February 4, 2011 Summary of Financial Results for the Third Quarter of Fiscal Year Ending March 31, 2011 (FY2010) (Nine Months Ended December 31, 2010) [Japanese GAAP] Company name: Sanrio Company, Ltd. Listed Stock Exchange: TSE 1st Section Stock code: 8136 URL: http://www.sanrio.co.jp/english/corporate/ir/ Representative: Shintaro Tsuji, President and Chief Executive Officer Inquiries: Susumu Emori, Managing Director TEL: +81-3-3779-8058 Scheduled date of filing of Quarterly Report: February 14, 2011 Starting date of dividend payment: - Preparation of supplementary materials for quarterly financial results: Yes Holding of quarterly financial results meeting: None (All amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for the Third Quarter of FY2010 (April 1, 2010 – December 31, 2010) (1) Consolidated results of operations (Percentages represent year-on-year changes) Sales Operating Profit Ordinary Profit Net Profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % Nine months ended Dec. 31, 2010 57,547 6.0 11,355 85.8 10,256 92.2 6,679 130.4 Nine months ended Dec. 31, 2009 54,285 (1.5) 6,110 5.2 5,336 5.9 2,899 63.2 Fully-Diluted Net Net Profit per Share Profit per Share Yen Yen Nine months ended Dec. 31, 2010 74.09 67.89 Nine months ended Dec. 31, 2009 29.16 28.50 (2) Consolidated financial position Total Assets Net Assets Equity Ratio Net Assets per Share Millions of yen Millions of yen % Yen As of Dec. 31, 2010 88,682 30,097 33.9 277.17 As of Mar. 31, 2010 85,765 31,594 36.8 241.62 (Reference) Shareholders’ equity (millions of yen) Dec. 31, 2010: 30,064 Mar. 31, 2010: 31,563 2. Dividends Dividend per Share 1Q-end 2Q-end 3Q-end Year-end Total Yen Yen Yen Yen Yen FY2009 - 0.00 - 10.00 10.00 FY2010 - 5.00 - FY2010 (forecast) 15.00 20.00 Note: 1. Revision of dividend forecast during the period: Yes Note: 2. The dividend figures above show dividends for common stock. Please refer to “Dividends of classified stock” (after-mentioned) for information on dividends for unlisted classified stock whose rights are different from those of the Company’s common stock. Note: 3. Dividends per share for fiscal year ending March 2011 include ¥5 paid at the end of the second quarter and ¥5 (projected) payable at the end of the fiscal year (a total of ¥10) to commemorate the 50th anniversary of the Company’s founding. 3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2011 (April 1, 2010 – March 31, 2011) (Percentages represent year-on-year changes) Net Profit per Sales Operating Profit Ordinary Profit Net Profit Share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 74,500 0.8 12,900 38.9 11,700 41.8 7,000 60.1 77.26 Note: Revision of consolidated forecast during the period: Yes 4. Others (Please refer to “Other Information” on page 6 of the attached documents for further information) (1) Changes in consolidated subsidiaries during the period: None Newly added: - Excluded: - Note: Changes in designated subsidiaries affecting the scope of consolidation during the period (2) Application of simplified accounting methods and special accounting methods: None Note: Application of simplified accounting methods and special accounting methods for presenting quarterly consolidated financial statements (3) Changes in accounting principles, procedures, presentation methods, etc. 1) Changes caused by revision of accounting standards: Yes 2) Other changes: None Note: Changes of accounting principles, procedures, presentation methods, etc. for presenting quarterly consolidated financial statements described in “Changes in the Significant Accounting Policies for the Preparation of Quarterly Consolidated Financial Statements” (4) Number of outstanding shares (common stock) 1) Number of outstanding shares at the end of period (including treasury stock) Dec. 31, 2010: 89,065,301 shares Mar. 31, 2010: 88,148,431 shares 2) Number of treasury stock at the end of period Dec. 31, 2010: 743,156 shares Mar. 31, 2010: 847,515 shares 3) Average number of shares outstanding during the period Nine months ended Dec. 31, 2010: 87,687,373 shares Nine months ended Dec. 31, 2009: 87,301,105 shares * Information regarding the implementation of quarterly review procedures The current quarterly financial statements are exempted from quarterly review procedures based on the Financial Instruments and Exchange Act. At the time of disclosure, we have completed the review process for these consolidated statements. * Cautionary statement with respect to forward-looking statements Forecasts regarding future performance in these materials are based on assumptions judged to be valid and information currently available to the Company. Actual results may differ significantly from these forecasts for a number of factors. Please refer to “Qualitative information regarding forecasts for consolidated business results” on page 5 for forecast assumptions and notes of caution for usage. Dividends of classified stock Breakdown of dividends for classified stock whose rights are different from those of common stock are shown below. Dividend per share Class B preferred stock 1Q-end 2Q-end 3Q-end Year-end Total Yen Yen Yen Yen Yen FY2009 - 0.00 - 469.00 469.00 FY2010 - 225.50 - FY2010 (forecast) 225.50 451.00 Sanrio Company, Ltd. (8136) Financial Results for the Third Quarter of FY2010 Attachments Contents of Attachments 1. Qualitative Information on Quarterly Consolidated Financial Performance 2 (1) Qualitative information regarding consolidated business results 2 (2) Qualitative information regarding consolidated financial position 4 (3) Qualitative information regarding forecasts for consolidated business results 5 2. Other Information 6 (1) Overview of changes in consolidated subsidiaries 6 (2) Overview of application of simplified accounting methods and special accounting methods 6 (3) Overview of changes in accounting principles, procedures, presentation methods, etc. 6 3. Quarterly Consolidated Financial Statements 7 (1) Consolidated Balance Sheets 7 (2) Consolidated Income Statements 9 (For the Nine-month Period) (3) Consolidated Cash Flow Statements 10 (4) Going Concern Assumption 11 (5) Segment Information, etc. 11 (6) Significant Changes in Shareholders’ Equity 13 1 Sanrio Company, Ltd. (8136) Financial Results for the Third Quarter of FY2010 1. Qualitative Information on Quarterly Consolidated Financial Performance (1) Qualitative information regarding consolidated business results The global economy performed strongly in the first nine months of the current fiscal year, supported by a solid recovery in U.S. markets and high growth in the emerging countries, especially China. Fears of a double-dip recession receded, and consumer spending gradually recovered against a backdrop of rising share prices. The domestic economy saw an improved income environment, as major corporations paid winter bonuses exceeding those of the previous winter for the first time in three years. Signs of a recovery in consumer spending are now showing, although concerns over the impact of the strong yen remain. Amid these conditions, total sales rose 6.0% year-on-year to 57.5 billion yen for the nine-month period. Domestic sales fell 3.3% to 36.3 billion yen while overseas sales rose 27.1% to 21.1 billion yen, buoyed by strong growth in the European region, to create an overseas sales ratio of 36.8% (up 6.1 percentage points). Operating profit rose 85.8% to 11.3 billion yen due to the above-mentioned strong performance in Europe combined with a recovery in the domestic licensing businesses and theme parks. Ordinary profit rose 92.2% year-on-year to 10.2 billion yen, affected by interest payments, withholding tax on overseas royalty income, and foreign exchange losses related to the collection of trade accounts receivables from overseas subsidiaries, revaluation of forward exchange contracts and other items. Net profit before income taxes and other adjustments rose 104.9% year-on-year to 9.5 billion yen. This sum includes 0.4 billion yen of asset retirement obligation and 0.09 billion yen of valuation loss on investment securities as extraordinary losses; an impairment loss of 0.2 billion yen for land and buildings of a previously directly managed store owned by Sanrio; and a 0.2 billion yen provision of allowance for doubtful accounts for loan claims relating to unconsolidated subsidiaries. Accordingly, net profit rose 130.4% year-on-year to 6.6 billion yen. Since the fiscal year-end for all overseas consolidated subsidiaries is December, the nine-month period under review covers the period from January to September 2010. Reportable Segment (100 millions of yen) Sales Segment profits (operating profit) Increase/ Increase/ First nine months of FY2009 FY2010 Change % FY2009 FY2010 Change % decrease decrease Product sales/others 333 317 (16) (4.9) Japan Royalties 54 62 7 13.8 27 63 36 129.2 Total 388 379 (8) (2.3) Product sales/others 30 25 (5) (16.8) Europe Royalties 49 83 33 69.2 25 38 12 49.6 Total 80 108 28 35.9 Product sales/others 10 11 0 9.0 North Royalties 23 25 2 10.9 5 8 2 54.9 America Total 34 37 3 10.3 Product sales/others 0 0 0 25.7 Latin Royalties 6 7 0 11.0 2 1 (1) (55.1) America Total 7 7 0 12.3 Product sales/others 21 27 5 24.8 Asia Royalties 11 13 2 26.3 2 5 3 119.1 Total 32 41 8 25.3 Adjustment - - - - (3) (4) (1) - Product sales/others 398 383 (15) (3.8) Consolidated Royalties 144 192 47 32.9 61 113 52 85.8 Total 542 575 32 6.0 Note: All regional subsidiaries overseas calculate amount of royalty revenue commensurate with the cost of sales while the Japanese parent company (the copyright holder) calculates this income as sales.