Financial Results
for the three Months Ended March 31, 2015 — Consolidated(Based on Japanese GAAP)May 8, 2015

Company name

Sapporo Holdings Limited

Security code
Listings
URL

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

Representative
Contact

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

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

Filing of quarterly financial report

May 14, 2015

Commencement of dividend payments-

Supplementary information to the quarterly earnings results

Available

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

1. Consolidated Financial Results for the three Months Ended March 31, 2015
(January 1 – March 31, 2015)(Amounts in million yen rounded down to the nearest million yen)

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

Three months ended
March 31, 2015
Three months ended
March 31, 2014

Operating income

Ordinary income
million yen%

million yen%

million yen

108,457(3.2)(4,328)-(4,555)-882-

112,084

11.5(1,726)-(2,348)-(3,815)-

Note: Accumulated other comprehensive income
Three months ended March 31, 2015 3,218 million yen
Three months ended March 31, 2014 (5,994) million yen

Net income per
share

Diluted net income
per share

Yen

Yen

Three months ended
March 31, 2015

2.26

-

Three months ended
March 31, 2014(9.78)-

1%

Net income
million yen%

(2) Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
sharemillion yen

million yen%

yen

March 31, 2015

606,653

158,62125.3

394.27

December 31, 2014

625,439

160,00425.0

401.17

Note: Shareholders’ equity
March 31, 2015:
153,612 million yen
December 31, 2014: 156,303 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, 2014—

Year ending
December 31, 2015—

Year ending
December 31, 2015
(forecast)

0.00

—

7.00

7.00

0.00

—

7.00

7.00

Note: No changes were made to dividend forecasts in the three months ended March 31, 2015.

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2015
(January 1 – December 31, 2015)(Percentage figures represent year-over-year changes)
Net income
Net sales

Operating income

Ordinary income

Net income
per share

Year ending
December 31,
2015

million yen%

million yen%

million yen%

million yen%

545,700

5.2

16,30010.7

15,2004.4

8,000

2252.8

Note: No Changes have been made to earnings forecasts since the latest release.
Earnings forecasts for the six months ending June 30, 2015 are omitted because the company manages
performance targets on a yearly basis.

2

yen

20.53

4. Other*For details, see "2. Other Information" on page 10.
(1) Changes in significant subsidiaries during the three months ended March 31, 2015: None
(2) Simplified accounting: Yes*Use of simplified accounting methods and/or accounting methods specific to quarterly consolidated
financial statements(3) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards etc.: Yes
2) Changes other than 1) above: None
3) Changes in accounting estimates: None
4) Retrospective restatement: None
Note: For details, see (3) Changes in accounting policy, changes in accounting estimates, andretrospective restatement, in section “2. Other Information” on page 10 in the accompanying
material.
(4) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
March 31, 2015:
393,971,493 shares
December 31, 2014: 393,971,493 shares
2) Number of shares held in treasury at end of period:
4,358,033 shares
March 31, 2015:
4,348,456 shares
December 31, 2014:
3) Average number of outstanding shares during the period:
Three months ended March 31, 2015:
389,616,758 shares
Three months ended March 31, 2014:
390,155,704 shares*Quarterly review status
The quarterly financial results are not subject to quarterly reviews pursuant to the Financial
Instruments and Exchange Act. The quarterly review of the quarterly financial results herein had
not been completed as of the date of this document.
Appropriate Use of Earnings Forecasts and Other Important Information
This document contains projections and other forward-looking statements based on information
available to the Company as of the date of this document. Actual results may differ from thoseexpressed or implied by forward-looking statements due to various factors.

3

1. Analysis of Operating Results(1)Consolidated Financial Results for the Three Months ended March 31, 2015
In the first quarter of 2015 (January 1 – March 31, 2015), the Japanese economy
remained on a moderate recovery track, supported by the government's economic stimulus
measures and the Bank of Japan's monetary easing. Personal consumption has beenrebounding from the downturn seen after the consumption tax hike, but the outlook
continues to lack clarity.
In this economic environment, the Japanese Alcoholic Beverages business’s shipmentsof beer and beer-type beverages fell sharply year over year, reflecting the surge in demanda year earlier ahead of the consumption tax hike. Meanwhile, the International Business’s
contribution to consolidated sales increased owing to a change in the accounting period of
one overseas subsidiary and the inclusion of another in the accounts for the first time, but
the overall sales of the SAPPORO Group declined year over year nonetheless.
The operating loss became larger than in the first quarter of 2014, mainly due to thedownturn in the Japanese Alcoholic Beverages business’s shipment volume combined witha decline in rental revenues at the Real Estate business as a result of replacing tenants
following the exit of a large tenant at the expiration of the lease contract in May 2014.
As a result of the above factors, the SAPPORO Group posted consolidated sales of¥108.4 billion (down ¥3.6 billion or 3% year over year), an operating loss of ¥4.3 billion(compared with a ¥1.7 billion loss a year earlier), and an ordinary loss of ¥4.5 billion(compared with a ¥2.3 billion loss a year earlier). However, the Group posted net income of¥0.8 billion in the first quarter of 2015 (compared with a ¥3.8 billion loss a year earlier),
owing to the realization of a gain on the sale of trust beneficiary rights in the Shibuya
Sakuragaoka Square office building in February.

Segment information is outlined below. Consolidated subsidiary New Sanko Inc., which
was included in the Japanese Alcoholic Beverages segment last year, has been moved to
the Restaurants segment from the first quarter of 2015.

Seasonal Factors
The Group’s operating results exhibit substantial seasonal variation because demand forthe products and services offered by the Japanese Alcoholic Beverages, International
Business, Food & Soft Drinks, and Restaurants businesses tends to be concentrated in thesummer months. Sales and profits consequently tend to be lower in the first quarter than in
the other three quarters.

4

Japanese Alcoholic Beverages
We estimate that total domestic demand for beer and beer-type beverages in the firstquarter of 2015 declined 9% year over year. Although demand for happoshu increased,
demand for both beer and new-genre beer was much lower than a year earlier, when
demand was inflated by consumers stocking up on product before the consumption sales
tax hike.
Under such market conditions, the Japanese Alcoholic Beverages business continued its
efforts to realize further growth by constantly providing customers with a value proposal
unique to Sapporo Breweries Ltd. These efforts continued to center on implementing the
new management vision first set forth in 2014 of “Seek No.1 by accumulating one-of-a-kindproducts” while also adhering to the campaign slogan, “Bringing more cheer to your‘Cheers’!”.
In the beer and beer-type beverages category, we again stimulated sales of our core
Yebisu brand with the release of two popular limited volume versions—Kaori Hanayagu
Yebisu in February and Yebisu Royal Selection in March. Also in March, we re-launched
Goku Zero, the world’s first beer-type beverage with zero purine bodies, as a happoshu. The
new, improved Goku Zero offers new value as a beverage using zero artificial sweeteners.
In the new-genre beer category, in February we introduced the latest version of the popular
Mugi to Hop The gold, featuring further refinement of the beverage’s characteristic rich taste.
In March, we unveiled the functional new-genre beer Green Aroma, which offers new value
in the form of a unique, refreshing aroma. However, these new product offerings were notenough to keep sales even with the high levels created by the pre-tax hike demand surge inthe first quarter of 2014. As a result, shipments of our beer and beer-type beverages
declined 17% year over year. Our market share also slipped from the previous year’s level.
In the RTD* category, Sapporo Otoko Ume Sour continued to win customers’ favor, andsales of our canned Bacardi RTD cocktails beat targets. As a result, overall RTD sales
volume showed a solid year-over-year growth.
Our wine business revamped the lineup of its flagship domestic premium brand, Grande
Polaire, with the limited volume release in March of three new wines—a syrah, achardonnay and a meritage**—in the Grande Polaire Azumino Ikeda Vineyard series madefrom grapes from Japan’s ultimate vineyard. The wines were well received by wine lovers,
helping boost sales of our domestic and imported mid- and high-price range wines above
the previous year's level. However, the Group’s overall wine sales were down from theprevious year, in line with the wider market trend, reflecting the high hurdle created by the
pre-tax hike demand surge a year earlier.
Our spirits business, achieved year-over-year sales growth of our lineup of
Bacardi brand products.

The Japanese liquor business posted a significant year-over-year growth in sales of its
umeshu (Japanese plum wine) offerings and also maintained sales of its Imo Shochu
Kokuimo, the No. 1 selling blended imo Shochu, on a par with the first quarter of 2014.

5

Category-wide sales, however, were down from the unusually high levels realized during
last year's demand surge.
Overall, the Japanese Alcoholic Beverages business posted first-quarter sales of ¥51.2
billion, down ¥7.8 billion or 13% year over year. Despite continued efforts to control costs,
the business posted a first-quarter operating loss of ¥2.3 billion, compared with a ¥1.1 billion
loss a year ago.
* RTD, or ready-to-drink, beverages are already-mixed, low-alcohol content cocktail-likebeverages that can be consumed as is immediately after opening.
** Meritage wines are a blend of two or more "noble" Bordeaux varieties.

International Business
In North America, the falling price of crude oil encouraged an increase in personal
consumption in the United States but appears to have had a negative impact on the
Canadian economy. Consequently, we estimate that total demand in the first quarter of2015 was largely flat in the U.S. beer market but fell about 1% year over year in Canada.
The Asian beer market, however, seems to continue to grow, supported by growing
populations and steadily expanding economies.
In this environment, our International Business continued aggressive marketing activities
targeting the premium beer markets in North America and Southeast Asia, the two regions
where the business is concentrating its resources and efforts. In Canada, SLEEMAN
BREWERIES's continued concentration of marketing expenditures on its premium brands
enabled it to enhance brand value and achieve a year-over-year increase in sales of its
premium brands. Overall, SLEEMAN's first-quarter shipments (excluding Sapporo brandbeer) rose 3% year over year. In the U.S. market, Sapporo USA’s expansion of its marketing
efforts targeting the Japanese-American market segment to the wider Asian-American andgeneral population market segments supported a year-over-year increase in shipments of
Sapporo brand beers. Silver Springs Citrus was adversely affected by the persistently highprice of oranges used to produce its juices, but the addition of Country Pure Foods Inc. as aconsolidated subsidiary in February strengthened our position in the U.S. juice market.
The Vietnam business continued its aggressive marketing efforts to establish the Sapporo
brand in the local market, including large-scale promotional events and placement of
product displays at the entrance to bars and restaurants. These efforts resulted in a
year-over-year increase in sales volume in the first quarter. In South Korea, we continued tostrengthen sales of beer to both the household and commercial markets by leveraging our
local partner's sales network. Meanwhile, cooperative efforts with our local subsidiary in
Singapore are expanding our sales channels in that country's household market. Lastly, theOceania business increased sales volumes over those a year earlier as it continued tostrengthen marketing and sustain its growth trend throughout the region, where ourbusiness centers on licensing agreements with local brewing partners. The efforts outlined
above enabled the International Business to increase first-quarter shipments of Sapporo
brand products in overseas markets by 30% year over year.

6Furthermore, we changed Silver Springs Citrus’s accounting period included in theGroup’s consolidated accounts and started to include Country Pure Foods in the
consolidated accounts from February.
Overall, the International Business posted first-quarter sales of ¥16.0 billion, up ¥5.5
billion or 53% year over year, thanks to the efforts noted above. Nonetheless, the segment
posted an operating loss of ¥1.2 billion (compared with ¥0.8 billion a year earlier).

Food & Soft Drinks
We estimate that overall demand for soft drinks in Japan decreased 4% year over year in
the first quarter of 2015, with the decline largely reflecting the high hurdle created by thedemand surge prior to the consumption tax hike in the first quarter of 2014. In addition, we
estimate that total demand for lemon-based products (flavorings) fell 3% and demand for
instant soup (including soups in a cup) slipped 2%.
In this environment, the Sapporo Group’s Food & Soft Drinks business began its third yearof integrated operations as POKKA SAPPORO Food & Beverage Ltd. The subsidiary isconcentrating investments on core brands as it endeavors to strengthen and nurture its
various brands.
The segment’s domestic soft drinks business enhanced its lineup of lemon-based
products with the introduction on March 30 of a new energy drink, ENERGIE, from our core
Kireto Lemon brand. The caffeine-free, low-calorie, re-cappable, carbonated lemon
juice-based energy drink is targeted at the adult female market segment. In terms of othersoft drinks offerings, reflecting the growing consumer demand for food safety, we launched
Nippon Oolong, an oolong tea made from domestic tea leaves, with hopes of capturing alarger share of the oolong tea market, which accounts for 15% of Japan’s unsweetened tea
market. The first-quarter sales volumes of our domestic soft drink offerings were stable withthe previous-year level, although sales of lemon-based drinks and tea drinks were solid, as
sales of vending machine stagnated.
With regard to lemon-based products, we enhanced the lineup of our Pokka Lemon 100
brand with the introduction of Pokka Lemon Premium Sicilian Straight Lemon Juice forvarious uses and Shio Lemon, a salted preserved lemon-based flavoring capable ofexpanding a cook's repertoire of dishes using lemon flavoring. Sales volumes oflemon-based products slipped 1% year over year but exceeded the total demand supported
by solid sales of these new products.
The instant soup category enhanced its lineup with two new additions to the Jikkuri
Kotokoto Kongari Pan series—a demi-glace version with large chunks of Kongari Pan(baked bread) and Yasai o Taberu Tomato Chowder, a healthy chowder loaded withvegetables. As a result, sales volumes of instant soups increased 12%.
In the domestic restaurants business, the Café de Crié coffee shop chain overcame risingcosts, including procurement costs and personnel expenses, and posted a solid increase insales. The solid result reflects a rebound in comparable-store sales fueled by timely anddetailed menu revisions.

7

The overseas soft drinks business had a solid first quarter, with sales in Singapore andexport sales both above previous-year levels. During the quarter, POKKA CORPORATION(Singapore) agreed to form a joint venture with PT DIMA INDONESIA to manufacture andsell soft drinks in Indonesia, a promising growth market.
Furthermore, we sold our restaurant business in Hong Kong in December 2014.
As a result of above, the Food & Soft Drinks segment recorded first-quarter sales of ¥29.3
billion, down ¥0.4 billion or 2% year over year. The segment posted an operating loss of¥1.2 billion (compared with a ¥0.7 billion loss a year earlier).

(Data source: Year-over-year total sales value comparisons for January–March 2015 forthe lemon foods market (Sapporo definition) and the instant soup market are based on
Intage SRI market research studies on the supermarket and convenience store industries.)

Restaurants
Japan’s restaurants industry is seeing some signs of improvement in consumer sentiment,
but the overall operating environment remains difficult, with procurement costs, energy costs
and labor costs all on the rise.
In this environment, our Restaurants Business continued to pursue the fulfillment of its
corporate philosophy of “Enhancing the Joy of Living” through constant efforts to deliversafe and sound food and service to customers while also striving to create restaurants that“deliver 100% satisfaction to customers.”
In the first quarter of 2015, the Restaurant business endeavored to raise profitability bychanging store formats. As part of its integrated profit structure reform, the business also
closed six outlets, including some unprofitable stores. As a result, the number of outlets
operating at period-end decreased to 179. In April, however, we will open the first Hokkaido
outlet for our popular Yebisu Bar chain.
Overseas, we opened another Rive Gauche cake and patisserie shop in Singapore,bringing the Restaurants Business’s total number of overseas outlets to 15. This number
includes two Ginza Lion Beer Halls, the second opened in October 2014, and we plan tocontinue creating eating and drinking establishments that will be popular with local
consumers.
Overall, the Restaurants business posted first-quarter sales of ¥5.8 billion, on par with thefirst quarter of 2014. The segment’s operating loss came to ¥0.3 billion, unchanged from a¥0.3 billion loss reported year earlier.

Real Estate
Japan’s real estate industry continued to see a moderate recovery in rent levels during thefirst quarter of 2015, as vacancy rates in the Greater Tokyo office leasing market also
continued to improve.
Amid such market conditions, our real estate leasing business was supported by its
success in finding replacement tenants for its core Yebisu Garden Place property, which saw

8its occupancy rate drop temporarily following the exit of a large tenant at the expiration of thelease contract in May 2014. The property’s occupancy rate has now recovered to the stably
higher levels at our other properties.
Yebisu Garden Place celebrated the 20th anniversary of its opening during 2014, and wecontinue to make renovations that enhance the property’s value by raising conveniencelevels and strengthening its brand appeal as we endeavor to provide tenants and visitorswith enjoyable experiences in comfortable and pleasant surroundings. During the firstquarter of 2015, we began a major renovation of the building’s B1 restaurant floor, withreopening scheduled for this June. Also, on March 28, we opened a new-concept movie
theater that provides new value to customers in line with our effort to create a new brandimage for the Ebisu area. At the complex’s rental housing building, we are proceeding withrenovations of communal-use areas to further enhance comfort for residents and visitors. At
the complex’s office tower, in March we completed the installation of equipment to ensure
electricity supply to tenant spaces during a disaster. Recent efforts to strengthen thefacilities' earthquake resistance and raise safety levels have increased its competitive
position in rental office market.
The new Ebisu First Square, which came on line in October 2014, has won high praisefrom tenants as a highly competitive office building with superior safety features, comfort
levels, and environmental performance. We look forward to a full-year’s contribution toearnings from the property in 2015.
The real estate development business began construction work in March on a newbuilding as part of its Ginza 5-chome Redevelopment Project. The building is scheduled to
be open for business in summer 2016. The aim is to develop a property that becomes thetalk of the town and a center of activity suitable for a Ginza landmark.
We are constantly reviewing and revising our property portfolio from a long-term
perspective. As a result, we sold our entire equity stake in Sapporo Sports Plaza inDecember 2014 as well as several lease properties, and during the first quarter of 2015 wesold trust beneficiary rights to the Shibuya Sakuragaoka Square office building in February.
As result of the efforts outlined above, the Real Estate business posted first-quarter salesof ¥4.7 billion, down ¥0.8 billion or 16% year over year, and operating income of ¥1.7 billion,
down ¥0.5 billion or 25%.

9

(2) Review of Consolidated Financial Condition
Consolidated Financial Condition
Consolidated assets as of the end of the first quarter on March 31, 2015, totaled ¥606.6
billion, an ¥18.7 billion decrease from the end of the previous fiscal year (December 31,2014). Despite the addition of Country Pure Foods, Inc., to consolidated accounts, overall
assets declined owing to a decrease in notes and accounts receivable – trade caused by theannual seasonal weakness in sales. The sale of trust beneficiary rights in the Shibuya
Sakuragaoka Square also contributed to the decrease in assets.
Consolidated liabilities totaled ¥448.0 billion, a ¥17.4 billion decrease from December 31,
2014, primarily reflecting a decrease in commercial paper and liquor taxes payable, whichmore than offset increases in short-term bank loans and net defined benefit liability.
Consolidated net assets as of March 31, 2015, totaled ¥158.6 billion, ¥1.3 billion less thanthe previous fiscal year-end level. The decline is attributable to the application of revised
retirement benefit accounting standard, etc. as well as the decline in retained earnings due tothe distribution of year-end dividends, which offset an increase in unrealized holding gain on
securities.

(3) Consolidated Earnings Forecast
The consolidated earnings forecast for the full fiscal year ending December 31, 2015 isunchanged from the forecast announced by the Company on February 12, 2015.

2. Other Information(1) Changes in significant subsidiaries during the three months ended March 31, 2015
Not applicable(2) Application of accounting methods specific to the preparation of quarterly
consolidated financial statements(Calculation of tax liabilities)
The Company calculates tax liabilities by producing a reasonable estimate of the effective
tax rate after applying tax-effect accounting to income before taxes and minority interests forthe fiscal year, which encompasses the three months ended March 31, 2015, and thenmultiplying income (loss) before taxes and minority interests by this estimated effective tax
rate.

(3) Changes in Accounting Policy, Changes in Accounting Estimates, andRetrospective Restatement(Changes in Accounting Policy)“Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan ASBJ - Statement No. 26 of May 17, 2012) and “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No. 25 of May 17, 2012) have been applied, effectivefrom the first quarter of the current consolidated financial year ending December 31, 2015, in
accordance with the provisions of Article 35 of the Accounting Standard for Retirement10Benefits and Article 67 of the Guidance on Accounting Standard for Retirement Benefits. As
a result, the method for calculating retirement benefit obligations and service costs has beenrevised, and the method for attributing projected benefits to periods has been changed fromthe straight-line basis to the benefit formula basis. As to the discount rate, it used to be
calculated based on the periods, comparable to employees’ average remaining years ofservice. Under the new accounting standard, however, the method of determining thediscount rate has now been changed to use a single weighted-average discount rate thatreflects the periods until the expected payment of retirement benefits and the amount ofprojected benefits for every such period.
In applying these retirement benefit-related accounting standards, etc. and in accordancewith the transitional treatment provided in Article 37 of the Accounting Standard for
Retirement Benefits, the effect of the change in calculation method for retirement benefit
obligations and service costs has been recognized by adjusting retained earnings at the
beginning of the first quarter of the current financial year ending December 31, 2015.
Consequently, as at the beginning of the first quarter of the current financial year ending
December 31, 2015, net defined benefit liability increased by ¥4,799 million, while retained
earnings decreased by ¥3,105 million. Furthermore, during the first quarter of the current
consolidated financial year, operating loss and ordinary loss decreased each by ¥42 million
respectively, and income before income taxes and minority interests grew by ¥42 million.

11

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(millions of yen)

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

12

December 31, 2014

March 31, 2015

AmountAmount9,781
89,24522,431
14,10820,971(165)
156,372

9,259
62,593
27,535
13,456
16,739(150)
129,434

387,644(211,317)
176,327
224,180(180,302)
43,878115,290
2,617
36,088(23,606)
12,482
350,597

386,452(212,776)
173,676
229,804(184,543)
45,260109,314
6,569
36,177(23,837)
12,340347,161

29,966
6,025
35,99135,2798,609
43,88859,9689,150
14,663(1,305)82,477
469,066
625,439

63,2099,021
15,219(1,282)
86,168477,218
606,653

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

13

December 31, 2014

March 31, 2015

AmountAmount35,534
31,44630,00012,00033,602
724
2,115
9,650
56,696
211,771

33,66539,931
21,00012,00017,270
1,494
4,205
9,221
48,808
187,596

50,000124,110
4,510
32,33642,704
253,662
465,434

50,000126,274
9,122
32,88242,154
260,434
448,03153,88645,912
34,913(1,544)133,168

53,88645,912
29,965(1,549)128,215

20,112
(0)
2,582
440
23,1353,700
160,004
625,439

23,948(3)714
737
25,397
5,009
158,621606,653

(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 loss
IV Non-operating income
1 Interest income
2 Dividend income
3 Equity in income of affiliates
4 Other
Total non-operating income
V Non-operating expenses
1 Interest expense
2 Equity in losses of affiliates
3 Foreign exchange losses
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 Gain on sales of consolidated subsidiaries
4 Subsidy income
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Loss on sales of property, plant and equipment
3 Loss on devaluation of investment securities
4 Impairment loss
5 Compensation expenses
Total extraordinary losses
Loss before income taxes and minority interests
Income taxes
Income (loss) before minority interests
Minority interests
Net Income (loss）

Three months ended
March 31, 2014
Amount112,084
73,21538,869(millions of yen)Three months ended
March 31, 2015
Amount108,457
73,81934,638

7,583
5,846
7,046
1,360
763
17,99440,596(1,726)

7,725
5,234
6,937
1,335
667
17,06538,966(4,328)

58
95

54
345
35
297
732

176
331
619
8
90
234
953
(2,348)
36
4

14

111
287
959
(4,555)

41

7,363
26
12
322
7,726

1,110
43
10
1,540
2,704
(5,012)(1,103)(3,908)(93)(3,815)

244
2
154
67
469
2,700
1,937
763
(119)
882

(3,908)763(1,176)(12)(896)(2,086)(5,994)

3,835(8)(1,668)
296
2,455
3,218

(6,034)
40

3,143
75

-

Income (loss） before minority interests
Other comprehensive income
Unrealized holding gain on securities
Deferred hedge gains (losses)
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests561

(3) Notes on the Going-concern Assumption
Not applicable(4) Segment Information
Ⅰ Three months ended March 31, 2014 (January 1, 2014 – March 31, 2014)
1. Sales, income, and loss by reportable segment(millions of yen)
Reportable segments
Japanese
Alcoholic
Beverages

International Food&
Restaurants
Soft Drinks

Real
Estate

Total

Other *1

Total

Amounts
reported on
Adjustments thestatements
of income *2

Net sales(1) Operating revenues(2) Intra-group sales and transfers
Total
Segment income (loss)

59,064

10,44029,801

5,859

5,608

110,775

1,309

501

21

28

0

647

1,199

4,281

59,566

10,462

29,830

5,859

6,255

111,974

5,591(1,142)

(891)

(771)

(328)

2,264

(870)

10

112,084
5,481
117,565(859)-

112,084(5,481)(5,481)

112,084(867)(1,726)-

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

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

AmountTotal for reportable segments(870)

Total other income
Unallocated corporate costs

10
(855)
(12)

Intra-segment sales
Operating losses on the statement of income(1,726)

3. Impairment loss on fixed assets or goodwill by reportable segment(Significant impairment losses on fixed assets)
Not applicable(Significant changes in the amount of goodwill)
Not applicable(Material Gain on negative goodwill)
Not applicable15

Ⅱ

Three months ended March 31, 2015 (January 1, 2015 – March 31, 2015)

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

International Food&
Restaurants
Soft Drinks

Real
Estate

Total

Other *1

Total

Amounts
reported on
Adjustments thestatements
of income *2

Net sales(1) Operating revenues(2) Intra-group sales and transfers
Total
Segment income (loss)

51,232

16,00829,303

5,880

4,725

107,151

1,306

624

23

28

0

593

1,269

4,042

51,856

16,032

29,331

5,881

5,319

108,420

5,348(2,326)(1,262)(1,204)

(333)

1,708

(3,418)(62)

108,457
5,312
113,769(3,481)-

108,457(5,312)(5,312)

108,457(847)(4,328)-Notes:(1) "Other" comprises businesses, such as logystics businesses, that are not included in reportable segments.
(2) Segment income and losses are adjusted based on operating income reported on the quarterly consolidated statements of income for the corresponding period.

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

AmountTotal for reportable segments(3,418)

Total other losses
Unallocated corporate costs

(62)
(851)
3

Intra-segment sales
Operating losses on the statement of income(4,328)

3. Changes in Reportable Segment, etc.
(Changes in Reportable Segment)
Following the share transfer between the consolidated subsidiaries, the segment classification of New Sanko Inc., which formerly used to be classified in the“Japanese Alcoholic Beverages” segment, has now been changed to the “Restaurants” segment, effective from the first quarter of the current consolidated financial
year.
The segment information for the first quarter of the previous consolidated financial year has been restated, reflecting this segment change.
(Application of Accounting Standard for Retirement Benefits, etc.)
In accordance with the revision of the method for calculating retirement benefit obligations and service costs, as per the above Changes in Accounting Policy,
effective from the first quarter of the current consolidated financial year, the calculation method for retirement benefit obligations and service costs in each businesssegment has been revised accordingly.
As a result, compared to the old calculation method, a segment loss of the “Japanese Alcoholic Beverages” was reduced by 40 million yen in the first quarter of thecurrent financial year. The effect of the said revision on the segment income or loss in other segments than the “Japanese Alcoholic Beverages is immaterial.

4. Impairment Loss on Fixed Assets or Goodwill by Reportable Segment(Significant impairment losses on fixed assets)
Not Applicable.
(Significant changes in the amount of goodwill)In the “International Business” segment, the shares of Country Pure Foods, Inc. has been acquired as at February 24, 2015, and thereby it has been made as theCompany’s consolidated subsidiary. As a result of the consolidation, the amount of goodwill increased by 5,924 million yen in the first quarter of the current
consolidated financial year.
The amount of goodwill is calculated on a tentative basis, because the allocation of acquisition cost has not been completed.
(Material Gain on negative goodwill)
Not Applicable16

(5)Notes on Significant Changes in the Amount of Shareholder's Equity
Not applicable(6)Business Combinations
Three months ended March 31, 2015 (January 1, 2015-March 31, 2015)【Business Combinations by Acquisition】
The Company’s consolidated subsidiary Sapporo International Inc. (“SI”) and Toyota Tsusho
America, Inc. (“TAI”) acquired the shares of Country Pure Foods, Inc. (“CPF”), a major foodservice juice manufacturer in the U.S., through Silver Springs Citrus, Inc. (“SSC”), a U.S. juice
manufacturing joint venture of SI and TAI.
1. Overview of Business Combination① Name and business description of acquired company- Company name: Country Pure Foods, Inc.
- Location: Akron, Ohio, U.S.
- Business description:
Manufacture and sales of food service juice in the healthcare and education sectors
Manufacture and sale of retail chain private label juice
Manufacturing services and sales for leading branded juice companies② Main reason for business combination
The Sapporo Group formulated the SAPPORO Group Medium-term Management Plan
2014-2016 in February 2014, and has accelerated its growth strategy as a manufacturer of foodproducts. It is taking steps to achieve the financial targets for 2016 by generating synergies
among Group companies and by pursuing M&As.
As part of the plan, SI has defined North America, its operational base, together with the
fast-growing Asian market, as its first priority markets for the beer business. It has also launchedits beverage business in North America by acquiring SSC in 2012. Since then, it has been
accumulated know-how and knowledge in that market.
Looking ahead, SI will maximize synergies with SSC by bringing CPF into its corporate Group
together with TAI, its partner in the North American juice business, to accelerate its growthstrategy for the International business in North America, including the beer business.
③ Entity from which the shares will be acquired: Mistral Winthorpe Holdings,LLC. and other④ Share acquisition period: February 24, 2015
⑤ Legal form of the business combination: Cash payment in exchange for shares⑥ Name of the company after acquisition: No change⑦ Share of voting rights to be acquired: 51%

17

⑧ Main grounds for determining the acquired company:
The company was determined to be acquired because its shares were acquired for cash
consideration by the Company’s subsidiary.

2. Consolidated quarterly accounting period for which earnings of the acquired company were
included in the consolidated statements of income:The acquired company's earnings are included from February 24, 2015 to March 31, 2015.

3. Acquisition cost and breakdown
Acquisition price: 4,370 million yen
Costs incurred directly in the acquisition: 491 million yen
Acquisition cost: 4,861 million yen

4. Amount of goodwill, reason for its recognition, amortization method, and amortization period①Amount of goodwill: 5,924 million yen

The amount of goodwill is calculated on a tentative basis, because the allocation of
acquisition cost has not been completed.
②Reason for its recognition: Future business activities are expected to generate excess
profitability.
③Amortization method and amortization period: 9 years with the straight-line method(7)Subsequent Events
Not applicable18