Interim Results
Konami Corporation
07 November 2005
Consolidated Financial Results
for the Six Months Ended September 30, 2005
(Prepared in Accordance with U.S. GAAP)
November 7, 2005
KONAMI CORPORATION
Address: 4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number: 9766
URL: www.konami.net
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)
Date of Board Meeting to
approve the financial November 7, 2005
results:
Adoption of U.S. GAAP: Yes
Note: Financial information presented herein was not audited by independent public accountants.
1. Consolidated Financial Results for the Six Months Ended September 30, 2005
(Amounts are rounded to the nearest million)
(1) Consolidated Results of Operations
(Millions of Yen, except per share
data)
Net revenues Change Operating income Change Income before Change
income taxes
Six months ended Y 111,870 (1.9)% Y 7,462 (37.0)% Y 14,335 23.7%
September 30, 2005
Six months ended 114,009 (12.3) 11,851 (45.4) 11,586 (48.3)
September 30, 2004
Year ended 260,691 28,136 27,442
March 31, 2005
Net income Change Net income Diluted net income
per share (Yen) Per share (Yen)
Six months ended Y 6,964 328.3% Y 53.45 Y 53.44
September 30, 2005
Six months ended 1,626 (85.0) 13.51 13.51
September 30, 2004
Year ended 10,486 87.41 87.41
March 31, 2005
Notes:
1. Equity in net income (loss) of affiliated companies
Six months ended September 30, 2005: Y - million
Six months ended September 30, 2004: (2,551) million
Year ended March 31, 2005: (6,293) million
2. Weighted-average common shares outstanding
Six months ended September 30, 2005: 130,300,952 shares
Six months ended September 30, 2004: 120,388,556 shares
Year ended March 31, 2005: 119,970,052 shares
3. Change in accounting policies: None
4. Change (%) of net revenues, operating income, income before income taxes and net income represents the
increase or decrease relative to the same period of the previous year.
(2) Consolidated Financial Position
(Millions of Yen, except per share amounts)
Total stockholders' Equity-assets Total stockholders'
Total assets equity ratio equity per share
(Yen)
September 30, 2005 Y 302,021 Y 133,866 44.3% Y 1,027.32
September 30, 2004 294,274 99,847 33.9% 833.28
March 31, 2005 304,321 105,857 34.8% 885.97
Note:
Number of shares outstanding
September 30, 2005: 130,306,075 shares
September 30, 2004: 119,823,294 shares
March 31, 2005: 119,481,411 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
Six months ended September 30, 2005 Y 2,270 Y 7,138 Y (23,840) Y 75,678
Six months ended September 30, 2004 6,547 (7,891) (6,814) 79,779
Year ended March 31, 2005 27,760 (14,343) (11,670) 89,583
(4) Number of Consolidated Subsidiaries and Companies Accounted for by the
Equity Method
Number of consolidated subsidiaries: 23
Number of affiliated companies accounted for by the equity method: 0
(5) Changes in Reporting Entities
Number of consolidated subsidiaries added: 3
Number of consolidated subsidiaries removed: 7
Number of affiliated companies accounted for by the equity method added: 0
Number of affiliated companies accounted for by the equity method removed: 2
2. Consolidated Financial Forecast for the Year Ending March 31, 2006
(Millions of Yen)
Net revenues Operating income Income before Net income
income taxes
Year ending March 31, 2006 Y270,000 Y28,500 Y34,000 Y18,000
(Reference)
Expected net income per share for the year ending March 31, 2006 is Y138.14.
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 13 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 23 consolidated subsidiaries. Each
of the Company and its subsidiaries is categorized into business segments based on its operations as stated
below. Four business segments categorization stated below is based on the same criteria explained under ''5.
Segment Information (Unaudited).'' However, Gaming Business Segment changed its name to Gaming & System Business
Segment on October 1, 2005, as mentioned note 2(*8) below.
Business Segments Major Companies
Digital Entertainment Domestic The Company (*1,2,3,4,6)
Konami Marketing Japan, Inc. (*6)
(*5) (*3) HUDSON SOFT CO., LTD(*4)
Overseas Konami Digital Entertainment, Inc.(*7)
Konami of Europe GmbH
Konami Software Shanghai, Inc.
Konami Marketing, Inc.(*7)
Konami Corporation of Europe B.V.
Konami Marketing (Asia) Ltd.
Hudson Entertainment, Inc. (*4)
Gaming & System Domestic The Company
Overseas Konami Gaming, Inc.
(*8) Konami Australia Pty Ltd, One other company
Health & Fitness Domestic The Company
Konami Sports Life Corporation
(*5) Konami Sports Corporation
Two other companies
Other Domestic KPE, Inc., Konami Marketing Japan, Inc.(*6)
Konami Real Estate, Inc., Konami School, Inc.
Two other companies
Overseas Konami Corporation of America
Konami Corporation of Europe B.V., One other company
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 year ended September 30, 2005 are as follows.
*1. The Company merged with Konami Computer Entertainment Studios, Inc., Konami Computer Entertainment
Tokyo, Inc., Konami Computer Entertainment Japan, Inc., Konami Online, Inc. and Konami Media
Entertainment, Inc. on April 1, 2005.
*2. The Company merged with Konami Traumer, Inc. on June 1, 2005.
*3. The Company has sold its entire shares of TAKARA Co., LTD, an equity-method affiliate, and has
dissolved its equity relationship on April 25, 2005.
*4. As a result of the Company's acceptance of a third party allotment of additional shares on April
27, 2005, HUDSON SOFT CO., LTD, an equity-method affiliate, became a 53.99% owned consolidated
subsidiary of the Company. Hudson Entertainment, Inc., a subsidiary of HUDSON CO., LTD, became a
consolidated subsidiary of the Company.
*5. Digital Entertainment segment comprises previous Computer & Video Games segment, Toy & Hobby
segment, Amusement segment, online business took over from Konami Online, Inc. and multimedia business
took over from Konami Media Entertainment, Inc. on April 1, 2005.
*6. The Company merged with Konami Marketing Japan, Inc. on October 1, 2005.
*7. Konami Digital Entertainment, Inc. merged with and Konami Marketing, Inc. on October 1, 2005.
*8. Gaming segment had changed its name to Gaming & System segment from October 1, 2005.
Business Organization
2. Management Policy
1. Management Policy
We place priority on our following corporate goal: 'We aim to be a business group of which people around the globe
have high expectations, through creating and providing them with ''valuable time'. Furthermore, our basic
management policy is to place priority on our shareholders, to maintain sound relationships with all stakeholders,
including shareholders, and to make a wide range of social contributions as a good corporate citizen. We aim to
make optimum use of the group's management resources and maintain these specific management policies: 'Adaptation
to Global Standards', 'Maintaining Fair Competition' and 'Pursuit of High Profits'.
In order to maximize our shareholders' value, we strive continuously to increase and improve our market
capitalization and provide stable dividends to return profits to shareholders. Our policy is to use retained
earnings for investments focused on business fields with good future profitability and other prospects to increase
our corporate value and as a source to pay dividends in the future.
We are working on maintaining sound relationships with our stakeholders, including investors, end-users,
suppliers, employees and the community in general, as well as contributing to society by supporting a wide range
of activities that promote education, sports and culture. Pursuant to this basic management policy, we aim to
create a 'High Quality Life' full of ''dreams'', ''surprises'' and ''fascination'' in everyday life for people all
over the world by offering entertainment and health products and services with universal appeal.
2. Profit Appropriation Policy
The Company's basic policy in profit distribution is to provide stable and high dividend payouts to our
stockholders and to increase our corporate value. Our policy is to use retained earnings for investments focused
on business fields with good future profitability and other prospects to strengthen our growth potential and
competitiveness.
3. Medium to Long-term Strategies and Objectives
Restructuring of business operations in order to respond to changing market conditions
The arrival of an internet society and the development of digital technology have been rapidly eroding the
business barriers among industries related to digital entertainment. Especially this trend has accelerated since
the emergence of the online game market. In order to respond to the diversifying needs of consumers, we positioned
five areas (Computer & Video Games, Toy & Hobby, Amusement, On-line and Multimedia) as a unified Digital
Entertainment Business and established a system that can maximize the synergy effects. Along with this business
restructuring, we established three business segments to respond to the changing market conditions: the Digital
Entertainment segment, the Gaming & System segment, and the Health & Fitness segment.
Increased profitability and injection of managerial resources into growing business areas
On April 1, 2005, we merged our three group companies engaged in the production of home videogame software and our
two group companies specialized in online games, music and publishing. As a result, we will be integrating and
sharing our creators, intellectual property, and production know-how-resources previously separated
between our three production companies. We also will pursue improved profitability by promoting an effective
product line-up and streamlining operations which have become redundant or complex over many years. With the
maturation of the internet and other online environments, we plan to redistribute our managerial resources from
our videogame software to our online business, an area which we expect to grow in the future. Through all of these
efforts, we will strive to maintain the Company's growth.
Promoting global development by implementing a corporate structure with regional responsibility
Given the acceleration of globalization and the growth the internet in recent years, it is important for us to
keep in mind of the features of a market which is growing globally, and respond flexibly and promptly, above and
beyond the structure of our existing business segments. We now classify the world market into four regions
-Japan, North America, Europe, and Asia. Henceforth we have built an organizational structure to achieve
maximal synergy effects among the businesses in the market of each region. Regional directors in Japan, North
America, Europe and Asia will take charge of the business in their respective markets. Regional directors are in
charge of development, production, and sales across business segments, and shoulders the role of promoting further
global development of the Konami Group by assuming ultimate responsibility in each region.
Addition of Hudson as our subsidiary
Responding to a request from HUDSON SOFT CO., LTD., a firm which expects to report a considerable net loss for the
year ended March31, 2005, we decided to support an increase of its capitalization on April 27, 2005 and accept a
subscription offer to increase allotment as a third party. Consequently, Hudson became our consolidated
subsidiary. We will support Hudson's management reconstruction and aim for a gain of synergy effects, mainly with
our online business.
Reorganization of sales, distribution and services
On October 1, 2005, we merged with our group company engaged in the sales and publicity of Digital Entertainment
Business and will operate a full range of functions of planning, production, publicity and sales in order to
operate the business more effectively and efficiently. At the same time, we divided our distribution and customer
service departments and established a new consolidated subsidiary, Konami Logistics and Service, Inc.
Group restructuring and shift to Holding Company structure by company separation
In the population ages and birth rates decline and people become more health-conscious, our subsidiaries, Konami
Sports Life and Konami Sports will merge and new Konami Sport after the merger becomes a wholly owned subsidiary
of the Company by share exchange. We allocate management resources properly and speed up management decision in
the Health industry where the great demand is highly expected.
Also, in terms of improving management transparency and building up speedy and flexible management structure, a
newly established wholly owned subsidiary through company separation, Konami Digital Entertainment Corporation,
will succeed our Digital Entertainment business and the Company will be a separate holding company.
These restructures make positions clear each of Digital Entertainment Business, Health & Fitness Business and
Gaming & System Business and separate decision and supervision functions of group, and execution function in each
business with speeding up our management decision makings from our shareholders' point of view.
4. Corporate Governance Development
Our basic management policy is to place priority on shareholders, to maintain a sound relationship with all
stakeholders, including shareholders, and to make a wide range of social contributions as a good corporate
citizen. We need to develop strong corporate governance in order to maintain and develop these policies, and we
have placed reform of our board of directors as the first and most important item in our corporate governance
development agenda.
We adopted an outside corporate director in May 1992 in an effort to revitalize and strengthen the function of the
board of directors, and we introduced a corporate officer system in June 1999. In June 2001, we reduced the size
of our board of directors from fifteen directors to nine, including four directors from outside the company. We
now have eight directors, three of whom are from outside the company. Diverse opinions are exchanged at meetings
of the board of directors, with eight board directors and four auditors. Through such reform measures, we are
striving to accelerate our managerial decision-making process, separate oversight and executive functions,
strengthen our managerial monitoring system, revitalize our board of directors, and achieve management
transparency. There are no direct interests between our outside directors and the Company, whether in terms of
related-party transactions or otherwise.
We are working to implement and revitalize committees so that we can respond more effectively to the
ever-complicated environment in which we operate. We established the Risk Management Committee in April 2000 in
order to enhance our ability to prevent and respond quickly and appropriately to internal and external risks. We
established the Compliance Committee in September 2001 to reinforce our entire system for encouraging compliance
with and keeping employees aware of applicable laws, rules, and regulations.
As an SEC reporting company listed on the New York Stock Exchange, we are subject to the Sarbanes-Oxley Act. With
the enactment of the Sarbanes -Oxley Act, we established a Disclosure Committee in April 2003. The Company will
also be subject to Article 404 of the Sarbanes-Oxley Act, 'Management Assessment of Internal Controls,' from the
fiscal year ending March 31, 2007. The entire Konami Group is currently reworking of our documentation and
assessment methods and monitoring system for important internal controls over financial reporting. Through these
processes, the Disclosure Committee is seeking to establish an internal management system and to develop group
company reporting procedures to facilitate accurate and timely disclosure.
We also established the Konami Group Code of Business Conduct and Ethics and the Konami Group Officers and
Employees Conduct Guidelines in order to integrate the new systems and guidelines and improve standards throughout
our group.
3. Business Performance and Cash Flows
1. Business Performance
Overview
During the interim consolidated accounting period under review, the Japanese economy showed signs of a solid
recovery, driven by private-sector demand at home as corporate profits recovered, private-sector capital
investment rose, and personal consumption slowly increased. The world economy, too, performed well overall
despite concerns about the soaring price of crude oil; in particular, the U.S. economy showed steady growth that
fueled a sharp rise in employment income, and the Chinese economy continued to grow.
As for the industries in which we operate, in the entertainment industry new markets continued to open up as
Nintendo and Sony released new portable game consoles. Furthermore, with the announcement of the next generation
of fixed-type game consoles by Nintendo, Sony, and Microsoft, demand is expected to rise even further. In the
health industry, demand for fitness clubs among middle-aged and senior consumers, our main target market, is
rising as the Japanese population ages and birth rates decline. Although the percentage of people who join
fitness clubs in Japan is still low compared with the U.S. and Europe, the market promises to grow as our target
demographic group expands and people become more health-conscious.
The following is a review of the Company's performance during the term, starting with the Digital Entertainment
Segment. In our computer and video game businesses, we have recorded brisk global sales of our popular soccer
games. At the Tokyo Game Show 2005 held in September 2005, we unveiled new titles for the next generation of
consoles, all in high-quality images, and offered METAL GEAR SOLID 3 SUBSISTENCE, the latest addition to the
METAL GEAR SOLID series that has been met with an enthusiastic response from users across the globe and enjoyed
strong attention from visitors to the event. In our toy & hobby business, the Yu-Gi-Oh! card game series, which
has expanded into a global business, with a particularly strong presence in the Japanese, U.S., and European
markets, continued to record strong sales. In particular, domestic sales of the card game increased
substantially from the previous year. In August 2005, the third Yu-Gi-Oh! World Championship 2005 was held in
Tokyo bringing together finalists who had won regional championships in countries around the globe (42 countries
for the card game and 12 counties for the computer game) to compete for the title of Yu-Gi-Oh! World Champion.
In our amusement business, products incorporating e-AMUSEMENT services for amusement arcades, especially
MAH-JONG FIGHT CLUB, recorded strong sales. In our online business, the full-dress service Yu-Gi-Oh! ONLINE, a
realistic online recreation of Yu-Gi-Oh! Official Card Game-Duel Monsters, was launched simultaneously in Japan,
the U.S., and Europe in April 2005. In combination with the commencement of our WORLD SOCCER Winning Eleven
series online match-up service, this marked the Company's full debute the online games market.
In our Gaming & System segment, construction of our new office building in Las Vegas was completed in June 2005,
enhancing our production capabilities. We also made other moves to gain a more solid presence in the North
American market. In September 2005, the unveiling of our new K2V gaming platform garnered strong interest at
Global Gaming Expo 2005, one of the U.S.'s largest gaming shows.
In our Health & Fitness segment, we expanded our network of sports facilities and, in an effort to further boost
the quality of our services, we made steady progress in installing our original e-XAX IT health management
system, primarily in new Konami Sports Clubs. We also expanded our lineup of original supplements with the
addition of the low-calorie sports drink Isotonic Sports Drink 'Isocycle' and the extra-rich green vegetable
Juice 'Ryokuno-Aoziru', thus continueing to offer a wide range of healthy lifestyle choices.
On April 1, 2005, we merged with our three home video game software production subsidiaries and two subsidiaries
engaged in the online, music, and publication business. On June 1, 2005, we completed a second merger with a
subsidiary specialized in the planning, production and distribution of toys and upscale household goods. Through
these mergers, we believe we are in a better position to adapt to changes in the entertainment industry. On
April 25, 2005, we sold entire shares of Takara Co., Ltd., an equity-method affiliate and gained 6,360 million
yen from it. On April 27, 2005, we accepted a request for third party allotment of additional shares from HUDSON
SOFT CO., LTD. and acquired shares of Hudson shares, thereby converting it from an equity-method affiliate to a
consolidated subsidiary.
As a result, consolidated net revenues for the six months ended September 30, 2005, amounted to Y118,870
million; consolidated operating income was Y7,462 million; consolidated net income before income taxes was Y
14,335 million; and consolidated net income was Y6,964 million. The interim dividend payout will be Y27 per
share.
Performance by business segment
Summary of net revenues by business segment:
Millions of Yen
Six months Six months % of previous
year
ended ended
September 30, September 30,
2004 2005
Digital Entertainment Y 64,900 Y 66,671 102.7%
Gaming & System 5,898 4,727 80.1%
Health & Fitness 39,778 40,609 102.1%
Other, Corporate and Eliminations 3,433 (137) -
Consolidated net revenues Y 114,009 Y 111,870 98.1%
*1 Computer & Video game Segment, Toy & Hobby Segment and Amusement Segment were reorganized
to Digital Entertainment Segment effective on April 1, 2005. Thus, records in previous
fiscal year are reclassified into new business segment.
*2 Gaming segment had changed its name to Gaming & System segment from October 1, 2005.
Digital Entertainment
In our Computer & Video Games business, the popular soccer game WORLD SOCCER Winning Eleven 9 recorded strong sales
in the Japanese market, and the well-established baseball titles JIKKYOU PAWAFURU PUROYAKYU 12 and PROYAKYU SPIRITS
2 both registered increased sales. Overseas, the Pro Evolution Soccer series which was released last year for the
European markets continued to sell at high volumes. Sales of Dance Dance Revolution EXTREME 2 and METAL GEAR ACID
remained strong.
In our Toy & Hobby business, the Yu-Gi-Oh! card game series, which has expanded, with a particularly strong presence
in the Japanese, U.S., and European markets, continued to record strong sales. Domestic sales of the game in
particular increased substantially from the previous year. As a follow-up to the Yu-Gi-Oh! card game series, we also
released two card games based on the popular animated TV series MALHEAVEN and EYESHIELD 21. Both are recording
strong sales.
In our Amusement business, the MAH-JONG FIGHT CLUB series, incorporating e-AMUSEMENT services for amusement arcades,
continued to record strong sales. As for token-operated games, the large-scale horse-racing game machines
GI-HORSEPARK and GI-TURFWILD 2 both performed well.
In our Online business, we established a full-fledged presence in the online games market for home users, which we
believe has tremendous growth potential, with the unveiling of the online match-up service for WORLD SOCCER Winning
Eleven 8 LIVEWARE EVOLUTION in March 2005 and for WORLD SOCCER Winning Eleven 9 in August 2005. We also made a
full-scale launch of Yu-Gi-Oh! ONLINE in April 2005. In addition, we made steady progress in the global expansion of
our mobile content distribution services via major carriers based in Japan and around the world.
In our Multimedia business, we released several guides to playing popular video games that earned favorable reviews.
We also produced our own original animated TV program, GOKUJO SEITOKAI, and released a series of tie-in products
consisting of music CDs, DVDs and character goods. In the future, we plan to further pursue a multi-pronged
merchandising strategy that integrates content from different businesses of our Digital Entertainment Segment.
As a result, consolidated net revenues in the Digital Entertainment segment for the six months ended September 30,
2005, amounted to Y66,671 million (102.7 % of the figure for the same period in the previous year).
Gaming & System
In North America, we steadily strengthened our presence in the gaming market. Construction of our new office
building in Las Vegas was completed in June 2005, and in September the unveiling of our new K2V gaming platform
enjoyed strong attention at Global Gaming Expo 2005, one of the largest events of its kind in the U.S. Sales of
video slot machines, one of our flagship products, increased, as did those of our mechanical slot machines, and
revenues from profit-sharing agreements have climbed. The Casino Management System, a system product that promises
to generate steady revenues, also attracted much customer interest. As a result, we believe our systems division can
look forward to strong growth.
In Australia, the domestic gaming market showed little change. Nonetheless, we maintained sales levels through
products such as our link progressive jackpot system, which won accolades at the Australasian Gaming Expo 2005 in
August, one of the largest events of its kind in the Oceania region. Exports to European and Asian markets have been
steady as well.
As a result, consolidated net revenue in the Gaming segment for the six months ended September 30, 2005, amounted to
Y4,727 million (80.1 % of the figure for the same period in the previous year).
Health & Fitness
In our fitness club management business, we further expanded our network of Konami Sports Clubs with the opening of
the Konami Sports Club Honten Hachioji (Tokyo) in May 2005, the Konami Sports Club Takamatsu (Kagawa Prefecture) in
June and the Konami Sports Club Myoden (Chiba Prefecture) in September. With the introduction of a designated
administrator system, we also expanded the scope of our subcontracting services to local governments, significantly
increasing the number of facilities we have been engaged to manage.
In the area of fitness products, we developed the e-XAX IT health management system, which incorporates the Konami
Group's latest technology, and made steady progress with its installation, primarily in new Konami Sports Clubs.
This new system has won much praise from members. We also worked on bolstering sales of original supplements by
releasing two unique new products: the low-calorie sports drink Isotonic Sports Drink 'Isocycle' and the extra-rich
green vegetable juice 'Ryokuno Aoziru'.
In July, our nationwide chain of Konami Sports Clubs became the first private-sector facilities in Japan to be
granted the right by the Japanese Olympic Committee to call themselves 'JOC Athlete Support Center authorized by the
Japanese Olympic Committee.' Konami Sports Clubs throughout Japan are committed to supporting Japan's top athletes
and promoting the Olympic movement in partnership with their members and all the people in their communities.
At the 32nd Int. Home Care & Rehabilitation Exhibition, which took place in September, our display showcased
proprietary equipment, programs, and services that we have developed specially for an increasingly aging society.
These displays integrated the expertise that we have accumulated in the course of running the Konami Sports Club
network with the collective know-how we have built up at the group level. We believe the many visitors to the event
came away with a better idea of our products and services in the health industry.
As a result, consolidated net revenue in the Health & Fitness segment for the six months ended September 30, 2005,
amounted to Y40,609 million (102.1 % of the figure for the same period in the previous year).
2. Cash Flows
Cash flow summary for the six months ended September 30, 2005:
Millions of Yen
Six months Six months Change
ended ended
September 30, September 30,
2004 2005
Net cash provided by operating activities Y 6,547 Y 2,270 Y (4,277)
Net cash used in investing activities (7,891) 7,138 15,029
Net cash used in financing activities (6,814) (23,840) (17,026)
Effect of exchange rate changes on cash and cash 1,052 527 (525)
equivalents
Net increase (decrease) in cash and cash equivalents (7,106) (13,905) (6,799)
Cash and cash equivalents, end of the period 79,779 75,678 (4,101)
Cash and cash equivalents (gcashh) amounted to Y 75,678 million (94.9 % of the
figure for the same period in previous year) at the end of September 30, 2005,
decreased Y 13,905 million compared to the amount at the end of last fiscal
year. This resulted primarily from income before income taxes of Y 14,335
million (123.7 % of the figure for the same period in previous year) and the
proceeds from sales of shares of an affiliated company of Y 11,016 million,
offset by payment of taxes of Y 10,268 million ( 724.1% of the figure for the
same period in previous year), capital expenditures of Y 6,187 million ( 79.7 %
of the figure for the same period in previous year), and redemption of bond of Y
15,000 million.
Cash flows from operating activities:
Net cash provided by operating activities amounted to Y 2,270 million (34.7% of the figure for the same period in
previous year) for the six months ended September 30, 2005. This resulted primarily from income before income taxes
of Y 14,335 million, offset by payment of taxes of Y 10,268 million.
Cash flows from investing activities:
Net cash provided by investing activities amounted to Y 7,138 million for the six months ended September 30, 2005
(used Y 7,891 million for the same period in previous year). This resulted primarily from the proceeds from sales of
shares of affiliated companies of Y 11,016 million and proceeds from sales of fixed assets Y 2,310 million,
offset by capital expenditures of Y 6,187 million for investment into facilities.
Cash flows from financing activities:
Net cash used in financing activities amounted to Y 23,840 million for the six months ended September 30, 2005
(349.9% of the figure for the same period in previous year). This was primarily due to redemption of bond of Y
15,000 million and payments of dividends of Y 3,341 million.
The following table represents certain cash flow indexes for the six months ended September 30, 2005:
Six months Six months Year ended March
31, 2005
ended ended
September 30, September 30,
2004 2005
Equity-assets ratio (%) 33.9 44.3 34.8
Equity-assets ratio at fair value (%) 99.4 110.2 93.4
Years of debt redemption (years) 11.8 29.9 2.8
Interest coverage ratio (times) 13.8 4.3 28.6
Equity-assets ratio = Stockholders ' equity Y Total assets
Equity-assets ratio at fair value = Market capitalization Y Total assets
Years of debt redemption = Interest-bearing debts Y Cash flows from operating activities
Interest coverage ratio = Cash flows from operating activities Y Interest expense
Notes:
1. Each index is calculated from figures prepared in accordance with U.S. generally accepted
accounting principles (U.S. GAAP).
2. Cash flows from operating activities are from the consolidated statements of cash flow.
3. Interest-bearing debt covers all liabilities with interest in the consolidated balance sheets.
3. Activities for the Future
Digital Entertainment
In our Computer & Video Games business, we plan to release Pro Evolution Soccer 5, the European version of WORLD
SOCCER Winning Eleven 9, which has a hit in Japan. In Japan, meanwhile, we intend to expand our range of sports game
titles with such offerings as the soccer game J. League Winning Eleven 9 Asia Championship, the and JIKKYOU PAWAFURU
PUROYAKYU 12, KETTEIBAN in the PAWAPURO series and plan to release GENSOSUIKODEN V which is the sequel of popular
series. Also slated is the release of METAL GEAR ACID 2, the latest installment in the Metal Gear series which
incorporates the SOLID EYE TOBIDAC!D stereoscopic viewing system which will allow users to see the world in a whole
new light. In addition, we will be enhancing our library of other popular titles, starting with the Yu-Gi-Oh! series
that has enjoyed sustained popularity abroad.
In our Toy & Hobby business, we plan further expansion of our product lineup, especially card games. The latest
version of the Yu-Gi-Oh! card game is expected to go on sale in Japan, the U.S., and Europe, and by continuing to
organize teaching events and competitions in various locations, we hope to make the series more globally popular
than ever before. In the area of toys for boys, the GRANSAZERS and THE JUSTIRISERS collection will soon be joined by
the SAZER X series, which is affiliated with the TV program of the same name that began broadcasting in October
2005.
In our Amusement business, we will continue efforts to boost sales of items incorporating e-AMUSEMENT services for
amusement arcades. As for video games, we will be releasing a new installment in the MAH-JONG FIGHT CLUB series now
well established. In the area of token-operated games, we will concentrate on further strengthening sales of our
popular large-scale horse-racing game machines.
In our Online business, we intend to expand our WORLD SOCCER Winning Eleven series online match-up service to make
it available in all parts of the globe on both PC and mobile formats. Plans also call for the Company's popular
Tokimeki Memorial to go online as a school community game for large numbers of players. In the area of mobile
content distribution services, we will make the most of our extensive library of content, beginning with the WORLD
SOCCER Winning Eleven series, in our campaign to expand our service area and add new carriers to our line-up.
In our Multimedia business, we plan to bring out a steady stream of music CDs, video DVDs, books and other items
that feature Konami content. We also expect to continue producing our own original animated programs, tying in
merchandise from in all sectors of our Digital Entertainment Segment.
Gaming & System
In this segment, plan to adopt a two-pronged approach that focuses on, first, slot machines, particularly the new
K2V gaming platform that attracted strong attention at the recent gaming expo, and, second, casino management
systems. In October 2005, we concluded a sales agreement which installment amounts are the biggest for the Company
in the past years for the Casino Management System with a casino directly operated by the government of Quebec in
Canada. With the legalization of gambling in Pennsylvania and other jurisdictions in North America and growing
demand in Europe and Southeast Asia, we believe the gaming market is poised for further expansion. The Company
intends to make the most of this opportunity, both by tapping the increased production capacity provided by our new
office building, and by enhancing our customer service and training facilities, indispensable to strengthening
system sales.
Health & Fitness
In our fitness club management business, we plan to continue expanding our network of high-quality facilities in
pursuit of our goal of providing safe, clean, comfortable sports clubs that cater to all our customers' fitness
needs.
In the fitness products business, we plan to make further headway in installing the e-XAX IT health management
system, enhance our lineup of original supplements and products for the home and actively develop products and
services designed to help seniors stay healthy and avoid the need for nursing care.
In July 2005, The Company decided to give its name to the Asia Series 2005, the first official international
baseball championship in which the top baseball teams from China, Chinese Taipei, South Korea, and Japan will
compete for the top spot in Asia. This event, to take place in November, is officially called the KONAMI CUP Asia
Series 2005. Through our Digital Entertainment and Health & Fitness segments, we help bring sports to people around
the world. Also, as an official partner of Nippon Professional Baseball, we have long supported the healthy
development of professional baseball. By sponsoring the Asia Series 2005, we hope again to create fun and excitement
for sports lovers everywhere.
We did not revise our consolidated earnings forecast for the year ending March 31, 2006, as announced on May 10,
2005. Year-end dividend payout for the consolidated fiscal year ending March 31, 2006 will be Y27 per share
(dividend for the year: Y54 per share including an interim dividend of Y27 per share).
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.
4. Consolidated Financial Statements
(1) Consolidated Balance Sheets (Unaudited)
Millions of Yen Thousands of
U.S. Dollars
September 30, September 30, March 31, 2005 September 30,
2004 2005 2005
% % %
ASSETS
CURRENT ASSETS:
Cash and cash equivalents Y 79,779 Y 75,678 Y 89,583 $668,593
Trade notes and accounts 25,017 25,029 33,577 221,124
receivable, net of allowance for
doubtful accounts of Y754 million,
Y 463 million ($ 4,090 thousand)
and Y604 million at September 30,
2004, September 30, 2005 and March
31, 2005, respectively
Inventories 23,826 22,550 15,488 199,223
Deferred income taxes, net 13,798 13,229 18,392 116,873
Prepaid expenses and other current 8,045 9,833 4,898 86,872
assets
Total current assets 150,465 51.1 146,319 48.5 161,938 53.2 1,292,685
PROPERTY AND EQUIPMENT, net 47,394 16.1 52,277 17.3 46,595 15.3 461,852
INVESTMENTS AND OTHER ASSETS:
Investments in marketable 130 185 165 1,634
securities
Investments in affiliates 9,419 - 5,184 -
Identifiable intangible assets 46,389 45,944 45,991 405,902
Goodwill 463 15,471 849 136,682
Lease deposits 23,684 25,032 24,216 221,150
Other assets 16,330 16,793 19,383 148,361
Total investments and other assets 96,415 32.8 103,425 34.2 95,788 31.5 913,729
TOTAL ASSETS Y 294,274 100.0 Y 302,021 100.0 Y 304,321 100.0 $2,668,266
See accompanying notes to consolidated financial statements
Millions of Yen Thousands of
U.S. Dollars
September 30, September 30, March 31, 2005 September 30,
2004 2005 2005
% % %
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Short-term borrowings Y 7,073 Y 9,990 Y8,582 $88,259
Current portion of long-term debt 17,591 17,147 16,727 151,489
and capital lease obligations
Trade notes and accounts payable 16,477 13,399 16,134 118,376
Accrued income taxes 21,960 19,770 28,372 174,662
Accrued expenses 18,173 17,248 19,875 152,381
Deferred revenue 6,088 5,986 5,396 52,885
Other current liabilities 4,139 4,080 4,741 36,045
Total current liabilities 91,501 31.1 87,620 29.0 99,827 32.8 774,097
LONG-TERM LIABILITIES:
Long-term debt and capital lease 52,572 40,717 52,780 359,723
obligations, less current portion
Accrued pension and severance 2,357 2,614 2,344 23,094
costs
Deferred income taxes, net 20,731 14,936 16,147 131,955
Other long-term liabilities 2,307 6,670 1,879 58,927
Total long-term liabilities 77,967 26.5 64,937 21.5 73,150 24.0 573,699
TOTAL LIABILITIES 169,468 57.6 152,557 50.5 172,977 56.8 1,347,796
MINORITY INTEREST IN 24,959 8.5 15,598 5.2 25,487 8.4 137,804
CONSOLIDATED SUBSIDIARIES
COMMITMENTS AND CONTINGENCIES - - - - - - -
STOCKHOLDERS' EQUITY:
Common stock, no par value-
Authorized 450,000,000 shares; 47,399 16.1 47,399 15.7 47,399 15.6 418,756
issued 128,737,566 shares at
September 30, 2004 and March 31,
2005, 139,531,708 shares at
September 30, 2005;
Outstanding 119,823,294 shares at
September 30, 2004, 130,306,075
shares at September 30, 2005 and
119,481,411 shares at March 31,
2005
Additional paid-in capital 46,736 15.9 70,376 23.3 46,736 15.4 621,751
Legal Reserve - 207 0.1 - 1,829
Retained earnings 32,152 10.9 41,308 13.7 37,776 12.4 364,944
Accumulated other comprehensive 950 0.3 2,745 0.9 2,217 0.7 24,251
income
Total 127,237 43.2 162,035 53.7 134,128 44.1 1,431,531
Treasury stock, at cost-
8,914,272 shares, 9,225,633 shares (27,390) (9.3) (28,169) (9.3) (28,271) (9.3) (248,865)
and 9,256,155 shares at September
30, 2004, September 30, 2005 and
March 31, 2005, respectively
Total stockholders' equity 99,847 33.9 133,866 44.3 105,857 34.8 1,182,666
TOTAL LIABILITIES AND Y 294,274 100.0 Y 302,021 100.0 Y 304,321 100.0 $2,668,266
STOCKHOLDERS' EQUITY
See accompanying notes to consolidated financial statements
(2) Consolidated Statements of Operations (Unaudited)
Millions of Yen Thousands of
U.S. Dollars
Six months ended Six months ended Year ended Six months
September 30, September 30, ended
2004 2005 March 31, 2005 September 30,
2005
% % %
NET REVENUES:
Product sales revenue Y 74,933 Y 74,377 Y183,030 $ 657,099
Service revenue 39,076 37,493 77,661 331,239
Total net revenues 114,009 100.0 111,870 100.0 260,691 100.0 988,338
COSTS AND EXPENSES:
Costs of products sold 45,409 44,038 114,547 389,063
Costs of services rendered 33,205 36,572 65,816 323,103
Selling, general and administrative 23,544 23,798 52,192 210,247
Total costs and expenses 102,158 89.6 104,408 93.3 232,555 89.2 922,413
Operating income 11,851 10.4 7,462 6.7 28,136 10.8 65,925
OTHER INCOME (EXPENSES):
Interest income 239 365 518 3,225
Interest expense (475) (531) (971) (4,691)
Gain on sale of shares of an - 6,917 563 61,109
affiliated company
Other, net (29) 122 (804) 1,077
Other income (expenses), net (265) (0.2) 6,873 6.1 (694) (0.3) 60,720
INCOME BEFORE INCOME TAXES, 11,586 10.2 14,335 12.8 27,442 10.5 126,645
MINORITY INTEREST AND EQUITY IN NET
INCOME(LOSS) OF AFFILIATED
COMPANIES
INCOME TAXES: 5,819 5.1 7,167 6.4 7,902 3.0 (63,318)
INCOME BEFORE MINORITY INTEREST AND 5,767 5.1 7,168 6.4 19,540 7.5 63,327
EQUITY IN NET INCOME(LOSS) OF
AFFILIATED COMPANIES
MINORITY INTEREST IN INCOME OF 1,590 1.4 204 0.2 2,761 1.1 (1,802)
CONSOLIDATED SUBSIDIARIES
EQUITY IN NET INCOME(LOSS) OF (2,551) (2.3) - - (6,293) (2.4) -
AFFILIATED COMPANIES
NET INCOME Y 1,626 1.4 Y 6,964 6.2 Y10,486 4.0 $61,525
See accompanying notes to consolidated financial statements
PER SHARE DATA: Yen U.S. Dollars
Six months Six months Year ended Six months
ended ended ended
September 30, September 30, March 31, September 30,
2004 2005 2005 2005
Basic net income per share Y13.51 Y53.45 Y 87.41 $ 0.47
Diluted net income per share 13.51 53.44 87.41 0.47
Weighted-average common shares
outstanding 120,388,556 130,300,952 119,970,052
See accompanying notes to consolidated financial statements
Consolidated Statements of Stockholders' Equity (Unaudited)
(3)
For the six months ended September 30, 2004
Millions of Yen
Common Additional Legal Retained Accumulated Treasury Total
Stock Paid-in Earnings Other Stockholders'@Equity
Capital Comprehensive Stock,
Reserve Income (Loss)
at Cost
Balance at Y Y46,736 Y- Y33,779 Y(119) Y Y102,129
47,399 (25,666)
March 31, 2004
Net income 1,626 1,626
Cash dividends, Y (3,253) (3,253)
27.0 per share
Foreign currency 1,322 1,322
translation
adjustments
Net unrealized (253) (253)
gains on
available-for-sale
securities
Repurchase of (1,724) (1,724)
treasury stock
Balance at Y Y46,736 Y- Y 32,152 Y950 Y Y99,847
47,399 (27,390)
September 30,
2004
For the six months ended September 30,
2005
Millions of Yen
Common Additional Legal Retained Accumulated Treasury Total Stockholders'
Stock Paid-in Earnings Other Equity
Capital Reserve Comprehensive Stock,
Income (Loss)
at Cost
Balance at Y Y46,736 Y@ - Y37,776 Y2,217 Y Y105,857
47,399 (28,271)
March 31, 2005
Net income 6,964 6,964
Cash dividends, Y (3,225) (3,225)
27.0 per share
Foreign currency 749 749
translation
adjustments
Net unrealized (221) (221)
losses on
available-for-sale
securities
Transfer from 207 207
Retained Earnings
Transfer to Legal (207) (207)
Reserve
Common stock 23,583 23,583
issued
Stock compensation 57 57
Reissuance of 102 102
treasury stock
Balance at Y Y70,376 Y207 Y41,308 Y2,745 Y Y133,866
47,399 (28,169)
September 30,
2005
See accompanying notes to consolidated financial statements
For the year ended March 31, 2005
Millions of Yen
Common Additional Legal Retained Accumulated Treasury Total
Stock Paid-in Earnings Other Stock, Stockholders'
Capital Reserve Comprehensive Equity
Income (Loss) at Cost
Balance at Y47,399 Y46,736 Y- Y33,779 Y(119) Y Y102,129
(25,666)
March 31, 2005
Net income 10,486 10,486
Cash dividends, Y (6,489) (6,489)
54.0 per
share
Foreign currency 2,285 2,285
translation
adjustments
Net unrealized (20) (20)
gains on
available-for-sale
securities
Adjustment for 71 71
minimum pension
liability
Repurchase of (2,605) (2,605)
treasury stock
Balance at Y47,399 Y46,736 Y - Y37,776 Y2,217 Y Y105,857
(28,271)
March 31, 2005
For the six months ended September 30,
2005
Thousands of U.S. Dollars
Common Additional Legal Retained Accumulated Treasury Total
Stock Paid-in Earnings Other Stockholders'
Capital Reserve Comprehensive Stock, Equity
Income (Loss)
at Cost
Balance at $418,756 $412,899 $ - $333,740 $19,586 $ $935,215
(249,766)
September 30, 2004
Net income 61,525 61,525
Cash dividends, (28,492) (28,492)
$0.24 per share
Foreign currency 6,617 6,617
translation
adjustments
Net unrealized (1,952) (1,952)
losses on
available-for-sale
securities
Transfer from 1,829 1,829
Retained Earnings
Transfer to Legal (1,829) (1,829)
Reserve
Common stock issued 208,348 208,348
Stock compensation 504 504
Reissuance of 901 901
treasury stock
Balance at $418,756 $621,751 $1,829 $364,944 $24,251 $ $1,182,666
(248,865)
September 30, 2005
See accompanying notes to consolidated financial statements
(4) Consolidated Statements of Cash Flows (Unaudited)
Millions of Yen Thousands
of U.S.
Dollars
Six months Six months Year ended Six months
ended
ended ended March 31, September
30, 2005
September September 2005
30, 2004 30, 2005
Cash flows from operating activities:
Net income Y 1,626 Y 6,964 Y 10,486 $ 61,525
Adjustments to reconcile net income to net cash
provided by operating activities -
Depreciation and amortization 4,224 5,054 9,360 44,651
Allowance (Reversal) for doubtful receivables (455) 814 (400) 7,191
Loss on sale or disposal of property and 635 830 1,553 7,333
equipment, net
Loss on sale of marketable securities 46 - 46 -
Gain on sales of shares of an affiliated company - (6,917) (563) (61,110)
Equity in net loss of affiliated companies 2,551 - 6,293 -
Minority interest 1,590 204 2,761 1,802
Deferred income taxes 1,616 4,104 (7,615) 36,258
Change in assets and liabilities, net of
business acquired:
Decrease (increase) in trade notes and accounts 955 10,797 (5,632) 95,388
receivable
Decrease (increase) in inventories (5,246) (6,156) 2,949 (54,386)
Increase (decrease) in trade notes and accounts (23) (2,619) 352 (23,138)
payable
Increase (decrease) in accrued income taxes (1,418) (10,268) 4,954 (90,715)
Other, net 446 (537) 3,216 (4,744)
Net cash provided by operating activities 6,547 2,270 27,760 20,055
Cash flows from investing activities:
Proceeds from sales of shares of affiliated - 11,016 1,407 97,323
companies
Capital expenditures (7,764) (6,187) (15,818) (54,660)
Proceeds from sales of property and equipment 333 2,310 696 20,408
Proceeds from sales of investments in marketable 22 - 22 -
securities
Acquisition of a new subsidiary, net cash - 1,433 - 12,660
aquired
Decrease in lease deposits, net 165 (827) (542) (7,306)
Expenditure from acquisition of minority - (695) - (6,140)
interests
Other, net (647) 88 (108) 777
Net cash provided by (used in) investing (7,891) 7,138 (14,343) 63,062
activities
Cash flows from financing activities:
Net increase (decrease) in short-term borrowings 4,485 (3,632) 6,001 (32,088)
Repayments of long-term debt (588) (642) (1,177) (5,672)
Principal payments under capital lease (1,176) (1,210) (2,255) (10,690)
obligations
Redemption of bonds - (15,000) - (132,521)
Dividends paid (4,217) (3,341) (7,963) (29,517)
Purchases of treasury stock by parent company (2,605) (256)
(1,724) (29)
Purchases of treasury stock by subsidiaries (3,555) (1) (3,593) (9)
Other, net (39) 15 (78) 134
Net cash used in financing activities (6,814) (23,840) (11,670) (210,619)
Effect of exchange rate changes on cash and cash 1,052 527 951 4,656
equivalents
Net increase (decrease) in cash and cash (7,106) (13,905) 2,698 (122,847)
equivalents
Cash and cash equivalents, beginning of the 86,885 89,583 86,885 791,440
period
Cash and cash equivalents, end of the period Y 79,779 Y 75,678 Y 89,583 $668,593
See accompanying notes to consolidated financial statements
5. Segment Information (Unaudited)
(1) Operations in Different Industries
Six months ended Digital Gaming Health & Other, Consolidated
Entertainment Fitness
September 30, Corporate and
2004 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 64,489 Y 5,898 Y 39,719 Y 3,903 Y 114,009
Intersegment 411 - 59 (470) -
Total 64,900 5,898 39,778 3,433 114,009
Operating 52,510 5,141 38,038 6,469 102,158
expenses
Operating income Y 12,390 Y 757 Y 1,740 Y (3,036) Y 11,851
(loss)
Six months ended Digital Health & Other, Consolidated
Entertainment Fitness
September 30, Gaming Corporate and
2005 Eliminations
(Millions of Yen)
Net revenue:
Customers Y 65,864 Y 4,727 Y 40,553 Y 726 Y 111,870
Intersegment 807 - 56 (863) -
Total 66,671 4,727 40,609 (137) 111,870
Operating 53,623 4,724 39,928 6,133 104,408
expenses
Operating income Y 13,048 Y 3 Y 681 Y (6,270) Y 7,462
(loss)
Year ended Digital Health & Other, Consolidated
Entertainment Fitness
March 31, 2005 Gaming Corporate and
Eliminations
(Millions of Yen)
Net revenue:
Customers Y 162,797 Y 11,641 Y 78,843 Y 7,410 Y 260,691
Intersegment 874 2 263 (1,139) -
Total 163,671 11,643 79,106 6,271 260,691
Operating 131,018 10,201 77,059 14,277 232,555
expenses
Operating income Y 32,653 Y 1,442 Y 2,047 Y (8,006) Y 28,136
(loss)
Six months ended Digital Health & Other, Consolidated
Entertainment Fitness
September 30, Gaming Corporate and
2005 Eliminations
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 581,889 $ 41,762 $ 358,274 $ 6,413 $ 988,338
Intersegment 7,129 - 494 (7,623) -
Total 589,018 41,762 358,768 (1,210) 998,338
Operating 473,743 41,735 352,752 54,183 922,413
expenses
Operating income $ 115,275 $ 27 $ 6,016 $ (55,393) $ 65,925
(loss)
Notes: 1. Primary businesses of each segment are as follows:
Digital Entertainment Segment: Digital Entertainment Segment contains former three business
segments, Computer & Video Games, Toy & Hobby and Amusement, and two new business areas, Online
and Multimedia to respond to the change on the digital entertainment market.
Computer & Video Games: Production, manufacture and sale of video game
software for consoles.
Production of contents for mobile phones.
Distribution of video game software
produced by third parties.
Production of online game software.
Toy & Hobby: Planning, production, manufacture and sale of card
games, electronic toys, toys for boys, candy toys,
figures, character goods and others.
Amusement: Planning, manufacture and sale of the content for
amusement facilities such as video games and token-
operated games.
Online: Creation of systems for online games.
Management and operation of online servers.
Distribution of the content for mobile phones.
Multimedia: Planning, production and sale of the products
related to music and video.
Planning, production and sale of books and
magazines.
Gaming & System segment: Production manufacture and sale of gaming machines
for casinos and casino management systems.
Health & Fitness Segment: Management of fitness centers.
Production manufacture and sale of
gaming machines and health-related products.
2. Computer & Video game Segment, Toy & Hobby Segment and Amusement Segment were reorganized to
Digital Entertainment Segment effective on April 1, 2005. Thus, records in previous fiscal year
are reclassified into new business segment.
3. '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.'
4. 'Corporate' primarily consists of administrative expenses of the Company.
5. 'Eliminations' primarily consist of eliminations of intercompany sales and of intercompany
profits on inventories.
6. Intersegment revenues primarily consist of Digital Entertainment segment to Health & Fitness
segment sales of hardware and components from Amusement Health & Fitness.
7. Gaming segment had changed its name to Gaming & System segment from October 1, 2005.
(2) Operations in Geographic Areas
Six months ended Japan Americas Europe Asia Total Eliminations Consolidated
September 30, 2004 /Oceania
/Others
(Millions of Yen)
Net revenue:
Customers Y 85,676 Y 14,422 Y 10,099 Y 3,812 Y 114,009 - Y 114,009
Intersegment 21,709 852 51 43 22,655 Y (22,655) -
Total 107,385 15,274 10,150 3,855 136,664 (22,655) 114,009
Operating expenses 94,885 15,097 9,915 3,188 123,085 (20,927) 102,158
Operating income Y 12,500 Y 177 Y 235 Y 667 Y 13,579 Y (1,728) Y 11,851
Six months ended Japan Americas Europe Asia Total Eliminations Consolidated
September 30, 2005 /Oceania
/Others
(Millions of Yen)
Net revenue:
Customers Y 90,332 Y 12,358 Y 5,120 Y 4,060 Y 111,870 - Y 111,870
Intersegment 11,396 881 22 64 12,363 Y (12,363) -
Total 101,728 13,239 5,142 4,124 124,233 (12,363) 111,870
Operating expenses 93,063 13,557 6,923 3,268 116,811 (12,403) 104,408
Operating income Y 8,665 Y (318) Y (1,781) Y 856 Y 7,422 Y 40 Y 7,462
Year ended Japan Americas Europe Asia Total Eliminations Consolidated
March 31, 2005 /Oceania
/Others
(Millions of Yen)
Net revenue:
Customers Y 176,566 Y 41,480 Y 34,878 Y 7,767 Y 260,691 - Y 260,691
Intersegment 57,123 1,593 450 419 59,585 Y (59,585) -
Total 233,689 43,073 35,328 8,186 320,276 (59,585) 260,691
Operating expenses 211,500 41,682 32,207 6,684 292,073 (59,518) 232,555
Operating income Y 22,189 Y 1,391 Y 3,121 Y 1,502 Y 28,203 Y (67) Y 28,136
Six months ended Japan Americas Europe Asia Total Eliminations Consolidated
September 30, 2005 /Oceania
/Others
(Thousands of U.S. Dollars)
Net revenue:
Customers $ 798,056 $ 109,179 $ 45,234 $ 35,869 $ 988,338 - $ 988,338
Intersegment 100,681 7,783 194 565 109,223 $ (109,223) -
Total 898,737 116,962 45,428 36,434 1,097,561 (109,223) 988,338
Operating expenses 822,183 119,772 61,163 28,872 1,031,990 (109,557) 922,413
Operating income $ 76,554 $ (2,810) $ (15,735) $ 7,562 $ 65,571 $ 354 $ 65,925
Note:
1. For the purpose of presenting its operations in geographic areas above, the Company and its
subsidiaries attribute revenues from external customers to individual countries in each area based
on where products are sold and services are provided.
Notes (Unaudited)
1. The U.S. dollar amounts included herein represent a translation using the mid price for telegraphic transfer of
U.S. dollars as of September 30, 2005 of Y113.19 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 U.S. generally accepted
accounting principles('U.S.GAAP')
Subsequent events
For Six months ended September 30, 2004
The Board of Directors of the Company resolved a plan to set a limit to
acquisition of treasury stock on October 21, 2004, pursuant to Article 211-3-1-2
of the Commercial Code of Japan to perform a timely and flexible capital
strategy.
Details of the Limit to Acquisition of Treasury Stocks
1. Type of shares to be acquired: Common Stock of the Company
2. Number of shares to be acquired: 1.5 million shares (maximum)
3. Total cost of shares to be acquired: 4.5 billion yen (maximum)
4. Treasury stock acquiring schedule: From November 11, 2004 to May 10, 2005
For Six months ended September 30, 2005
The Company, Konami Sports Life Corporation (hereafter referred as 'Konami
Sports Life') and Konami Sports Corporation (hereafter referred as 'Konami
Sports') hereby announce that their respective Boards of Directors' decided
through resolutions at meetings held on today, November 7, 2005, to merge Konami
Sports Life into Konami Sports into new Konami Sports, and to effect share
exchange share exchange between the new Konami Sports and the Company, and have
executed a basic agreement among the three companies as parties thereto. The
Company will also shift to a holding company structure by separating its digital
entertainment business into a newly formed wholly owned subsidiary.
I. Merger of Konami Sports Life into Konami Sports into new Konami Sports and
turning Konami Sports into wholly owned subsidiary of the Company by share
exchange.
1.Objective
It is expected that the multiple needs of the Health & Fitness service industry
will expand as the arrival of population ages, birth rates decline, and people
become more health-conscious. To meet the change in the current environment, we
plan to merge Konami Sports, which operates sports clubs, and Konami Sports
Life, which provides health and fitness products and services, to create new
markets and provide more kinds of health and fitness services. In addition, we
plan to turn Konami Sports into a wholly owned subsidiary of the Company by
share exchange to allocate management resources properly, speed up management
decisions and maximize shareholder value.
2. Outline of merger
Schedule of the merger (planned)
January 5, 2006 Board of Director's meeting to approve the resolution of
basic agreement
January 26, 2006 Shareholders' meeting for approval on merger contracts
February 28, 2006 Date of merger
Method of merger
Konami Sports will be the surviving company and Konami Sports Life will
subsequently be dissolved.
Merger ratio
Registered name Konami Sports Corporation Konami Sports Life Corporation
(Surviving company) (Dissolving company)
Merger ratio 1 3.99
Share allotment ratio
3.99 shares of Konami Sports will be allotted to 1 share of Konami Sports Life.
Basis for the determination of merger ratio
The calculation of the merger ratio was conducted by Nikko Cordial Securities
Inc., ('Nikko') independently and reasonably based on each subject company's
request.
Nikko calculated the range of the merger ratio using adjusted a net asset method
for Konami Sports Life and the market share price method and the DCF method
(Discounted Cash Flow method) for Konami Sports.
The merger ratio was agreed after consideration and negotiation between the
subject companies based on the above evaluations.
However, this merger ratio may be changed after discussions between the subject
companies in the event material changes in the basis of calculation occur.
Number of shares to be allotted with respect to the merger
Konami Sports will allot 15,760,500 shares of its common stock held as treasury
stock, which includes 15,457,741 shares that will be succeeded from Konami
Sports Life, to the Company as a shareholder of Konami Sports Life.
Cash paid due to merger
Cash will not to be paid for this merger.
3. Outline of share exchange
Share exchange schedule (planned)
January 5, 2006 Board of Director's meetings to approve execution of on share
exchange agreement.
January 26, 2006 Extraordinary Shareholders' meetings for approval of share
exchange agreement.
February 23, 2006 Date of delisting of Konami Sports.
March 1, 2006 Date of share exchange.
Method of share exchange
In the condition of effectiveness of merger between Konami Sports Life and
Konami Sports, the Company and Konami Sports will execute share exchange that
the Company will become a complete parent company and Konami Sports will become
a wholly owned subsidiary.
Share exchange ratio
Registered name Konami Corporation Konami Sports Corporation
Complete parent company A wholly owned subsidiary
Share exchange ratio 1 0.79
Share allotment ratio
0.79 shares of Konami will be allotted to 1 share of Konami Sports. However,
there will be no share allotment for Konami Sports' shares that will be allotted
to the Company upon the merger between Konami Sports and Konami Sports Life.
Basis of calculation of share exchange ratio
The calculation of share exchange ratio was conducted by Nikko independently and
reasonably based on each subject company's request.
Nikko calculated the range of the share exchange ratio using the market share
price method and the DCF method for Konami Corporation and Konami Sports.
The share exchange ratio was agreed after consideration and negotiation between
the subject companies based on the above evaluations.
However, this share exchange ratio may be changed after discussions between the
subject companies in the event material changes in the basis of calculation
occur.
Number of shares will be allotted with respect to the share exchange
The Company will allot a total 9,898,911 shares of its common stock, including
4,024,078 newly issued shares and 5,874,833 shares held as treasury stocks.
Cash paid due to share exchange
Cash will not to be paid for this share exchange.
II. Shifting to holding company structure by company separation
1. Objective
The Konami group will endeavor to increase enterprise value and shareholder
value and fulfill the social responsibility of the Konami group by achievement
of the main aims provided below under the new holding company structure.
Improving management transparency
Konami group will endeavor to strengthen group governance through taking this
opportunity to shift to a holding company structure, to build on the work on
corporate governance we have done actively until now.
We will pursue management transparency by further strengthening of our group
management structure, separating the decision and supervision functions of the
group, delineating the execution function in each business clearly, speeding up
our management decision making, and executing business evaluation and allocating
management resources from our shareholders' point of view.
Creating a speedy and flexible management structure.
We will make clear the position within our group that each of the Digital
Entertainment Business, Health & Fitness Business and Gaming & System Business
have within our group and try to respond more speedily and flexibly to changes
in each business environment, with each of our group companies pursuing its area
of specialty and creativity in each business area. In addition, we will try to
create a structure that can execute business tie-ups, capital acquisitions and
other activities more quickly.
Creating a complete profit responsibility structure.
We will make our profit responsibility structure clear by assessing the
profitability of each business more completely.
The holding company will have functions of planning the corporate strategy of
the entire group, planning for investment projects through the allocation of
management resources and checking the status of business execution within each
subsidiary. Business subsidiaries will make timely and speedy decisions in each
company's business area. Thus, we will aim to maximize our business values at
the Konami group level.
2. Outline of company separation
Schedule of separation (planned)
January 5, 2006 Boards of Directors' meeting for preparation of separation
planning documents
January 26, 2006 Extraordinary shareholders' meetings for approval of
separation planning documents
March 31, 2006 Date of separation
Method of separation
The method to be used will be a company separation, with Konami (the Company) as
the separating company and a newly established Konami Digital Entertainment as
the succeeding company.
For the fiscal year ended March 31, 2005
On December 16, 2004, the Company entered into a plan of merger agreement with
three of its consolidated subsidiaries, Konami STUDIO, Konami TYO and Konami
JPN, which was approved in the extraordinary shareholders' meeting of each
company held on February 22, 2005. Under the terms of the agreement, 0.42, 1.00
and 0.81 of one share of the Company' common stocks were exchanged for each
common share of Konami STUDIO, Konami TYO and Konami JPN. The Company
consummated the mergers on April 1, 2005, by issuing 10,794,142 new common
shares to minority shareholders of those merged companies. The Company will
account for the acquisition of additional equity interest in the merged
companies as a step-acquisition.
On April 25, 2005, the Company sold its entire equity interest in Takara, an
equity-method investee, for total cash consideration of Y11,016 million. The
sale resulted in a gain of Y6,360 million.
On April 27, 2005, the Company acquired an additional 3,000,000 shares of
Hudson's newly issued common stock for total consideration of Y1,434 million in
cash. Accordingly, the Company's equity ownership interest in Hudson increased
from 45.47 % to 53.99 % and, as a result, Hudson became a consolidated
subsidiary. The transaction will be accounted for as a step-acquisition.
On June 23, 2005, the shareholders of the Company approved the Company's Board
of Directors resolutions on May 10 and 19, 2005 for approval of the nine plans
of stock subscription rights to directors and employees of the Company and its
subsidiaries. Those stock subscription rights plans are intended to enable the
grant of stock options and the total maximum number of shares issuable under the
plans is 1,562,900 shares of common stock of the Company. The exercise periods
will range from 4 months to 24 months through June 30, 2009, and exercise prices
will range from Y1,670 to Y2,857, except for one plan for which the exercise
price has not been set but will be equal to 1.20 times the daily average closing
price on the Tokyo Stock Exchange for the month prior to the grant date.
6. Summary of Non-consolidated Financial Results
for the Six Months Ended September 30, 2005
(Prepared in Accordance with Japanese GAAP)
November 7, 2005
KONAMI CORPORATION
Address: 4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number: 9766
URL: www.konami.net
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)
Date of Board Meeting to
approve the financial November 7, 2005
results:
Date of commencement of
interim dividend payment: November 30, 2005
Adoption of
interim dividend system: Yes
Adoption of
unit trading system: Yes (1 unit: 100 shares)
1. Financial Results for the Six Months Ended September 30, 2005
(1) Results of Operations
(Figures truncated)
Net Operating Ordinary
revenues income income
(Y million) Change (Y million) Change (Y million) Change
Six months ended Y51,016 (12.6)% Y5,179 709.2% Y 9,408 155.3%
September 30, 2005
Six months ended 58,350 (21.4) 640 (95.3) 3,685 (78.6)
September 30, 2004
Year ended 134,117 4,261 13,447
March 31, 2005
Net Net income
income per share
(Y million) Change (Y)
Six months ended Y11,197 304.8% Y85.93
September 30, 2005
Six months ended 2,766 (75.1) 22.98
September 30, 2004
Year ended 12,794 105.33
March 31, 2005
Notes:
1. Weighted-average common shares outstanding
Six months ended September 30, 2005: 130,300,952 shares
Six months ended September 30, 2004: 120,388,556 shares
Year ended March 31, 2005: 119,970,052 shares
2. Change in accounting policies: None
3. Change (%) of net revenues, operating income, ordinary income and net income represents the
percentage change of the increase or decrease compared to the same period of the previous year.
(2) Dividends
Cash dividends per share
Interim Annual
(Y) (Y)
Six months ended September 30, 2005 Y27.00 -
Six months ended September 30, 2004 27.00 -
Year ended March 31, 2005 - Y54.00
(3) Financial Position
(Figures truncated)
Total stockholders' Equity-assets Total stockholders'
Total assets equity ratio equity per share
(Y million) (Y million) (%) (Y)
September 30, 2005 Y203,217 Y149,486 73.6 Y1,147.20
September 30, 2004 179,580 105,512 58.8 880.57
March 31, 2005 187,798 111,423 59.3 931.24
Notes:
Number of shares outstanding
September 30, 2005: 130,306,075 shares
September 30, 2004: 119,823,294 shares
March 31, 2005: 119,481,411 shares
Number of treasury stock
September 30, 2005: 9,225,633 shares
September 30, 2004: 8,914,272 shares
March 31, 2005: 9,256,155 shares
2. Financial Forecast for the Year Ending March 31, 2006
Net Ordinary Net Cash dividends per share
revenues income income Year-end Annual
(Y million) (Y million) (Y million) (Y) (Y)
Year ending March 31, 2006 Y27.00 Y54.00
Note:
1. Non-consolidated financial forecast for the year ending March 31, 2006 is not disclosed.
7. Non-consolidated Financial Statements
(1) Non-consolidated Balance Sheets (Unaudited)
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
% % %
ASSETS
CURRENT ASSETS:
Cash and cash equivalents Y32,470 Y57,773 Y37,121
Trade notes receivable - 1 -
Trade accounts receivable 15,195 12,207 18,233
Inventories 6,592 13,061 5,585
Other (Note 1) 20,474 16,711 19,163
Allowance for doubtful accounts (167 ) ) (199 )
(16
Total current assets 74,566 41.5 99,738 49.1 79,904 42.5
FIXED ASSETS:
Tangible fixed assets (Note 2) 2,392 3,709 1,986
Intangible fixed assets 6,830 11,767 11,332
Investments and other assets 95,791 88,001 94,574
Investment securities 89,231 80,654 87,678
Other 6,685 7,446 7,008
Allowance for doubtful accounts (125 ) (98 ) (111 )
Total fixed assets 105,013 58.5 103,478 50.9 107,894 57.5
TOTAL ASSETS Y 100.0 Y203,217 100.0 Y 100.0
179,580 187,798
See accompanying notes to non-consolidated financial statements
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
% % %
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade notes payable Y5,887 Y1,448 Y5,662
Trade accounts payable 8,721 8,710 8,589
Current portion of long-term 912 2,152 912
debt
Current portion of long-term 15,000 15,000 15,000
bonds
Income taxes payable 134 573 3,245
Other (Note 4) 6,157 7,236 7,598
Total current liabilities 36,814 20.5 35,120 17.3 41,008 21.9
LONG-TERM LIABILITIES:
Straight bonds 30,000 15,000 30,000
Long-term debt 4,428 2,276 3,972
Allowance for directors' 1,354 1,332
retirement
1,354
Benefits
Allowance for loss incurred 1,430 - -
by subsidiaries
Long-term deposits received 41 2 41
Total long-term liabilities 37,253 20.7 18,610 9.1 35,367 18.8
Total liabilities 74,067 41.2 53,730 26.4 76,375 40.7
STOCKHOLDERS'' EQUITY:
Common Stock 47,398 26.4 47,398 23.3 47,398 25.2
Additional paid-in capital 47,106 26.2 60,236 29.6 47,106 25.1
Retained earnings 38,395 21.4 70,018 34.5 45,188 24.1
Legal reserve - 206 -
Voluntary earned surplus 29,094 34,094 29,094
Unappropriated earned surplus 9,300 35,716 16,093
Net unrealized gains on 1 0.0 1 0.0 0 0.0
available-for-sale securities
Treasury Stock (27,389 ) (15.2 ) (28,168 ) (13.8 ) (28,271 ) (15.1 )
Total stockholders' equity 105,512 58.8 149,486 73.6 111,423 59.3
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY Y 100.0 Y203,217 100.0 Y187,798 100.0
179,580
See accompanying notes to non-consolidated financial statements
(2) Non-consolidated Statements of Operations (Unaudited)
(Millions of Yen)
Six months ended Six months ended Year ended
September 30, 2004 September 30, 2005 March 31, 2005
% % %
Net revenues Y58,350 100.0 Y51,016 100.0 Y134,117 100.0
Cost of revenues 46,423 79.6 33,041 64.8 107,121 79.9
Gross profit 11,927 20.4 17,975 35.2 26,995 20.1
Selling, general and administrative 11,286 19.3 12,795 22,733 16.9
expenses 25.1
Operating income 640 1.1 5,179 10.1 4,261 3.2
Non-operating income (Note 1) 3,339 5.7 4,505 8.8 9.838 7.3
Non-operating expenses (Note 2) 295 0.5 276 0.5 652 0.5
Ordinary income 3,685 6.3 9,408 18.4 13,447 10.0
Extraordinary income (Note 3) 0 0.0 5,788 11.3 1,722 1.3
Extraordinary losses (Note 4) 12 0.0 25 0.0 67 0.1
Income before income taxes 3,673 6.3 15,172 29.7 15,102 11.2
Income taxes:
Current 672 697 4,410
Deferred 234 3,277 (2,102)
Total income taxes 906 1.6 3,974 7.8 2,308 1.7
Net income 2,766 4.7 11,197 21.9 12,794 9.5
Unappropriated earned surplus 6,534 7,710 6,534
carried forward
Received undistributed profit from - 16,808 -
merger
Interim cash dividends - - 3,235
Unappropriated earned surplus Y9,300 Y35,716 Y16,093
See accompanying notes to non-consolidated financial statements
Basis of Presentation
The accompanying interim non-consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in Japan.
Summary of Significant Accounting Policies
1. Marketable and Investment Securities
Investments in subsidiaries and affiliated companies and other securities for which the market value is
not readily determinable are stated at cost based on the moving average method.
Other securities for which the market value is determinable are stated at market value as of the
balance sheet date. Unrealized gains and losses on those securities are reported in the stockholders'
equity and the cost of securities sold is determined by the moving average method.
2. Derivative Financial Instruments
Derivative financial instruments are stated at market value.
3. Inventories
Inventories other than work in process are stated at cost determined by the moving average method.
Work in process consisting of hardware products is stated at cost determined by the moving average
method while work in process consisting of software products is stated at cost determined by the
specific identification method.
4. Depreciation Methods
Tangible fixed assets are depreciated using the declining balance method while intangible fixed assets
are amortized mainly using the straight-line method. For in-house software, amortization is computed
using the straight-line method based on the estimated useful life of 5 years.
Long-term prepaid expenses are amortized using the straight-line method.
5. Provisions
(a) Allowance for doubtful accounts
Generally, allowance for doubtful accounts is calculated based on the actual ratio of
bad debt losses incurred. For specific accounts with higher possibility of bad debt
loss, the allowance is determined by independent judgment.
(b) Allowance for employees' retirement benefits (Prepaid pension expense)
Allowance for retirement benefits to be paid to employees as of balance sheet date is
calculated based on the estimated amount of the projected benefit obligation and the
plan assets at the fiscal year-end. Unrecognized net transition asset or obligation
is amortized over 13 years.
Unrecognized actuarial net gain or loss will be amortized from the following fiscal
year within the average remaining service period of 8 years on a straight-line basis.
(c) Allowance for directors' retirement benefits
Required amount for retirement benefits to be paid to directors as of balance sheet
date is reserved as liability.
(d) Allowance for loss incurred by subsidiaries
Allowance for loss incurred by subsidiaries is provided at the amount determined
based on its financial condition.
6. Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated at the current
exchange rates as of the balance sheet date, and the translation gains and losses are credited or
charged to income.
7. Leases
Finance leases other than those that deem to transfer ownership of the leased property to the lessee
are accounted for as operating lease transactions.
8. Other significant matters
(a) Consumption Tax
Consumption tax is excluded from the stated amount of revenue and expenses.
Notes to Non-consolidated Financial Statements
Notes to Balance Sheets
1. Net amount of consumption tax payable and consumption tax to be refunded at
September 30, 2004, is included in 'Other' of current assets.
2. Accumulated depreciation of tangible fixed assets is as follows:
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
Accumulated depreciation of
tangible fixed assets Y3,306 Y5,734 Y3,949
3. The Company guarantees subsidiaries' loans payable to financial institutions
as follows:
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
Konami Software Shanghai, Inc. Y87 Y97 Y-
(US$ 785 thousand) (US$ 863 thousand) -
Total Y87 Y97 Y-
4. Net amount of consumption tax payable and consumption tax to be refunded at
September 30, 2005,
is included in 'Other' of current liabilities.
5. Number of shares issued for the six months ended September 30, 2005.
Reason for Issue: Merger
Issued date: April 1, 2005
Number of shares issued: 10,794,142 shares
Issued price: -
Total capitalized amount: -
Notes to Statements of Operations
1. Non-operating income mainly consists of the following:
Six months ended September 30, 2004: Interest income: Y 35 million, Dividend income: Y 3,199 million,
Foreign exchange gains: Y 57 million
Six months ended September 30, 2005: Interest income: Y 29 million, Dividend income: Y 4,394 million,
Foreign exchange gains: Y 4 million
Year ended March 31, 2005: Interest income: Y 64 million, Dividend income: Y 9,418 million,
Foreign exchange gains: Y 245 million
2. Non-operating expenses mainly consist of the following:
Six months ended September 30, 2004: Bond interest expenses: Y 200 million
Six months ended September 30, 2005: Bond interest expenses: Y 200 million
Year ended March 31, 2005: Bond interest expenses: Y 400 million
3. Extraordinary income mainly consists of the following:
Six months ended September 30, 2004: None
Six months ended September 30, 2005: Gain on sale of shares of affiliated companies: Y 5,555million
Year ended March 31, 2005: Gain on sale of shares of affiliated companies: Y 703 million
4. Extraordinary losses mainly consist of the following:
Six months ended September 30, 2004: Loss on sale and disposal of fixed assets : Y 12 million
Six months ended September 30, 2005: Loss on sale and disposal of fixed assets: Y 25 million
Year ended March 31, 2005: Loss on sale and disposal of fixed assets: Y 67 million
5. Depreciation expense for each period is as follows:
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
Tangible fixed assets Y464 Y634 Y1,303
Intangible fixed assets 285 1,352 715
Leases
Finance leases other than those deemed to transfer ownership of leased property
to the lessee:
1. Acquisition cost, accumulated depreciation, accumulated impairment and ending
balance of leased assets
(Millions of Yen)
September 30, 2004
Acquisition Accumulated Ending
cost depreciation balance
Tangible Y811 Y361 Y449
fixed assets
Intangible 10 3 7
fixed assets
Total Y821 Y364 Y456
(Millions of Yen)
September 30, 2005 March 31, 2005
Acquisition Accumulated Ending Acquisition Accumulated Ending
cost depreciation balance cost depreciation balance
Tangible
fixed assets Y662 Y386 Y275 Y772 Y419 Y353
Intangible 10 5 4 10 4 6
fixed assets
Total Y672 Y391 Y280 Y782 Y423 Y359
2. Obligations under finance leases
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
Due within one year Y188 Y156 Y166
Due after one year 288 136 209
Total Y476 Y292 Y375
3. Lease payments, depreciation expense, interest expense and impairment loss
(Millions of Yen)
Six month ended Six month ended Year ended
September 30, 2004 September 30, 2005 March 31, 2005
Lease payments Y110 Y87 Y211
Depreciation expense 105 84 202
Interest expense 2 3 6
4. Depreciation expense is computed according to the straight-line method with lease term as useful life and
salvage value of zero.
5. Interest expense is defined as the difference between total lease payment and acquisition cost, and
allocated using the effective interest method to each period.
6. There is no impairment loss allocated to lease assets.
Investments in Subsidiaries and Affiliated Companies
Investments in subsidiaries and affiliated companies as of each balance sheet
date are as follows:
(Millions of Yen)
September 30, 2004 September 30, 2005 March 31, 2005
Balance Balance Balance
sheet sheet sheet
amount Market amount Market amount Market
value value value
Differences Differences Differences
Investments Y1,312 Y46,073 Y44,761 Y8,167 Y6,618 Y(1,548)
in Y1,312 Y49,991 Y48,679
subsidiaries
Investments 12,194 15,005 2,810 - - - 12,194 14,756 2,562
in affiliated
companies
Total Y13,506 Y61,078 Y47,571 Y8,167 Y6,618 Y(1,548) Y13,506 Y64,748 Y51,241
Subsequent Events
For Six months ended September 30, 2004
The Board of Directors of the Company resolved a plan to set a limit to
acquisition of treasury stock on October 21, 2004, pursuant to Article 211-3-1-2
of the Commercial Code of Japan to perform a timely and flexible capital
strategy.
Details of the Limit to Acquisition of Treasury Stocks
1. Type of shares to be acquired: Common Stock of the Company
2. Number of shares to be acquired: 1.5 million shares (maximum)
3. Total cost of shares to be acquired: 4.5 billion yen (maximum)
4. Treasury stock acquiring schedule: From November 11, 2004 to May 10, 2005
5. Acquisition of method:
(a) Direct purchase from Securities Company
(b) Purchase through Securities Company by preannouncement
(c) Purchase through Securities Company by trust
For Six months ended September 30, 2005
1. The Company merged with Konami Marketing Japan, Inc., ('KMJ'), a wholly owned consolidated subsidiary of
the Company, effective on October 1, 2005, pursuant to resolutions of meetings of the Boards of Directors
of the Company held on July 28, 2005.
Prior to the merger with the Company, KMJ divided its distribution and customer-service departments and
established a new consolidated subsidiary 'Konami Logistics and Service, Inc.'.
(1) Objective of Merger
KMJ has operated the sales, logistics and service distribution functions for the Company's computer & video games, card
games toys, and amusement arcade machines including advertisement,.
The Company will take over KMJ's sales and promotion operations, and cover total functions from planning and production
up to advertisement and sales promotion for the Company's digital entertainment business. We believe that integrating
KMJ's businesses and management division into the Company will enable us to operate the business more effectively and
timely.
(2) Method of Merger
The Company is the surviving entity and KMJ was subsequently dissolved. This merger took place without the approval of
a meeting of the Company's shareholders in accordance with Article 413-3-1 of the Japanese Commercial Code. In
addition, KMJ divided its distribution and customer-service departments, and established a new consolidated subsidiary
without the approval of a meeting of KMJ's shareholders in accordance with Article 374-6-1 of the Japanese Commercial
Code.
Effective date of Merger: October 1, 2005
Merger Ratio
The Company KMJ
1.00 1.00
Cash Paid for the Merger: Cash will not be paid for the merger.
(3) Outline of Merging Companies
Registered name The Company KMJ
(Surviving company) (Dissolved company)
Total Assets 187,798 million yen 13,857 million yen
Stockholders' Equity 111,423 million yen 4,934 million yen
Number of employees 876 employees 304 employees
Capital 47,398 million yen 1,162 million yen
Total number of shares issued 128,737,566 shares 23,173 shares
Main Business Planning, production and Sales and promotion activities of
distribution activities of online consumer game software, card
games, consumer game software, games toys and amusement machines
card game, toys, contents for for whole sale
amusement facility and contents
for mobile phone
Financial figures above are as ended March, 2005
(4) Outline of New Consolidated Company
Registered name Konami Logistics and Service, Inc.
Number of employees 113 employees
Capital 100 million yen
Total number of shares issued 100 shares
Main business Repair, customer-service, set-up and delivery of amusement and health &
fitness related
2. The Company, Konami Sports Life Corporation (hereafter referred as 'Konami Sports Life') and Konami Sports
Corporation (hereafter referred as 'Konami Sports') hereby announce that their respective Boards of
Directors' decided through resolutions at meetings held on today, November 7, 2005, to merge Konami Sports
Life into Konami Sports into new Konami Sports, and to effect share exchange share exchange between the
new Konami Sports and the Company, and have executed a basic agreement among the three companies as
parties thereto. The Company will also shift to a holding company structure by separating its digital
entertainment business into a newly formed wholly owned subsidiary.
(1) Merger of Konami Sports Life into Konami Sports into new Konami Sports and
turning Konami Sports into wholly owned subsidiary of the Company by share
exchange.
A. Objective
It is expected that the multiple needs of the Health & Fitness service industry
will expand as the arrival of population ages, birth rates decline, and people
become more health-conscious. To meet cthe change in the current environment, we
plan to merge Konami Sports, which operates sports clubs, and Konami Sports
Life, which provides health and fitness products and services, to create new
markets and provide more kinds of health and fitness services. In addition, we
plan to turn Konami Sports into a wholly owned subsidiary of the Company by
share exchange to allocate management resources properly, speed up management
decisions and maximize shareholder value.
B. Outline of merger
Schedule of merger (planned)
January 5, 2006 Board of Director's meeting to approve the resolution of the
basic agreement.
January 26, 2006 Extraordinary shareholders' meeting approval of merger
contracts
February 28, 2006 Date of merger
Method of merger
Konami Sports will be the surviving company and Konami Sports Life will
subsequently be dissolved.
Merger ratio
Registered name Konami Sports Corporation Konami Sports Life Corporation
(Surviving company) (Dissolving company)
Merger ratio 1 3.99
Share allotment ratio
3.99 shares of Konami Sports will be allotted to 1 share of Konami Sports Life.
Basis for the determination of merger ratio
The calculation of the merger ratio was conducted by Nikko Cordial Securities
Inc., ('Nikko') independently and reasonably based on each subject company's
request.
Nikko calculated the range of the merger ratio using adjusted a net asset method
for Konami Sports Life and the market share price method and the DCF method
(Discounted Cash Flow method) for Konami Sports.
The merger ratio was agreed after consideration and negotiation between the
subject companies based on the above evaluations.
However, this merger ratio may be changed after discussions between the subject
companies in the event material changes in the basis of calculation occur.
Number of shares to be allotted with respect to the merger
Konami Sports will allot 15,760,500 shares of its common stock held as treasury
stock, which includes 15,457,741 shares that will be succeeded from Konami
Sports Life, to the Company as a shareholder of Konami Sports Life.
Cash paid due to merger
Cash will not to be paid for this merger.
3. Outline of share exchange
Share exchange schedule (planned)
January 5, 2006 Board of Director's meeting to approve execution of the share
exchange agreement.
January 26, 2006 Extraordinary shareholders' meetings for approval of share
exchange agreement.
February 23, 2006 Date of delisting of Konami Sports.
March 1, 2006 Date of share exchange.
Method of share exchange
In the condition of effectiveness of merger between Konami Sports Life and
Konami Sports, the Company and Konami Sports will execute share exchange that
the Company will become a complete parent company and Konami Sports will become
a wholly owned subsidiary.
Share exchange ratio
Registered name Konami Corporation Konami Sports Corporation
Complete parent company A wholly owned subsidiary
Share exchange ratio 1 0.79
Share allotment ratio
0.79 shares of the Company will be allotted to 1 share of Konami Sports.
However, there will be no share allotment for Konami Sports' shares that will be
allotted to the Company upon the merger between Sports and Konami Sports Life.
Basis of calculation of share exchange ratio
The calculation of share exchange ratio was conducted by Nikko independently and
reasonably based on each subject company's request.
Nikko calculated the range of the share exchange ratio using the market share
price method and the DCF method for Konami Corporation and Konami Sports.
The share exchange ratio was agreed after consideration and negotiation between
the subject companies based on the above evaluations.
However, this share exchange ratio may be changed after discussions between the
subject companies in that the event material changes in the basis of calculation
occur.
Number of shares will be allotted with respect to the share exchange
The Company will allot a total 9,898,911 shares of its common stock, icluding
4,024,078 newly issued shares and 5,874,833 shares held as treasury stocks.
Cash paid due to share exchange
Cash will not to be paid for this share exchange.
II. Shifting to holding company structure by company separation
1. Objective
The Konami group will endeavor to increase enterprise value and shareholder
value and fulfill the social responsibility of the Konami group by achievement
of the main aims provided below under the new holding company structure.
Improving management transparency
Konami group will endeavor to strengthen group governance through taking this
opportunity to shift to a holding company structure, to build on the work on
corporate governance we have done actively until now.
We will pursue management transparency by further strengthening of our group
management structure, separating the decision and supervision functions of the
group, delineating the execution function in each business clearly, speeding up
our management decision making, and executing business evaluation and allocating
management resources from our shareholders' point of view.
Creating a speedy and flexible management structure.
We will make clear the position within our group that each of the Digital
Entertainment Business, Health & Fitness Business and Gaming & System Business
have within our group and try to respond more speedily and flexibly to changes
in each business environment, with each of our group companies pursuing its area
of specialty and creativity in each business area. In addition, we will try to
create a structure that can execute business tie-ups, capital acquisitions and
other activities more quickly.
Creating a complete profit responsibility structure.
We will make our profit responsibility structure clear by assessing the
profitability of each business more completely.
The holding company will have functions of planning the corporate strategy of
the entire group, planning for investment projects through the allocation of
management resources and checking the status of business execution within each
subsidiary. Business subsidiaries will make timely and speedy decisions in each
company's business area. Thus, we will aim to maximize our business values at
the Konami group level.
2. Outline of company separation
Schedule of separation (planned)
January 5, 2006 Boards of Directors' meeting for approval of separation
planning documents
January 26, 2006 Extraordinary shareholders' meetings for approval of
separation planning documents
March 31, 2006 Date of separation
Method of separation
The method to be used is a company separation, with the Company as the
separating company and a newly established, Konami Digital Entertainment as the
succeeding company.
3. Corporate profiles after shifting to holding company structure.
(1) @KONAMI CORPORATION
Main Business
Planning and execution of management strategy to improve the profitability of
the entire group, as well as the management of business execution within each
subsidiaries.
Head office location
2-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
Representative
Chairman of the Board Kagemasa Kozuki
Capital 47,398 million yen
Total Assets Undecided
(2) @Konami Digital Entertainment Co., Ltd.
Main Business
Planning, production, manufacturing and distribution of online games, computer &
video games, amusement machines, toys, card games, contents for mobile phone,
music, image software, books, and magazines.
Head office location
6-10-1, Roppongi, Minato-ku, Tokyo, Japan
Representative
Representative Director and President Fumiaki Tanaka
Capital Undecided
Total Assets Undecided
(3) @Konami Sports & Life CorporationiFormerly Konami Sports Corporationj
Main Business
Management of sports clubs.
Operation of Fitness Clubs, and development, manufacturing and sales of health
and care support machines and health and care support goods.
Providing health services and prevention of care.
Head office location
4-10-1, Higashi-Shinagawa, Shinagawa-ku, Tokyo, Japan
Representative
Representative Director and President Toshimitsu Oishi
Capital 5,040 million yen
Total assets Undecided
(*)Konami Sports Corporation will change its registered name to Konami Sports &
Life Corporation on March 31, 2006, after executing share exchange.
4. Outline concerning company
(1) Registered KONAMI Konami Sports Konami Sports Life
name
CORPORATION Corporation Corporation
As of September 30, 2005 As of September 30, As of September 30,
2005 2005
(2) Main business Planning, production, and Operating fitness Developing,
distribution of computer & clubs, swimming manufacturing and
video games, amusement schools, gymnastic sales on fitness and
machines, toys, card games, schools and other care support machines
online games, contents for relating business. and fitness and care
mobile phone, music, image support goods.
software, books, and
magazines.
(3) Date of March 19, 1973 March 14, 1973 December 16, 1975
incorporation
(4) Head office 2-4-1, Marunouchi, 4-10-1, 4-10-27,
location Chiyoda-ku, Tokyo Higashi-shinagawa, Higashi-shinagawa,
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
(5) Representative Kagemasa Kozuki, Chairman of Toshimitsu Oishi, Fumiaki Tanaka,
the Board and CEO Representative Chairman of the Board
Director and President
(6) Capital 47,398 million yen 5,040 million yen 15,050 million yen
(7) Total number 139,531,708 shares 28,290,768 shares 3,950,000 shares
of shares
issued
(8) Shareholders' 149,486 million yen 11,368 million yen 30,630 million yen
Equity
(9) Total assets 203,217 million yen 48,719 million yen 32,329 million yen
(10) Financial year March 31 March 31 March 31
end
(11) Number of 1,960 employees 1,507 employees 80 employees
employees
(12) Major venders (Suppliers) (Suppliers) (Suppliers)
and customers
Sony Computer Entertainment Konami Sports Life Konami Corporation
Inc.
(Purchasers) Japan Beverage Inc.
Nintendo Co., Ltd.
Individual member, (Purchasers)
(Purchasers) Corporate member
Konami Sports
Konami Digital Entertainment
Inc.
(13) Major Kozuki Holding 9.69% Konami 54.64% KONAMI 100.00%
shareholder's B.V. Sports Life CORPORATION
and Corporation
shareholding Kozuki 9.69% Japan 2.45%
ratios Foundation For Trustee
Sports and Bank of
Education Japan, Ltd.
The Master Trust 7.46%
Bank of Japan,
Ltd, Konami 1.50%
Sports
Japan Trustee 7.46% Employee
Bank of Japan, Stock
Ltd. Purchase
KONAMI 6.61% Association
CORPORATION
(14) Main banks Sumitomo Mitsui Banking Bank of Sumitomo Mitsui
Corporation Tokyo-Mitsubishi Ltd. Banking Corporation
(15) Relationship among concerning company
Capital The Company owns 100% of the issued shares of Konami Sports Life. Konami Sports Life
owns 54.64% of the issued shares of Konami Sports.
Personnel The Chairman of the board of Konami Sports also serves as director of the Company.
The Chairman of the board of Konami Sports Life also serves as executive corporate
officer of the Company and director of Konami Sports.
The President of Konami Sports also serves as President of Konami Sports Life.
Transactions Konami Sports Life consigns the production of fitness machines to the Company.
Konami Sports purchases fitness machines and health related goods from Konami Sports
Life.
(16)Results for the last three fiscal years
A. KONAMI CORPORATION
(Unit: million yenj
Non-consolidated Consolidated
Fiscal Year March 31, March 31, March 31, September March 31, March 31, March 31, September
2003 2004 2005 30, 2005 2003 2004 2005 30, 2005
Net sales 130,186 146,654 134,117 51,016 253,657 273,412 260,691 111,870
Operating 11,577 13,303 4,261 5,179 (21,870) 40,713 28,136 7,462
income
Ordinary 13,068 16,910 13,447 9,408 (22,096) 40,107 27,442 14,335
income
Net income (11,284) 10,381 12,794 11,197 (28,519) 20,104 10,486 6,964
Net income (92.82) 83.71 105.33 85.93 (234.58) 166.86 87.41 53.45
per share
Annual dividend 54.00 54.00 54.00 27.00 | | | |
per share (interim)
Shareholders' 872.38 894.08 931.24 1,147.20 750.35 847.66 885.97 1,027.32
equity per share
B. Konami Sports Corporation
(Unit: million yen)
Non-consolidated Consolidated
Fiscal Year March 31, March 31, March 31, September March 31, March 31, March 31, September
2003 2004 2005 30, 2005 2003 2004 2005 30, 2005
Net sales 66,682 76,486 77,380 39,946 75,149 77,511 78,026 40,115
Operating 2,944 5,023 4,412 963 3,220 5,063 4,451 960
Income
Ordinary 2,791 4,738 3,965 833 3,002 4,771 4,003 827
income
Net income 950 1,157 1,204 301 933 1,155 1,216 291
Net income 34.67 43.81 48.08 12.50 34.05 43.71 48.59 12.07
per share
Annual dividend 45.60 30.00 30.00 15.00 | | | |
per share (interim)
Shareholders' 572.44 545.43 473.20 471.12 578.43 551.92 480.59 478.08
equity per share
C. Konami Sports Life Corporation
(Unit: million yenj
Non-consolidated
Fiscal Year March 31, March 31, March 31, September 30,
2003 2004 2005 2005
Net sales 14,135 7,222 5,043 2,158
Operating 585 (157) (705) (42)
income
Ordinary 475 425 (242) 190
income
Net income 239 223 (253) 152
Net income 101.24 56.60 (64.09) 38.45
per share
Annual dividend per - - - -
share
Shareholders' 7723.64 7,780.25 7,716.16 7,754.60
equity per share
Note: There is no consolidated financial statement for Konami Sports Life
Corporation
5. Future forecast after shifting to holding company structure
Forecasts for non-consolidated and consolidated operating results after company
separation, merger and share exchange will be released as soon as they are
determined.
For the fiscal year ended March 31, 2005
1. The Company merged with Konami Computer Entertainment Studios, Inc, ('Konami STUDIO), Konami Computer
Entertainment Tokyo, Inc, ('Konami TYO') and Konami Computer Entertainment Japan, Inc. ('Konami JPN'),
(collectively, the 'Production Companies') effective on April 1, 2005, under the approval of shareholders'
meetings of each company, held on February 22, 2005.
(1) Objective of Merger
Currently, for the Computer & Video Games business of Konami Group, Production Companies develop game software, and the
Company merchandizes such game software as a publisher and then, the products are sold through sales subsidiaries in
the Konami Group. With this merger, the Company will take over the three Production Company's active role. As a result,
the Company will be an integrated game software publisher taking functions, from planning and developing products to
acquiring merchandizing rights and sales promotion, which will enable us to be faster and more flexible in making
business decisions.
We will shift our managerial resources into the online game business which is expected to grow, integrating and sharing
the creative forces and know-how in developing game software which each Production Company presently possesses
separately. In addition, we will enhance the effectiveness of the merger by merging with Konami Online, Inc. on April
1, 2005, a wholly-owned subsidiary which is a core company in our online game business. We will also strive to improve
synergy with our other businesses, including our Amusement business and Toy & Hobby business.
(2) Method of Merger
The Company is the surviving entity and absorbs Konami STUDIO, Konami TYO and Konami JPN, which was subsequently
dissolved.
Effective date of Merger
April 1, 2005
Merger Ratio
Konami Konami STUDIO Konami TYO Konami JPN
1.00 0.42 1.00 0.81
Cash paid for the Merger
The Company set an appraised basis as, 50% of net income for the year ending March 31, 2005, less interim dividend.
Standard date is the day before the merger date, and was paid to shareholders' of each company as shown in the table
below.
Konami STUDIO 0 million yen (0 yen Y per share)
Konami TYO 424 million yen (88.00 yen Y per share)
Konami JPN 271 million yen (55.50 yen Y per share)
(3) Outline of Merging Companies
Registered name Konami STUDIO Konami TYO Konami JPN
Net revenues 8,907 million yen 15,766 million yen 11,232 million yen
Net income 17 million yen 3,563 million yen 2,400 million yen
Total Assets 7,826 million yen 17,791 million yen 18,193 million yen
Stockholders' Equity 5,371 million yen 13,039 million yen 14,658 million yen
Number of Employees 351 employees 293 employees 220 employees
Capital 1,213 million yen 2,323 million yen 3,366 million yen
Total number of shares 14,941,500 shares 14,601,840 shares 14,424,000 shares
issued
Main business Production, manufacture Production, manufacture Production, manufacture
and sales for consumer and sales for consumer and sales for consumer
game software game software game software
Financial figures above are as ended March 2005
2. On April 11, 2005, pursuant to resolutions adopted at meeting of the Board of Directors, the Company
supported HUDSON SOFT CO., LTD., ('Hudson') by accepting a third party allotment of new shares of Hudson,
an equity method affiliate of the Company. As a result, the Company owned 53.99% of Hudson shares and
Hudson became a consolidated subsidiary of the Company.
(1) Objective of Merger
Hudson expected to record a large loss in the fiscal year ended March 31, 2005, which was expected to result in a
substantial reduction in its net worth, and it requested the assistance of the Company in connection with the
reorganization of its business and operations. The Company has decided to accept the request and support its company.
The Company will support its reorganization and drive for synergy with its company especially in online business area.
(2) Method of acceptance of third share allotment of new shares
Number of Shares Acquired: 3,000,000 shares (Acquisition Cost: 1,434 million yen)
Date of Payment: April 27, 2005
(3) Outline of Hudson
Registered name Hudson
Net revenues 11,605 million yen
Net income (8,382) million yen
Total Assets 8,511 million yen
Stockholders' Equity 744 million yen
Number of Employee 480 employees
Capital 4,347 million yen
Total number of shares issued 16,214,000 shares
Main business Production, manufacture and sales
of contents for mobile, online
and consumer game software
Financial figures above are as ended March 2005
3. The Company made a decision to sale Takara Co., Ltd. ('Takara') shares, pursuant to resolutions adopted at
meeting of the Board of Directors, held on April 25, 2005, and sold them on this very day.
(1) Objective of sales of shares
The Company held 20,104,000 shares, or 22.2% of the outstanding shares of Takara.
In July 2000, in response to a request from Takara, the Company accepted a third party allotment of new shares of
Takara, and the Company has supported Takara since then. However, the business environment for both parties has changed
drastically over the last 4 years and 9 months, prompting the Company to review its capital relationship with Takara,
which led to its decision to sell its holdings of Takara shares.
(2) Outline of sale of holding shares
Number of Shares Owned before the Sale 20,104,000 shares
Number of Shares Sold 20,104,000 shares
(Sale Price: 11,016 million yen)
Number of Shares Owned after the Sale 0 shares
Gain on the Sale 5,555million yen (Non-Consolidated Basis)
Date of sale of holding shares April 25, 2005
(3) Outline of Takara
Registered name Takara
Net revenues 45,606 million yen
Net income (20,385) million yen
Total Assets 43,423 million yen
Stockholders' Equity 8,725 million yen
Number of Employees 484 employees
Capital 18,121 million yen
Total number of shares issued 90,462,244 shares
Main business Production and sales of
contents for toys
Financial figures above are as ended March 2005
This information is provided by RNS
The company news service from the London Stock Exchange
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