Edgar Filing: SONY CORP

a51150995.htm

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July 2015

Commission File Number: 001-06439

SONY CORPORATION

(Translation of registrant's name into English)

1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN

(Address of principal executive offices)

The registrant files annual reports under cover of Form 20-F.

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F,

Form 20-F X

Form 40-F __

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934, Yes No X

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-______

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SONY CORPORATION
	(Registrant)


	By: /s/ Kenichiro Yoshida
	(Signature)
	Kenichiro Yoshida
	Executive Deputy President and
	Chief Financial Officer

Date: July 30, 2015

List of materials

Documents attached hereto:

i) Press release announcing Consolidated Financial Results for the First Quarter Ended June 30, 2015


	1-7-1 Konan, Minato-ku Tokyo 108-0075 Japan
News & Information

No. 15-064E

3:00 P.M. JST, July 30, 2015

Consolidated Financial Results for the First Quarter Ended June 30, 2015

Tokyo, July 30, 2015 -- Sony Corporation today announced its consolidated financial results for the first quarter ended June 30, 2015 (April 1, 2015 to June 30, 2015).

	(Billions of yen, millions of U.S. dollars, except per share amounts)
	First Quarter ended June 30
	2014		2015		Change in yen			2015*
Sales and operating revenue	¥	1,809.9	¥	1,808.1		-0.1	%	$	14,820
Operating income		69.8		96.9		+38.8			794
Income before income taxes		68.4		138.7		+102.9			1,137
Net income attributable to Sony Corporation’s stockholders		26.8		82.4		+207.5			676
Net income attributable to Sony Corporation’s stockholders per share of common stock:
- Basic	¥	25.69	¥	70.52		+174.5		$	0.58
- Diluted		22.94		70.36		+206.7			0.58

* U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 122 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of June 30, 2015.

All amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

Sony Corporation and its consolidated subsidiaries are together referred to as “Sony”.

The average foreign exchange rates during the quarters ended June 30, 2014 and 2015 are presented below.

	First Quarter ended June 30
	2014		2015		Change
The average rate of yen
1 U.S. dollar	¥	102.2	¥	121.3		15.8	%	(yen depreciation）
1 Euro		140.1		134.2	4.5			(yen appreciation）

Consolidated Results for the First Quarter Ended June 30, 2015

Sales and operating revenue (“Sales”) decreased by 0.1% compared to the same quarter of the previous fiscal year (“year-on-year”) to 1,808.1 billion yen (14,820 million U.S. dollars). Sales were essentially flat year-on-year mainly due to a decrease in Mobile Communications (“MC”) segment sales reflecting a significant decrease in smartphone unit sales and a decrease in Home Entertainment & Sound (“HE&S”) segment sales reflecting a decrease in unit sales of mid-range LCD televisions, substantially offset by the impact of foreign exchange rates and a significant increase in Devices segment sales reflecting the strong performance of image sensors. On a constant currency basis, sales decreased 7% year-on-year. For further details about the impact of foreign exchange rate fluctuations on sales and operating income (loss), see Notes on page 9.

Operating income increased 27.1 billion yen year-on-year to 96.9 billion yen (794 million U.S. dollars). This significant increase was primarily due to an increase in operating income in the Music segment, reflecting the recording of a remeasurement gain, described below, and the impact of the increase in sales in the Devices segment. This increase was partially offset by the negative impact of foreign exchange rates in the MC segment and lower sales in the Pictures segment due to a decrease in theatrical and television licensing revenues for Motion Pictures.

Operating income in the current quarter includes a 151 million U.S. dollar (18.1 billion yen) gain on the remeasurement to fair value of Sony Music Entertainment (“SME”)’s 51% equity interest in Orchard Media, Inc. (“The Orchard”), which had previously been accounted for under the equity method, as a result of SME increasing its ownership interest to 100%, in the Music Segment, as well as a gain of 12.3 billion yen (101 million U.S. dollars) from the sale of a part of the logistics business, in connection with the formation of a logistics joint venture, recorded in Corporate and elimination. Operating income in the same quarter of the previous fiscal year included a gain of 14.8 billion yen recognized on the sale of certain buildings and premises at the Gotenyama Technology Center in Japan, recorded in Corporate and elimination.

During the current quarter, restructuring charges, net, decreased 5.1 billion yen year-on-year to 10.1 billion yen (83 million U.S. dollars).

Equity in net income of affiliated companies, recorded within operating income, decreased 2.8 billion yen year-on-year to 0.4 billion yen (3 million U.S. dollars). This decrease was mainly due to a deterioration of equity in net income (loss) for Intertrust Technologies Corporation in All Other.

The net effect of other income and expenses was income of 41.8 billion yen (343 million U.S. dollars), an improvement of 43.2 billion yen year-on-year due to a 46.8 billion yen (384 million U.S. dollars) gain on the sale of certain shares of Olympus Corporation (“Olympus”) and a 2.7 billion yen (22 million U.S. dollars) gain on the sale of shares in connection with the above-mentioned formation of a logistics joint venture, partially offset by a gain of 4.8 billion yen on the sale of Sony Corporation’s shares of SQUARE ENIX HOLDINGS CO., LTD. recorded in the same quarter of the previous fiscal year.

Income before income taxes increased 70.3 billion yen year-on-year to 138.7 billion yen (1,137 million U.S. dollars).

Income taxes: During the current quarter, Sony recorded 39.8 billion yen (326 million U.S. dollars) of income tax expense, resulting in an effective tax rate of 28.7%. This effective tax rate was lower than the Japanese statutory tax rate primarily as a result of profits recorded at foreign subsidiaries and in the insurance business, which are both subject to lower tax rates, coupled with lower income tax expenses due to profits recorded at Sony Corporation and its national tax filing group in Japan which currently have valuation allowances.

Net income attributable to Sony Corporation’s stockholders, which deducts net income attributable to noncontrolling interests, increased 55.6 billion yen year-on-year to 82.4 billion yen (676 million U.S. dollars).

Operating Performance Highlights by Business Segment

“Sales and operating revenue” in each business segment represents sales and operating revenue recorded before intersegment transactions are eliminated. “Operating income (loss)” in each business segment represents operating income (loss) reported before intersegment transactions are eliminated and excludes unallocated corporate expenses.

Mobile Communications (MC)

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014			2015			Change in yen			2015
Sales and operating revenue	¥	335.0		¥	280.5			-16.3	%	$	2,299
Operating loss		(1.6	)		(22.9	)		-			(188	)

Due to certain changes in Sony’s organizational structure, sales and operating revenue and operating income (loss) of the MC segment of the comparable prior period have been reclassified to conform to the current presentation. For details, please see Notes on page 8.

Sales decreased 16.3% year-on-year (an 18% decrease on a constant currency basis) to 280.5 billion yen (2,299 million U.S. dollars). This decrease was due to a significant decrease in smartphone unit sales resulting from a strategic decision not to pursue scale in order to improve profitability.

Operating loss increased 21.3 billion yen year-on-year to 22.9 billion yen (188 million U.S. dollars). The above-mentioned decrease in smartphone unit sales and an increase in restructuring charges were offset primarily by reductions in marketing and other expenses as well as an improvement in product mix. However, operating loss increased mainly due to the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs. During the current quarter there was a 25.4 billion yen negative impact from foreign exchange rate fluctuations.

Game & Network Services (G&NS)

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Sales and operating revenue	¥	257.5	¥	288.6		+12.1	%	$	2,365
Operating income		4.3		19.5		+350.5			160

The G&NS segment includes the Hardware, Network, and Other categories. Hardware includes home and portable game consoles; Network includes network services relating to game, video and music content provided by Sony Network Entertainment Inc.; Other includes packaged software and peripheral devices.

Sales increased 12.1% year-on-year (a 7% increase on a constant currency basis) to 288.6 billion yen (2,365 million U.S. dollars). This significant increase was primarily due to increases in PlayStation 4 (“PS4”) software sales and PS4 peripheral device unit sales as well as the impact of foreign exchange rates, partially offset by a decrease in PlayStation®3 (“PS3”) hardware and software sales.

Operating income increased 15.1 billion yen year-on-year to 19.5 billion yen (160 million U.S. dollars). This significant increase was primarily due to PS4 hardware cost reductions, the above-mentioned increases in PS4 software sales and PS4 peripheral device unit sales, partially offset by the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs and the decrease in PS3 software sales. Operating income in the current quarter also includes 4.7 billion yen (39 million U.S. dollars) of insurance recoveries related to losses incurred from the cyberattack on Sony’s network services including the PlayStation®Network in the fiscal year ended March 31, 2012. During the current quarter there was a 15.6 billion yen negative impact from foreign exchange rate fluctuations.

Imaging Products & Solutions (IP&S)

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Sales and operating revenue	¥	164.6	¥	170.4		+3.5	%	$	1,396
Operating income		17.4		21.3		+22.2			174

The IP&S segment includes the Digital Imaging Products and Professional Solutions categories. Digital Imaging Products includes compact digital cameras, interchangeable single-lens cameras and video cameras; Professional Solutions includes broadcast- and professional-use products.

Sales increased 3.5% year-on-year (a 5% decrease on a constant currency basis) to 170.4 billion yen (1,396 million U.S. dollars), primarily due to the impact of foreign exchange rates and an improvement in the product mix of digital cameras reflecting a shift to high value-added models, partially offset by a decrease in unit sales of digital cameras* reflecting a contraction of the market.

Operating income increased 3.9 billion yen year-on-year to 21.3 billion yen (174 million U.S. dollars). This increase was mainly due to the improvement in digital camera product mix reflecting a shift to high value-added models, a year-on-year increase in insurance recoveries related to damages and losses incurred from the floods in Thailand in the fiscal year ended March 31, 2012, and the positive impact of foreign exchange rates, partially offset by the impact of the decrease in unit sales of digital cameras. During the current quarter there was a 2.0 billion yen positive impact from foreign exchange rate fluctuations.

* Digital cameras includes compact digital cameras, interchangeable single-lens cameras and interchangeable lenses.

Home Entertainment & Sound (HE&S)

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Sales and operating revenue	¥	293.7	¥	253.1		-13.8	%	$	2,075
Operating income		8.8		10.9		+23.6			90

The HE&S segment includes the Televisions and Audio and Video categories. Televisions includes LCD televisions; Audio and Video includes Blu-ray DiscTM players and recorders, home audio, headphones and memory-based portable audio devices. Due to certain changes in Sony’s organizational structure, sales and operating revenue and operating income (loss) of the HE&S segment of the comparable prior period have been reclassified to conform to the current presentation. For details, please see Notes on page 8.

Sales decreased 13.8% year-on-year (a 21% decrease on a constant currency basis) to 253.1 billion yen (2,075 million U.S. dollars). This decrease was primarily due to a decrease in unit sales of LCD televisions, mainly in the mid-range, as well as a decrease in home audio and video unit sales reflecting a contraction of the market.

Operating income increased 2.1 billion yen year-on-year to 10.9 billion yen (90 million U.S. dollars). This increase was primarily due to cost reductions and an improvement in product mix reflecting a shift to high value-added models, partially offset by the above-mentioned decrease in LCD televisions and home audio and video unit sales, as well as the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs. During the current quarter there was a 7.7 billion yen negative impact from foreign exchange rate fluctuations.

In Televisions, sales decreased 17.6% year-on-year to 168.9 billion yen (1,385 million U.S. dollars). This decrease was primarily due to a decrease in unit sales. LCD television unit sales decreased year-on-year in all areas other than North America mainly due to a strategic decision not to pursue scale in order to improve profitability. Operating income* decreased 0.9 billion yen year-on-year to 7.0 billion yen (57 million U.S. dollars). This decrease was primarily due to the impact of the decrease in unit sales and the negative impact of the appreciation of the U.S. dollar, reflecting the high ratio of U.S. dollar-denominated costs, partially offset by an improvement in product mix reflecting a shift to high value-added models and cost reductions.

* The operating income (loss) in Televisions excludes restructuring charges, which are included in the overall segment results and are not allocated to product categories.

Devices

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Sales and operating revenue	¥	176.1	¥	237.9		+35.1	%	$	1,950
Operating income		11.5		30.3		+163.8			249

The Devices segment includes the Semiconductors and Components categories. Semiconductors includes image sensors; Components includes batteries and recording media. Due to certain changes in Sony’s organizational structure, sales and operating revenue and operating income (loss) of the Devices segment of the comparable prior period have been reclassified to conform to the current presentation. For details, please see Notes on page 8.

Sales increased 35.1% year-on-year (an 18% increase on a constant currency basis) to 237.9 billion yen (1,950 million U.S. dollars). This increase was primarily due to a significant increase in sales of image sensors reflecting higher demand for image sensors for mobile products, the impact of foreign exchange rates, as well as a significant increase in sales of camera modules. Sales to external customers increased 41.2% year-on-year.

Operating income increased 18.8 billion yen year-on-year to 30.3 billion yen (249 million U.S. dollars). This significant increase was primarily due to the impact of the above-mentioned increase in sales of image sensors and the positive impact of foreign exchange rates. During the current quarter there was an 11.0 billion yen positive impact from foreign exchange rate fluctuations.

* * * * *

Total inventory of the five Electronics* segments above as of June 30, 2015 was 675.6 billion yen (5,538 million U.S. dollars), a decrease of 4.8 billion yen, or 0.7% year-on-year. Inventory increased by 114.1 billion yen, or 20.3% compared with the level as of March 31, 2015.

* The term “Electronics” refers to the sum of the MC, G&NS, IP&S, HE&S and Devices segments.

In connection with the realignment made from the first quarter of the fiscal year ending March 31, 2016, total inventory of the five Electronics segments as of June 30, 2014 and March 31, 2015 has been reclassified to conform to the presentation for the fiscal year ending March 31, 2016. For further details, please see Notes on page 8.

* * * * *

Pictures

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015			Change in yen			2015
Sales and operating revenue	¥	194.8	¥	171.5			-11.9	%	$	1,406
Operating income (loss)		7.8		(11.7	)		-			(96	)

The Pictures segment is comprised of the Motion Pictures, Television Productions, and Media Networks categories. Motion Pictures includes the production, acquisition and distribution of motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks.

The results presented in Pictures are a yen-translation of the results of Sony Pictures Entertainment Inc. (“SPE”), a U.S.-based operation that aggregates the results of its worldwide subsidiaries on a U.S. dollar basis. Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results is specified as being on “a U.S. dollar basis.”

Sales decreased 11.9% year-on-year (a 26% decrease on a U.S. dollar basis) to 171.5 billion yen (1,406 million U.S. dollars). The decrease in sales on a U.S. dollar basis was primarily due to significantly lower sales for Motion Pictures reflecting a decrease in theatrical and television licensing revenues. Theatrical revenues decreased due to the stronger worldwide theatrical performance of films released in the same quarter of the previous fiscal year which benefitted from the performances of The Amazing Spider-Man 2 and 22 Jump Street. Television licensing revenues were lower in the current quarter as the same quarter of the previous fiscal year benefitted from sales of Cloudy With A Chance of Meatballs 2 and Captain Phillips.

Operating loss of 11.7 billion yen (96 million U.S. dollars) was recorded, compared to operating income of 7.8 billion yen in the same quarter of the previous fiscal year. This deterioration in operating results was primarily due to the impact of the decrease in theatrical and television licensing revenues noted above.

Music

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Sales and operating revenue	¥	120.0	¥	130.2		+8.5	%	$	1,067
Operating income		11.6		31.8		+172.9			260

The Music segment is comprised of the Recorded Music, Music Publishing and Visual Media and Platform categories. Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes various service offerings for music and visual products and the production and distribution of animation titles.

The results presented in Music include the yen-translated results of SME, a U.S.-based operation which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis, the results of Sony Music Entertainment (Japan) Inc., a Japan-based music company which aggregates its results in yen, and the yen-translated consolidated results of Sony/ATV Music Publishing LLC (“Sony/ATV”), a 50% owned U.S.-based joint venture in the music publishing business which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

Due to certain changes in Sony’s organizational structure, sales and operating revenue and operating income (loss) of the Music segment of the comparable prior period have been reclassified to conform to the current presentation. For details, please see Notes on page 8.

Sales increased 8.5% year-on-year (a 3% decrease on a constant currency basis) to 130.2 billion yen (1,067 million U.S. dollars) primarily due to the impact of the depreciation of the yen against the U.S. dollar. The decrease in sales on a constant currency basis was primarily due to lower Recorded Music sales. Recorded Music sales decreased primarily due to the continued worldwide contraction of the physical music market. Best-selling titles included Meghan Trainor’s Title, Shogo Hamada’s Journey of a Songwriter and Francis Cabrel’s In Extremis.

Operating income increased 20.1 billion yen year-on-year to 31.8 billion yen (260 million U.S. dollars). This increase was primarily due to the 151 million U.S. dollar (18.1 billion yen) gain on the remeasurement to fair value of SME’s 51% equity interest in The Orchard, which had previously been accounted for under the equity method, as a result of SME increasing its ownership interest to 100% and the positive impact of foreign exchange rates.

Financial Services

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014		2015		Change in yen			2015
Financial services revenue	¥	247.0	¥	279.4		+13.1	%	$	2,290
Operating income		43.8		46.0		+5.0			377

The Financial Services segment results include Sony Financial Holdings Inc. (“SFH”) and SFH’s consolidated subsidiaries such as Sony Life Insurance Co., Ltd. (“Sony Life”), Sony Assurance Inc. and Sony Bank Inc. (“Sony Bank”) The results of Sony Life discussed in the Financial Services segment differ from the results that SFH and Sony Life disclose separately on a Japanese statutory basis.

Financial services revenue increased 13.1% year-on-year to 279.4 billion yen (2,290 million U.S. dollars) primarily due to an increase in revenue at Sony Life. Revenue at Sony Life increased 15.7% year-on-year to 250.9 billion yen (2,056 million U.S. dollars) mainly due to an increase in insurance premium revenue reflecting an increase in policy amount in force, as well as an improvement in investment performance in the separate account resulting mainly from a larger rise in the Japanese stock market during the current quarter than in the same quarter of the previous fiscal year.

Operating income increased 2.2 billion yen year-on-year to 46.0 billion yen (377 million U.S. dollars). This increase was mainly due to an increase in operating income at Sony Life. Operating income at Sony Life increased 3.7 billion yen year-on-year to 40.9 billion yen (335 million U.S. dollars) primarily due to an improvement in investment performance in the general account.

All Other

	(Billions of yen, millions of U.S. dollars)
	First Quarter ended June 30
	2014			2015			Change in yen			2015
Sales and operating revenue	¥	102.9		¥	79.3			-22.9	%	$	650
Operating loss		(20.0	)		(5.0	)		-			(41	)

All Other included the PC business in the previous fiscal year. Due to certain changes in Sony’s organizational structure, sales and operating revenue and operating loss of All Other of the comparable prior period have been reclassified to conform to the current presentation. For details, please see Notes on page 8.

Sales decreased 22.9% year-on-year to 79.3 billion yen (650 million U.S. dollars). This significant decrease in sales was primarily due to the recording of sales in the same quarter of the previous fiscal year from the PC business which was sold in July, 2014.

Operating loss decreased 15.0 billion yen year-on-year to 5.0 billion yen (41 million U.S. dollars). This decrease was primarily due to the absence of the operating loss from the PC business in the same quarter of the previous fiscal year.

* * * * *

Cash Flows

For Consolidated Statements of Cash Flows, charts showing Sony’s cash flow information for all segments, all segments excluding the Financial Services segment and the Financial Services segment alone, please refer to pages F-4 and F-12.

Operating Activities: During the current quarter, there was a net cash outflow of 154.3 billion yen (1,265 million U.S. dollars) from operating activities, compared to a net cash inflow of 66.2 billion yen in the same quarter of the previous fiscal year.

For all segments excluding the Financial Services segment, there was a net cash outflow of 234.6 billion yen (1,923 million U.S. dollars), an increase of 207.1 billion yen, or 752.9% year-on-year. This increase was primarily due to a larger decrease in accrued expenses in other current liabilities, a larger increase in notes and accounts receivable, trade and inventories, and an increase in film costs, partially offset by factors such as a larger increase in notes and accounts payable, trade.

The Financial Services segment had a net cash inflow of 90.8 billion yen (744 million U.S. dollars), a decrease of 10.8 billion yen, or 10.6% year-on-year. This decrease was primarily due to an increase in marketable securities held by Sony Life for trading purposes.

Investing Activities: During the current quarter, Sony used 172.0 billion yen (1,410 million U.S. dollars) of net cash in investing activities, an increase of 47.3 billion yen, or 37.9% year-on-year.

For all segments excluding the Financial Services segment, there was a net cash outflow of 7.5 billion yen (61 million U.S. dollars), compared to a net cash inflow of 0.2 billion yen in the same quarter of the previous fiscal year. The net cash outflow was due to factors such as an increase in the amount of fixed asset purchases, partially offset by factors such as cash inflow from the sale of certain shares of Olympus.

The Financial Services segment used 164.5 billion yen (1,349 million U.S. dollars) of net cash, an increase of 39.7 billion yen, or 31.8% year-on-year. This increase was mainly due to a year-on-year increase in payments for investments and advances at Sony Life.

In all segments excluding the Financial Services segment, net cash used in operating and investing activities combined*1 for the current quarter was 242.1 billion yen (1,984 million U.S. dollars), an increase of 214.8 billion yen, or 785.4% year-on-year.

Financing Activities: Net cash used by financing activities during the current quarter was 7.8 billion yen (64 million U.S. dollars), a decrease of 283.5 billion yen, or 97.3% year-on-year.

For all segments excluding the Financial Services segment, there was a 61.9 billion yen (508 million U.S. dollars) net cash outflow, a decrease of 191.7 billion yen, or 75.6% year-on-year. This decrease was primarily due to the repayment of a syndicated loan in the same quarter of the previous fiscal year and a year-on-year decrease in the redemption of straight bonds.

In the Financial Services segment, financing activities provided 43.6 billion yen (358 million U.S. dollars) of net cash, compared to 45.5 billion yen of net cash used in the same quarter of the previous fiscal year. This change was primarily due to a smaller decrease in customer deposits at Sony Bank and an increase in short-term borrowings at Sony Life.

Total Cash and Cash Equivalents: Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents at June 30, 2015 was 628.1 billion yen (5,148 million U.S. dollars). Cash and cash equivalents of all segments excluding the Financial Services segment was 450.7 billion yen (3,694 million U.S. dollars) at June 30, 2015, a decrease of 65.2 billion yen, or 12.6% compared with the balance as of June 30, 2014, and a decrease of 291.2 billion yen, or 39.3% compared with the balance as of March 31, 2015. Sony believes that it continues to maintain sufficient liquidity through access to a total, translated into yen, of 716.8 billion yen (5,876 million U.S. dollars) of unused committed lines of credit with financial institutions in addition to the cash and cash equivalents balance at June 30, 2015. Within the Financial Services segment, the outstanding balance of cash and cash equivalents was 177.4 billion yen (1,454 million U.S. dollars) at June 30, 2015, an increase of 5.9 billion yen, or 3.4% compared with the balance as of June 30, 2014, and a decrease of 30.1 billion yen, or 14.5% compared with the balance as of March 31, 2015.

Sony has included the information for cash flow from operating and investing activities combined, excluding the Financial Services segment’s activities, as Sony’s management frequently monitors this financial measure, and believes this non-U.S. GAAP measurement is important for use in evaluating Sony’s ability to generate cash to maintain liquidity and fund debt principal and dividend payments from business activities other than its Financial Services segment. This information is derived from the reconciliations prepared in the Condensed Statements of Cash Flows on page F-12. This information and the separate condensed presentations shown below are not required or prepared in accordance with U.S. GAAP. The Financial Services segment’s cash flow is excluded from the measure because SFH, which constitutes a majority of the Financial Services segment, is a separate publicly traded entity in Japan with a significant minority interest and it, as well as its subsidiaries, secure liquidity on their own. This measure may not be comparable to those of other companies. This measure has limitations because it does not represent residual cash flows available for discretionary expenditures principally due to the fact that the measure does not deduct the principal payments required for debt service. Therefore, Sony believes it is important to view this measure as supplemental to its entire statement of cash flows and together with Sony’s disclosures regarding investments, available credit facilities and overall liquidity.

A reconciliation of the differences between the Consolidated Statement of Cash Flows reported and cash flows from operating and investing activities combined excluding the Financial Services segments’ activities is as follows:

	(Billions of yen, millions of U.S. dollars)
	First quarter ended June 30
	2014			2015			2015

Net cash provided by (used in) operating activities reported in the consolidated statements of cash flows	¥	66.2		¥	(154.3	)	$	(1,265	)
Net cash used in investing activities reported in the consolidated statements of cash flows		(124.7	)		(172.0	)		(1,410	)
		(58.5	)		(326.3	)		(2,675	)

Less: Net cash provided by operating activities within the Financial Services segment		101.6			90.8			744
Less: Net cash used in investing activities within the Financial Services segment		(124.9	)		(164.5	)		(1,349	)
Eliminations *2		7.9			10.5			86

Cash flow used by operating and investing activities combined excluding the Financial Services segment’s activities	¥	(27.3	)	¥	(242.1	)	$	(1,984	)

*2	Eliminations primarily consist of intersegment dividend payments.

* * * * *

Notes

Business Segment Realignment

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2016 to reflect modifications to its organizational structure as of April 1, 2015, primarily repositioning certain operations in All Other and the Devices segment. In connection with this realignment, the operations of Sony’s disc manufacturing business in Japan, which were included in All Other, are now included in the Music segment and the operations of So-net Corporation and its subsidiaries, which were included in All Other, are now included in the MC segment. Certain operations regarding pre-installed automotive audio products which were included in the Devices segment are now included in the HE&S segment.

In connection with these realignments, the sales and operating income (loss) of each segment in the fiscal year ended March 31, 2015 have been reclassified to conform to the presentation of the fiscal year ending March 31, 2016.

Impact of Foreign Exchange Rate Fluctuations on Sales and Operating Income (Loss)

For all segments other than Pictures and Music, the impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s quarterly weighted average exchange rate for the three months ended June 30, 2014 from the three months ended June 30, 2015 to the major transactional currencies in which the sales are denominated. The impact of foreign exchange rate fluctuations on operating income (loss) described herein is calculated by subtracting from the impact on sales the impact on cost of sales and selling, general and administrative expenses calculated by applying the same major transactional currencies calculation process to cost of sales and selling, general and administrative expenses as for the impact on sales. Since the worldwide subsidiaries of the Pictures segment and of SME and Sony/ATV in the Music segment are aggregated on a U.S. dollar basis and are translated into yen, the impact of foreign exchange rate fluctuations is calculated by applying the change in the periodic weighted average exchange rate for the three months ended June 30, 2014 from the three months ended June 30, 2015 from U.S. dollar to yen to the U.S. dollar basis operating results. This information is not a substitute for Sony’s consolidated financial statements measured in accordance with U.S. GAAP. However, Sony believes that these disclosures provide additional useful analytical information to investors regarding the operating performance of Sony.

* * * * *

Outlook for the Fiscal Year Ending March 31, 2016

The forecast for consolidated results for the fiscal year ending March 31, 2016, as announced on April 30, 2015, remains unchanged, as per the table below.

	(Billions of yen)
	July Forecast		March 31, 2015 Results			Change from March 31, 2015 Results
Sales and operating revenue	¥	7,900	¥	8,215.9			-3.8%
Operating income		320		68.5		+ ¥251.5 bil
Income before income taxes		345		39.7		+ ¥305.3 bil
Net income (loss) attributable to Sony Corporation’s stockholders		140		(126.0	)	+ ¥266.0 bil

Assumed foreign currency exchange rates for the remainder of the fiscal year ending March 31, 2016 are the following. Due to the recent volatility in foreign exchange rates, the assumed foreign currency exchange rates were revised after the individual segments had already completed their forecasts. Accordingly, the impact of the difference between the currently assumed rates and the rates used when the individual segments completed their forecasts has been included in the forecast for All Other.

Assumed foreign currency exchange rates for the remainder of the current fiscal year

	Consolidated forecast	Forecasts for each segment
1 U.S. dollar	approximately 125 yen	approximately 123 yen
1 Euro	approximately 130 yen	approximately 134 yen

(For your reference)

Assumed foreign currency exchange rates for the current fiscal year at the time of the April forecast

	Consolidated forecast	Forecasts for each segment
1 U.S. dollar	approximately 120 yen	approximately 118 yen
1 Euro	approximately 125 yen	approximately 136 yen

The forecast for each business segment has been revised as follows:

	(Billions of yen)									Change - July Forecast from
	July Forecast			April Forecast			March 31, 2015 Results			April Forecast	March 31, 2015 Results
Mobile Communications
Sales and operating revenue	¥	1,190		¥	1,310		¥	1,410.2		-9.2%	-15.6%
Operating loss		(60	)		(39	)		(217.6	)	- ¥21.0 bil	+ ¥157.6 bil
Game & Network Services
Sales and operating revenue		1,490			1,370			1,388.0		+8.8%	+7.3%
Operating income		60			40			48.1		+ ¥20.0 bil	+ ¥11.9 bil
Imaging Products & Solutions
Sales and operating revenue		720			690			720.0		+4.3%	-
Operating income		60			50			54.7		+¥10.0 bil	+ ¥5.3 bil
Home Entertainment & Sound
Sales and operating revenue		1,160			1,160			1,238.1		-	-6.3%
Operating income		22			22			24.1		-	- ¥2.1 bil
Devices
Sales and operating revenue		1,100			1,080			927.1		+1.9%	+18.7%
Operating income		121			121			89.0		-	+ ¥32.0 bil
Pictures
Sales and operating revenue		1,020			1,020			878.7		-	+16.1%
Operating income		64			64			58.5		-	+ ¥5.5 bil
Music
Sales and operating revenue		550			550			559.2		-	-1.7%
Operating income		74			74			60.6		-	+ ¥13.4 bil
Financial Services
Financial services revenue		1,060			1,060			1,083.6		-	-2.2%
Operating income		175			175			193.3		-	- ¥18.3 bil
All Other, Corporate and Elimination
Operating loss		(196	)		(187	)		(242.2	)	-¥ 9.0 bil	+ ¥46.2 bil
Consolidated
Sales and operating revenue		7,900			7,900			8,215.9		-	-3.8%
Operating income		320			320			68.5		-	+ ¥251.5 bil

Mobile Communications

Sales are expected to be lower than the April forecast primarily due to an expected decrease in smartphone unit sales. Although higher than originally anticipated selling prices of smartphones and additional cost reductions are expected to offset the negative impact of the above-mentioned decrease in sales, operating loss is expected to be larger than the April forecast primarily due to the negative impact of foreign exchange rates.

Game & Network Services

Sales are expected to be higher than the April forecast primarily due to an expected increase in PS4 hardware unit sales and PS4 software sales. Operating income is expected to be above the April forecast due to the above-mentioned increase in sales, partially offset by the negative impact of foreign exchange rates and an expected increase in marketing and promotional costs.

Imaging Products & Solutions

Sales and operating income are expected to be higher than the April forecast primarily due to an expected increase in unit sales of digital cameras and the positive impact of foreign exchange rates.

Devices

Sales are expected to be higher than the April forecast primarily due to an expected increase in image sensor sales reflecting the impact of foreign exchange rates, partially offset by an expected decrease in battery business sales. The forecast for operating income remains unchanged from the April forecast mainly due to the above-mentioned increase in image sensor sales being offset mainly by the above-mentioned decrease in battery business sales.

The forecasts for sales and operating income for the HE&S, Pictures, Music, and Financial Services segments remain unchanged from the April forecast.

The effects of future gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future. Accordingly, future market fluctuations could further impact the current forecast.

The forecast for capital expenditures, depreciation and amortization, as well as research and development expenses for the current fiscal year remains unchanged from the April forecast.

Consolidated

	(Billions of yen)
	July Forecast		March 31, 2015 Results		Change from March 31, 2015 Results
Capital expenditures*	¥	510	¥	251.0		+103.1	%
[additions to property, plant and equipment (included above)		430		164.8		+160.9	]
[additions to intangible assets (included above) *		80		86.2		-7.2	]
Depreciation and amortization**		365		354.6		+2.9
[for property, plant and equipment (included above)		175		165.9		+5.5	]
[for intangible assets (included above)		190		188.8		+0.7	]
Research and development expenses		490		464.3		+5.5

* Does not include the increase in intangible assets resulting from business acquisitions.

** The forecast for depreciation and amortization includes amortization expenses for deferred insurance acquisition costs.

Sony without Financial Services

	(Billions of yen)
	July Forecast		March 31, 2015 Results		Change from March 31, 2015 Results
Capital expenditures*	¥	501	¥	243.9		+105.4	%
[additions to property, plant and equipment (included above)		428		163.4		+161.9	]
[additions to intangible assets (included above) *		73		80.5		-9.3	]
Depreciation and amortization**		294		288.4		+1.9
[for property, plant and equipment (included above)		174		164.7		+5.7	]
[for intangible assets (included above)		120		123.7		-3.0	]

* Does not include the increase in intangible assets resulting from business acquisitions.

This forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances. Actual results may differ materially from those included in this forecast due to a variety of factors. See “Cautionary Statement” below.

* * * * *

Cautionary Statement

Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. Sony cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore investors should not place undue reliance on them. Investors also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to:

(i)	the global economic environment in which Sony operates and the economic conditions in Sony’s markets, particularly levels of consumer spending;

(ii)	foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, or in which Sony’s assets and liabilities are denominated;

(iii)

Sony’s ability to continue to design and develop and win acceptance of, as well as achieve sufficient cost reductions for, its products and services, including televisions, game platforms and smartphones, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing consumer preferences;

(iv)	Sony’s ability and timing to recoup large-scale investments required for technology development and production capacity;

(v)	Sony’s ability to implement successful business restructuring and transformation efforts under changing market conditions;

(vi)	Sony’s ability to implement successful hardware, software, and content integration strategies for all segments excluding the Financial Services segment, and to develop and implement successful sales and distribution strategies in light of the Internet and other technological developments;

(vii)

Sony’s continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to prioritize investments correctly (particularly in the electronics businesses);

(viii)

Sony’s ability to maintain product quality;

(ix)	the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures and other strategic investments;

(x)	significant volatility and disruption in the global financial markets or a ratings downgrade;

(xi)	Sony’s ability to forecast demands, manage timely procurement and control inventories;

(xii)

the outcome of pending and/or future legal and/or regulatory proceedings;

(xiii)

shifts in customer demand for financial services such as life insurance and Sony’s ability to conduct successful asset liability management in the Financial Services segment;

(xiv)

the impact of unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment;

(xv)	Sony’s ability to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information, potential business disruptions or financial losses; and

(xvi)

risks related to catastrophic disasters or similar events.

Risks and uncertainties also include the impact of any future events with material adverse impact.

Investor Relations Contacts:

Tokyo	New York	London
Atsuko Murakami	Justin Hill	Haruna Nagai
+81-(0)3-6748-2111	+1-212-833-6722	+44-(0)19-3281-6000

IR home page: http://www.sony.net/IR/

Presentation slides: http://www.sony.net/SonyInfo/IR/financial/fr/15q1_sonypre.pdf

(Unaudited)
Consolidated Financial Statements
Consolidated Balance Sheets
	(Millions of yen, millions of U.S. dollars)
	March 31			June 30			Change from		June 30
ASSETS	2015			2015			March 31, 2015		2015
Current assets:
Cash and cash equivalents	¥	949,413		¥	628,087		¥	-321,326	$	5,148
Marketable securities		936,731			971,231			+34,500		7,961
Notes and accounts receivable, trade		986,500			1,087,321			+100,821		8,912
Allowance for doubtful accounts and sales returns		(86,598	)		(82,047	)		+4,551		(673	)
Inventories		665,432			780,356			+114,924		6,396
Other receivables		231,947			275,748			+43,801		2,260
Deferred income taxes		47,788			49,559			+1,771		406
Prepaid expenses and other current assets		466,688			517,487			+50,799		4,244
Total current assets		4,197,901			4,227,742			+29,841		34,654

Film costs		305,232			353,208			+47,976		2,895

Investments and advances:
Affiliated companies		171,063			166,820			-4,243		1,367
Securities investments and other		8,360,290			8,440,738			+80,448		69,187
		8,531,353			8,607,558			+76,205		70,554

Property, plant and equipment:
Land		123,629			124,084			+455		1,017
Buildings		679,125			686,185			+7,060		5,624
Machinery and equipment		1,764,241			1,797,563			+33,322		14,735
Construction in progress		35,786			53,215			+17,429		436
		2,602,781			2,661,047			+58,266		21,812
Less-Accumulated depreciation		1,863,496			1,882,372			+18,876		15,429
		739,285			778,675			+39,390		6,383

Other assets:
Intangibles, net		642,361			650,817			+8,456		5,335
Goodwill		561,255			608,945			+47,690		4,991
Deferred insurance acquisition costs		520,571			528,103			+7,532		4,329
Deferred income taxes		89,637			87,769			-1,868		719
Other		246,736			248,549			+1,813		2,036
		2,060,560			2,124,183			+63,623		17,410
Total assets	¥	15,834,331		¥	16,091,366		¥	+257,035	$	131,896


LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	62,008		¥	130,175		¥	+68,167	$	1,067
Current portion of long-term debt		159,517			136,018			-23,499		1,115
Notes and accounts payable, trade		622,215			758,028			+135,813		6,213
Accounts payable, other and accrued expenses		1,374,099			1,309,658			-64,441		10,735
Accrued income and other taxes		98,414			104,525			+6,111		857
Deposits from customers in the banking business		1,872,965			1,866,583			-6,382		15,300
Other		556,372			532,135			-24,237		4,362
Total current liabilities		4,745,590			4,837,122			+91,532		39,649

Long-term debt		712,087			670,777			-41,310		5,498
Accrued pension and severance costs		298,753			301,954			+3,201		2,475
Deferred income taxes		445,876			426,651			-19,225		3,497
Future insurance policy benefits and other		4,122,372			4,215,771			+93,399		34,556
Policyholders’ account in the life insurance business		2,259,514			2,321,115			+61,601		19,026
Other		316,422			311,060			-5,362		2,549
Total liabilities		12,900,614			13,084,450			+183,836		107,250

Redeemable noncontrolling interest		5,248			5,861			+613		48

Equity:
Sony Corporation’s stockholders’ equity:
Common stock		707,038			707,603			+565		5,800
Additional paid-in capital		1,185,777			1,186,694			+917		9,727
Retained earnings		813,765			896,200			+82,435		7,346
Accumulated other comprehensive income		(385,283	)		(402,179	)		-16,896		(3,296	)
Treasury stock, at cost		(4,220	)		(4,253	)		-33		(35	)
		2,317,077			2,384,065			+66,988		19,542

Noncontrolling interests		611,392			616,990			+5,598		5,056
Total equity		2,928,469			3,001,055			+72,586		24,598
Total liabilities and equity	¥	15,834,331		¥	16,091,366		¥	+257,035	$	131,896

F-1

Consolidated Statements of Income
	(Millions of yen, millions of U.S. dollars, except per share amounts)
	Three months ended June 30
	2014			2015			Change from 2014			2015
Sales and operating revenue:
Net sales	¥	1,539,806		¥	1,503,311					$	12,322
Financial services revenue		245,750			277,689						2,276
Other operating revenue		24,352			27,059						222
		1,809,908			1,808,059			-0.1	%		14,820

Costs and expenses:
Cost of sales		1,150,839			1,134,269						9,297
Selling, general and administrative		410,447			378,722						3,104
Financial services expenses		201,678			232,038						1,902
Other operating (income) expense, net		(19,669	)		(33,454	)					(274	)
		1,743,295			1,711,575			-1.8			14,029

Equity in net income of affiliated companies		3,201			423			-86.8			3

Operating income		69,814			96,907			+38.8			794

Other income:
Interest and dividends		3,415			2,652						22
Gain on sale of securities investments, net		5,200			50,782						416
Other		617			647						5
		9,232			54,081			+485.8			443

Other expenses:
Interest		6,412			4,394						36
Foreign exchange loss, net		1,976			5,746						47
Other		2,281			2,138						17
		10,669			12,278			+15.1			100

Income before income taxes		68,377			138,710			+102.9			1,137

Income taxes		26,046			39,812						326

Net income		42,331			98,898			+133.6			811

Less - Net income attributable to noncontrolling interests		15,523			16,457						135

Net income attributable to Sony Corporation’s stockholders	¥	26,808		¥	82,441			+207.5	%	$	676



Per share data:
Net income attributable to Sony Corporation’s stockholders
— Basic	¥	25.69		¥	70.52			+174.5	%	$	0.58
— Diluted		22.94			70.36			+206.7			0.58

Consolidated Statements of Comprehensive Income
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
		2014			2015		Change from 2014				2015

Net income	¥	42,331		¥	98,898			+133.6	%	$	811

Other comprehensive income, net of tax –
Unrealized gains (losses) on securities		1,875			(47,066	)					(386	)
Unrealized losses on derivative instruments	–				(636	)					(5	)
Pension liability adjustment		336			202						2
Foreign currency translation adjustments		(20,840	)		27,607						226

Total comprehensive income		23,702			79,005			+233.3			648

Less - Comprehensive income attributable to noncontrolling interests		18,727			13,460						111

Comprehensive income attributable to Sony Corporation’s stockholders	¥	4,975		¥	65,545			+1,217.5	%	$	537

F-2

Supplemental equity and comprehensive income information
	(Millions of yen, millions of U.S. dollars)
	Sony Corporation’s stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2014	¥	2,258,137		¥	525,004		¥	2,783,141
Exercise of stock acquisition rights		19		–				19
Stock based compensation		377		–				377

Comprehensive income:
Net income		26,808			15,523			42,331
Other comprehensive income, net of tax
Unrealized gains (losses) on securities		(498	)		2,373			1,875
Pension liability adjustment		366			(30	)		336
Foreign currency translation adjustments		(21,701	)		861			(20,840	)
Total comprehensive income		4,975			18,727			23,702

Dividends declared	–				(8,712	)		(8,712	)
Transactions with noncontrolling interests shareholders and other		(2,509	)		(4,051	)		(6,560	)
Balance at June 30, 2014	¥	2,260,999		¥	530,968		¥	2,791,967

Balance at March 31, 2015	¥	2,317,077		¥	611,392		¥	2,928,469
Exercise of stock acquisition rights		1,130		–				1,130
Stock based compensation		287		–				287

Comprehensive income:
Net income		82,441			16,457			98,898
Other comprehensive income, net of tax –
Unrealized losses on securities		(43,356	)		(3,710	)		(47,066	)
Unrealized losses on derivative instruments		(636	)	–				(636	)
Pension liability adjustment		200			2			202
Foreign currency translation adjustments		26,896			711			27,607
Total comprehensive income		65,545			13,460			79,005

Dividends declared		–			(9,847	)		(9,847	)
Transactions with noncontrolling interests shareholders and other		26			1,985			2,011
Balance at June 30, 2015	¥	2,384,065		¥	616,990		¥	3,001,055

	Sony Corporation’s stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2015	$	18,992		$	5,010		$	24,002
Exercise of stock acquisition rights		10		–				10
Stock based compensation		2		–				2

Comprehensive income:
Net income		676			135			811
Other comprehensive income, net of tax –
Unrealized losses on securities		(356	)		(30	)		(386	)
Unrealized losses on derivative instruments		(5	)	–				(5	)
Pension liability adjustment		2			0			2
Foreign currency translation adjustments		220			6			226
Total comprehensive income		537			111			648

Dividends declared	–				(81	)		(81	)
Transactions with noncontrolling interests shareholders and other		1			16			17
Balance at June 30, 2015	$	19,542		$	5,056		$	24,598

F-3

Consolidated Statements of Cash Flows
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
	2014			2015			2015
Cash flows from operating activities:
Net income	¥	42,331		¥	98,898		$	811
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of deferred insurance acquisition costs		84,298			87,021			713
Amortization of film costs		70,892			63,356			519
Accrual for pension and severance costs, less payments		(3,433	)		(3,035	)		(25	)
Other operating (income) expense, net		(19,669	)		(33,454	)		(274	)
Gain on sale or devaluation of securities investments, net		(5,198	)		(50,706	)		(416	)
Gain on revaluation of marketable securities held in the financial services business for trading purposes, net		(10,287	)		(19,088	)		(156	)
(Gain) loss on revaluation or impairment of securities investments held in the financial services business, net		(1,196	)		2,069			17
Deferred income taxes		4,888			5,471			45
Equity in net (income) loss of affiliated companies, net of dividends		(2,046	)		798			7
Changes in assets and liabilities:
Increase in notes and accounts receivable, trade		(38,005	)		(83,030	)		(681	)
Increase in inventories		(65,977	)		(103,603	)		(849	)
Increase in film costs		(63,690	)		(105,273	)		(863	)
Increase in notes and accounts payable, trade		51,364			132,276			1,084
Decrease in accrued income and other taxes		(1,776	)		(6,378	)		(52	)
Increase in future insurance policy benefits and other		101,663			128,265			1,051
Increase in deferred insurance acquisition costs		(18,526	)		(21,790	)		(179	)
Increase in marketable securities held in the financial services business for trading purposes		(8,143	)		(21,679	)		(178	)
Increase in other current assets		(19,940	)		(62,015	)		(508	)
Decrease in other current liabilities		(43,164	)		(147,587	)		(1,210	)
Other		11,856			(14,806	)		(121	)
Net cash provided by (used in) operating activities		66,242			(154,290	)		(1,265	)

Cash flows from investing activities:
Payments for purchases of fixed assets		(51,490	)		(77,034	)		(631	)
Proceeds from sales of fixed assets		26,014			2,484			20
Payments for investments and advances by financial services business		(224,724	)		(316,299	)		(2,593	)
Payments for investments and advances (other than financial services business)		(4,481	)		(4,323	)		(35	)
Proceeds from sales or return of investments and collections of advances by financial services business		101,317			153,984			1,262
Proceeds from sales or return of investments and collections of advances (other than financial services business)		26,092			74,358			609
Proceeds from sales of businesses		–			17,790			146
Other		2,575			(22,962	)		(188	)
Net cash used in investing activities		(124,697	)		(172,002	)		(1,410	)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		8,999			9,712			80
Payments of long-term debt		(219,689	)		(84,767	)		(695	)
Increase (decrease) in short-term borrowings, net		(19,015	)		62,111			509
Increase (decrease) in deposits from customers in the financial services business, net		(32,462	)		20,392			167
Dividends paid		(13,100	)		(59	)		(0	)
Other		(16,087	)		(15,212	)		(125	)
Net cash used in financing activities		(291,354	)		(7,823	)		(64	)

Effect of exchange rate changes on cash and cash equivalents		(9,252	)		12,789			105

Net decrease in cash and cash equivalents		(359,061	)		(321,326	)		(2,634	)
Cash and cash equivalents at beginning of the fiscal year		1,046,466			949,413			7,782

Cash and cash equivalents at end of the period	¥	687,405		¥	628,087		$	5,148

F-4

Business Segment Information
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Sales and operating revenue	2014			2015			Change			2015
Mobile Communications
Customers	¥	334,742		¥	279,536			-16.5	%	$	2,291
Intersegment		238			988						8
Total		334,980			280,524			-16.3			2,299

Game & Network Services
Customers		231,368			265,898			+14.9			2,179
Intersegment		26,162			22,691						186
Total		257,530			288,589			+12.1			2,365

Imaging Products & Solutions
Customers		164,136			168,257			+2.5			1,379
Intersegment		464			2,114						17
Total		164,600			170,371			+3.5			1,396

Home Entertainment & Sound
Customers		293,049			252,487			-13.8			2,070
Intersegment		694			662						5
Total		293,743			253,149			-13.8			2,075

Devices
Customers		136,735			193,005			+41.2			1,582
Intersegment		39,350			44,892						368
Total		176,085			237,897			+35.1			1,950

Pictures
Customers		194,666			171,420			-11.9			1,405
Intersegment		104			129						1
Total		194,770			171,549			-11.9			1,406

Music
Customers		114,861			126,980			+10.6			1,041
Intersegment		5,176			3,211						26
Total		120,037			130,191			+8.5			1,067

Financial Services
Customers		245,750			277,689			+13.0			2,276
Intersegment		1,217			1,697						14
Total		246,967			279,386			+13.1			2,290

All Other
Customers		82,822			60,475			-27.0			496
Intersegment		20,097			18,866						154
Total		102,919			79,341			-22.9			650

Corporate and elimination		(81,723	)		(82,938	)		–			(678	)
Consolidated total	¥	1,809,908		¥	1,808,059			-0.1	%	$	14,820

Game & Network Services (“G&NS”) intersegment amounts primarily consist of transactions with All Other.

Devices intersegment amounts primarily consist of transactions with the Mobile Communications (“MC”) segment, the G&NS segment and the Imaging Products & Solutions (“IP&S”) segment.

All Other intersegment amounts primarily consist of transactions with the Pictures segment, the Music segment and the G&NS segment.

Corporate and elimination includes certain brand and patent royalty income.

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Operating income (loss)	2014			2015			Change			2015
Mobile Communications	¥	(1,609	)	¥	(22,924	)	–		%	$	(188	)
Game & Network Services		4,319			19,459			+350.5			160
Imaging Products & Solutions		17,409			21,271			+22.2			174
Home Entertainment & Sound		8,834			10,923			+23.6			90
Devices		11,500			30,342			+163.8			249
Pictures		7,831			(11,687	)		–			(96	)
Music		11,634			31,750			+172.9			260
Financial Services		43,772			45,972			+5.0			377
All Other		(19,951	)		(4,960	)		–			(41	)
Total		83,739			120,146			+43.5			985
Corporate and elimination		(13,925	)		(23,239	)		–			(191	)
Consolidated total	¥	69,814		¥	96,907			+38.8	%	$	794

The 2014 segment disclosure above has been reclassified to reflect the change in the business segment classification discussed in Note 5.

Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.

Corporate and elimination includes headquarters restructuring costs, restructuring costs related to the reduction in scale of sales companies following the decision to exit from the PC business, and certain other corporate expenses, including the amortization of certain intellectual property assets such as the cross-licensing of intangible assets acquired from Ericsson at the time of the Sony Mobile Communications acquisition, which are not allocated to segments.

Within the Home Entertainment & Sound (“HE&S”) segment, the operating income of Televisions, which primarily consists of LCD televisions, for the three months ended June 30, 2014 and 2015 was 7,916 million yen and 7,003 million yen, respectively. The operating income of Televisions excludes restructuring charges which are included in the overall segment results and are not allocated to product categories.

F-5

Sales to Customers by Product Category
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Sales and operating revenue (to external customers)	2014		2015		Change			2015

Mobile Communications	¥	334,742	¥	279,536		-16.5	%	$	2,291

Game & Network Services
Hardware		136,873		129,465		-5.4			1,061
Network		69,253		105,801		+52.8			867
Other		25,242		30,632		+21.4			251
Total		231,368		265,898		+14.9			2,179

Imaging Products & Solutions
Digital Imaging Products		106,135		107,156		+1.0			878
Professional Solutions		55,716		57,120		+2.5			468
Other		2,285		3,981		+74.2			33
Total		164,136		168,257		+2.5			1,379

Home Entertainment & Sound
Televisions		204,989		168,920		-17.6			1,385
Audio and Video		87,414		81,311		-7.0			666
Other		646		2,256		+249.2			19
Total		293,049		252,487		-13.8			2,070

Devices
Semiconductors		84,948		140,415		+65.3			1,151
Components		50,039		50,155		+0.2			411
Other		1,748		2,435		+39.3			20
Total		136,735		193,005		+41.2			1,582

Pictures
Motion Pictures		104,626		58,175		-44.4			477
Television Productions		42,362		50,975		+20.3			418
Media Networks		47,678		62,270		+30.6			510
Total		194,666		171,420		-11.9			1,405

Music
Recorded Music		79,395		89,328		+12.5			732
Music Publishing		16,288		17,844		+9.6			146
Visual Media and Platform		19,178		19,808		+3.3			163
Total		114,861		126,980		+10.6			1,041

Financial Services		245,750		277,689		+13.0			2,276
All Other		82,822		60,475		-27.0			496
Corporate		11,779		12,312		+4.5			101
Consolidated total	¥	1,809,908	¥	1,808,059		-0.1	%	$	14,820

The above table includes a breakdown of sales and operating revenue to external customers for certain segments shown in the Business Segment Information on page F-5. Sony management views each segment as a single operating segment. However, Sony believes that the breakdown of sales and operating revenue to external customers for the segments in this table is useful to investors in understanding sales by product category.

Sony has realigned its product category configuration from the first quarter of the fiscal year ending March 31, 2016. In connection with the realignment, all prior period sales amounts by product category in the table above have been reclassified to conform to the current presentation.

In the G&NS segment, Hardware includes home and portable game consoles; Network includes network services relating to game, video, and music content; Other includes packaged software and peripheral devices. In the IP&S segment, Digital Imaging Products includes compact digital cameras, interchangeable single-lens cameras and video cameras; Professional Solutions includes broadcast- and professional-use products. In the HE&S segment, Televisions includes LCD televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones, and memory-based portable audio devices. In the Devices segment, Semiconductors includes image sensors; Components includes batteries and recording media. In the Pictures segment, Motion Pictures includes the production, acquisition and distribution of motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks. In the Music segment, Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes various service offerings for music and visual products and the production and distribution of animation titles.

F-6

Other Items
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Depreciation and amortization	2014		2015		Change			2015
Mobile Communications	¥	6,949	¥	6,196		-10.8	%	$	51
Game & Network Services		4,000		4,640		+16.0			38
Imaging Products & Solutions		6,967		7,012		+0.6			57
Home Entertainment & Sound		6,105		5,581		-8.6			46
Devices		21,014		24,135		+14.9			198
Pictures		4,565		5,252		+15.0			43
Music		3,594		4,181		+16.3			34
Financial Services, including deferred insurance acquisition costs		15,619		16,521		+5.8			135
All Other		2,714		1,700		-37.4			14
Total		71,527		75,218		+5.2			616

Corporate		12,771		11,803		-7.6			97
Consolidated total	¥	84,298	¥	87,021		+3.2	%	$	713

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30, 2014
Restructuring charges and associated depreciation	Total net restructuring charges		Depreciation associated with restructured assets		Total

Mobile Communications	¥	13	¥	–	¥	13
Game & Network Services		64		–		64
Imaging Products & Solutions		129		–		129
Home Entertainment & Sound		540		–		540
Devices		542		–		542
Pictures		–		–		–
Music		25		–		25
Financial Services		–		–		–
All Other and Corporate		13,280		669		13,949
Consolidated total	¥	14,593	¥	669	¥	15,262

	Three months ended June 30, 2015
Restructuring charges and associated depreciation	Total net restructuring charges			Depreciation associated with restructured assets		Total

Mobile Communications	¥	7,737		¥	315	¥	8,052
Game & Network Services		15					15
Imaging Products & Solutions		44					44
Home Entertainment & Sound		(57	)		–		(57	)
Devices		(30	)		–		(30	)
Pictures		49			–		49
Music		77			–		77
Financial Services		–			–		–
All Other and Corporate		1,578			403		1,981
Consolidated total	¥	9,413		¥	718	¥	10,131

Depreciation associated with restructured assets as used in the context of the disclosures regarding restructuring activities refers to the increase in depreciation expense caused by revising the useful life and the salvage value of depreciable fixed assets to coincide with the earlier end of production under an approved restructuring plan. Any impairment of the assets is recognized immediately in the period it is identified.

	Three months ended June 30, 2015
Restructuring charges and associated depreciation	Total net restructuring charges			Depreciation associated with restructured assets		Total

Mobile Communications	$	63		$	3	$	66
Game & Network Services		0			–		0
Imaging Products & Solutions		0			–		0
Home Entertainment & Sound		(0	)		–		(0	)
Devices		(0	)		–		(0	)
Pictures		0			–		0
Music		1			–		1
Financial Services		–			–		–
All Other and Corporate		13			3		16
Consolidated total	$	77		$	6	$	83

F-7

Geographic Information
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Sales and operating revenue (to external customers)	2014		2015		Change			2015
Japan	¥	511,379	¥	561,581		+9.8	%	$	4,603
United States		305,286		352,393		+15.4			2,888
Europe		392,196		367,705		-6.2			3,014
China		133,041		130,701		-1.8			1,071
Asia-Pacific		244,873		238,947		-2.4			1,959
Other Areas		223,133		156,732		-29.8			1,285
Total	¥	1,809,908	¥	1,808,059		-0.1	%	$	14,820

Geographic Information shows sales and operating revenue recognized by location of customers.
Major areas in each geographic segment excluding Japan, United States and China are as follows:
	(1) Europe: United Kingdom, France, Germany, Russia, Spain and Sweden
	(2) Asia-Pacific: India, South Korea and Oceania
	(3) Other Areas: The Middle East/Africa, Brazil, Mexico and Canada

F-8

Condensed Financial Services Financial Statements

The results of the Financial Services segment are included in Sony’s consolidated financial statements. The following schedules show unaudited condensed financial statements for the Financial Services segment and all other segments excluding Financial Services. These presentations are not in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which is used by Sony to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements. Transactions between the Financial Services segment and Sony without the Financial Services segment, including noncontrolling interests, are included in those respective presentations, then eliminated in the consolidated figures shown below.

Condensed Balance Sheets
	(Millions of yen, millions of U.S. dollars)
Financial Services	March 31		June 30
	2015		2015		2015
ASSETS
Current assets:
Cash and cash equivalents	¥	207,527	¥	177,435	$	1,454
Marketable securities		933,424		967,472		7,930
Other		147,663		165,564		1,358
		1,288,614		1,310,471		10,742

Investments and advances		8,217,715		8,377,928		68,672
Property, plant and equipment		17,305		17,358		142
Other assets:
Deferred insurance acquisition costs		520,571		528,103		4,329
Other		45,645		44,719		366
		566,216		572,822		4,695
Total assets	¥	10,089,850	¥	10,278,579	$	84,251

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	6,351	¥	56,862	$	466
Deposits from customers in the banking business		1,872,965		1,866,583		15,300
Other		199,098		198,144		1,624
		2,078,414		2,121,589		17,390

Long-term debt		44,460		34,595		284
Future insurance policy benefits and other		4,122,372		4,215,771		34,556
Policyholders’ account in the life insurance business		2,259,514		2,321,115		19,026
Other		335,964		330,934		2,711
Total liabilities		8,840,724		9,024,004		73,967

Equity:
Stockholders’ equity of Financial Services		1,247,840		1,253,282		10,273
Noncontrolling interests		1,286		1,293		11
Total equity		1,249,126		1,254,575		10,284
Total liabilities and equity	¥	10,089,850	¥	10,278,579	$	84,251

F-9

	(Millions of yen, millions of U.S. dollars)
Sony without Financial Services	March 31		June 30
	2015		2015		2015
ASSETS
Current assets:
Cash and cash equivalents	¥	741,886	¥	450,652	$	3,694
Marketable securities		3,307		3,759		31
Notes and accounts receivable, trade		893,847		999,396		8,192
Other		1,272,562		1,465,604		12,013
		2,911,602		2,919,411		23,930

Film costs		305,232		353,208		2,895
Investments and advances		395,189		310,805		2,548
Investments in Financial Services, at cost		111,476		111,476		914
Property, plant and equipment		720,694		760,031		6,230
Other assets		1,497,805		1,554,822		12,743
Total assets	¥	5,941,998	¥	6,009,753	$	49,260

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	215,175	¥	209,331	$	1,716
Notes and accounts payable, trade		622,215		758,028		6,213
Other		1,832,085		1,750,312		14,347
		2,669,475		2,717,671		22,276

Long-term debt		671,104		639,645		5,243
Accrued pension and severance costs		274,220		276,994		2,270
Other		478,704		459,198		3,764
Total liabilities		4,093,503		4,093,508		33,553

Redeemable noncontrolling interest		5,248		5,861		48

Equity:
Stockholders’ equity of Sony without Financial Services		1,733,233		1,796,933		14,729
Noncontrolling interests		110,014		113,451		930
Total equity		1,843,247		1,910,384		15,659
Total liabilities and equity	¥	5,941,998	¥	6,009,753	$	49,260

	(Millions of yen, millions of U.S. dollars)
Consolidated	March 31		June 30
	2015		2015		2015
ASSETS
Current assets:
Cash and cash equivalents	¥	949,413	¥	628,087	$	5,148
Marketable securities		936,731		971,231		7,961
Notes and accounts receivable, trade		899,902		1,005,274		8,239
Other		1,411,855		1,623,150		13,306
		4,197,901		4,227,742		34,654

Film costs		305,232		353,208		2,895
Investments and advances		8,531,353		8,607,558		70,554
Property, plant and equipment		739,285		778,675		6,383
Other assets:
Deferred insurance acquisition costs		520,571		528,103		4,329
Other		1,539,989		1,596,080		13,081
		2,060,560		2,124,183		17,410
Total assets	¥	15,834,331	¥	16,091,366	$	131,896

LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings	¥	221,525	¥	266,193	$	2,182
Notes and accounts payable, trade		622,215		758,028		6,213
Deposits from customers in the banking business		1,872,965		1,866,583		15,300
Other		2,028,885		1,946,318		15,954
		4,745,590		4,837,122		39,649

Long-term debt		712,087		670,777		5,498
Accrued pension and severance costs		298,753		301,954		2,475
Future insurance policy benefits and other		4,122,372		4,215,771		34,556
Policyholders’ account in the life insurance business		2,259,514		2,321,115		19,026
Other		762,298		737,711		6,046
Total liabilities		12,900,614		13,084,450		107,250

Redeemable noncontrolling interest		5,248		5,861		48

Equity:
Sony Corporation’s stockholders’ equity		2,317,077		2,384,065		19,542
Noncontrolling interests		611,392		616,990		5,056
Total equity		2,928,469		3,001,055		24,598
Total liabilities and equity	¥	15,834,331	¥	16,091,366	$	131,896

F-10

Condensed Statements of Income
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Financial Services	2014			2015		Change			2015

Financial services revenue	¥	246,967		¥	279,386		+13.1	%	$	2,290
Financial services expenses		202,917			233,736		+15.2			1,915
Equity in net income (loss) of affiliated companies		(278	)		322		–			2
Operating income		43,772			45,972		+5.0			377
Other income (expenses), net		–			–		–			–
Income before income taxes		43,772			45,972		+5.0			377
Income taxes and other		13,851			13,860		+0.1			114
Net income of Financial Services	¥	29,921		¥	32,112		+7.3	%	$	263

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Sony without Financial Services		2014		2015	Change				2015

Net sales and operating revenue	¥	1,565,285	¥	1,530,977		-2.2	%	$	12,549
Costs and expenses		1,542,723		1,480,148		-4.1			12,133
Equity in net income of affiliated companies		3,479		101		-97.1			1
Operating income		26,041		50,930		+95.6			417
Other income (expenses), net		6,393		52,248		+717.3			429
Income before income taxes		32,434		103,178		+218.1			846
Income taxes and other		15,748		29,586		+87.9			243
Net income of Sony without Financial Services	¥	16,686	¥	73,592		+341.0	%	$	603

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Consolidated		2014			2015	Change				2015

Financial services revenue	¥	245,750		¥	277,689		+13.0	%	$	2,276
Net sales and operating revenue		1,564,158			1,530,370		-2.2			12,544
		1,809,908			1,808,059		-0.1			14,820
Costs and expenses		1,743,295			1,711,575		-1.8			14,029
Equity in net income of affiliated companies		3,201			423		-86.8			3
Operating income		69,814			96,907		+38.8			794
Other income (expenses), net		(1,437	)		41,803		–			343
Income before income taxes		68,377			138,710		+102.9			1,137
Income taxes and other		41,569			56,269		+35.4			461
Net income attributable to Sony Corporation’s stockholders	¥	26,808		¥	82,441		+207.5	%	$	676

F-11

Condensed Statements of Cash Flows
	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Financial Services	2014			2015			2015

Net cash provided by operating activities	¥	101,582		¥	90,809		$	744
Net cash used in investing activities		(124,862	)		(164,539	)		(1,349	)
Net cash provided by (used in) financing activities		(45,522	)		43,638			358
Net decrease in cash and cash equivalents		(68,802	)		(30,092	)		(247	)
Cash and cash equivalents at beginning of the fiscal year		240,332			207,527			1,701
Cash and cash equivalents at end of the period	¥	171,530		¥	177,435		$	1,454

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Sony without Financial Services		2014			2015			2015

Net cash used in operating activities	¥	(27,510	)	¥	(234,645	)	$	(1,923	)
Net cash provided by (used in) investing activities		165			(7,463	)		(61	)
Net cash used in financing activities		(253,662	)		(61,915	)		(508	)
Effect of exchange rate changes on cash and cash equivalents		(9,252	)		12,789			105
Net decrease in cash and cash equivalents		(290,259	)		(291,234	)		(2,387	)
Cash and cash equivalents at beginning of the fiscal year		806,134			741,886			6,081
Cash and cash equivalents at end of the period	¥	515,875		¥	450,652		$	3,694

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
Consolidated		2014			2015			2015

Net cash provided by (used in) operating activities	¥	66,242		¥	(154,290	)	$	(1,265	)
Net cash used in investing activities		(124,697	)		(172,002	)		(1,410	)
Net cash used in financing activities		(291,354	)		(7,823	)		(64	)
Effect of exchange rate changes on cash and cash equivalents		(9,252	)		12,789			105
Net decrease in cash and cash equivalents		(359,061	)		(321,326	)		(2,634	)
Cash and cash equivalents at beginning of the fiscal year		1,046,466			949,413			7,782
Cash and cash equivalents at end of the period	¥	687,405		¥	628,087		$	5,148

F-12

(Notes)

1.	U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥122 = U.S. $1, the approximate Tokyo foreign exchange market rate as of June 30, 2015.

2.	As of June 30, 2015, Sony had 1,266 consolidated subsidiaries (including variable interest entities) and 104 affiliated companies accounted for under the equity method.

3.	The weighted-average number of outstanding shares used for the computation of earnings per share of common stock are as follows:

Weighted-average number of outstanding shares	(Thousands of shares)
	Three months ended June 30
Net income attributable to Sony Corporation’s stockholders	2014		2015
— Basic		1,043,681		1,168,969
— Diluted		1,168,516		1,171,746

The dilutive effect in the weighted-average number of outstanding shares for the three months ended June 30, 2014 primarily resulted from convertible bonds which were issued in November 2012. The dilutive effect in the weighted-average number of outstanding shares for the three months ended June 30, 2015 primarily resulted from stock acquisition rights.

4.	Recently adopted accounting pronouncements:

Reporting discontinued operations and disclosures of disposals of components of an entity

In April 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations that has, or will have, a major effect on the entity’s operations and financial results should be presented as discontinued operations. Additionally, the revised guidance requires additional disclosures for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. This guidance was effective for Sony as of April 1, 2015. The adoption of this guidance did not have a material impact on Sony’s results of operations and financial position.

Repurchase-to-maturity transactions and repurchase financings

In June 2014, the FASB issued new accounting guidance for the accounting and disclosure of repurchase-to-maturity transactions and repurchase financings. The guidance requires that repurchase-to-maturity transactions be accounted for as secured borrowings, and requires that a transfer of a financial asset and a repurchase agreement executed contemporaneously be accounted for separately. The guidance also requires additional disclosures about certain transferred financial assets accounted for as sales and certain transactions accounted for as secured borrowings. Except for the disclosure for transactions accounted for as secured borrowings, the guidance was effective for Sony as of January 1, 2015. The guidance for disclosure for transactions accounted for as secured borrowings was effective for Sony as of April 1, 2015. The adoption of this guidance did not have a material impact on Sony’s result of operations and financial position.

Sony realigned its business segments for the first quarter of the fiscal year ending March 31, 2016 to reflect modifications to its organizational structure as of April 1, 2015, primarily repositioning certain operations, which were in All Other and the Devices segment. In connection with this realignment, the operations of Sony’s disc manufacturing business in Japan, which were included in All Other are now included in the Music segment and the operations of So-net Corporation and its subsidiaries, which were included in All Other are now included in the MC segment. Certain operations regarding pre-installed automotive audio products which were included in the Devices segment are now included in the HE&S segment. For further details of current segments and categories, see page F-6. In connection with this realignment, the sales and operating revenue and operating income (loss) of each segment for the comparable period have been reclassified to conform to the current presentation.

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Sony estimates the annual effective tax rate ("ETR") derived from a projected annual net income before taxes and calculates the interim period income tax provision based on the year-to-date income tax provision computed by applying the ETR to the year-to-date net income before taxes at the end of each interim period. The income tax provision based on the ETR reflects anticipated income tax credits and net operating loss carryforwards; however, it excludes the income tax provision related to significant unusual or extraordinary transactions. Such income tax provision is separately reported from the provision based on the ETR in the interim period in which it occurs.

7.	Certain reclassifications of the financial statements and accompanying footnotes for the three months ended June 30, 2014 have been made to conform to the presentation for the three months ended June 30, 2015.

Other Consolidated Financial Data

	(Millions of yen, millions of U.S. dollars)
	Three months ended June 30
	2014			2015			2015
Capital expenditures*	¥	55,228		¥	93,761		$	769
(Additions to property, plant and equipment)		(37,127	)		(77,485	)		(636	)
(Additions to intangible assets)		(18,101	)		(16,276	)		(133	)
Depreciation and amortization expenses**		84,298			87,021			713
(Depreciation expenses for property, plant and equipment)		(38,574	)		(41,931	)		(343	)
(Amortization expenses for intangible assets)		(45,724	)		(45,090	)		(370	)
Research and development expenses		106,926			111,311			912

*	Excluding additions for tangible and intangible assets from business combinations.
**	Including amortization expenses for deferred insurance acquisition costs.

Subsequent events

On July 21, 2015, Sony raised 285,967 million yen in proceeds from the issuance of new shares by way of the Japanese public offering and the international offering and 120,000 million yen in proceeds from the issuance of 130% callable unsecured zero coupon convertible bonds with stock acquisition rights (the “Zero Coupon Convertible Bonds”). In addition, the possible issuance of new shares by way of third-party allotment in connection with a secondary offering of shares to cover over-allotments is scheduled for August 18, 2015 and is expected to raise up to an additional 15,741 million yen in proceeds. The Representative Corporate Executive Officer, President & CEO of Sony Corporation made the decision to raise funds pursuant to a delegation of authority by the Board of Directors of Sony Corporation.

I. Issuance of new shares

1. Issuance of new shares through the Japanese public offering and the international offering
(1)Class and number of shares issued	87,200,000 new shares of common stock
(2)Issue price	JPY3,420.5 per share
(3)Amount paid	JPY3,279.44 per share
(4)Total amount paid	JPY285,967,168,000
(5)Amount of stated capital increased	JPY142,983,584,000
(6)Payment date	July 21, 2015
(7)Use of proceeds	Capital expenditures and research and development expenditures

2. Issuance of new shares by way of third-party allotment in connection with secondary offering of shares to cover over-allotments
(1)Class and number of shares to be issued	(Up to) 4,800,000 new shares of common stock
(2)Amount paid	JPY3,279.44 per share
(3)Total amount paid	(Up to) JPY15,741,312,000
(4)Amount of stated capital to be increased	(Up to) JPY 7,870,656,000
(5)Payment date	August 18, 2015
(6)Use of proceeds	Capital expenditures and research and development expenditures

F-14

II. Issuance of the callable unsecured convertible bonds with stock acquisition rights through a public offering in Japan

The bondholders are entitled to stock acquisition rights effective from September 1, 2015 to September 28, 2022. The initial conversion price is 5,008 yen per common share. In addition to the standard anti-dilution provisions, the conversion price is reduced for a certain period before an early redemption triggered upon the occurrence of certain corporate events including a merger, corporate split and delisting event. The reduced amount of the conversion price will be determined by a formula which is based on the effective date of the reduction and Sony’s common stock price. The reduced conversion price ranges from 3,526.5 yen to 5,008 yen per common share. The conversion price is also adjusted for dividends in excess of 25 yen per common share per fiscal year. Sony has the option to redeem all of the Zero Coupon Convertible Bonds outstanding at 100% of the principal amount after July 21, 2020, if the closing sales prices per share of Sony’s common stock on the Tokyo Stock Exchange for 20 consecutive trading days are 130% or more of the conversion price of the Zero Coupon Convertible Bonds applicable on those trading days. There are no significant adverse debt covenants related to the Zero Coupon Convertible Bonds. Proceeds from the Zero Coupon Convertible Bonds will be used to fund capital expenditures, to redeem outstanding corporate bonds and to repay borrowings.

F-15