May 11, 2011 Press Release Nippon Columbia Issues Notice of Consolidated Business Results for the Full Fiscal Year Ending March 2011 Nippon Columbia Co., Ltd. (hereinafter the Company; Head Office: Minato-ku, Tokyo; Representative Director/President and Chief Operating Officer (COO): Yasuharu Hara) today gives notice that it has issued its consolidated business results indicating the Company’s overall performance for the full fiscal year ending March 31, 2011 (April 1, 2010 ~ March 31, 2011). Consolidated Business Performance for FY2010 1. Sales Revenue During the fiscal year under review, the Company’s consolidated sales totaled 16,446 million yen (a decrease of 9.3% compared with the previous fiscal year). The main reasons for the overall decline in the Company’s sales were that although sales of Digital Distribution products (music downloads) centered on J-Pop titles increased, sales of major releases showed a year-on-year decline and sales revenue for the Company’s Production & Distribution (P&D) Business and the Company’s subsidiary Creative Core Co., Ltd. also decreased. 2．Profit and Loss Regarding the profit & loss situation, during the fiscal year under review, the Company increased its sales of high-margin digital distribution products, improved its overall sales profit ratio by reducing expenses and sales costs, and made continuing efforts to reduce general management costs including salaries, compensation, while a reduction in employee retirement benefit expenses resulting from restructuring of the company’s pension scheme also made a contribution to improving profitability. Taking the above factors into account, the Company recorded a consolidated operating profit for the fiscal year under review of 882 million yen (compared with a profit of 337 million yen for the previous fiscal year). In addition, with review of accrued royalties resulted in the booking of non-operating revenue, the Company recorded in a consolidated ordinary profit of 989 million yen (compared with a profit of 301 million yen for the previous fiscal year). The Company also booked an extraordinary profit of 35 million yen in respect of a profit on the stock options transferred, and extraordinary losses in respect of the following items: 37 million yen in expenses for the Company’s 100th anniversary event, 50 million yen in disaster-related losses, 90 million yen as a loss on the sale of shares in a subsidiary. Taking the above extraordinary profit and loss items into account, the Company booked a net profit for the fiscal 1 May 11, 2011 year under review of 876 million yen (compared with a profit of 569 million yen for the previous fiscal year). 3. Segment Performance The Company’s performance on a segment basis is as follows. Also, please note until the fiscal year ending March 31, 2010, the Music Production Business was treated as a single segment. However, since the consolidated first quarter accounting period of the present fiscal year, there has been a change of the segment classification with the Music Production Business divided into the three segments: Sales/Digital Distribution Business, Special Products/Direct Sales Business, and Other Businesses. <Sales/Digital Distribution Business> Sales of Educational titles, Jazz and Classical titles and Game titles all increased, and Digital Distribution sales were also favorable. However, sales of major releases centered on J-Pop titles decreased, resulting in an overall decline in sales revenue. As a result, this business segment recorded sales revenue of 10,930 million yen (a decrease of 11.3% compared with the previous fiscal year) and an operating profit of 1,456 million yen (compared with a profit of 1,426 million yen for the previous fiscal year). < Special Products/Direct Sales Business> This business benefited from a steady expansion in sales of products to direct sales companies (including Hibari Cover Song Collection, Enka no Hanamichi, Yumiko Samejima ga Utau Nihon no Uta, Sekai no Uta 100) in addition to a favorable trend in revenue from the music licensing sales. As a result, this business segment recorded sales revenue of 2,382 million yen (an increase of 1.4% compared with the previous fiscal year) and an operating profit of 1,093 million yen (compared with a profit of 919 million yen for the previous fiscal year). <Other Businesses> As a result of declining sales revenue for the Production & Distribution (P&D) Business and the Company’s subsidiary Creative Core Co., Ltd., sales revenue for this segment was 3,134 million yen (a decrease of 9.5% compared with the previous fiscal year). However, in line with the improvement of gross profit margin due to cost reduction, this segment recorded an operating profit of 558 million yen (compared with a profit of 543 million yen for the previous fiscal year) The recorded music industry is continuing to experience a contracting market and an overall difficult environment. Despite this situation, however, the Company places the utmost importance on achieving continuous profitability through the termination of non-profitable operations and the establishment of a profit-generating constitution, and to this end we are implementing a variety of measures that include focusing our corporate resources onto fields of strength and fields of growth, optimizing the size of the workforce and cutting costs. As a part of this effort, the Company disposed 2 May 11, 2011 of all its shares in its consolidated subsidiary Creative Core Co., Ltd., on March 31, 2011. As the environment surrounding the music and visual-related industries remains to be difficult, the Company will strive to further improve its business efficiency in future by continuing to concentrate its management resources on businesses centered on its core music production business. Moreover, by building up our strategic partnership with Faith as a member of the Faith Group, we will endeavor to improve our line-up of music-related services and move forward with our plans to realize business synergies. Full Year Consolidated Business Result Forecast for FY 2012 Regarding the consolidated business performance forecast for the next fiscal year, although the effects of the abovementioned management improvements and reductions in fixed costs will have a positive influence on the Company’s performance, because the market scale of music production business continues to follow a contracting trend, and in view of concern over a further decline in demand arising from the recent earthquake disaster, the difficult environment is expected to continue for some time to come. In addition, the elimination of the revenues generated by the subsidiary sold at the end of the current fiscal year will affect the Company’s overall performance. Accordingly, our current forecast for the fiscal year ending March 2012 is for sales revenue of 15 billion yen, an operating profit of 350 million yen, an ordinary profit of 350 million yen, and a net profit of 300 million yen. Artists and Titles Making Major Contributions to Sales <Sales/Digital Distribution Business> ■ Music Products Kiyoshi Hikawa— Hikawa Kiyoshi Enka Meikyoku Collection 12 ~Shamisen Tabi Garasu~, Hikawa Kiyoshi Enka Meikyoku Collection 13 ~ Nijiro no Baiyon ~, Shamisen Tabi Garasu, Nijiro no Baiyon, Ano Ko to Nogiku to Watashi Bune Toshimi Tagawa— Kita no Minato Eki, Fuyu no Nihonkai Hitomi Idemitsu— Onna Shichirin, Kagurazaka Maiko Takigawa— Shinjuku Tazunebito Madoka Oishi— Modoribashi Eisaku Ohkawa— Hagure Bune, Horetayo Kaela Kimura— 5years, Ring a Ding Dong, A winter fairy is melting a snowman Team Dragon from AKB48— Kokoro no Hane Not yet— Shumatsu Not Yet Chiharu Matsuyama— Zutto Issho, Kishhotenketsu Kegawa no Maries— Kegawa no Maries clammbon— 2010 3 May 11, 2011 Tamurapan— Nakunai THE IDOLM@STER Series Tenso Sentai Goseiger Series Kaizoku Sentai Gokaiger Series ■ Video Products Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2009 Kiyoshi Konoyoru Vol. 9 Kiyoshi to Konoyoru Kiyoshi Kono Aji Selection Chiharu Matsuyama— Tokyo Kosei Nenkin Kaikan Final Finalist Chiharu Matsuyama Miitsuketa! Oisu! Inai Inai Baa! - Series ■ Digital Distribution Kaela Kimura— Ring a Ding Dong, Butterfly, deep beep, A winter fairy is melting a snowman, You bet!! Team Dragon from AKB48— Kokoro no Hane Yo Hitoto— Hanamizuki ■ Video Game Products Nintendo DS Software Kirei Zukin Seikatsu, Wan Nyan Animal Hospital, Mister Donut DS < Special Products/ Direct Sales Business> Enka no Hanamichi Yumiko Samejima ga Utau Nihon no Uta, Sekai no Uta 100 Hibari Misora Treasures Hibari Cover Song Collection <Others> P&D (Production & Distribution) ◇ YOSHIMOTO R and C Co., Ltd. YU-A— 2 Girls Shinsengumi Rian— Jokyo Monogatari, Ai no Uta, 2010 FIRST TOUR Jokyo Monogatari ◇ acehigh records Nitro Microphone Underground— The Laboratory 4 May 11, 2011 ■ Company Outline Company Name: Nippon Columbia Co., Ltd. Address: Edomizaka Mori Bldg., 4-1-40 Toranomon, Minato-ku, Tokyo Representative: Representative Executive Officer/President & COO Yasuharu Hara Business contents: Production, advertising and sales of music software, game software, etc., and music artist management Paid-in capital: ¥1,000,000,000 URL: http://columbia.jp ■ For further information concerning this subject please contact: Nippon Columbia Co., Ltd. Chikayo Suzuki, Deputy Executive Director, Finance Division Telephone: 03-6895-9870 Facsimile: 03-6895-9116 Email: [email protected] ※ On October 1, 2010, in commemoration of the centenary of it’s foundation, the Company’s corporate name was changed back to Nippon Columbia Co., Ltd. ### 5.