Financial Results
for the Nine Months Ended September 30, 2016 — Consolidated(Based on Japanese GAAP)
November 2, 2016

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 report

November 11, 2016

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 Nine Months Ended September 30, 2016
(January 1 – September 30, 2016)(Amounts in million yen rounded down to the nearest million yen)

<Note>On July 1, 2016, the Company carried out a share consolidation at a ratio of 1 share for 5
shares of the Company’s common stock. Accordingly, values for the items noted below havebeen recalculated on the assumption that the share consolidation took place at the beginningof the previous fiscal year.
・Net income per share・Diluted net income per share
・Number of shares issued at end of period (treasury stock included)
・Number of shares held in treasury at end of period

・Average number of outstanding shares during the period
In addition, the following forecast per-share values for the fiscal year ending December 31,
2016 take into account the share consolidation.
・Dividend per share
・Net income per share1(1) Operating Results(Percentage figures represent year-over-year changes)
Net sales

Operating income

Ordinary income

Net income

million yen%

million yen%

million yen%

million yen%

392,270

1.1

12,886

115.1

11,580

134.5

5,269

174.8

388,147

2.3

5,991

(27.7)

4,938(35.6)

1,917-

Nine months ended
September 30, 2016
Nine months ended
September 30, 2015

Note: Accumulated other comprehensive income
Nine months ended September 30, 2016

(5,386) million yen

Nine months ended September 30, 2015

529 million yen

Net income per
share

Diluted net income
per share

Yen

Yen

Nine months ended
September 30, 2016

67.65

-

Nine months ended
September 30, 2015

24.61

-

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

million yen

million yen%

September 30, 2016

592,301

155,747

25.4

December 31, 2015

620,388

163,82225.5

Note: Shareholders’ equity
September 30, 2016: 150,617 million yen
December 31, 2015: 157,928 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, 2015

—

0.00

—

Year ending
December 31, 2016

—

0.00

—

Year ending
December 31, 2016
(forecast)

7.00

7.00

35.00

35.00

Note: No changes were made to dividend forecasts in the nine months ended September 30, 2016.

2

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2016
(January 1 – December 31, 2016)(Percentage figures represent year-over-yearchanges)
Net income
Net income
Net sales

Operating income

Ordinary income

attributable toper shareowners of the parent

Year ending
December 31,
2016

million yen%

million yen%

million yen%

million yen

547,700

2.6

20,10044.1

19,20045.3

10,000

%

yen

63.7

128.38

Note: Changes were made to earnings forecasts in the nine months ended September 30, 2016: Yes

4. Other*For details, see "2. Other Information" on page 11.
(1) Changes in significant subsidiaries during the nine months ended September 30, 2016: 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.: Yes
2) Changes other than 1) above: Yes
3) Changes in accounting estimates: Yes
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):
September 30, 2016: 78,794,298 shares
December 31, 2015: 78,794,298 shares
2) Number of shares held in treasury at end of period:
September 30, 2016: 898,001 shares
December 31, 2015: 890,305 shares
3) Average number of outstanding shares during the period:
Nine months ended September 30, 2016: 77,901,780 shares
Nine months ended September 30, 2015: 77,920,686 shares

3

*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.

4(1) Consolidated Financial Results for the Nine Months ended September 30, 2016
In the first nine months of 2016 (January 1 – September 30, 2016), the Japanese economy was generally
in a moderate recovery trend but lacked positive signs from the corporate and household sectors.
Uncertainties in the international arena and unseasonable weather conditions added to the uncertainties
weighing on domestic investment and consumption.
Despite the lackluster economic environment, the SAPPORO Group posted a year-on-year increase sales.
The key growth drivers included (1) year-on-year increase in sales of beer and beer-type beverages at theJapanese Alcoholic Beverage business, (2) the contribution from an International Business subsidiary thatwas consolidated in February 2015, and (3) the contribution from the soymilk business acquired by the Food
& Soft Drinks business in October 2015.
Group profits also increased, as (1) the Japanese Alcoholic Beverage business achieved a year-on-yearincrease in sales of beer and beer-type beverages, (2) the Real Estate business maintained high occupancy
rates at its rental properties and therefore increased rental income, and (3) cost reductions and operating
efficiency improvements were seen in all business segments.
As a result of the above factors, in the first nine months of 2016 the SAPPORO Group posted consolidated
sales of ¥392.2 billion (up ¥4.1 billion or 1% year over year), operating income of ¥12.8 billion (up ¥6.8 billion
or 115%), ordinary income of ¥11.5 billion (up ¥6.6 billion or 135%), and net income attributable to owners of
the parent of ¥5.2 billion (up ¥3.3 billion or 175%).

Segment information is outlined below.

Japanese Alcoholic Beverages
We estimate that total domestic demand for beer and beer-type beverages in the first nine months of 2016
was lower than in the same period of 2015.
Amid such market conditions, the Japanese Alcoholic Beverage business continued its efforts to realize
management’s vision of “Seek to be No.1 by accumulating one-of-a-kind products” and achieve further
growth by constantly providing customers with a unique value proposal and by investing aggressively in thebeer business during 2016, which has been designated as the “first year of a new period of growth in the beerbusiness.”
The Japanese Alcoholic Beverage business’ efforts produced a 5% year-on-year increase in beer
shipments in Japan, led by strong sales of canned versions of Sapporo Draft Beer Black Label and Yebisu
Beer. In the happoshu category, shipments of Goku Zero slipped below the previous year’s level, but
continued strong sales of Mugi to Hop The gold bolstered sales of our new-genre beer. Overall, shipments ofour beer and beer-type beverages products were in line with the previous year’s result.
In the RTD*1 category, the high-value-added collaboration products Sapporo Otoko Ume Sour and Nectar

5Sour, as well as Kireto Lemon Sour, continued to sell well and achieve year-on-year sales growth.
In the wine category, strengthened marketing of domestic and imported fine wines*2 led to higher sales ofPenfolds, an imported wine from Treasury Wine Estates, as well as Taittinger champagne and our Grande
Polaire series of domestic wines.
Our spirits business achieved year-on-year sales growth, led by strong sales of products from major
overseas brands, such as Bacardi and Dewars.
Our Japanese liquor business also achieved sales growth, led by continued strong sales of Imo Shochu
Kokuimo, Japan’s No. 1 selling*3 blended imo shochu, and a favorable response to the newly introduced
Kokuimo Red.
Overall, the Japanese Alcoholic Beverages business posted cumulative first three-quarter sales of ¥200.0
billion, up ¥4.8 billion or 2% year on year, and operating income of ¥6.3 billion, up ¥3.3 billion or 111%.
*1) RTD, or ready-to-drink, beverages are already-mixed, low-alcohol content cocktail-like beverages that canbe consumed as is immediately after opening.
*2) Fine wines are wines priced in the mid- to high-price range (¥1,500 and higher per bottle).
*3) Based on Intage SRI market research on combined blended imo shochu sales in the supermarket,
convenience store, and direct sales channels from January 2013 to December 2015.

International BusinessIn the North American beer market in the first nine months of 2016, we estimate that total demand for beerin the United States increased year over year, with the main driver being demand for imported beers. In
Canada, demand appears to have been on par with 2015. In Asia, demand appears to be staying on thegrowth track formed by growing populations and relatively stable economic growth.
In this environment, our International Business continued aggressive marketing activities targeting thepremium beer markets in North America and Southeast Asia, the two regions where the business is focusing
its marketing efforts. In addition, we expanded our sales channel in the US fruit juice market.
Our Canadian subsidiary SLEEMAN BREWERIES continued to invest in the marketing of its core premium
brands. As a result, its overall beer sales volume (excluding Sapporo brand beer) increased about 1% year
over year. In the U.S. market, where Sapporo USA continues its effort to expand its core target customer
markets from Japanese Americans to the wider Asian-American and general population market segments,
shipments of Sapporo brand beers were up 1% year on year. Our U.S. soft drinks business also achieved
year-on-year sales growth, with U.S. subsidiary Country Pure Foods’ acquisition of a fruit juice sorbet
business in May contributing to the growth. Silver Springs Citrus also achieved year-on-year sales growththanks to its efforts to expand sales channels (After adjustment for period included in Sapporo Group results).
In Southeast Asia, the new versions of Sapporo Premium Beer in bottles and cans introduced in the
Vietnam market in November 2015 continued to sell well, driving overall sales volumes in Vietnam above thelevel achieved a year earlier. In addition, the Vietnam business launched Sapporo Blue Cap in July to a6

favorable market response. In Singapore, sustained cooperative efforts with our local subsidiary to expand
sales channels to that country's household and commercial markets continued to produce year-on-year
growth in sales volume.
Elsewhere in the region, we increased beer sales volumes in South Korea by leveraging our local partner's
sales network to strengthen sales to both the household and commercial markets and by increasing thenumber of sales outlets carrying our Sapporo Premium Beer. In Oceania, continued efforts to strengthen
sales via licensing agreements with local brewing partners produced a year-on-year gain in beer sales
volumes.
As a result of the efforts noted above, the International Business’s shipments of Sapporo brand products inoverseas markets during the first nine months of 2016 were 5% higher than the volume recorded in the same
period of 2015.
However, due to adverse currency-translation effects, the segment’s sales for the first three quarters of theyear totaled ¥48.0 billion, down ¥5.2 billion or 10% year on year. Operating income came to ¥0.7 billion,
compared with a loss of less than ¥0.0 billion in the first three quarters of fiscal 2015.

Food & Soft Drinks
We estimate that overall demand for soft drinks in Japan in the first nine months of 2016 increased 3% year
on year. In this somewhat favorable environment, the Food & Soft Drinks business continued its efforts tostrengthen and nurture its various brands, focusing its resources on its core soup and lemon-based products.
The domestic soft drinks business continued to expand its lineup of lemon-based product brands, centeringon the Kireto Lemon brand. During the first nine months of 2016, the business launched World Lemonade
and FREE Tea, which was approved for marketing with a functional food label. Other products that madesignificant contributions to sales included distinctive offerings from Pokka Sapporo, such as Nippon Oolong,
made from domestic tea leaves, and Furano Lavender Tea, made from lavender grown in Furano, Hokkaido.
Overall, shipments of our domestic soft drinks increased 3% year on year. During the period, we completed
installation of an aseptic bottling line at our Gunma plant in July, part of our plan to raise productivity byincreasing our in-house bottling capacity.
In the lemon-based food category, product shipments increased 2% year on year, on solid sales of ourmainstay Pokka Lemon 100 brand products and a contribution from the newly marketed Pokka Lemon
Organic Sicilian Straight Lemon Juice.
In the soup category, we commemorated the 20th anniversary of the launch of our Jikkuri Kotokoto brandsoups with the introduction of several additions to the brand, including Jikkuri Kotokoto Gohobi Dining,
packaged in a microwavable pouch. The new product offerings reflect our unceasing efforts to differentiate
our soup brands and further enhance our competitive advantage.
At the domestic restaurants business, the Café de Crié coffee shop’s constant efforts to revise and improve
its seasonal menus led to steady growth in comparable-store sales, enabling the chain to achieve

7year-on-year sales growth. .
The overseas soft drinks business continued its effort to further enhance recognition of its POKKA brandproducts, especially its tea drinks and non-chilled fruit juice beverages, both of which have already secured
top market shares in Singapore*.
Overall, the Food & Soft Drinks segment recorded sales of ¥101.5 billion, up ¥2.2 billion or 2% year on year
and posted operating income of ¥0.6 billion (compared with a ¥0.5 billion loss a year earlier).
* Based on data from Nielsen Singapore Market Track March 2016 (Copyright 2016, The Nielsen Company)

Restaurants
Japan’s restaurant industry has stayed on the recovery track in 2016 despite grappling with a difficult
operating environment complicated by continuous rising labor costs and food material procurement prices.
In this environment, the Restaurants business continued to pursue the fulfillment of its philosophy of“Enhancing the Joy of Living” through constant efforts to deliver safe and sound food and service tocustomers while also striving to create restaurants that “deliver 100% satisfaction to customers.”
In Japan, our Restaurants business continued to open new stores, with an emphasis on expanding into
new geographical areas and new store formats. Thus far in 2016 the business has opened its first restaurant
inside a zoo and the first outlet of CRAFT BEER KOYOEN, our entry into the craft beer pub format.
Meanwhile, our core Ginza Lion chain of Beer hall chains got a boost from the reopening of flagship outlets in
Shimbashi and Ginza areas when the GINZA PLACE commercial complex and others opened after a lengthy
redevelopment project. Overall, we opened 12 new restaurants in the first nine months of 2016, while also
reopening two completely renovated outlets.
In addition, Marushinkawamura Inc., an operator of restaurants located primarily in Hokkaido, including theKushiro and Sapporo Ginrin chains, became a consolidated subsidiary from June.
Meanwhile, six unprofitable outlets have been closed, bringing the total number of restaurants operated by
our Restaurants business in Japan as of end-September 2016 to 202.
The Restaurant business also has 14 shops operating in Singapore as of end-September. In addition to
opening the first Tonkichi Ginza Shokudo outlet in November 2015, we continue to create a chain of locally
popular restaurants in Singapore that are spreading the reputation of our Ginza Lion brand to the world.
Overall, Restaurants business sales in the first nine months of 2016 totaled ¥21.0 billion, up ¥0.4 billion or
2% year on year. Segment operating income was ¥0.5 billion, up ¥0.1 billion or 45% from the first nine monthsof 2015.

8

Real Estate
Japan’s real estate industry continues to benefit from solid demand in the Greater Tokyo office leasing
market and low vacancy rates, which combined are supporting a sustained moderate recovery in rent levels.
In this environment, our real estate leasing business was able to maintain high occupancy rates at its
properties in the Tokyo Metropolitan area, including Yebisu Garden Place Tower, the business’ core source of
earnings. In addition, the high occupancy rates provided a solid platform for more assertive efforts to increase
rents of existing tenants.
The real estate leasing business also continued to enhance the value of our Yebisu Garden Place
commercial complex through its efforts to raise convenience levels and strengthen the property’s brandappeal as a landmark of the stylish and sophisticated Ebisu area. In the complex’s commercial area, we arepresently renovating the restaurant floor on the 38th floor of the Yebisu Garden Place Tower. At the City Walk
area on the side of the complex along the JR Yamanote Line tracks, we constructed a new row of eateries
called BRICK END, which opened in October. Our other core property in the Ebisu area, the new Ebisu First
Square, which opened in October 2014, has won high praise from tenants as a highly competitive officebuilding with superior safety features, comfort levels, and environmental performance. The property has
maintained full occupancy since opening, and its contribution to segment earnings is on the rise.
The real estate development business completed construction of the GINZA PLACE, a redeveloped
commercial complex located at the busy Ginza 4-chome intersection, and held its grand opening on schedulein September. We look forward to this complex, located in the heart of Tokyo’s world-famous Ginza
commercial and shopping district, providing visitors from around the world insights into Japanese traditions,culture, advanced technologies and a wide range of other interesting topics and eventually becoming a“landmark that gives birth to the Ginza of tomorrow” In addition, we have newly started the redevelopment of
our former Sapporo factory as part of the renovation of the area on the east side of the Sosei River, a focus of
the city’s urban redevelopment program. In addition to raising the value of the Sapporo Factory as acommercial complex, we are redeveloping the parking lot adjacent to the factory site into a new commercial
building.

As result of the efforts outlined above, Real Estate business sales in the first nine months of 2016 totaled¥16.7 billion, up ¥1.5 billion or 10%. Operating income was ¥8.0 billion, up ¥1.9 billion or 31%.

9

(2) Consolidated Financial Condition
Consolidated assets as of September 30, 2016, totaled ¥592.3 billion, down ¥28.0 billion from the end of
the previous fiscal year (December 31, 2015). The decline is mainly attributable to decreases in trade notes
and accounts receivable and in investment securities, which more than offset the increase in buildings andstructures owing to the opening of GINZA PLACE.
Consolidated liabilities totaled ¥436.5 billion, ¥20.0 billion less than on December 31, 2015, with the decline
primarily owing to decreases in income taxes payable and liquor taxes payable.
Consolidated net assets totaled ¥155.7 billion, ¥8.0 billion less than on December 31, 2015. The
contraction in net assets primarily reflects the payment of dividends and decreases in unrealized holding gain
on securities and in foreign currency translation adjustments, which offset the posting of net income
attributable to owners of the parent.

(3) Outlook for the fiscal year ending December 31, 2016
As a result of taking into account the performance of each business, the forecasts for the full year have beenrevised as indicated below.

Revision of consolidated full-year earnings forecast for the fiscal year ending December 31, 2016
(January 1 to December 31, 2016)(millions of yen, except percentages and per-share data)
Net income

Net sales

Operating

Ordinary

incomeincomeper share
Net income(yen)Previous forecast (A)565,400

21,10020,20010,500134.78Current forecast (B)547,700

20,10019,20010,000128.38Change (B-A)(17,700)(1,000)(1,000)(500)-

Percent change(3.1)%(4.7)%(5.0)%(4.8)%-

533,748

13,95013,211

6,108

78.40

For reference:
Results for the fiscal year
ended December 31, 201510

2. Other Information(1) Changes in significant subsidiaries during the nine month ended September 30, 2016
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 nine months ended September 30, 2016, and then multiplying income (loss) before taxes
and minority interests by this estimated effective tax rate.

(3) Changes in accounting policies, changes in accounting estimates, and retrospective
restatements(Changes in accounting policies)
The following changes to accounting policies were applied from the first quarter of fiscal year 2016:
Accounting Standard for Business Combinations (Accounting Standards Board of Japan - ASBJ - Statement
No. 21 of September 13, 2013); Accounting Standard for Consolidated Financial Statements (ASBJ
Statement No. 22 of September 13, 2013); and Accounting Standard for Business Divestitures (ASBJ
Statement No. 7 of September 13, 2013). Accordingly, in cases where the parent company continues to havecontrol, differences arising from changes in the Company’s ownership interests in subsidiaries are now
recorded in capital surplus, and acquisition expenses for business combinations are now treated as expenses
in the consolidated financial statements for the year in which they arise. Regarding business combinations
that take place on or after the beginning of the first quarter of fiscal year 2016, any change to the allocation of
the acquisition cost arising from confirmation of the provisional accounting treatment must now be reflected in
the consolidated financial statements for the quarter in which the business combination occurred. In addition,
the presentation of the net income category has been revised and minority interests has been changed to
non-controlling interests. Consolidated financial statements for the first-half of the previous fiscal year and forthe entire previous fiscal year have been restated in order to reflect this change in presentation.
Application of the newly adopted accounting standards noted at the outset of this section has been
implemented from the start of the first quarter of fiscal year 2016, in accordance with the transitional
provisions in Article 58-2(4) of the Accounting Standard for Business Combinations, Article 44-5(4) of the
Accounting Standard for Consolidated Financial Statements, and Article 57-4(4) of the Accounting Standard
for Business Divestitures.
These changes in accounting policy had no effect on the quarterly operating income, ordinary income, andincome before income taxes reported for the third quarter of fiscal 2016.

11

(Changes to accounting policies difficult to distinguish from changes in accounting estimates)
The SAPPORO Group has in the past applied the declining-balance method for depreciation of property,
plant and equipment (however, the straight-line method was applied to property, plant and equipment of the
Hokkaido Brewery, rental properties acquired since January 1988, Yebisu Garden Place, Sapporo Factory,buildings (excluding fixtures and equipment) acquired since April 1, 1998, Kyushu Hita Brewery, the Gunma
Brewery’s Japanese liquor manufacturing equipment, and Nasu Brewery). However, from fiscal year 2016 allproperty, plant and equipment will be depreciated using the straight-line method.
Group companies Sapporo Breweries Ltd. and POKKA SAPPORO Food & Beverage Ltd. have carriedout aggressive capital investments on the assumption that growth in total demand would deliver early returns
on those investments. However, in recognition of the maturation of our markets and operating environment,
we are now prioritizing stable supply from existing facilities. In the current fiscal year, we plan to invest in new
manufacturing facilities and the renewal of existing facilities to secure additional stable supplies of coreproducts. In preparation for the drafting of the next long-term and medium-term plan to be implemented fromJanuary 2017, we have examined the current state of usage of the Group’s property, plant, and equipment
and plans for future capital investments. This examination indicates that we will be able to maintain stableutilization of such domestic property, plant and equipment, which in turn has led to the decision that using thestraight-line method to evenly distribute the acquisition cost of these assets over their useful lives will lead tomore appropriate calculations of profit and loss in each reporting period.
The change from the declining-balance method to the straight-line method of depreciation reduced
depreciation expense by ¥1,322 million, had a ¥1,252 million positive impact on operating income, and added¥1,262 million to ordinary income and to income before income taxes in the third quarter of fiscal 2016.

(4) Additional information(Board Benefit Trust (BBT) for directors, group operating officers of the Company, and some directors of
the Company’s subsidiaries)
Following the approval of shareholders of a resolution at the 92nd Ordinary General Meeting of Shareholders,the Company on May 31, 2016, introduced a new stock-based compensation system (Board Benefit Trust, or
BBT) (hereinafter referred to as the “System”), for directors, group operating officers of the Company, andsome of the directors of the Company’s subsidiaries (excluding outside directors, hereinafter referred to as
the “Group Target Officers”). The new System is designed to increase Group Target Officers’ awareness of
their contributions to improving the performance of the Company over the longer term and to enhancing
corporate value.
1. Overview of System
The Company shall grant points to the Group Target Officers according to their respective positions andperformance achievements. The BBT will then provide the Company’s shares to Group Target Officers

12who meet certain conditions in proportion to the points granted to them. In principle, Group Target
Officers will receive the Company’s shares when they retire. The shares to be awarded to Group Target
Officers, including shares for future allocation, shall be purchased using money contributed by theCompany at the time of the System’s establishment, and shall be managed separately as Trust property.
2. Company shares remaining in the Trust
Upon the introduction of the System during the second quarter of the current fiscal year, Trust & Custody
Services Bank, Ltd. (Trust Account E) has acquired shares 754,600 shares of the Company. The bookvalue (excluding incidental costs) of the Company shares now held by the Trust are accounted for astreasury stock in the net assets section of the Company’s balance sheet. As of the end of the second
quarter of fiscal 2016, the book value and total number of treasury shares held by the Trust are,respectively, ¥445 million and 754,600 shares.
With an effective date of July 1, 2016, the Company implemented a consolidation of shares at a ratioof 1 share for each 5 shares of the Company’s common shares. Following this share consolidation, thenumber of shares held by the Trust totaled 150,920.

13

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 Merchandise 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

14

December 31, 2015

September 30, 2016

AmountAmount10,43092,33524,912
13,722
15,028(64)
156,364

13,296
71,24327,737
12,876
15,577(57)
140,675

383,087(213,567)
169,519
227,534(183,165)
44,368105,121
6,637
33,985(22,589)
11,395
337,042

389,446(218,034)
171,412
224,652(183,440)
41,211
106,735
3,566
34,723(21,030)
13,693
336,619

30,235
10,74340,97827,695
9,872
37,567

61,848
9,016
16,372(1,234)54,017
8,833
15,818(1,230)86,00277,438464,023
620,388451,625592,301

Liabilities
I Current liabilities
1 Notes and accounts payable - trade
2 Short-term bank loans
3 Commercial Paper
4 Current portion of bonds
5 Liquor taxes payable
6 Income taxes payable
7 Accrued bonuses
8 Deposits received
9 Other
Total current liabilities
II Long-term liabilities
1 Bonds
2 Long-term bank loans
3 Net defined benefit liability
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
3 Foreign currency translation adjustments
4 Remeasurements of defined benefit plans
Total accumulated other comprehensive income
III Non-controlling Interests
Total net assets
Total liabilities and net assets

15

December 31, 2015
AmountSeptember 30, 2016
Amount36,77265,822
17,00010,00033,903
6,114
2,219
8,824
52,986
233,643

38,88041,21315,00010,00020,426
1,282
3,630
7,569
56,876
194,880

50,00091,9197,636
32,83340,533
222,921456,565

50,217
112,033
6,859
33,25639,306
241,672
436,553

53,88645,91335,189(1,595)
133,394

53,88646,08937,700(1,792)
135,883

23,926(11)(1,255)
1,874
24,533
5,894
163,822620,388

18,743(2)(5,687)1,680
14,734
5,129
155,747
592,301

(2) Consolidated Statements of Income(millions of yen)
Nine months ended Nine months ended
September 30, 2015 September 30, 2016
AmountAmount388,147
392,270
256,480
254,524
131,667
137,745

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 income of affiliates
4 Gain on valuation of derivatives
5 Other
Total non-operating income
V Non-operating expenses
1 Interest expense
2 Foreign exchange losses
3 Loss on valuation of derivatives
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
3 Gain on sales of consolidated subsidiaries
4 Subsidy income
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 Loss on impairment of property, plant and equipment
4 Loss on devaluation of investment securities
5 Compensation expenses
Total extraordinary losses
Income before income taxes
Income taxes
Net Income
Loss attributable to Non-controlling interests
Net Income attributable to owners of the parent
Net Income
Other comprehensive income
Unrealized holding gain on securities
Deferred hedge gains (losses)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests

16

25,50917,82623,025
1,819
2,089
55,405
125,676
5,991

27,45815,85922,9122,186
601
55,839124,858
12,886

179
802
36
49
772
1,839

172
743
12
595
1,522

1,738
534
619
2,893
4,938

1,620
713
33
462
2,829
11,580

7,382
27
72
322
7,805

46
9
55

862
4
3,298
1,757
140
6,062
6,680
4,906
1,773
(144)
1,917

1,155
4
509
22
325
2,017
9,619
4,380
5,238
(31)
5,269

1,773

5,238

1,682
(4)
(3,766)844(1,243)529(5,183)33(5,282)(193)(10,625)(5,386)699(169)(4,529)(857)

(3) Notes on the Going-concern Assumption
Not applicable(4) Segment Information
Ⅱ Nine months ended September 30, 2015 (January 1, 2015 – September 30, 2015)
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

195,261

53,232

99,341

20,56915,260383,665

4,482

2,157

76

208

4

1,898

4,344

14,593

197,41953,30899,54920,573

17,159388,009

19,076

3,007

(35)

(513)

364

6,145

8,969

74

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

388,147
18,938407,085
9,043-

388,147(18,938)(18,938)

388,147(3,052)

5,991-

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 ofincome8,969
74(3,023)(28)
5,991

3. Impairment Loss on Fixed Assets or Goodwill by Reportable Segment(Significant impairment losses on fixed assets)
In the “Japanese Alcoholic Beverages” business, the book value of the buildings and land has been revalued and lowered to the expected sales price, following thedecision to sell off idle real estate. As a result, an impairment loss of 1,688 million yen has been recognized in the third quarter of the financial year 2015.
(Significant changes in the amount of goodwill)
The International Business on September 25, 2015, acquired additional shares of SAPPORO VIETNAM LTD., making the company a wholly owned subsidiary. The
transaction increased goodwill included on the balance sheets as of the end of the third quarter of the current consolidated financial year by 1,663 million yen.
(Material Gain on negative goodwill)
Not Applicable17

Ⅱ Nine months ended September 30, 2016 (January 1, 2016 – September 30, 2016)
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

200,067

48,026

101,581

21,048

16,775

387,499

4,770

2,108

77

202

0

1,917

4,306

14,761

202,175

48,104

101,783

21,04918,693391,805

19,532

6,337

790

688

527

8,070

16,414(107)(2) Intra-group sales and transfers
Total
Segment income (loss)

392,270
19,067411,338
16,307-392,270(19,067)(19,067)

392,270(3,420)12,886-

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 ofincome16,414(107)(3,382)(38)
12,886

3. Changes in Reportable Segment, etc.
(Change to depreciation method)
As described in “Changes in accounting policies,” the depreciation method for property, plant and equipment has been changed with effect from the first quarter offiscal year 2016.
This change increases the third quarter segment profit of the Japanese Alcoholic Beverages business by¥692 million, Food & Soft Drinks business by ¥260 million,
Restaurants business by ¥137 million and the Real Estate business by ¥120 million over the profit that would have been recorded under the previous method.
The change also has a positive effect on earnings of Others segments, reducing third quarter losses by ¥4 million. The change also reduces Adjustments by ¥38
million.

4. Impairment Loss on Fixed Assets or Goodwill by Reportable Segment(Significant impairment losses on fixed assets)
At the Food & Soft Drinks business, the book value of fixed assets owned by consolidated subsidiary NIHON BEANS CO., LTD., are now estimated to be less thanassumed when forecasting earnings for fiscal 2016. Accordingly, the book value of these assets has been lowered to the expected recoverable amount. As a result,an impairment loss of ¥400 million has been recognized on the accounts for the first nine months of fiscal 2016.
(Significant changes in the amount of goodwill)
Not Applicable(Material Gain on negative goodwill)
Not Applicable18

(5)Notes on Significant Changes in the Amount of Shareholder's Equity
Not applicable(6)Subsequent Events
Not applicable19