Investor Relations

Outline of Results Briefing by SQUARE ENIX HOLDINGS held on November 6, 2013

Outline of Results Briefing by SQUARE ENIX HOLDINGS held on November 6, 2013
(Continued from previous page.)*

Other items are explained on page 5 of the Earnings Briefing. The operating income is as explained previously. Recurring income amounted to ¥5,669 million. This amount is a result of the ¥942 million exchange gain, due to a weaker yen, created by converting assets in foreign-currency.

With regards to extraordinary profits and losses, an extraordinary gain of ¥351 million was recorded for the acceptance of compensation due to the closure of one of our amusement facilities, because of a local area redevelopment project.

An extraordinary loss of ¥1,641 million occurred as a Loss on Evaluation of Content, which was already accounted for in the first quarter as a result of restructuring of our European-owned studios.
These factors resulted in Income before income taxes of ¥4,297 million, and Net Income of ¥2,606 million for the quarter.

Next, I would like to explain the balance sheet. Please take a look at page 3 of the Earnings Briefing.
Major revisions to titles during the previous fiscal year resulted in the content production account of ¥15.8 billion at the end of last year, but the balance increased to ¥25.4 billion at the end of the second quarter.

The breakdown of the content production account is split roughly 50-50 between Japan and overseas, but its nature is changing.
We have been putting more efforts into the production of online game titles in Europe and North America, which has changed the composition of the content production account. I believe that WIP turnover will increase over time. Taking this factor into consideration, we are tightening controls over the level of WIP balance.

There are no significant changes in other items since the end of the last fiscal year.

There is no major change in the cash and deposit balance, which was ¥104.8 billion at the end of the quarter.

The liabilities listed on page 4 of the Earnings Briefing have also not significantly changed since the end of the last fiscal year.