Financial Results
for the Nine Months Ended September 30, 2011 — Consolidated(Based on Japanese GAAP)
October 31, 2011

Company name

Sapporo Holdings Limited

Code Number
2501
Shares Listed
Tokyo Stock Exchanges (First Section); Sapporo Securities Exchanges
URL
http://www.sapporoholdings.jp/english/
Representative
Tsutomu Kamijo, President and Representative Director, Group CEO
Contact
Tatsuya Komatsu, Director of the Corporate Communications Department
Telephone+81-3-5423-7407
Scheduled dates:
Filing of quarterly financial report
November 14, 2011
Commencement of dividend payments
Supplementary information to the quarterly earnings results
Available
Yes
Quarterly earnings results briefing held
(mainly targeted at institutional
investors and analysts)

1. Consolidated Financial Results for the Nine Months Ended September 30, 2011
(January 1 – September 30, 2011)(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

Nine months ended
September 30, 2011

324,402

14.2

12,26829.2

10,56723.2

573(82.9)

Nine months ended
September 30, 2010

284,085

0.3

9,497

21.1

8,575

36.8

3,352

44.6

Net income per
share

Diluted net income
per share

yen

yen

Nine months ended
September 30, 2011

1.46

-

Nine months ended
September 30, 2010

8.56

7.51

1

%

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

September 30, 2011

543,144

122,49422.2

308.60December 31, 2010

494,798

126,64525.3

319.32

Note: Shareholders’ equity
September 30, 2011: 120,840 million yen
December 31, 2010: 125,047 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, 2010

—

0.00

Year ending
December 31, 2011

—

0.00

—

7.00

7.00

Year ending
7.00
7.00
December 31, 2011
(forecast)
Note: No changes have been made to the dividend forecasts since the latest release

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2011
(January 1 – December 31, 2011)(Percentage figures represent year-over-year changes)
Net sales

Full year

Operating income

Ordinary income

Net income

Net income

per share

million yen%

million yen%

million yen%

million yen%

yen

462,000

18.7

18,00016.9

15,5008.2

2,700(74.9)

6.90

Note: No changes have been made to earnings forecasts since the latest release

4. Other(1) Changes to scope of consolidation: None
*Changes affecting the status of significant subsidiaries (scope of consolidation)(2) Use of simplified accounting methods and/or accounting methods specific to quarterly
consolidated financial statements: Yes*Use of simplified accounting methods and/or accounting methods specific to quarterly
consolidated financial statements(3) Changes in accounting principles, procedures, and methods of presentation
1) Changes in accord with amendments to accounting standards: Yes
2) Changes other than the above: None
*Changes in accounting principles, procedures, and methods of presentation used toprepare the quarterly financial statements2(4) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
September 30, 2011: 393,971,493 shares
December 31, 2010: 393,971,493 shares
2) Number of shares held in treasury at end of period:
September 30, 2011:
2,396,205 shares
December 31, 2010:
2,367,424 shares
3) Average number of outstanding shares during the period:
Nine months ended September 30, 2011: 391,582,338 shares
Nine months ended September 30, 2010: 391,711,624 shares*Quarterly review status
The quarterly financial results are not subject to quarterly reviews pursuant to the Financial
Instruments and Exchange Act. The quarterly review of the quarterly financial results herein
had not been completed as of the date of this document.
Appropriate Use of Earnings Forecasts and Other Important Information
This document contains projections and other forward-looking statements based on information
available to the Company as of the date of this document. Actual results may differ from thoseexpressed or implied by forward-looking statements due to various factors. For the assumptions
underlying the forecasts herein and other notice on the use of earnings forecasts, please refer to"Consolidated Earnings Forecast" in "Analysis of Operating Results" on page 10.

3

1. Analysis of Operating Results
Consolidated Financial Results for the Nine Months ended September 30, 2011
During the first nine months of 2011 (January–September), the Japanese economy showedsigns of a moderate recovery in business conditions in the early part of the year, until the Great
East Japan Earthquake and tsunami disaster struck on March 11. The impact of the disaster andsubsequent electricity shortages dealt a heavy blow to the economy, resulting in a sharp
slowdown. Although the recovery process has taken hold, the outlook for a full-fledged recovery ofthe domestic economy remains clouded by a number of major concerns, including financial
instability in Europe, an economic slowdown in the United States, and continued yen appreciation.
In this economic environment, sales at the Sapporo Group’s Japanese Alcoholic Beverages andRestaurants businesses have fallen as a direct result of the post-disaster environment. On theother hand, the Soft Drinks business managed to post year-on-year sales growth during the firstnine months thanks to successful marketing strategies launched at the start of the year.
Meanwhile, the addition of the POKKA Group to our consolidated accounts from April 1 hascontributed to a sharp increase in the Sapporo Group’s consolidated sales.
Operating income was boosted by cost reductions in all business segments, the addition of the
POKKA Group, and profit gains at our Real Estate business.
Meanwhile, the Sapporo Group has made various contributions to recovery efforts after theGreat East Japan Earthquake. Immediately after the earthquake/tsunami disaster our Restaurants
business began distributing food to disaster-struck areas and continued to do so until June 20.
The same business has donated a portion of sales from draft beer campaigns at its restaurants
and from the Sapporo Group’s Yebisu Beer Festival held in Tokyo’s Ebisu district in September for
use in disaster-recovery efforts.
As a result of the above factors, in the first nine months of 2011 the Sapporo Group posted
consolidated net sales of ¥324.4 billion (up ¥40.3 billion, or 14%, year over year). Operating
income was ¥12.2 billion (up ¥2.7bn, or 29%), and ordinary income came to ¥10.5 billion (up¥1.9 billion, or 23%). However, we posted a ¥1.0 billion loss from changes in accounting
standards for asset retirement obligations and “disaster losses” of ¥4.7 billion booked in relation
to the earthquake/tsunami disaster. As a result, net profit for the first nine months of 2011 was¥0.5 billion (¥2.7 billion, or 83%, less than in the first nine months of 2010).
Segment Information is outlined below. The presentation of segment information has changed
owing to adoption of the management approach from this fiscal year. Changes from the previous
fiscal year are explained in the supplementary materials.
Japanese Alcoholic Beverages
Domestic demand for beer and beer-type beverages in March fell about 13% year over year in
the aftermath of the Great East Japan Earthquake and tsunami disaster. Despite a gradualrebound in demand in subsequent months, total demand for beer and beer-type beverages during

4the first nine month of 2011 appears to have been at around 94–95% of the year-earlier level.
Our Japanese Alcoholic Beverage business suffered some quake damage to buildings,
equipment, and distribution facilities at its Sendai Brewery (Natori City, Miyagi Prefecture) andChiba Brewery (Funabashi City, Chiba Prefecture). Some product losses also were sustained.
These damages forced the shutdown of the two breweries and the halt of product shipments.
Operations were resumed in stages, but product supply shortages in the weeks immediately
after the disaster cut into sales, and the Japanese Alcoholic Beverage business had to limit
production to certain core brands and delay the launch of new products. It also refrained fromadvertising and in-store marketing activities.
During the third quarter, we continued to see a gradual recovery from the post-disaster businessslump, but sales failed to rebound fully to levels seen in past years. As a result, cumulative unit
sales of our beer products during the nine months of the year were down about 7% year over year.
In the low-alcohol category, in April we launched a new and improved version of Sapporo Nectar
Sour Sparkling Peach, a year-round cocktail-style drink. That launch was supplemented by the
introduction of several limited volume, seasonal versions of our Sapporo Nectar Sour cocktails,
including mango- and La France pear–flavored versions, which were warmly received bycustomers.
In the nonalcoholic beer category, we introduced Sapporo Premium Alcohol Free on March 16,
and sales have exceeded original targets despite the launch coming soon after the earthquake. In
June, we doubled our original unit sales target for 2011 to 1.2 million cases, and sales have been
trending in line with that more bullish target.
The wine and liquor business has enjoyed solid demand for domestic and imported wines,
enabling it to achieve unit sales above levels seen in the first nine months of 2010. As a result,sales and income during the first nine months both show year-over-year gains.
In the shochu business, the Triangle Ginger Highball canned cocktail launched in May and the
Sasainata shochu introduced nationwide in September helped boost sales and profits.
Overall, the Japanese Alcoholic Beverages business posted cumulative sales of ¥191.5 billion(down ¥9.7 billion, or 5%, year over year) in the first nine months of the year. Despite the drop insales, the business posted operating income of ¥5.0 billion (a slight decrease compared with thesame period a year earlier).
International Alcoholic Beverages
North American beer demand remained sluggish despite signs of a recovery in consumer
spending. Industrywide demand appears to have contracted 1–2% compared with demand in thefirst nine months of 2010. The Asian beer market has continued to grow steadily, supported by
fast-growing economies in the region.
In this environment, the International Alcoholic Beverages business continued marketing activities
targeting the premium beer segment. Canadian subsidiary SLEEMAN BREWERIES LTD.
achieved a 7% year-over-year increase in unit sales (excluding outsourced production of Sapporo

5brand products), sustaining its five-year growth streak. Sapporo USA, meanwhile, expanded its
unit sales of Sapporo brand beers by 5% over the volume seen in the first nine months of 2010.
Sales outside of North America, which are concentrated mainly in Asia, continued to grow briskly,
with unit sales up 53% year over year.
In Vietnam, we began preparing for the start of production at a new brewery under construction.
In August, we began stocking ingredients and have steadily proceeded with preparations for thefermentation and aging processes. The new plant is scheduled for completion on November 24,
and we look forward to the start of sales of locally brewed Sapporo Beer. In other overseas
markets, we pursued various growth strategies. For example, in Singapore we are working with
the POKKA Group on expanding sales channels in the local household market, while in South
Korea we began selling Sapporo brand beers to the household and commercial markets via analliance with Maeil Dairies Co., Ltd. In Oceania, we signed a licensing agreement with Australianbeer maker Coopers Brewery in July, and the Australian brewer started brewing and selling
Sapporo-brand beer from October.
As a result of the above activities, our International Alcoholic Beverages business achieved solid
sales gains on local-currency bases. Yen appreciation, however, diluted the gains in yen terms,
which show sales for the first nine months of 2011 reaching ¥19.4 billion (a slight decrease
compared with the same period a year earlier). The business managed to post operating incomeof ¥0.5 billion (up slightly compared with the same period a year earlier), despite startup
investments totaling ¥0.5 billion in Vietnam.
Soft Drinks
We estimate that domestic demand for soft drinks in the first nine months of 2011 was largely
flat year over year, as the high hurdle created by the hot summer of 2010 proved insurmountable
despite expanded demand for mineral water.
In this environment, the Soft Drinks business continued to strengthen and cultivate its brands byfocusing marketing investment and sales-force resources on core brands, while also
strengthening product development operations targeted at creating new value propositions. We
also sustained thorough efforts to achieve appropriate costs throughout the value chain as part ofour program to strengthen profitability through a select-and-focus approach (i.e., selectively
focusing resources on key areas).
For example, we implemented the “Tie Together with Ribbon Hokkaido Project” for our core
Ribbon soft drink brand, which helped keep Ribbon sales during the first nine months of 2011 at
99% of the previous-year level. Meanwhile, we achieved solid growth（7% year over year
increase）in sales of the Gabunomi series thanks to a marketing tie-up with a new movie releaseand to efforts to broaden sales points and solidify the products’ market presence. We aim to further
expand sales points through sales campaigns planned from this fall through next spring. Sales ofGerolsteiner, naturally carbonated water from Germany, increased 5% year over year, supported
by greater product recognition realized through in-store trial offers and repeat purchasepromotions that included passing out samples and other events.

6

We also posted growth in sales (6% year over year increase compared with the first ninemonths of 2010) of our mineral water and unsweetened beverage offerings, as strong post-quake
demand offset lower sales in the latter part of August and in September owing to unseasonably
cool weather.
On the cost front, our rigorous select-and-focus approach enabled us to carry out cost-structurereforms throughout the value chain, including optimization of our production structure. As a result,
we achieved further cost reductions despite rising materials costs and an increase in losses fromwaste and spoilage.
As a result of the above activities, the Soft Drinks business achieved sales of ¥28.4 billion (up¥3.0 billion, or 12%, year over year). However, operating income came to ¥1.0 billion (down ¥0.2
billion, or 20%), partially owing to a goodwill amortization charge of ¥0.3 billion.
POKKA GroupWe estimate that domestic demand for soft drinks during the six months from April throughSeptember fell slightly below the previous year’s level, as the impact of unseasonably cool
weather in August–September erased gains during April–July. Meanwhile, total demand in themarkets for lemon-based products (flavorings) and instant soups appears to have been slightly
above the levels seen in 2010.
In this environment, the POKKA Group’s Domestic Beverage & Foods business endeavored tostrengthen and cultivate brand power by focusing investments on core brands and newer growthbrands.
POKKA’s domestic beverages business saw post-earthquake supply shortages force thecancellation or delay of some new product launches and shipment adjustments. Business was
also hampered by the impact of energy-saving measures and a decline in demand caused byunseasonable weather in August and September. To overcome these adverse conditions,
POKKA carried out a 10th anniversary sales campaign for Kireto Lemon, launched Kireto Lemon
Soukai Sparkling, bolstered the POKKA Coffee lineup, and introduced annual promotionalcanned drinks to the usual favorable market response.
POKKA’s domestic foods business offset the negative impact of the March disaster, including
adjustments to soup shipments and fewer in-store bargain sales with its efforts to market POKKA
Lemon 100 as a drink to take in the morning, a TV ad campaign for the Kantanbimi soup line, andthe introduction of several new products, including Jikkuri Kotoko Shrimp Bisque in August.
Overall, Pokka’s Domestic Beverage & Foods business achieved a year-over-year increase insales during the April–September period. POKKA overcame rising vending machine and raw
material costs and secured higher profits by reducing fixed costs and concentrating marketing
efforts on higher margin products.
The Overseas Beverage & Foods business, however, posted year-over-year declines in sales
and profits during the April–September period. Steady progress in lowering the COGS ratio and7distribution costs was offset by intense price competition in Singapore and lower sales in otheroverseas markets.
The Domestic Restaurants business achieved year-over-year sales and profit growth as itscore Café de Crie coffee shop chain continued with operational improvements amid a difficult
post-quake market environment for the café industry. Improvements included the introduction of
new menu items on a regular basis and ongoing store remodeling. In addition, the businessresumed its chain expansion efforts.
The Overseas Restaurants business also secured gains in sales and profits on the strength of
new store openings in Hong Kong, the business’ core overseas market.
Overall, the POKKA Group posted sales of ¥49.9 billion, while operating income amounted to¥1.7 billion due to a ¥0.6 billion charge for goodwill amortization.
POKKA Group Overview
POKKA Group results were added to our income statement from April 1. As such, Sapporo
Holdings’ consolidated results for the first nine months of 2011 include POKKA’s results for the six
months from April through September. We therefore provide the previous-year data for reference.
* For reference: POKKA CORPORATION (including subsidiary companies) results forApril–September 2010 and 2011 (before intersegment eliminations)
2010

Sales

¥50.5 billion

Operating income
2011

Sales

¥2.1 billion¥50.9 billion (up ¥0.4 billion or 1% year over year)

Operating income¥2.4 billion (up ¥0.2 billion or 13% year over year)

Restaurants
Japan’s restaurant industry slumped sharply in the wake of the Great East Japan Earthquake,as many restaurants closes or shortened operating hours. The industry was also negatively
affected by the self-restraint mood the prevailed throughout Japanese society after the disaster.
From the latter half of April, however, our Restaurants business resumed various sales
campaigns and marketing efforts that had been put on hold at the height of the self-restraint mood,as we sought to bring customers back to our restaurants.
In addition to reopening beer halls and gardens in Sendai, Nasu and Chiba that had beenclosed after the March disaster, we launched a draft beer campaign that coincided with our“August 4 is beer hall day,” a companywide celebration to commemorate the anniversary of thefounding of Sapporo’s restaurant business. Through such efforts, we endeavored to rejuvenate
demand after the March disaster. As a result, same-store sales during July–September rebounded
to about 96% of their previous year levels, after having fallen to 67% the previous year’s level inMarch.
We opened five new restaurants during the first quarter of the year. Then in May we opened ourfourth and fifth YEBISU Bar outlets, the former in the Tokyo Dome City facility and latter in
Kagurazaka, Tokyo, bringing total new openings in the first three quarters of 2011 to seven. Sales8

at all new outlets are in line with targets.
We have also been revitalizing existing outlets by, for example, converting existing restaurants
to our Ooi Hokkaido (Hello Hokkaido) Betsukai Pub format, a Japanese-style pub officiallyrecognized by and featuring fare from the town of Betsukai in Hokkaido. We converted an outlet inTokyo’s Kanda district in May and two more stores in the Otemachi district in August.
On the other hand, we closed five unprofitable locations with little prospect of an earnings
improvement in the near term and one other location was closed upon the end of the contract withthe party entrusted with shop operation. As a result, we had 195 locations operating at the end of
September.
Reflecting the above activities and circumstances faced during the first nine months of 2011, theRestaurants business posted sales of ¥17.8 billion (down ¥2.2 billion, or 11%, year over year).
Thanks to cost-cutting efforts, the business managed to limit the operating loss for the period toclose to zero (compared with operating income of just barely above zero a year earlier).
Real Estate
The Greater Tokyo office leasing market has seen improvement in vacancy rates since April
2011, but rents continue to fall.
Amid such an operating environment, our Real Estate business has been endeavoring tomaintain or boost rents and occupancy rates and realize additional cost savings at existing
properties. Properties damaged by the earthquake, including YEBISU Garden Place, have been
undergoing repairs, and our core properties in the Tokyo metropolitan area are maintaining highoccupancy rates. Our properties adopted various measures to reduce electric power consumption
in the peak summer months and continue these energy-conservation measures.
Real estate development activities during the first nine months of 2011 featured the completionof a new wing at the Pal Urayasu fitness club in Urayasu, Chiba in June. The new wing hasreceived praise from the club’s clientele.
Meanwhile, our primary new acquisition of the year, the Storia Shirokanedai rental apartmentbuilding in the Minato district in Tokyo, which we acquired in February, is already contributing tosegment earnings.
Reflecting the above, Real Estate business sales in the first nine months of 2011 totaled ¥16.6
billion (down ¥0.6 billion, or 4%, year over year), while operating income, with a reduction in
depreciation and amortization, rose to ¥6.4 billion (up ¥0.8 billion, or 16%).

9

(2) Review of Consolidated Financial Condition
Consolidated Financial Condition
Consolidated assets as of September 30, 2011, totaled ¥543.1 billion, a ¥48.3 billion
increase from the end of the previous fiscal year (December 31, 2010). The increase is due
mainly to an increase in goodwill related to the purchase of shares of Sapporo Beverage Co.,
Ltd., and to the inclusion of POKKA CORPORATION as a consolidated subsidiary.
Consolidated liabilities totaled ¥420.6 billion, a ¥52.4 billion increase from December 31,
2010, owing to the newly consolidated subsidiary and the issue of commercial papers, which
was partially offset by decreases in liquor taxes payable and deposits received.
Consolidated net assets totaled ¥122.4 billion, ¥4.1 billion less than on December 31,
2010. The decrease primarily reflects the dividend distribution at the end of the previous
fiscal year, offset to some extent by net income posted for the first nine months of 2011.
Consolidated Cash Flows
Consolidated cash flows for the nine months ended September 30, 2011, were as follows.
Operating activities provided net cash of ¥19.1 billion. The major decremental factors
included a decrease in liquor taxes payable (¥14.3 billion) and an increase in inventories(¥3.0 billion), while the main incremental factors included income before taxes and otheradjustments (¥2.6 billion), depreciation and amortization (¥17.8 billion), and a decrease innotes and accounts receivable (¥10.8 billion).
Investing activities used net cash of ¥48.2 billion. Major investment outflows included
purchases of shares of newly consolidated subsidiaries (¥18.6 billion), purchases of sharesof subsidiaries (¥16.1 billion), and purchases of property, plant and equipment (¥8.9 billion).
Financing activities provided net cash of ¥24.4 billion. The major financing inflows wereshort-term bank loans (¥18.1 billion), long-term bank loans (¥24.6 billion), bond issuance(¥9.9 billion), and a net increase in commercial paper (¥15.0 billion). The main outflows
were the repayment of long-term bank loans (¥18.6 billion), bond redemptions (¥20.0 billion),cash dividends paid (¥2.7 billion), and the repayment of finance lease obligations (¥1.9
billion).
As a result of the above cash flows, cash and cash equivalents totaled ¥8.7 billion as of
September 30, 2011.
(3) Consolidated Earnings Forecast
The Company has made no revisions to its consolidated earnings forecast for the year
ending December 31, 2011, since it last revised its forecast on June 30, 2011.

10

2. Other(1) Changes affecting the consolidation status of material subsidiaries (scope of
consolidation)
None(2) Use of simplified accounting methods and/or accounting methods specific to quarterly
consolidated financial statements
Simplified accounting
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 theprevious fiscal year to assess the likelihood of deferred tax assets being used at alater date. If there have been material changes in the business environment and/orin 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 materialchanges.
Accounting methods specific to quarterly consolidated financial statements
Calculation of tax liabilities
The Company calculates tax liabilities by producing a reasonable estimate of theeffective tax rate after applying tax-effect accounting to income before taxes andminority interests for the fiscal year, which encompasses the nine months ended
September 30, 2011, and then multiplying income (loss) before taxes and minority
interests by this estimated effective tax rate. Note that “deferred income taxes” areincluded under “income taxes.”(3) Overview of changes in accounting principles, procedures, and methods ofpresentation used to prepare the quarterly financial statements
Changes in accord with amendments to accounting standards
Adoption of accounting standard related to equity method
Effective the first quarter of the fiscal year ending December 31, 2011, theCompany adopted the Revised Accounting Standard for Equity Method of
Accounting for Investments (ASBJ Statement No. 16, revised March 10, 2008) and
the Practical Solution on Unification of Accounting Policies Applied to Associates

11Accounted for Using the Equity Method (PITF No.24, March 10, 2008). The impactof this adoption on ordinary income and net income before income taxes andminority interests was nil.
Adoption of accounting standard related to asset retirement obligations
Effective the first quarter of the fiscal year ending December 31, 2011, theCompany adopted the Accounting Standard for Asset Retirement Obligations(Statement No.18, March 31, 2008) and its associated Guidance on AccountingStandard for Asset Retirement Obligations (Guidance No.21, March 31, 2008).
Due to this adoption, operating income and ordinary income for the nine months
ended September 30, 2011 were each 80 million yen lower, while income before
income taxes and minority interests was 1,164 million yen lower. Asset retirement
obligations changed by 602+ million yen due to adoption of the accounting
standard and guidance.
Changes in presentation methods
In accord with the adoption of the Cabinet Office Ordinance on Partial Revision of
the Regulations Concerning the Terminology, Forms and Preparation Methods ofFinancial Statements and Other Items (Cabinet Office Ordinance No. 5, March 24,2009) based on the Accounting Standard for Consolidated Financial Statements(ASBJ Statement No.22, December 26, 2008), the Company used the account title“income before minority interests” for the nine months ended September 30, 2011.
Consolidated quarterly statements of cash flows
In the third quarter of the fiscal year ended December 31, 2010, “repayment offinance lease obligations” was included in "other" under cash flows from financing
activities. In the third quarter of the fiscal year ending December 31, 2011, though,it ceased to be included in “other” and was presented separately because of its
increased importance.
For reference, “repayment of finance lease obligations” in the fiscal year ended
December 31, 2010 was 129 million yen and included in "other” under cash flows
from financing activities.

12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 Marketable securities
4 Merchandize 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

13

September 30, 2011

December 31, 2010

AmountAmount8,917
63,756
18,33911,025
12,575(231)
114,382

13,39061,352
2
12,412
9,756
12,984(161)
109,737

376,258(200,565)
175,692
199,544(161,222)
38,321
84,920
4,743
40,202(25,438)
14,764318,443

357,769(185,485)
172,284
180,519(142,521)
37,997
77,583
3,563
20,400(15,201)
5,199
296,629

41,044
9,337
50,381

14,128
10,331
24,45932,157
10,1522,810
16,336(1,519)59,937428,762
543,144

38,027
10,3962,649
14,493(1,594)
63,972
385,061494,798(millions of yen)

Liabilities
I Current liabilities
1 Notes and accounts payable - trade
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 losses
3 Foreign currency translation adjustments
Total valuation and translation adjustments
III Minority Interests
Total net assets
Total liabilities and net assets

14

September 30, 2011

December 31, 2010

AmountAmount31,704
46,95819,8872,433
3,854
15,24467,701
187,783

24,34828,08920,00034,253
1,818
2,055
19,21837,259167,043

42,000114,053
13,8187,507
33
32,74422,709232,866
420,650

35,843
97,402
13,4557,190
42
31,935
15,239201,109368,152

53,88646,312
26,141(1,197)125,142

53,88646,31528,317(1,190)127,3292,426(5)(6,722)(4,302)
1,654
122,494543,1442,985(7)(5,258)(2,281)
1,597
126,645494,798

(2) Consolidated Statements of Income

I Net sales
II Cost of sales
Gross profit
III Selling, general and administrative expenses
1 Sales incentives and commissions
2 Advertising and promotion expenses
3 Salaries
4 Provision for bonuses
5 Retirement benefit expenses
6 Other
Total selling, general and administrative expenses
Operating income
IV Non-operating income
1 Interest income
2 Dividend income
3 Equity in gain of affiliates
4 Foreign exchange gain
5 Gain on gift voucher redemptions
6 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 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 Reversal of removal costs
5 Gain on change in equity
6 Settlement received
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Impairment loss
3 Loss on devaluation of inventories
4 Loss on sales of investment securities
5 Effect of adoption of new accounting standards for asset
retirement obligations
6 Compensation expenses
7 Loss on phased acquisition
8 Disaster losses
9 Business structure improvement expenses
Total extraordinary losses
Income before income taxes and minority interests
Income taxes
Income before minority interests
Minority interests in gains
Net income

15

Nine months ended
September 30, 2010
Amount284,085
191,113
92,972(millions of yen)
Nine months ended
September 30, 2011
Amount324,402
204,801
119,600

14,965
13,574
13,5181,399
2,148
37,867
83,474
9,497

23,136
11,732
19,2751,709
2,416
49,061
107,332
12,268

374
393
280
21
467
494
2,031

271
376
379
507
1,535

2,735
218
2,953
8,575

2,664
26
144
400
3,236
10,567

2
656
71
569
1,299

22
21
353
261
658

912
112
1,348
-

310
436
1,160
23

650
3,024
6,851
3,468
30
3,352

1,084
267
566
4,742
8,592
2,633
2,013
620
46
573

(3) Consolidated Statements of Cash Flows
Nine months ended
September 30, 2010
AmountI Cash flows from operating activities
1 Income (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 fixed assets
9 (Gain) loss on sales of investment securities
10 (Gain) loss on revaluation of investment securities
11 Effect of adoption of new accounting standards for asset
retirement obligations
12 (Increase) decrease in notes and accounts receivable - trade
13 (Increase) decrease in inventories
14(Increase) decrease in other current assets
15 Increase (decrease) in notes and accounts payable - trade
16 Increase (decrease) in liquor taxes payable
17 Increase (decrease) in deposits received
18 Other
Sub total
18 Interest and dividends received
19 Interest paid
20 Income taxes paid
21 Income taxes refund
Net cash provided by 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 Purchases of newly consolidated subsidiaries
6 Purchase of subsidiaries' shares
7 Other
Net cash 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 bond
5 Redemption of bonds
6 Increase (decrease) in commercial paper
7 Cash dividends paid
8 Payments received from minority shareholders
9 Repayment of finance lease obligations
9 Other
Net cash provided by 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

16(millions of yen)
Nine months ended
September 30, 2011
Amount6,851
17,057
872
(233)
(187)
(768)
2,735
909
(656)
1,348

2,633
17,846
2,178
(132)
(108)
(648)
2,680
288
2
1,160

9,996
(812)
386
3,991
(14,235)(6,934)
5,822
26,143894(2,641)(1,148)1,207
24,455

1,084
10,810(3,014)2,242(1,307)(14,310)(4,188)
6,991
24,208726(2,823)(2,963)
6
19,153(2,763)(15,478)472(1,666)(1,608)(209)(21,253)(2,116)(8,942)67(1,534)(18,662)(16,141)(937)(48,268)(12,524)
15,600(11,473)
11,952(2,739)
(168)
646
(327)
3,520
6,267
9,788

18,12924,636(18,691)
9,960(20,000)
15,000(2,732)
181(1,987)(10)
24,484150(4,479)13,2708,790

4. Notes on the Going-concern Assumption
Not applicable

5. Segment Informationa. Segment Information by Business(millions of yen)
Nine months ended September 30, 2010 (January 1, 2010 – September 30, 2010)
Corporate andReal
Alcoholic
Soft
Consolidated
Total
Restaurants
eliminations
EstateBeverages
Drinks
Net sales(1) Operating revenues

220,399

25,7614,240

210

224,640

25,972

5,647

694(2) Intra-group sales and transfers
Total
Operating income (loss)

20,634

17,289284,085

-

1,690

6,141

(6,141)

284,085-

20,634

18,979290,226(6,141)

284,085

(14)

5,529

11,856(2,358)

9,497-

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(6) Changes in Accounting Policies
Nine months ended September 30, 2010 (January 1, 2010 – September 30, 2010)
Change in accounting standard for recognizing revenues from and costs of completed construction

For recognition of revenues associated with construction work, the Company has adopted the Accounting Standard forConstruction Contracts (ASBJ Statement No. 15, December 27, 2007) and its associated Guidance on the AccountingStandard for Construction Contracts (ASBJ Statement No. 18, December 27, 2007). 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 third quarter (September 30, 2010) were accounted for with the percentage-of-completion method. The effect of thischange on segment information was minor.

b. Segment Information by Geographic Area
Nine months ended September 30, 2010 (January 1, 2010 – September 30, 2010)
Sales in Japan constituted more than 90% of consolidated sales.
Accordingly, geographical segment information has not been disclosed.

c. Overseas Sales
Nine months ended September 30, 2010 (January 1, 2010 – September 30, 2010)
Overseas sales constituted less than 10% of consolidated sales.
Accordingly, overseas sales have not been disclosed.

17Segment Information
1. Overview of reportable segments
Nine months ended September 30, 2011 (January 1, 2011 – September 30, 2011)
The Company’s reportable segments are components of the Company about which separate
financial information is available. These segments are subject to periodic examinations to enable theCompany’s board of directors to decide how to allocate resources and assess performance.
The Sapporo Group utilizes the assets of the Group and its traditional areas of strength in the twobusiness domains, "creation of value in food" and "creation of comfortable surroundings." Under
Sapporo Holdings, a pure holding company, each group company formulates development plans andstrategies for its products, services, and sales markets and conducts business accordingly.
The Group’s businesses are therefore segmented mainly based on the products, services, and sales
markets of Group companies and their affiliated companies. The Company’s six reportable segments
are Japanese Alcoholic Beverages, International Alcoholic Beverages, Soft Drinks, the POKKA
Group, Restaurants, and Real Estate.
The Japanese Alcoholic Beverages segment produces and sells alcoholic beverages in Japan,
while the International Alcoholic Beverages segment produces andsells alcoholic beverages overseas.
The Soft Drinks segment produces and sells soft drinks and other non-alcoholic beverages.
The POKKA Group segment is a business group led by POKKA CORPORATION.
The Restaurants segment operates restaurants of various styles.
The Real Estate segment's activities include leasing and development of real estate.

2. Sales, income, and loss by reportable segment
Nine months ended September 30, 2011 (January 1, 2011 – September 30, 2011)(millions of yen)
Reportable segments
AlcoholicAlcoholic
Beverages Beverages(Japan) (International)
Net sales(1) Operating revenues(2) Intra-group sales and transf
Total
Segment income (loss)

191,509
4,422
195,932
5,032

19,42617
19,443594

Soft
Drinks

POKKA
Group

Restaurants

28,434732
29,166
1,049

49,9301,006
50,937
1,757

17,897
17,897(94)

Amounts
reported on

Real
EstateTotal

16,6181,650
18,2696,416

323,8157,830
331,646
14,756

Other *1

Total

Adjustment thestatements
of income *2

586 324,402
30
7,860
616
332,262(521) 14,235- 324,402(7,860)(7,860) 324,402(1,966) 12,268

Notes:(1) "Other" comprises businesses, such as food 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.

3. Reconciliation and main components of differences between income and loss of reportable segments and figures on the statement of income (information ondifferences)
Nine months ended September 30, 2011 (January 1, 2011 – September 30, 2011)(millions of yen)Segment income (loss)
AmountTotal for reportable segments
14,756
Loss from other segments(521)
Unallocated corporate costs*(1,903)(63)
Intra-segment sales
Operating income on the statement
12,268
Note: Unallocated corporate costs consist mainly of SGA that is not attributable to reportablesegments.
4. Impairment loss on fixed assets or goodwill by reportable segment
Material impairment loss on fixed assets
There were no material impairment losses.
Material change in amount of goodwill
There were no material changes in amount of goodwill.
Material negative goodwill gains
There were no material gains on negative goodwill.
Additional information
Effective the first quarter of the fiscal year ending December 31, 2011, the Company adopted the Revised
Accounting Standard for Disclosures about Segments of an Enterprise and Related information (ASBJ
Statement No.17 (Revised 2009)) and its associated Guidance on the Accounting Standard forDisclosures about Segments of an Enterprise and Related Information (Guidance No. 20, March 21,2008).
6. Notes on Significant Changes in the Amount of Shareholders' Equity
Not applicable
7. Subsequent Events
Not applicable18