Financial Results
For the Three Months Ended March 31, 2008—Consolidated
April 30, 2008

Company name

Sapporo Holdings Limited

Security code
Listings
URL
Representative
Contact

2501
Tokyo Stock Exchange (First Section); Sapporo Securities Exchange
http://www.sapporoholdings.jp/english/
Takao Murakami, President and Group CEO
Tsutomu Kamijo, Director and General Manager of the Corporate
Planning Department+81-3-5423-7407

Telephone

1. Consolidated Financial Results for the Three Months Ended March 31, 2008
(January 1, 2008 – March 31, 2008)
1) Operating Results(amounts rounded down to the nearest million yen;percentage figures represent year-on-year changes)
Net sales
million yen

Three months ended
March 31, 2008
Three months ended
March 31, 2007
Year ended
December 31, 2007%

Ordinary income

million yen

million yen%%

Net income
million yen%

91,652

1.6(1,300)—(2,541)—(3,344)—90,196

5.7(4,771)—(5,847)—(3,981)—

449,011

Three months ended
March 31, 2008
Three months ended
March 31, 2007
Year ended
December 31, 2007

Operating income

12,362

8,118

Net income
per share

Diluted net
income per share

yen

yen

(8.53)—(10.30)

—

14.10

13.76

5,508

2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

Three months ended
March 31, 2008

545,282

113,65920.8

289.08Three months ended
March 31, 2007

569,303

116,82220.5

297.71

Year ended
December 31, 2007

561,858

125,18922.3

319.071

3) Cash Flows
Cash flows from
Cash flows from
Cash flows fromoperating activities investing activities financing activities

Cash and cash
equivalents at
end of period

million yen

million yen

million yen

million yen

Three months ended
March 31, 2008

(4,285)(8,105)

15,326

8,569

Three months ended
March 31, 2007

2,440

(4,826)

2,199

8,087

Year ended
December 31, 2007

30,690(13,495)(19,568)

5,881

2. Forecast of Consolidated Earnings for the Year Ending December 31, 2008
(January 1, 2008 – December 31, 2008)

Net sales

Operating income(percentage figures represent year-on-year changes)
Net income
Ordinary income
Net income
per share

million yen%

million yen%

million yen%

million yen%

yenInterim

208,000(1.6)(1,000)－(2,700)

－

6,900

－

17.59

Full year

449,200

0.0

13,500

9.2

9,200

13.3

12,800

132.4

32.64

Note: Forecast of business results stated above has not been changed from the forecast
disclosed on February 15, 2008.

3. Others
1) Changes affecting the status of significant subsidiaries (scope of consolidation): None
2) Use of simplified accounting methods: Yes
3) Changes in accounting policies from previous period: Yes
Note: For details, see page 8 under subsection 4, “Other Matters”, of the “Results of Operations
and Financial Statements” section below.
Appropriate Use of Earnings Forecasts and Other Important Information
This document contains projections and other forward-looking statements based on
information available to the Company as of the date of this document. Actual results may
differ from forecasts depending on various factors. For the Company’s earnings forecasts,
please refer to page 8 under subsection 3, “Consolidated Outlook for the Fiscal Year Ending
December 31, 2008”, of the “Results of Operations and Financial Statements” section below.

2

Results of Operations and Financial Statements
1. Review of Consolidated Results of Operations
Net sales for the first quarter (January 1, 2008 – March 31, 2008) were up¥1.4 billion, or 2% year over year, to ¥91.6 billion, while we recorded an
operating loss of ¥1.3 billion (last year’s first-quarter operating loss was ¥4.7
billion). We also recorded an ordinary loss of ¥2.5 billion (¥5.8 billion loss inthe first quarter last year) and a net loss for the quarter of ¥3.3 billion (¥3.9
billion loss in the first quarter last year).
Although sales volume declined from the previous year in the Soft Drinks
business, where we implemented reforms to the cost structure, net sales in theJapanese Alcoholic Beverages business exceeded last year’s, and performance
was strong in the Overseas Alcoholic Beverages, Restaurants, and Real Estatebusinesses.
1) Segment Information

Impact of Seasonal Factors
The Group’s operating results vary significantly by season, owing to the factthat demand in the Alcoholic Beverages, Soft Drinks, and Restaurants
businesses are highest during the summer months. As a result, first quarter
net sales tend to be lower than net sales in other quarters.

Alcoholic Beverages (Japan)
Net sales in the Japanese Alcoholic Beverages business increased by ¥3.3
billion, or 5% year over year, to ¥66.0 billion, while the business recorded an
operating loss of ¥1.4 billion (last year’s first-quarter operating loss was ¥4.3
billion).
Total demand in the Japanese beer market during the first quarter was
limited to an estimated 98.7% compared to the same period last year. This
reflected sales-price hikes by industry competitors in February and March,
prompted by a rise in prices in the food sector that began at the start of the
year.

3

Against this backdrop, demand for Yebisu brand products, our premium beeroffering in the Japanese alcoholic beverages market, rose 12% compared withthe first quarter last year. Along with the launch of a new product, Beer Fine,sales of commercial-use kegs increased 9% year over year. These factors
combined with the re-launch of our flagship product, Draft One, in the new
genre category, allowing us to outperform total demand.
Net sales in the wine category increased year over year, supported by firm
growth in total demand for domestic and imported wines, the strong debut of
Aroma Rouge and Aroma Blanc, new domestic wine products, as well as theeffects of price increases on imported wines.
The shochu category saw 14% year over year growth in revenues, underpinned
by solid sales of the Triangle brand and large-volume products.
With regard to costs, although increases in the prices of materials and raw
ingredients—primarily imported malt and aluminum cans—placed upward
pressure on the cost of goods sold, efforts to curtail advertising and sales
promotion expenses, as well as initiatives to reduce equipment costs and otherexpenses resulted in year-over-year growth in operating income.

Alcoholic Beverages (Overseas)
Sales volume in the Overseas Alcoholic Beverages business was firm, but theappreciation of the yen against the U.S. dollar had a negative impact on post
yen-conversion amounts. Net sales declined ¥0.1 billion, or 3% year over year,to ¥4.9 billion, and the business recorded an operating loss of ¥0.2 billion (lastyear’s first-quarter operating loss was ¥0.1 billion).
In the North American beer market, estimates call for total demand to growslightly, so overall competition in the market is intensifying. Still, demand forcertain premium category products, such as domestic craft beers, is growing
firmly. However, the U.S. economy has been experiencing a slowdown sincelast year triggered by the subprime mortgage crisis, and there are concernsthat this will impact consumer spending going forward. Meanwhile, the beermarket is growing overall in Asian countries and other markets outside North
America.

4Against this backdrop, we engaged in aggressive sales efforts in the premium
market and other markets exhibiting growth. This year we launched sales of
Yebisu beer in the U.S. high-end market. As a result, Canada’s Sleeman
Breweries’ sales volume was 107% of last year’s first-quarter levels, while
Sapporo USA performed firmly with sales volume at 103% of last year’s
first-quarter levels. Sales volume from exports to other countries also rose to154% of last year’s first-quarter levels.

Soft Drinks
Net sales in the Soft Drink business declined ¥2.4 billion, or 24% year overyear, to ¥7.9 billion, and the business recorded an operating loss of ¥0.7 billion(last year’s first-quarter operating loss was ¥1.0 billion).
As in the previous year, the soft drinks industry was led by strong sales ofcarbonated beverages and mineral water products, with total demand
estimated to be around 101% of last year’s first-quarter levels.
In this environment, to improve our cost structure and ensure that sales
efforts are geared toward earnings, we began employing a select-and-focus
strategy, which includes the review of unprofitable accounts. As a result, sales
volumes were lower than in the previous year. However, with the aim ofbuilding high value-added brands, we launched both Hop Kenkyujo Areru
Smooth, which uses our own special ingredients, and the Ocean Spray
Cranberry series, which expanded our customer reach and firmly established
our presence in the market. We also carried out a nationwide launch of thecanned coffee brand Kissui, which performed strongly in test marketing
campaigns run in Hokkaido beginning last year, and sales for this producthave been firm.
We also accelerated efforts to comprehensively restructure our businesstoward making us more competitive in the future, and pushed further ahead
with the shift to a more stable earnings structure through initiatives to reduce
fixed costs by revising our organizational structure and personnel system,working to efficiently use sales promotion expenses, and reducing vending
machine costs.

Restaurants

5

Net sales in the Restaurants business rose ¥0.4 billion, or 8% year over year,to ¥6.6 billion, while the business recorded an operating loss of ¥0.1 billion(last year’s first-quarter operating loss was ¥0.3 billion).
In the restaurant industry, cases of contaminated ingredients in Chinese
frozen food products emerged just as the public was already becoming
increasingly concerned about food safety, and this has heavily impacted thefamily restaurant segment. Year-over-year growth in the fast food segment has
also run its course, causing the slowdown to intensify.
In this environment, we took initiatives in our restaurants business to improve
the quality of our food and service based on the three key ideas of safety, peaceof mind, and authentic food, and we also made efforts to keep costs down.
Existing establishments performed strongly during the period. Japaneserestaurants such as Kakoiya and Irimoya enjoyed strong growth throughFebruary, as the weather was colder than normal. Subsequently, warmer
temperatures in March resulted in higher sales in the beer hall segment.
Toward the end of March, we opened J’s Table Ginza 8-Chome, the second
establishment of its type, in a popular entertainment district of Tokyo.
Meanwhile, we closed three establishments during the period, including Ginza
Komatsu, which had been open for 35 years, in conjunction with the rebuildingof the building in which it was located. At the end of the period, we had 199
establishments in operation.
We held cost of goods sold to levels on par with the previous year by using a
Web ordering system to pursue the advantages of scale and offset thecontinuing rise in prices of food ingredients. We also improved the personnel
cost ratio and expense ratios.

Real Estate
Net revenue in the Real Estate business rose by ¥0.2 billion, or 4% year overyear, to ¥6.0 billion, while operating income grew by ¥0.2 billion, or 15% year
over year, to ¥1.9 billion.
Within the real estate sector, conditions have become increasingly tough in the6housing market and in regional cities as it gradually becomes clear that theeconomy is slowing down. However, the office rental market remains firm as
vacancy rates, particularly in central Tokyo, remain low, and rent levels
continue to improve even though there has been a slight cooling off.
Against this backdrop, we maintained high occupancy rates and succeeded inraising rents in Yebisu Garden Place and other existing properties primarily in
the Tokyo area. Additionally, commercial rental property facilities around
Sapporo Garden Park in Sapporo City (which opened last year) contributed tothe increase in net revenue. Moreover, although energy costs increased, costs
decreased as a result of a decline in depreciation expenses and other factors.
2. Financial Condition
1) Assets, Liabilities, and Net Assets
Total consolidated assets at the end of the first quarter were down ¥24.0
billion compared with the end of the first quarter last year to ¥545.2 billion,
reflecting a decline in fixed assets due to a once-off depreciation charge on
Sapporo Breweries’ Osaka plant and lower unrealized capital gains on
investment securities.
Liabilities stood at ¥431.6 billion, a year-over-year decline of ¥20.8 billion.
Although bonds increased due to the issuance of bonds, the decline is
attributable to a decrease in short-term bank loans and the current portion of
long-term debt as well as a decrease in liquor tax payable and trade accounts
payable, owing to the last day of the first quarter being a bank trading day.
The balance of net assets was ¥113.6 billion, a year-over-year decline of ¥3.1
billion. Although retained earnings increased, the decline is attributable to adecrease in both the unrealized holding gain on securities and foreign currencytranslation adjustments.
2) Cash FlowsThe consolidated balance of cash and cash equivalents at the end of the firstquarter stood at ¥8.5 billion

7

The following presents consolidated cash flow figures for the first quarter
together with an overview of factors that affected each category.

Cash Flows from Operating Activities
Net cash used in operating activities was ¥4.2 billion. This is mainly due to aquarterly loss before income taxes and minority interests of ¥5.0 billion and adecrease in notes and accounts receivable of ¥14.1 billion, which were offset bya ¥14.6 billion decrease in liquor tax payable.

Cash Flows from Investing Activities
Net cash used in investing activities was ¥8.1 billion. This primarily reflects
outflows of ¥6.2 billion for the acquisition of property, plant and equipmentand ¥1.7 billion for the purchase of intangibles.

Cash Flows from Financing Activities
Net cash provided by financing activities was ¥15.3 billion. This primarilyreflects a ¥15.9 billion increase in short-term bank loans and ¥3.8 billion inproceeds from the issuance of bonds.
3. Consolidated Outlook for the Fiscal Year Ending December 31, 2008
Performance forecasts for the fiscal year ending December 31, 2008, remainunchanged from those released on February 15, 2008.
4. Other Matters
1) Changes affecting the status of significant subsidiaries (scope of
consolidation)
N/A
2) Use of simplified accounting methods• Available-for-sale securities were valued at market value at the end of
March, but impairment losses have not been recognized.
• Depreciation expenses represent the portion attributable to the firstquarter of depreciation expenses expected over the fiscal year.

83) Changes in accounting policies from previous consolidated accounting
periodAccounting method for net sales
Sales incentives and commissions on soft drinks were previously
accounted for under selling, general and administrative expenses. However,
we have now established an invoice management system for soft drinksthat enables us to display sales amounts with sales incentives andcommissions directly deducted on invoices, and a portion of sales incentives
and commissions are therefore deducted from sales before they arerecorded in the accounts.
The effect of this change in accounting method was to reduce both net
sales and selling, general and administrative expenses by ¥137.2 billion
compared to what they would have been with the previous method, but thechange does not impact operating income, ordinary income, or income
before income taxes and minority interests.
The impact on segment information is discussed below subsection 5,“Segment Information”.

95 Consolidated financial statement
1.Consolidated Balance Sheets(in millions of yen, except percentages)
As of March 31, 2007 (A)AmountAssetsI Current assets
1 Cash and cash equivalents
2 Notes and accounts receivable - trade
3 Inventories
4 Other current assets
5 Allowance for doubtful receivables
Total current assets
II Fixed assets
1 Property, plant and equipment
2 Intangible assets
3 Investments and other assets
Total fixed assets
Total assets
Liabilities
I Current liabilities
1 Notes and accounts payable
2 Short-term bank loans and current
portion of long-term debt
3 Liquor taxes payable
4 Other
Total current liabilities
II Long-term liabilities
1 Bonds
2 Long-term bank loans
3 Employees' retirement benefits
4 Other
Total long-term liabilities
Total liabilities% of total

As of March 31, 2008 (B)Amount% of total(B)-(A)
AmountAs of December 31, 2007
Amount% of total

8,087

8,569

482

6,511

54,33654,842506

69,68526,518
17,681(210)
106,41218.7

22,69925,995(228)
111,838

20.5(3,818)
8,274
(17)
5,426

24,041
17,754(275)
117,717

21.0

81.3
100.0

340,083
30,74862,611
433,443545,282

79.5
100.0

(15,558)(2,345)(11,543)(29,446)(24,020)

338,504
33,36872,267444,141
561,858

79.0
100.0

355,641
33,094
74,155462,890569,303

25,901

21,453(4,448)26,121

104,938

79,644(25,293)

64,41528,00890,017
248,866

43.7

23,38989,369213,857

39.2(4,619)(647)(35,009)

38,14094,824
223,501

39.8

49,72077,531
15,626
60,737
203,614452,480

35.8
79.5

73,55374,67914,39955,133
217,765431,62240.0
79.2

23,833(2,851)(1,227)(5,603)
14,150(20,858)

69,71074,33915,13553,984
213,168
436,669

37.9
77.7

Net Assets
I Shareholders' equity
1 Common stock
2 Capital surplus
3 Retained earnings
4 Treasury stock, at cost
Total shareholders' equity
II Valuation and translation
adjustments

53,88146,301
4,599(656)
104,126

9.5
8.1
0.8
(0.1)
18.3

53,88646,313
8,987(873)
108,313

9.9
8.5
1.7
(0.2)
19.9

5
11
4,387
(216)
4,187

53,88646,31014,292(848)
113,641

9.6
8.2
2.5
(0.1)
20.2

1 Unrealized holding gain on
securities

13,089

2.3

6,733

1.2

(6,355)

9,640

1.7

2 Foreign currency translation
adjustments

(393)

(0.1)

(1,683)(0.3)(1,290)

1,853

0.4

12,695

2.2

5,050

0.9

(7,645)

11,493

2.1－
116,822569,303

－
20.5
100.0

295
113,659545,282

0.0
20.8
100.0

295
(3,162)(24,020)53
125,189
561,858

0.0
22.3
100.0

Total valuation and translation
adjustments
III Minority Interests
Total net assets
Total liabilities and net assets

102.Consolidated Statements of Income(in millions of yen except percentages)
Three months ended March 31,
2007 (A)Three months ended March
31, 2008 (B)Amount90,19662,787
27,408% of total

100.0
69.6
30.4

Amount
91,65265,922
25,729III Selling, general and administrative expenses

32,17935.7

Operating income (loss)
IV Non-operating income
1 Interest and dividend income
2 Other
V Non-operating expenses
1 Interest expense
2 Loss on disposal of inventories
3 Equity in loss of affiliates
4 OtherOrdinary income (loss)
VI Extraordinary gains
1 Gain on sales of property, plantand equipment(4,771)

(5.3)

329

0.4

I Net sales
II Cost of sales
Gross profit

2 Gain on sales of investment
securities
3 Reversal of provision for doubtfulreceivables
4 Other
VII Extraordinary losses
1 Loss on disposal of property,
plant and equipment
2 Loss on impairment of property,
plant and equipment
3 Depreciation expenses resulting fromrevision of residual value
4 Provision for gift voucher redemptions
5 Other
Income (loss) before income taxes and minority
interests
Current income taxes
Income tax adjustment
Minority loss
Net income (loss)

165
164
1,053
93
114
145

1,406
(5,847)

138
318

1.6
(6.5)

1,066
148
21
461

(B)-(A)

Fiscal year ended December
31, 2007

1,456
3,086
(1,630)

Amount449,011305,078
143,933% of total

100.0
71.9
28.1

27,02929.5(5,101)

131,570

29.3(1,300)

(1.4)

3,470

12,362

2.8

457

0.5

127

2,306

0.5

6,550
8,118

1.5
1.8

7,596

1.7

15,493

3.5

221

0.0

(5,285)
1
5,508

(1.2)
0.0
1.2

1,697
(2,541)% of total Amount

1.9
(2.8)

291
3,306

1,026
1,280
4,280
858
132
1,280

5

55

6,769

19

1

766

78

－
－

25

0.0

－

27
134

0.1

109

32

179

478

1,300

－

－

6,939

－

－

6,583

－
0

90
(2,107)

746
1,458

179

0.2

(6,001)(6.7)(2,017)2(3,981)

(2.3)
0.0
(4.4)

11

23
(1,761)

100.0
67.9
32.1

2,683

2.9

2,504

(5,090)

(5.6)

911

(1,737)
7(3,344)

(1.9)
0.0
(3.7)

279
5
637

－
670

3,349
(8,634)

3.Statement of Changes in Shareholders’ CapitalThree Months Ended March 31, 2007

(January 1, 2007 – March 31, 2007)(millions of yen)
Shareholders' capital

Common stock Capital surplus
Balance as of December 31,
2006
Changes during period
Issuance of new shares
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of March 31,
2007

50,06642,484

3,815

3,815

Retainedearnings
10,472

Treasury stock

Total
shareholders'
capital(571)

102,451

(86)

7,630
(1,890)(3,981)(86)

1

3(1,890)(3,981)
1

3,815

3,817

(5,872)

(84)

1,674

53,88146,301

4,599

(656)

104,126

Valuation and translation adjustments
Net unrealized
gains (losses) onother securities
Balance as of December 31,
2006
Changes during period
Issuance of new shares
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of March 31,
2007

11,318Foreigncurrency
adjustments

Total valuationand translation
adjustments(276)

11,041

Minority
interests

Total net assets

2

113,495
7,630(1,890)(3,981)
(86)
3

1,771

(116)

1,654

(2)

1,651

1,771

(116)

1,654

(2)

3,326

13,089(393)

12,695－

116,82212

Statement of Changes in Shareholders’ CapitalThree Months Ended March 31, 2008

(January 1, 2008 – March 31, 2008)(millions of yen)
Shareholders' capital
Retainedearnings

Common stock Capital surplus
Balance as of December 31,
2007
Changes during period
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of March 31,
2008

53,88646,31014,292

Treasury stock

Total
shareholders'
capital(848)

113,641(28)(1,960)(3,344)(28)

4

7(1,960)(3,344)2－

2(5,305)(24)(5,327)53,88646,313

8,987

(873)

108,313

Valuation and translation adjustments
Net unrealized
gains (losses) onother securities
Balance as of December 31,
2007
Changes during period
Issuance of new shares
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of December 31,
2008

9,640

Foreigncurrency
adjustments

Total valuationand translation
adjustments

1,853

11,493

Minority
interests

Total net assets

53

125,189(1,960)(3,344)(28)
7(2,906)(3,536)(6,443)241(6,201)(2,906)(3,536)(6,443)

241(11,529)

6,733(1,683)

5,050

295

113,659

13

Statement of Changes in Shareholders’ CapitalYear ended December 31, 2007

(January 1, 2007 – December 31, 2007)(millions of yen)
Shareholders' capital
Retainedearnings

Common stock Capital surplus
Balance as of December 31,
2006
Changes during period
Issuance of new shares
Cash dividends
Increase in retained
earnings due to increase in
number of consolidated
subsidiaries
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of December 31,
2007

50,06642,484

3,820

3,820

Treasury stock

10,472

(571)

Total
shareholders'
capital102,451(1,890)7,640(1,890)

202

202

5,508
(284)

5,508
(284)

7

12

5

3,820

3,825

3,820

(277)

11,18953,88646,31014,292(848)

113,641

Valuation and translation adjustments
Net unrealized
gains (losses) onother securities
Balance as of December 31,
2006
Changes during period
Issuance of new shares
Cash dividends
Increase in retained
earnings due to increase in
number of consolidated
subsidiaries
Net income
Purchase of treasury stock
Disposition of treasurystock
Net change in items otherthan shareholders’ capitalduring period
Total changes during period
Balance as of December 31,
2007

11,318Foreigncurrency
adjustments

Total valuationand translation
adjustments(276)

11,041

Minority
interests

Total net assets

2

113,495
7,640(1,890)
202
5,508
(284)
12

(1,677)

2,129

452

51

503

(1,677)

2,129

452

51

11,693

9,640

1,853

11,493

53

125,18914

Consolidated Statements of Cash Flows(in millions of yen, except percentages)
Three months ended Three months ended Fiscal year ended
March 31, 2007
March 31, 2008
December 31, 2007
AmountAmountAmountI Cash flows from operating activities
1 Income (loss) before income taxes and minority interests
2 Depreciation and amortization
3 Depreciation expenses resulting from revision of residual value
4 Loss on impairment of property, plant and equipment
5 Decrease in employees’ retirement benefits
6 Decrease in allowance for doubtful receivables
7 Interest and dividend income
8 Interest expense
9 Gain on sales of property, plant and equipment
10 Loss on sales and disposal of property, plant and equipment
11 Decrease in notes and accounts receivable - trade
12 (Increase) decrease in inventories
13 Decrease in notes and accounts payable
14 Decrease in liquor taxes payable
15 Other
Sub total
16 Interest and dividends received
17 Interest paid
18 Income taxes paid
Net cash provided by (used in) operating activities
II Cash flows from investing activities
1 Purchases of investment securities
2 Proceeds from sales of investment securities
3 Purchases of property, plant and equipment
4 Proceeds from sales of property, plant and equipment
5 Purchases of intangibles
6 Increase in long-term loans receivable
7 Collection of long-term loans receivable
8 Other
Net cash provided by (used in) investing activities
III Cash flows from financing activities
1 Increase (decrease) in short-term bank loans
2 Proceeds from long-term debt
3 Repayment of long-term debt
4 Proceeds from issuance of bonds
5 Redemption of bonds
6 Net increase (decrease) in commercial paper
7 Cash dividends paid
8 Other
Net cash provided by (used in) financing activities
IV Effect of exchange rate changes on cash and cash equivalents
V Net increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of year
VII Cash and cash equivalents of additional consolidated
subsidiaries
VIII Cash and cash equivalents at end of year15

(6,001)
5,757
－
－
(675)
(11)
(165)
1,053
(5)
179
19,248(2,137)(3,014)(10,263)
204
4,167
384
(875)
(1,236)2,440(5,090)
5,629
－
－
(736)
(73)
(138)
1,066
(55)
478
14,152715(4,347)(14,645)
1,936(1,105)383(782)(2,781)(4,285)

221
24,526
6,583
6,939(1,166)(295)(1,026)
4,280(6,769)
1,300
4,387
777
(3,015)(207)(248)
36,288991(4,237)(2,350)30,690(34)
779(4,441)8(1,210)(67)
104
35(4,826)(588)
101(6,269)60(1,726)
(14)
100
230
(8,105)

(250)
2,804
(17,815)7,206(2,067)(74)
414(3,711)(13,495)

22,7794,000(22,952)－－－(1,544)
(83)
2,199
(9)
(195)
8,282

15,97910,000(9,064)3,843－(4,000)(1,660)228
15,326
(248)
2,687
5,881

(4,999)24,001(50,335)
19,925(10,000)
4,000(1,888)(271)(19,568)(43)(2,416)
8,282

－

－

15

8,087

8,569

5,881

5. Segment Information
Segment Information by Business(millions of yen)

Consolidated

Corporateandeliminations

67,761

10,431

6,161

5,841

90,196－

90,196(2) Intra-group sales
and transfers

1,356

29

－

649

2,035

(2,035)－

69,118

10,460

6,161

6,490

92,231(2,035)90,19673,631(4,513)

11,541(1,080)

6,474
(312)

4,813
1,677

96,461(4,229)(1,493)(541)

94,967(4,771)

Total

Soft
Drinks(1) Operating
revenues

RealEstateAlcoholicbeverages

Restaurants

Three months ended March 31, 2007
(January 1, 2007 – March 31, 2007)

I Net sales and operating
expenses
Net sales

Total
Operating expenses
Operating income (loss)(millions of yen)

Consolidated

Corporate andeliminations

Total

Real Estate

Restaurants

Soft Drinks

Alcoholic
Beverages

Three months ended March 31, 2008
(January 1, 2008 – March 31, 2008)

I Net sales and operating
expenses
Net sales(1) Operating revenues

71,011

7,941

6,628

6,072

91,652－91,652(2) Intra-group sales
and transfers

1,170

31

－

616

1,817

(1,817)－

72,181

7,972

6,628

6,688

93,470(1,817)91,65273,929(1,748)

8,699
(727)

6,772
(143)

4,759
1,928

94,161(690)(1,208)(609)

92,952(1,300)Total
Operating expenses
Operating income (loss)16

(millions of yen)

Consolidated

Corporateandelimination

Total

Real
EstateRestaurants

Soft
DrinksAlcoholic
Beverages

Fiscal year ended December 31, 2007
(January 1, 2007 – December 31, 2007)

I Net sales and operating
expenses
Net sales(1) Operating revenues

343,670

52,23928,954

24,147 449,011(2) Intra-group sales and

6,323

330

－

349,993

52,56928,954

26,787 458,305(9,293) 449,011

342,139

53,40828,29819,714 443,560(6,912) 436,648

7,854

(839)

656

7,073

(2,381)

334,827

9,618

Depreciation and amortizatio 15,525

425

799

7,776

24,526－

24,526

Loss on impairment

204

570

214

5,950

6,939

－

6,939

Capital expenditures

13,988

394

1,706

3,458

19,548－19,548

2,639

9,293

－ 449,011(9,293)－transfers
Total
Operating expenses
Operating income (loss)

14,744

12,362II Assets, depreciation andamortization, impairment andcapital expenditures
Identifiable assets

14,542 187,815 546,804

15,053 561,858

Notes:
1. Segment classifications reflect the similarity of constituent businesses and take into
account standard industry classifications in Japan.
2. Main products in each segment
Business Segment
Alcoholic Beverages

Main Products
Beer, happoshu and other beverages, wine, whiskey, shochu and other pro
distribution, brewing equipment

Soft Drinks
Restaurants
Real EstateSoft drinks and other non-alcoholic beverages
Operation of beer halls and restaurants
Real estate leasing, real estate sales, operation of commercial facilities,
utility supplies, and fitness clubs

3. Unallocated operating expenses included in “Corporate and eliminations”
569 million yen at March 31, 2007, 621 million yen at March 31, 2008, and 2,477
million yen at December 31, 2007.
These are principally operating expenses incurred by Sapporo Holdings (as parent
company) for each of the operating companies.

174. Change in accounting methods
January 1, 2007 – March 31, 2007
No applicable information
January 1, 2008 – March 31, 2008
As described under “Changes in accounting policies from previous consolidated
accounting period” (subsection 4, “Other Matters”, in the “Results of Operations
and Financial Statements” section), we changes our method of accounting for net
sales. The effect of this change in accounting method was to reduce both net sales
and operating expenses in the Soft Drinks business by ¥137.2 billion compared towhat they would have been with the previous method, but the change does not
impact operating income.
January 1, 2007 – December 31, 2007
No applicable information

18

Consolidated Earnings Report —Supplementary Information
Condensed Consolidated Results (Three Months Ended March 31, 2008)
1. Condensed Consolidated Statements of Income(Billions of yen)Three months
ended March
31, 2007Three months
ended March
31, 2008

Alcholic beverages

67.7

71.0

3.2

4.8

(Japan)(Overseas)

62.6
5.0

66.0
4.9

3.3
(0.1)

5.4
(2.6)

10.4
6.1
5.8

7.9
6.6
6.0

(2.4)
0.4
0.2

90.1

91.6

1.4

(23.9)
7.6
4.0
1.6

Soft drinks
Restaurants
Real estate
Net sales

ChangeChange (%)

Alcholic beverages

(4.5)

(1.7)

2.7

－

(Japan)(Overseas)

(4.3)
(0.1)

(1.4)
(0.2)

2.8
(0.1)

－
－

(1.0)
(0.3)
1.6

(0.7)
(0.1)
1.9

0.3
0.1
0.2

－
－
15.0

(0.5)

(0.6)

(0.0)

－

(4.7)

(1.3)

3.4

－

0.3
1.4

0.4
1.6

0.1
0.2

38.5
20.7

Ordinary income

(5.8)

(2.5)

3.3

－

Extraordinary gains
Extraordinary losses
Income before income taxes and minority
interests
Net income

0.0
0.2

0.1
2.6

0.1
2.5

435.5
1,393.7

(6.0)

(5.0)

0.9

－

(3.9)

(3.3)

0.6

－

Three months
ended March
31, 2007Three months
ended March
31, 2008

232.1

227.8

Capital expenditures (cash basis)

5.6

7.9

2.3

41.5

Depreciation and amortization

5.7

5.6

(0.1)

(2.2)

Soft drinks
Restaurants
Real estate
General corporate and intercompany
eliminations
Operating income
Non-operating income
Non-operating expenses

Consolidated
Financial liabilities

Change(4.3)

Change (%)(1.9)

Breakdown of Selling, General and Administrative Expenses(Billions of yen)

Total selling, general and administrative expenses

Three months
ended March
31, 2007Three months
ended March
31, 2008

ChangeChange (%)

32.1

27.0

(5.1)

(16.0)

Sales incentives and commissions

7.5

4.2

(3.2)

(43.3)

Advertising and promotion expenses

5.7

4.7

(1.0)

(18.2)

Salaries and bonuses

5.1

5.0

(0.0)

(1.8)

Retirement benefit expenses

0.7

0.7

0.0

0.9

Other

12.9

12.2

(0.7)

(5.6)

Supplementary Information１

Consolidated Results (Three Months Ended March 31, 2008)
2. Consolidated Statements of Income
Breakdown of Key Changes(Figures in parentheses are negative)
Details

Fixed and other costs

Three months
ended March
31, 2008

(0.1)

0.1

(0.1)
(4.3)

(0.1)
(1.4)

(0.1)

(0.2)

(1.0)

(0.7)

(0.3)
1.6
1.6
(0.5)
(4.7)
(0.9)
(0.1)
(1.0)

(0.1)
1.9
1.9
(0.6)
(1.3)
(0.9)
(0.3)
(1.2)

2.6
(0.5)
0.6
(0.5)
(0.2)
(0.4)
3.1
3.1
0.0
0.2
0.1
0.1
0.0
2.8
0.1
(0.2)
(0.1)
(0.3)
(0.0)
0.6
0.3
0.1
0.1
0.2
0.2
(0.0)
3.4
(0.0)
(0.2)
(0.2)

(5.8)
0.0
(0.2)
－
(0.0)
(0.2)

(2.5)
0.1
(0.5)
(0.7)
(1.4)
(2.5)

3.3
0.1
(0.3)
(0.7)
(1.4)
(2.3)

(6.0)
2.0
(3.9)

(5.0)
1.7
(3.3)

0.9
(0.3)
0.6

(4.1)

Beer and related products
Marginal profit(Billions of yen)Three months
ended March
31, 2007(1.4)

Sub total
Increase (decrease) in volume / Product mix
Increase in cost of raw ingredients and materials
Transportation expenses
Other
Sub total
Decrease in sales promotion costs
Other

Wine and spirits
Increase (decrease) in volume / Product mix
Decrease in sales promotion costs / Other cost reductions
Other
Alcholic beverages (Japan)
Increase in volume / Product mix
Other
Alcholic beverages (Overseas)
Decrease in volume / Product mix
Increase in cost of raw ingredients and materials
Other cost reductions
Soft drinks
Existing stores / New stores / Refurbished stores
Restaurants
Rent
Real estate
General corporate and intercompany eliminations
Change in operating income
Financial income (expense)
Other
Non-operating income and expenses
Change in ordinary income
Extraordinary gains
Loss on disposal of property, plant and equipment
Provision for gift voucher redemptions
Other extraordinary losses
Extraordinary gains and losses
Change in income before income taxes and minority interests
Change in income taxes
Change in net income

Supplementary Information
2

Change