No.200７０１４ August 10, 2007 Press Release Columbia Music Entertainment Issues Notice of Consolidated Business Results for First Quarter of Fiscal Year Ending March 2008 ~ Substantial Profit & Loss Improvement Over Previous Year’s Same Term ~ Columbia Music Entertainment Inc. (hereinafter CME; Head Office: Minato-ku, Tokyo; Chief Executive Officer (CEO): Sadahiko Hirose) today gives notice that it has issued its consolidated business results indicating the Company’s overall performance for the first quarter of the fiscal year ending March 31, 2008 (FY 2007 Q1; April 1 ~ June 30, 2007). During the quarter under review, our sales were higher than in the same quarter of the previous fiscal year, led by the digital business, which recorded a 20% increase. However, as the result of an 802 million reduction in sales booked by the P&D business according to a change in the accounting procedure from a total sales method to a handling fee method, and also because there were no hits of comparable size to those of the same quarter of the previous fiscal year, the Company’s consolidated sales totaled 4,406 million yen (a decline of 22.2% compared with the same quarter of the previous fiscal year). Moving on to the profit and loss situation, although total sales declined, the gross margin profit rate rose by 9.3 points to 45.4%. In addition, advertising expenses and general administrative expenses declined, resulting in a major improvement compared our performance for the same quarter of the previous fiscal year. The ordinary loss for the quarter under review was 50 million yen (compared with a loss of 200 million yen for the same quarter of the previous fiscal year). Moreover, the overall net loss for the quarter was 29 million yen (compared with a loss of 327 million yen for the same quarter of the previous fiscal year), marking an improvement in the Company’s performance of 297 million yen. In the Digital business, which is a growing field, we have started a new business producing movies for digital distribution in a joint venture with Toei Kyoto Studio. The first product of this venture, a movie named Metal Samurai, has already had a huge impact from the pre-distribution stage by gathering attention from a wide range of layers. We will further accelerate the growth of the digital business by making multifaceted use of in-house produced and owned visual contents for digital distribution, broadcasting, and package sales. No.200７０１４ August 10, 2007 Regarding our new music distribution service Customize CD, trials are proceeding favorably following the installation of the equipment in five stores in Tokyo (2 stores), Kanazawa, Shizuoka, and Kyoto. Through this service, we can increase the opportunities for people to purchase titles from the Columbia catalogue and open up a new music market. In addition, in the LP Project aimed at baby boomers, since last October we have revived sales of a number of well-known nostalgic vinyl LPs. So far, we have released a total of 15 titles in two batches, which have been warmly welcomed by the targeted customer layer We have decided to release a third batch of 9 titles on 10 October this year From now on too, we will continue to develop new business models with a view to expanding our profitability. <Artists and Titles Making Major Contributions to Sales (During the Current First Quarter)> • Music Software Kiyoshi Hikawa— Abayo/Asagao Nikki Kiyoshi no Soran Bushi/Kibo to iu Na no Saishu Resha Chiyoko Shimakura— Okaerinasai Yo Hitoto― BESTYO+CONCERTYO Sadistic Mika Band— Live in Tokyo Ryuichi Kawamura— Dare no Tame demo naku…Kimi ni, ORANGE Clammbon— Musical Minako Honda— Classic Best ~ Ten ni Hibiku Uta ~ Saori Yano— I&I, Yano Saori Best ~ Jazz Kikai Idol Master Series Juken Sentai Gekiranger Series ~ Oya kara Ko, Ko kara Mago e ~ Oyako de Utaitsugou Nihon Uta Hakusen SIMIAN MOBILE DISCO— Attack, Decay, Sustain Release <Video Software> Inai Inai Baa! Series Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2006 Kiyoshi no Yoru Vol.6 Hiharu Matsuyama— Matsuyama Chiharu Video Clip Shu <Mail Order Business> Misora Hibari— Showa o Utau Kazuo Funaki— Omoide Album Naomi Chiaki— Showa Kokoro Uta No.200７０１４ August 10, 2007 <Incoming Call Melodies> Kaela Kimura— Samantha, Snowdome, Magic Music Yo Hitoto— Hanamizuki, Morainaki, Sayonara Arigato Dragonball Series <Third Party Distribution Business> ◇ R and C Ltd. Hitoshi Matsumoto & others—Hitoshi Matsumoto no Suberanai Hanashi Downtown— DOWNTOWN no Gaki no Tsukai ya Arahende!! Series Foxxi misQ— GLOSS ■ Columbia Music Entertainment Inc. Company Name: Columbia Music Entertainment Inc. Address: Roppongi 21 Mori Bldg., 1-4-33 Roppongi, Minato-ku, Tokyo Representative: Representative Director and CEO Sadahiko Hirose Business contents: Production, manufacturing, advertising and sales of audio and video software, etc., and music artist management Paid-in capital: ¥1,000,000,000 URL: www.columbia.co.jp ■ For further information concerning this subject please contact: Columbia Music Entertainment, Inc. Rr. Hideki Nomura, PR/ER Group, Strategic Planning Division email: [email protected] URL: www.columbia.co.jp .