No.2010025 February 10, 2011 Press Release Nippon Columbia Issues Notice of Consolidated Business Results for the Third Quarter of Fiscal Year Ending March 2011 Nippon Columbia Co., Ltd. (hereinafter the Company; Head Office: Minato-ku, Tokyo; Representative Executive Officer/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 to the end of the third quarter of the fiscal year ending March 31, 2011 (April 1 ~ December 31, 2010). Consolidated Business Performance of FY 2010 Q3 1. Sales Revenue As of the end of the third quarter under review, the Company’s cumulative consolidated sales totaled 12,122 million yen (a decrease of 3.7% compared with the same period of the previous fiscal year). The main reasons were that although there was an increase in sales of J-Pop digital distribution products (music downloads), there were fewer major releases compared with the previous fiscal year and sales revenue for the Production & Distribution (P&D) Business and the Company’s subsidiary Creative Core Co., Ltd. also showed year on year declines. 2. Profit and Loss Regarding the profit and loss situation, as a result of the aforementioned increase in sales revenue from digital distribution products in addition to the Company’s continuous efforts to reduce expenses including employee and executive compensation along with a decrease in retirement benefit expenses in accordance with the changes made to the pension system, the Company recorded a cumulative operating profit of 627 million yen (compared with an operating profit of 54 million yen for the same period of the previous fiscal year). Moreover, the Company posted an ordinary profit of 581 million yen (compared with an ordinary profit of 20 million yen for the same period of the previous fiscal year) and a net profit for the quarter under review of 574 million yen (compared with a net profit of 445 million yen for the same period of the previous fiscal year). The Company’s performance on a segment basis is as follows. Also, please note until 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 in the segment classification. No.2010025 February 10, 2011 <Sales/Digital Distribution Business> In this business, sales of Enka and Kayokyoku titles, Educational titles, Classical titles and Game titles all increased, while sales of J-Pop titles and Animation titles decreased, resulting in an overall decline in sales revenue for this segment. However, with regard to profitability, because of the favorable sales of J-Pop digital distribution products (music downloads), overall profitability increased compared with the same period of the previous fiscal year. As a result, this segment recorded an operating profit of 1,143 million yen on sales revenue of 7,988 million yen. <Direct Sales Business> This business benefited from a steady sales of products to mail order companies (including Hibari Cover Song Collection, Enka no Hanamichi, Yumiko Samejima ga Utau Nihon no Uta - Sekai no Uta 100) in addition to a income from licensing of sound sources to corporate clients. As a result, this department recorded an operating profit of 832 million yen on sales revenue of 1,794 million yen. The recorded music industry is continuing to experience a declining market and the Company continues to face an overall difficult business environment. However, the Company places the utmost importance on achieving continuous profitability through the discontinuation of non-profitable operations and the establishment of a profit-generating constitution. In order to accomplish these tasks, we will continue to implement a variety of measures that include focusing our corporate resources onto fields of strength and fields of growth, as well as optimizing the size of the workforce 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 2010 Concerning the consolidated business performance forecast for the full fiscal year ending March 2011, our current forecast for the full fiscal year ending March 2011 (April 1, 2010 ~ March 31, 2011), which was disclosed on November 4, 2010, is for full-year sales of 15.8 billion yen, an operating profit of 520 million yen, an ordinary profit of 500 million yen, and a net profit for the full 2010 fiscal year of 370 million yen. No.2010025 February 10, 2011 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 Toshimi Tagawa— Kita no Minato Eki Hitomi Idemitsu— Onna Shichirin, Kagurazaka Kaela Kimura— 5 years, Ring a Ding Dong, A winter fairy is melting a snowman Team Dragon from AKB48— Kokoro no Hane Yo Hitoto— Hanamizuki —Kimi to Suki na Hito ga Hyaku-nen Tsuzukimasu you ni— clammbon— 2010 Chiharu Matsuyama— Zutto Issho, Kishotenketsu 12 Kegawa no Maries— Kegawa no Maries Tamurapan— Nakunai THE IDOLM@STER Series Tenso Sentai Goseiger Series 2010 POP HIT MARCH ~YELL~ ■ Video Products Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2009 Kiyoshi Kono Yoru Vol. 9, Kiyoshi to Konoyoru Kiyoshi Kono Aji Selection Miitsuketa! Oisu! Inai Inai Baa! - Series Chunichi Dragons Yuushou Kinen-ban Kandou no Kiseki 2010 DVD ■ Digital Distribution Kaela Kimura— Butterfly, Ring a Ding Dong, deep beep, You Bet!!, A winter fairy is melting a snowman Team Dragon from AKB48— Kokoro no Hane Guru Guru Dokkaan— Inai Inai Baa! ■ Video Game Products Nintendo DS Software Kirei Zukin Seikatsu, Wan Nyan Animal Hospital, Mister Donut DS <Direct Sales Business> Hibari Cover Song Collection Enka no Hanamichi Yumiko Samejima ga Utau Nihon no Uta, Sekai no Uta 100 No.2010025 February 10, 2011 <Others> P&D (Production & Distribution) ◇ YOSHIMOTO R and C Co., Ltd. Shinsengumi Rian— Jokyo Monogatari, Ai no Uta Hannya, Fruit Punch— Punch Shitatte Iindayo/Nante Fuwa Fuwa Nanda Japan/Daru Daru Darling Downtown, Hosei Yamazaki, Kokoriko, etc.— Downtown no Gaki no Tsukai ya Arahende! (Shuku) Housou 1000 Kai Toppa Kinen DVD (16) (Batsu) Zettai ni Waratte wa Ikenai Hotel Man 24 Ji ASH— A-Z Vol. 1, A-Z Vo. 2 ◇ Yamaha Music and Visuals, Inc. The Rolling Stones— Stones in Exile: Main Street no Narasu Mono no Shinjitsu ◇ acehigh records Nitro Microphone Underground— THE LABORATORY ■ 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. PR/ER Group, Corporate Planning & Communication Dept. 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. ### .