations relating to Three F’s convenience store
operations.
③ Date of business combination
June 1, 2017
④ Legal form of business combination
Absorption-type company split whereby Three F is the split company and Lawson is the succeedingcompany⑤ Main grounds for determining the Company to be the acquiring company
The Company acquired Three F’s business for a cash consideration.
(2) Acquisition cost for acquiring the business and breakdown by type of consideration(Millions of yen)Type of consideration

Cash and deposits

10,996

Acquisition cost

10,996(3) Details and amount of major acquisition-related expenses
Advisory compensation and fees, etc.
78 million yen(4) Amount, cause, and amortization method and period of goodwill generated① Amount of goodwill generated
5,688 million yen② Cause of generation of goodwill
Mainly excess earnings power anticipated through business development③ Method and period of amortization

Straight-line method over 9 years(5) Amounts and major breakdown of assets acquired and liabilities assumed on the date of businesscombination(Millions of yen)
Non-current assets

5,308

Total assets

5,308(6) Estimated amount and its calculation method regarding the impact on the consolidated statement of income
for the current fiscal year assuming that the business combination was completed at the beginning of thecurrent fiscal year
The estimated amount of the impact is not presented as it cannot be reasonably calculated.

30

(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 andEntertainment-related Business while incorporating other related businesses.
Therefore, the Group has made the Domestic Convenience Store Business, Seijo Ishii Business andEntertainment-related Business unit 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 Store100, Inc. undertakes the direct management of LAWSON STORE100
stores. SCI, Inc., a functional subsidiary which comprehensively manages the process from procurement tosale, aims to improve the efficiency of the entire process.
Regarding Seijo Ishii Business, SEIJO ISHII CO., LTD. operates SEIJO ISHII supermarket.
Regarding Entertainment-related Business, Lawson HMV Entertainment, Inc. conducts the management
and sales of concert tickets at LAWSON stores and others, music and video software products at HMV storesand others. In addition, United Cinemas Co., Ltd. operates multiplex movie theatres.
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.

31

3. Information on net sales, and profit or loss by reportable segment
Previous fiscal year (From March 1, 2016 to February 28, 2017)(Millions of yen)
Reportable segment
Adjustments(Note 2)

Total
(Note 3)

631,288－631,288

919

7,228

(7,228)－55,147

638,517(7,228)631,288

Others(Note 1)

Total

Seijo Ishii
Business

Entertainmentrelated
Business

419,690

85,82471,54554,227

4,918

－

1,390

424,60885,82472,936

Domestic
Convenience
Store
Business
Gross operating
revenue
Sales to externalcustomers
Intersegment sales
or transfers
Total
Segment profit

59,865

6,911

3,988

2,999

73,765

773,772

Segment assets

800,383

58,70562,271

56,925

978,285(111,708)

866,577

44,796

2,005

2,278

3,386

52,468－52,468

911

1,676

501

99

3,189

－

3,189

4,922

－

－

－

4,922

－

4,922

55,488

1,054

1,483

2,928

60,955－60,955

Other
Depreciation
Amortization of
goodwill
Investments inaffiliates
Increase in noncurrent 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, and Financial Services-related
Business operated by Lawson ATM Networks, Inc.
2. Adjustments to segment profit and segment assets are due to the elimination of intra-segment transactions.
3. Segment profit corresponds to consolidated operating income.

32

Current fiscal year (From March 1, 2017 to February 28, 2018)(Millions of yen)
Reportable segment
Adjustments(Note 2)

Total
(Note 3)657,324－

657,324

1,258

8,140

(8,140)－75,38065,442

665,465(8,140)657,324

3,853

1,464

65,820－65,82060,457

63,84570,522

1,029,469(129,213)

900,256

46,161

1,798

2,300

4,503

54,763－54,763

1,839

1,437

501

59

3,837

－

3,837

5,145

－

－

－

5,145

－

5,145

49,156

1,060

1,242

8,611

60,070－60,070

Others(Note 1)

Domestic
Convenience
Store
Business

Seijo Ishii
Business

Entertainment-related
Business

437,216

81,95773,96764,183

5,467

－

1,413

Total

442,684

81,957

Segment profit

53,6486,854

Segment assets

834,643

Total

Gross operating
revenue
Sales to externalcustomers
Internal sales ortransfers between
segments

Other
Depreciation
Amortization of
goodwill
Investments inaffiliates
Increase in noncurrent 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, and Financial Services-related
Business operated by Lawson ATM Networks, Inc.
2. Adjustments to segment assets are due to the elimination of intra-segment transactions.

33

(Related information)
Previous fiscal year (From March 1, 2016 to February 28, 2017)
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, 2017 to February 28, 2018)
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.

34

(Information on impairment loss on non-current assets by reportable segment)
Previous fiscal year (From March 1, 2016 to February 28, 2017)
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

Entertainmentrelated
Business

9,034

62

208

Others

Total

Adjustments

Total

229

9,535

－

9,535

Current 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

Entertainmentrelated
Business

16,85487

149

Others

Total

Adjustments

Total

441

17,533－

17,533(Information on amortization of goodwill and amortized balance by reportable segment)
Previous fiscal year (From March 1, 2016 to February 28, 2017)(Millions of yen)
Reportable segment
Domestic
Convenience
Store
Business

Seijo Ishii
Business

Entertainmentrelated
Business

Others

Total

Adjustments

Total

Balance at
end of fiscal
11,26925,2708,690
812
46,041
46,041－year
Note: Regarding amortization of goodwill, this information is omitted since similar information is disclosed insegment information.

35

Current fiscal year (From March 1, 2017 to February 28, 2018)(Millions of yen)
Reportable segment
Domestic
Convenience
Store
Business

Seijo Ishii
Business

Entertainmentrelated
Business

Others

Total

Adjustments

Total

Balance at
end of fiscal
15,15923,833
8,188
765
47,94747,947－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, 2016 to February 28, 2017)
Not applicable.
Current fiscal year (From March 1, 2017 to February 28, 2018)
Not applicable.

36

(Per Share Information)
Previous fiscal year
From March 1, 2016 to
February 28, 2017

Current fiscal year
From March 1, 2017 to
February 28, 2018

2,748.39 yen

2,755.06 yen

Profit per share

363.96 yen

268.16 yen

Diluted profit per share

363.70 yen

268.02 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, 2016 to
February 28, 2017

Item

Current fiscal year
From March 1, 2017 to
February 28, 2018

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

36,40026,828－－

Profit attributable to common stock (millions of yen)

36,40026,828Average number of common stock during the fiscal
year (thousands of shares)

100,009

100,044

－

－

71

53

(71)

(53)

－

－

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.

37

(Significant Subsequent Events)
Borrowing of funds
Lawson Bank Preparatory Company, Inc. (“LBP”), a consolidated subsidiary of Lawson, Inc., resolved toconclude a syndicated loan agreement as described below at the Board of Directors’ Meeting held on March
26, 2018, and entered into the agreement on March 30, 2018. The agreement is subject to the acquirement ofa banking license as a prerequisite for the execution of the loan.
1. Reason for borrowing of funds
The Lawson Group has been providing a limited selection of financial services by operating an ATM
business. In order to enhance the convenience of our financial services, we have decided to apply for apreliminary examination to acquire a banking business license. Accordingly, based on the assumption thatthe license will be obtained, LBP will finance the working capital for its banking business through thesyndicated loan.
2. Outline of the syndicated loan agreement(1)

Date of agreement

March 30, 2018(2)

Arranger

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (currently, MUFG Bank, Ltd.)(3)

Co-Arrangers

Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation(4)

BorrowerLawson Bank Preparatory Company, Inc.

(5)

Executable period

From September 28, 2018 to October 31, 2018

(6)

Repayment method

Lump-sum repayment(7)

Amounts

50,000 million yen

80,000 million yen(8)Loan periods

Three years

Five years(9)Interest rate

Floating rate

Floating rate

(10)

Guarantee

Lawson, Inc. jointly guarantees the loan.

(11)

Financial covenants

Financial covenants of Lawson Bank, Inc. (note) and Lawson, Inc., theguarantor of the loani) Covenants related to the recording of losses in consecutive periods.
ii) Covenants related to the amount of net assets.

iii) Covenants related to collateral provided.
Note: Lawson Bank Preparatory Company, Inc. will change its trade name to Lawson Bank, Inc. prior to
the execution of the loan.

38