Financial Results
for the Year Ended December 31, 2009—Consolidated
February 12, 2010

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

Takao Murakami, President and Representative Director, Group CEO
Yoichi Kato, Director and General Manager of the Corporate Planning
Department

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

Annual general meeting of shareholders

March 30, 2010

Filing of financial reports

March 31, 2010

Commencement of dividend payments

March 31, 2010

1. Consolidated Financial Results for the Year Ended December 31, 2009
(January 1 – December 31, 2009)(Amounts in million yen rounded down to the nearest million yen)

(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%

Year ended
December 31, 2009

387,534(6.5)

12,895(12.2)

10,7251.9

4,535(40.6)

Year ended
December 31, 2008

414,558(7.7)

14,68518.8

10,526

29.7

7,640

38.7

Net income per
share

Diluted net
income per
share

Return on
equityOrdinary
income to total
assetsOperatingincome to net
sales

yen

yen

%

%

%

Year ended
December 31, 2009

11.57

11.05

3.9

2.1

3.3

Year ended
December 31, 2008

19.49

18.89

6.3

1.9

3.5

Note: Equity method investment gains or losses:
Year ended December 31, 2009: 275 million yen
Year ended December 31, 2008:(1) million yen㪈(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

December 31, 2009

506,874

118,59023.4

302.16

December 31, 2008

527,286

116,86222.1

297.60Note: Shareholders’ equity
December 31, 2009:

118,371 million yen

December 31, 2008:

116,636 million yen(2) Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at endof period

million yen

million yen

million yen

million yen

December 31, 2009

12,454(32,227)

3,745

6,267

December 31, 2008

22,291

16,856(22,207)22,217

2. Dividends
Dividend per share
Record date or

Payout ratio(consolidated)

Dividends to
net assets(consolidated)

End Q1End Q2End Q3

yen

yen

yen

yen

yen

million yen%%

Year ended
December 31,
2008

-

0.00

-

7.00

7.00

2,743

35.9

2.3

Year ended
December 31,
2009

-

0.00

-

7.00

7.00

2,742

60.5

2.3

Year ending
December 31,
2010 (forecast)

-

0.00

-

7.00

7.00

periodYear-end Full year

Total
dividends
paid㪉

(full year)

57.1

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2010
(January 1 – December 31, 2010)(Percentage figures represent year-over-year changes)
Net
Net sales

Operating income

Ordinary income

Net income

incomeper share

million yen%

million yen%

million yen%

million yen%yen

Six months
ending June 30,
2010

184,000

0.9

(500)

-

(2,000)-(2,000)--

Full year

394,500

1.8

13,500

4.7

11,000

2.6

4,800

5.8

12.30

4. Other(1) Changes affecting the status of significant subsidiaries (scope of consolidation): None
(2) Changes in accounting principles, procedures, and methods of presentation used to prepare
the financial statements
1) Changes in accord with amendments to accounting standards: Yes
2) Changes other than the above: None
(3) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
December 31, 2009: 393,971,493 shares
December 31, 2008: 393,971,493 shares
2) Number of shares held in treasury at end of period:
December 31, 2009:
2,218,784 shares
December 31, 2008:
2,045,360 shares

Reference:
1. Non-consolidated Financial Results for the Year Ended December 31, 2009
(January 1 – December 31, 2009)(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%

Year ended
December 31, 2009

9,072

(12.1)

6,092(23.6)

6,745(24.8)

6,202

42.2

Year ended
December 31, 2008

10,318

88.9

7,974

318.3

8,970

202.0

4,362

116.0

㪊

Net income per
share

Diluted net income
per share

yen

yen

Year ended
December 31, 2009

15.83

-

Year ended
December 31, 2008

11.13

10.93

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

December 31, 2009

324,652

133,23641.0

340.10December 31, 2008

314,401

129,93141.3

331.52

Note: Shareholders’ equity
December 31, 2009:

133,236 million yen

December 31, 2008:

129,931 million yen

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. For the Company’s
earnings forecasts, please refer to“ b) Outlook for the Fiscal Year Ending December 31, 2010” onpage 9 in the 1. Operating results, (1) Analysis of Operating Results section below.

㪋1. Operating results(1) Analysis of operating resultsa) Review of the fiscal year ended December 31, 2009
(1) Overview
Millions of yen, except percentages
Net sales2009
387,534
2008
414,558
Change (%)(6.5)

Operating income
12,895
14,685(12.2)

Ordinary income
10,725
10,526
1.9

Net income
4,535
7,640
(20.6)In 2009, the perennially export-dependent Japanese economy was hard-hit by a major
contraction in global demand amid a synchronous global recession ensuing from the financial
crisis that began the previous autumn.
Against such a backdrop, the Japanese economy was beset by deepening deflation ascompanies were forced to downsize their workforces and curtail investment, resulting in large
declines in domestic consumer spending and capital investment.
In the alcoholic beverage, soft drink, and restaurant industries in which the Group operates, theconsumer spending slump and unseasonable summer weather weighed heavily on corporate
earnings.
In the real estate industry, Greater Tokyo office building rents and vacancy rates continued toworsen from January. Although the deterioration trend has gradually slowed since mid-2009, it
has yet to reverse.
Amid such an environment, the Group endeavored to strengthen its earnings base and expand
operations that capitalize on its strengths in pursuit of sustained growth in accord with the key
priorities of its rolling two-year Management Plan based on the Sapporo Group’s New
Management Framework unveiled in 2007.
To realize sustained growth into the future, the Group laid the groundwork for attaining theManagement Plan’s targets through such means as deciding to expand the beer business into
Vietnam, forming a capital and operational alliance with Pokka Corporation, and initiating a joint
venture with the Marudai Food Group in the yogurt, dessert, and chilled beverage markets. In
terms of strengthening its earnings base, the Group made progress toward achieving theManagement Plan’s earnings targets by continuously tightening cost controls and reforming its
cost structure in the aim of achieving earnings stability amid a changing economic environment.
Earnings, however, declined due to accounting and taxation changes.
The Group’s 2009 consolidated results are summarized as follows.
Net Sales
Consolidated net sales declined to ¥387.5 billion, a 7% or ¥27 billion decrease from 2008, as aresult of unseasonable summer weather, a falloff in demand for restaurant meals, reviews of
unprofitable sales accounts in the Soft Drinks business, and growth in new genre beer products’share of the Japanese Alcoholic Beverages business.
Operating Income
Consolidated operating income declined 12% or ¥1.7 billion to ¥12.8 billion. Despite implementing
tighter cost controls, the Japanese Alcoholic Beverages business saw its operating income fall asa result of special factors, including increased depreciation due to accounting and taxation
changes and inventory disposal losses charged to operations. The International Alcoholic
Beverages business increased its unit sales, mainly in Canada, but its operating income declined,
largely as a result of exchange rate movements.

㪌The Soft Drinks business achieved operating income growth through continued efforts tostrengthen profitability even as it invested in building its food operations.
The Restaurant business’s operating income decreased due to a sales decline in the wake ofthe slump in spending on dining out.
The Real Estate business endeavored to cut costs while maintaining or boosting rents levels
and occupancy rates, but its operating income declined, partly as a result of divestment of a 15%
stake in Yebisu Garden Place in 2008.
Ordinary Income
Consolidated ordinary income grew 2%, or ¥100 million, to ¥10.7 billion, largely as a result of
income from investments in equity-method affiliates Pokka Corporation and Azumino Food Co.,
Ltd. Although outstanding debt remained unchanged from December 31, 2008, net interest
expense was reduced by a decrease in the average interest rate payable on borrowings.
Net Income
Consolidated net income decreased 41%, or ¥3.1 billion, to ¥4.5 billion. The main factor behindthe decrease was nonrecurrence of a gain on fixed-asset sales booked in 2008.
ROE
ROE fell to 3.9% from its 2008 level of 6.3% in conjunction with the 41% decrease in consolidated
net income.
(2) Results by Business Segment
Millions of yen, except percentages
Net sales
2008
2009
Alcoholic324,720
305,495
beverages
Japan
299,698
282,913International
25,021
22,581
Soft Drinks
36,84830,745
Restaurants
29,53728,026
Real Estate
23,451
23,266% change
(5.9)
(5.6)
(9.7)
(16.6)(5.1)(0.8)

Operating income
2008
2009
% change
8,610
8,176
(5.0)
7,709
901
220
550
7,612

7,483
693
301
(171)
7,524

(2.9)
(23.1)
36.5
—
(1.2)

Alcoholic Beverages
Alcoholic Beverages (Japan)
In Japan, deflationary forces continued to intensify throughout 2009 amid continued deteriorationin the employment environment in the wake of the global economic crisis that erupted in autumn
2008. Overall domestic beer demand contracted an estimated 2.1% from 2008, largely as a resultof unseasonable summer weather. With consumers increasingly tightening their belts, demand forconventional beer and happoshu (low-malt beer) decreased while demand for new genre beergrew a hefty 21%.
In the Japanese Alcoholic Beverages business, we promoted our Yebisu Beer brand’s uniquegustatory value and endeavored to create new demand with limited-edition products such as
Yebisu Silk and Kohaku Yebisu. Yebisu brand unit sales consequently fared better than overallbeer demand. Our overall unit sales of conventional beer were down 9% in 2009 as a result ofconsumers’ growing preference for low-priced products and a slump in demand in the commercial
market. In the new genre category, sales of a new product launched in March fell short of ourtarget, but sales of our Mugi to Hop brand, which debuted in 2008, grew 116%. We also offeredconsumers new value with Off no Zeitaku, a functional new genre beer launched in October. Our
total unit sales in the new genre category grew 27%, outpacing overall new genre demand growth.

㪍Our overall 2009 beer sales fell 5% as a result of growth in low-priced new genre products’ shareof total sales.
In the wine business, sales of the imported Mythique and Beringer brands held firm, roughly inline with overall wine demand. Among our domestic wines, our antioxidant-additive-free productline sold briskly but underperformed overall wine demand, largely due to 2008 price increases on
its low-end products. Our overall wine sales consequently decreased, but the wine business’s
earnings grew.
Shochu sales grew 4% by virtue of Waramugi, Karariimo, and other premium brands’ steadypenetration of the commercial market coupled with strong sales of mass-market brands also. The
shochu business’s earnings also grew.
Overall, the Japanese Alcoholic Beverages business earned operating income of ¥7.4 billion(down 3% or ¥200 million from 2008) on net sales of ¥282.9 billion (down 6% or ¥16.7 billion).
Although certain expenses increased due to accounting and taxation changes, these incremental
expenses were more than offset by reductions in other costs, most notably manufacturing andsales promotion expenses.
Alcoholic Beverages (International)
Our estimates indicate that total demand in the North American beer market has contracted bysome 2–3% as consumer spending was dampened by the US economy’s pronounced slowdown
since autumn 2008. Demand for US domestic beers (particularly low-priced brands) held
relatively firm, but demand for premium-priced imported beers was generally down some 10%.
Beer consumption declined in the commercial market but was buoyant in the household market,
reflecting consumers’ response to the economic downturn. Outside of North America, many otheroverseas markets likewise saw beer demand stagnate in response to the economic downturn.
Faced with such a challenging environment, we conducted proactive sales activities targeted at
the premium market segments in which we have strong brands. Canadian subsidiary Sleeman
Breweries’ unit sales (excluding outsourced production of Sapporo brand products) grew 10%. At
Sapporo USA, by contrast, unit sales declined 13%, reflecting that its sales mix is heavily
weighted toward the super-premium price range and the commercial market.
Overall, the International Alcoholic Beverages business earned operating income of ¥600
million (down 23% or ¥200 million from 2008) on net sales of ¥22.5 billion yen (down 10% or ¥2.4
billion). In local currency terms, however, its sales were up relative to 2008. The sales decline inyen terms was attributable to exchange rate movements.
Soft Drinks
In the domestic soft drink market, total demand shrank an estimated 3% as a result of consumer
belt-tightening in response to the economic downturn, unseasonable summer weather, and weak
demand in the vending machine channel.
Amid such an environment, the Soft Drinks business engaged in aggressive brand-building toestablish a meaningful market presence in the aim of realizing our corporate vision: “Foreveryone’s smile, we will provide unforgettable taste with infinite passion.”
In our brand-building activities, we actively endeavored to expand sales channels in the aim ofcultivating and perpetuating brands that add value to consumers’ lives. For example, we
conducted a campaign to win new orders for Ribbon brand products, mainly Ribbon Citron, whichcelebrated its centennial year on the market in 2009. For Gabunomi, we introduced bottle labelingfeaturing the popular animation series One Piece. We also pursued marketing strategies focused
mainly on cultivating and strengthening existing brands. For Gerolsteiner naturally carbonatedwater, we conducted TV advertising and consumer campaigns and endeavored to deepen its
market penetration by expanding customer-contact points and bolstering its point-of-salepresence. Despite such measures, the Soft Drink business’s unit sales declined 18% from 2008,
partly due to the effect of reviewing unprofitable sales accounts.
Meanwhile, we continued to carry out the strategy we initiated in 2008 to regain sustained
profitability. Toward this end, we implemented measures aimed at shoring up stability of thesegment’s earnings base through such means as optimizing production operations, rationalizing㪎raw material and procurement costs, and reducing losses on product disposals and raw material
spoilage.
In the food business, our Sapporo Potekaru range of non-oil-fried potato chips, which werelaunched in February, have been well received by consumers.
As a result, the Soft Drinks business’s sales revenue ended at ¥30.7 billion (down 17% or ¥6.1
billion). Although we incurred initial investment costs, our ongoing program to boost earnings
power via a select-and-focus approach (selectively focusing resources on key areas) helped us
achieve operating income of ¥300 million (up 36% from 2008).
Restaurants
In the restaurant industry, restaurant chains lowered prices in rapid succession in response to
consumers’ growing frugality amid severe deterioration in personal incomes and the employment
environment. Our existing restaurant operations saw a major falloff in customer traffic and acontinued decline in average spending-per-customer, partly due to a decline in corporate
entertainment spending at pubs.
Amid such an environment, our Restaurant business avoided becoming embroiled in cut-pricecompetition while seeking to restore customer traffic through such means as expanding banquet
courses’ price range and offering smaller servings of featured menu items at lower prices. We
also endeavored to boost revenues by conducting a Beer Hall Day to commemorate the 110th
anniversary of our the Sapporo Lion Beer Hall chain’s inception and deploying a Group-widesales force to attract corporate events to our restaurants.
We opened 13 new restaurant locations in 2009. In November, we simultaneously opened new
Kakooiya and Tomoru restaurants at the Shinjuku Sanchome Toho Building. We also opened our
first Yebisu Bar, a new format we developed by tapping into Group synergies, in Tokyo’s Ginza
district. We also closed six restaurant locations in 2009 to end the year with a total of 211
locations.
However, as a result of a large falloff in sales at comparable restaurants, the Restaurant
business incurred an operating loss of ¥100 million (down ¥700 million from 2008's operating
income) on sales of ¥28 billion (down 5% or ¥1.5 billion).
Real Estate
The rise in vacancy rates and decline in rents, ongoing since the year’s outset, both eased
gradually through the second half of the year, but a recovery has yet to materialize.
Amid such an environment, we strived to maintain or raise occupancy rates and rents, and tofurther reduce costs, at existing properties. We maintained high occupancy rates mainly at central
Tokyo properties such as the Yebisu Garden Place office tower, but felt the impact of theeconomic downturn as occupancy rates stagnated at upscale rental apartments. In real estatedevelopment, we opened the MLB Cafe Tokyo commercial property in Ebisu (Tokyo) in
September, completed construction of the Chikusa Garden Terrace condominium complex in
Nagoya, and we continued work on the Shinjuku office building development. We also acquired
new income properties. In February, we acquired Rose City Higashi Sapporo, a rental
condominium located in Sapporo, and in August, we acquired Ebisu Square, an office building
located in Ebisu.
As a result of the above, and partly due to the April 2008 divestment of a 15% stake in Yebisu
Garden Place, the Real Estate business’s revenues declined to ¥23.2 billion (down 1% or ¥0.1
billion) and its operating income declined to ¥7.5 billion (down 1% or approximately ¥0.0 billion).

㪏b) Outlook for the fiscal year ending December 31, 2010
(1) Overview
Millions of yen, except percentages

2010 forecast
2009 results
Projected
increase (%)

Net sales
394,500
387,534

Operatingincome13,50012,895

Ordinary income
11,00010,725

Net income
4,800
4,535

1.8

4.7

2.6

5.8

In accord with the 2010-11 Sapporo Group Management Plan, a rolling two-year plan, the Groupwill focus on two priorities in 2010: strengthening our existing operations and launching a new
growth strategy.
The Group has designated 2010-11 as a period of transition from a phase of earnings basestrengthening to a growth phase. The Group aims to grow its businesses into the future.
Net Sales
We project 2010 consolidated net sales of ¥394.5 billion, a 2%, or ¥6.9 billion, increase from 2009.
In the Alcoholic Beverages business, we aim to expand domestic sales by pursuing a strategy
focused on growing existing brands. Overseas, we will pursue sales growth through further
market penetration in the US and Canada. In the Soft Drink business, we expect to achieve sales
growth by pursuing marketing strategies focused primarily on developing and strengthening
existing brands. In the Restaurant business, we will focus mainly on implementing an expansion
strategy adapted to the current environment, but we expect sales to decline because we will also
close unprofitable locations. In the Real Estate business, we will pursue growth and expansion by
maintaining and boosting occupancy rates, raising rents, and undertaking development projects.
Operating Income
We project 2010 consolidated operating income of ¥13.5 billion, a 5%, or ¥600 billion, increase
from 2009.
In the Alcoholic Beverages business, we will experience increased costs in the domestic
market as a result of putting into operation a new IT system for sales and logistics, but we aim toearn stable profits by continuing to control costs. Overseas, we will incur upfront investment costs
in conjunction with our expansion into Vietnam, but we expect to achieve operating income
growth by expanding unit sales. In the Soft Drinks and Restaurant businesses, we expect toincrease operating income by continuing to implement measures to strengthen profitability. In theReal Estate business, we project operating income growth from new property acquisitions andrent increases at existing properties.
Ordinary Income
We project 2010 consolidated ordinary income of ¥11 billion, a 3%, or ¥200 million, increase from2009, by virtue of growth in consolidated operating income.
Net Income
We project 2010 consolidated net income of ¥4.8 billion, a 6%, or ¥200 million, increase from2009, by virtue of growth in consolidated operating income.
ROE
We expect ROE to increase to 4.0% from 3.9% in 2009 as a result of the projected increase inconsolidated net income.

㪐(2) Outlook by Segment
Millions of yen, except percentages
Net sales
2009
2010
Alcoholic
305,495
311,000
Beverages
Japan
282,913285,000
International
22,581
26,000Soft Drinks
30,74532,000
Restaurants
28,02627,000Real Estate
23,266
24,500% change
1.8
0.7
15.1
4.1
(3.7)
5.3

Operating income
2009
2010
% change
8,176
8,300
1.5
7,483
693
301
(171)
7,524

7,500
800
700
200
8,000

0.2
15.4
132.5
—
6.3

Alcoholic Beverages
Alcoholic Beverages (Japan)
In the domestic alcoholic beverage market, aggregate demand is expected to continue tostagnate amid concerns about further economic deterioration and the risk of a deflationary spiral.
With consumers expected to remain in belt-tightening mode in 2010, demand in the beermarket is likely to continue to generally shift from conventional beer and happoshu to new genre
products. However, given that consumers are interested in not merely saving money but also
enjoying life and are exhibiting greater health consciousness and a growing penchant forauthenticity, we expect beer consumption to grow increasingly diverse, with consumers turning tobeer as a minor luxury and seeking classic taste and new functional attributes from beer.
Amid such a market environment, we aim to boost earnings by offering uniquely Sapporo value
propositions. Toward this end, our first priority is to conduct marketing that induces consumers toexperience our beer products’ refreshing taste, using a communication message of Bringing morecheer to your “Cheers!” (translated from the Japanese).
More specifically, we will primarily focus on further increasing the market presence of threebrands in particular: our long-standing Yebisu Beer and Sapporo Draft Beer Black Label brands,
and Mugi to Hop, a new genre brand with favorable prospects for continued sales growth in 2010.
In the aim of gaining new growth brands, we will also cultivate the Off no Zeitaku functional new
genre brand we launched in October 2009. Additionally, we will offer Silk Yebisu on a year-roundbasis in 2010 following its well-received limited debut in 2009. By thus proactively proposing
innovative “refreshment,” we aim to expand our legion of Sapporo beer enthusiasts.
Cost-wise, our newly launched IT system for sales and logistics will be an incremental cost
factor, but we will continue to strengthen the Japanese Alcoholic Beverages’ earnings base bycontinuing to implement effective procurement policies in response to fluctuations in raw material
prices, enhance production operations’ flexibility, and further improve cost-effectiveness,particularly with respect to sales promotion expenditures.
Alcoholic Beverages (International)
In North America, the Alcoholic Beverages business continues to face uncertainty in terms ofwhether the global economy will recover from its downturn triggered by the US financial crisis orrelapse into a double-dip recession. Aggregate beer demand in North America, the Alcoholic
Beverages business’s core overseas market, is projected to be roughly flat in 2010, but we aim tocontinue to solidify our North American market position by capitalizing on our strengths in thepremium beer category.
In the Canadian market, Sleeman Breweries will continue to invest in marketing to maintain andenhance the brand value of its core Sleeman, Unibroue, and Okanagan Spring premium brands.
Sleeman Breweries aims to achieve unit sales growth in excess of the Canadian market’s overallbeer demand growth rate inclusive of the growing value-brand segment.

㪈㪇In the US market, where Sapporo USA is our core subsidiary, we aim to achieve unit sales
growth in excess of the overall demand growth rate by strengthening our presence beyond theAmerican-Japanese market segment while to continuing to target that segment as we have done
until now.
In export and overseas production operations, we aim to increase sales through aggressive
expansion into growth markets, while also looking to cultivate new markets and exit regions withunfavorable prospects for earnings growth. In Vietnam in particular, a market that we decided toenter in December 2009, we will commence construction on a new brewery as we continue todevelop marketing strategies and a distribution network. In Singapore, a market in which we
intend to synergistically collaborate with Pokka Corporation, an equity-method affiliate since 2009,
we plan to strengthen our operating base by expanding sales channels in the household market.
Soft Drinks
In the Soft Drink business, we will continue to endeavor to strengthen our operating base andsolidify our profit structure in pursuit of sustained growth.
Specifically, we will implement marketing strategies focused mainly on developing andstrengthening existing brands, including Gabunomi, which is undergoing brand renewal; Ribbon,
particularly Ribon Citron, now in its 101st year on the market; functional fruit-juice beverages
Ocean Spray Cranberry and Karada ni Oishii Ume; and Gerolsteiner naturally carbonated water,
Germany’s top-selling mineral water. We plan to roll out new Gerolsteiner products for thevending machine channel in 2010.
In terms of cost, we will follow through from 2009 with continued efforts to strengthen
profitability through a rigorous select-and-focus approach (selectively focusing resources on key
areas). We will also further rationalize costs across all value chains and cut costs by tapping into
economies of scale in procurement, production, and logistics through our strategic alliance with
Pokka Corporation. Through these initiatives, we aim to achieve stable, sustained profits.
In the food business, we will expand our production capacity for Sapporo Potekaru non-oil-friedpotato chips, which have won favor among consumers since their launch last spring, toaccommodate demand growth. We aim to further expand the food business by rolling out new
and improved Sapporo Potekaru from March.
Restaurants
The restaurant industry is expected to remain under pressure from the ongoing demand slump.
Amid such an environment, the Restaurant business will pursue early recovery in existing
restaurants’ earnings by closing unprofitable locations, cutting fixed costs (e.g., rents), andcontrolling personnel expenses through stringent shift management. Although we will temporarily
curtail new restaurant openings, we will steadily open new restaurants adapted to consumers’changing lifestyles amid the recessionary environment.
Real Estate
The real estate industry’s operating environment is likely to remain adverse.
In response, our Real Estate business will maintain its earnings power by maintaining andincreasing occupancy rates and raising rents to fair-market levels at existing buildings, mostnotably Yebisu Garden Place. We will also continue to pursue earnings growth through newproperty acquisitions and a proactive approach to development projects.
Note: The above projections are predicated on information available as of this document’s
publication date, as well as assumptions regarding uncertainties that will affect future operating
results. These assumptions are likewise current as of the publication date. Actual operating
results may differ materially from the above projections due to various factors.

㪈㪈(2) Review of Consolidated Financial Condition(a) Consolidated Financial Condition
Consolidated assets totaled ¥506.8 billion at December 31, 2009, a ¥20.4 billion decrease from
December 31, 2008. The decrease was attributable to a reduction in current assets in the form of
a drawdown of cash and deposits. The decrease in current assets was partially offset by growth
in investment securities due to the acquisition of an equity interest in Pokka Corporation andgrowth in property, plant and equipment, largely in the form of newly acquired land.
Consolidated liabilities totaled ¥388.2 billion, a ¥22.1 billion decrease from December 31, 2008.
The decrease was largely attributable to reductions in outstanding bonds, short-term bank loans,and deposits received, partially offset by growth in long-term bank loans.
Consolidated net assets totaled ¥118.5 billion, a ¥1.7 billion increase from December 31, 2008.
The increase was largely attributable to growth in retained earnings and an increase in the foreign
currency translation adjustment account balance as a result of yen depreciation as of fiscal yearend relative to a year earlier.
(b) Consolidated Cash Flows
Consolidated cash and cash equivalents (“cash”) totaled ¥6.2 billion at December 31, 2009, a¥15.9 billion or 72% decrease from December 31, 2008. The decrease resulted from use of cash
provided by operating activities to acquire affiliates and tangible fixed assets and redeem
outstanding bonds.
Following are consolidated cash flow figures for 2009 and an overview of factors that affectedeach category.
Cash flows from operating activities
Operating activities provided net cash of ¥12.4 billion, a 44% or ¥9.8 billion decrease from 2008.
Major sources of operating cash flow included ¥8.8 billion in income before taxes and minority
interests, ¥22.5 billion in depreciation and amortization, and ¥1.0 billion in goodwill amortization.
Major uses of operating cash flow included a ¥19.7 billion reduction in deposits received inconjunction with termination of sales of beer gift vouchers.
Cash flows from investing activities
Investing activities used net cash of ¥32.2 billion (versus a net cash inflow of ¥16.8 billion in2008). Major investment outflows included ¥8 billion spent to acquire equity interests in affiliates,¥18.3 billion spent to acquire property, plant and equipment, and ¥3.4 billion spent to acquire
intangibles.
Cash flows from financing activities
Financing activities provided net cash of ¥3.7 billion (versus a net cash outflow of ¥22.2 billion in2008). Major financing inflows included ¥50 billion in proceeds from long-term bank loans. Major
outflows included ¥17.2 billion in repayments of long-term bank loans, ¥19.7 billion in bondredemptions, and ¥2.7 billion in dividend payments.
Cash Flow Indicators
2005
19.8
42.8
6.5
10.9

As of December 31,
2006
2007
2008
19.2
22.3
22.1
43.5
62.8
41.5
9.4
8.0
9.9
9.1
7.2
6.0

Equity ratio (%)
Equity ratio based on market capitalization (%)
Cash flow to interest-bearing debt (years)
Interest coverage ratio (%)
Equity ratio: Total net assets / Total assets
Equity ratio based on market capitalization: Market capitalization / Total assets

㪈㪉

2009
23.4
39.3
18.4
3.5

Cash flow to interest-bearing debt: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest expense
Notes:
1. All of the above indicators are calculated based on consolidated financial statement
data.
2. Market capitalization is calculated based on the number of shares issued andoutstanding, excluding treasury stock.
3. “Cash flow” is operating cash flow.
4. Of the debt carried on the consolidated balance sheet, interest-bearing debt is total
debt on which interest is currently payable.
(3) Dividend Policy and Dividends for 2009 and 2010
Providing fair returns to our shareholders is a key management policy of our Group. Our basic
policy is to pay stable dividends to the extent permitted by our operating performance andfinancial condition.
We also aim to maximize corporate value by internally retaining funds to strengthen our
financial base and strategically invest in growth businesses in accord with our Management Plan.
In accord with these policies, we plan to pay annual dividends for 2009 of ¥7 per share.
For 2010, we plan to again pay annual dividends of ¥7 per share by steadily carrying out ourManagement Plan while also making strategic investments and strengthening our financial
foundation.
Dividends for 2009 and 2010 (yen per share)
InterimYear-end
2009
—
7.0
2010
—
7.0

Total
7.0
7.0

2. Management Policy(1) Fundamental Management Policy
The Sapporo Group’s management philosophy is “to make people’s lives richer and moreenjoyable.” In conducting its business activities, the Sapporo Group strives to maintain integrity
and corporate conduct that reinforces stakeholder trust and aims to achieve continuous growth incorporate value. This is our fundamental management policy.
(2) Operating Performance Targets
The Sapporo Group’s New Management Framework’s management targets for 2016 are as
follows.
Consolidated net sales:¥600 billion
Consolidated operating income:¥40 billion yen
Debt/equity ratio:around 1.0
ROE:
above 8%(3) Medium- to Long-Term Management Strategies
In October 2007, we unveiled the Sapporo Group’s New Management Framework with targets for
2016, the 140th anniversary of the Group’s founding.
The New Management Framework’s basic strategies are as follows.
1) Create High-Value-Added Products and Services
In all of our businesses, we will build sustained market advantages and pursue maximal
capital efficiency by concentrating management resources in market segments where we aremost competitive. We will create high value-added, placing priority on “providing valuable
products and services that customers can identify with” as a shared Group value.

㪈㪊2) Form Strategic Alliances
Instead of single-mindedly operating our businesses on a stand-alone basis, we will form
strategic alliances with strong partners to amplify our strengths, complement our functional
capabilities, and gain access to know-how in the aim of expeditiously gaining competitive
advantages on a large scale.
3) Promote International Expansion
We will pursue overseas expansion of not only alcoholic beverage operations but also softdrink and food operations also. We aim to build brands in overseas markets by capitalizingon operational alliances and proprietary technological capabilities.
4) Expand Group Synergies
We will pursue greater inter-business synergies through flexible coordination andcooperation that transcends individual Group companies and organizational frameworks. We
aim to maximize both operational and strategic synergies.
(4) Issues to be Addressed
We formulated the 2010-2011 Sapporo Group Management Plan, a revision of the 2008-2009
Sapporo Group Management Plan as a two-year rolling plan that takes into account internal andexternal environmental changes.
We formulated the 2010-11 Sapporo Group Management Plan as a specific action plan towardachievement of the Sapporo Group’s New Management Framework’s targets.
Under the 2010-11 Sapporo Group Management Plan, we will undertake the following
initiatives.
First, in response to a still inclement operating environments, we will continue to strengthen
cost controls, implement additional structural reforms, and endeavor to further increase ouradaptability to changes in the environment to achieve earnings stability.
Next, to ensure the Group’s future growth, we will strengthen our operating base andconcentrate resources on our strengths, including each of our businesses’ core products. We will
also aggressively undertake new initiatives in pursuit of growth, as we have done recently withthe launch of a food business, our strategic alliance with Pokka Corporation, and our entry into
the Vietnamese beer market.
In 2009, we held the Yebisu Beer Festival in Ebisu, Tokyo, and local beer festivals throughout
Hokkaido, most notably in Sapporo, the Group’s city of origin, as events to showcase Groupsynergy. These festivals were well attended by the public. In 2010, we will continue such Groupunity initiatives in the aim of enhancing brand value through Group synergies.
We regard management rooted in corporate social responsibility (CSR) as a key strategy
conducive to our Group’s sustained growth. We will conduct programs targeted at specific issues,
such as food safety, drunken driving and other alcohol-related problems, the environment, andclimate change. Additionally, we will continue to build CSR and compliance programs as thefoundation that always governs our corporate behavior, and implant CSR and compliance within
our corporate culture through in-house education.

㪈㪋3.Consolidated Financial Statement(1)Consolidated Balance Sheeets(millions of yen)

AssetsI Current assets
1 Cash and cash equivalents
2 Notes and accounts receivable - trade
3 Marketable securities
4 Inventories
5 Merchandize and finished products
6 Raw materials and supplies
7 Deferred tax assets
8 Refundable income taxes
9 Other
10 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) Deferred tax assets(4) Other(5) Allowance for doubtful receivables
Total investments and other assets
Total fixed assets
Total assets

㪈㪌

December 31, 2008

December 31, 2009

AmountAmount22,49462,25839
21,409
䋭
䋭
6,267
2,969
14,147(167)
129,418

6,387
60,12047
䋭
13,258
9,689
2,787
1,236
8,941
(192)
102,277

358,590(177,716)
180,873
180,772(134,476)
46,29678,893
9,145
20,045(16,047)
3,998
319,207361,276(184,898)
176,378
182,373(138,387)
43,98684,384
8,487
19,784(15,182)
4,601
317,838

17,018
3,948
20,966

14,926
6,967
21,894

26,460
10,4805,039
17,523(1,809)57,693397,868
527,286

35,39011,072
4,824
15,339(1,763)64,863
404,596506,874

Liabilities
I Current liabilities
1 Notes and accounts payable
2 Short-term bank loans and current portion of long-term debt
3 Short-term bank loans
4 Current portion of long-term debt
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 Deferred tax liabilities
4 Employees' retirement benefits
5 Directors’ and corporate auditors’ severance benefits
6 Dealers' deposits for guarantees
7 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 Valuation and translation adjustments
1 Unrealized holding gain on securities
2 Deferred hedge gains (losses)
3 Foreign currency translation adjustments
Total valuation and translation adjustments
III Minority Interests
Total net assets
Total liabilities and net assets

㪈㪍

23,82963,516
䋭䋭
35,585724
1,350
46,83541,361
213,203

20,185
䋭
36,735
10,00035,242843
1,638
27,08437,523
169,252

53,84371,892
12,3037,531
52
32,023
19,573
197,220
410,424

43,843106,216
12,0977,487
45
32,011
17,330219,032
388,284

53,88646,325
19,972(1,058)
119,126

53,88646,31820,286(1,131)
119,360

3,046
䋭(5,536)(2,490)226
116,862
527,286

2,637
0(3,627)(988)
218
118,590
506,874

(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 Foreign exchange gain
4 Gain (loss) on gift voucher redemptions
5 Equity in income of affiliates
6 Other
Total non-operating income
V Non-operating expenses
1 Interest expense
2 Loss on disposal of inventories
3 Equity in loss of affiliates
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 Reversal of provision for doubtful receivables
4 Compensation income from store closures
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Loss on impairment of property, plant and equipment
3 Provision for gift voucher redemptions
4 Loss on revision of retirement benefit plan
5 Early retirement benefits
6 Business reorganization costs
7 Loss on devaluation of investment securities
8 Loss on devaluation of inventories
Total extraordinary losses
Income before income taxes and minority interests
Current income taxes
Deferred income taxes
Minority loss
Net income

Year ended
December 31, 2008
Amount414,558
288,146
126,411(millions of yen)
Year ended
December 31, 2009
Amount387,534
267,690
119,843

21,076
18,236
19,068813
2,718
49,814
111,726
14,685

18,972
16,717
18,906931
3,119
48,299106,947
12,895

402
566
53
䋭
䋭
707
1,730

398
536
50
532
275
431
2,226

3,714
1,102
1
1,070
5,888
10,526

3,623
䋭
䋭
773
4,396
10,72525,89220
10
111
26,035

948
19
䋭
㧙
967

5,835
8,206
746
1,307
305
1,443
746
㧙
18,592

1,523
925
䋭
䋭
䋭
䋭
244
125
2,818

17,970
519
9,835
(24)
7,640

8,874
912
3,437
(11)
4,535

㪈㪎

(3)Consolidated Statements of Cash Flows
Year ended
December 31, 2008
AmountI Cash flows from operating activities
1 Income before income taxes and minority interests
2 Depreciation and amortization
3 Loss on impairment of property, plant and equipment
4 Amortization of goodwill
5 Increase (decrease) in employees’ retirement benefits
6 Increase (decrease) in allowance for doubtful receivables
7 Interest and dividend income
8 Interest expense
9 (Gain) loss on sales of property, plant and equipment
10 (Gain) loss on sales and disposal of property, plant and equipment
11 (Gain) loss on sales of investment securities
12 (Gain) loss on devaluation of investment securities
13 (Increase) decrease in notes and accounts receivable - trade
14 (Increase) decrease in inventories
15 (Increase) decrease in other current liabilities
16 Increase (decrease) in notes and accounts payable
17 Increase (decrease) in liquor taxes payable
18 Increase (decrease) in deposits received
19 Increase (decrease) in other current liabilities
20 Other
Sub total
21 Interest and dividends received
22 Interest paid
23 Income taxes paid
24 Income taxes refunded
Net cash provided by (used in) operating activities
II Cash flows from investing activities
1 Payments for time deposits
2 Proceeds from time deposits
3 Purchases of investment securities
4 Proceeds from redemption and sale of investment securities
5 Purchases of affiliates securities
6 Purchases of property, plant and equipment
7 Proceeds from sales of property, plant and equipment
8 Purchases of intangibles
9 Increase in long-term loans receivable
10 Collection of long-term loans receivable
11 OtherNet cash provided by (used in) investing activities
III Cash flows from financing activities
1 Net increase (decrease) in short-term bank loans
2 Proceeds from long-term bank loans
3 Repayment of long-term bank loans
4 Proceeds from issuance of bonds
5 Net increase (decrease) in commercial paper
6 Cash dividends paid
䇭 7 Redemption of bonds
8 Purchase of treasury stock
9 Proceeds form sales of treasury stock
10 Proceeds from minority shareholders
11 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 Cash and cash equivalents at end of period㪈㪏17,97021,604
8,206
867(7,603)
(523)
(969)
3,714
(25,892)
5,835
(20)
746
5,760
1,056

(millions of yen)
Year ended
December 31, 2009
Amount(1,447)(2,287)(1,854)4,805
253
30,225974(3,743)(5,164)
䋭
22,291

8,874
22,546
925
1,032
(43)
(23)
(935)
3,623
(948)
1,523
(19)
244
2,667
(980)
5,976
(3,884)(433)(19,751)(4,402)(1,835)
14,156932(3,544)(1,951)
2,862
12,454(593)
866(1,166)152(52)(22,791)
49,082(4,551)(525)
251(3,816)
16,856(1,468)56(8,042)(18,398)
1,439(3,429)(755)
207(1,835)(32,227)(4,816)
20,357(35,684)3,843(4,000)(1,963)
䋭
(262)
68
250
䋭
(22,207)(604)
16,335
5,881
22,217(6,398)50,000(17,254)䋭䋭(2,739)(19,710)
(119)
39
䋭
(71)
3,745
77
(15,949)
22,217
6,267

(4)Statement of Changes in Shareholders' Equity(millions of yen)

Shareholders’ Equity
Common stock
Balance at end of previous period
Changes during period
Total changes during period
Balance at end of period
Capital surplus
Balance at end of previous period
Changes during period
Disposition of treasury stock
Total changes during period
Balance at end of period
Retained earnings
Balance at end of previous period
Changes due to change in accounting policies applied to foreignsubsidiaries
Changes during period
Cash dividends
Net income
Total changes during period
Balance at end of period
Treasury stock
Balance at end of previous period
Changes during period
Purchase of treasury stock
Disposition of treasury stock
Total changes during period
Balance at end of period
Total shareholders' equity
Balance at end of previous period
Changes due to change in accounting policies applied to foreignsubsidiaries
Changes during period
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury stock
Total changes during period
Balance at end of period㪈㪐Year ended
December 31, 2008
AmountYear ended
December 31, 2009
Amount53,88653,886

䋭
53,886

䋭
53,88646,31046,32515
15
46,325(7)(7)
46,31814,292

19,972

㧙(1,477)(1,960)7,640
5,679
19,972(2,743)
4,535
1,791
20,286(848)(1,058)

(262)
52
(209)
(1,058)

(119)
46
(73)
(1,131)

113,641

119,126

㧙

(1,477)(1,960)
7,640
(262)
68
5,485
119,126(2,743)
4,535
(119)
39
1,711
119,360

Valuation and translation adjustments
Unrealized holding gain on securities
Balance at end of previous period
Changes during period
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period

9,640

3,046

(6,594)(6,594)
3,046

(408)
(408)
2,637

㧙

㧙

㧙
㧙
㧙

0
0
0

1,853

(5,536)(7,389)(7,389)(5,536)

1,909
1,909
(3,627)

11,493(2,490)(13,984)(13,984)(2,490)

1,501
1,501
(988)

53

226

172
172
226

(7)
(7)
218

125,189

116,862㧙

(1,477)(1,960)
7,640
(262)
68
(13,811)(8,326)
116,862(2,743)
4,535
(119)
39
1,494
3,205
118,590

Deferred hedge gains (losses)
Balance at end of previous period
Changes during period
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period
Foreign currency translation adjustments
Balance at end of previous period
Changes during period
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period
Total valuation and translation adjustments
Balance at end of previous period
Changes during period
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period
Minority interests
Balance at end of previous period
Changes during period
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period
Total net assets
Balance at end of previous period
Changes due to change in accounting policies applied to foreignsubsidiaries
Changes during period
Cash dividends
Net income
Purchase of treasury stock
Disposition of treasury stock
Net change in items other than shareholders' equity during period
Total changes during period
Balance at end of period㪉㪇(5) Segment Information
1. Segment Information by Business(millions of yen)
Fiscal year ended December 31, 2008
Alcoholic
Soft
Restaurants
Beverages
Drinks(January 1, 2008 – December 31, 2008)
Real
Corporate andTotal
Estateeliminations

Consolidated

I Net sales and operating income (loss)
Net sales

324,720
6,263

36,848321

29,537
䋭

23,451
2,373

414,558
8,958

㧙(8,958)414,558
㧙

330,983
322,373
8,610

37,17036,950220

29,53728,987550

25,824
18,212
7,612

423,516
406,522
16,993(8,958)(6,649)(2,308)414,558
399,872
14,685

Loss on impairment

307,517
14,125
6,619

17,536272
1,250

14,738779
320

172,5636,427
16

512,355
21,6038,206

14,9301
㧙

527,286
21,604
8,206

Capital expenditures

15,099998

856

12,41929,374

4

29,378(1) Operating revenues(2) Intra-group sales andtransfers
Total
Operating expenses
Operating income (loss)
II Assets, depreciation andamortization, impairment andcapital expenditures
Identifiable assets
Depreciation and amortization(millions of yen)
Year ended December 31, 2009 (January 1, 2009 – December 31, 2009)
Soft
Real
Corporate andAlcoholic
Restaurants
Total
DrinksEstateeliminations
Beverages
Net sales(1) Operating revenues(2) Intra-group sales and transfers
Total
Operating expenses
Operating income (loss)
II Assets, depreciation andamortization, impairment andcapital expenditures
Identifiable assets
Depreciation and amortization
Loss on impairment
Capital expenditures

Consolidated

305,495
5,740
311,235
303,059
8,176

30,745304
31,05030,748301

28,026
㧙
28,02628,198(171)

23,2662,289
25,55618,032
7,524

387,5348,334
395,868
380,038
15,829㧙
(8,334)(8,334)(5,400)(2,933)

387,534
㧙
387,534
374,638
12,895

290,323
15,219398
10,053

19,337384
䋭
1,466

13,669776
527
875

175,904
6,160
㧙11,073499,235
22,541
925
23,468

7,639
5
㧙
16

506,874
22,546925
23,484

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
Main products
Alcoholic Beverages
Beer, happoshu and new-genre beverages, wine, whiskey, shochu and other products,
distribution, brewing equipment, etc.
Soft Drinks
Soft drinks, other non-alcoholic beverages, and snack foods
Restaurants
Operation of beer halls and restaurants
Real Estate
Real estate leasing, real estate sales, operation of commercial facilities,
utility supplies, and operation of fitness clubs(3) Unallocated operating expenses included in "Corporate and eliminations": 2,344 million yen at December 31, 2008, and 2,979 million yen at
December 31, 2009. These are operating expenses incurred by the Company.
(4) Unallocated assets included in "Corporate and eliminations" amounted to 29,131 million yen and 21,582 million yen at December 31, 2008
and 2009, respectively, and consisted principally of cash and cash equivalents and marketable securities, long-term investments, and assets
of general administration divisions.
(5) Depreciation and amortization, loss on impairment, and capital expenditures include long-term prepaid expenses and their write-offs.
(6) Changes in Accounting Policies
Year ended December 31, 2008 (January 1, 2008 – December 31, 2008)
1) Accounting method for sales
The Company has adopted a new accounting method for consolidated sales, and now deducts sales incentives paid to customers for sales ofsoft drinks from net sales. Due to this change, in the Soft Drinks business, net sales and operating expenses were each ¥6,629 million lower
than the amounts that would have resulted with the previous method, but there was no effect on operating income.
2) Method for translating the revenue and expenses of foreign subsidiaries
The Company has adopted a new accounting method that uses the average exchange rate during the relevant fiscal period when translating
the revenue and expenses of foreign subsidiaries into Japanese yen. Due to this change, in the Alcoholic Beverages business, net sales were㪉㪈3) Accounting Standard for Lease Transactions
Effective the fiscal year ended December 31, 2009, lease transactions have been accounted for in the same manner as purchase and saletransactions due to adoption of the Accounting Standard for Lease Transactions (ASBJ Statement No.13 (June 17, 1993; 1st Committee,
Business Accounting Council; revised March 31, 2007) and its accompanying Guidance on Accounting Standard for Lease Transactions(ASBJ Statement Guidance No.16; January 18, 1994, Accounting System Committee, Japanese Institute of Certified Public Accountants;
revised March 30, 2007). For finance leases for which ownership of the leased assets does not transfer to the lessees and entered into on or
before December 31, 2008, the Company uses the conventional method, which accounts for such leases in the same manner as operatingleases.
Effects of this change on each segment are not significant.

Additional information
Change in Useful Life of Property, Plant and Equipment
The Company and its subsidiaries in Japan have reviewed the useful lives of property, plant and equipment following the 2008 revision ofJapan’s Corporation Tax Act, and effective the fiscal year ended December 31, 2009, began using new useful lives for depreciation ofmachinery assets.
Due to this change, in the fiscal year ended December 31, 2009, compared with what they would have been under the previous accounting
method, operating income in the Alcoholic Beverages business was ¥1,553 million lower; in the Soft Drinks business, higher by approximately¥0 million; and in the Real Estate business, ¥1 million lower. By the same comparison, operating loss in the Restaurants business was higherby ¥14 million.

2. Segment Information by Geographic Area
Year ended December 31, 2008 (January 1, 2008 – December 31, 2008) andyear ended December 31, 2009 (January 1, 2009 – December 31, 2009)
Sales in Japan constituted more than 90% of consolidated sales.
Accordingly, geographical segment information has not been disclosed.

3. Overseas SalesYear ended December 31, 2008 (January 1, 2008 – December 31, 2008) andyear ended December 31, 2009 (January 1, 2009 – December 31, 2009)
Overseas sales constituted less than 10% of consolidated sales.
Accordingly, overseas sales have not been disclosed.

㪉㪉