This document is a summary translation of the Japanese language original version. In the event of any discrepancy, errors and/or omissions, the Japanese language version shall prevail.
Consolidated Financial Summary for the Third Quarter Ended September 30, 2017 (Japanese Standard) |
October 27, 2017
Listed company name: Coca-Cola Bottlers Japan Inc. | Listed stock exchanges: Tokyo and Fukuoka | ||
Code number: 2579 | URL: https://en.ccbji.co.jp | ||
Delegate: | Title: Representative Director & President | Name: Tamio Yoshimatsu | |
Contact: | Title: Leader, Finance Controller Group | Name: Masakiyo Uike | Phone: +81-3-6896-1707 |
Expected date of quarterly report submission: November 10, 2017 | Expected date of the dividend payments: - | ||
FY 2017 3Q supplementary information: Yes | |||
FY 2017 3Q financial presentation: Yes |
(Fractions of one million yen are rounded down)
1. | Consolidated financial results for the 3rd quarter 2017 (from January 1, 2017 to September 30, 2017) |
(Percentages indicate changes over the same period in the prior fiscal year)
(1) | Consolidated financial results |
Net revenues | Operating income | Recurring income | Net profit attributable to shareholders of parent | |||||
million yen | % | million yen | % | million yen | % | million yen | % | |
3nd quarter 2017 | 645,088 | 82.4 | 38,606 | 102.9 | 37,876 | 106.7 | 23,797 | 123.9 |
3nd quarter 2016 | 353,710 | 7.3 | 19,025 | 65.3 | 18,320 | 62.2 | 10,627 | (25.9) |
Note: | Comprehensive income |
3Q 2017: 26,707 million yen 228.5% | 3Q 2016:8,129 million yen (44.1)% |
Earnings per share | Diluted earnings per share | ||
yen | yen | ||
3nd quarter 2017 | 143.17 | - | |
3nd quarter 2016 | 97.37 | - |
(2) | Consolidated financial position |
Total assets | Net assets | Net assets (excl. minority interests) to total assets | |
As of | million yen | million yen | % |
3nd quarter 2017 | 889,577 | 622,831 | 69.9 |
Full year 2016 | 377,468 | 261,173 | 69.1 |
Reference: Net assets (excl. minority interests)
3Q 2017: 621,853 million yen | End of 2016: 260,758 million yen |
2. | Dividends |
Dividends per share | |||||
(Record date) | End of 1Q | End of 2Q | End of 3Q | Year-end | Annual |
Year ended | yen | yen | yen | yen | yen |
Full year 2016 | - | 22.00 | - | 24.00 | 46.00 |
Full year 2017 | - | 22.00 | - | ||
Full year 2017 (forecast) | 22.00 | 44.00 |
Note: | Revisions to the cash dividends forecasts most recently announced: None |
End of 2Q FY 2016 dividend | : an ordinary dividend of 21.00 yen, a commemorative dividend of 1.00 yen |
FY 2016 ending dividend | : an ordinary dividend of 23.00 yen, a commemorative dividend of 1.00 yen |
3. Forecast of consolidated financial results 2017 (from January 1, 2017 to December 31, 2017)
(Percentages indicate changes over the same period in the prior fiscal year)
Net revenues | Operating income | Recurring income | Net profit attributable to shareholders of parent | Earnings per share | |||||
million yen | % | million yen | % | million yen | % | million yen | % | Yen | |
Full year 2017 | 906,500 | 96.9 | 40,100 | 89.7 | 38,100 | 84.9 | 21,500 | 309.9 | 122.85 |
Note: | Revisions to the forecasts of consolidated financial results most recently announced: None |
Notes
(1) | Changes in significant subsidiaries during the current period | : Yes | |||
(changes in specified subsidiaries resulting in change in scope of consolidation) | |||||
Newly included: One (Coca-Cola East Japan Co., Ltd.) | Excluded: None | ||||
Note: | Please refer to “2. Quarterly Consolidated Financial Statements (3) Notes to Quarterly Consolidated Financial Statements (Change in Significant Subsidiaries during the Current Period)” on page 8 for details. | ||||
(2) | Application of special accounting for preparing the quarterly consolidated financial statement | : None | |||
(3) | Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements after error corrections | ||||
1) Changes in accounting policies due to revisions to accounting standards and other regulations | : None | ||||
2) Changes other than those in 1) above | : Yes | ||||
3) Changes in accounting estimates | : Yes | ||||
4) Restatement of prior period financial statements after error corrections | : None | ||||
(4) | Number of outstanding shares (common shares) | ||||
1) Number of outstanding shares at the end of period (including treasury shares): | |||||
3Q 2017: 206,268,593 shares | FY 2016: 111,125,714 shares | ||||
2) Number of treasury shares at the end of period: | |||||
3Q 2017: 2,012,035 shares | FY 2016: 1,989,069 shares | ||||
3) Average number of outstanding shares at end of period (nine months): | |||||
3Q 2017: 166,211,884 shares | 3Q 2016: 109,138,069 shares | ||||
Note: | The total number of outstanding shares increased by 95,142,879 to 206,268,593 as of April 1, 2017 in connection with the integration with Coca-Cola East Japan Co., Ltd. | ||||
* | These Consolidated Financial Results are not subject to quarterly review procedures. |
* | Explanation regarding appropriate use of the forecast, other special instructions |
Figures in the above forecast are based on information available to management at the time of announcement.
Due to number of inherent uncertainties in the forecast, actual results may differ materially from the forecast. Furthermore, please refer to “1. Qualitative Information on the Financial Summary for this Quarter (3) Information on the Future Outlook, Including Forecast of Consolidated Financial Results” on page 3 for matters relating to performance forecasts.
Table of contents
Page
Attachment
1. | Qualitative Information on the Financial Summary for this Quarter | ||
(1) | Details of Consolidated Financial Results | 2 | |
(2) | Details of Consolidated Financial Position | 3 | |
(3) | Information on the Future Outlook, Including Forecast of Consolidated Financial Results | 3 | |
2. | Quarterly Consolidated Financial Statements | ||
(1) | Quarterly Consolidated Balance Sheets | 4 | |
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income | 6 | |
Quarterly Consolidated Statements of Income | 6 | ||
Quarterly Consolidated Statements of Comprehensive Income | 7 | ||
(3) | Notes to Quarterly Consolidated Financial Statements | 8 | |
(Notes Relating to Assumptions for the Going Concern) | 8 | ||
(Change in Significant Subsidiaries during the Current Period) | 8 | ||
(Notes for Case Where Shareholders’ Equity underwent Significant Changes in Value) | 8 | ||
(Application of Special Accounting for Preparing the Quarterly Consolidated Financial Statement) | 8 | ||
(Changes in Accounting Policies, etc.) | 8 | ||
(Additional Information) | 9 | ||
(Segment Information) | 9 |
1
1. Qualitative Information on the Financial Summary for this Quarter
(1) Details of Consolidated Financial Results
During the year-to-date third quarter period of the fiscal year ending December 31, 2017, the Japanese economy continued to show a modest recovery with continued improvement of the job market and income situation as well as positive indicators of consumer sentiment and consumer spending.
In the soft drink industry, the market remained almost flat in terms of sales volume when compared to the same period in the previous year, reflecting poor weather during the summer peak season in eastern Japan, with continuous rain in the Kanto and Tohoku regions. Continued roll-outs of FOSHU (Food for Specific Health Usage), functional-claim and other value-added products have helped to offset this negative impact of weather on industry volume performance.
Both the health food and cosmetics industries continue to generate positive results, supported by launches of functional-claim food products and a stream of market entrants from other industries driven by the demand from health-conscious consumers in the health food industry. In the cosmetics industry, consumer needs continue to diversify and the demand from inbound tourism has also contributed growth.
In this operating environment, in order to pursue new business opportunities and realize sustainable growth, Coca-Cola Bottlers Japan Inc. (CCBJI) was formed through the business integration of Coca-Cola West (CCW) and Coca-Cola East Japan Co., Ltd. (CCEJ) effective April 1, 2017 through a combination of a share exchange and an absorption-type company split.
Furthermore, CCBJI (the Company) announced a medium-term business plan, the “Growth Roadmap for 2020 & Beyond” for the period up to 2020, which sets forth the Company’s strategic initiatives, namely profitable revenue growth, integration synergies, establishment of a new operating model and a holistic financial framework to create shareholder value while investing in people capability development and shared value with local communities. The Company will focus on these initiatives to achieve sustainable growth, leverage the synergy effects of the business integration, and continue to lead the domestic soft drink industry.
The summary of financial results for the year-to-date third quarter period of this fiscal year is as follows.
<Net Revenues>
Year-to-date third quarter, consolidated net revenues of the soft drink business increased by 293,576 million yen to 622,837 million yen (up 89.2%) year on year, primarily owing to factors such as the business integration of CCW and CCEJ effective as of April 1, 2017. Consolidated net revenues of the healthcare & skincare business fell by 2,198 million yen to 22,251 million yen (down 9.0%) year on year. As a result, the total consolidated net revenues increased by 291,378 million yen to 645,088 million yen (up 82.4%) year on year.
<Operating Income and Recurring Income>
Year-to-date third quarter, consolidated operating income of the soft drink business increased by 19,832 million yen to 36,341 million yen (up 120.1%) year on year, due to an increase in net revenues led by the business integration described above as well as a decrease of expenses brought by the change in depreciation method for fixed assets and cost savings initiatives (at both CCW and CCEJ). Consolidated operating income in the healthcare & skincare business fell by 252 million yen to 2,264 million yen (down 10.0%) year, due to factors such as the aforementioned drop in net revenues. As a result, the total consolidated operating income for the year-to-date period increased by 19,508 million yen to 38,606 million yen (up 102.9%) year on year. Furthermore, consolidated recurring income increased by 19,556 million yen to 37,876 million yen (up 106.7%) year on year.
<Net Profit Attributable to Shareholders of Parent>
Year-to-date third quarter, net profit attributable to owners of parent increased by 13,170 million yen to 23,797 million yen (up 123.9%) year on year, mainly due to an increase in recurring income, etc.
<Reference>
Year-to-date third quarter pro-forma revenues, assuming the business integration of CCW and CCEJ from January 2017 and estimating 2016 results using the same standard, decreased by 12,892 million yen to 764,029 million yen (down 1.7%) year on year, mainly impacted by a decrease of sales volume partly driven by poor weather as well as our continued focus on driving profitability. Year-to-date pro-forma operating income increased by 2,620 million yen to 40,131 million yen (up 7.0%) year on year driven by cost reductions in manufacturing as well as generating integration synergies in the soft drink business, etc. Year-to-date pro-forma net profit attributable to shareholders of parent was 24,389 million yen, up 2,599 million yen (11.9 %) year on year.
CCBJI also discloses the earnings presentation material on the CCBJI website (https://en.ccbji.co.jp/ir/). On the website, a live webcast and replay are available for listening the CCBJI earning presentation.
2
(2) Details of Consolidated Financial Position
Total assets at the end of the second quarter of the fiscal year under review increased by 512,108 million yen to 889,577 million yen (up 135.7%) compared to the end of the previous consolidated fiscal year, mainly due to the inclusion of Coca-Cola East Japan Co., Ltd. in our scope of consolidation in connection with the business integration.
Liabilities increased by 150,449 million yen to 266,745 million yen (up 129.4%) from the end of the previous consolidated fiscal year. This was chiefly due to the impact of the aforementioned new consolidated company.
Net assets increased by 361,658 million yen to 622,831 million yen (up 138.5%) compared to the end of the previous consolidated fiscal year as a result primarily of an increase in other capital surplus in connection with the issuance of new shares as part of the business integration.
(3) Information on the Future Outlook, Including Forecast of Consolidated Financial Results
Full-year consolidated performance forecasts of Coca-Cola Bottlers Japan Inc. for the fiscal year ending December 31, 2017 remain unchanged from the performance forecasts released on June 5, 2017.
3
2. Quarterly Consolidated Financial Statements and Main Notes
(1) Quarterly Consolidated Balance Sheets
(Millions of yen)
As of December 31, 2016 | As of September 30, 2017 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and deposits | 63,849 | 91,849 | ||||||
Trade notes and accounts receivable | 29,649 | 82,205 | ||||||
Marketable securities | 23,112 | 13,000 | ||||||
Merchandise and finished goods | 27,279 | 54,968 | ||||||
Work in process | 652 | 596 | ||||||
Raw materials and supplies | 1,998 | 10,114 | ||||||
Other | 17,333 | 40,624 | ||||||
Allowance for doubtful accounts | (287 | ) | (428 | ) | ||||
Total current assets | 163,587 | 292,931 | ||||||
Fixed assets | ||||||||
Property, plant and equipment | ||||||||
Buildings and structures, net | 31,162 | 73,233 | ||||||
Machinery, equipment and vehicles, net | 22,688 | 66,154 | ||||||
Sales equipment, net | 39,999 | 110,409 | ||||||
Land | 62,128 | 151,892 | ||||||
Construction in progress | 5 | 259 | ||||||
Other, net | 1,829 | 5,462 | ||||||
Total property, plant and equipment | 157,815 | 407,410 | ||||||
Intangible assets | ||||||||
Goodwill | 22,668 | 78,012 | ||||||
Franchise intangible | - | 50,748 | ||||||
Other | 4,889 | 14,981 | ||||||
Total intangible assets | 27,557 | 143,743 | ||||||
Investments and other assets | ||||||||
Investment securities | 20,144 | 30,581 | ||||||
Retirement benefit assets | 123 | 135 | ||||||
Other | 8,760 | 15,499 | ||||||
Allowance for doubtful accounts | (519 | ) | (724 | ) | ||||
Total investments and other assets | 28,508 | 45,491 | ||||||
Total fixed assets | 213,881 | 596,645 | ||||||
Total assets | 377,468 | 889,577 |
4
(Millions of yen)
As of December 31, 2016 | As of September 30, 2017 | |||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Trade notes and accounts payable | 15,990 | 44,114 | ||||||
Current portion of long-term borrowings | 17 | 2,138 | ||||||
Accrued income taxes | 5,717 | 8,201 | ||||||
Other accounts payable | 25,042 | 53,134 | ||||||
Provision for sales and promotion expenses | 308 | 405 | ||||||
Provision for bonuses | - | 3,354 | ||||||
Provision for directors’ bonuses | - | 101 | ||||||
Provision for environmental measures | - | 163 | ||||||
Other | 8,662 | 20,899 | ||||||
Total current liabilities | 55,739 | 132,513 | ||||||
Non-current liabilities | ||||||||
Bonds payable | 50,000 | 66,000 | ||||||
Long-term loans payable | 183 | 12,719 | ||||||
Net defined benefit liability | 3,505 | 24,932 | ||||||
Liabilities for directors’ and corporate auditors’ retirement benefits | 191 | 223 | ||||||
Provision for environmental measures | - | 90 | ||||||
Other | 6,675 | 30,265 | ||||||
Total non-current liabilities | 60,556 | 134,232 | ||||||
Total liabilities | 116,295 | 266,745 | ||||||
Equity | ||||||||
Shareholders’ equity | ||||||||
Capital stock | 15,231 | 15,231 | ||||||
Capital surplus | 109,072 | 450,639 | ||||||
Retained earnings | 137,404 | 154,088 | ||||||
Treasury stock | (4,593 | ) | (4,677 | ) | ||||
Total shareholders’ equity | 257,114 | 615,282 | ||||||
Accumulated other comprehensive income | ||||||||
Net unrealized gains(loss) on other marketable securities | 4,092 | 6,051 | ||||||
Deferred gains or losses on hedges | 77 | 560 | ||||||
Foreign currency translation adjustments | (3 | ) | 14 | |||||
Remeasurements of defined benefit plans | (522 | ) | (57 | ) | ||||
Total accumulated other comprehensive income | 3,643 | 6,570 | ||||||
Non-controlling interests | 414 | 978 | ||||||
Net assets | 261,173 | 622,831 | ||||||
Total liabilities and equity | 377,468 | 889,577 |
5
(2) | Quarterly Consolidated Statements of Income and Comprehensive Income |
(Quarterly Consolidated Statements of Income)
(First nine-month period of this fiscal year)
(Millions of yen)
Nine months ended September 30, 2016 | Nine months ended September 30, 2017 | |||||||
Net revenues | 353,710 | 645,088 | ||||||
Cost of goods sold | 170,213 | 310,837 | ||||||
Gross profit | 183,497 | 334,250 | ||||||
Selling, general and administrative expenses | 164,471 | 295,644 | ||||||
Operating income | 19,025 | 38,606 | ||||||
Non-operating income | ||||||||
Interest income | 37 | 15 | ||||||
Dividends income | 226 | 278 | ||||||
Share of profit of investees equity-method | 39 | - | ||||||
Rent income | 94 | 246 | ||||||
Gain on sales of valuable wastes | 84 | 246 | ||||||
Other | 151 | 232 | ||||||
Total non-operating income | 633 | 1,019 | ||||||
Non-operating expenses | ||||||||
Interest expense | 352 | 401 | ||||||
Investment loss on equity method | - | 37 | ||||||
Loss on disposal of property plant and equipment | 493 | 757 | ||||||
Other | 492 | 553 | ||||||
Total non-operating expenses | 1,339 | 1,749 | ||||||
Recurring income | 18,320 | 37,876 | ||||||
Extraordinary income | ||||||||
Gain on sale of property plant and equipment | 744 | 369 | ||||||
Gain on sale of investment securities | 17 | 16 | ||||||
Gain on step acquisitions | - | 188 | ||||||
Total extraordinary income | 761 | 574 | ||||||
Extraordinary loss | ||||||||
Loss on disaster | 1,052 | - | ||||||
Loss on impairment of investment securities | 148 | - | ||||||
Loss on abandonment of inventories | 648 | - | ||||||
Business integration-related expenses | - | 721 | ||||||
Total extraordinary loss | 1,849 | 721 | ||||||
Income before income taxes and minority interests | 17,232 | 37,730 | ||||||
Income taxes - current | 6,079 | 12,934 | ||||||
Income taxes - deferred | 479 | 1,014 | ||||||
Total income taxes | 6,559 | 13,949 | ||||||
Net profit | 10,673 | 23,780 | ||||||
Net profit (loss) attributable to non-controlling interests | 45 | (16 | ) | |||||
Net profit attributable to owners of parent | 10,627 | 23,797 |
6
(Quarterly Consolidated Statements of Comprehensive Income)
(First nine-month period of this fiscal year)
(Millions of yen)
Nine months ended September 30, 2016 | Nine months ended September 30, 2017 | |||||||
Net profit | 10,673 | 23,780 | ||||||
Other comprehensive income | ||||||||
Net unrealized gains (loss) on other marketable securities | (3,029 | ) | 1,959 | |||||
Deferred gains or losses on hedges | - | 508 | ||||||
Foreign currency translation adjustments | 59 | 18 | ||||||
Remeasurements of defined benefits | 724 | 440 | ||||||
Share of other comprehensive income of investees equity-method | (298 | ) | (0 | ) | ||||
Total other comprehensive income | (2,543 | ) | 2,926 | |||||
Comprehensive income | 8,129 | 26,707 | ||||||
Comprehensive income attributable to owners of the parent | 8,083 | 26,724 | ||||||
Non-controlling interests | 45 | (16 | ) |
7
(3) Notes to Quarterly Consolidated Financial Statements
(Notes Relating to Assumptions for the Going Concern)
Not applicable.
(Notes for Case Where Shareholders’ Equity underwent Significant Changes in Value)
The Company conducted a share exchange with Coca-Cola East Japan Co., Ltd. as of April 1, 2017, through which the Company became the wholly owning parent company and Coca-Cola East Japan Co., Ltd. became a wholly owned subsidiary company.
As a result, during the nine-month period of this fiscal year, capital surplus increased by 341,562 million yen, and is recorded at 450,639 million yen as of the end of the third quarter.
(Change in Significant Subsidiaries during the Current Period)
(Significant Change in the Scope of Consolidation)
The Company made Coca-Cola East Japan Co., Ltd. a wholly owned subsidiary through a share exchange as of April 1, 2017, and included it in the scope of consolidation on the same day.
(Application of Special Accounting for Preparing the Quarterly Consolidated Financial Statement)
Not applicable.
(Changes in Accounting Policies)
(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates, and changes in accounting estimates)
(Change in depreciation method and change in service life)
Previously, the Company and some of its consolidated subsidiaries mainly used the declining balance method to calculate depreciation of property, plant and equipment (excluding sales equipment and leased assets), but we have switched to the straight-line method from the first quarter of this fiscal year.
The business integration with Coca-Cola East Japan Co., Ltd. carried out as of April 1, 2017 gives us a stronger business platform, and by bringing together the know-how in the areas of sales and manufacturing that both companies have cultivated over the past years it will allow us to create an optimal production structure covering a wide geographical area. Consequently, as we expect to be able to benefit from the long-term, stable use of property, plant and equipment (excluding sales equipment and leased assets), using straight-line depreciation to distribute the expense over its service life will appropriately reflect the pattern of consumption of economic benefits for such property, plant and equipment, so we have therefore decided to change our depreciation method to the straight-line method.
The Company and some of its consolidated subsidiaries also used the opportunity provided by the change in our depreciation method to conduct a utilization study. Previously, we had set the key service life of manufacturing machinery and equipment at 10 years, but as a result of our study we have revised it to 7-20 years – a predicted economic life that more accurately reflects the reality of the situation – and have made changes extending into the future.
We also took the opportunity provided by the change in our depreciation method for property, plant and equipment to devaluate the residual value of property, plant and equipment after the elapse of its service life to a nominal value of one yen, from the first quarter of this consolidated fiscal year.
Compared to the previous method, the aforementioned changes have resulted in an increase in operating income, recurring income and income before income taxes and minority interests of 558 million yen, 532 million yen and 532 million yen, respectively, for the first nine-month period of this consolidated fiscal year.
Please refer to “2. Quarterly Consolidated Financial Statements and Main Notes (3) Notes to Quarterly Consolidated Financial Statements (Segment Information)” for the impact on segment information.
8
(Additional Information)
(Changes in Presentation)
(Quarterly Consolidated Statements of Income)
“Rent income” and “gain on sales of valuable wastes,” which were included in “other” in “non-operating income” in the first nine-month period of the previous fiscal year, are shown separately from the current period, considering their significant monetary impacts. To reflect this change in presentation, the Company has made certain reclassifications to its consolidated financial statements for the first nine-month period of the previous fiscal year.
As a result, 331 million yen, which was presented in “other” in “non-operating income” in the Consolidated Statements of Income for the first nine-month period of the previous fiscal year, has been reclassified as rent income (94 million yen), gain on sales of valuable wastes (84 million yen) and other (151 million yen).
(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
“Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26 dated March 28, 2016) is applied from the first quarter of this consolidated fiscal year.
(Segment Information)
First nine-month period of the previous fiscal year (January 1, 2016 – September 30, 2016) Information on net revenues and profits or losses by reported segment
(Millions of yen)
Soft drink business | Healthcare & skincare business | Total | |||
Net revenues | |||||
Net revenues-outside customers | 329,261 | 24,449 | 353,710 | ||
Net revenues and transfer-inter-segment | - | - | - | ||
Total | 329,261 | 24,449 | 353,710 | ||
Segment profit | 16,509 | 2,516 | 19,025 |
(Note) Net revenues and Segment profit are equivalent to Net revenues and Operating income in Quarterly Consolidated Statements of Income, respectively.
9
First nine-month period of this fiscal year (January 1, 2017 – September 30, 2017)
1. Information on net revenues and profits or losses by reported segment
(Millions of yen)
Soft drink business | Healthcare & skincare business | Total | |||
Net revenues | |||||
Net revenues-outside customers | 622,837 | 22,251 | 645,088 | ||
Net revenues and transfer-inter-segment | - | - | - | ||
Total | 622,837 | 22,251 | 645,088 | ||
Segment profit | 36,341 | 2,264 | 38,606 |
(Note) Net revenues and Segment profit are equivalent to Net revenues and Operating income in Quarterly Consolidated Statements of Income, respectively.
2. Matters relating to assets by reported segment
In connection with the Company making Coca-Cola East Japan Co., Ltd. its wholly-owned subsidiary as of April 1, 2017, the Company included Coca-Cola East Japan Co., Ltd., two of its subsidiaries and four affiliates of the Company accounted for under the equity method in the scope of consolidation, effective the same day. Mainly due to the impact of such inclusion, the amount of assets by reported segment in the soft drink business at the end of the first nine-month period of this fiscal year increased by 513,741 million yen year on year.
3. Matters relating to changes in the Company’s reported segments
(Change in depreciation method and change in service life)
As discussed in “2. Quarterly Consolidated Financial Statements and Main Notes (3) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies, etc.),” from the first quarter of this consolidated fiscal year the depreciation method for property, plant and equipment (excluding sales equipment and leased assets) was changed to the straight-line method. The key service life of machinery and equipment has been revised to 7-20 years, and changes have been applied into the future. Furthermore, from the first quarter of this consolidated fiscal year the residual value of property, plant and equipment after the elapse of its service life has been devaluated to a nominal value of one yen.
As a result of these changes, compared to the previous method, segment revenue for the first nine-month period of this fiscal year has increased by 541 million yen in the soft drink business and 17 million yen in the healthcare & skincare business.
4. Information on impairment loss of fixed assets or goodwill by reported segment
(Significant change in the amount of goodwill)
In connection with the Company making Coca-Cola East Japan Co., Ltd. its wholly-owned subsidiary as of April 1, 2017, goodwill has arisen with respect to the soft drink business.
The recorded amount of goodwill provisionally calculated in connection with the above is 58,154 million yen for the first nine-month period of this fiscal year.
10