Financial Results
for the Six Months Ended June 30, 2014 — Consolidated(Based on Japanese GAAP)
August 5, 2014

Company name

Sapporo Holdings Limited

Security code
Listings
URL

2501
Tokyo Stock Exchange (First Section); Sapporo Securities Exchange
http://www.sapporoholdings.jp/english/

Representative
Contact

Tsutomu Kamijo, President, Representative Director and Group CEO
Toshihiko Umezato, Director of the Corporate Communications Department

Telephone
Scheduled dates:+81-3-5423-7407

Filing of quarterly financial reportAugust 13, 2014

Commencement of dividend payments-

Supplementary information to the quarterly earnings results

Available

Quarterly earnings results briefing heldYes(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the Six Months Ended June 30, 2014
(January 1 – June 30, 2014)(Amounts in million yen rounded down to the nearest million yen)

(1) Operating Results(Percentage figures represent year-over-year changes)
Net sales

Six months ended
June 30, 2014
Six months ended
June 30, 2013

Operating income

Ordinary income

Net income

million yen%

million yen%

million yen%

million yen

239,862

3.7

1,007

114.2

272

(18.8)%(10,928)-

231,225

3.7

470

-

335

-

189

-

Note: Accumulated other comprehensive income
Six months ended June 30, 2014 (9,946) million yen
Six months ended June 30, 2013

9,264 million yen

Net income per
share

Diluted net income
per share

Yen

Yen

Six months ended
June 30, 2014

(28.02)-Six months ended
June 30, 2013

0.49

-

1

%

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yenJune 30, 2014

603,296

142,39723.0

356.27

December 31, 2013

616,752

155,36624.6

388.77

Note: Shareholders’ equity
June 30, 2014:
138,857 million yen
December 31, 2013: 151,683 million yen

2. Dividends
Dividend per share
Record date or
periodEnd Q1End Q2End Q3Year-end

Full year

Yen

yen

yen

Yen

yen

Year ended
December 31, 2013

—

0.00

Year ending
December 31, 2014

—

0.00

Year ending
December 31, 2014
(forecast)

—

7.00

7.00

—

7.00

7.00

Note: No changes were made to dividend forecasts in the six months ended June 30, 2014.

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2014
(January 1 – December 31, 2014)(Percentage figures represent year-over-year changes)
Net
Net sales

Operating income

Ordinary income

Net income

incomeper share

Year ending
December 31,
2014

million yen%

million yen%

million yen%

million yen

537,700

5.5

15,000(2.2)

13,600(10.1)(2,000)Note: Changes were made to earnings forecasts in the six months ended June 30, 2014.

2

%

yen

-

(5.13)

4. Other*For details, see "2. Other Information" on page 11.
(1) Changes in significant subsidiaries during the six months ended June 30, 2014: None
(2) Simplified accounting: Yes*Use of simplified accounting methods and/or accounting methods specific to quarterly consolidated
financial statements(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards etc.: None
2) Changes other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
Note: For details, see (2) Changes in accounting policy, changes in accounting estimates, andretrospective restatement, in section “2. Other Information” on page 11 in the accompanying
material.
(4) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):June 30, 2014:
393,971,493 shares
December 31, 2013: 393,971,493 shares
2) Number of shares held in treasury at end of period:
4,216,587 shares
June 30, 2014:
December 31, 2013:
3,805,058 shares
3) Average number of outstanding shares during the period:
Six months ended June 30, 2014:
390,021,090 shares
Six months ended June 30, 2013:
390,873,563 shares*Quarterly review status
The quarterly financial results are not subject to quarterly reviews pursuant to the Financial
Instruments and Exchange Act. The quarterly review of the quarterly financial results herein had
not been completed as of the date of this document.
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 thoseexpressed or implied by forward-looking statements due to various factors.

3

1. Analysis of Operating Results(1) Consolidated Financial Results for the Six Months ended June 30, 2014
In the first half of 2014 (January 1 – June 30), the Japanese economy showed signs of amoderate recovery, including rising corporate earnings, against a backdrop of monetaryeasing and economic stimulus measures. However, the consumption environment remains
clouded with uncertainties as the surge in demand seen in March ahead of the consumption
tax hike has been followed by a reactionary decline in consumption from April.
Amid this environment, the SAPPORO Group achieved a sizable year-on-year increase insales. The strong result was led by the Japanese Alcoholic Beverages business, which
posted a big year-over-year increase in shipments of beer and beer-type beverages. The
Food & Soft Drinks business also saw sales volumes increase. The International Businessalso did well, with support from a weaker yen, leading to a sizable increase in sales for theGroup as a whole.
Thanks to the higher sales at the Japanese Alcoholic Beverages and the Food & Soft
Drinks business, we also achieved growth in operating income.
As a result, in the first half of 2014 the SAPPORO Group posted consolidated sales of¥239.8 billion (up ¥8.6 billion or 4% year over year), operating income of ¥1.0 billion (up ¥0.5
billion or 114%) and ordinary income of ¥0.2 billion (down ¥0.0 billion or 19%). The Groupalso posted a first-half net loss totaling ¥10.9 billion (compared with a ¥0.1 billion profit in thefirst half of 2013), owing to extraordinary expenses. The Real Estate business’ decision to
redevelop of the Sapporo Ginza Building at the Ginza 4-chome intersection led to theposting of ¥2.3 billion in costs related to demolition and removal of the building. In addition,
the Japanese Alcoholic Beverage business’ voluntary decision to file a revised liquor tax
return related to the inclusion of Goku Zero in a different tax rate category caused an ¥11.6
billion upward adjustment to our liquor tax burden (including overdue tax).
For more details on the extraordinary loss stemming from the additional liquor tax
payment (including overdue tax), see our June 20 news release entitled “Notice on
Recording an Extraordinary Loss”. Regarding the payment of additional liquor taxes(including overdue tax), we plan to pursue legal procedures to gain recognition of the
SAPPORO Group's view on the proper tax rate category, with assistance from external
experts.

Segment information is outlined below.

Seasonal Factors
The Group’s operating results exhibit substantial seasonal variation in demand for the
products and services offered by the Japanese Alcoholic Beverages, International Business,
Food & Soft Drinks, and Restaurant businesses. As a result, sales in the first quarter, which
affect the first-half results, tend to be lower than sales in the other three quarters.

4

Japanese Alcoholic Beverages
We estimate that total domestic demand for beer and beer-type beverages in the first halfof 2014 fell about 1% year over year, reflecting both the surge in demand in March ahead of
the consumption tax hike and the reflexive drop in demand in April. Demand for beer was up,
but shipments of happoshu and new-genre beer were less than the previous-year levels.
Under such market conditions, the Japanese Alcoholic Beverage business continued its
efforts to realize further growth by constantly providing its customers with a unique value
proposal. In the first half of 2014, these efforts centered on implementing a new vision of“seek No.1 by accumulating one-of-a-kind products” while also adhering to its campaign
slogan, “Bringing more cheer to your ‘Cheers’!”.
In the beer and beer-type beverages category, sales of our core Yebisu brand rose by 2%
year on year, supported by the limited-volume release of Kaori Hanayagu Yebisu in January
and the limited-time release of Yebisu Royal Selection in May. Sales also received support
from the release of Yebisu Natsu no Koku, available only in summer season gift packs.
In the new-genre beer category, in February we launched Mugi to Hop The Gold, a richer
flavored version of our popular Mugi to Hop brand. The new offering was a big hit withcustomers, helping boost sales by 13% over the previous year’s level. In addition, Goku
Zero exceeded our sales targets by a wide margin as customers continued their support forthis new-genre beer, the world’s first beer-type beverage with zero purine bodies.
Meanwhile, the Company was requested by the National Tax Agency to provide
information on the production method of Goku ZERO to verify the tax rate category of the
product. Although the Company understood that Goku ZERO falls in the “(1) Effervescentalcoholic beverages” category, after providing the requested data and information, it haschecked the legal interpretation of the Japanese Liquor Tax Law by the National Tax
Agency, based on which it conducted a voluntary review on such data.
Our careful review continues, and confirmation of the product category in line with thelegal interpretation of the Japanese Liquor Tax Law by the National Tax Agency has yet tobe completed. If it is determined as a result of future verification that Goku ZERO does not
3

fall in the “(1) Effervescent alcoholic beverages” category, many customers and ourbusiness partners could be affected.
To address this situation, the Company decided to voluntarily discontinue the current
Goku ZERO, which has been sold as a product in the “(1) Effervescent alcoholic beverages”
category, review part of its production method and, while maintaining its core values of zeropurine and zero carbohydrate properties, which customers expect, relaunched the productin July as a happoshu (beer-type beverage with malt content less than 25%).
Despite the temporary halt of sales of Goku Zero, first-half shipments of our beer andbeer-type beverages were 5% greater than in the first half of 2013. With our shipment
growth exceeding the overall domestic growth in demand, we succeeded in increasing
market share.
In the RTD* category, we launched a renewed version of Sapporo Nectar Sour Peach in
February and continued to enjoy solid customer support for Sapporo Otoko Ume Sour, first5

introduced in 2013. In April, we added to our RTD offerings with the nationwide launch of
Sapporo Kireto Lemon Sour, the first collaboration RTD using the Food & Soft Drinks
business’ long-time core product Kireto Lemon. The favorable market response to this newoffering and our other RTD products led to a 94% year-over-year increase in RTD productshipments in the first half.
At our wine and liquor business, sales of our mainstay domestic premium brand, Grande
Polaire, remained on a steady pace. We launched Polaire Sangria Rico in March, a new lineof Sangria beverages that are enjoying increasing popularity, especially with young women.
As a result, sales of our domestic wine offerings exceeded plan, with shipments 2% higher
than a year earlier.

Meanwhile, shipments of our imported wines increased 4% year overyear, lifting our total wine shipment volume 3% higher than in the first half of 2013.
Our western spirits business achieved 9% growth in sales volume for its various Bacardi
brand products, which include a Mojito RTS** cocktail made from the world’s No.1 selling
Bacardi rum. The category’s sales also include products from a number of other global
power brands owned by Bacardi, such as Bombay Sapphire, Martini, Dewar’s, and Cutty
Sark.
The shochu business posted 10% growth in sales volume, led by continued strong salesof Imo Shochu Kokuimo, the No. 1 selling blended imo shochu.
As a result of the above, the Japanese Alcoholic Beverage business posted first-half salesof ¥127.1 billion, up ¥6.6 billion or 5% year over year. Segment operating income came to¥1.3 billion, up ¥1.1 billion or 560% from a year ago.
* RTD, or ready-to-drink, beverages are already-mixed, low-alcohol content cocktail-like beverages that canbe consumed as is immediately after opening.
** RTS refers to ready-to-serve liquors used to make cocktails by mixing with soda and other mixers.

International Business
In North America, we estimate that total demand in Canada’s beer market fell 2–3% year
over year while demand in the United States was largely flat, despite some positive macrodevelopments, including improving employment conditions. The Asian beer market,
however, continues to grow steadily, supported by the region’s fast-growing economies.
In this environment, our International Business continued marketing activities targetingthe premium beer market, where it has core strengths. However, our Canadian subsidiary
SLEEMAN BREWERIES was challenged by intensifying price competition and saw its sales
volume (excluding Sapporo brand beer) slip 1% year over year. In the United States,
Sapporo USA saw shipments of Sapporo brands decline year over year despite the end in
April of delayed deliveries caused by the severe winter weather. Meanwhile, Silver Springs
Citrus was adversely affected by rising prices of oranges used in its products.
In Vietnam, we continued full-fledged marketing activities aimed at establishing the
Sapporo brand in the local market. We launched a TV ad campaign during the prime Tet(New Year’s holiday) sales season and received a favorable customer response. In South
Korea, we continued our efforts to expand sales of beers to the household and commercial

6markets through cooperation with our local partners in the Maeil Dairies’ group. In Oceania,
we continued efforts to expand sales via our brewing licensing agreement with Australia’s
Coopers Brewery, and in Singapore we worked with our local subsidiary to expand sales
channels in the local household market. The International Business’ shipments of Sapporo
brand products increased year over year, despite weak volumes in North America.
Overall, the International Business posted first-half sales of ¥23.7 billion, up ¥0.6 billion or
3% year over year, as the benefits of a weaker yen overcame the decline in shipment
volume in North America. Nonetheless, the segment posted an operating loss of ¥0.5 billion(compared with operating income of ¥0.3 billion a year earlier).

Food & Soft Drinks
We estimate that overall domestic demand for soft drinks increased 2% year over year in
the first half of 2014, as the demand surge ahead of the consumption tax hike was followed
by a relatively light reflexive downturn. We estimate that overall demand for lemon-based
products (flavorings) slipped 2% (*1), while that for instant soup (including soups in a cup)
increased an estimated 4% (*2).
In this environment, the SAPPORO Group’s Food & Soft Drinks business started its
second year of integrated operations as POKKA SAPPORO Food & Beverage Ltd. The
subsidiary is concentrating investments on core brands as it endeavors to strengthen andnurture its various brands.
The domestic food and soft drinks business strengthened its lineup of domestic soft drink
brands with the April launch of Green Shower, a nonsweetened carbonated water drink withthe aroma of hops. Vending machine sales of our coffee drinks, however, were adversely
affected by convenience store over-the-counter sales of fresh brewed coffee. Celebrating
the 100th anniversary of our Ribbon brand, we launched new versions of Ribbon Citron andRibbon Napolin, the latter sold only in Hokkaido in April. In the lemon & natural foods
category, we launched Kireto Lemon Salty Sparkling as our first soft drink targeted atcombating heat stroke. Together with Kireto Lemon Sparkling, the new product stimulated
solid sales for our Kireto Lemon brand drinks. We promoted our Pokka Lemon 100 brand by
opening for a limited time in Nagoya a shop featuring lemon-based alcoholic andnonalcoholic beverages and a menu of nonfried foods. Among our foreign brand food andsoft drink products, marketing contents of Gerolsteiner naturally carbonated water from
Germany attracted customers. We also continued our efforts to stimulate the market for hard
drinking waters in Japan through Contrex and Vittel bottled natural mineral waters. In
particular, we launched a sales promotion campaign of Contrex for women. In the soup andrelated foods category, we expanded the product lineup of our Jikkuri Kotokoto Kongari Pan
series to include spicy flavored soups to stimulate appetites during the summer months. The
new offerings contributed to a solid increase in sales over the previous year. Products in thecommercial-use products category also posted solid increases, led by our lemon andbeverage product offerings as well as our soup and dessert offerings. In new productcategories, in April we launched the Ashita no Kirei brand of lactic acid bacteria, soymilk

7ferment drinks through internet sales. We also entered the arena for heath drinks featuring
ornithine and soy isoflavones as well as Shiawase Nyusankin SBL88R, a lactic acid bacteria
discovered through years of fermentation research by our Japanese Alcoholic Beveragebusiness.
In this segment’s domestic restaurants business, the Café de Crié coffee shop chain
turned in a steady performance supported by timely menu revisions responding to customer
needs and effective promotional campaign at each shop.
The segment’s overseas soft drinks business also turned in a solid performance,increasing sales in Singapore despite stepped up competition and steadily expanding
exports.
The segment’s overseas restaurant business struggled somewhat amid an economic
slowdown in Hong Kong.
As a result of the above, the Food & Soft Drinks segment recorded first-half sales of ¥62.7
billion, up ¥2.0 billion or 3% year over year. The segment’s operating loss came to ¥1.8
billion (compared with a ¥2.4 billion loss in the first half of 2013).
(*1) (*2) data sources: Year-over-year total sales value comparisons for January–June
2014 for the lemon foods market (Sapporo definition) and the instant soup market based on
Intage SRI research on the supermarket and convenience store industries.

Restaurants
Japan’s restaurant industry is seeing some signs of improvement in consumer sentiment,
but the overall operating environment remains difficult, with both material costs and laborcosts on the rise.
In this environment, our Restaurants Business pursued the fulfillment of its corporate
philosophy of “Enhancing the Joy of Living” by continuing its efforts to raise the quality of its
service as well as its food and beverages, including draft beer, and by endeavoring to create
restaurants that “deliver 100% satisfaction to customers.”
New outlet openings in the first half of 2014 included outlets in Tokyo’s Shinjuku and Ueno
districts for the YEBISU BAR chain, one of our core restaurant brands. Including outlets in
hot spring facilities operated on a contract basis, we opened 10 new stores in the first half of2014.
While continuing efforts to improve the profitability of existing stores, we are also opening
new formats and converting stores to different formats as we seek to acquire newcustomers.
Meanwhile, we closed 17 stores during the first half of 2014, including two flagship stores,
the Beer Hall LION GINZA 5-Chome outlet and the Beer Hall Lion Shinbashi store, both ofwhich had to be shut down for an extended period of time due to building redevelopment
projects. As a result of store openings and closures during the term, our Restaurants
business had 183 operating outlets in Japan as of end-June 2014.
Overseas, our initial Ginza Lion Beer Hall in Singapore, which opened in October 2013, isdoing well, and we are now in the process of selecting the site for our next local store

8

opening as part of our plan to establish the Ginza Lion brand in Singapore.
Overall, the Restaurants business posted sales of ¥12.3 billion in the first half of 2014, fora ¥0.2 billion or 2% decline from the previous year’s result. The segment’s operating loss
came to ¥0.3 billion (compared with a ¥0.2 billion loss in the previous year).

Real Estate
Japan’s real estate industry is now showing clear signs of a recovery trend, with vacancy
rates in the Greater Tokyo office leasing market continue to improve and rents also
recovering moderately.
Amid such market conditions, our real estate leasing business saw a temporary drop in
the occupancy rate at its core property, Yebisu Garden Place, owing to the exit of a large
tenant at the expiration of its lease contract in May. However, we are steadily progressing
with efforts to find replacement tenants, and occupancy rates at other properties remain athigh levels.
Efforts to enhance the appeal and value of Yebisu Garden Place, which this year iscelebrating the 20th anniversary of its opening, are focused on providing tenants andvisitors with enjoyable experiences in comfortable and pleasant surroundings. In April, wewelcomed a large upscale restaurant as a new tenant on the commercial-use floor and also
undertook a major renovation of public-use floors. At the complex’s rental housing building,we carried out renovations designed to enhance the building’s comfort level and amenities,
including refurbishing the entrance hall, improving the building’s barrier-free and universal
design features, and replacing standard equipment in each apartment unit. At the office
tower, in March we completed the installation of emergency power-generating systems thatwill supply electricity to tenant spaces in the event of a disaster and therefore help tenants
maintain business continuity. We also are continuing work to ensure power supply to
public-use areas of the building during a disaster, with completion of this work scheduled forspring 2015.
The real estate development business is making steady progress with the redevelopmentof the site in Ebisu despite concerns about rising construction costs and delays caused by ashortage of labor. We plan to complete construction on schedule in September and lookforward to the new Ebisu First Square becoming a center of activity in Tokyo’s Ebisu district.
Leasing efforts are also proceeding smoothly and we look forward to a high occupancy rate
when the new building opens. In February, we made a final decision to redevelop the
Sapporo Ginza Building at the Ginza 4-chome intersection. We began work to take down theold building in April and are moving forward with project planning that will keep costs undercontrol and result in a new building that will feature an exterior design suitable for a new
Ginza landmark. We are targeting completion in early summer of 2016.
As result of the efforts as outlined above, the Real Estate business posted first-half salesof ¥10.9 billion, down ¥0.0 billion or 1% year over year. Operating income totaled ¥4.3 billion,
down ¥0.1 billion or 3%.

9(2) Review of Consolidated Financial Condition
Consolidated Financial Condition
Consolidated assets as of the end of the second quarter on June 30, 2014, totaled ¥603.2
billion, a ¥13.4 billion decrease from the end of the previous fiscal year (December 31, 2013).
The decline is attributable to a decrease in notes and accounts receivable - trade, whichmore than offset increases in merchandize, finished products and of construction inprogress and investment securities.
Consolidated liabilities totaled ¥460.8 billion, a ¥0.4 billion decrease from December 31,
2013, primarily reflecting a decrease in short-term bank loans and in liquor taxes payable,
which more than offset increases in commercial paper and long-term bank loans.
Consolidated net assets as of June 30, 2014, totaled ¥142.3 billion, a ¥12.9 billion decline
from December 31, 2013. The decline is primarily owing to the distribution of year-end
dividends and the booking of a net loss for the first half of the current fiscal year, which
combined to offset an increase in unrealized holding gain on securities.

Consolidated Cash Flows
Consolidated cash flows for the six months ended June 30, 2014 were as follows.
Operating activities provided net cash of ¥1.8 billion. The major sources of operating cash
were a ¥17.5 billion decrease in notes and accounts receivable - trade and depreciation andamortization of ¥12.0 billion. Cash inflows from these and other sources were largely offset
by a ¥14.3 billion loss before income taxes and minority interests and by outflows related toincome taxes paid (¥4.8 billion) and a decrease in liquor taxes payable (¥10.8 billion).
Investing activities used net cash of ¥11.4 billion. The major investment outflows werepurchases of property, plant and equipment (¥8.6 billion) and purchases of intangibles (¥1.1
billion).
Financing activities provided net cash of ¥9.0 billion. The major inflows were fromproceeds from long-term bank loans (¥10.0 billion) and an increase in commercial paper(¥18.0 billion). The major outflows were the repayment of long-term bank loans (¥13.6
billion) and cash dividends paid (¥2.7 billion).
As a result of the above, cash and cash equivalents stood at ¥10.8 billion as of June 30,
2014.

(3) Consolidated Earnings Forecast
In the first half of 2014, the Japanese economy showed signs of a moderate recovery,
including rising corporate earnings, against a backdrop of monetary easing and economic
stimulus measures. However, the consumption environment remains clouded withuncertainties as the surge in demand seen in March ahead of the April consumption tax hikehas been followed by a reactionary decline in consumption.
The SAPPORO Group continues to face a challenging operating environment but issteadily implementing various measures in each business segment targeted at securing
Group profits.

10

Considering Group earnings through the end of the second quarter of 2014, we havemade the following revisions to the full-year 2014 consolidated earnings forecast issued on
February 12, 2014.

Revisions to consolidated earnings forecasts for fiscal 2014 (January 1 – December 31,
2014)(Unit: millions of yen)
Net Sales

Previously

Operating

Ordinary

IncomeIncomeNet Income

537,700

15,00013,6005,000

537,700

15,00013,600(2,000)Change (B – A)

-

-

-

(7,000)Percent change (%)

-

-

-

-

509,834

15,344

15,1309,451

announced forecast (A)Revised forecast (B)For reference
Fiscal 2013 result

2. Other Information(1) Changes in significant subsidiaries during the six months ended June 30, 2014
Not applicable(2) Application of accounting methods specific to the preparation of quarterly
consolidated financial statements(Calculation of tax liabilities)
The Company calculates tax liabilities by producing a reasonable estimate of the effective tax
rate after applying tax-effect accounting to income before taxes and minority interests for the
fiscal year, which encompasses the six months ended June 30, 2014, and then multiplying
income (loss) before taxes and minority interests by this estimated effective tax rate.
(3) Changes in accounting policy, changes in accounting estimates, and retrospective
restatement
Not applicable113. Consolidated Financial Statements(1) Consolidated Balance Sheets(millions of yen)

AssetsI Current assets
1 Cash and cash equivalents
2 Notes and accounts receivable - trade
3 Merchandize and finished products
4 Raw materials and supplies
5 Other
6 Allowance for doubtful receivables
Total current assets
II Fixed assets
1 Property, plant and equipment(1) Buildings and structures
Accumulated depreciation
Buildings and structures, net(2) Machinery and vehicles
Accumulated depreciation
Machinery and vehicles, net(3) Land(4) Construction in progress(5) Other
Accumulated depreciation
Other, net
Total property, plant and equipment
2 Intangible assets(1) Goodwill(2) Other
Total intangible assets
3 Investments and other assets(1) Investment securities(2) Long-term loans receivable(3) Other(4) Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

12

December 31, 2013

June 30, 2014

AmountAmount11,55287,14820,832
13,552
14,479(228)
147,336

10,886
69,341
24,876
12,84815,376(206)
133,123

390,326(212,741)
177,585
218,275(176,691)
41,583
115,056
5,668
37,757(24,768)
12,988352,882

388,319(213,191)
175,128
218,995(177,768)
41,227
115,062
8,487
36,683(23,950)
12,733352,638

34,418
7,566
41,98532,411
6,320
38,731

51,221
9,544
15,109(1,326)74,548469,416
616,752

54,503
9,290
16,333(1,325)78,802
470,172
603,296

Liabilities
I Current liabilities
1 Notes and accounts payable - trade
2 Short-term bank loans
3 Commercial Paper
4 Liquor taxes payable
5 Income taxes payable
6 Accrued bonuses
7 Deposits received
8 Other
Total current liabilities
II Long-term liabilities
1 Bonds
2 Long-term bank loans
3 Employees' retirement benefits
4 Dealers' deposits for guarantees
5 Other
Total long-term liabilities
Total liabilities
Net Assets
I Shareholders' equity
1 Common stock
2 Capital surplus
3 Retained earnings
4 Treasury stock, at cost
Total shareholders' equity
II Accumulated other comprehensive income
1 Unrealized holding gain on securities
2 Deferred hedge gains (losses)
3 Foreign currency translation adjustments
Total accumulated other comprehensive income
III Minority Interests
Total net assets
Total liabilities and net assets

13

December 31, 2013

June 30, 2014

AmountAmount35,902
63,64225,00033,7003,837
2,090
10,82452,309227,308

34,31856,10843,00022,819661
1,296
10,48356,396225,086

52,000107,185
5,907
32,42336,561
234,077
461,386

52,000110,054
5,391
32,55335,813
235,811
460,898

53,88645,91137,409(1,311)
135,896

53,88645,911
23,646(1,484)
121,960

15,4674314
15,786
3,683
155,366
616,752

17,353(4)(452)
16,896
3,540
142,397603,296(2) Consolidated Statements of Income

I Net sales
II Cost of sales
Gross profit
III Selling, general and administrative expenses
1 Sales incentives and commissions
2 Advertising and promotion expenses
3 Salaries
4 Provision for bonuses
5 Retirement benefit expenses
6 Other
Total selling, general and administrative expenses
Operating income
IV Non-operating income
1 Interest income
2 Dividend income
3 Equity in earnings of affiliates
4 Foreign exchange gains
5 Other
Total non-operating income
V Non-operating expenses
1 Interest expense
2 Equity in loss of affiliates
3 Foreign exchange losses
4 Other
Total non-operating expenses
Ordinary income
VI Extraordinary gains
1 Gain on sales of property, plant and equipment
2 Gain on sales of investment securities
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Loss on sales of property, plant and equipment
3 Impairment loss
4 Loss on devaluation of investment securities
5 Loss on sales of investment securities
6 Additional liquor tax paid and other
7 Compensation expenses
8 Business structure improvement expenses
Total extraordinary losses
Income (loss) before income taxes and minority interests
Income taxes
Income (loss) before minority interests
Minority interests
Net Income (loss)

Six months ended
June 30, 2013
Amount231,225
149,515
81,709(millions of yen)Six months ended
June 30, 2014
Amount239,862
155,293
84,56815,24011,363
15,834773
1,690
36,337
81,239470

16,005
11,846
16,057797
1,548
37,30583,561
1,007

129
523

114
473
82

470
685
1,810

502
1,172

1,426
3

1,229
-

514
1,944
335

296
381
1,907
272

42
3,491
3,533

57
20
78

248
288
11
3

185
737
3,132
2,982
149
(40)
189

9
0
11,684
1,618
14,699(14,348)(3,212)(11,135)(207)(10,928)

149(11,135)

6,011
(25)
3,128
9,115
9,264

1,885
(16)
(680)
1,189
(9,946)

8,893
371(9,818)(127)-

Income (loss) before minority interests
Other comprehensive income
Unrealized holding gain on securities
Deferred hedge gains (losses)
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests

14

1,336
49

(3) Consolidated Statements of Cash Flows

I Cash flows from operating activities
1 Income (loss) before income taxes and minority interests
2 Depreciation and amortization
3 Goodwill amortization
4 Increase (decrease) in employees’ retirement benefits
5 Increase (decrease) in allowance for doubtful receivables
6 Interest and dividend income
7 Interest expense
8 (Gain) loss on sales and disposal of fixed assets
9 (Gain) loss on sales of investment securities
10 (Gain) loss on revaluation of investment securities
11 (Increase) decrease in notes and accounts receivable - trade
12 (Increase) decrease in inventories
13 (Increase) decrease in other current assets
14 Increase (decrease) in notes and accounts payable - trade
15 Increase (decrease) in liquor taxes payable
16 Increase (decrease) in deposits received
17 Increase (decrease) in other current liabilities
18 Other
Sub total
19 Interest and dividends received
20 Interest paid
21 Income taxes paid
Net cash provided by (used in) operating activities
II Cash flows from investing activities
1 Purchases of property, plant and equipment
2 Proceeds from sales of property, plant and equipment
3 Purchases of intangibles
4 Payments for purchases of investment securities
5 Proceeds from sales of investment securities
6 Purchase of subsidiaries' shares
7 Purchase of affiliates securities
8 Other
Net cash provided by (used in) investing activities
III Cash flows from financing activities
1 Net increase (decrease) in short-term bank loans
2 Increase (decrease) in commercial paper
3 Proceeds from long-term bank loans
4 Repayment of long-term bank loans
5 Proceeds from issuance of bonds
6 Redemption of bonds
7 Cash dividends paid
8 Cash dividends paid to minority shareholders
9 Repayment of finance lease obligations
10 OtherNet 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 period
Ⅶ Increase( decrease) in Cash and cash equivalents from newly consolidated
subsidiaries
Ⅷ Increase in cash and cash equivalents resulting from merger
Ⅸ Cash and cash equivalents at end of period15

Six months ended June30, 2013
Amount(millions of yen)Six months ended June30, 2014
Amount3,132
12,561
2,014
(979)
4
(653)
1,452
206
(3,488)11
8,538(3,066)(388)(58)(1,917)(663)(817)(1,479)14,408758(1,478)(4,997)
8,690(14,348)
12,064
1,877
(513)
(23)
(587)
1,242
1,328
(20)
9
17,562(3,414)179(1,454)(10,849)
(338)
5,254
(777)
7,188
708
(1,266)(4,806)
1,823(5,817)
94
(818)
(324)
4,339
(14)
(286)
(1,826)(4,653)(8,624)145(1,145)
(263)
29
(90)
(1,487)(11,435)(7,251)
2,000
23,250(15,774)
9,960(10,000)(2,729)(7)(2,371)(934)(3,859)
246
424
9,725

(904)
18,00010,000(13,615)(2,727)(14)(1,694)
(26)
9,017
(126)
(721)
11,518

(116)

9

-

46

10,033

10,852

(4) Notes on the Going-concern Assumption
Not applicable(5) Segment InformationⅠ

Six months ended June 30, 2013 (January 1, 2013 – June 30, 2013)

1. Sales, income, and loss by reportable segment(millions of yen)
Reportable segments
Japanese
Alcoholic
Beverages

International Food&
Restaurants
Soft Drinks

Real
Estate

Total

Other *1

Total

Amounts
reported on
Adjustments thestatements
of income *2

Net sales(1) Operating revenues

120,573

23,09060,751

12,603

11,014228,034

3,190

1,117

41

117

0

1,296

2,574

8,905

121,691

23,13260,86912,604

12,311

230,608

12,095199

337(2,451)

(225)

4,448

2,307

28

(2) Intra-group sales and transfers
Total
Segment income (loss)

231,225
11,479242,704
2,335-

231,225(11,479)(11,479)

231,225(1,865)470

Notes:(1) "Other" comprises businesses, such as logistics businesses, that are not included in reportable segments.
(2) Segment income and losses are adjusted based on operating income reported on the quarterly consolidated statements of income for the corresponding period.

2. Reconciliation and main components of differences between income and loss of reportable segments and figures on the statement of income(information on differences)(millions of yen)Segment income (loss)

AmountTotal for reportable segments
Total other losses
Unallocated corporate costs
Intra-segment sales
Operating income on the statement ofincome2,307
28(1,726)(138)
470

3. Impairment loss on fixed assets or goodwill by reportable segment(Significant impairment losses on fixed assets)
Not applicable(Significant changes in the amount of goodwill)
Not applicable(Material Gain on negative goodwill)
Not applicable

16

-

Ⅱ

Six months ended June 30, 2014 (January 1, 2014 – June 30, 2014)

1. Sales, income, and loss by reportable segment(millions of yen)
Reportable segments
Japanese
Alcoholic
Beverages

International Food&
Restaurants
Soft Drinks

Real
Estate

Total

Other *1

Total

Amounts
reported on
Adjustments thestatements
of income *2

Net sales(1) Operating revenues

127,177

23,73762,757

12,367

10,930236,970

2,891

1,169

47

136

2

1,287

2,642

9,285

128,347

23,78462,89312,36912,217

239,612

12,177

1,313

(582)

(1,833)

(335)

4,317

2,879

111

(2) Intra-group sales and transfers
Total
Segment income (loss)

239,862
11,927
251,789
2,990-

239,862(11,927)(11,927)

239,862(1,983)

1,007-

Notes:(1) "Other" comprises businesses, such as logistics businesses, that are not included in reportable segments.
(2) Segment income and losses are adjusted based on operating income reported on the quarterly consolidated statements of income for the corresponding period.

2. Reconciliation and main components of differences between income and loss of reportable segments and figures on the statement of income (information ondifferences)(millions of yen)Segment income (loss)

AmountTotal for reportable segments
Total other losses
Unallocated corporate costs
Intra-segment sales
Operating income on the statement ofincome2,879
111(1,894)(89)
1,007

3. Impairment loss on fixed assets or goodwill by reportable segment(Significant impairment losses on fixed assets)
Not applicable(Significant changes in the amount of goodwill)
Not applicable(Material Gain on negative goodwill)
Not applicable(6)Notes on Significant Changes in the Amount of Shareholder's Equity
Not applicable(7)Subsequent Events
Not applicable17