BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 3rd QUARTER OF THE FISCAL YEAR ENDING MARCH 2015
This is an English translation of summarized consolidated financial results prepared
for the convenience of non-resident shareholders. Should there be any inconsistency
between the translation and the official Japanese text, the latter shall prevail.

February 12, 2015
Company name: Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Jiro Saeki, CFO/Director (Tel: +81-3-5464-7633)
Date of Submission of Securities Report: February 13, 2015
Starting Date of the Dividend Payment: —Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Consolidated Results for the 3rd Quarter of the Fiscal Year Ending March 2015
(From April 1, 2014 to December 31, 2014)(1) Consolidated Operating Results
Percentages indicate changes compared with the 2nd quarter of the previous fiscal year

Net Sales

Operating Income

March 2015

14,163

198.0

△888

—

△864

—

△797

—

March 2014

4,752

△7.1

476

△41.4

509

△44.6

464

△42.5

%

Millionsof yenNet Income

Millionsof yen%Millionsof yenOrdinary Income

Q3 of the year ending%

Millionsof yen%(Note) Comprehensive income: 3rd quarter of fiscal year ending March 2015: △¥1,233 million (—%); 3rd quarter of fiscal year ending
March 2014: ¥544 million (△30.7%)

Net Income per ShareQ3 of the year ending
March 2015
March 2014
(Note)

Diluted Net Income per ShareYen△70.09

Yen
—

40.79

40.79

With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share. The
quarterly Net Income per share and the quarterly diluted Net Income per share are calculated under the supposition that the stock
split had taken place at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Position
Total Assets

Q3 of the year ending
March 2015
Year ending March 2014

Ratio of Equity Capital

Net Income Per Share

Millions of yen

Net Assets
Millions of yen%

yen

27,62520,80971.7

1,752.62

29,88722,34069.6

1,825.44(Reference) Equity Capital: 3rd quarter of fiscal year ending March 2015: ¥19,816 million; fiscal year ended March 2014: ¥20,792 million

2. Dividends
Dividends per share(Record dates)

Year ending March 2014
Year ending March 2015

1st Quarter

yen
—
—

Interim

yen
50.00
5.00

Year ending March 2015 (Forecast)

3rd Quarter

yen
—
—

Year-end

Total

yen
5.00

yen
—

5.00

10.00

(Notes) Forecasts for dividends have not been modified since the time of the most recently announced business forecast.
With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10 shares per share.

13. Forecast for the Consolidated Business Results for the Year Ending March 2015
(from April 1, 2014 to March 31, 2015)(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Full year
ending March2015

Operating Income

Ordinary Income

Net Income

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen%18,200

187.1

△810

—

△770

—

△920

—

Net Income
per ShareYen△80.77(Notes) Forecasts for business results have not been modified since the time of the most recently announced business forecast.

※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* For details, please refer to “2. Summary Information, (2) Adoption of Simplified Accounting Methods in the
Preparation of Quarterly Financial Statements” on page 4 of the accompanying material.

(3) Changes in accounting policy, changes in accounting estimates, and restatements(i) Changes accompanying revisions of accounting standards, etc.: Applicable(ii) Changes other than the above: None(iii) Changes in accounting estimates: None(iv) Restatements: None
* For details, please refer to “2. Summary Information, (3) Changes in Accounting Principles, Procedures, and Disclosure
Methods” on page 4 of the accompanying material.

(4) Outstanding shares (common shares)(i) Outstanding shares at the end of the fiscal periods (including treasury shares):
The 3rd quarter of the fiscal year ending March 2015: 11,960,000 shares
The fiscal year ending March 2014: 11,960,000 shares(ii) Treasury shares at the end of the fiscal periods:
The 3rd quarter of the fiscal year ending March 2015: 653,000 shares
The fiscal year ending March 2014: 569,670 shares(iii) Average number of shares at the interim accounting period
The 3rd quarter of the fiscal year ending March 2015: 11,380,784 shares
The 3rd quarter of the fiscal year ending March 2014: 11,392,610 shares(Note) With effect from October 1, 2013, the Company carried out a stock split of its common shares at a ratio of 10
shares per share. For this reason, the numbers of shares listed above are calculated under the supposition thatthe stock split had taken place at the beginning of the previous consolidated fiscal year.
* Indication of auditing procedures implementation status
This financial results report is exempt from quarterly review procedures under Japan’s Financial Instruments and Exchange
Law. As of the time of disclosure of this report, the auditing procedure based on the Financial Instruments and Exchange Law
has not been completed.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “1. (3) Explanation Concerning Future Forecast Information on the Consolidated
Financial Results, etc.” on page 4 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental documents related to the Company’s quarterly and other financial results are posted on the company website.
(URL: http://www.faith-inc.com/ir/library.html )2

Contents
1. Qualitative Information Concerning the Settlement of Accounts for the 3rd Quarter ····················(1) Explanation Concerning the Operating Results ····························································(2) Explanation Concerning the Financial Position ····························································(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.

2
2
4
4

2. Summary Information ······························································································(1) Changes in Major Subsidiaries During the 3rd Quarter ·····················································(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements ·········(3) Changes in Accounting Principles, Procedures, and Disclosure Methods ······························

4
4
4
4

3. Consolidated Financial Statements ···············································································(1) Consolidated Balance Sheet ···················································································(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ········(Consolidated Statement of Income) ··········································································(Consolidated Statement of Comprehensive Income) ·······················································(3) Notes Concerning the Consolidated Financial Statements ·················································(Note Concerning the Premise of a Going Concern) ························································(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity) ···················(Segment Information) ·························································································

5
5
7
7
8
9
9
9
9

1

1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter(1) Operating Result Review
Information and communications technology (ICT) is spreading on a global scale, and in keeping withthe development of the Internet infrastructure, high-performance mobile devices such as smartphones
and tablets have become widespread throughout the world. While the growth rate of smartphone
shipments has slowed, the smartphone ownership ratio in Japan at the end of 2013 rose to 62.6% while
the tablet device ownership ratio increased to 21.9% (*1). Meanwhile, in September 2014, smartphones
accounted for more than half of all mobile phone subscription contracts for the first time, with
62,480,000 smartphone contracts (structural ratio: 50.3%) against 61,760,000 feature phone contracts(structural ratio: 49.7%) (*2). As the smartphone approaches the full-scale popularization phase, themarket for MVNO services, which combine low price with highly functional models and plans known
as “affordable SIM”, is expanding. With this, the mobile market is breaking into a new era in which it is
responding to diversified needs by developing variations such as models specifically designed for senioruse or children’s use, and consequently it is expected that the mobile market including the market for
peripherals will continue to grow in future.
Moreover, changes in lifestyle brought about by the spread of the Internet and smartphones has asignificant effect on people’s consumption behavior. Consumer behavior is shifting, with the ratio ofhouseholds that make use of Internet shopping increasing consistently since 2002 to reach 28.4% in2014 (*3). In the field of music content distribution too, the impact of this change has been significant,as illustrated by the fact that more CDs and DVDs are now purchased at online stores than at real
brick-and-mortar stores and that 39% of smartphone users listen to music on their smartphone (*1).
In the music CD and DVD package products market, sales of music software including music videos
during the January-December 2014 period fell to 94% of the previous year’s level. Also, while theJapanese music market as a whole is continuing to shrink, paid music distribution sales during theJanuary-September 2014 period stood at 103% of their level during the same period in 2013, reflecting
favorable sales of subscription distribution services (*4). Meanwhile, in music contents distribution, theimportance of the Internet and smartphones is increasing.
(*1) From the 2014 Information and Telecommunications White Paper(*2) From MM Research Institute’s “Mobile Phone Shipments in the Domestic Market in the First Half of 2014”(*3) From the Ministry of Internal Affairs and Communications Statistics Bureau’s“Trends in Consumption Due to Internet Shopping” (Japanese only)(*4) Research by the Recording Industry Association of Japan

In the market environment dominated by these sudden changes in all areas from infrastructure toplatforms, the Faith Group is continuing to move ahead with its Multi-Content and Multi-Platform
Strategy of creating an environment that allows people to enjoy a wide diversity of contents whenever
and wherever they choose while providing compatibility with today’s increasingly popular smart
devices. We have made unceasing efforts to strengthen the functions of our platforms that gather
relevant information from the mass that floods the Internet, sort it into categories, increase its added
value, and provide it to users, as well as to develop new services in response to the changing market
environment. In the music market, Faith is focusing primarily on music service platform construction bymaking effective use of the business synergies between the companies within the Group, as well as on
fixed-priced subscription-based music distribution business that allow customers to use the service as
many times as they need within a fixed period, which has been expanding at an accelerating rate inrecent years.
Regarding the Faith Group’s business performance since the start of the current consolidated fiscal year,
although sales of smartphone services continued to expand strongly, sales of the Group’s mainstream
feature phone distribution services declined, and since the start of the 3rd quarter sales of high-margin
package products launched in past years by Nippon Columbia, Co., Ltd. (which became a fully
consolidated subsidiary of Faith in April 2014) declined sharply. As a result, for the business period
including this 3rd quarter, the Faith Group, due to the inclusion of the Columbia Business Segment’s
sales and operating loss, recorded net sales of ¥14,163 million (an increase of 198.0% compared withthe same period of the previous fiscal year), an operating loss of ¥888 million (compared with anoperating income of ¥476 million for the same period of the previous year), and an ordinary loss of¥864 million (compared with an ordinary income of ¥509 million for the same period of the previous

2year), Moreover, due to the reporting of an extraordinary loss of ¥150 million in connection with theorganizational reform of a consolidated subsidiary, and of a minority interest loss of ¥582 million, theGroup recorded a net loss for the current quarter of ¥797 million (compared with a net income of ¥464
million for the same period of the previous year).
The Company’s performance on a segment basis is as follows.
Content Business
Under a strategy that calls for expanding and commercializing the contact points between artists andfans, Faith is actively engaged in new business development and is continuing to promote theintroduction of high value-added services to match the changing lifestyles of consumers in response to
the popularization of smartphones, and other such technology.
Fans™, a one-stop system that supports a full range of artist activities from fan club operation to salesof e-tickets for live performances, will continue to expand its service menu as a music business platformthat makes use of the Faith Group’s diverse music- and artist-related service functions. As part of its
strategy, Faith worked to develop these functions by acquiring the business of Japan’s largest-scale
band member recruitment social media service “with9” in June 2014, and in future too the Company
will aim at creating a total music platform by adding essential functions to facilitate exchanges between
artists and fans.
Concerning the internet-based radio service FaRao®, Faith will try to expand recognition of this service
while continuing to promote the development of a multi-device approach objected at general users. In
addition, the Company launched the business-use BGM service FaRao PRO™ in November 2014
aimed at restaurants and retail stores. Targeting a wide diversity of potential customers ranging fromchain stores to small and medium-sized privately operated shops, Faith is attempting to expand theservice’s commercial user base by making available over 3,000 channels—the largest number of any
Japanese Internet radio service—and by offering users fast installation and low cost operation. In future,in addition to developing store-use solutions and functions for sales promotion, etc., the Company isplanning to proceed sequentially with overseas expansion with the aim of creating a new BGM market
both in Japan and internationally.
In the lifestyle field apart from music, from the worldwide intellectual training application brand forpre-school children Kidzapplanet®, Faith has released five titles beginning with the child rearing app
called BabySmile, which was planned and developed by a father and mother team while they wereraising their own children. Child rearing services for smartphone users is a field for which there is aconsiderable need and national and local governments are also considering making use of these apps.
Faith is planning to launch further new services in this field in future.
As a result of the developments listed above, taking into account the active ongoing deployment of newservices in response to the changing market environment and the decline in sales of services to featurephone users, the Content Business recorded net sales of ¥3,425 million (a decline of 8.9% year on year).
Also, due to increasing costs in connection with the start up of new smartphone-user services, inaddition to the abovementioned decline in sales, this business recorded an operating income of ¥132
million (a decline of 68.4% year on year).
Point Service BusinessIn the Point Service Business, sales of points increased in line the opening of new point member stores
and aggressive point sales promotion, with the result that this business recorded net sales of ¥1,675
million (an increase of 68.6% year on year). However, although the Company maintained to keepsales-related expenses and general and administrative expenses in line, this segment resulted in adecrease in profit rate due to redemptions of former points in line with the shift to server-based
management, resulting in an operating income of ¥18 million (a decrease of 66.5% year on year).
Columbia Business
Amid the difficult environment facing the music and video-related industry in line with the continuing
shrinking of the music market, the Columbia Business experienced an overall decline in sales of music
CDs, digital distribution titles, and products supplied to mail order companies. Also, due to declines in3

sales of high-margin titles released in past years and in transactions utilizing sound sources, thisbusiness reported net sales for the 3rd quarter of FY 2014 of ¥9,061 million and an operating loss of¥1,047 million. Moreover, as the Columbia Business has been included in the Faith Group’s businessperformance only since the start of the current fiscal year, no comparisons with the 3rd quarter of theprevious fiscal year are given here.

(2) Explanation Concerning the Financial Position(Analysis of Financial Position)
Total assets as of December 31, 2014 decreased by ¥2,262 million compared to March 31, 2014 to¥27,625 million. This result was mainly due to decreases in cash and deposits, notes receivable andtrade accounts receivable.
Total liabilities decreased by ¥731 million compared to the end of the previous consolidated fiscal yearto ¥6,815 million. This result was mainly due to decreases in notes payable and trade accounts payable.
Total net assets decreased by ¥1,530 million compared to the end of the previous consolidated fiscal
year to ¥20,809 million. This was mainly due to a decrease in retained earnings in accordance with thepayment of dividends and the recording of a quarterly net loss, as well as to a decrease in minority
interests.
As a result of the above, the equity ratio increased by 2.1 percentage points to 71.7%.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. In addition, the current performance forecast for the full financial year is unchanged
from the revised forecast issued on October 28, 2014.

2. Summary Information(1) Changes in Major Subsidiaries during the 3rd Quarter
None(2) Adoption of Simplified Methods in the Preparation of Quarterly Financial Statements
Tax expenses for the Company and a portion of its consolidated subsidiaries are calculated by making areasonable estimate of the effective tax rate after applying tax effect accounting to the amount ofquarterly Net Income before tax deduction for the consolidated financial year including the current 3rdquarter accounting period, and then multiplying the amount of quarterly Net Income before tax
deduction by the current estimated effective tax rate.

(3) Changes in Accounting Principles, Procedures, and Disclosure Methods(Changes in Accounting Principles)
For certain consolidated subsidiaries, with effect from the beginning of the first quarter of the current
consolidated fiscal year, we have applied the regulations stipulated in the main texts of Item 35 of the
Accounting Standard for Retirement Benefits (ASBJ Statement No. 26, May 17, 2012) and Item 67 of
the Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012)
in revising the retirement benefit obligations and the service cost calculation method.
These changes will have no material impact on the Group’s retained earnings or profitability for thecurrent 3rd quarter accounting period.

43. Consolidated Financial Statements(1) Consolidated Balance Sheet
FY 2013(As of March 31, 2014)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refund receivable, etc.
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Accounts and notes payable
Short-term loans payable
Lease obligations
Accrued expenses payable
Income taxes payable
Reserve for bonuses
Reserve for point card certificates
Reserve for sales returns
Allowance for organizational reform
OthersTotal current liabilities
Fixed liabilities
Long-term loans payable
Net defined retirement benefits
Lease obligations
Deferred tax liabilities
OthersTotal fixed liabilities
Total liabilities

5(Unit: thousands of yen)
3rd Quarter of FY 2014

(As of Dec. 31, 2014)

14,196,991
3,238,570
241,587
464,387
440,60363,564
67,118286,638
774,474△74,763
19,699,173

12,338,965
2,724,320
242,965
435,153
412,396
68,705
194
176,846
1,322,391△66,130
17,655,810

3,062,848

2,978,800

4,247,061
871,886
5,118,948

4,068,778
963,709
5,032,487

1,679,127
623,900△296,727
2,006,300
10,188,097
29,887,271

1,619,780
638,435△300,050
1,958,164
9,969,452
27,625,262

1,243,213
906,520
51,491
2,062,945
73,76370,403
191,510
148,890—
1,399,389
6,148,127

911,400
411,532
21,642
2,318,959
188,671
65,496
20,570119,030
32,7501,136,863
5,226,917

105,400
996,110
41,915
209,823
45,628
1,398,877
7,547,004

418,320
914,977
28,614
190,406
36,4791,588,798
6,815,715

(Net assets)
Shareholder's equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Cumulative adjustment for retirement benefit
obligations
Total other accumulated comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

6(Unit: thousands of yen)
3rd Quarter of FY 2014

FY 2013(As of March 31, 2014)(As of Dec. 31, 2014)

3,218,000
3,708,355
14,393,333△754,679
20,565,008

3,218,000
3,708,355
13,481,699△848,856
19,559,198

227,400－－

197,811
10,74349,083

227,400
61,949
1,485,909
22,340,267
29,887,271

257,638
58,591
934,118
20,809,547
27,625,262

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income)(Unit: thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income or loss (△)
Non-operating income
Interest income
Dividend income
Interest on securities
Foreign exchange gain
Investment partnership operation gain
Interest on refund
Gain on disposal of unpaid royalties
Miscellaneous receipts
Total non-operating income
Non-operating expenses
Interest paid
Investment partnership operation loss
Investment loss on equity method
Miscellaneous expenses
Total non-operating expenses
Ordinary income or loss (△)
Extraordinary income
Gain on sale of investment securities
Gain on change in equity
Gain on transfer of business
Gain on reversal of subscription rights to shares
Total extraordinary income
Extraordinary losses
Loss on disposal of fixed assets
Relocation expenses
Overseas tax-related loss
Organizational reform-related loss
Total extraordinary losses
Net income or net loss before income taxes (△)
Corporate, local, and business taxes
Corporate tax adjustment amount
Net income or net loss before minority interests (△)
Minority interests in loss (△)
Net income or loss for the current quarter (△)

3rd Quarter of FY 2013

3rd Quarter of FY 2014

(April 1-Dec. 31, 2013)
4,752,604
2,650,875
2,101,729
1,625,136
476,592(April 1-Dec. 31, 2014)
14,163,008
9,296,760
4,866,248
5,754,742△888,493

13,254
7,096
2,061
4,041
4,909
18,669－10,15260,183

7,269
6,101
105
3,663
11,412－
10,673
17,53056,755

4,161－
23,540－27,702509,074

7,828
6,244
18,198691
32,962△864,701

25,2203,759
28,320－57,300

－
－
－
3,357
3,357

14,248
2,314
7,491
－
24,054542,319
77,554
70
464,694

4,308－－
150,000
154,308△1,015,652
254,612
109,819△1,380,084△582,352△797,732－

464,694

7

(Consolidated Statement of Comprehensive Income)(Unit: thousands of yen)

Net income or net loss before minority interests (△)
Other comprehensive income
Valuation difference on other available-for-salesecurities
Foreign currency translation adjustment
Retirement benefit adjustments
Share in comprehensive income of equity method
affiliates
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to minority
interests

8

3rd Quarter of FY 2013

3rd Quarter of FY 2014

(April 1-Dec. 31, 2013)
464,694(April 1-Dec. 31, 2014)△1,380,084

74,562

29,520－－5,183

21,08396,319－79,746544,440

146,922△1,233,162

544,440△708,315－△524,846

(3) Notes Concerning the Consolidated Financial Statements(Note Concerning the Premise of a Going Concern)
Not applicable(Note in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Segment Information)
Ⅰ 3rd quarter of the previous consolidated fiscal year/FY 2013 (April 1, 2013 through Dec. 31, 2013)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Content

Point Service Columbia

Total

Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount

3,758,796

993,808－

4,752,604－

4,752,604

10,529297－

10,826△10,826－

Total

3,769,325

994,105－

4,763,431△10,826

4,752,604

419,734

56,079－475,814778

476,592

Segment income/loss

Notes: 1. The segment income adjustment amount of ¥778 thousand is calculated by eliminating intersegment transactions.
2. Segment income/loss is adjusted with operating income in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.
Ⅱ 3rd quarter of the current consolidated fiscal year/FY 2014 (April 1, 2014 through Dec. 31, 2014)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)Content

Point Service Columbia

Total

Amount recorded in
Adjustment
Consolidated Financial
amount (Note 1) Statements (Note 2)

Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount

3,425,788

1,675,431

9,061,788

14,163,008－

14,163,008

102,786645

33,888137,320△137,320－

Total

3,528,575

1,676,076

9,095,677

14,300,329△137,320

14,163,008

18,773 △1,047,373△895,848

7,354△888,493

Segment income/loss

132,752

Notes: 1. The segment loss adjustment amount of ¥7,354 thousand is calculated by eliminating intersegment transactions.
2. Segment income/loss is adjusted with operating income in the quarterly consolidated profit and loss statement.

92. Note concerning changes in reportable segments, etc.
As a result of the acquisition of additional shares of stock in Nippon Columbia Co., Ltd., by meansof a public tender offer that took place in March 2014, Nippon Columbia Co., Ltd. and its
subsidiaries have been included as consolidated subsidiaries of Faith, Inc. from the end of theprevious consolidated fiscal year. Accordingly, the Company has reorganized its business segmentclassification method so that the existing classification into two segments of the Content Businessand the Point Service Business has been changed to a classification into the three segments of theContent Business, the Point Service Business, and the Columbia Business. Moreover, in keepingwith this change, segment information for the previous consolidated 3rd quarter presented ascomparison information with the 3rd quarter of the current consolidated first quarter is reproduced
based on the revised reportable segment classification.

3. Information regarding impairment loss on fixed assets or goodwill by segment reported
That information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.

10