In fiscal 2013, ended March 31, 2013, SEGA SAMMY HOLDINGS INC. recorded year-on-year declines of 18.7% in net sales, to ¥321.4 billion, and 67.3% in operating income, to ¥19.0 billion. Net income was up 53.3% year on year, to ¥33.4 billion.

The main causes of the decrease in net sales were lower revenues from the Pachislot and Pachinko Machine Business segment and the Amusement Machine Sales Business segment. In the Pachislot and Pachinko Machine Business segment, the pachislot machine business posted less revenues because it postponed the launches of several titles, while changes in market conditions led to a downturn in the revenues of the pachinko machine business. As a result, the Pachislot and Pachinko Machine Business segment's net sales were down 32.9% from the previous fiscal year. As for the Amusement Machine Sales Business segment, despite solid revenues from revenue-sharing titles, the absence of major titles caused a 21.6% year-on-year decrease in revenues. In addition, the Amusement Center Operations segment's revenues were down 4.3% year on year because sales struggled at existing amusement centers. Also, narrowing down the number of titles lowered unit sales of packaged game software, resulting in a 2.1% decline in revenues from the Consumer Business segment.

The Pachislot and Pachinko Machine Business segment's earnings decreased 66.9% year on year, and the Amusement Machine Sales Business segment's earnings were down 74.3% year on year. Meanwhile, the Amusement Center Operations segment posted higher earnings due to mitigation of its depreciation burden accompanying a change in accounting policy. Furthermore, the Consumer Business segment saw a significant improvement in operating loss from the previous fiscal year's ¥15.1 billion to ¥0.7 billion, which was attributable to a decrease in cost of sales and operating expenses due to the previous fiscal year's restructuring in North America and Europe. As a result of the above, the operating margin deteriorated 8.9 percentage points, to 5.9%.

The Group recorded extraordinary gain of ¥10.1 billion, including gain on sales of investment securities and gain on transfer of benefit obligation relating to employees' pension fund. Extraordinary loss of ¥5.4 billion included certain U.S. subsidiaries' recognition of impairment loss on goodwill and loss on liquidation of subsidiaries and affi liates. Furthermore, the Group recorded deferred tax assets for the amount expected to be deductible from future taxable income in relation to a tax loss, which arose from the completion of liquidation of certain U.S. subsidiaries. As a result of the above, net income rose 53.3% year on year, to ¥33.4 billion.

R&D expenses and content production expenses decreased 15.1% year on year, mainly because of a decline in packaged game software accompanying restructuring of the Consumer Business segment.
Capital expenditures was down 9.0% from the previous fiscal year, reflecting the absence of the previous fiscal year's investment to construct a new pachislot and pachinko machine plant and distribution center. Depreciation rose 12.5% year on year due to an increase in titles in the digital game content business and the start-up of operations at the pachislot and pachinko machine plant and distribution center.

For fiscal 2013, we paid interim cash dividends of ¥20.00 per share and year-end cash dividends of ¥20.00 per share, thereby amounting to full-year cash dividends of ¥40.00 per share. As a result, the consolidated dividend payout ratio was 29.2%. The Group acquired 10 million shares of treasury stock between June 7, 2012, and July 31, 2012, for ¥16.1 billion.