Financial Results
for the Three Months Ended March 31, 2010—Consolidated
April 30, 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+81 3-5423-7407

Telephone
Scheduled dates:
Filing of financial reports
Commencement of dividend payments

May 13, 2010―

1. Consolidated Financial Results for the Three Months Ended March 31, 2010
(January 1 – March 31, 2010)(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%

Three months ended
March 31, 2010

77,130(5.5)(3,583)-(4,143)-(2,978)-Three months ended
March 31, 2009

81,622-(3,370)-(3,839)-(3,284)-

Net income per
share

Diluted net income
per share

yen

yen

Three months ended
March 31, 2010

(7.60)-

Three months ended
March 31, 2009(8.38)-

1

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

March 31, 2010

498,879

115,67622.9

291.65

December 31, 2009

506,874

118,59023.4

302.16

Note: Shareholders’ equity
March 31, 2010:

114,246 million yen

December 31, 2009:

118,371 million yen

2. Dividends
Dividend per share
Record date or period

End Q1End Q2End Q3Year-end

Full year

yen

yen

yen

yen

yen

Year ended December
31, 2009

-

0.00

-

7.00

7.00

Year ending December
31, 2010

0.00

-

7.00

7.00

Year ending December
31, 2010 (forecast)

Note: No changes were made to dividend forecasts in the three months ended March 31, 2010.

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

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

Note: No changes were made to earnings forecasts in the three months ended March 31, 2010.

2

%

yen

4. Other(1) Changes affecting the status of significant subsidiaries (scope of consolidation): None
(2) Use of simplified accounting methods and/or accounting methods specific to quarterly
consolidated financial statements: Yes
Note: For details, see "4. Other” on page 10 in the “Analysis of Operating Results” section
below.
(3) 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
Note: For details, see "4. Other” on page 10 in the “Analysis of Operating Results” section
below.
(4) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
March 31, 2010:
393,971,493 shares
December 31, 2009: 393,971,493 shares
2) Number of shares held in treasury at end of period:
March 31, 2010:
2,245,943 shares
December 31, 2009:
2,218,784 shares
3) Average number of outstanding shares during the period:
Three months ended March 31, 2010: 391,732,438 shares
Three months ended March 31, 2009: 391,915,082 shares

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 "3. Consolidated Earnings Forecasts” on page 9 in the “Analysisof Operating Results” section below.

31. Analysis of Operating Resultsa) Consolidated Financial Results for the Three Months ended
March 31, 2010
In the first quarter (January 1 – March 31, 2010), consolidated net sales fell to¥77.1 billion, down ¥4.4 billion or 6% from the year-earlier quarter, as domestic
alcoholic beverage sales, soft drink sales, and restaurant sales declined amid
adverse conditions posed by the economic downturn and unseasonable weather.
In response, the Group implemented cost controls, particularly to reduce
production and sales promotion expenses. Despite these efforts, the Group’s
first-quarter consolidated operating and ordinary losses respectively widened to¥3.5 billion and ¥4.1 billion (from year-earlier levels of ¥3.3 billion and ¥3.8 billion,
respectively), but its net loss narrowed to ¥2.9 billion (from ¥3.2 billion in the
year-earlier quarter).

Segment Information
Seasonal Factors
The Group’s operating results exhibit substantial seasonal variation because
demand for the Alcoholic Beverages, Soft Drinks, and Restaurant businesses’
products tend to be disproportionately concentrated in the summer months. Sales
and profits consequently tend to be lower in the first quarter than in the otherthree quarters.
Year-over-year comparisons are included below for reference.

Alcoholic Beverages

Alcoholic Beverages (Japan)
In the Japanese beer and beer-type beverages market, aggregate demand
contracted an estimated 4% year over year in the first quarter amid
unseasonable weather and continued belt-tightening among consumers.
Demand continued to shift to low-priced new genre beers, unit sales of whichwere up 14% year over year, while unit sales of conventional beer and happoshu(low-malt beer) fell short of their year-earlier levels.

4㪋

Amid such an environment, the Japanese Alcoholic Beverages business ispursuing its 2010 priorities under the slogan of “Bringing more cheer to your‘Cheers!’” (translated from the Japanese). Specifically, it is endeavoring to create
and cultivate growth brands while strengthening its core Sapporo Draft Beer
Black Label, Yebisu, and Mugi to Hop brands through concentrated allocation of
resources.
The Yebisu brand outperformed the overall beer market, with unit sales down
only 3% year over year. Its unit sales were bolstered by Yebisu Silk, which was
relaunched this year as a year-round product after achieving popularity evenamid an adverse market environment. Sapporo Draft Beer Black Label’s unit
sales fell 9% year over year under the weight of consumers’ growing preference
for low-priced products and a demand slump in the commercial market. Overall,
conventional beer sales decreased 8% year over year in unit terms, roughly inline with aggregate demand’s rate of decline.
In the new genre category, unit sales grew a robust 24% year over year,
buoyed by strong sales of Mugi to Hop, which was rebranded in January with theslogan “So tasty you’ll think it’s real beer” (translated from the Japanese).
Sapporo Creamy White, a new product developed by our new productdevelopment team and test-marketed in a limited geographic area, was wellreceived by consumers. Total new genre unit sales declined 1% year over year,
partly because the year-over-year comparison base was elevated by a new
product launch in March 2009. Overall, the domestic beer business’s unit sales
were down 6% year over year in the first quarter.
In the wine and liquor business, sales were down year over year, but profits
were roughly flat year over year, bolstered by cost-cutting and improvement in
the sales mix. The shochu business likewise achieved profit growth through cost
cutting despite a year-over-year decline in sales.
In terms of costs, the Japanese Alcoholic Beverages business continued tostrengthen cost controls while focusing its cost-cutting efforts on reducing
production and sales promotion expenses.
Overall, the Japanese Alcoholic Beverage business incurred an operating lossof ¥3.8 billion (versus a ¥3.3 billion loss in the year-earlier quarter) on sales of¥53.7 billion (down ¥5.2 billion or 9% year over year).

5㪌Alcoholic Beverages (International)
North American beer demand remained sluggish despite signs of partial recovery
in consumer spending, with aggregate demand estimated to have contracted
several percent. While beer consumption has held relatively firm in the householdmarket, it is still depressed in the commercial market. Outside of North America,
beer demand is in a recovery trend, spearheaded by Asia with its strong
economic growth momentum.
Amid such an environment, the International Alcoholic Beverages businessproactively conducted sales activities targeted at the premium market segmentthat is its forte. Canadian subsidiary SLEEMAN BREWERIES’ unit sales(excluding outsourced production of Sapporo brand products) increased 7% year
over year while Sapporo USA’s Sapporo brand unit-sales grew 26% year overyear. Elsewhere, Sapporo USA’s overseas unit sales grew 59% year over year,with most of this growth derived from Asia.
In December 2009, we reached a decision to enter Vietnam. We are currently
preparing to build a brewery, formulating a marketing strategy, and building a
distribution network in preparation for locally producing and selling beer inpartnership with the state-owned Vietnam National Tobacco Corp.
The International Alcoholic Beverages business incurred an operating loss of¥300 million (versus a ¥400 million loss in the year-earlier quarter) on sales of¥5.2 billion (up ¥900 million or 23% year over year).

Soft Drinks
The domestic soft drink market environment remained inclement due to sluggish
economic conditions compounded by continued erratic weather, resulting in an
estimated 2% decrease in aggregate demand.
Against such a backdrop, the Soft Drinks business focused its marketingstrategy on cultivating and strengthening existing brands and intensively
allocated marketing expenditures and sales-force resources to core brandproducts.
This spring, we did a complete brand renewal of Gabunomi for the first time inthree years. We endeavored to expand sales channels for the Ribbon brand,
particularly Ribbon Citron, now in its 101st year on the market. For Gerolsteiner
naturally carbonated water from Germany, we introduced new products for thevending machine channel, aggressively conducted consumer trials, and6㪍expanded points of contact with consumers. However, the Soft Drinks business’s
overall unit sales fell 7% year over year, mainly as a result of a falloff in unit salesof ready-to-drink green tea.
In terms of costs, we implemented cost-structure reforms throughout the value
chain, including production, purchasing, and logistics operations, partly bytapping into synergies derived from our alliance with Pokka Corporation, in theaim of building a stable earnings foundation.
The food business is experiencing brisk sales growth as it continues to scale up
to meet customers’ needs. It expanded production capacity for Sapporo Potekaru
non-fried potato chips, a popular new product launched in 2009, and also
unveiled product improvements and redesigned packaging in March.
Overall, the Soft Drinks business incurred an operating loss of ¥200 million(unchanged from the year-earlier quarter) on net sales of ¥6.2 billion (down ¥300
million or 5% year over year).

Restaurants
The Japanese restaurant industry is beset by intensifying price competition as
increasingly frugal consumers dine out less frequently. Although some fast foodchains have seen a rebound in customer traffic in response to price cuts, mostpubs’ sales have continued to decline despite any price reductions, which havegenerally failed to stimulate enough growth in customer traffic to offset the pricereductions.
Amid such an environment, our Restaurant business’s like-for-like sales havecontinued to track below their year-earlier level, but we endeavored todifferentiate our restaurants through such means as offering menu specials madewith seasonal ingredients while avoiding homogenized competition and cut-pricecompetition. By virtue of these efforts, sales’ rate of decline decreased in the firstquarter.
We ended the first quarter with a total of 210 locations after opening two newrestaurant locations during the quarter and closing three others in conjunction
with profit-structure reform. Specifically, we opened a second Yebisu Bar location
and a Brasserie Ginza Lion beer hall at Kasumigaseki Common Gate in January.
The Restaurant business incurred an operating loss of the ¥300 million (versusa ¥400 million loss in the year-earlier quarter) on sales of ¥6.1 billion (down ¥100
million or 2% year over year).

7㪎Real Estate
In the Greater Tokyo office leasing market, both vacancy rates and rents remain
in deterioration trends, albeit with some signs of stabilization recently emerging.
Amid such an environment, our Real Estate business has been endeavoring tomaintain or boost rents and occupancy rates and realize additional cost savings
at existing properties. It has successfully maintained high occupancy rates at our
office properties in Greater Tokyo. Among our development projects, sales areprogressing at Chikasu Garden Terrace, a condominium development in Nagoya.
Construction is proceeding on schedule at our development project in Shinjuku,
Tokyo, which is slated to be ready for occupancy by mid-year. Several recently
acquired properties also contributed to the Real Estate business’s first-quarter
earnings, including Rose City Higashi Sapporo, a rental housing complex in
Sapporo acquired last year; Ebisu Square, an office building in Ebisu, Tokyo; andMLB café Tokyo, a commercial property.
The Real Estate business earned operating income of ¥1.8 billion (up ¥100
million or 7% year over year) on revenues of ¥5.7 billion (up ¥100 million or 3%
year over year).

2. Review of Consolidated Financial Conditiona) Consolidated Financial Condition
Consolidated assets totaled ¥498.8 billion at March 31, 2010, a ¥7.9 billion
decrease from December 31, 2009. The decrease was the net result of several
factors, a decrease in notes and accounts receivable, an increase in otherintangible assets, resulting from commissioning of a new sales and logistics
system, and the associated decrease in construction in progress.
Consolidated liabilities totaled ¥383.2 billion, a ¥5.0 billion decrease from
December 31, 2009. The decrease was chiefly attributable to decreases in liquor
taxes payable and deposits received, partially offset by growth in long-term bankloans.
Consolidated net assets totaled ¥115.6 billion, a ¥2.9 billion decrease from
December 31, 2009. The decrease was mainly due to a year-end dividend
distribution and the first quarter’s net loss.

8㪏b) Consolidated Cash Flows
Consolidated cash flows were as follows in the first quarter.
Operating activities provided net cash of ¥100 million. Major sources ofoperating cash flow included depreciation of ¥5.6 billion and a ¥16.3 billion
decrease in trade receivables. Major uses of operating cash flow included apretax loss of ¥3.8 billion and a ¥17.2 billion decrease in liquor taxes payable.
Investing activities used net cash of ¥3.5 billion. Major investment outflows
included ¥800 million spent to acquire investment securities and ¥2.7 billion
spent to acquire property, plant and equipment.
Financing activities provided net cash of ¥11.5 billion. Major financing inflows
included a ¥9.8 billion increase in short-term bank loans and ¥10 billion inproceeds from long-term bank loans. Major outflows included ¥5.9 billion in
repayments of long-term bank loans.
As a result of the above cash flows, cash and cash equivalents totaled ¥14.3
billion at March 31, 2010.

3. Consolidated Earnings Forecast
Our consolidated earnings forecast for the fiscal year ending December 31, 2010,
remains unchanged from that announced on February 12, 2010.

4. Other(1) Changes affecting the consolidation status of material subsidiaries (scope of
consolidation)
None

9㪐

(2) Use of simplified accounting methods and/or accounting methods specific toquarterly consolidated financial statements

1) Simplified accounting methods

Calculation of deferred tax assets and deferred tax liabilities
If there have been no material changes in either the business environment or
temporary differences since the end of the previous fiscal year, the Company
uses the same earnings forecasts and tax planning strategies that it used in
the previous fiscal year to assess the likelihood of deferred tax assets being
used at a later date. If there have been material changes in the businessenvironment and/or in temporary differences since the end of the previous
fiscal year, the Company uses the earnings forecasts and tax planning
strategies that it used in the previous fiscal year but modifies them to allow for
the likely impact of these material changes.

2) Accounting methods specific to 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 threemonths ended March 31, 2010, and then multiplying income (loss) before
taxes and minority interests by this estimated effective tax rate.
Note that “deferred income taxes” are included under “income taxes”.

(3) Changes in accounting principles, procedures, and methods of presentation
used to prepare the quarterly financial statements

Changes in accord with amendments to accounting standards
Change in accounting standard for recognizing revenues from and costs ofcompleted construction10㪈㪇Effective the first quarter of the fiscal year ending December 31, 2010, theCompany adopted the Accounting Standard for Construction Contracts(ASBJ Statement No. 15, December 27, 2007) and its accompanying
Guidance on Accounting Standard for Construction Contracts (ASBJ
Guidance No. 18, December 27, 2007) for recognizing revenues associatedwith contracted construction. All construction contracts, including those inexistence at the beginning of the quarter, for which certain elements were
determinable with certainty at end of the first quarter (March 31, 2010) were
accounted for with the percentage-of-completion method.
The impact on each business segment is stated in the relevant sectionsof this document.

11㪈㪈5. Consolidated Financial Statement(1) Consolidated Balance Sheets(in millions of yen)March 31, 2010
AssetsI Current assets
1 Cash and cash equivalents
2 Notes and accounts receivable - trade
3 Marketable securities
4 Merchandise and finished products
5 Raw materials and supplies
6 Other
7 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
Liabilities
I Current liabilities
1 Notes and accounts payable
2 Short-term bank loans
3 Current portion of long-term debt
4 Liquor taxes payable
5 Income taxes payable
6 Accrued bonuses
7 Deposits received
8 Other
Total current liabilities
II Long-term liabilities
1 Bonds
2 Long-term bank loans
3 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

December 31, 2009

14,51443,92912
13,613
9,639
12,501(174)
94,035

6,387
60,12047
13,258
9,689
12,966(192)
102,277

361,650(186,840)
174,810
183,147(139,977)
43,16984,397
5,573
20,431(15,239)5,192
313,142361,276(184,898)
176,378
182,373(138,387)
43,98684,384
8,487
19,784(15,182)
4,601
317,838

15,72910,335
26,064

14,926
6,967
21,89437,433
10,572
4,589
14,813(1,772)
65,636404,843498,879

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

18,97945,37910,00017,986620
3,366
23,99738,061
158,393

20,18536,735
10,00035,242843
1,638
27,08437,523
169,252

43,843
111,730
12,126
7,417
42
32,39817,251
224,810383,203

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

53,88646,31814,565(1,144)
113,625

53,88646,31820,286(1,131)
119,3603,759(6)(3,131)620
1,429
115,676
498,879

2,637
0(3,627)(988)
218
118,590
506,87412㪈㪉(2) Consolidated Statements of Income(in millions of yen)Three months ended
March 31, 2009

Three months ended
March 31, 2010

AmountAmountI Net sales
II Cost of sales

81,62258,14823,473

77,13053,761
23,368

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 loss
IV Non-operating income
1 Interest income
2 Dividend income
3 Foreign exchange gain
4 Gain (loss) on gift voucher redemptions
5 Other
Total non-operating income
V Non-operating expenses
1 Interest expense
2 Equity in loss of affiliates
3 Foreign exchange loss
4 Other
Total non-operating expenses
Ordinary loss
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 Reversal of removal costs
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Loss on devaluation of investment securities
3 Loss on devaluation of inventories
Total extraordinary losses

4,090
6,023
3,750
1,055
765
11,157
26,843(3,370)

4,121
5,547
3,909
1,097
716
11,55926,952(3,583)

95
121
47
229
493

107
83
151
297
639

860
44

895
275
6
21
1,199
(4,143)

Loss before income taxes and minority interests
Income taxes
Minority interests
Net loss

Gross profit
III Selling, general and administrative
expenses

58
963(3,839)
2

21

0
1
16
569
587

264
137
125
527

194
91
286

(4,345)(1,063)2(3,284)(3,842)(863)
0(2,978)19

13㪈㪊

(3) Consolidated Statements of Cash Flows(in millions of yen)Three months ended
March 31, 2009
AmountI Cash flows from operating activities
1 Loss before income taxes and minority interests
2 Depreciation and amortization
3 Amortization of goodwill
4 Increase (decrease) in employees’ retirement benefits
5 Increase (decrease) in allowance for doubtful receivables
6 Interest and dividend income
7 Interest expense
8 (Gain) loss on sales and disposal of property, plant and equipment
9 (Gain) loss on devaluation of investment securities
10 (Increase) decrease in notes and accounts receivable - trade
11 (Increase) decrease in inventories
12 (Increase) decrease in other current assets
13 Increase (decrease) in notes and accounts payable
14 Increase (decrease) in liquor taxes payable
15 Increase (decrease) in deposits received
16 Other
Sub total
17 Interest and dividends received
18 Interest paid
19 Income taxes paid
Net cash provided by (used in) operating activities
II Cash flows from investing activities
1 Purchases of investment securities
2 Purchases of property, plant and equipment
3 Proceeds from sales of property, plant and equipment
4 Purchases of intangibles
5 Other
Net cash provided by (used in) investing activities
III Cash flows from financing activities
1 Net increase (decrease) in short-term bank loans
2 Proceeds from long-term bank loans
3 Repayment of long-term bank loans
4 Cash dividends paid
5 Other
Net cash provided by (used in) financing activities
IV Effect of exchange rate changes on cash and cash equivalents
V Net increase (decrease) in cash and cash equivalents
VI Cash and cash equivalents at beginning of period
VII Cash and cash equivalents at end of period14㪈㪋Three months ended
March 31, 2010
Amount(4,345)
5,602
248
(47)
(22)
(216)
860
262
137
17,059(2,067)
6,847(2,509)(16,602)(6,226)
528
(491)
460
(582)
(428)
(1,042)(3,842)
5,686
262
(70)
(10)
(190)
895
193
91
16,382(146)
1,272(1,306)(17,279)(3,086)
2,354
1,206
439
(802)
(683)
159

(1,610)(2,398)364(1,010)(238)(4,893)(837)(2,768)0(135)
179(3,561)

4,124
9,000
(8,803)(2,326)
(7)
1,986
93
(3,854)
22,21718,362

9,877
10,000(5,954)(2,339)(42)
11,540
(12)
8,126
6,267
14,394

(4) Notes on the going-concern assumption
Not applicable(5) Segment Information
1. Segment Information by Business(millions of yen)Three months ended March 31, 2009 (January 1, 2009 – March 31, 2009)
Corporate and
Real
Soft
Alcoholic
Total
Restaurants
eliminations
EstateDrinksBeverages
Net sales(1) Operating revenues(2) Intra-group sales and transfers
Total
Operating income (loss)

63,264
1,097
64,361(3,792)

6,554
21
6,576
(222)

6,249
6,249
(421)

5,553
550
6,103
1,776

81,622
1,669
83,291(2,660)(1,669)(1,669)(709)

Consolidated

81,622
81,622(3,370)(millions of yen)Three months ended March 31, 2010 (January 1, 2010 – March 31, 2010)
Corporate and
Real
Soft
Alcoholic
Total
Restaurants
eliminations
EstateDrinksBeverages
Net sales(1) Operating revenues(2) Intra-group sales and transfers
Total
Operating income (loss)

58,996
1,145
60,142(4,170)

6,249
29
6,278
(270)

6,142
6,142
(338)

5,741
548
6,289
1,898

77,1301,723
78,854(2,881)(1,723)(1,723)(702)

Consolidated

77,13077,130(3,583)

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) Changes in Accounting Policies
Change in accounting standard for recognizing revenues from and costs of completed construction
Effective the first quarter of the fiscal year ending December 31, 2010, the Company adopted the Accounting Standard for Construction
Contracts (ASBJ Statement No.15, December 27, 2007) and its accompanying Guidance on Accounting Standard for Construction
Contracts (ASBJ Guidance No.18, December 27, 2007) for recognizing revenues associated with contracted construction. All construction
contracts, including those in existence at the beginning of the first quarter, for which certain elements were determinable with certainty at
end of the first quarter were accounted for with the percentage-of-completion method.
The effect of this change on segment information was negligible.

2. Segment Information by Geographic Area
Three months ended March 31, 2010 (January 1, 2010 – March 31, 2010)
Sales in Japan constituted more than 90% of consolidated sales.
Accordingly, geographical segment information has not been disclosed.

3. Overseas Sales
Three months ended March 31, 2010 (January 1, 2010 – March 31, 2010)
Overseas sales constituted less than 10% of consolidated sales.
Accordingly, overseas sales have not been disclosed.

(6) Notes on significant changes in the amount of shareholders’ equity
Not applicable

6. Other Information
Not applicable15㪈㪌