May 11, 2012 Press Release Nippon Columbia Issues Notice of Consolidated Business Results for the Full Fiscal Year Ending March 2012 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, 2012 (April 1, 2011 ~ March 31, 2012). Consolidated Business Performance for FY2011 (Ending March 2012) 1. Sales Revenue During the fiscal year under review, the Company’s consolidated sales totaled 14,681 million yen (a decrease of 10.7% compared with the previous fiscal year). The main reasons for the overall decline in the Company’s sales were the reduction in the scale of the Others segment following the spinoff of the Company’s subsidiary Creative Core Co., Ltd., and decreased sales in the Physical Sales/Digital Distribution Business segment, where although sales of Animation and Dance & Fitness titles moved steadily, digital distribution sales centered on J-Pop titles declined. 2．Profit and Loss Regarding the profit & loss situation, in line with the decline in sales of digital distribution products, the Company recorded a consolidated operating profit for the fiscal year under review of 513 million yen (compared with a profit of 882 million yen for the previous fiscal year). Also, with addition of reversal of accrued royalties, the Company reported an ordinary profit of 534 million yen (compared with an ordinary profit of 989 million yen for the previous fiscal year) and a net profit of 463 million yen (compared with a net profit of 876 million yen for the same quarter of the previous fiscal year). The Company’s performance on a segment basis is as follows. < Retail Products/Digital Distribution Business> While digital distribution sales centered on J-Pop titles declined substantially, Animation and Dance & Fitness titles sold steadily, and sound source fee related revenues increased. As a result, this business segment recorded sales revenue of 10,597 million yen (a decrease of 1 May 11, 2012 4.7% compared with the previous fiscal year). Also, in line with the decline in sales revenue, this segment recorded an operating profit of 1,373 million yen (compared with a profit of 1,638 million yen for the previous fiscal year). <Direct Sales Business> Sales have continued to move favorably since the start of the Company’s business partnerships with Victor Entertainment Inc. and EMI Music Japan Inc., with the result that this segment recorded sales revenue of 2,513 million yen (an increase of 5.5% year on year). However, due to the influence of a decrease in transactions with corporate clients involving the use of sound sources, the Company recorded an operating profit of 1,010 million yen (compared with a profit of 1,093 million yen for the same quarter of the previous fiscal year). <Other Businesses> Following the Company’s sale of its subsidiary Creative Core Co., Ltd., sales revenue generated by that company is no longer being included in the Company’s consolidated business results. Consequently, the Other Businesses segment recorded sales revenue of 1,570 million yen (a decrease of 46.6% year on year) and an operating profit of 400 million yen (compared with a profit of 375 million yen for the same quarter of the previous fiscal year). The Columbia Group regards the achievement of continuous profitability as its most important business aim, and to this end the Company is implementing a variety of measures that include focusing its management resources onto fields of expertise and fields of growth, optimization of the workforce and decreasing costs. The music and visual-related industries are now experiencing a difficult business environment. But despite this situation, by concentrating its management resources on the Retail Products/Digital Distribution Business, centered on the core music production operations, and on the Direct Sales Business, and also by making use of sound sources and pursuing new businesses derived from both of these business segments, the Company will further improve its business efficiency and profitability. Moreover, by building up its strategic partnership with Faith as a member of the Faith Group, the Company will promote approaches to new styles of music distribution in an effort to improve its line-up of music-related services and move forward with its plans to realize business synergies. As a part of this effort, in September 2011 we established Future Records KK as a joint venture company that engages in planning, production and management of copyrighted works related to artists. Full Year Consolidated Business Result Forecast for FY2012 (Ending March 2013) The Columbia Group sees its largest aim to achieve stable profitability, so in the future the Company will continuously carry out measures such as concentrating its operational resources 2 May 11, 2012 into fields of expertise and fields of growth, optimizing the size of its workforce, and cutting costs. Regarding the consolidated business result forecast for the next fiscal year, as the music industry is still encountering a contracting market trend, the earnings environment is expected to remain difficult for some time to come. Accordingly, our current forecast for FY2012 (the fiscal year ending March 2013) is for sales revenue of 15 billion yen, an operating profit of 350 million yen, an ordinary profit of 320 million yen, and a net profit of 280 million yen. Artists and Titles Making Major Contributions to Sales <Sales/Digital Distribution Business> ■ Music Products Hibari Misora— Hibari Senya Ichiya Kiyoshi Hikawa— Hikawa Kiyoshi Enka Meikyoku Collection 14 ~Ano Ko to Nogiku to Watashibune~, Hikawa Kiyoshi Enka Meikyoku Collection 15 ~Jonetsu no Mariachi~, Ano Ko to Nogiku to Watashibune, Jonetsu no Mariachi Eisaku Ohkawa— Takayama no Hito ~Shin Rokuon~ Sachiko Kobayashi— Onna no Sakaba Kanako Minami— Ame no Midnight Station Showa no Dai Hit Dai Zenshu (Definitive Edition) THE IDOLM@STER Series Kaizoku Sentai Gokaiger Series Tokumei Sentai Go-Busters Series KAMEN RIDER BEST 1971-1994 TV Animation Toriko Opening Theme “Guts Guts!!” Phero☆Men— MIDNIGHT☆BUTTERFLY 30th Anniversary ETERNAL EDITION PREMIUM: Space Battleship YAMATO CD Box 2011 Pop Hit March ~VICTORY~ 2011 Anime & Kids Hit March ~Best Wish! ~ Chisako Takashima— Adegietto ~ My Best Classical Melodies Not yet— Perapera Perao, Naminori Kakigori clammbon— clammbon – columbia best Kaela Kimura— 8EIGHT8, Kidoairaku plus Ai Kegawa no Maries— THE END NIKIIE— * (NOTES) Chiharu Matsuyama— 35th Anniversary Matsuyama Chiharu no Sekai ~ Chiharu Matsuyama Selection 3 May 11, 2012 ■ Visual Products Kiyoshi Hikawa— Hikawa Kiyoshi Special Concert 2010 Kiyoshikonoyoru Vol. 10, Tabi no Kaori: Hikawa Kiyoshi Hachi Nen Kan no Tabi Nikki ~Ichigo Ichie Fureai Hen~ Inai Inai Baa! Series Miitsuketa! Series Jillian Michaels— Jillian Michaels 30 Days Shred Chunichi Dragons Yuusho Kinen-ban Kandou no Kiseki 2011 ~Kyudan Shijo Hatsu no Central League Renpa~ THE IDOLM@STER 6th ANNIVERSARY SMILE SUMMER FESTIV@L! Digest ~Tokyo/ Osaka and Sapporo/Nagoya/Fukuoka~ ■ Digital Distribution Kaela Kimura— Chocolate, Kidoairaku plus Ai, Butterfly, Ring a Ding Dong, A winter fairy is melting a snowman Not yet— Perapera Perao, Naminori Kakigori, Shumatsu Not yet Yo Hitoto— Hanamizuki Kaizoku Sentai Gokaiger Series ■ Video Game Products Nintendo DS Software MAMESHIBA, Pika Pika Nurse Monogatari, Kirei Zukin Seikatsu 2, Wan Nyan Animal Hospital <Direct Sales Business> Misora Hibari Showa o Utau Uta wa Yo ni Tsure, Showa Kayo Ogon Jidai Funamura Toru ga Utau Aiseki no Fu Seishun Uta Nenkan Senzen/Sengo Hen <Others> P&D (Production & Distribution) ◇ YOSHIMOTO R and C Co., Ltd. Shinsengumi Lien— Merry X’mas to U, Iroito In Flames— Sounds of a Playground Fading Ayaman Japan— Poi Poi, Poi Poi Poi Popoi Poi Popi Mirei Shiaratori— Pikaru Koi ga Shitai Downtown no Gaki no Tsukai ya Arahende!! 17 (Batsu) Zettai ni Waratte wa Ikenai Spy 24 Ji BOX [Limited Release] 4 May 11, 2012 ◇ Ward Records Inc. The Rolling Stones— Some Girls—Live in Texas ‘78 Whitesnake— Live at Donington 1990 ◇ Trooper Entertainment Inc. Arch Enemy— Khaos Legions ■ 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, 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, Finance Division Telephone: 03-6895-9870 Facsimile: 03-6895-9116 Email: [email protected] ### 5.