FY 2008 Full Year Results

FYFY 20082008 FullFull YearYear ResultsResults May 15th, 2008 SEGA SAMMY HOLDINGS INC [Disclaimer] The contents of this material and comments made during the questions and answers etc of this briefing session are the judgment and projections of the Company’s management based on currently available information. These contents involve risk and uncertainty and the actual results may differ materially from these contents/comments. Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 1 Contents 【 FY2008 Full Year results 】【FY2009 Full Year Plan】 FY 2008 Highlight 3 Measures for profitability improvement 22 Topics 4 FY 2009 Plan 23 Extraordinary Items Breakout 5 Segment Plan 24 Condensed Consolidated Income Statement 6 Segment Plan: Pachinko Pachislot 25 Condensed Consolidated Balance Sheet 7 Segment Plan: Amusement Machines 27 Cash Flow Breakout 8 Segment Plan: Amusement Facilities 28 Segment Information 9 Segment Plan: Consumer Business 29 Segment Results: Pachinko Pachislot 10 Cost & Expenses 31 Segment Results: Amusement Machines 12 Listed Subsidiaries Plan 32 Segment Results: Amusement Facilities 14 Sammy Networks / SEGA TOYS 33 Segment Results: Consumer Business 15 TAIYO ELEC / TMS Entertainment 34 Cost and Expenses 17 Listed Subsidiaries Results 18 Appendix 35 Sammy Networks / SEGA TOYS 19 TAIYO ELEC / TMS Entertainment 20 Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 2 FY 2008 Highlights Items Points Net sales of 458.9 billion, down 13.1% from FY07, Operating ・ Net Sales Profits loss of 5.8 billion, Net loss of 52.4 billion ■Pachinko Pachislot ・Decrease in sales and profits year-over-year ・Pachislot: Units sold and gross margin were decreased year– over-year due to sluggish new regulation market and limited term Pachislot rental plan ・Pachinko: Taiyo Elec was steady and contributed, but total units decreased year-over-year ■Amusement Machine ・Decrease in revenue and profits year over year ・Certain main titles were postponed to FY 2009 ・Operating income above our latest forecast by posting recall expenses for defective AM machine, which was included in Segment latest plan, as an extraordinary loss. Overview ■Amusement Facilities ・Decrease in revenue, Operating loss ・Same store sales below last year’s level ・Accelerate closure and selling facilities with low profitability ■Consumer ・Increase in revenue, Operating loss ・Weak sales in domestic game software market ・Steady sales in overseas game software market ・Operating results of listed subsidiaries below last year’s level ■Others ・Decrease in revenue. Operating loss but, loss amount decreased. ・Nissho Inter Life changed from a consolidated subsidiary to an equity-method affiliate Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 3 Topics Items Points ■Transferred Fields stock ・Number of shares transferred : 27,500 shares ・Favorable trading Relations with Fields continues ■Transferred Nissho Inter Life 07/12/25 ・Sold NIL stock to P ARK Holdings, large Pachinko Pachislot (NIL) Stock Operator Stock ・NIL changed from a consolidated subsidiary to an equity-method Acquisition affiliate. Stock Sales ■Acquired its shares in TAIYO 07/12/07 ・Realize group synergy by sharing Sammy’s resources and ELEC Co., LTD additionally. competence in R&D, production and sales with TAIYO ELEC, developing differentiated products, reducing further costs, utilizing Made TAIYO ELEC a copyright effectively and advertising effectively subsidiary ・Number of shares after the acquisition :11,623,100 shares （Shareholding ratio : 50.9％） Business ■Co-developed new character 08/01/15 ・Joint development project of new characters including “Jewelpet” Alliance with Sanrio Cooperation was launched ■Accelerated closure and sales ・Determined to close or sell approximately 110 facilities based on of Amusement facilities profitability rating. ・ Measures Completed closure and selling of 88 facilities in FY 2008 for profit ■Discontinued Yokohama 08/03/28 Please refer to P23 for details recovery Minato Mirai Project ■Solicited voluntary retirement 08/02/08 Please refer to P23 for details at SEGA ■Revaluation loss on investment 08/04/04 ・Posted 12.3 billion of impairment loss on investment securities Others securities Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 4 Extraordinary Items Breakout (JPY Billion ) -8.2 Ordinary Losses 4.4 Sales of Investment Securities Extraordinary Gain of 6.9 billion 2.5 (0.5) Other Extraordinary Gain (0.5 billion) -12.3 (12.0) Revaluation Loss on Investment Securities -9.2 (-1.2) Impairment Loss on Assets -5.5 (-5.5) Discontinuance of MM Project Extraordinary Loss -2.7 Solicitation for Voluntary Retirement of 38.8 billion (24.5 billion） -2.2 (-2.2) Product Recall Expenses -6.7 (-3.4) Other Extraordinary Loss -40.1 Losses before Income Taxes and Minority Interests -12.3 Income Taxes -52.4 Net Losses ＊( ) numbers were not included in the publicized numbers on Feb. 8th and main causes of April 25th forecast revision. Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 5 Condensed Consolidated Income Statement FY 2007 FY 2008 FY Results Interim FY Interim FY plan on Feb. 8 ） Results Results Results YOY (JPY Billions Change Net Sales 283.5 528.2 231.0 458.9 -13.1% 475.0 Operating - -6.0 Income 62.9 76.5 -4.3 -5.8 Ordinary Income 66.0 81.2 -3.9 -8.2 - -7.0 Net Income 37.9 43.4 -20.2 -52.4 - -26.0 Net Assets per 1,362.68 1,341.80 1,196.21 1,030.09 -311.71 - share (JPY) Net Income per 150.80 172.47 -80.44 -208.26 - - share (JPY) Dividends per 30 30 (60) 30 15(45) -15 - share (JPY) Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 6 Condensed Consolidated Balance Sheet （ JPY Million）【 Assets 】【 Liiabilities and Net Assets 】 Account Prior Current Change Account Prior Current Change Cash and Cash Equivilents 146,645 101,539 △- 45,106 Accounts Payable 71,414 49,496 △- 21,918 Accounts Receivable 83,492 72,541 △- 10,951 Short term borrowings 29,244 27,455 △- 1,789 Securities 996 2,495 1,499 Other 52,363 55,912 3,549 Inventories 40,117 51,435 11,318 Current Liability % 27.9% 28.3% 0.4% Other 40,925 47,028 6,103 Total Current Liabilities 153,021 132,863 △- 20,158 Current Asset % 56.8% 58.6% 1.8% Bonds Payable 15,695 25,679 9,984 Total Current Assets 312,175 275,038 △- 37,137 Long Term Debt 1,111 6,988 5,877 Tangible Fixed Assets 111,897 104,029 △- 7,868 Other 21,254 22,484 1,229 Intangible Fixed Assets 25,267 20,217 △- 5,050 Long Term Liabilities % 6.9% 11.7% 4.8% Total Long-term Liabilities 38,060 55,151 17,091 Investment Securities 63,471 35,608 △- 27,863 Total Liabilities 191,082 188,014 △- 3,068 Other 37,130 34,750 △- 2,378 Shareholders Equity 348,565 278,253 △- 70,312 Valuation/Translation Adjustments △- 10,496 △- 18,733 △- 8,237 Warrants 454 1,070 615 Minority Interest 20,334 21,038 704 Fixed Asset % 43.2% 41.4% -1.8% Net Assets % 65.2% 60.0% -5.2% Total Fixed Assets 237,765 194,604 △- 43,161 Total Net Assets 358,858 281,627 △- 77,231 Total Liabilities Total Assets 549,940 469,642 △- 80,298 549,940 469,642 △- 80,298 and Net Assets Topics （JPY Billion) End Mar. 07 End Mar. 08 Change Total Assets 549.9 469.6 -80.3 ■Current Asset：Decreased by 37.1 Billion due to decrease in Cash, Cash Equivalents, Accounts Receivable Net Assets 358.8 281.6 -77.2 ■Fixed Asset：Decreased by 43.1 Billion due to decrease in investment securities Equity Ratio 61.5% 55.3% -6.2 pts. ■Current Liability：Decreased by 20.1 Billion due to Accounts Payable Current Ratio 204.0% 207.0% +3.0pts. ■Fixed Liability：Increased by 17.0 Billion due to increase in company debt and long term borrowings. Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 7 Cash Flows Breakout (JPY Billion ) Cash and cash equivalents 144.8 (2007 March End) -40.1 Loss before income taxes and minority interests Cash Flows from 45.6 Depreciation and amortization Operating Activities -9.8 Increase in inventories -25.8 billion -22.1 Payment and refund of income taxes -22.0 Purchase of tangible fixed assets -4.0 Purchase of intangible fixed assets Cash Flows from Investing Activities 5.8 Sales of investment securities -10.3 billion 6.4 Acquisition of consolidated subsidiaries 15.4 Issuance of bonds Cash Flows from -7.9 Redemption of bonds Financing Activities -15.0 Cash dividends paid -7.5 billion -1.3 Effect of exchange rate changes on cash and cash equivalents, etc Cash and cash equivalents 99.9 (2008 March End) Copyright © SEGA SAMMY HOLDINGS INC. All Rights Reserved. 8 Segment Information FY 2007 FY 2008 FY Results Interim FY Interim FY plan YOY on Feb. 8 (JPY Billions） Results Results Results Change Net Sales 283.5 528.2 231.0 458.9 -13.1% 475.0 Pachinko Pachislot 145.0 211.5 99.7 145.5 -31.2% 158.6 Amusement Machines 34.6 75.4 34.3 71.0 -5.8% 72.8 Amusement Facilities 53.5 103.8 47.9 91.2 -12.1% 92.6 Consumer 40.7 119.5 41.2 141.7 +18.5% 142.0 Other 9.6 17.8 7.7 9.3 -47.7% 9.0 Operating Income 62.9 76.5 -4.3 -5.8 - -6.0 Pachinko Pachislot 63.7 71.1 12.1 8.4 -88.1% 11.0 Amusement Machines 6.6 11.6 1.8 7.1 -38.7% 5.2 Amusement Facilities 2.9 0.1 -2.2 -9.8 - -11.4 Consumer -6.7 1.7 -12.5 -5.9 - -4.7 Other -0.4 -1.3 -0.2 -0.0 - -0.1 Eliminations -3.2 -6.7 -3.4 -5.5 - -6.0 Copyright © SEGA SAMMY HOLDINGS INC.

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