3rd Quarter Results
Konami Corporation
29 January 2004
Consolidated Financial Results
for the Third Quarter Ended December 31, 2003
(Prepared in Accordance with U.S. GAAP)
January 29, 2004
KONAMI CORPORATION
Address: 4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number, TSE: 9766
Ticker symbol, NYSE: KNM
URL: http://www.konami.com
Shares listed: Tokyo Stock Exchange, New York Stock Exchange, London Stock Exchange and
Singapore Exchange
Representative: Kagemasa Kozuki, Chairman of the Board and Chief Executive Officer
Contact: Noriaki Yamaguchi, Executive Vice President and Chief Financial Officer
(Phone: +81-3-5220-0163)
1. Preparation Basis for Consolidated Financial Results for the Third Quarter Ended
December 31, 2003
(1) Adoption of U.S. GAAP: Yes
(2) Change in accounting policies: None
(3) Number of consolidated subsidiaries and affiliated companies accounted for by the equity
method
Number of consolidated subsidiaries: 28
Number of affiliated companies accounted for by the equity method: 3
(4) Changes in reporting entities
Number of consolidated subsidiaries added: 3
Number of consolidated subsidiaries removed: 3
Number of affiliated companies added: 0
Number of affiliated companies removed: 0
(5) Financial information presented herein was not audited by independent public accountants.
2. Consolidated Financial Results for the Third Quarter Ended December 31, 2003 and
for the Nine Months Ended December 31, 2003
(Amounts are rounded to the nearest million)
(1) Consolidated Results of Operations
(Millions of Yen, except per share data)
Net revenues Period- Operating Period- Income (loss) before Period-
income income taxes,
on- on- minority interest and on-
equity in net income
period period (loss) of affiliated period
companies
change change change
(%) (%) (%)
Third quarter ended Y 82,310 5.3 Y 13,321 (2.4) Y 12,963 (1.0)
December 31, 2003
Third quarter ended 78,161 - 13,646 - 13,095 -
December 31, 2002
Nine months ended 212,286 10.9 35,019 47.1 35,371 52.2
December 31, 2003
Nine months ended 191,356 - 23,811 - 23,245 -
December 31, 2002
Year ended March 31, 253,657 (21,870) (22,096)
2003
Net income (loss) Period-on- Net income (loss) Diluted net income
period per share (Yen) per share (Yen)
change
(%)
Third quarter ended Y 8,044 (3.9) Y 66.76 -
December 31, 2003
Third quarter ended 8,371 - 69.47 -
December 31, 2002
Nine months ended 18,903 48.4 156.89 -
December 31, 2003
Nine months ended 12,739 - 104.50 -
December 31, 2002
Year ended March 31, 2003 (28,519) (234.58)
Notes:
1. Equity in net income (loss) of affiliated companies
Third quarter ended December 31, 2003: Y311 million
Third quarter ended December 31, 2002: 978 million
Nine months ended December 31, 2003: 541 million
Nine months ended December 31, 2002: 1,622 million
Year ended March 31, 2003: (1,288) million
2. Weighted-average common shares outstanding (consolidated)
Third quarter ended December 31, 2003: 120,483,726 shares
Third quarter ended December 31, 2002: 120,487,247 shares
Nine months ended December 31, 2003: 120,484,014 shares
Nine months ended December 31, 2002: 121,898,446 shares
Year ended March 31, 2003: 121,572,154 shares
3. Net income (loss) per share was calculated in accordance with Statement of Financial Accounting
Standards (SFAS) No. 128 ''Earnings per Share''.
4. Consolidated financial statements for the nine months in the previous year was not prepared in
accordance with U.S. GAAP. Therefore, period-on-period change for the nine months ended December 31,
2002 is not presented herein.
(2) Consolidated Financial Position
(Millions of Yen, except per share amounts)
Total Equity-assets Total shareholders'
shareholders'
Total assets Equity Ratio equity per share (Yen)
December 31, 2003 Y 302,370 Y 101,558 33.6% Y 842.92
December 31, 2002 320,673 131,325 41.0 1,089.97
March 31, 2003 278,250 90,406 32.5 750.35
Note:
Number of shares outstanding (consolidated)
December 31, 2003: 120,483,525 shares
December 31, 2002: 120,484,926 shares
March 31, 2003: 120,484,375 shares
(3) Consolidated Cash Flows
(Millions of Yen)
Net cash provided by (used in) Cash and
Operating Investing Financing cash equivalents
activities activities activities at end of period
Nine months ended December 31, 2003 Y 23,136 Y (1,248) Y (11,992) Y 84,287
Nine months ended December 31, 2002 6,799 (4,457) (16,894) 60,670
Year ended March 31, 2003 27,711 (12,242) (16,443) 74,680
3. Forecast for the Year Ending March 31, 2004
(Millions of Yen)
Net revenues Operating income Income before Net income
income taxes,
minority interest
and equity in net
income of
affiliated
companies
Year ending March 31, 2004 Y 267,000 Y 38,000 Y 38,000 Y 20,000
Note:
Expected net income per share for the year ending March 31, 2004 is Y 166.00.
Cautionary Statement with Respect to Forward-Looking Statements:
Statements made in this document with respect to our current plans, estimates, strategies and beliefs,
including the above forecasts, are forward-looking statements about our future performance. These
statements are based on management's assumptions and beliefs in light of information currently
available to it and, therefore, you should not place undue reliance on them. A number of important
factors could cause actual results to be materially different from and worse than those discussed in
forward-looking statements. Such factors include, but are not limited to: (i) changes in economic
conditions affecting our operations; (ii) fluctuations in currency exchange rates, particularly with
respect to the value of the Japanese yen, the U.S. dollar and the Euro; (iii) our ability to continue
to win acceptance of our products, which are offered in highly competitive markets characterized by
the continuous introduction of new products, rapid developments in technology and subjective and
changing consumer preferences; (iv) our ability to successfully expand internationally with a focus on
our video game software business, card game business and gaming machine business; (v) our ability to
successfully expand the scope of our business and broaden our customer base through our exercise
entertainment business; (vi) regulatory developments and changes and our ability to respond and adapt
to those changes; (vii) our expectations with regard to further acquisitions and the integration of
any companies we may acquire; and (viii) the outcome of contingencies.
Please refer to page 10 of the attached material for information regarding the assumptions and other
related items used in the preparation of these forecasts.
1. Organizational Structure of the Konami Group
The Konami Group is a conglomerate engaged in the amusement and health industry providing customers with
'High Quality Life' and is comprised of KONAMI CORPORATION (the ''Company''), its 28 consolidated
subsidiaries and 3 equity method affiliates.
Each of the Company, its subsidiaries and affiliated companies is categorized into business segments based
on its operations as stated below.
Business segment categorization is based on the same criteria explained below under ''6. Segment
Information (Unaudited)''.
Business Segments Major Companies
Computer & Video Games Domestic The Company (*1, 9), Konami Marketing Japan, Inc. (*4)
Konami Computer Entertainment Studios, Inc. (*3)
Konami Computer Entertainment Tokyo, Inc.
Konami Computer Entertainment Japan, Inc.
Konami Online, Inc. (*11)
HUDSON SOFT CO., LTD. (*14), Genki Co., Ltd. (*14)
TAKARA CO., LTD. (*12, 14)
Overseas Konami Digital Entertainment, Inc. (*2, 13)
Konami of Europe GmbH
Konami Marketing (Asia) Ltd.
Konami Software Shanghai, Inc., One other company
Exercise Entertainment Domestic Konami Sports Corporation (*5, 7)
Konami Sports Life Corporation, One other company
Toy & Hobby Domestic The Company (*1, 9)
Konami Marketing Japan, Inc. (*4)
Konami Media Entertainment, Inc. (*10)
Konami Traumer, Inc. (*1)
Overseas Konami Marketing, Inc. (*2, 13)
Konami of Europe GmbH
Konami Marketing (Asia) Ltd.
Amusement Domestic The Company (*1, 9)
Konami Marketing Japan, Inc. (*4)
KPE, Inc., One other company
Overseas Konami Marketing, Inc. (*2, 13)
Konami Corporation of Europe B.V. (*6)
Konami Marketing (Asia) Ltd.
Gaming Domestic The Company (*1, 9)
Overseas Konami Gaming, Inc.
Konami Australia Pty Ltd., One other company
Other Domestic Konami Marketing Japan, Inc. (*4), Konami School, Inc. (*9)
Konami Computer Entertainment School, Inc. (*8)
Konami Real Estate, Inc.
One other company
Overseas Konami Corporation of America
Konami Corporation of Europe B.V. (*6), One other company (*6)
Notes:
1. Companies that have operations categorized in more than one segment are included in
each segment in which they operate.
2. Primary changes in major companies for the nine months ended December 31, 2003 are as
follows:
(*1) The Company acquired 77.8% of the issued shares of Traumer, Inc. and added Traumer, Inc. to its
subsidiaries on April 17, 2003. Consequently, the corporate name of Traumer, Inc. was changed to Konami
Traumer, Inc. on the acquisition date.
(*2) On April 18, 2003, the Company transferred its arcade game sales operations in the U.S. from Konami of
America, Inc. to the newly established Konami Marketing, Inc.
(*3) Konami Computer Entertainment Osaka, Inc. merged with Konami Computer Entertainment Studios, Inc. on
May 1, 2003 and changed its corporate name to Konami Computer Entertainment Studios, Inc. on June 18,
2003.
(*4) On May 1, 2003, Konami Service, Inc. merged with Konami Marketing Japan, Inc. in order to improve
customer satisfaction by integrating their sales, marketing and customer service businesses.
(*5) On May 1, 2003, Konami Athletics Inc. merged with Konami Sports Corporation in order to improve the
efficiency of their operations and enhance customer convenience.
(*6) On June 1, 2003, Konami Marketing Europe Ltd. transferred its amusement business to Konami Corporation
of Europe B.V.
(*7) On July 31, 2003, in order to enhance its business in Kinki area (western part of Japan), Konami Sports
Corporation acquired fitness club business from Hankyu Dentetsu Corporation and its subsidiary, Okicey
Corporation.
(*8) On July 31, 2003, Konami School, Inc. changed its name to Konami Computer Entertainment School, Inc.
(*9) On August 1, 2003, the Company established Konami School, Inc. in order to find talent for our all
business segments.
(*10) On September 30, 2003, Konami Music Entertainment, Inc. changed its name to Konami Media Entertainment,
Inc.
(*11) On September 30, 2003, Konami Mobile & Online, Inc. changed its name to Konami Online, Inc.
(*12) TAKARA CO., LTD. which had been included in Other segment until the period ended March 31, 2003 is
included in Computer & Video Games segment from the six months period ended September 30, 2003.
(*13) On October 1, 2003, Konami of America, Inc. changed its name to Konami Digital Entertainment, Inc. and
transferred its Toy & Hobby division to Konami Marketing, Inc.
(*14) These are equity method affiliates.
2. Business Performance and Cash Flows
1. Business Performance
Overview
In the third quarter of the current fiscal year, there were a number of movements in the entertainment
industry in which we operated, such as announcements by companies to enter the promising market of China,
growth of the mobile and online game markets, and Sony's introduction of a new PSX device, with which
customers could enjoy various contents including games.
Under these circumstances, we performed well in most business segments in the third quarter ended December
31, 2003, especially in the Computer & Video Games and Toy & Hobby segments, where the Yu-Gi-Oh! products,
a home video game software title and the related card game, made solid sales into the second consecutive
year and experienced growth in sales and popularity in the U.S. and Europe.
In the Computer & Video Games segment, Karaoke Revolution, which combined music and games, sports titles
and action titles generated favorable sales.
The Exercise Entertainment segment provided a wide range of services such as HAWAII PROJECT which offered
sports events in Hawaii.
The Toy & Hobby segment introduced large toy series for boys called GRANSAZERS and related goods for the
year-end selling season.
The Amusement segment offered e-AMUSEMENT products to more people by launching the new game machine, QUIZ
MAGIC ACADEMY.
The Gaming segment started sales in the stepper reel market, which represented the largest market share in
North America.
We established a new center of operations for the Computer & Video Games segment in Los Angeles and started
activities which were geared toward the market needs to expand our market share in the U.S. game market.
As a result, consolidated net revenues amounted to Y82,310 million for the three months ended December 31,
2003 (105.3 % of consolidated net revenues for the same period in the previous year) and Y212,286 million
for the nine months ended December 31, 2003 (110.9 % of consolidated net revenues for the same period in
the previous year). Consolidated operating income was Y13,321 million for the three months ended December
31, 2003 (97.6 % of consolidated operating income for the same period in the previous year) and Y35,019
million for the nine months ended December 31, 2003 (147.1 % of consolidated operating income for the same
period in the previous year). Consolidated net income was Y8,044 million for the three months ended
December 31, 2003 (96.1 % of consolidated net income for the same period in the previous year) and Y18,903
million for the nine months ended December 31, 2003 (148.4 % of consolidated net income in the same period
in the previous year).
Performance by business segment
Summary of net revenues by business segment:
Millions of Yen
Nine months Nine months
ended ended
December 31, 2002 December 31, 2003
Computer & Video Games Y67,005 Y73,336
Exercise Entertainment 59,049 59,690
Toy & Hobby 37,798 47,546
Amusement 21,894 24,819
Gaming 6,338 7,998
Other, Corporate and Eliminations (728) (1,103)
Consolidated net revenues Y191,356 Y212,286
In the Computer & Video Games segment, as for the domestic market, sales of baseball titles such as JIKKYO POWAFUL
PUROYAKYU 10 FINAL MEMORIAL for PlayStation2 and GameCube and Powerful Professional Baseball 6 for Game Boy Advance
reached 400,000 copies in total, and Korroke ! 3 for Game Boy Advance and Castlevania for PlayStation2 also marked
bumper sales for the three months ended December 31, 2003. As for the overseas market in North America, sales of
TEENAGE MUTANT NINJA TURTLES reached 1,300,000 copies shipment for Game Boy Advance, PlayStation2, GameCube, X-box
and PC in total for the three months ended December 31, 2003 due to strategic marketing in collaboration with the
related TV animation. The Yu-Gi-Oh! series continued to be in good demand. Yu-Gi-Oh! The sacred cards for Game Boy
Advance and Yu-Gi-Oh! THE FALSEBOUND KINGDOM for GameCube achieved 1,240,000 copies shipment in total and
Castlevania:Lament of Innocence for PlayStation2 marked favorable sales for the three months ended December 31,
2003. In Europe, Pro Evolution Soccer 3 for PlayStation2 released in October 2003 achieved 1,500,000 copies shipment
for the three months ended December 31, 2003. In Europe, the Yu-Gi-Oh! series were also sold well and these series
reached 800,000 shipments including Yu-Gi-Oh! DUNGEONDICE MONSTERS for Game Boy Advance, Yu-Gi-Oh! POWER OF CHAOS
for PC and repeat shipments of previously released titles for the three months ended December 31, 2003.
As a result, consolidated net revenues of the Computer & Video Games segment were Y34,791 million for the three
months ended December 31, 2003 (108.9 % of consolidated net revenues for the same period in the previous year) and
Y73,336 million for the nine months ended December 31, 2003 (109.4 % of consolidated net revenues for the same
period in the previous year).
With regard to the Exercise Entertainment segment, we opened the Tsukushino branch (Fukuoka) and continued the
expansion of the Konami Sports Club's high quality facility networks. In September 2003, in order to make the best
use of our nation-wide franchise operation for existing facilities, we introduced a new membership system to offer
services responding to customers' diversified needs and to improve their convenience.
As to new activities for new products and services, we launched HAWAII PROJECT, a new service in the fitness
industry, sponsoring the Honolulu marathon held in December 2003 as an activity in Hawaii and approximately 1,000
members from Konami Sports Club participated in the event.
Utilizing our knowledge in entertainment and technology, we introduced EZ series, fitness machines for commercial
use, into each of our exercise facilities and tried to expand our products line up. We also made efforts to increase
sales of existing products such as Aerobics Revolution for PlayStation2, which allowed players to enjoy aerobics
activities at home.
As a result, the consolidated net revenues of the Exercise Entertainment segment were Y20,011 million for the three
months ended December 31, 2003 (105.6 % of consolidated net revenues for the same period in the previous year) and
Y59,690 million for the nine months ended December 31, 2003 (101.1 % of consolidated net revenues for the same
period in the previous year).
The Toy & Hobby segment maintained solid sales of the Yu-Gi-Oh! Trading Card Game in the U.S. and Europe into its
second consecutive year. We started to sell the Yu-Gi-Oh! Trading Card Game in main countries in Europe and promoted
global business expansion. In the domestic market, we acquired an exclusive merchandising right of GRANSAZERS, a
large toy series produced for boys by Toho Corporation based on a special effect hero TV program on air through 6 TV
Tokyo affiliated stations and 26 nation-wide network stations. We introduced toys and bits which were made in the
motif of heroes and robots appearing on the TV program and got favorable reviews.
As a result, consolidated net revenues of the Toy & Hobby segment were Y16,091 million for the three months ended
December 31, 2003 (87.7 % of consolidated net revenues for the same period in the previous year) and Y47,546 million
for the nine months ended December 31, 2003 (125.8 % of consolidated net revenues for the same period in the
previous year).
In the Amusement segment, QUIZ MAGIC ACADEMY for amusement arcades, a quiz game which allowed players to
intellectually compete with other players, and WORLD SOCCER WINNING ELEVEN Arcade Game Style 2003, the arcade
version of WINNING ELEVEN, which received favorable reviews as a home video game software product, received good
reviews as an e-AMUSEMENT product.
The MAH-JONG FIGHT CLUB series, which allowed players to compete directly with players in other arcade game
locations nation-wide via online connection, GUITARFREAKS and drummania, music simulation game series, remained
strong with the introduction of new variations and the e-AMUSEMENT system contributed to sales as well.
As for token-operated products, Fantasic Fever, a new style of 'penny-falls' game machine, which decorated amusement
facilities by medals flowing in the air and electric light shows like a parade, received favorable reviews. MONSTER
GATE ON LINE, the first e-AMUSEMENT product of token-operated game machines, FORTUNE ORB Chapter 2, a new version of
FORTUNE ORB, a large-sized ''penny-falls'' game machine, and GI-TURFWILD and GI-WINNING SIRE, large scale token
operated horse racing games, marked favorable sales.
The LCD unit business contributed to sales by introducing differentiated and attractive products to customers.
As a result, consolidated net revenues of the Amusement segment were Y8,860 million for the three months ended
December 31, 2003 (124.7 % of consolidated net revenues for the same period in the previous year) and Y24,819
million for the nine months ended December 31, 2003 (113.4 % of consolidated net revenues for the same period in the
previous year).
As for the Gaming segment, in North America, our main video slot machines, MARIACHI MADNESS and SOLTICE GOLD, continued
to mark solid sales, especially in Nevada, California and Wisconsin. We have entered into the stepper reel market which
has a dominate share of the casino gaming machine market in North America, started to sell Advantage Series, our first
stepper reel product in December 2003 and expect more sales in the future. In Australia, products such as The Monster
Show marked solid sales.
We have obtained gaming licenses in the total of 19 states in North America and in every state in Australia.
As a result, consolidated net revenues of the Gaming segment were Y2,833 million for the three months ended December
31, 2003 (117.9 % of consolidated net revenues for the same period in the previous year) and Y7,998 million for the
nine months ended December 31, 2003 (126.2 % of consolidated net revenues for the same period in the previous year).
2. Cash Flows
Cash flow summary for the nine months ended December 31, 2003:
Millions of Yen
Nine months Nine months Year
ended ended ended
December 31, December 31, March 31,
2002 2003 2003
Net cash provided by operating activities Y 6,799 Y 23,136 Y 27,711
Net cash used in investing activities (4,457) (1,248) (12,242)
Net cash used in financing activities (16,894) (11,992) (16,443)
Effect of exchange rate changes on cash and cash 34 (289) 466
equivalents
Net increase (decrease) in cash and cash (14,518) 9,607 (508)
equivalents
Cash and cash equivalents, end of the period 60,670 84,287 74,680
Cash flows from operating activities:
Net cash provided by operating activities amounted to Y23,136 million for the nine months ended December 31, 2003,
compared to Y6,799 million for the nine months ended December 31, 2002. This resulted primarily from a net income
of Y18,903 million due to overall favorable results including sustained strong sales of the home video game
software title and card game of the Yu-Gi-Oh! in popularity in the U.S. and Europe.
Cash flows from investing activities:
Net cash used in investing activities amounted to Y1,248 million for the nine months ended December 31 2003,
compared to Y4,457 million for the nine months ended December 31, 2002. This resulted primarily from capital
expenditures of Y3,272 million, offset by the proceeds from sales of investment in marketable securities of Y1,593
million.
Cash flows from financing activities:
Net cash used in financing activities amounted to Y11,992 million for the nine months ended December 31, 2003,
compared to Y16,894 million for the nine months ended December 31, 2002. This was primarily due to payments of
dividends of Y8,959 million and treasury stock acquisitions by a subsidiary of Y2,192 million.
3. Outlook for Fiscal Year Ending March 31, 2004
Our net revenues are expected to surpass the previous forecast for the year ending March 31, 2004 due to the
following reasons: the home video game software title and card game of the Yu-Gi-Oh! made solid sales in popularity
in the U.S. and Europe and Pro Evolution Soccer 3, home video game software, achieved million sales for two
consecutive years also in the overseas market following the domestic market.
Our profit is also expected to surpass the previous forecast for the year ending March 31, 2004 due to the overall
increase of net revenues as well as increases of products with higher profit margins such as card games and
e-AMUSEMENT products .
As a result, our previous forecast for consolidated results for the year ending March 31, 2004 announced in May 2003
is expected to be revised as presented below and the revised forecast for operating income surpasses our highest
record of Y37,900 million in the year ended March 31, 2001. (Operating income of Y37,900 million was prepared in
accordance with U.S. GAAP).
(Millions of Yen)
Net revenues Operating income Income before income Net income
taxes, minority
interest and equity
in net income of
affiliated companies
Previous forecast (A) 255,500 27,500 26,700 14,500
Revised forecast (B) 267,000 38,000 38,000 20,000
Change (B) - (A) 11,500 10,500 11,300 5,500
Change (%) 4.5 38.2 42.3 37.9
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Compared to the previous fiscal year ended March 31, 2003
(Millions of Yen)
Net revenues Operating income Income (loss) before Net income
(loss) income taxes,
minority interest and (loss)
equity in net income
(loss) of affiliated
companies
Previous actual result (A) 253,657 (21,870) (22,096) (28,519)
Revised forecast (B) 267,000 38,000 38,000 20,000
Change (B) - (A) 13,343 59,870 60,096 48,519
Change (%) 5.3 - - -
(Millions of Yen)
Computer & Exercise Toy & Hobby Amusement Gaming Other, Consolidated
Video Games Entertainment Corporate and
Eliminations
Previous 87,476 78,525 45,948 34,305 8,215 (812) 253,657
actual
result (A)
Revised 88,000 79,000 55,000 34,500 10,500 0 267,000
forecast (B)
Change (B) - (A) 524 475 9,052 195 2,285 812 13,343
(Millions of Yen)
Computer Exercise Toy & Hobby Amusement Gaming Other, Consolidated
& Video Entertainment Corporate and
Games Eliminations
Previous 13,987 (49,412) 16,629 7,270 (169) (10,175) (21,870)
actual
result (A)
Revised 16,000 3,000 18,500 10,000 500 (10,000) 38,000
forecast (B)
Change 2,013 52,412 1,871 2,730 669 175 59,870
(B) - (A)
Cautionary Statements with Respect to Outlook
Statements made in this document with respect to our current plans, estimates, strategies and beliefs,
including the above forecasts, are forward-looking statements about our future performance. These
statements are based on management's assumptions and beliefs in light of information currently available
to it and, therefore, you should not place undue reliance on them. A number of important factors could
cause actual results to be materially different from and worse than those discussed in forward-looking
statements. Such factors include, but are not limited to: (i) changes in economic conditions affecting our
operations; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the
Japanese yen, the U.S. dollar and the Euro; (iii) our ability to continue to win acceptance of our
products, which are offered in highly competitive markets characterized by the continuous introduction of
new products, rapid developments in technology and subjective and changing consumer preferences; (iv) our
ability to successfully expand internationally with a focus on our video game software business, card game
business and gaming machine business; (v) our ability to successfully expand the scope of our business and
broaden our customer base through our exercise entertainment business; (vi) regulatory developments and
changes and our ability to respond and adapt to those changes; (vii) our expectations with regard to
further acquisitions and the integration of any companies we may acquire; and (viii) the outcome of
contingencies.
3. Consolidated Balance Sheets (Unaudited)
Millions of Yen Thousands of
U.S. Dollars
December 31, December 31, March 31, 2003 December 31,
2002 2003 2003
% % %
ASSETS
CURRENT ASSETS:
Cash and cash equivalents Y 60,670 Y 84,287 Y 74,680 $ 785,161
Trade notes and accounts 39,715 36,460 29,107 339,637
receivable, net of allowance
for doubtful accounts of Y868
million, Y732 million ($6,819
thousand) and Y976 million at
December 31, 2002, December 31,
2003 and March 31, 2003,
respectively
Inventories 17,652 17,228 13,359 160,484
Deferred income taxes, net 11,558 13,167 12,820 122,655
Prepaid expenses and other 6,696 10,045 6,739 93,572
current assets
Total current assets 136,291 42.5 161,187 53.3 136,705 49.1 1,501,509
PROPERTY AND EQUIPMENT, net 42,919 13.4 46,320 15.3 46,284 16.6 431,486
INVESTMENTS AND OTHER ASSETS:
Investments in marketable 145 123 189 1,146
securities
Investments in affiliates 14,884 12,823 12,422 119,450
Identifiable intangible assets 57,527 46,020 46,503 428,691
Goodwill 36,967 464 125 4,322
Lease deposits 24,079 23,983 24,489 223,409
Other assets 7,861 11,450 11,533 106,661
Total investments and other 141,463 44.1 94,863 31.4 95,261 34.3 883,679
assets
TOTAL ASSETS Y 320,673 100.0 Y 302,370 100.0 Y 278,250 100.0 $ 2,816,674
Millions of Yen Thousands of
U.S. Dollars
December 31, December 31, March 31, 2003 December 31,
2002 2003 2003
% % %
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term borrowings Y 3,938 Y 3,562 Y 8,308 $ 33,181
Current portion of long-term 2,035 2,892 1,815 26,940
debt and capital lease
obligations
Trade notes and accounts 20,912 19,073 18,684 177,671
payable
Accrued income taxes 9,426 21,238 13,788 197,839
Accrued expenses 18,603 20,907 18,968 194,755
Deferred revenue 5,324 6,389 5,535 59,516
Other current liabilities 4,593 5,499 4,676 51,225
Total current liabilities 64,831 20.2 79,560 26.3 71,774 25.8 741,127
LONG-TERM LIABILITIES:
Long-term debt and capital 63,236 68,636 63,514 639,366
lease obligations, less current
portion
Accrued pension and severance 2,450 2,519 2,345 23,465
costs
Deferred income taxes, net 21,923 19,370 18,854 180,438
Other long-term liabilities 3,170 3,307 2,502 30,806
Total long-term liabilities 90,779 28.3 93,832 31.0 87,215 31.3 874,075
TOTAL LIABILITIES 155,610 48.5 173,392 57.3 158,989 57.1 1,615,202
MINORITY INTEREST IN 33,738 10.5 27,420 9.1 28,855 10.4 255,426
CONSOLIDATED SUBSIDIARIES
COMMITMENTS AND - - - -
CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, no par value-
Authorized 450,000,000 shares; 47,399 14.8 47,399 15.7 47,399 17.0 441,537
issued 128,737,566 shares at
December 31, 2002, December 31,
2003 and March 31, 2003
Additional paid-in capital 46,736 14.6 46,736 15.4 46,736 16.8 435,361
Legal reserve 2,163 0.7 - 2,163 0.8 -
Retained earnings 60,239 18.8 32,577 10.8 18,981 6.8 303,466
Accumulated other comprehensive 449 0.1 511 0.2 790 0.3 4,760
income
Total 156,986 49.0 127,223 42.1 116,069 41.7 1,185,124
Treasury stock, at cost-
8,252,640 shares, 8,254,041 (25,661) (8.0) (25,665) (8.5) (25,663) (9.2) (239,078)
shares and 8,253,191 shares at
December 31, 2002, December 31,
2003 and March 31, 2003,
respectively
Total shareholders' equity 131,325 41.0 101,558 33.6 90,406 32.5 946,046
TOTAL LIABILITIES AND Y 320,673 100.0 Y 302,370 100.0 Y 278,250 100.0 $ 2,816,674
SHAREHOLDERS' EQUITY
4. Consolidated Statements of Operations (Unaudited)
(For the nine months ended December 31, 2003)
Millions of Yen Thousands of
U.S. Dollars
Nine months Nine months Year ended Nine months
ended December ended December ended
31, 2002 31, 2003 March 31, 2003 December 31,
2003
% % %
NET REVENUES:
Product sales revenue Y 135,052 Y 153,901 Y 178,766 $ 1,433,638
Service revenue 56,304 58,385 74,891 543,875
Total net revenues 191,356 100.0 212,286 100.0 253,657 100.0 1,977,513
COSTS AND EXPENSES:
Costs of products sold 77,787 88,520 112,364 824,592
Costs of services rendered 50,615 48,058 62,515 447,676
Impairment charge for goodwill - - 47,599 -
and
other intangible assets
Selling, general and 39,143 40,689 53,049 379,031
administrative
Total costs and expenses 167,545 87.6 177,267 83.5 275,527 108.6 1,651,299
Operating income (loss) 23,811 12.4 35,019 16.5 (21,870) (8.6) 326,214
OTHER INCOME (EXPENSES):
Interest income 256 325 373 3,027
Interest expense (633) (648) (938) (6,036)
Gain on sale of subsidiary 552 - 904 -
shares
Other, net (741) 675 (565) 6,288
Other income (expenses), net (566) (0.3) 352 0.2 (226) (0.1) 3,279
INCOME (LOSS) BEFORE INCOME 23,245 12.1 35,371 16.7 (22,096) (8.7) 329,493
TAXES, MINORITY INTEREST AND
EQUITY IN NET INCOME (LOSS) OF
AFFILIATED COMPANIES
INCOME TAXES 10,371 5.4 15,039 7.1 6,186 2.4 140,094
INCOME (LOSS) BEFORE MINORITY 12,874 6.7 20,332 9.6 (28,282) (11.1) 189,399
INTEREST AND EQUITY IN NET
INCOME (LOSS) OF AFFILIATED
COMPANIES
MINORITY INTEREST IN INCOME 1,757 0.9 1,970 0.9 (1,051) (0.4) 18,351
(LOSS) OF CONSOLIDATED
SUBSIDIARIES
EQUITY IN NET INCOME (LOSS) OF 1,622 0.9 541 0.2 (1,288) (0.5) 5,040
AFFILIATED COMPANIES
NET INCOME (LOSS) Y 12,739 6.7 Y 18,903 8.9 Y (28,519) (11.2) $ 176,088
PER SHARE DATA: Yen U.S. Dollars
Nine months Nine months Year ended Nine months
ended December ended December ended
31, 2002 31, 2003 March 31, 2003 December 31,
2003
Basic and diluted net income Y 104.50 Y 156.89 Y (234.58) $ 1.46
(loss) per share
Weighted-average common 121,898,446 120,484,014 121,572,154
shares outstanding
Note: Net income per share was calculated in accordance with Statement of Financial Accounting Standards
(SFAS) No. 128 ''Earnings per Share''. Konami had no dilutive securities outstanding at December 31,
2002, December 31, 2003 and March 31, 2003, and therefore there was no difference between basic and
diluted EPS.
(For the third quarter ended December 31, 2003)
Millions of Yen Thousands of
U.S. Dollars
Third quarter Third quarter Third quarter
ended December ended December ended
31, 2002 31, 2003 December 31,
2003
% %
NET REVENUES:
Product sales revenue Y 59,843 Y 62,640 $ 583,512
Service revenue 18,318 19,670 183,232
Total net revenues 78,161 100.0 82,310 100.0 766,744
COSTS AND EXPENSES:
Costs of products sold 34,061 37,902 353,070
Costs of services rendered 17,129 16,260 151,467
Selling, general and 13,325 14,827 138,118
administrative
Total costs and expenses 64,515 82.5 68,989 83.8 642,655
Operating income 13,646 17.5 13,321 16.2 124,089
OTHER INCOME (EXPENSES):
Interest income 87 97 903
Interest expense (190) (223) (2,077)
Other, net (448) (232) (2,161)
Other income (expenses), net (551) (0.7) (358) (0.5) (3,335)
INCOME BEFORE INCOME TAXES, 13,095 16.8 12,963 15.7 120,754
MINORITY INTEREST AND EQUITY IN
NET INCOME OF AFFILIATED
COMPANIES
INCOME TAXES 5,159 6.6 4,370 5.3 40,708
INCOME BEFORE MINORITY INTEREST 7,936 10.2 8,593 10.4 80,046
AND EQUITY IN NET INCOME OF
AFFILIATED COMPANIES
MINORITY INTEREST IN INCOME 543 0.7 860 1.0 8,011
OF CONSOLIDATED SUBSIDIARIES
EQUITY IN NET INCOME OF 978 1.2 311 0.4 2,897
AFFILIATED COMPANIES
NET INCOME Y 8,371 10.7 Y 8,044 9.8 $ 74,932
PER SHARE DATA: Yen U.S. Dollars
Third quarter Third quarter Third quarter
ended December ended December ended
31, 2002 31, 2003 December 31,
2003
Basic and diluted net income Y 69.47 Y 66.76 $ 0.62
per share
Weighted-average common 120,487,247 120,483,726
shares outstanding
Note: Net income per share was calculated in accordance with Statement of Financial Accounting Standards
(SFAS) No. 128 ''Earnings per Share''. Konami had no dilutive securities outstanding at December 31,
2002, December 31, 2003 and March 31, 2003, and therefore there was no difference between basic and
diluted EPS.
5. Consolidated Statements of Cash Flows (Unaudited)
Millions of Thousands
Yen of
U.S.
Dollars
Nine months Nine months Year ended Nine months
ended ended ended
December December March 31, December
31, 2002 31, 2003 2003 31, 2003
Cash flows from operating activities:
Net income (loss) Y 12,739 Y 18,903 Y (28,519) $ 176,088
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities -
Depreciation and amortization 8,263 6,499 11,979 60,540
Impairment charge for goodwill and other - - 47,599 -
intangible assets
Provision for doubtful receivables 569 (167) 429 (1,556)
Loss on sale or disposal of property and 837 686 2,344 6,390
equipment, net
Gain on sale of marketable securities (2) (1,303) (20) (12,138)
Gain on sale of subsidiary shares (552) - (904) -
Equity in net loss (income) of affiliated (1,622) (541) 1,288 (5,040)
companies
Minority interest 1,757 1,970 (1,051) 18,351
Deferred income taxes (3,078) 161 (11,326) 1,500
Change in assets and liabilities, net of
business acquired:
Decrease (increase) in trade notes and (6,269) (7,555) 4,580 (70,377)
accounts receivable
Decrease (increase) in inventories (1,774) (4,187) 2,556 (39,003)
Increase (decrease) in trade notes and 874 1,220 (1,521) 11,365
accounts payable
Increase (decrease) in accrued income (3,880) 7,507 394 69,930
taxes
Increase (decrease) in accrued expenses (2,742) 1,516 (2,271) 14,122
Increase in deferred revenue 1,468 854 1,669 7,955
Other, net 211 (2,427) 485 (22,608)
Net cash provided by operating activities 6,799 23,136 27,711 215,519
Cash flows from investing activities:
Purchases of investments in a subsidiary (315) - (315) -
Proceeds from sales of investments in 2,081 - 2,081 -
subsidiaries
Capital expenditures (7,723) (3,272) (15,357) (30,479)
Proceeds from sales of property and 1,444 207 2,234 1,928
equipment
Proceeds from sales of investments in 363 1,593 371 14,839
marketable securities
Acquisition of new subsidiaries, net of - (206) (449) (1,919)
cash acquired
Decrease in time deposits, net 521 63 516 587
Decrease (increase) in lease deposits, (384) 505 (306) 4,704
net
Other, net (444) (138) (1,017) (1,285)
Net cash used in investing activities (4,457) (1,248) (12,242) (11,625)
Cash flows from financing activities:
Net decrease in short-term borrowings (6,811) (4,812) (2,448) (44,825)
Proceeds from long-term debt 14,902 6,400 15,402 59,618
Repayments of long-term debt (2,486) (543) (2,765) (5,058)
Principal payments under capital lease (1,931) (1,793) (3,439) (16,702)
obligations
Dividends paid (6,172) (8,959) (6,324) (83,456)
Purchases of treasury stock by parent (10,658) (2) (10,660) (19)
company
Purchases of treasury stock by (3,075) (2,192) (4,516) (20,419)
subsidiaries
Other, net (663) (91) (1,693) (848)
Net cash used in financing activities (16,894) (11,992) (16,443) (111,709)
Effect of exchange rate changes on cash 34 (289) 466 (2,692)
and cash equivalents
Net increase (decrease) in cash and cash (14,518) 9,607 (508) 89,493
equivalents
Cash and cash equivalents, beginning of 75,188 74,680 75,188 695,668
the period
Cash and cash equivalents, end of the Y 60,670 Y 84,287 Y 74,680 $ 785,161
period
6. Segment Information (Unaudited)
a . Operations in Different Industries
(Nine months ended December 31)
Nine months Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2002 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 65,770 Y 58,977 Y 37,776 Y 20,989 Y 6,338 Y 1,506 Y 191,356
Intersegment 1,235 72 22 905 - (2,234) -
Total 67,005 59,049 37,798 21,894 6,338 (728) 191,356
Operating 54,308 59,874 23,607 16,988 6,426 6,342 167,545
expenses
Operating Y 12,697 Y (825) Y 14,191 Y 4,906 Y (88) Y (7,070) Y 23,811
income (loss)
Nine months Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2003 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 71,497 Y 59,670 Y 47,480 Y 24,287 Y 7,998 Y 1,354 Y 212,286
Intersegment 1,839 20 66 532 - (2,457) -
Total 73,336 59,690 47,546 24,819 7,998 (1,103) 212,286
Operating 58,924 57,326 29,513 16,619 7,504 7,381 177,267
expenses
Operating Y 14,412 Y 2,364 Y 18,033 Y 8,200 Y 494 Y (8,484) Y 35,019
income (loss)
Nine months Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2003 Eliminations
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 666,018 $ 555,845 $ 442,292 $ 226,241 $ 74,504 $ 12,613 $ 1,977,513
Intersegment 17,131 186 615 4,956 - (22,888) -
Total 683,149 556,031 442,907 231,197 74,504 (10,275) 1,977,513
Operating 548,896 534,010 274,923 154,812 69,902 68,756 1,651,299
expenses
Operating $ 134,253 $ 22,021 $ 167,984 $ 76,385 $ 4,602 $ (79,031) $ 326,214
income (loss)
(Year ended March 31, 2003)
Year ended Computer Exercise Toy & Amusement Gaming Other, Consolidated
& Video Entertain- Hobby Corporate
March 31, 2003 Games ment and
Eliminations
(Millions of Yen)
Net revenue:
Customers Y 85,891 Y 78,437 Y 45,887 Y 33,105 Y 8,215 Y 2,122 Y 253,657
Intersegment 1,585 88 61 1,200 - (2,934) -
Total 87,476 78,525 45,948 34,305 8,215 (812) 253,657
Operating 73,489 127,937 29,319 27,035 8,384 9,363 275,527
expenses
Operating Y 13,987 Y (49,412) Y 16,629 Y 7,270 Y (169) Y (10,175) Y (21,870)
income (loss)
(Third quarter ended December 31)
Third quarter Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2002 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 31,367 Y 18,894 Y 18,351 Y 6,604 Y 2,403 Y 542 Y 78,161
Intersegment 567 47 4 502 - (1,120) -
Total 31,934 18,941 18,355 7,106 2,403 (578) 78,161
Operating 25,207 20,176 11,065 4,938 2,247 882 64,515
expenses
Operating Y 6,727 Y (1,235) Y 7,290 Y 2,168 Y 156 Y (1,460) Y 13,646
income (loss)
Third quarter Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2003 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 34,302 Y 19,994 Y 16,060 Y 8,633 Y 2,833 Y 488 Y 82,310
Intersegment 489 17 31 227 - (764) -
Total 34,791 20,011 16,091 8,860 2,833 (276) 82,310
Operating 28,319 18,651 9,986 5,570 2,680 3,783 68,989
expenses
Operating Y 6,472 Y 1,360 Y 6,105 Y 3,290 Y 153 Y (4,059) Y 13,321
income (loss)
Third quarter Computer Exercise Toy & Amusement Gaming Other, Consolidated
ended & Video Entertain- Hobby Corporate
December 31, Games ment and
2003 Eliminations
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 319,534 $ 186,251 $ 149,604 $ 80,419 $ 26,390 $ 4,546 $ 766,744
Intersegment 4,554 159 289 2,115 - (7,117) -
Total 324,088 186,410 149,893 82,534 26,390 (2,571) 766,744
Operating 263,801 173,740 93,023 51,886 24,965 35,240 642,655
expenses
Operating $ 60,287 $ 12,670 $ 56,870 $ 30,648 $ 1,425 $ (37,811) $ 124,089
income (loss)
Notes: 1. Primary businesses of each segment are as follows:
Computer & Video Games: Production and sale of home-use video game software
Exercise Entertainment: Operation of health and fitness clubs
Toy & Hobby: Production and sale of character related products
Amusement: Manufacture and sale of amusement arcade games and LCD
units for pachinko machines
Gaming: Manufacture and sale of gaming machines for
overseas market
2. 'Other' consists of segments which do not meet the quantitative criteria for separate
presentation under SFAS No. 131 'Disclosures about Segments of an Enterprise and Related
Information. '
3. 'Corporate' primarily consists of administrative expenses for the Company.
4. 'Eliminations' primarily consist of eliminations of intercompany sales and of intercompany
profits on inventories.
5. In the fourth quarter ended March 31, 2003, the Amusement segment transferred its health
entertainment business to the Exercise Entertainment segment, and the Gaming segment transferred
its token-operated game machine business to the Amusement segment. In accordance with these
changes, results for the three months ended December 31, 2002 and for the nine months ended
December 31, 2002 have been reclassified to conform to the presentation for the year ended March
31, 2003.
6. Effective the second quarter ended September 30, 2003, Other segment is combined with Corporate
and Eliminations. In accordance with this change, results for the three months ended December
31, 2002, for the nine months ended December 31, 2002 and for the year ended March 31, 2003 have
been reclassified to conform to the presentation for the six months ended September 30, 2003.
7. Intersegment revenues primarily consist of sub-licensing of intellectual property rights from
Computer & Video Games and Toy & Hobby to Amusement and Gaming and sales of hardware and
components from Amusement to Computer & Video Games and Exercise Entertainment.
8. An impairment charge of Y 47,599 million for goodwill and other intangible assets was included
in the operating expenses of the Exercise Entertainment segment for the year ended March 31,
2003.
b . Operations in Geographic Areas
(Nine months ended December 31)
Nine months ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2002 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 138,208 Y 36,545 Y 10,777 Y 5,826 Y 191,356 - Y 191,356
Intersegment 38,522 794 27 315 39,658 Y (39,658) -
Total 176,730 37,339 10,804 6,141 231,014 (39,658) 191,356
Operating expenses 154,850 36,838 10,370 4,864 206,922 (39,377) 167,545
Operating income Y 21,880 Y 501 Y 434 Y 1,277 Y 24,092 Y (281) Y 23,811
(loss)
Nine months ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2003 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 132,080 Y 44,327 Y 29,706 Y 6,173 Y 212,286 - Y 212,286
Intersegment 58,833 1,355 90 200 60,478 Y (60,478) -
Total 190,913 45,682 29,796 6,373 272,764 (60,478) 212,286
Operating expenses 162,345 43,422 24,950 5,251 235,968 (58,701) 177,267
Operating income Y 28,568 Y 2,260 Y 4,846 Y 1,122 Y 36,796 Y (1,777) Y 35,019
(loss)
Nine months ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2003 /Oceania
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 1,230,368 $ 412,920 $ 276,721 $ 57,504 $ 1,977,513 - $ 1,977,513
Intersegment 548,049 12,622 838 1,863 563,372 $ (563,372) -
Total 1,778,417 425,542 277,559 59,367 2,540,885 (563,372) 1,977,513
Operating expenses 1,512,296 404,490 232,417 48,915 2,198,118 (546,819) 1,651,299
Operating income $ 266,121 $ 21,052 $ 45,142 $ 10,452 $ 342,767 $ (16,553) $ 326,214
(loss)
(Year ended March 31, 2003)
Year ended Japan Americas Europe Asia Total Eliminations Consolidated
March 31, 2003 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 182,345 Y 47,729 Y 16,297 Y 7,286 Y 253,657 - Y 253,657
Intersegment 50,670 805 27 506 52,008 Y (52,008) -
Total 233,015 48,534 16,324 7,792 305,665 (52,008) 253,657
Operating expenses 258,551 47,112 14,917 6,236 326,816 (51,289) 275,527
Operating income Y (25,536) Y 1,422 Y 1,407 Y 1,556 Y (21,151) Y (719) Y (21,870)
(loss)
(Third quarter ended December 31)
Third quarter ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2002 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 46,412 Y 22,667 Y 6,772 Y 2,310 Y 78,161 - Y 78,161
Intersegment 22,717 605 - 80 23,402 Y (23,402) -
Total 69,129 23,272 6,772 2,390 101,563 (23,402) 78,161
Operating expenses 58,551 21,791 5,897 1,868 88,107 (23,592) 64,515
Operating income Y 10,578 Y 1,481 Y 875 Y 522 Y 13,456 Y 190 Y 13,646
(loss)
Third quarter ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2003 /Oceania
(Millions of Yen)
Net revenue:
Customers Y 47,268 Y 17,301 Y 15,616 Y 2,125 Y 82,310 - Y 82,310
Intersegment 21,167 1,201 2 21 22,391 Y (22,391) -
Total 68,435 18,502 15,618 2,146 104,701 (22,391) 82,310
Operating expenses 61,203 16,444 11,686 1,899 91,232 (22,243) 68,989
Operating income Y 7,232 Y 2,058 Y 3,932 Y 247 Y 13,469 Y (148) Y 13,321
(loss)
Third quarter ended Japan Americas Europe Asia Total Eliminations Consolidated
December 31, 2003 /Oceania
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 440,317 $ 161,164 $ 145,468 $ 19,795 $ 766,744 - $ 766,744
Intersegment 197,177 11,188 19 195 208,579 $ (208,579) -
Total 637,494 172,352 145,487 19,990 975,323 (208,579) 766,744
Operating expenses 570,126 153,181 108,859 17,690 849,856 (207,201) 642,655
Operating income $ 67,368 $ 19,171 $ 36,628 $ 2,300 $ 125,467 $ (1,378) $ 124,089
(loss)
Note: 1. For the purpose of presenting its operations in geographic areas above, Konami and its subsidiaries
attribute revenues from external customers to individual countries in each area based on where
products are sold and services are provided.
2. An impairment charge of Y 47,599 million for goodwill and other intangible assets was included in
the operating expenses of the Japan segment for the year ended March 31, 2003.
Notes:
1. The U.S. dollar amounts included herein represent a translation using the mid price for telegraphic transfer of U.S.
dollars as of December 31, 2003 of Y107.35 to $1 and are included solely for the convenience of the reader. The
translation should not be construed as a representation that the yen amounts have been, could have been, or could in
the future be converted into U.S. dollars at the above or any other rate.
2. The consolidated financial statements presented herein were prepared in accordance with accounting principles
generally accepted in the United States of America (U.S. GAAP).
3. Comprehensive income for the nine months ended December 31, 2002 and December 31, 2003 and for the year ended March
31, 2003 consisted of the following:
Millions of yen Thousands of
U.S. Dollars
Nine months Nine months Year ended Nine months
ended ended ended
December 31, December 31, March 31, December 31,
2002 2003 2003 2003
Net income (loss) Y 12,739 Y 18,903 Y (28,519) $ 176,088
Other comprehensive income
(loss):
Foreign currency (186) (491) 85 (4,574)
translation adjustments
Net unrealized gains on 89 212 159 1,975
available-for-sale
securities
(97) (279) 244 (2,599)
Comprehensive income Y 12,642 Y 18,624 Y (28,275) $ 173,489
(loss)
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