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Columbia Music Entertainment Issues Notice of Consolidated Business Results for Third Quarter of Fiscal Year Ending March 2005
February, 16 2005

Columbia Music Entertainment Inc. (hereinafter CME; Head Office: Minato-ku, Tokyo; Chief Executive Officer (CEO): Sadahiko Hirose) today issued its consolidated business results for the third quarter (October 1 ~ December 31, 2004) of the fiscal year ending March 31, 2005.

Against the backdrop of the ongoing sales challenges in the broader music market, the Company’s business performance for the quarter under review was lead by a strong showing in its in-house music entertainment business, as well as higher-than-planned sales in its third-party manufacturing and distribution businesses. Accordingly, consolidated sales for the quarter under review totalled 25,171 million yen (an increase of 15.0% compared with the same quarter of the previous fiscal year).

For the first three quarters of the current fiscal year, the Company recorded an ordinary profit of 536 million yen and a net profit of 188 million yen. Both of these figures represent a significant improvement over the corresponding figures for the previous fiscal year.

Artists and Titles Making Major Contributions to Sales

Music Software

Kiyoshi Hikawa— Hikawa Kiyoshi Enka Meikyoku Collection 4 (album)

Sachiko Kobayashi— Kobayashi Sachiko Zenkyoku-shu Isoshigi (album)

Kaela Kimura— KAELA (album), happiness!!! (single)

Yo Hitoto— Hito Omoi -Limited Edition- (album), Hanamizuki (single)

Psychic Lover, Isao Sasaki— Tokuso Sentai Dekaranger — Original Album Complete Song Collection

Symphonic Orchestra Yamato— Seitan 30 Shunen Kinen ETERNAL EDITION PREMIUM Uchu-Senkan Yamato CD-BOX [Marking the 30th Anniversary the start of the SF animated TV series]

Video Software



Chunichi Dragons Official Song, Dragons Victory Commemoration — Kando no Kiseki 2004

Dayan no Fushigi na Boken

Educational Department— Inai Inai Baa! Series

Mail Order Business
Misora Hibari Showa wo Utau
Enka Ranman

Digital Distribution (incoming call melodies)

Yo Hitoto— Hanamizuki

Kaela Kimura— happiness!!!

Kagrra,— Yami ni Chirikeri・・・ ,and others

Third Party Distribution Business Products

• R and C Ltd.

Downtown— Downtown no Gaki no Tsukai-ya Arahen-de!! (DVD) Series

Masatoshi Hamada & Noriyuki Makihara— Chicken Rice (single)


Ayaka Hirahara— The Voice (album), ODYSSEY (album)

Revision of consolidated mid-term earnings forecast for the fiscal year ending March 31, 2005> (April 1, 2004 ~ March 31, 2005)

(Units: Millions of yen, %)

Net sales Ordinary profit Net profit
for current term
Previous forecast (A) 28,000 200 100
Revised forecast (B) 31,000 300  100
Increase/decrease amount (B) - (A) 3,000 100  0
Increase/decrease ratio (%) 10.7 50.0 —

Previous term actual result

(First half of FY 2004)

31,207 825 745

In addition to stronger sales of the Company’s own in-house produced titles in the music production business, sales in the third party manufacturing and distribution business were higher than initially planned. As a result, we now expect both sales and ordinary profit to be higher than the initial forecast. Consequently we are now issuing a revised forecast for the Company’s consolidated and non-consolidated business results for the fiscal year ending March 31, 2005.

Future Developments

The Company has a number of promising new releases planned for the balance of the fiscal year. The fourth quarter will witness new releases by a succession of major artists including the single SILENT ALARM by BLOC PARTY, HATSUKOI RESSHA by Kiyoshi Hikawa,

debut single MIRAI no CHIZU by MI, the album ETERNAL MELODYⅡby YOSHIKI, which is his original solo album, and Kaela's third shingle RIRULA RIRUHA by Kaela Kimura, and others.

CME will continue to devote its energies to strengthening sales and achieving more efficient operation of sales management, production, and advertising/publicity expenses, with the goal of realizing sustained profitability in operating income, ordinary profit and net profit for the current fiscal year.