Financial Results
for the Three Months Ended March 31, 2011 — Consolidated(Based on Japanese GAAP)May 11, 2011

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 and Representative Director, Group CEO
Tatsuya Komatsu, Director of the Corporate Communication Department

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

Filing of quarterly financial report

May 12, 2011

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, 2011
(January 1 – March 31, 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
million yen%

million yen%

million yen

Three months ended
March 31, 2011

72,967(5.4)(3,338)-(4,098)-(6,291)-Three months ended
March 31, 2010

77,130(5.5)(3,583)-(4,143)-(2,978)-Net income per
share

Diluted net income
per share

yen

yen

Three months ended
March 31, 2011

(16.07)-

Three months ended
March 31, 2010

(7.60)-

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, 2011

532,904

119,73021.8

296.80December 31, 2010

494,798

126,64525.3

319.32

Note: Shareholders’ equity
March 31, 2011:
116,221 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—

Year ending
December 31, 2011

—

0.00

—

7.00

7.00

Year ending
0.00
—
7.00
7.00
December 31, 2011
(forecast)
Note: No changes were made to dividend forecasts in the three months ended March 31, 2011.

3. Forecast of Consolidated Earnings for the Year Ending December 31, 2011
(January 1 – December 31, 2011)
Note: Changes were made to earnings forecasts in the three months ended March 31, 2011.
The Company omits disclosure of its earnings forecast for the year ending December 31, 2011 because
reasonable estimates of the Great East Japan Earthquake’s impact are not currently possible, making it
impossible to provide shareholders and investors with fair, reliable information. The Company will release arevised consolidated earnings forecast as soon as reasonable estimates are possible. For details, see "3.
Consolidated Earnings Forecast" on page 11.

4. Other*For details, see "4. Other" on page 11.
(1) Changes to scope of consolidation: None
*Changes affecting the status of significant subsidiaries (scope of consolidation)(2) Simplified accounting: 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2) Changes other than the above: None
*Changes in accounting principles, procedures, and methods of presentation used toprepare the quarterly financial statements(4) Number of shares issued and outstanding (common stock)1) Number of shares issued at end of period (treasury stock included):
March 31, 2011:
393,971,493 shares
December 31, 2010: 393,971,493 shares
2) Number of shares held in treasury at end of period:
March 31, 2011:
2,386,303 shares
December 31, 2010:
2,367,424 shares
3) Average number of outstanding shares during the period:
Three months ended March 31, 2011:
391,590,749 shares
Three months ended March 31, 2010:
393,732,438 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
Consolidated Financial Results for the Three Months ended March 31, 2011
In the first quarter of 2011 (January 1 – March 31, 2011), the Japanese economy was in the
midst of a moderate recovery in business conditions, supported by improvements in the global
economy and corporate earnings, when the Great East Japan Earthquake and tsunami
disaster struck on March 11, leading to a sudden drop in economic activity and an unclear
future.
The Sapporo Group’s Japanese Alcoholic Beverages and Restaurants businesses havebeen directly affected by the disaster. In response to falling sales, both businesses have cut
costs, including facility expenditures. Meanwhile, the International Alcoholic Beverages andthe Soft Drinks businesses both achieved sales growth thanks to successful marketingstrategies launched at the start of 2011, which translated into year-over-year operating income
gains.
As a result of the above factors, in the first quarter the Sapporo Group posted consolidated
net sales of ¥72.9 billion (down ¥4.1 billion, or 5%, from the year-earlier quarter). The
operating loss narrowed to ¥3.3 billion (a ¥200 million improvement over the year-earlier
quarter), while the ordinary loss contracted to ¥4.0 billion (a ¥400 million improvement fromthe year-earlier quarter). First-quarter net loss was ¥6.2 billion (versus an operating loss of¥2.9 billion in the year-earlier quarter), with most of the increase in net loss due to a ¥1.0
billion charge owing to changes in accounting standards for asset retirement obligations and“disaster losses” of ¥1.9 billion booked in relation to the earthquake.
We are unable to make reasonable estimates of all earthquake-related losses at this time
and therefore expect to post additional losses in future periods as the amount of such losses
becomes clear.
Regarding the management integration with POKKA CORPORATION, the acquisition of
additional shares on March 29 made POKKA a consolidated subsidiary of Sapporo Holdings.
However, the acquisition will be recognized as having occurred on March 31, so POKKA’s
balance sheet items only will be consolidated for the first quarter, with statement of income
items to be incorporated into consolidated results from the second quarter. The two companies
are now engaged in discussions to institute a new business structure from April 2012.
Segment Information
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 the4supplementary materials.
Seasonal Factors
The Group’s operating results exhibit substantial seasonal variation because demand for theAlcoholic Beverages, Soft Drinks, and Restaurants businesses’ products tend to bedisproportionately concentrated in the summer months. Sales therefore tend to be lower in thefirst quarter than in the other three quarters.
Japanese Alcoholic Beverages
In the first quarter, total demand for beer and beer-type beverages in the Japanese market
was trending in line with the previous year through the end of February, but in demand Marchfell 13% in the aftermath of the Great East Japan Earthquake. As a result, total demand forbeer and beer-type beverages appears to have been at around 94–95% of its year-earlier
level.
The earthquake caused some damage to buildings, equipment, and distribution facilities at
the Group’s Sendai Brewery (Natori City, Miyagi Prefecture) and Chiba Brewery (Funabashi
City, Chiba Prefecture). Some product losses were also sustained. These damages forced the
shutdown of the two breweries and the halt of product shipments. In addition, post-quake
shortages of fuel, transport vehicles, and supply capabilities forced the Japanese Alcoholic
Beverage business to limit production to certain core brands and to delay the launch of new
products. It also refrained from advertising and in-store marketing activities.
Under such circumstances, marketing activities were focused on the business’s core brands,
namely Yebisu, Sapporo Draft Beer Black Label, and Mugi to Hop, and total unit sales of
Sapporo beer products fell 11% year over year in the first quarter.
In the low-alcohol category, in February we launched the limited-quantity Sapporo Nectar
Creamy Peach cocktail-style drink and received a favorable market reaction. In the
nonalcoholic beer category, we introduced Sapporo Premium Alcohol Free on March 16, andsales of the new product surpassed original targets despite the launch coming soon after theearthquake.
In the wine business, demand for imported wines in the core Greater Tokyo market was
stunted in the earthquake’s aftermath and revenues consequently fell year over year.
Domestic wines, on the other hand, posted year-over-year revenue growth thanks to growing
demand in areas west of the Tokai region (which centers on Nagoya), which were unscathedby the massive earthquake in northeast Japan. Nonetheless, our wine business as a whole
saw sales and profits income fall below year-earlier levels.
In the shochu business, we were forced to postpone the originally scheduled March 23

5

launch of the Triangle Ginger Highball canned cocktail because of the earthquake’s impact.
This product is now scheduled for launch on May 11. As a result, the shochu business sufferedyear-over-year declines in both revenues and profits.
As for operations at our quake-damaged breweries, the Chiba Brewery restored its
packaging line to partial operation on March 28 and resumed pre-fermentation processes on
April 25, so it is now well on the way to fully reinstating operations. The Sendai Brewery
resumed partial operation of its packaging line on May 2.
Overall, the Japanese Alcoholic Beverages business saw first-quarter sales fall to ¥49.2
billion (down ¥4.6 billion, or 9%, year over year) and incurred an operating loss of ¥4.0 billion(versus an operating loss of ¥3.8 billion in the year-earlier quarter).

International Alcoholic Beverages
North American beer demand remained sluggish despite signs of a recovery in consumer
spending. Industry-wide demand appears to have contracted by around 1–2% versus the firstquarter of 2010. Meanwhile, the Asian beer market continues 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’unit sales (excluding outsourced production of Sapporo brand products) increased 4% year
over year, maintaining its five-year growth streak. Sapporo USA’s Sapporo brand unit sales
were up 24% year over year. Meanwhile, non-North American sales, which are concentrated
mainly in Asia, continued to grow briskly, with unit sales up 19% year over year.
In Vietnam, brewery construction is proceeding smoothly, and we plan to begin beer
production and sales of locally produced beer during 2011. Toward that end, we are working toestablish a production system, formulating a marketing strategy, and building a distribution
network. In Singapore, we continue to work with POKKA CORPORATION on expanding sales
channels in the local household market. In South Korea we entered the household andcommercial beer markets via an alliance with Maeil Dairies Co., Ltd.
As a result, our International Alcoholic Beverages business achieved sales of ¥5.4 billion (anincrease of ¥0.1 billion, or 4%, year over year) and reduced its operating loss to ¥0.1 billion(¥0.1 billion improvement from a year earlier) despite startup investment totaling ¥0.2 billion in
Vietnam.
Soft Drinks
We estimate that domestic demand for soft drinks was running ahead of the previous year’s

6pace in January and February, but the March 11 earthquake halted sales of some new
products and postponed launches for some others. Sales were also curtailed by supply
shortages owing to damages suffered by ingredient makers and the negative impact on
product distribution caused by gasoline shortages. A 4% year-over-year decline inmarket-wide demand in March alone limited total domestic soft drink sales in the first quarterto a 1% rise.
In this environment, the Soft Drinks business continued to strengthen and cultivate its
brands, in particular by focusing marketing investment and sales-force resources on core
brands, while also strengthening product development operations targeted at creating newvalue propositions. We also stepped up efforts to dramatically lower operating costs,
implementing cost measures designed to strengthen profitability through a select-and-focus
approach (i.e., selectively focusing resources on key areas).
Specifically, we did our first renewal of the Ribbon brand in two years and launched amarketing campaign for the Gabunomi series that helped broaden sales points and solidify the
products’ market presence. To promote market recognition of Gerolsteiner (naturally
carbonated water from Germany), we passed out samples as part of in-store trial offers andrepeat purchase promotions. We also enhanced our Oishii Tansansui lineup of bottled soda
waters and introduced new offerings in the Sonamama Zukuri series of all-natural fruit juice
drinks.
In addition to these efforts, a post-earthquake surge in demand for mineral water andunsweetened beverages led to a 10% year-over-year increase in sales volume for suchproducts.
In terms of costs, we countered rising materials procurement costs by optimizing our
production structure and reducing losses from waste and spoilage, as we continued to pursue
cost-structure reforms throughout the value chain through our rigorous select-and-focus
approach.
As a result, the Soft Drinks business achieved sales of ¥7.5 billion (up ¥1.4 billion, or 23%,year over year) and booked operating income, just above break even, at under ¥0.1 billion(improving by ¥0.1 billion from a year earlier), on the strength of the higher sales and thebenefits cost-structure reforms.
Restaurants
In the first quarter of 2011, Japan’s restaurant industry continued to feel the pinch of weak
consumer spending in the face of an unclear economic outlook and increasingly stiffcompetition among restaurant operators. An already harsh operating environment was madeeven more difficult by the earthquake and tsunami disaster, which forced many outlets to close7

or shorten operating hours and triggered a sharp drop in consumer spending.
To increase customer traffic amid this difficult operating environment, the Restaurants
business has conducted a number of campaigns since the outset of 2011, including
promotions highlighting various Sapporo-brand beers and campaigns to increase membershipof house cards. However, after the earthquake knocked out key lifeline infrastructure andcaused damage at some restaurants, eight locations in Miyagi Prefecture were closed, as
were the Chiba Beer Garden and the Nasu Mori no Beer En facility. Additionally, plannedrolling power outages and other disaster-related complications forced many restaurants in the
Greater Tokyo area to close or reduce their hours of operation.
In the aftermath of the earthquake, Sapporo Group restaurants in Sendai City and the
Sendai Beer Garden in Natori City have contributed to relief efforts by supplying meals to
evacuation centers on a continuous basis.
We opened five new restaurant locations during the first quarter. In January, we opened ashop within the Shiki Theater Company’s Hokkaido theater hall. In February, we took on
operation of a Shabu Ichimonji shabu-shabu restaurant in Kashiwa Takashimaya Station Malland a buffet restaurant in the Hakone Kowakien Yunessun hot spring resort, and we opened
our third Yebisu Bar in the Whity Umeda part of the Umeda underground shopping district inOsaka. In March, Brasserie Ginza Lion opened its newest location in Sapporo City’s Tokyu
Plaza.
We also closed five unprofitable locations with little prospect of an earnings improvement in
the near term. As a result, the Sapporo Group had 194 locations operating at the end of
March.
The Restaurants business generated sales of ¥4.7 billion (down ¥1.1 billion, or 20%, year
over year), leading to an operating loss of ¥0.7 billion (versus a loss of ¥0.3 billion a year
earlier).
Real Estate
Vacancy rates and rents in the Greater Tokyo office leasing market have shown no signs ofimprovement since the start of 2011, and deteriorated even further in the wake of the March
earthquake.
Amid such an environment, our Real Estate business has been endeavoring to maintain or
boost rents and occupancy rates and realize additional cost savings at existing properties.
Planned rolling power outages in the first few weeks immediately following the earthquake
forced some of our office buildings and commercial facilities, including Yebisu Garden Place,to limit usage, but these facilities have since returned to normal operating conditions.

8Real estate development activities during the quarter focused on ongoing construction of a
new wing at the Pal Urayasu fitness club in Urayasu, Chiba.
In February, we acquired the Storia Shirokanedai rental apartment building in the Meguro
area of Tokyo, and this property is already contributing to segment earnings.
The Real Estate business’s sales totaled ¥5.7 billion (¥300 million less than a year earlier),while operating income improved to ¥2.2 billion (up ¥0.3 billion, or 18%, year over year).
2. Review of Consolidated Financial Condition
Consolidated Financial Condition
Consolidated assets totaled ¥532.9 billion at March 31, 2011, a ¥38.1billion increase fromthe end of the previous fiscal year (December 31, 2010). The increase was attributable tomaking POKKA CORPORATION a consolidated subsidiary and an increase in land holdings,
partially offset by a decrease in notes and accounts receivable.
Consolidated liabilities totaled ¥413.1 billion, a ¥45.0 billion increase from December 31,
2010, notably due to the newly consolidated subsidiary, partially offset by decreases in liquor
taxes payable and deposits received.
Consolidated net assets totaled ¥119.7 billion, a ¥6.9 billion decrease from December 31,
2010. The decrease is primarily due to dividend payments at the end of the previous fiscal
year and the booking of a net loss for the first quarter.
Consolidated Cash Flows
Consolidated cash flows for the three months ended March 31, 2011 were as follows.
Operating activities used net cash of ¥1.8 billion. Main decremental factors included a loss
before income taxes and minority interests (¥7.9 billion), a decrease in notes and accounts
payable (¥6.4 billion), and a decrease in liquor taxes payable (¥18.3 billion). Main
incremental factors included depreciation and amortization (¥4.9 billion), a decrease in notes
and accounts receivable (¥22.3 billion), and a decrease in other current assets (¥2.1 billion).
Investing activities used net cash of ¥22.3 billion. Major investment outflows included
acquisitions of subsidiaries' shares resulting in changes in scope of consolidation (¥18.6
billion) and purchases of property, plant and equipment (¥3.6 billion).
Financing activities provided net cash of ¥25.3 billion. The major financing inflows were
proceeds from short-term bank loans (¥26.4 billion), partly offset by repayments of long-termbank loans (¥4.8 billion).
As a result of the above cash flows, cash and cash equivalents totaled ¥14.3 billion as of9March 31, 2011.
3. Consolidated Earnings Forecast
As it is still difficult to estimate the impact of the Great East Japan Earthquake on Groupearnings, we cannot provide a reasonable forecast at this time, but we will do so as soon as
accurate estimates can be made.
Forecasting at this time is complicated by the following.
• Reasonable estimates of the cost of restoring damaged facilities to pre-quake conditions
have not yet been made.
• Trends in economic activity and consumer spending in the post-quake period remain unclear.
• The impact of electric power supply restrictions, etc., on manufacturing operations remains
unclear.
4. 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 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 business environment 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.
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 three months ended
March 31, 2011, and then multiplying income (loss) before taxes and minority

10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 of presentation
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, the Company
adopted the Revised Accounting Standard for Equity Method of Accounting forInvestments (ASBJ Statement No. 16, revised March 10, 2008) and the Practical
Solution on Unification of Accounting Policies Applied to Associates Accounted for
Using the Equity Method (PITF No.24, March 10, 2008). The impact of this adoption
on ordinary income and net income before income taxes and minority interests was
nil.
Adoption of accounting standard related to asset retirement obligations
Effective the first quarter of the fiscal year ending December 31, 2011, the Company
adopted the Accounting Standard for Asset Retirement Obligations (Statement
No.18, March 31, 2008) and its associated Guidance on Accounting Standard for
Asset Retirement Obligations (Guidance No.21, March 31, 2008). Due to thisadoption, operating loss and ordinary loss were each 25 million yen higher, and loss
before income taxes and minority interests was 1,110 million yen higher. Assetretirement 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“loss before minority interests” for the first quarter ended March 31, 2011.

11

4. 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

12

March 31, 2011

December 31, 2010

AmountAmount14,47053,272－
16,376
10,690
14,239(130)108,918

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

373,912(197,319)
176,592
200,695(159,440)
41,25484,876
4,322
39,560(24,560)
14,999322,045357,769(185,485)
172,284
180,519(142,521)
37,997
77,583
3,563
20,400(15,201)
5,199
296,629

32,501
10,38942,891

14,128
10,331
24,45931,165
10,232
2,680
16,626(1,656)59,048423,985
532,904

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 gains (losses)
3 Foreign currency translation adjustments
Total valuation and translation adjustments
III Minority Interests
Total net assets
Total liabilities and net assets

13

March 31, 2011

December 31, 2010

AmountAmount27,24264,10820,00015,917983
4,810
17,89350,240201,195

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

35,843
98,40814,3387,615
33
32,823
22,913211,977
413,173

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

53,88646,315
19,281(1,197)
118,285

53,88646,31528,317(1,190)127,3292,507
4(4,576)(2,064)
3,509
119,730
523,904

2,985(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 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
5 Settlement received
Total extraordinary gains
VII Extraordinary losses
1 Loss on disposal of property, plant and equipment
2 Effect of adoption of new accounting standards for asset
retirement obligations
3 Loss on phased acquisition
4 Disaster losses
5 Loss on devaluation of investment securities
Total extraordinary losses
Loss before income taxes and minority interests
Income taxes
Loss before minority interests
Minority interests in gains (losses)
Net loss

14

Three months ended
March 31, 2011
Amount72,96749,382
23,584(millions of yen)Three months ended
March 31, 2010
Amount77,13053,761
23,368

4,500
4,758
4,077
1,149
743
11,69426,923(3,338)

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

96
55
54
124
93
423

107
83
－
151
297
639

831
282
－
68
1,182
(4,098)

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

0
0
26
－
261
288

0
1
16
569
－
587

79

194

1,084
566
1,907
489
4,128
(7,937)(1,635)(6,302)(11)(6,291)

－
－
－
91
286
(3,842)(863)(2,978)0(2,978)

(3) Consolidated Statements of Cash Flows
Three months ended
March 31, 2011
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(7,937)
4,984
305
(24)
(70)
(151)
831

8 (Gain) loss on sales and disposal of fixed assets

79489

9 (Gain) loss on revaluation of investment securities
10 Effect of adoption of new accounting standards for asset
retirement obligations
11 (Increase) decrease in notes and accounts payable - trade
12 (Increase) decrease in inventories
13( Increase) decrease in other current liabilities
14 Increase (decrease) in notes and accounts payable - trade
15 Increase (decrease) in liquor taxes payable
16 Increase (decrease) in deposits received
17 Other
Sub total
18 Interest and dividends received
19 Interest paid
20 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 Purchases of newly consolidated subsidiaries
6 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 Increase (decrease) in commercial paper
5 Cash dividends paid
6 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 period

15(millions of yen)Three months ended
March 31, 2010
Amount(3,842)
5,686
262
(70)
(10)
(190)
895
193
91
－

1,084
22,387(0)2,107(6,435)(18,367)(1,538)
2,672
417
350
(851)
(1,812)(1,895)

16,382(146)
1,272(1,306)(17,279)(3,086)
2,354
1,206
439
(802)
(683)
159

(111)
(3,628)27(480)(18,644)442(22,395)(837)(2,768)
0
(135)
－
179
(3,561)

26,416
3,080(4,802)3,000(2,326)(64)
25,30427
1,041
13,27014,311

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 Informationa. Segment Information by Business

Alcoholic
Beverages(millions of yen)Three months ended March 31, 2010 (January 1, 2010 – March 31, 2010)
Corporate and
Real
Soft
Consolidated
Total
Restaurants
eliminations
EstateDrinks

Net sales(1) Operating revenues

58,9966,249(2) Intra-group sales and transfers

1,145

29

60,142(4,170)Total
Operating income (loss)

6,142

5,741

77,130

-

-

548

1,723

(1,723)

6,278

6,142

6,289

78,854(1,723)

77,130

(270)

(338)

1,898

(2,881)(702)(3,583)

77,130-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
Three months ended March 31, 2010 (January 1, 2010 – March 31, 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 quarter, for which certain elements were determinable with certainty at end of thefirst quarter (March 31, 2010) were accounted for with the percentage-of-completion method. The effect of this change on
profit and loss was minor.

b. 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.

c. 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.

16Segment Information
1. Overview of reportable segments
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 and sells 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
Three months ended March 31, 2011 (January 1, 2011 – March 31, 2011)(millions of yen)
Reportable segments
Japanese
Alcoholic
Beverages

International
Alcoholic
Beverages(1) Operating revenues

49,251

5,461(2) Intra-group sales and transfers

1,039

Soft
DrinksRestaurants

Real
Estate

Total

Other *1

Total

Amounts
reported on
Adjustments thestatements
of income *2

Net sales

Total
Segment income (loss)

7,582
-

4,760

30

-

5,709

72,765

201

540

1,611

7

50,291

5,461

7,613

4,760

6,249

74,377208(4,019)

(147)

88

(723)

2,244

(2,558)(175)

72,967
1,618
74,585(2,734)-72,967(1,618)(1,618)72,967(604)(3,338)-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) The POKKA Group segment was not included in reportable segments as it comprises affiliated POKKA Group companies to which the equity method was applied in thethree months ended March 31, 2011.

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

AmountTotal for reportable segments(2,558)

Total other sales
Unallocated corporate costs(175)

Intra-segment sales
Operating income on the statement ofincome(585)(18)(3,338)

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
Effective March 29, 2011, the Company made POKKA CORPORATION a consolidated subsidiary throughan additional acquisition of shares and categorized it into the POKKA Group segment. POKKACORPORATION had been an affiliated company under the equity method since September 30, 2009. As aresult, goodwill increased by 18,525 million yen in the three months ended March 31, 2011.
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 for Disclosuresabout Segments of an Enterprise and Related Information (Guidance No. 20, March 21, 2008).

176. Notes on Significant Changes in the Amount of Shareholders' Equity
Not applicable

7. Subsequent Events
On April 15, 2011, the Company terminated its business alliance with YK, Crescent Partners and Goudou
Kaisha CRPBH (the "Investor"), a fund operated by Crescent Partners.
Accordingly, on April 28, the Company purchased all shares in Sapporo Beverage after conversion of all
bonds with stock acquisition rights of Sapporo Beverage Co., Ltd. held by the Investor.
Common stock of Sapporo Beverage Co., Ltd.
Type of shares
94,157 shares (49% of issued shares)
Number of shares
Ownership ratio after the
additional acquisition

100%

Purchase amount

10,871 million yen

8. Business Combinations
Three months ended March 31, 2011 (January 1, 2011 – March 31, 2011)
Business combination through acquisition
1. Information related to business combination and acquired company
1) Name and business of acquired company
Name: POKKA CORPORATIONBusiness: Beverages, food, restaurant, confectionaries, distribution, and other businesses
2) Primary reasons for business combination
In September 2009, the Company and POKKA CORPORATION entered into a new capital andbusiness alliance agreement strengthen their existing business alliance in the beverage industry andto expand both companies' business areas. Subsequent efforts to enhance the vending machine
business, generate costs savings through joint procurement, optimize production systems, and jointly
develop businesses in foreign markets have produced some results. Since that time, market
circumstances have become increasingly severe, and both companies have to enhance corporate
value by expanding into new business areas and further pursuing synergies through collaboration.
In the current market climate, the Company and POKKA reached the decision that jointly, notindependently, building a new food value creation group that is highly competitive in the alcoholic andnon-alcoholic beverages, food, and restaurant industries in Japan and overseas would be the best
way for both companies to enhance corporate value by accelerating expansion into new businessareas, generating added value through collaborative synergies, and building a solid business foundatio

3) Date of business combination
March 29, 2011
4) Legal form of business combination
Cash payment in exchange for shares5) Name of companies after business combination
Corporate names remain unchanged after the business combination.
6) Percentage of voting rights acquired
Percentage of voting rights held before the business combination:
Percentage of voting rights acquired on the date of business combination:
Percentage of voting rights held after the business combination:

18

21.41%
65.35%
86.76%

7) Primary reasons for deciding on the acquiring company
The Company was decided on as the acquiring company because it proposed to buy the equity
in exchange for cash.
2. Consolidated quarterly accounting period and period for which earnings of the acquired company were
included in the consolidated statements of income
Because the acquisition is recognized as having occurred on March 31, 2011, the acquired company's earnings are only reflected in thequarterly consolidated statement of income for the three months ended March 31, 2011 as equity in losses of affiliates.
3. Acquisition cost and breakdown
Acquisition price:

29,514 million yen
18 million yen
29,533 million yen

Costs incurred directly in the acquisition:
Acquisition cost:

4. Difference between the acquisition cost and the accumulated acquisition cost paid for each transaction
Difference arising from phased acquisition: 566 million yen
5. Amount of goodwill, reason for its recognition, amortization method, and amortization period
1) Amount of goodwill: 16,680 million yen
2) Reason for its recognition: Future business activities are expected to generate excess profitability.
3) Amortization method and amortization period: 15 years with the straight-line method
6. Approximate effects on the consolidated statements of income for the three months ended
March 31, 2011 assuming that the business combination was completed at the beginning of the fiscal
year ending December 31, 2011
Net sales:
Ordinary loss:
Net loss:

22,305 million yen(123) million yen(816) million yen

These approximate effects have not been audited.

19