OMC Card, Inc.

　　　　 April 14, 2005April 14, 2005OMC Card, Inc.OMC Card, Inc.

OMC Card, Inc.

OMC Card, Inc.

P／L (Consolidated)Unit: billions of Yen

Feb, 2005Change vs.Feb, 2004(amount)

Change vs.Feb, 2004(base:100%)

Transaction volume 1,587.7 46.1 103.0%

Operating revenues 139.2 12.2 109.6%

Operating expenses(excl. provision of

credit losses)111.4 2.2 102.0%

82.2 ▲0.9 99.0%

Operating income 27.7 10.0 156.5%

Ordinary income 27.9 9.9 155.0%

Net income 15.8 9.7 259.1%

OMC Card, Inc.

Transaction volume (Consolidated)Unit: billions of Yen

Feb, 2005 Change vs. Feb, 2004(base:100%)% of total

Credit card contracts 843.3 53.1% 101.5%

Acquiring service 94.4 5.9% 112.9%

Cash advances 448.1 28.2% 118.3%

Loan agency 101.1 6.4% 86.4%

Insurance 12.2 0.8% 107.1%

Travel 14.9 0.9% 57.3%Merchandise sales 1.3 0.1% 17.5%Other 72.4 4.6% 83.7%

TOTAL 1,587.7 100.0% 103.0%

OMC Card, Inc.

Operating revenues (Consolidated)Unit: billions of Yen

Feb, 2005 Change vs. Feb, 2004(base:100%)% of total

24.3 (24.7) 17.4% 104.3% (105.1%)※ ※Credit card contracts

95.8 (97.7) 68.9% 119.7% (118.9%)※ ※Cash advances

1.2 0.9% 82.4%Loan agency

2.1 1.5% 109.3%Insurance

1.2 0.9% 54.0%Travel

0.7 0.5% 22.0%Merchandise sales

13.8 9.8% 94.4%Other

0.1 0.1% 92.4%Financial transactions

139.2 100.0% 109.6%TOTAL※　(　　) = amounts before securitization

OMC Card, Inc.

Operating expenses (Consolidated)Unit: billions of Yen

Feb, 2005Change vs. Feb, 2004(amount)

Change vs. Feb, 2004(base:100%)

23.0 0.2 101.0%Selling expenses

17.4 ▲0.8 95.8%Salaries and fringebenefits

24.4 ▲0.2 99.2%General andadministrative expenses

3.7 ▲0.4 89.9%Equipment expenses

29.3 3.1 111.8%

13.6 0.3 102.3%

Provision of credit losses

Financial expenses

111.4 2.2 102.0%82.2 ▲0.9 99.0% )(excl. provision of credit losses)

TOTAL

OMC Card, Inc.

Extraordinary income & losses (Consolidated)

Feb, 2005Unit: billions of Yen

6.1

5.6Reversal of liability for retirement benefitsdue to the dissolution of employees' pension fund

（2.3）Gains on sales of investment securities

（2.8）

Restructuring loss

（1.5）

（2.3）

（0.7）

（1.6）

（0.5）

Provision for operating receivables

Provision for reserve for past year credit card points redemption

Other

Extraordinary losses

Extraordinary income

Other

OMC Card, Inc.

Main operating indicators

Aggressively boosting cardmembers from Non-Daiei channelsAggressively boosting cardmembers from Non-Daiei channels

Unit: in thousand

Feb, 2004 Change vs.Feb, 2003 (base: 100%)

Change vs.Feb, 2003 (amount)

1,437 ▲91 94.0%Applications

1,198 ▲50 96.0%Issuances

7,528 208 102.8%Cardholder

63.5% ▲0.9% -Card user rate

351 +6 101.7%Affiliated stores

127 +9 108.1%CD & ATM machines

OMC Card, Inc.

Daiei Channel

2.6%

3.4%

4.0%

0

500

1,000

1,500

2,000

Feb, 2003 Feb, 2004 Feb, 2005

36%44%49%

2,000

Feb, 2003 Feb, 2004 Feb, 2005

（ 91.7%） （ 77.4%）

(134.5%) (110.1%) (107.1%)

(88.0%)

Daiei channelNon-Daiei channelDaiei Share▲

(89.1%) （ ） （ ）

(104.7%) (104.9%) (110.6%)

(90.2%)(83.3%)

30%27%

35%

0

2,000

4,000

6,000

8,000

10,000

12,000

Feb, 2003 Feb, 2004 Feb, 2005

(90.2%) (88.0%) (84.0%)

(108.2%) (109.9%) (110.0%)

Card Application

Transaction Volume of Credit Card Contract

Operating RevenuesUnit: billions of Yen

Unit: billions of Yen

Unit: in thousand

1,500

1,000

500

0

Steady Expansion of Non-Daiei ChannelsNonNon--Daiei Channels

Steady Expansion of Steady Expansion of Daiei Channels

OMC Card, Inc.

Credit Situation

Conservatively, sufficient bad debts allowances have been provided.

4.5%4.1%

5.2%

3.2%3.2%

2.6%

5.2%

4.6%

3.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Feb, 2003 Feb, 2004 Feb, 2005

Write-off rate

Reserve rate

Delinquency rate

OMC Card, Inc.

Interest-bearing debt (Consolidated)

Taking long-term and stable funds and diversifying funding instrumentsTaking long-term and stable funds and diversifying funding instruments

Unit: billions of Yen

Feb. 2004 % oftotal Feb. 2005 % of

totalVariation(amount)

213.4 46.4% 289.4 64.2% +76.0Long-term debt

210.0 45.7% 131.6 29.2% ▲78.4Short-termborrowings

36.4 7.9% 30.0 6.6% ▲6.4CP

459.7 100.0% 451.0 100.0% ▲8.7TOTAL

OMC Card, Inc.

Main financial indicators (incl. Securitization)

Feb. 2004 Feb. 2005 Change vs.Feb, 2004

26.3% 30.2% +3.9%Direct financing ratio

40.9% 51.4% +10.6%Fixed-interest

debt ratio

50.5% 67.4% +16.9%Long-term

financing ratio

OMC Card, Inc.

Financial position

Steady accumulation of profits has nullified the losses carried forward.

621.1621.1 611.0611.0

40.140.1 56.456.4

TotalTotalAssetsAssets

EquityEquity

Feb, 2004Feb, 2004 Feb, 2005Feb, 2005

Asset Efficiency Further Improves

Expanded operating receivable +41.7Expanded securitization ▲40.5Decreased interest-bearing debt ▲8.7　

Unit: billions of Yen

6.5% 9.2%

Equity ratioFeb, 2004 Feb, 2005

OMC Card, Inc.

OMC Card, Inc.

Establishing its Unique business model

Important Strategic MeasuresImportant Strategic Measures

◆◆ Strengthening Revenue SourcesStrengthening Revenue Sources

◆◆ Evolving Database Marketing

1. Enhancing cash advance business 2．Enhancing cost competitiveness

1. Establishing a CRM-solutionproviding business model

2. Striving to activate cardmembers

DatabaseMarketing

Processing

Card-based Membership Business

Credit Card Business

Third-party Card Processing Business

CardmemberDatabase

SystemInfrastructures

OMC Card, Inc.

Evolving Database MarketingEvolving Database Marketing

OMC Card, Inc.

DBM: evolving into a new phase

1. Building a Database1. Building a Database

２．Developing business, using the DB

２．Developing business, using the DB

３． Providing a tool for co-brandand affinity card strategy

３． Providing a tool for co-brandand affinity card strategy

Developing Customer ValueChain (CVC) business

Launching MARKS, a new test- marketing system

Personal messageVariable lending rate setting

system for each cash advance

Building a DB• Managing cardmember

attributesManaging businesspromotion

User-friendly operations

Establishingone-to-one marketing

Establishing a business model for

our marketing solution partners

Boost co-branded card businessContributing for our partner to boost sales

• Supporting business through analysis ofcardmember shopping behavior

Boost affinity card business• Enhancing communication tools

Buildinga DB-marketinginfrastructure

OMC Card, Inc.

Partner

CreditCredit

CRMCRM

DBMDBM

CustomersCustomers’’buying powerbuying power

Capability toCapability tococo--develop servicesdevelop services

Capability toCapability tosend customerssend customers

◆◆Boost salesBoost sales

◆◆Acquiring Acquiring stable customersstable customers

◆◆ Enhancing salesEnhancing salesat shopping floorsat shopping floors

◆BoostingBoostingcardmemberscardmembers

◆IncreasingIncreasingaffiliated merchantsaffiliated merchants

◆◆ BoostingBoostingtransaction volumetransaction volume

Marketing Solution PartnerMarketing Solution PartnerMarketing Solution Partner

OMC Card, Inc.

１．Establishing a CRM-alliance Business Model

Realizing “win-win” business volume with our partnersRealizing “win-win” business volume with our partners

Cardmember benefits:

Month-end Aug., 05: aiming to boost up to

100 thousand cardmembers

Points: HIMARAYA pointsDiscount: tune-up discounts for ski and snowboardCoupon: discount coupon effective upon card use

Cardholders newly acquired:35 thousand from Nov., 04 to Feb., 05

Purchase on credit card:1.7 times higher than that of cash sales

HIMARAYAHIMARAYA’’ss casecase

Main products: ski, snowboard, golf, outdoor, and other sports goods

No. of shops: 63 nationwide

Company name: HIMARAYA Co., Ltd.

HIMARAYA Card

OMC Card, Inc.

２． Measures for Activating and Reactivating Cardmembers

Highest card user rate in the Japanese credit card industryHighest card user rate in the Japanese credit card industry

67.6%66.5%

63.5%

61%

73%

64.4%

50%

60%

70%

80%

Feb, 2002 Feb, 2003 Feb, 2004 Feb, 2005

Recent history of our card user rate and non-Daiei transaction share

Card user rate

Non-Daiei share in total credit card contracttransaction volume

OMC Card, Inc.

9

58

201

0

50

100

150

200

250

Feb, 2003 Feb, 2004 Feb, 2005

176

387

622

0

200

400

600

800

Feb, 2003 Feb, 2004 Feb, 20051

2

3

4

5

（１） Enhancing our presence in mass-market

Growth in cardmembersand transaction volume

(in thousand) Index

Activating postal savings joint card market Growing Electronic Toll Collection(ETC) market

Increase in ETC cardmembers(in thousand)

Activating existing cardmembersBoosting cardmembers by OMC’s uniquecard solicitation know-how.

Card application channels:expressway service areascar product shopsweb site

Methodology:On-site credit card issuing system Business strategy:

no annual fee

Card user rate of ETC cardmember:

84.3%

Growth indexfor transaction volume(basing the 2002 figure as 1)

No. of cardmembers

Raising card use rate, by making use of DBM:providing high-quality information, taking

advantage of our Personal Message enhancing point services

OMC Card, Inc.

0

2,000

4,000

6,000

8,000

10,000

Feb, 2003 Feb, 2004 Feb, 2005

（２） Growing Customer Value Chain (CVC) Business

Cardmembers

EducationEducation Finance &InsuranceFinance &InsuranceHousingHousingShopping

& GourmetShopping

& GourmetFashion& BeautyFashion& Beauty AutomobileAutomobile Travel &

ResortTravel &

Resort

●●

●●

●●

Life TimeProviding high quality products & services

Number of CVC-allied companies as of Feb., 2005: 152

• improving customer satisfactionand conveniencebuilding strong partnershipincreasing loyal customers

• boosting co-branded & affinity card businessthrough alliances

strengthening menus for products and services

Record of CVC transaction volumeJPY millionCardmember strategy:

Product & alliance strategy:

OMC Card, Inc.

（３） Expansion in standing order credit card payment market

Increasing loyal customers and raising a percentage share in the new payment markets

80%

90%

100%

110%

Feb, 2004 Feb, 2005

＋8point

Maintenance rate of new cardmembers

Kansai Electric Powercard payment members

All Cardmembers

Existing marketCommunication and

network payment marketUtility bills

payment market

Transportationpayment market

・DoCoMo

・KDDI

・TTNET・Nifty serve

・WOWWOW since Nov, 2004

since Oct, 2004

・Saibu Gas

・The Sankei Shimbun

・Yamanashi Kotsu

・ＪＲ Group

・JH

・JAL,ANA, Skymark, AIR.DO..

・KEPCO

・Osaka Gas

・CHUBU Electric Power

・The Chugoku Electric Power

・TOKYO GAS・ITOCHU ENEX HOMELIFE KYUSHU

since Nov, 2004

Medical ExpenseMedical ExpensePaymentsPayments

Tax PaymentTax Payment

Future Payment Markets

Growth PotentialAverage annual card use per account of Kansai Electric Power bill payment cardmembers:

Threefold of average OMC cardmembers

Latest Market ShareOMC’s share in credit card standing order payments:KEPCO 30%Saibu Gas 30%

OMC Card, Inc.

Strengthening Revenue SourcesStrengthening Revenue Sources

OMC Card, Inc.

Expanding Cash Advance Business

（１）Acquiring new credit card accounts

Growth of 120,000 cash advance accounts during 2004Growth of 120,000 cash advance accounts during 2004In JPY billion

Breakdown of net increase in cashadvance outstanding as of Feb., 2005

Net increasefrom existingusers:

61.8%

New cash advancefrom new users:

38.2%

Expanding business, by making use of ourunique on-site credit card issuing system anda unique functionality to change lending ratefor each cash advance. 200

250

300

350

400

Feb, 2004 Aug, 2004 Feb, 2005

Reinforced credit review

Boosted new accounts

368

Net increase

+45323

Status of cash advance balance(Influence of securitization adjusted)

OMC Card, Inc.

（２）Diversifying credit risks

Reducing cash advance balance per account by increasing new accounts (with low credit lines)

Reducing cash advance balance per account by increasing new accounts (with low credit lines)

110%

99%

118%109%

101% 105%105%

108%

101%

105%

50%

100%

150%

Feb, 2003 Aug, 2003 Feb, 2004 Aug, 2004 Feb, 2005

Annual growth in number of accounts withoutstanding balance

Annual growth in cash advance outstanding per account

OMC Card, Inc.

（３）Improving credit quality

Number of personal bankruptcies in Japan is steadily fallingNumber of personal bankruptcies in Japan is steadily falling

80.0%

100.0%

120.0%

140.0%

1Q, 03 2Q, 03 3Q, 03 4Q, 03 1Q, 04 2Q, 04 3Q, 04 4Q, 04

Annual increase/decrease in number of bankruptcies

OMC Card, Inc.

(4) Evolving Credit Risk Management Technology

World’s leading credit risk management systemWorld’s leading credit risk management system

Index

0.15%

0.08%0.08%

0.07%

0.04%

0.13%

0.00%

0.05%

0.10%

0.15%

2002 2003 2004

Fraud incidence in proportion to totalcredit card outstanding balance

Industry average

OMC

Lower than the industry average

GriffonGriffon

SprintSprint

Security Manager :

Workflow Master :

•Unlimited number of fraudpattern registration

•Real-time processing ofnew registration ruling

Hawks, Merchant Monitoring System

Fraud Inspection System

Implemented a new fraud inspection system

•Automatic summation andanalysis of fraud use data

• Enabling rationalization withpaperless work process

New

New

HawksHawksStore Manager :

•Upgraded in line withimplementation of GriffonSystem.

Renewal

Achieving further reduction in fraud

OMC Card, Inc.

(5) Toward further strong growth

Other LoanProducts

Cash Advance

Finance BusinessLending rate setting system(for each cash advance)

Flexible interest rate setting

Increasing new cardmembers

Boosting cash advance users

Diversifying products

Providing customers withflexible interest service

Specific customer

Optional term

Each independentcash advance transaction

×

×

•Winning new cardmembers•Activating dormant accounts•Increasing and maintaining

frequent cash advance users

•Providing favored interest rate•Shifting to a new customer segment

from existing inactive segment

•Releasing lending products inaccordance with level of credit risks

•“Consolidation” loans

OMC Card, Inc.

Card Business

Sold travel business toNippon Travel Agency, Co., Ltd.

Sold mail-order businessto Edion Group

Sold door-to-doorsales business to

Yamano Holdings, Co., Ltd.

Concentrating on core business

Forming an alliance with purchasing companies

Reduced JPY2.5 billion for the last fiscal year.

Disposal of unprofitable business

Enhancing Cost Competitiveness

(1) Re-engineering business structure

Drastically slashing cost by means of withdrawing from unprofitable business

OMC Card, Inc.

(2) Re-engineering cost structure

Striving to restructure card business processStriving to restructure card business process

Credit scoring& card issuance

Credit scoring& card issuance

Promotingcard use

Promotingcard use Billing & collectionBilling & collection

Abolition Change Kaizen Maintenance

Re-engineering the entire operational process

MethodologyApplication materialsApplication sitesMan hour used

MethodologyInquiring credit iInformation

Internal credit policy

Interrelatingoperations

Card use promotionControl of card applicationmaterialsVerification of resultsSharing verification results

MethodologyMan hour usedMaintenance of manuals

eg., cardmembersolicitation

Management

Operations

Smooth interrelationship

Card applicationCard application

Cost Reduction Target: 10%, excluding bad debts provisions

OMC Card, Inc.

効率化と品質維持・向上の両立効率化と品質維持・向上の両立効率化と品質維持・向上の両立

（EX）パーソナルメッセージ

印刷 　封入 　発送

抜本的見直し

年間５億円のコスト削減 カラー化による

品質改善＋

eg., Personal Message on monthly statement

Plus, brought up qualityby releasing coloredPersonal Message version

＋

Achieved JPY500 millioncost reduction per year

Achieved efficiency, quality maintenance and improvementAchieved efficiency, quality maintenance and improvement

Drastically re-engineeredthe whole process

Drastically re-engineeredthe whole process

Printing Enclosing Mailing

OMC Card, Inc.

Achieving a higher brand recognition

Cardmembers

◆ Enhancing level of businessand services

•Enhancing card businessand CVC business

Customer SatisfactionImproving CommitteeBuilt “fure-ai”, or contact,service counters

◆ Improved organizational structure:

Service Level Agreement (SLA) managementCareer-path personnelmanagement

◆ Achieving highquality Call Center:

Consequently, won “Contact Center Award for 2004”

•94 per cent of all our employeesare “Personal Information Administrator” certified by Japan Consumer Credit Industry Association

◆Thorough training andeducation of all employees

In February, 2005, won “Customer SatisfactionStandard Award”, a newlyintroduced CS standard award by JMA Consultants, Inc.

In March, 2005, won “Consumer-oriented Excellent Company Award for 2004”, given by Minister of Economy, Trade and Industry.

Steadily implemented such measures as described above in order to further improve the level of customer satisfaction.

OMC Card, Inc.

OMC Card, Inc.

Main operating indicators

1,400,000 New ApplicationsAnnual Target:

7,800,000 CardholdersYear-end Target:

75％Non-Daiei Share

on transaction volume Year-end Target:

OMC Card, Inc.

P/L target for Fiscal February, 2006

Feb. 2006forecast

Change vs.Feb. 2005(base:100%)

Change vs.Feb. 2005(amount)

Unit: billions of Yen

1,592.0 4.3 100.3%Transaction volume

145.4 6.2 104.5%Operating revenues

32.5 4.6 116.5%Ordinary income

18.0 2.2 113.8%Net income

OMC Card, Inc.

Main indicators for Fiscal February, 2006

Feb. 2005results

Feb. 2006forecast

2.6％ 3.0％ROA

9.2％ 13.0％Stockholders’

equity ratio

32.8％ 27.5％ROE

20.0％ 22.4％Ordinary income per operating revenue

OMC Card, Inc.

Financing Strategy for Fiscal February, 2006

Fiscal Feb., 2005 Fiscal Feb., 2006

Insufficient capital baseLow credit standing of the company

Disposition of losses carried forward

Restarting dividend payout

Improved credit standing of the company

[Managerial status]

•High cost of funds•Low company rating

Financing Strategy and Measures

Strategy Measures1.Shifting from funding volume to quality (1).Lowering funding cost

(2).Promoting efficient use of funds2.Promoting diversification of funding (1).Opening new bank lines

(2).Enhancing direct financing3.Improvement of company rating (1).Raising existing company ratings

(2).Obtaining new ratings

OMC Card, Inc.

Financing Plans for February 2006 (Consolidated)Unit: billions of Yen

Feb. 2006forecast

Change vs.Feb. 2005(amount)

% of total

292.5 72.5%＋3.1Long-term debt

86.9 21.5%　　▲44.7Short-termborrowings

▲5.924.1 6.0%CP &securitization

▲47.5403.5 100.0%TOTAL