Consolidated Financial and Business Results
FY08 (Ended March 2009)

Faith, Inc.
May 15, 20091

11

Agenda1.

Consolidated Financial Results for the FY08 (Ended March2009)• Highlights of Consolidated Financial Results• Results of the Contents Business• Results of the Electronic Money Business

2. Full-Year Forecast of Consolidated Financial Results for the
FY09 (Ending March 2010)
3. Business Strategies• Faith's Business Concept• Faith Group's Vision of the Future• Multi-Content/Multi-Platform Strategies and Group Synergy

222Consolidated Financial Results for FY08 (Ended March 2009)3

33

Highlights of Consolidated Financial Results
Achieved continuous growth in net sales due to the expansion of the Electronic Money
business. Operating profit decreased caused by the cost increase for developing
distribution platform and procurement of contents.
Profit: billion

Net sales: billion

6

60

5

50

4

40

3

30

2

20

1

10

Net sales

00

EBITDA-10

Operatingprofit

FY04
-1

FY05

FY06

FY07

FY08

Net profit
-2

-20

4

44

Results of the Contents Business During FY08
Net sales decreased due to the decline of ringtone business revenue and the businessrealignment. Profits also decreased due to the upfront investments on the platform
development and the increase in costs for the content production and the procurement ofcontents.
Net sales: billion

Profit: billion

6

20
18

5

16
14

4

12
10

3

8
2

1

0

6

Net sales

4

EBITDA

2

Operatingprofit

0
FY04

FY05

FY06

FY07

FY08

5

55

Results of the Electronic Money Business During FY08
Net sales achieved continuous high growth driven by the increase in the total value of
settlement mainly in the online game category. Profit declined due to the increase in costfor the service development and the procurement.
Net sales: billion

Profit: million

700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
-50
-100
-150

45
40
35
30
25
20
15
10
5
0
FY04

FY05

FY06

FY07

FY08

-5
-10

Net sales
EBITDA
Operatingprofit666

Consolidated Balance Sheet (year-on-year change)
Reduce ¥2.6 liability with interest
Improve capital ratio by 2.3 points (41.5% to 43.8%)■ End of March 2008

■ End of March 2009

Short-term loans¥2.5 billion
Cash equivalent¥13.4 billion

Trade Notes andAccounts payable¥5.9 billion
Current liabilities¥13.9 billion

Accounts and notes
receivable ¥6.8 billion

Long-term liabilities¥4 billion
Fixed liabilities ¥5.6 billion

Current assets ¥22.6 billion

Capital stock ¥3.2 billion

Tangible fixed assets¥6 billion
Intangible fixed assets¥8.5 billion
Investment securities ¥3.4
billionFixed assets ¥13.4 billion

Capital surplus¥3.7 billion
Accumulated profit ¥7.6
billion
Net assets ¥16.5 billion

Total assets 36.1 billion yen

Total
liabilities¥19.6 billion

Short-term loans¥2 billion
Cash equivalent¥13.5 billion

includesliability withinterest¥6.7 billion
Accounts and notes
receivable ¥6.9 billion

Trade Notes andAccounts payable¥6.2 billion
Current liabilities¥13.4 billion
Long-term liabilities¥2 billion
Fixed liabilities ¥2.5 billion

Total
liabilities¥15.9 billion
includesliability withinterest¥4.1 billion

Capital stock ¥3.2 billion
Current assets ¥22 billion
Tangible fixed assets¥4 billion
Intangible fixed assets¥5.6 billion
Investment securities ¥1.7
billionFixed assets ¥8.4 billion

Capital surplus¥3.7 billion
Accumulated profit¥7.3 billion
Net assets ¥14.4 billion

Total assets 30.5 billion yen
777Highlights of Business
Development during FY08888

Highlights of Business Development during FY08
●GIGA NETWORKS launched a video distribution site GIGA
Miranca viewable on various devices including mobile phone, PC.
Content Business -Platform(Utilized Near Field Rights Management® technology)●An application to view video on mobile phone and PC has
preinstalled on the four major PC brands in Japan.
●Promoted video distribution service for PC equipped withterrestrial digital broadcasting tuner. (Viewable on PC mobile
phone and PC, Infrared communication system equipped)●KAZAS Channel, a total video distribution portal site, was preinstalled on a broadband TV which connects terrestrial digital
broadcasting and Internet seamlessly.

* For the outline of Faith Group, see p.44.

999

Highlights of Business Development during FY08

Content Business - Video Content●GIGA NETWORKS started distribution of "Koisuru Ketsuekigata", a drama
series of love stories by blood type specially produced for mobile phone incooperation with major distributors etc.
●GIGA NETWORKS, in collaboration with TBS DigNet and Kodansha, started
distribution of "Elemental GIRLS" on GIGA Miranca.
●GIGA NETWORKS started a tie-up promotion with WOWOW for"Gokurakucho 1-chome," a live-action drama of a popular comic series.
●GIGA NETWORKS produced "Tokyo Ghost Trip" in collaboration with Toho,
Sony Music Entertainment, DENTSU etc. and started distribution on GIGA
Miranca.
●Faith obtained the license to distribute "THE OUTSIDER" mixed martial arts
videos and started distribution on GIGA Miranca operated by GIGA
NETWORKS.
●GIGA NETWORKS and ISAO, the top 2 firms in the video distribution
industry, started partnership allowing the subscribers mutual access to bothsites.
●GIGA NETWORKS started distribution of Osamu Tezuka's major 6 anime
comic video series on GIGA Miranca.

* For the outline of Faith Group, see p.44.

10

1010

Expansion of Video Contents－Proactive content production－Collaboration with leading companies－Acquisition of appealing contents▲
Tokyo Ghost Trip

▼Judges Award winner in 23rd Digital Content Grand Prix
Tokyo 2008 ONLYPIC▲▼Koisuru Ketsuekigata▼Elemental GIRLS

Gokurakumachi▲MAMESHIBA-chome

1

11

1111

Expansion of Video Contents－Proactive content production－Collaboration with leading companies－Acquisition of appealing contents

12

1212

Expansion of Video Contents－Proactive content production－Collaboration with leading companies－Acquisition of appealing contents▲BANDAI Channel▲THE OUTSIDER▲Tezuka Osamu animations▼Short films

13

1313

Highlights of Business Development during FY08

Contents Business●Medical Communication launched Pocket Karte, in cooperation with
WILLCOM etc., a medical/health record management system retrievable on
mobile phone and PC, and accepted the MCPC Mobile Consumer Award
2009.
●Faith launched a content distribution site Eikyufumetsu Contents for mobile
phone and PC in collaboration with Credit Saison.
●Faith renewed mobile phone version of Eikyufumetsu Contents site incollaboration with Credit Saison and DeNA.
●Brave started collaboration in the music business with MySpace, one of theworld largest SNS, to promote an online content store, viBirth.
●Brave launched KASIMO, a lyric auto-display service during playback on
iTunes.
●Faith launched ROSE POINT ISLAND on Rose Online in collaboration with
ADWAYS to give away loyalty points in return for registering direct
marketing sites.
●Desperado's production film "PACO and the Magical Book" became a big hit
and Rose Online merchandised its characters.
●Faith started distribution of 3D characters developed from Rose Online and"PACO and the Magical Book" as mobile phone wall papers customized for
NTT Docomo's iConcier service.
* For the outline of Faith Group, see p.44.

14

1414

Medical and Health Information Distribution■Pocket Karte●In cooperation with
WILLCOM and othercompanies, administration
and browsing of user's
individual health and medical
records (Karte) is easily
available with mobile phone
and PC. Diagnosis based on
the statistical data and theirown past records will
increase the chances ofprecise treatment.

●1. The number of subscribers
surpassed 10,000 in the first six
months from its start.
2. Accepted the Mobile
Consumer Award at “theMCPC Award 2009*1”.
＊1 The award organized by MCPC, Mobile Computing Promotion

Consortium, established with the aim of shaping and expanding a fullscale and sound mobile computing system market by the cooperation
among communication carriers, computer hardware and software
manufacturers, system integrators and other parties.

15

1515

Music Distribution and Relevant Services■viBirth×MySpace■KASIMO

Brave formed partnership inmusic business with “MySpace”,
one of the world's largest SNS
through “viBirth”.

Brave launched "KASIMO" anautomatic lyric display service for
iTunes users.

16

1616

Production of Video Content and Further Development■Made a blockbuster film “PACO and the Magical Book”
produced by Desperado.

Merchandize thecharacters at Rose
Online Legend

Released as characterson standby screen formobile phone

17

1717

Highlights of Business Development during FY08
●WebMoney launched “WebMoney Wallet Plus” service thatusers can earn extra points by credit card payment.
Electronic Money Business●WebMoney launched “WebMoney Point Park” which theregistrants can earn “WebMoney” free of charge.
●WebMoney started “@nifty WebMoney Park” in cooperation
with NIFTY Corporation.
●WebMoney tied up with Admiral Systems Inc. and enabled
settlement by WebMoney at all EC site when processed
through the company.
●WebMoney adopted as a settlement solution at “EC-CUBE”,
an open source software to design EC site.
* For the outline of Faith Group, see p.44.

18

1818

Start of Gold Points Provision Service■WebMoney Wallet Plus
Exclusive Gold Points are given when users purchased"WebMoney " by credit.
<Benefits>
1.Exchange Gold Points for exclusive gift items
2.Exchange Gold Points for "WebMoney"
3.More premium award available depending on the amount of"WebMoney" purchase

19

1919

Advertising Solution

WebMoney Point Park:
Provides free WebMoney whenregistered on shopping sites or applied
for promotional campaigns on PC andmobile phone.
WebMoney is automatically credited toyour WebMoney Wallet or WebMoney
Wallet Plus and spendable at partner
vendors.

@nifty WebMoney Park:
Launched in cooperation withNIFTY Corporation and Adways Co.,
Ltd. Users can earn free WebMoney
shopping or membership registration.

■Service flow
1. Shopping or
registration

2. WebMoney
automaticallycredited to yourWallet

3. Pay in WebMoneyat partner vendors
20

2020

Expansion of the Realm of WebMoney Circulation■Affiliate with “EC-CUBE”■Admiral Systems Inc.

Provides WebMoney to “ECCUBE*”, an open source software
to design EC site

WebMoney was adopted as asettlement solution at all EC
sites when processed throughAdmiral Systems Inc.

*(accumulative active sites: approx. 3000 sites)

21

2121

Full-Year Forecast of Consolidated Financial
Results for the FY09 (Ending March 2010)

22

2222

FY09 Financial Forecast for the Business Results
Fractional increase is expected in net sales due to the expansion of the Electronic Money
Business covering the expected decrease in ringtone business. Profits are expected todecrease due to the fall in revenue from ringtone business and the cost for ongoinginvestments on the system construction, the production and the procurement of contents.
Net sales: billion

Profit: billion

6

60

5

50

4

40

3

30

2

20

1

10
Net sales

0

0
FY04

FY05

FY06

FY07

FY08

FY09(Plan)

-1

-10

-2

-20

EBITDA
OperatingprofitNet profit/loss
23

2323

FY09 Consolidated Financial Forecasts by Segment(million yen)
FY08

FY09
(Plan)

53,95754,730773

1.4%

Content Business

13,105

10,360 ▲ 2,745-20.9%

Electronic Money Business

39,47243,0003,528

Others

1,378

1,370

▲8

-0.6%

EBITDA

4,208

3,323

▲ 885

-21.0%

3,608

2,584 ▲ 1,024-28.4%Net Sales

Content BusinessYear-on- Year-onyear
yearchange change

Causes for year-on-year change

Decline of yield from ringtone solution and license fee for ringtone
playback technology
Increase in settlement caused by the growing demand for digital
8.9%
content mainly online game

Increase in cost for development of platform, content production andprocurement of contents

Electronic Money Business

537

629

92

17.1% Effected by increased revenue

Others

77

110

33

42.9%

1,425

680

▲ 745

-52.3%

Content Business

990

165

▲ 825

-83.3%

Electronic Money Business

388

425

37

9.5% Effected by increased revenue

Others

60

90

30

50.0%

Recurring Profit

994

510

▲ 484

▲ 149

100

249

Operational Profit

Net Profit

Increase in cost for development of platform, content production andprocurement of contents-48.7% Decrease in operating profit
-

24

2424

Business Strategies

25

2525

Business Concept

26

2626

Business Concept
Recipients motives=
Desire to see, listen
and learn

Sender’s motives=Desire to deliver

Faith, Inc.
Broad Contents
Videos,Music, etc

User

Grasp the evolution of user’s value instantaneously and
Deliver contents through the best means
to meet of the needs of the times
27

2727

Expansion of Digital Contents Business Domain

Film

Music
ComicsGame
Novel

Ceremonial
occasionsGambleAdvertisement
Qualification
Shopping

SportsMedical/Health

Education

28

2828

Multi-Platform and Multi-Content Strategies
Multi-Content

Multi-Platform

User

Music

Film

PC

Mobile phone

Game

STB

TV

DVD
Game

Information

Car navigation
systemPDA

Ticketing device

Meet the market needs instantly and deliver contents
through any network or devices to users

29

2929

Visions of the Future Created by Faith Group

30

3030

Exemplar Model for Video Contents

31

3131

View the first episode of a drama on mobile

32

3232

View the second episode on TV at home

33

3333

View the third episode during a business trip

34

3434

View the forth episode on a drive

35

3535

Exemplar Model for Music Contents

36

3636

Record live sound source

37

3737

Distribute music from home to the world

38

3838

Exemplar Model for
Medical/Health Information

39

3939

Reference previous medical record at hospital

40

4040

Exemplar Model for
Personal Authentication

41

4141

Personal Authentication with Mobile Phone

Log in to MY page at internet cafe

42

4242

Multi-Platform and Multi-Content Strategies

Multi-Content

Multi-Platform

User

Music

Film

PC

Mobile phone

Game

STB

TV

DVD
Game

Information

Car navigation
systemPDA

Ticketing device

43

4343

Group Synergy by Business Realignment

44

4444

Appendix

45

4545

FY08 Consolidated Financial Results by Segment(Unit: billion yen)
Year-onyearchangeYear-onyearchange

FY05

Year-onyearchangeYear-onyearchangeFY06

23,6288,957

61.10%

30,0406,411

27.10%

Content business

11,5501,25112.20%

14,0402,489Electronic Money

11,7247,640

187.10%15,106

Others353

65

22.80%EBITDA4,712▲ 1,015

Content business

4,729

▲ 899

Electronic Money

▲ 19

FY04
Net sales

OthersYear-onyearchangeYear-onyearchange

FY07

Year-onyearchangeYear-onyearchangeFY0844,152

14,11247.00%

50,192

6,039

13.70%

21.60%

18,572

4,532

32.30%

16,264▲ 2,307

3,381

28.80%

22,6507,544

49.90%

32,389893

540

152.80%

2,905

2,011

225.00%-17.70%

4,630

▲ 82

-1.70%

4,395

▲ 235

-16.00%

5,033

304

▲ 62 -145.70%

235

254

6.40%

5,503
581

ー

Year-onyearchangeYear-onyearchange53,957

3,765

7.5%

-12.40%13,105▲ 3,159-19.4%

9,739

43.00%

39,472

7,083

21.9%

1,538

▲ 1,366-47.10%

1,378

▲ 160

-10.4%-5.10%

5,285

890

20.30%

4,208▲ 1,077-20.4%

470

9.30%

4,579

▲ 924

-16.80%

3,608

▲ 971

-21.2%

345

147.10%643

6210.70%

537▲ 106-16.5%

ー

64

65

ー

63

▲1

-1.6%

2

▲ 54

-95.60%▲ 15▲ 18 -718.20%

▲1

14

4,017

▲ 1,097-21.40%

3,391

▲ 626

-15.60%1,060▲ 2,330-68.70%

2,266

1,206

113.70%

1,425

▲ 841

-37.1%

Content business

4,152

▲ 980

-19.10%

4,029

▲ 122

-3.00%

2,484▲ 1,544-38.30%

1,674

▲ 810

-32.60%

990

▲ 684

-40.9%

Electronic Money

▲ 136

▲ 106

355.20%

119

256

ー

473

353

295.40%527

5411.50%

388▲ 139-26.3%

2 -900.00%

-82%

▲ 51

▲ 53

-2479%

▲ 64

▲ 13

ー

63

128

－

60

▲ 21

-27.0%

Operating profit

OthersRecurring profit
Net profit

4,047

▲ 965

-19.30%

3,455

▲ 592

-14.60%853▲ 2,601-75.30%

1,909

1,055

123.70%

994

▲ 915

-47.9%

316▲ 2,383-88.30%

1,438

1,122

355.10%▲ 1,883▲ 3,321

ー

537

2,420

－

▲ 149

▲ 686

-

46

4646

FY08 Consolidated Financial Results(Compared with the forecast)(Unit: billion yen)
FY0７

FY08
Planned

FY08

Year-onyearchangeYear-onyearchange7.5%

Causes for year-on-year change

50,19254,60053,957

3,765

Content business

16,264

14,70013,105▲ 3,159

Electronic Money32,38938,30039,472

7,083

21.9%

Others

1,538

1,600

1,378

▲ 160

-10.4%

5,285

4,000

4,208

▲ 1,077-20.4%

Content business

4,579

3,380

3,608

▲ 971

-21.2% contents

Electronic Money

643

520

537

▲ 106

-16.5% management structure

Others

64

100

77

13

20.3%

Operating profit

2,266

1,000

1,425

▲ 841

-37.1%

Content business

1,674

580

990

▲ 684

-40.9% contents

Electronic Money

527

320

388

▲ 139

-26.3% management structure

Others

63

100

60

▲ 21

-25.9%

Recurring profit

1,909

800

994

▲ 915

-47.9%Net sales

EBITDANet profit

537

100

▲ 149

▲ 686

-19.4% Decline of ringtone solution, etc.

Increase in cost for development of distribution platform, production and procurement of
Increase in cost for development and operation of new services and for enhancement of

Increase in cost for development of distribution platform, production and procurement of
Increase in cost for development and operation of new services and for enhancement of-Gain on sale of investments in securities +approx. 260 billion, Reversal of ｌ oss from
disposal of business +approx. 100 billion
Loss on revaluation of investments in securities △ approx. 270 billion, Loss fromtransfer of operation △ approx. 370 billion, Amortization of goodwill △ approx. 290
billion474747

Amortization of Goodwill(Unit: billion yen)
FY03

FY04

FY05

FY06

FY07

FY08

FY09
(Plan)

WebMoney

51

82

82

82

84

73

74

Digiplug
TakeNetFaith Communications
GoodyPoint
GIGA NETWORKS
Brave

221

239

MVP
Media Complex
Others
Total－－

Years ofEnd ofAmortization Amortization
10 years

2013/9

－

－

－

ー

ー

－

－

531

424

－

－

－

ー

ー

－

－

63

94

－

－

－

ー

ー

－

－

39

39

－

－

－

ー

ー

－

－

－

1,771

2,125

2,125

2,125

5 years

2011/5

－

－

－

3

3

3

5 years

2012/3

－

－

－

－

4

4

ー

5 years

ー

－

－

－

－

11

11

ー

5 years

ー

－

－

－

217

217

64

25

5 years

ー

2,627

2,444

2,291

2,226

ー

ー

272

322

715

zDigiplug: one-time depreciation of unamortized balance 1,936 million yen in FY04 (recorded as extraordinary loss）
zGoodypoint: one-time depreciation of unamortized balance 308 million yen in interim FY06 (recorded as extraordinary loss）
zTakeNET: one-time depreciation of unamortized balance 2,218 million yen in 3Q FY06 (recorded as extraordinary loss）
zFaith Communications: one-time depreciation of unamortized balance 462 million yen in 3Q FY06 (recorded as extraordinary loss）

48

4848

FY08 Consolidated Net Sales (year-on-year basis)(Unit: billion yen)

FY07
Electronic Money
Business
Overseas
Realignment

50.1

Increase of sales caused by
growth of settlement+approx. 7.1
Sellout of Contents distribution business in USA△approx. 500 million
Sellout of TakeNET in South America △approx.
900 million yen
Liquidation of Faith Technologies △approx. 200
million yen△approx. 1.6

Ringtone Solution△approx. 1.1

Others△approx. 0.5
53.9

FY08
400

420

440

460

480

500

520

540

560

580

600

49

4949

FY08 Consolidated Operating Profit (year-on-year basis)(Unit: million yen)

FY07

2,266

Ringtone business△approx. 1100

Electronic Money△approx. 140+approx. 60

Overseas realignment
Decrease in advertisement+approx. 300

Amortization of goodwill+approx. 150

Others△approx. 100

Efficient business operation

1,425

FY08
0

500

1,000

1,500

2,000

2,500

3,000

3,500

50

5050

FY08 Consolidated Recurring Profit (year-on-year basis)(Unit: million yen)

FY07

1,909

Decrease in operating profit△841

Interest received△67

Exchange profit or loss
Interest paid
Investment loss on equity method

△224
+103
+161

Others
FY08

500

Decrease in interest paid due
to repayment of debt

△47
994

1,000

1,500

2,000

51

5151

FY08 Consolidated Net Profit (year-on-year basis)(Unit: million yen)
（単位：百万円）
FY07:
Profit on sale of real estate

FY07
Decrease in recurring profit
Decrease in gain on disposal of fixed assets
Gain on transfer of operation
Gain on sale of investments in securities
Proceeds from equity movement
Disposal of fixed assets and decrease of depletion
Loss on revaluation of investments in securities
Gain on reversal of subsidiaries losses
Loss from transfer of operation
O ther extraordinary gain or loss
Decrease in income tax, etc.
Profit or loss of Minority shareholders
FY08

FY07: Gain on sellout of contents
distribution business in USA

537
△915
△228
△827
+260
△367
+348
△132
+397
△379

Proceeds from equity
movement due to increase
capital for subsidiaries

+29
+796
+332

-2500 -2000 -1500 -1000 -500

149

0

Loss from service
suspension of Debit@

500 1000 1500 2000 2500

FY07：Reserve amount for expectedliquidation of Faith Technologies

52

5252

NoticeThis document and its supporting documents containprojections of our company’s future performance. Theseare estimates by the management of Faith based on
currently available information. There are potential risks
and uncertainties that may affect the results. Please beadvised that actual performance may differ significantly
from the forecast.

53

5353