1
Contacts:
Hideyuki Yamamoto, General Manager
Yuka
Kin,
Manager
Media and Investor Relations Division
Japan
Tobacco
Inc.
Tokyo:
+81-3-5572-4292
E-mail:
jt.media.relations@jt.com

FOR IMMEDIATE RELEASE

JT Posts Record Net Sales and EBITDA for
the Fiscal Year that Ended March 2009


TOKYO, April 30, 2009 --- Japan Tobacco Inc. (JT) (TSE: 2914) announced today
that the company posted record net sales and EBITDA
1
for the fiscal year that ended
March 31, 2009. Top-line growth achieved by the international tobacco business and
consolidation of Gallaher contributed to strong results for the period.

1. CEO Message

“Growth in our Global Flagship Brands
2
in the international tobacco business, in
addition to two consecutive years of increased domestic market share, has contributed
to a strong year of achievement,” said Hiroshi Kimura, President and CEO of JT.

“We
aim to carry our growth momentum into another year of progress, both with the
continued success of our international tobacco business, and further gains in market
share domestically.”

2. Consolidated Financial Results for the Fiscal Year that Ended March 31, 2009


Net sales and EBITDA increased to ¥6,832.3 billion and ¥646.2 billion,
respectively, as a result of top-line growth by the international tobacco business
and the consolidation of Gallaher and the Katokichi Group.

Operating income
3
and net income
4
decreased to ¥363.8 billion and ¥123.4 billion,
respectively, largely due to goodwill amortization related to acquisition of
Gallaher and the Katokichi Group.

The company’s board is recommending a year-end dividend of ¥2,800 to an
annualized rate of ¥5,400 per share. The annualized payout ratio excluding the
goodwill amortization exceeds 20 percent.

Units: Billions of Yen
1
EBITDA was calculated as operating income + depreciation of tangible fixed assets + amortization of
intangible fixed assets + amortization of long-term prepaid expenses + amortization of goodwill.
2
Global Flagship Brands (GFB) consist of eight brands: Winston, Camel, Mild Seven, Benson &
Hedges, Silk Cut, LD, Sobranie, and Glamour.
3
Operating income excluding goodwill amortization related to the international tobacco business and
the foods business was ¥469.3 billion yen.
4
Net income excluding goodwill amortization related to the international tobacco business and the
foods business was ¥228.9 billion yen.

Fiscal Year Ended
March 31, 2008
Fiscal Year Ended
March 31, 2009
Net change
(%)
Net sales including tax
6,409.7
6,832.3
6.6
EBITDA 602.0
646.2
7.3
Operating income
430.5
363.8
- 15.5
Net income
238.7
123.4
- 48.3

2


3. Results by Business Segment


Domestic Tobacco Business

Due to the continuing market decline and the introduction of the “taspo” age
verification system for cigarette vending machines, sales volume
5
for the domestic
tobacco business decreased 4.7 percent to 159.9 billion cigarettes, and net sales
declined to ¥3,200.4 billion, compared to the previous year. EBITDA decreased to
¥272.2 billion, due in part to increased sales promotions with a focus on over-the-
counter sales channels, which recorded a rise in sales following the introduction of
“taspo.”

JT posted increases in market share for two consecutive years to 65.1 percent. This
was achieved through focused investment in building the equity of the company’s key
brands, including Mild Seven, and in programs supporting sales in over-the-counter
channels. Market share for Mild Seven grew robustly to 32.3 percent.



5
Sales volume from both domestic duty free and the “China Division” were not incorporated in the
above figures, which totaled 3.6 billion cigarettes in the full year that ended March 31, 2009.
6
Net sales excluding tax does not account for sales of imported tobacco by TS Network Co., Ltd.

Fiscal Year Ended
March 31, 2008
Fiscal Year Ended
March 31, 2009
Net change
(%)
Net sales including tax
(billions of yen)
3,362.3
3,200.4 -
4.8
Net sales excluding tax
6

(billions of yen)
715.0
679.3 -
5.0
EBITDA
(billions of yen)
306.7
272.2 -
11.2
Operating income
(billions of yen)
222.3
188.2 -
15.3
Sales volume
(billions of cigarettes)
167.7
159.9 -
4.7

3

International Tobacco Business

The international tobacco business achieved solid growth in the full year that ended
December 31, 2008
7
, as a result of GFB-driven top-line growth and the consolidation
of the Gallaher acquisition. Net sales excluding tax and revenue from the distribution
business grew 16.5 percent to ¥1,102.3 billion. EBITDA increased by 24.8 percent to
¥337.9 billion. Due to goodwill amortization related to the acquisition of Gallaher,
operating income decreased by 14.9 percent to ¥174.7 billion. Operating income
showed an increase of 31.0 percent to ¥269.0 billion, when the impact of amortization
is excluded. Sales volume grew 17.3 percent to 452.3 billion cigarettes and GFB sales

increased 20.8 percent to 245.5 billion cigarettes.

Sales volume for Winston grew 13.8 percent due to robust sales in Russia, Turkey,
Ukraine, Spain, France, Italy and the Near East. Camel sales volume rose 10.3 percent,
supported by strong results in Italy, Russia and Spain. Mild Seven posted a sales
volume increase of 11.4 percent during the period with gains in Korea, Taiwan, Russia
and Malaysia. In addition, LD and Glamour had robust performances in Russia.
Jan. – Dec.
2007
8

Jan. – Dec.
2008
Net change
(%)
Net sales including tax
(billions of yen)
2,639.9
3,118.3 18.1
Net sales excluding tax
9

(billions of yen)
945.9
1,102.3 16.5
EBITDA
(billions of yen)
270.7
337.9 24.8
Operating income
(billions of yen)
205.3
174.7 -14.9
Total sales volume
(billions of cigarettes)
385.6
452.3 17.3
GFB sales volume
(billions of cigarettes)
203.2
245.5 20.8

For Reference Only: Like-for-Like Performance
10
Jan. – Dec.
2007
Jan. – Dec.
2008
Net change
(%)
Net sales excluding tax
11

(millions of US$)
9,076
10,652 17.4
EBITDA (before royalty payment to JT)
(millions of US$)
2,830
3,452 22.0
Total sales volume
(billions of cigarettes)
430.2
452.3 5.1
GFB sales volume
(billions of cigarettes)
216.6
245.5 13.3
7
The results of the international tobacco business for the full year (from January to December 2008)
were incorporated into JT’s consolidated financial results that ended March 31, 2009
8
Gallaher’s results were incorporated into results of JT’s international tobacco business as of April 18,
2007.
9
Net sales excluding tax does not account for revenue from the distribution business in JT’s
international tobacco business.
10
The like-for-like comparison discussed in this press release is based on a theoretical assumption that
incorporates results for the Gallaher business from January 1, 2007 to April 17, 2007, despite Gallaher’s having become a consolidated JT subsidiary as of April 18, 2007.
11
Net sales excluding tax does not account for revenue from the distribution business in JT’s
international tobacco business.

4

Pharmaceutical Business

Net sales for JT’s pharmaceutical business increased to ¥56.7 billion, and EBITDA
improved to ¥4.8 billion. This was due to revenue received as an upfront payment for
“JTT-305,” a compound for the treatment of osteoporosis licensed to Merck, and
milestone revenue related to the development of “JTT-705,” a drug licensed to Roche
for the treatment of dyslipidemia.

The company currently has nine compounds in clinical trial, including “JTK-656,” for
the treatment of HIV infection, and “JTT-751” for the treatment of hyperphosphatemia,
both of which entered clinical trial within the past year. The development of four
compounds
12
was terminated during the fiscal year.

Units: Billions of Yen

Fiscal Year Ended
March 31, 2008
Fiscal Year Ended
March 31, 2009
Net change
(%)
Net sales
49.0
56.7
15.7
EBITDA -
6.2
4.8
-
Operating income
- 9.6
1.0
-
Foods Business

While increases were recorded in net sales and EBITDA for the foods business,
attributed to the consolidation of the Katokichi Group and the introduction of lease
accounting, respectively, an operating loss was incurred primarily due to goodwill
amortization related to the acquisition of the Katokichi Group. Excluding the impact
of goodwill amortization, operating loss was contained to ¥1.2 billion

The processed foods and seasonings businesses were restructured around the
Katokichi Group, and the integration was completed on April 1, 2009, as previously
scheduled. In line with JT’s continued efforts to improve its food safety measures, the
company has implemented proactive policies to initiate pesticide testing of imported
frozen food products, and to disclose ingredient information.

Units: Billions of Yen
12
Development was discontinued for “JTT-553” for the treatment of obesity, “JTK-652” for the
treatment of hepatitis C, “JTT-552” for the treatment of hyperuricemia, and “JTT-651” for the treatment of diabetes.

Fiscal Year Ended
March 31, 2008
Fiscal Year Ended
March 31, 2009
Net change
(%)
Net sales
336.4
435.9
29.6
EBITDA 8.3
17.0
103.9
Operating income
0.6
- 11.4
-

5

4. Outlook for the Fiscal Year Ending March 31, 2010 (consolidated)

For the fiscal year ending March 31, 2010, net sales and EBITDA are forecasted to
decline, largely due to decreasing sales volume by the domestic tobacco business and
adverse currency effects on the international tobacco business.

Units: Billions of Yen
Fiscal Year
Ended March
31, 2009
Actual
(A)
Fiscal Year
Ending March
31, 2010
Forecast
(B)
Difference
(B)-(A)
Net
Change
(%)
Net Sales including Tax

6,832.3
6,000.0
- 832.3
- 12.2

Net sales excluding Tax
13
2,243.6
1,985.0
-258.6
-11.5
EBITDA

646.2
475.0
- 171.2
- 26.5
Operating Income

363.8
244.0
- 119.8
- 32.9
Net Income

123.4
100.0
- 23.4
- 19.0



Domestic Tobacco Business

Net sales excluding tax and EBITDA are projected to decrease to ¥619.0 billion and
¥246.0 billion, respectively. This is due to a reduction in forecasted sales volume, of
4.6 percent to 152.5 billion cigarettes, as a result of declining overall market volume
and the remaining effects of the “taspo” age verification system for cigarette vending
machine purchases. In order to mitigate the effects, the company aims to achieve
another year of growth in market share through aggressive brand and sales channel
strategies, with a focus on Mild Seven, Seven Stars and Pianissimo, and over-the-
counter channels.
International Tobacco Business

With forecasted net sales excluding tax and EBITDA of ¥890.0 billion and ¥209.0
billion, respectively, the international tobacco business is expected to be affected by
the strengthening of the dollar and the yen against the company’s key currencies. The
company is forecasting the dollar denominated EBITDA in the international tobacco
business to be negatively impacted by US$1.6 billion for the year ending March 31,
2010. Further, when the forecasted EBITDA is stated in yen, there is an adverse
currency impact amounting to ¥21 billion. The international tobacco business will
continue to contribute as the growth engine to the JT Group, through its well-balanced
brand portfolio and geographical footprint, aiming to significantly exceed 10 percent
EBITDA growth at constant rates of exchange.

13
Net sales excluding tax does not account for imported tobacco, domestic duty free and the “China
Division,” in JT’s domestic tobacco business, in addition to the distribution business, private label products, contract manufacturing and other peripheral businesses in the international tobacco business.