Edgar Filing: SONY CORP

a5813878.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 October 2008

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/ Nobuyuki Oneda
	(Signature)
	Nobuyuki Oneda
	Executive Vice President and
	Chief Financial Officer

Date: October 29, 2008

List of materials

Documents attached hereto:

i) Press release announcing Consolidated Financial Results for the Second Quarter Ended September 30, 2008.

1-7-1 Konan, Minato-ku

Tokyo 108-0075 Japan

News & Information

No: 08-139E

3:00 P.M. JST, October 29, 2008

Consolidated Financial Results

for the Second Quarter Ended September 30, 2008

Tokyo, October 29, 2008 -- Sony Corporation today announced its consolidated results for the second quarter ended September 30, 2008 (July 1, 2008 to September 30, 2008).

l	Consolidated sales decreased 0.5% year-on-year; local currency sales increased 5%.

l	Operating income decreased due to the impact from the decline in the Japanese stock market on the Financial Services segment and a ¥60.7 billion gain on sale of a portion of the former headquarters site recorded in the same quarter of the previous fiscal year.

(Billions of yen, millions of U.S. dollars, except per share amounts)
Second quarter ended September 30
	2007		2008		Change in yen				2008	*
Sales and operating revenue	¥	2,083.0	¥	2,072.3		-0.5	%	$	19,926
Operating income **		111.6		11.0		-90.1			106
(Equity in net income of affiliated companies recorded within operating income)		21.1		1.1		-94.6			11
Income before income taxes **		109.1		7.3		-93.3			70
Net income		73.7		20.8		-71.8			200
Net income per share of common stock
— Basic	¥	73.50	¥	20.74		-71.8		$	0.20
— Diluted		70.09		19.83		-71.7			0.19

Unless otherwise specified, all amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

* U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104=U.S. $1, the approximate Tokyo foreign exchange market rate as of September 30, 2008.

** Effective from the first quarter of the fiscal year ending March 31, 2009, Sony revised the presentation of its financial information to ensure that it is consistent with the way management views its consolidated operations. Since Sony considers Sony Ericsson Mobile Communications AB (“Sony Ericsson”), S-LCD Corporation (“S-LCD”) and SONY BMG MUSIC ENTERTAINMENT (“SONY BMG”) (which together constitute a majority of Sony’s equity investments) to be integral to Sony’s operations, Sony determined that the most appropriate method to report equity in net income or loss of all affiliated companies was as a component of operating income. Of the above equity affiliates, the equity earnings from Sony Ericsson and S-LCD are recorded within the operating income of the Electronics segment and the equity earnings from SONY BMG are recorded within All Other. In connection with this reclassification, consolidated operating income, operating income of each segment and consolidated income before income taxes for all prior periods have been reclassified to conform with the current quarter presentation.

Due to the above noted change in presentation of operating income to include equity in net income of affiliated companies, “sales and operating revenue less costs and expenses” is equivalent to the definition of operating income under the previous presentation. For purposes of assisting investors comparing Sony’s current information with information under the prior presentation, the table below reconciles sales and operating revenue less costs and expenses to operating income as presented above:

(Billions of yen)
Second quarter ended September 30
	2007		2008
Sales and operating revenue less costs and expenses	¥	90.5	¥	9.9
Equity in net income of affiliated companies		21.1		1.1
Operating income	¥	111.6	¥	11.0

Sales and operating revenue less costs and expenses is not a presentation in accordance with U.S. GAAP. It is presented as supplemental information for transition purposes and should be considered in addition to, not as a substitute for, Sony’s operating income and net income.

Consolidated Results for the Second Quarter Ended September 30, 2008

Sales and operating revenue (“sales”) decreased 0.5% compared to the same quarter of the previous fiscal year (“year-on-year”).

Electronics segment sales decreased 0.6% year-on-year due to the negative impact from the appreciation of the yen against the U.S. dollar despite higher sales of certain products, primarily BRAVIA LCD televisions and VAIO™ PCs. In the Game segment, sales increased 10.3% year-on-year primarily as a result of an increase in sales of PLAYSTATION®3 (“PS3”) and PSP® (PlayStation Portable) (“PSP”). In the Pictures segment, there was a 3.4% increase in sales year-on-year due to higher motion picture revenues, primarily from the strong worldwide theatrical performance of Hancock. In the Financial Services segment, although revenue from insurance premiums at Sony Life Insurance Co., Ltd. (“Sony Life”) increased, segment revenue decreased by 36.1% year-on-year due to the impact of a significant decline in the Japanese stock market.

On a local currency basis, consolidated sales increased 5% year-on-year. For references to sales on a local currency basis, see Note on page 8.

Operating income decreased 90.1% year-on-year. One of the factors causing the year-on-year decrease in operating income was a more than ¥40 billion ($385 million) impact from the decline in the Japanese stock market on the Financial Services segment. Additionally, operating income for the same quarter of the previous fiscal year included a ¥60.7 billion gain on the sale of a portion of Sony’s former headquarters site.

In the Electronics segment, operating income decreased significantly, mainly due to the deterioration of the cost of sales ratio, reflecting a decline in unit selling prices and a decrease in equity in net income for Sony Ericsson. In the Game segment, operating loss decreased significantly year-on-year primarily due to PS3 hardware cost reductions and increased sales of PS3 software, as well as strong sales of PSP hardware. In the Pictures segment, operating income increased mainly due to the increase in motion picture revenues described above. In the Financial Services segment, operating income decreased significantly year-on-year due to a deterioration in profitability at Sony Life resulting from the significant decline in the Japanese stock market.

Restructuring charges of ¥0.9 billion ($9 million) were recorded as operating expenses this quarter compared to ¥18.5 billion in the same quarter of the previous fiscal year.

Equity in net income of affiliated companies recorded within operating income decreased 94.6% year-on-year to ¥1.1 billion ($11 million). Sony recorded equity in net loss for Sony Ericsson of ¥1.6 billion ($15 million), compared to equity in net income of ¥21.1 billion in the same quarter of the previous fiscal year primarily due to a shift of the product mix to lower priced phones. Sony also recorded equity in net loss of ¥3.1 billion ($30 million) for SONY BMG, a deterioration of ¥2.6 billion year-on-year, reflecting the impact of the timing of new releases, the continued decline of the worldwide physical music market and higher restructuring costs. Equity in net income of ¥2.6 billion ($25 million) was recorded for S-LCD, a joint-venture with Samsung Electronics Co., Ltd., compared to equity in net loss of ¥0.5 billion in the same quarter of the previous fiscal year.

Income before income taxes was ¥7.3 billion ($70 million), a year-on-year decrease of 93.3%, due to the decrease in operating income discussed above.

Income taxes: During the quarter, Sony recorded an income tax benefit amounting to ¥8.9 billion ($86 million). The benefit resulted from the utilization of tax credits and a reversal of tax reserves principally due to the favorable outcome of tax audits and litigation at certain Sony subsidiaries outside of Japan.

Minority interest in loss of consolidated subsidiaries was ¥4.6 billion ($44 million), compared with ¥0.5 billion income in the same quarter of the previous fiscal year. Minority interest in loss was recorded during the quarter due to the recording of a loss at Sony Life. Sony Life is a consolidated subsidiary of Sony Financial Holdings Inc. (“SFH”), in which Sony’s ownership decreased from 100% to 60% as a result of the global initial public offering of SFH shares in October 2007.

As a result of the changes in the items discussed above, net income decreased 71.8% year-on-year to ¥20.8 billion ($200 million).

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 and unallocated corporate expenses are eliminated.

Electronics

(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
	2007		2008		Change in yen			2008
Sales and operating revenue	¥	1,663.1	¥	1,653.3		-0.6	%	$	15,897
Operating income		127.2		75.6		-40.5			727

Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales decreased by 0.6% year-on-year (a 5% increase on a local currency basis) to ¥1,653.3 billion ($15,897 million) despite higher sales of certain products, primarily BRAVIA LCD televisions, which saw increased unit sales in all regions, VAIO PCs, which saw increased sales outside of Japan, and “α” digital single-lens reflex cameras. This was more than offset by the negative impact from the appreciation of the yen against the U.S. dollar. Sales to outside customers increased 1.7% year-on-year.

Operating income decreased by 40.5% year-on-year to ¥75.6 billion ($727 million). This decrease was largely due to a deterioration of the cost of sales ratio as a result of a decline in unit selling prices and a decrease in equity in net income for Sony Ericsson. With regard to products within the Electronics segment, while profitability improved for BRAVIA LCD televisions and image sensors, profit decreased for Cyber-shotTM compact digital cameras, which were impacted by a decrease in unit sales due to slowing market growth and price declines, VAIO PCs, which were impacted by severe competition and lower prices, and Handycam® video cameras, which saw a decrease in sales due to the contraction of the market.

Inventory, as of September 30, 2008, was ¥1,086.5 billion ($10,447 million), an increase of ¥79.9 billion, or 7.9%, compared with the level as of September 30, 2007 and an increase of ¥70.5 billion, or 6.9%, compared with the level as of June 30, 2008.

Operating Results for Sony Ericsson Mobile Communications AB

The following operating results for Sony Ericsson, which is accounted for by the equity method as Sony Corporation’s ownership percentage is 50%, are not consolidated in Sony’s consolidated financial statements. However, Sony believes that this disclosure provides additional useful analytical information to investors regarding operating performance of Sony. As previously stated, the equity earnings of Sony Ericsson are included in operating income of the Electronics segment.

(Millions of euro)
Quarter ended September 30
	2007		2008			Change in euro
Sales and operating revenue	€	3,108	€	2,808			-10	%
Income (loss) before taxes		384		(13	)		-
Net income (loss)		267		(18	)		-

Sales for the quarter ended September 30, 2008 decreased 10% year-on-year mainly due to the impact of exchange rate fluctuations, as well as a shift of the product mix to lower priced phones. Loss before taxes of €13 million was recorded, a significant deterioration year-on-year, due to continued price pressure at a time of adverse cost trends in the supplier base and strong competition particularly in Europe, which more than offset the contribution of new products introduced at the end of the quarter ended June 30, 2008.

Game

(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
	2007			2008			Change in yen			2008
Sales and operating revenue	¥	243.4		¥	268.5			+10.3	%	$	2,582
Operating income (loss)		(96.7	)		(39.5	)	-				(379	)

Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales increased 10.3% year-on-year (a 15% increase on a local currency basis) to ¥268.5 billion ($2,582 million).

Hardware: Overall hardware sales increased as a result of an increase in sales of PS3 and PSP. Sales of PlayStation®2 (“PS2”) decreased year-on-year.

Software: Despite an increase in PS3 and PSP software sales, overall software sales decreased as a result of a decrease in PS2 software sales.

An operating loss of ¥39.5 billion ($379 million) was reported, an improvement of ¥57.2 billion year-on-year. The decrease in operating loss in the current quarter was primarily due to PS3 hardware cost reductions and increased sales of PS3 software, as well as strong sales of PSP hardware.

Worldwide hardware unit sales (increase/decrease year-on-year):

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PS2:

2.50 million units (a decrease of 0.78 million units)

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PSP:

3.18 million units (an increase of 0.60 million units)

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PS3:

2.43 million units (an increase of 1.12 million units)

Worldwide software unit sales (increase/decrease year-on-year):

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PS2:

23.1 million units (a decrease of 14.9 million units)

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PSP:

11.8 million units (a decrease of 0.8 million units)

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PS3:

21.1 million units (an increase of 10.7 million units)

Inventory, as of September 30, 2008, was ¥243.2 billion ($2,338 million), which represents a ¥4.6 billion decrease compared with the level as of September 30, 2007. Inventory increased by ¥83.7 billion, or 52.5%, compared with the level as of June 30, 2008, due to increased inventory of PS3 and PSP hardware for the holiday sales season.

Pictures

(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
	2007		2008		Change in Yen			2008
Sales and operating revenue	¥	189.6	¥	196.1		+3.4	%	$	1,885
Operating income		3.7		11.0		+199.9			106

Unless otherwise specified, all amounts are reported on a U.S. GAAP basis. The results presented above are a yen-translation of the results of Sony Pictures Entertainment (“SPE”), a U.S. based operation which aggregates the results of its worldwide subsidiaries. Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results are specified as being on “a U.S. dollar basis.”

Sales increased 3.4% year-on-year (13% increase on a U.S. dollar basis). Sales increased due to higher motion picture revenues, primarily from the strong worldwide theatrical performance of Hancock. In the same quarter of the prior year, there was no similar major theatrical release. Other notable releases that contributed to the current quarter’s motion picture revenues included the theatrical releases of Step Brothers and Pineapple Express as well as the home entertainment releases of 21 and Vantage Point.

Operating income of ¥11.0 billion ($106 million) was recorded, a 199.9% increase year-on-year. Operating income benefited from the higher motion picture revenues discussed above as well as higher equity income from the sale of a European cable television channel by an equity affiliate.

Financial Services

(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
	2007		2008			Change in yen			2008
Financial service revenue	¥	157.5	¥	100.7			-36.1	%	$	968
Operating income (loss)		23.1		(25.3	)		-			(243	)

In Sony's Financial Services segment, results include SFH and SFH's consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank Inc. (“Sony Bank”), as well as Sony Finance International Inc. Unless otherwise specified, all amounts are reported on a U.S. GAAP basis. Therefore, the results of Sony Life shown below differ from the results that SFH and Sony Life disclose on a Japanese statutory basis. As a result of the global initial public offering of SFH shares in October 2007, Sony Corporation’s ownership percentage in SFH is 60%. Consolidated results for SFH continue to be presented in Sony’s consolidated financial statements along with a minority interest component.

Financial service revenue decreased 36.1% year-on-year due to a decrease in revenue at Sony Life. Revenue at Sony Life was ¥72.8 billion ($700 million), a ¥51.6 billion or 41.5% decrease year-on-year. Revenue decreased year-on-year due to increased net valuation losses from convertible bonds and impairment losses on equity securities in the general account and net losses from investments in the separate account, brought on by a significant decline in the Japanese stock market. Partially offsetting this was an increase in revenue from insurance premiums reflecting an increase in insurance-in-force.

An operating loss of ¥25.3 billion ($243 million) was recorded as the result of a deterioration in profitability at Sony Life. The operating loss at Sony Life was ¥25.5 billion ($245 million), compared to operating income of ¥17.7 billion in the same quarter of the previous fiscal year. This decrease was mainly due to increased net valuation losses from convertible bonds and impairment losses on equity securities in the general account which more than offset the contribution from increased revenue from insurance premiums at Sony Life.

All Other

(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
	2007		2008		Change in yen			2008
Sales and operating revenue	¥	95.2	¥	90.3		-5.2	%	$	868
Operating income		10.6		3.5		-66.7			34

Unless otherwise specified, all amounts are on a U.S. GAAP basis.

Sales decreased 5.2% year-on-year. Although sales of So-net Entertainment Corporation increased due to higher fee revenue from broadband connection services, especially fiber-optic, overall segment sales decreased due to a decrease in sales at Sony Music Entertainment (Japan) Inc. (“SMEJ”).

Sales at SMEJ decreased year-on-year mainly due to a decrease in album sales resulting from a decline in the physical music market. SMEJ’s best-selling albums during the quarter included PANIC FANCY by ORANGE RANGE and COLOR CHANGE! by CRYSTAL KAY.

Operating income decreased 66.7% year-on-year primarily due to the decreased sales at SMEJ discussed above and a deterioration in equity in net income (loss) for SONY BMG.

Operating Results for SONY BMG MUSIC ENTERTAINMENT

The following operating results for SONY BMG, accounted for by the equity method as Sony Corporation’s ownership percentage during the quarter ended September 30, 2008 was 50%, are not consolidated in Sony’s consolidated financial statements. However, Sony believes that this disclosure provides additional useful analytical information to investors regarding operating performance of Sony. As previously stated, the equity earnings of SONY BMG have been included in operating income of All Other.

	2007			2008			Change in U.S. dollars


Sales and operating revenue	$	851		$	762			-11	%
Income (loss) before income taxes		8			(45	)		-
Net income (loss)		(8	)		(57	)		-

During the quarter ended September 30, 2008, sales at SONY BMG decreased by 11% year-on-year primarily due to the timing of new releases combined with the continued decline in the worldwide physical music market not being offset by growth in digital product sales. SONY BMG recorded a loss before income taxes of $45 million for the quarter ended September 30, 2008 compared to income before income taxes of $8 million that was recorded in the same quarter of the previous fiscal year. The loss for the period reflects the impact of the lower revenue as well as a year-on-year increase in restructuring costs of $4 million. Best selling releases during the quarter included Kings of Leon’s Only by the Night, AC/DC’s No Bull, and Paul Potts’ One Chance.

On October 1, 2008, Sony completed the previously announced acquisition of Bertelsmann AG’s (“Bertelsmann”) 50% stake in SONY BMG. The music company, to be called Sony Music Entertainment (SME), became a wholly owned subsidiary of Sony. The transaction was structured as follows: First, a portion of Bertelsmann’s interest in SONY BMG was redeemed for approximately $600 million of cash by SONY BMG. Sony then purchased the remaining interest from Bertelsmann for approximately $600 million. As a result, Bertelsmann received approximately $900 million in value for its 50% stake plus $300 million of its share of cash on SONY BMG's balance sheet. Sony views this as approximately $600 million net cash cost as it did not consolidate SONY BMG’s cash. In addition, Bertelsmann acquired a limited amount (less than 1% of SONY BMG’s revenues in calendar year 2007) of selected European music catalog assets from SONY BMG. The parties also will continue to share the company’s manufacturing and distribution requirements between Sony’s manufacturing subsidiary, Sony DADC, and Bertelsmann’s services company, Arvato Digital Services GmbH (“Arvato”), by extending agreements with Arvato for additional terms of up to six years. Effective October 1, 2008, SONY BMG will be consolidated by Sony.

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 F12, respectively.

Operating Activities: During the six months ended September 30, 2008, there was a net cash outflow of ¥144.1 billion ($1,385 million) in operating activities, an increase of ¥75.0 billion, or 108.7% year-on-year. For all segments excluding the Financial Services segment, ¥257.1 billion ($2,471 million) of net cash was used in operating activities, an increase of ¥126.6 billion, or 97.0% year-on-year. The Financial Services segment had a net cash inflow of ¥116.4 billion ($1,119 million) from operating activities, an increase of ¥49.3 billion, or 73.4% year-on-year.

During the six months ended September 30, 2008, with respect to all segments excluding the Financial Services segment, the major cash outflow factors included increases in inventory, particularly within the Electronics and Game segments, and income tax payments. This exceeded cash inflow, which included an increase in notes and accounts payable, trade and a cash contribution from net income, after taking into account depreciation and amortization. The Financial Services segment generated net cash mainly from an increase in revenue from insurance premiums reflecting a steady increase in insurance-in-force at Sony Life.

Compared with the same period of the previous fiscal year, within all segments excluding the Financial Services segment, net cash used increased mainly as a result of an increase in income tax payments. Within the Financial Services segment, net cash generated increased year-on-year mainly due to an increase in revenue from insurance premiums reflecting a steady increase in insurance-in-force at Sony Life.

Investing Activities: During the six months ended September 30, 2008, Sony used ¥488.1 billion ($4,693 million) of net cash in investing activities, a decrease of ¥60.7 billion, or 11.1% year-on-year. For all segments excluding the Financial Services segment, ¥170.9 billion ($1,644 million) of net cash was used in investing activities, an increase of ¥16.6 billion, or 10.7% year-on-year. The Financial Services segment used ¥334.0 billion ($3,211 million) in net cash, a decrease of ¥54.7 billion, or 14.1% year-on-year.

During the six months ended September 30, 2008, with respect to all segments excluding the Financial Services segment, payments for items such as purchases of manufacturing equipment in the Electronics segment and the acquisitions of Gracenote, Inc. and 2waytraffic N.V. exceeded proceeds generated mainly from the sales of semiconductor fabrication equipment. Within the Financial Services segment, payments for investments carried out at Sony Life, and payments for advances carried out at Sony Bank, where operations are expanding, exceeded proceeds mainly from the maturities and sales of marketable securities and collections of advances.

Compared with the same period of the previous fiscal year, net cash used in investing activities increased within all segments excluding the Financial Services segment. The net cash outflows for the six months ended September 30, 2008, as described above, exceeded the prior year’s net cash outflows which were partially offset by the proceeds from the sale of a portion of Sony’s former headquarters site. On the other hand, net cash used in investing activities within the Financial Services segment decreased year-on-year mainly due to a decrease in payments for investments, carried out primarily at Sony Life.

In all segments excluding the Financial Services segment, net cash used by operating and investing activities combined was ¥428.0 billion ($4,116 million), an increase of ¥143.2 billion compared to net cash used of ¥284.9 billion in the same period of the previous fiscal year.

Financing Activities: During the six months ended September 30, 2008, ¥236.6 billion ($2,275 million) of net cash was provided by financing activities, a decrease of ¥210.6 billion, or 47.1% year-on-year. For all segments excluding the Financial Services segment, there was a net cash inflow of ¥2.9 billion ($28 million) in financing activities, a decrease of ¥216.5 billion compared to a net cash inflow of ¥219.4 billion in the same period of the previous fiscal year. This was primarily due to an issuance of commercial paper in the same period of the previous fiscal year. There was no similar issuance this fiscal year. In the Financial Services segment, as a result of an increase in policyholder accounts at Sony Life and an increase in deposits from customers at Sony Bank, financing activities generated ¥247.1 billion ($2,376 million) of net cash, an increase of ¥30.8 billion, or 14.2% year-on-year.

Total Cash and Cash Equivalents: Accounting for the above factors and the effect of fluctuations in the exchange rate, the total outstanding balance of cash and cash equivalents at September 30, 2008 was ¥700.9 billion ($6,740 million), a decrease of ¥385.5 billion, or 35.5% compared with the balance as of March 31, 2008. This is an increase of ¥73.9 billion, or 11.8% compared with the balance as of September 30, 2007. The outstanding balance of cash and cash equivalents of all segments excluding the Financial Services segment, was ¥533.7 billion ($5,131 million), a decrease of ¥415.1 billion, or 43.7% compared with the balance as of March 31, 2008. This is an increase of ¥78.5 billion, or 17.3% compared with the balance as of September 30, 2007. Within the Financial Services segment, the outstanding balance of cash and cash equivalents was ¥167.3 billion ($1,608 million), an increase of ¥29.5 billion, or 21.5% compared with the balance as of March 31, 2008. This is a decrease of ¥4.6 billion, or 2.7% compared with the balance as of September 30, 2007.

Note

During the quarter ended September 30, 2008, the average value of the yen was ¥106.7 against the U.S. dollar and ¥160.4 against the euro, which was 9.6% higher against the U.S. dollar and remained flat against the euro, compared with the average rates for the same quarter of the previous fiscal year.

Sales on a local currency basis described herein reflect sales obtained by applying the yen’s monthly average exchange rate in the same quarter of the previous fiscal year to local currency-denominated monthly sales in the current quarter. Sales on a local currency basis are not reflected in Sony’s consolidated financial statements and are not measures conforming with U.S. GAAP. Sony does not believe that these measures are a substitute for U.S. GAAP measures. However, Sony believes that disclosing sales information on a local currency basis provides additional useful analytical information to investors regarding operating performance of Sony.

Outlook for the Fiscal Year ending March 31, 2009

Our forecast for the fiscal year ending March 31, 2009, as revised on October 23, 2008, is as per the table below:

	(Billions of yen)
			Change from
	Current		March 31, 2008
	Forecast		Actual Results
Sales and operating revenue	¥	9,000		+1	%
Operating income		200		-58
(Equity in net income of affiliated companies)		0		-100
Income before income taxes		210		-63
Net income		150		-59

Assumed foreign currency exchange rates for the second half of the fiscal year: approximately ¥100 to the U.S. dollar and approximately ¥140 to the euro.

This forecast is based on management’s current expectations and is subject to uncertainty 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.

As noted above, our current forecast was prepared based on assumed foreign currency exchange rates of approximately ¥100 to the U.S. dollar and approximately ¥140 to the euro. Although Sony has hedged a portion of its sales for the second half of the fiscal year, the unprecedented foreign exchange rate fluctuations occurring in most currencies since the current forecast was prepared may further negatively impact the current forecast.

As is our policy, the effects of gains and losses on investments held by Sony Life due to market fluctuations since the end of the quarter, September 30, 2008, have not been incorporated within the above forecast as we cannot predict where the financial markets will be at the end of the fiscal year ended March 31, 2009. Accordingly, these market fluctuations could further negatively impact the current forecast.

Our forecast for capital expenditures, depreciation and amortization, and research and development expenses, as per the table below, is unchanged from the forecast announced on July 29, 2008.

(Billions of yen)
	July Forecast		Change from previous fiscal year
Capital expenditures (additions to fixed assets) *	¥	430		+28	%
Depreciation and amortization**		420		-2
(Depreciation expenses for tangible assets)		330		0
Research and development expenses		540		+4

* Investments in equity affiliates are not included within the forecast for capital expenditures.
** The forecast for depreciation and amortization includes amortization of intangible assets and amortization of deferred insurance acquisition costs.

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,” “may” or “might” 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 and beliefs in light of the information currently available to it. Sony cautions you 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 you should not place undue reliance on them. You 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, as well as the economic conditions in Sony’s markets, particularly levels of consumer spending as well as the recent worldwide crisis in the financial markets and housing sectors; (ii) exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales 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 newly introduced platforms within the Game segment, which are offered in highly competitive markets characterized by continual new product introductions, rapid development in technology and subjective and changing consumer preferences (particularly in the Electronics, Game and Pictures segments, and the music business); (iv) Sony’s ability and timing to recoup large-scale investments required for technology development and increasing production capacity; (v) Sony’s ability to implement successfully business reorganization activities in its Electronics segment; (vi) Sony’s ability to implement successfully its network strategy for its Electronics, Game and Pictures segments, and All Other, including the music business, and to develop and implement successful sales and distribution strategies in its Pictures segment and the music business 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 correctly prioritize investments (particularly in the Electronics segment); (viii) Sony’s ability to maintain product quality (particularly in the Electronics and Game segments); (ix) the success of Sony’s joint ventures and alliances; (x) the outcome of pending legal and/or regulatory proceedings; (xi) 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; and (xii) 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. Risks and uncertainties also include the impact of any future events with material adverse impacts.

(Unaudited)
Consolidated Financial Statements
Consolidated Balance Sheets
	(Millions of yen, millions of U.S. dollars)
	September 30													March 31
ASSETS	2007			2008			Change from 2007				2008			2008
Current assets:
Cash and cash equivalents	¥	626,984		¥	700,923		¥	+73,939	+11.8	%	$	6,740		¥	1,086,431
Call loan in the banking business		271,638			325,765			+54,127	+19.9			3,132			352,569
Marketable securities		495,143			475,158			-19,985	-4.0			4,569			427,709
Notes and accounts receivable, trade		1,429,133			1,206,065			-223,068	-15.6			11,597			1,183,620
Allowance for doubtful accounts and sales returns		(106,207	)		(71,974	)		+34,233	-32.2			(692	)		(93,335	)
Inventories		1,262,152			1,365,392			+103,240	+8.2			13,129			1,021,595
Deferred income taxes		257,480			230,419			-27,061	-10.5			2,216			237,073
Prepaid expenses and other current assets		757,672			897,764			+140,092	+18.5			8,631			794,001
		4,993,995			5,129,512			+135,517	+2.7			49,322			5,009,663

Film costs		319,936			324,118			+4,182	+1.3			3,117			304,243

Investments and advances:
Affiliated companies		434,159			333,236			-100,923	-23.2			3,204			381,188
Securities investments and other		3,636,241			4,187,704			+551,463	+15.2			40,267			3,954,460
		4,070,400			4,520,940			+450,540	+11.1			43,471			4,335,648

Property, plant and equipment:
Land		168,985			157,888			-11,097	-6.6			1,518			158,289
Buildings		992,839			911,878			-80,961	-8.2			8,768			903,116
Machinery and equipment		2,555,014			2,417,791			-137,223	-5.4			23,248			2,483,016
Construction in progress		62,710			80,480			+17,770	+28.3			774			55,740
Less-Accumulated depreciation		(2,366,962	)		(2,339,054	)		+27,908	-1.2			(22,491	)		(2,356,812	)
		1,412,586			1,228,983			-183,603	-13.0			11,817			1,243,349
Other assets:
Intangibles, net		274,229			307,447			+33,218	+12.1			2,956			263,490
Goodwill		306,837			341,207			+34,370	+11.2			3,281			304,423
Deferred insurance acquisition costs		399,244			401,324			+2,080	+0.5			3,859			396,819
Deferred income taxes		231,074			210,915			-20,159	-8.7			2,028			198,666
Other		462,559			507,970			+45,411	+9.8			4,884			496,438
		1,673,943			1,768,863			+94,920	+5.7			17,008			1,659,836
	¥	12,470,860		¥	12,972,416		¥	+501,556	+4.0	%	$	124,735		¥	12,552,739

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	¥	303,338		¥	71,215		¥	-232,123	-76.5	%	$	685		¥	63,224
Current portion of long-term debt		23,797			378,313			+354,516	+1,489.8			3,638			291,879
Notes and accounts payable, trade		1,186,260			1,228,377			+42,117	+3.6			11,811			920,920
Accounts payable, other and accrued expenses		974,155			987,859			+13,704	+1.4			9,499			896,598
Accrued income and other taxes		115,347			51,318			-64,029	-55.5			493			200,803
Deposits from customers in the banking business		888,443			1,338,223			+449,780	+50.6			12,868			1,144,399
Other		485,296			456,412			-28,884	-6.0			4,388			505,544
		3,976,636			4,511,717			+535,081	+13.5			43,382			4,023,367

Long-term liabilities:
Long-term debt		1,015,239			649,414			-365,825	-36.0			6,244			729,059
Accrued pension and severance costs		180,245			221,084			+40,839	+22.7			2,126			231,237
Deferred income taxes		293,538			238,631			-54,907	-18.7			2,295			268,600
Future insurance policy benefits and other		3,182,692			3,420,503			+237,811	+7.5			32,889			3,298,506
Other		277,055			236,521			-40,534	-14.6			2,275			260,032
		4,948,769			4,766,153			-182,616	-3.7			45,829			4,787,434

Minority interest in consolidated subsidiaries		36,597			262,630			+226,033	+617.6			2,525			276,849

Stockholders' equity:
Capital stock		629,243			630,765			+1,522	+0.2			6,065			630,576
Additional paid-in capital		1,147,507			1,153,571			+6,064	+0.5			11,092			1,151,447
Retained earnings		1,842,655			2,085,045			+242,390	+13.2			20,049			2,059,361
Accumulated other comprehensive income		(106,542	)		(432,571	)		-326,029	+306.0			(4,160	)		(371,527	)
Treasury stock, at cost		(4,005	)		(4,894	)		-889	+22.2			(47	)		(4,768	)
		3,508,858			3,431,916			-76,942	-2.2			32,999			3,465,089
	¥	12,470,860		¥	12,972,416		¥	+501,556	+4.0	%	$	124,735		¥	12,552,739

F-1

Consolidated Statements of Income
	(Millions of yen, millions of U.S. dollars, except per share amounts)
														Fiscal year
	Three months ended September 30													ended March 31
	2007			2008			Change from 2007				2008			2008
Sales and operating revenue:
Net sales	¥	1,903,932		¥	1,950,289		¥	+46,357	+2.4	%	$	18,753		¥	8,201,839
Financial service revenue		151,109			97,469			-53,640	-35.5			937			553,216
Other operating revenue		27,996			24,547			-3,449	-12.3			236			116,359
		2,083,037			2,072,305			-10,732	-0.5			19,926			8,871,414
Costs and expenses:
Cost of sales		1,504,207			1,514,812			+10,605	+0.7			14,566			6,290,022
Selling, general and administrative		410,213			419,888			+9,675	+2.4			4,037			1,714,445
Financial service expenses		125,697			121,641			-4,056	-3.2			1,170			530,306
(Gain) loss on sale, disposal or impairment of assets, net		(47,550	)		6,061			+53,611	-			58			(37,841	)
		1,992,567			2,062,402			+69,835	+3.5			19,831			8,496,932

Equity in net income of affiliated companies		21,146			1,145			-20,001	-94.6			11			100,817

Operating income		111,616			11,048			-100,568	-90.1			106			475,299

Other income:
Interest and dividends		5,235			6,531			+1,296	+24.8			63			34,272
Foreign exchange gain, net		7,904			—			-7,904	-			—			5,571
Gain on sale of securities investments, net		—			319			+319	-			3			5,504
Gain on change in interest in subsidiaries and equity investees		14			336			+322	+2,300.0			3			82,055
Other		4,528			6,620			+2,092	+46.2			64			22,045
		17,681			13,806			-3,875	-21.9			133			149,447

Other expenses:
Interest		6,493			6,611			+118	+1.8			64			22,931
Loss on devaluation of securities investments		9,364			502			-8,862	-94.6			5			13,087
Loss on sale of securities investments, net		38			—			-38	-			—			—
Foreign exchange loss, net		—			6,803			+6,803	-			65			—
Other		4,332			3,631			-701	-16.2			35			21,594
		20,227			17,547			-2,680	-13.2			169			57,612

Income before income taxes		109,070			7,307			-101,763	-93.3			70			567,134

Income taxes		34,879			(8,935	)		-43,814	-			(86	)		203,478

Income before minority interest		74,191			16,242			-57,949	-78.1			156			363,656

Minority interest in income (loss) of consolidated subsidiaries		476			(4,574	)		-5,050	-			(44	)		(5,779	)

Net income	¥	73,715		¥	20,816		¥	-52,899	-71.8		$	200		¥	369,435

Per share data:
Common stock
Net income
— Basic	¥	73.50		¥	20.74		¥	-52.76	-71.8		$	0.20		¥	368.33
— Diluted		70.09			19.83			-50.26	-71.7			0.19			351.10

F-2

	(Millions of yen, millions of U.S. dollars, except per share amounts)
												Fiscal year
	Six months ended September 30											ended March 31
	2007			2008		Change from 2007				2008		2008
Sales and operating revenue:
Net sales	¥	3,672,084		¥	3,725,551	¥	+53,467	+1.5	%	$	35,823	¥	8,201,839
Financial service revenue		328,161			275,851		-52,310	-15.9			2,652		553,216
Other operating revenue		59,302			49,947		-9,355	-15.8			480		116,359
		4,059,547			4,051,349		-8,198	-0.2			38,955		8,871,414
Costs and expenses:
Cost of sales		2,833,109			2,882,477		+49,368	+1.7			27,716		6,290,022
Selling, general and administrative		814,337			814,137		-200	-0.0			7,828		1,714,445
Financial service expenses		271,118			269,425		-1,693	-0.6			2,591		530,306
(Gain) loss on sale, disposal or impairment of assets, net		(48,810	)		4,208		+53,018	-			41		(37,841	)
		3,869,754			3,970,247		+100,493	+2.6			38,176		8,496,932

Equity in net income of affiliated companies		43,111			3,385		-39,726	-92.1			33		100,817

Operating income		232,904			84,487		-148,417	-63.7			812		475,299

Other income:
Interest and dividends		14,695			14,313		-382	-2.6			138		34,272
Foreign exchange gain, net		—			—		—	-			—		5,571
Gain on sale of securities investments, net		1,342			461		-881	-65.6			4		5,504
Gain on change in interest in subsidiaries and equity investees		14			324		+310	+2,214.3			3		82,055
Other		10,980			11,803		+823	+7.5			114		22,045
		27,031			26,901		-130	-0.5			259		149,447

Other expenses:
Interest		13,537			11,427		-2,110	-15.6			110		22,931
Loss on devaluation of securities investments		9,405			1,442		-7,963	-84.7			14		13,087
Foreign exchange loss, net		11,012			19,730		+8,718	+79.2			190		—
Other		11,188			8,560		-2,628	-23.5			82		21,594
		45,142			41,159		-3,983	-8.8			396		57,612

Income before income taxes		214,793			70,229		-144,564	-67.3			675		567,134

Income taxes		74,529			10,066		-64,463	-86.5			97		203,478

Income before minority interest		140,264			60,163		-80,101	-57.1			578		363,656

Minority interest in income (loss) of consolidated subsidiaries		94			4,370		+4,276	+4,548.9			42		(5,779	)

Net income	¥	140,170		¥	55,793	¥	-84,377	-60.2		$	536	¥	369,435

Per share data:
Common stock
Net income
— Basic	¥	139.79		¥	55.60	¥	-84.19	-60.2		$	0.53	¥	368.33
— Diluted		133.22			53.11		-80.11	-60.1			0.51		351.10

F-3

Consolidated Statements of Cash Flows
	(Millions of yen, millions of U.S. dollars)
										Fiscal year
	Six months ended September 30									ended March 31
	2007			2008			2008			2008
Cash flows from operating activities:
Net income	¥	140,170		¥	55,793		$	536		¥	369,435
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of deferred insurance acquisition costs		204,576			195,026			1,875			428,010
Amortization of film costs		163,160			125,271			1,205			305,468
Stock-based compensation expense		1,798			1,967			19			4,130
Accrual for pension and severance costs, less payments		(10,468	)		(11,143	)		(107	)		(17,589	)
(Gain) loss on sale, disposal or impairment of assets, net		(48,810	)		4,208			41			(37,841	)
Gain on sale or loss on devaluation of securities investments, net		8,063			981			10			7,583
Loss on revaluation of marketable securities held in the financial service business for trading purpose, net		4,114			26,312			253			56,543
Gain on change in interest in subsidiaries and equity investees		(14	)		(324	)		(3	)		(82,055	)
Deferred income taxes		(17,605	)		(36,937	)		(355	)		20,040
Equity in net (income) losses of affiliated companies, net of dividends		2,410			28,164			271			(13,527	)
Changes in assets and liabilities:
(Increase) decrease in notes and accounts receivable, trade		47,824			(43,857	)		(422	)		185,651
Increase in inventories		(320,912	)		(364,438	)		(3,504	)		(140,725	)
Increase in film costs		(181,942	)		(135,025	)		(1,298	)		(353,343	)
Increase (decrease) in notes and accounts payable, trade		6,249			297,840			2,864			(235,459	)
Increase (decrease) in accrued income and other taxes		55,494			(137,391	)		(1,321	)		138,872
Increase in future insurance policy benefits and other		78,603			78,754			757			166,356
Increase in deferred insurance acquisition costs		(33,172	)		(35,122	)		(338	)		(62,951	)
Increase in marketable securities held in the financial service business for trading purpose		(45,649	)		(26,057	)		(251	)		(57,271	)
Increase in other current assets		(95,484	)		(230,880	)		(2,220	)		(24,312	)
Increase (decrease) in other current liabilities		28,464			(1,379	)		(13	)		51,838
Other		(55,904	)		64,159			616			48,831
Net cash provided by (used in) operating activities		(69,035	)		(144,078	)		(1,385	)		757,684

Cash flows from investing activities:
Payments for purchases of fixed assets		(232,311	)		(236,183	)		(2,271	)		(474,552	)
Proceeds from sales of fixed assets		73,898			139,867			1,345			144,741
Payments for investments and advances by financial service business		(939,979	)		(823,116	)		(7,915	)		(2,283,491	)
Payments for investments and advances (other than financial service business)		(71,472	)		(73,226	)		(704	)		(103,082	)
Proceeds from maturities of marketable securities, sales of securities investments and collections of advances by financial service business		569,844			500,942			4,817			1,441,496
Proceeds from maturities of marketable securities, sales of securities investments and collections of advances (other than financial service business)		44,735			4,016			39			51,947
Proceeds from sales of subsidiaries' and equity investees' stocks		928			—			—			307,133
Other		5,506			(406	)		(4	)		5,366
Net cash used in investing activities		(548,851	)		(488,106	)		(4,693	)		(910,442	)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		22,867			12,055			116			31,093
Payments of long-term debt		(23,697	)		(9,408	)		(91	)		(34,701	)
Increase in short-term borrowings, net		242,231			12,237			118			15,838
Increase in deposits from customers in the financial service business, net		202,568			237,183			2,281			485,965
Increase in call money and bills sold in the banking business, net		14,000			—			—			—
Dividends paid		(12,537	)		(12,517	)		(121	)		(25,098	)
Proceeds from issuance of shares under stock-based compensation plans		4,742			378			4			7,484
Proceeds from issuance of stocks by subsidiaries		—			—			—			28,943
Other		(2,982	)		(3,343	)		(32	)		(4,006	)
Net cash provided by financing activities		447,192			236,585			2,275			505,518

Effect of exchange rate changes on cash and cash equivalents		(2,221	)		10,091			97			(66,228	)

Net increase (decrease) in cash and cash equivalents		(172,915	)		(385,508	)		(3,706	)		286,532
Cash and cash equivalents at beginning of the fiscal year		799,899			1,086,431			10,446			799,899

Cash and cash equivalents at the end of the period	¥	626,984		¥	700,923		$	6,740		¥	1,086,431

F-4

Business Segment Information
	(Millions of yen, millions of U.S. dollars)
	Three months ended September 30
Sales and operating revenue	2007			2008			Change			2008
Electronics
Customers	¥	1,436,773		¥	1,461,081			+1.7	%	$	14,049
Intersegment		226,287			192,229						1,848
Total		1,663,060			1,653,310			-0.6			15,897

Game
Customers		229,232			245,427			+7.1			2,360
Intersegment		14,192			23,119						222
Total		243,424			268,546			+10.3			2,582

Pictures
Customers		188,820			196,079			+3.8			1,885
Intersegment		776			—						—
Total		189,596			196,079			+3.4			1,885

Financial Services
Customers		151,109			97,469			-35.5			937
Intersegment		6,395			3,234						31
Total		157,504			100,703			-36.1			968

All Other
Customers		77,103			72,249			-6.3			695
Intersegment		18,094			18,033						173
Total		95,197			90,282			-5.2			868

Elimination		(265,744	)		(236,615	)		-			(2,274	)
Consolidated total	¥	2,083,037		¥	2,072,305			-0.5	%	$	19,926

Electronics intersegment amounts primarily consist of transactions with the Game segment, Pictures segment and All Other.

Game intersegment amounts primarily consist of transactions with the Electronics segment.

All Other intersegment amounts primarily consist of transactions with the Electronics, Game and Pictures segments.

Operating income (loss)	2007			2008			Change			2008
Electronics	¥	127,221		¥	75,646			-40.5	%	$	727
Game		(96,686	)		(39,465	)		-			(379	)
Pictures		3,664			10,987			+199.9			106
Financial Services		23,137			(25,279	)		-			(243	)
All Other		10,626			3,542			-66.7			34
Total		67,962			25,431			-62.6			245

Corporate and elimination		43,654			(14,383	)		-			(139	)
Consolidated total	¥	111,616		¥	11,048			-90.1	%	$	106

The 2007 segment disclosure above has been revised to reflect the reclassification discussed in Note 5.

F-5

	(Millions of yen, millions of U.S. dollars)
	Six months ended September 30
Sales and operating revenue	2007			2008			Change			2008
Electronics
Customers	¥	2,752,822		¥	2,811,672			+2.1	%	$	27,035
Intersegment		339,567			280,752						2,700
Total		3,092,389			3,092,424			+0.0			29,735

Game
Customers		413,141			460,419			+11.4			4,427
Intersegment		26,865			37,742						363
Total		440,006			498,161			+13.2			4,790

Pictures
Customers		420,218			355,717			-15.3			3,420
Intersegment		776			—						—
Total		420,994			355,717			-15.5			3,420

Financial Services
Customers		328,161			275,851			-15.9			2,652
Intersegment		14,183			7,877						76
Total		342,344			283,728			-17.1			2,728

All Other
Customers		145,205			147,690			+1.7			1,421
Intersegment		34,169			34,731						333
Total		179,374			182,421			+1.7			1,754

Elimination		(415,560	)		(361,102	)		-			(3,472	)
Consolidated total	¥	4,059,547		¥	4,051,349			-0.2	%	$	38,955

Electronics intersegment amounts primarily consist of transactions with the Game segment, Pictures segment and All Other.

Game intersegment amounts primarily consist of transactions with the Electronics segment.

All Other intersegment amounts primarily consist of transactions with the Electronics, Game and Pictures segments.

Operating income (loss)	2007			2008			Change			2008
Electronics	¥	230,752		¥	119,997			-48.0	%	$	1,154
Game		(125,892	)		(34,047	)		-			(327	)
Pictures		8,303			2,725			-67.2			26
Financial Services		56,890			5,298			-90.7			51
All Other		19,507			10,264			-47.4			98
Total		189,560			104,237			-45.0			1,002

Corporate and elimination		43,344			(19,750	)		-			(190	)
Consolidated total	¥	232,904		¥	84,487			-63.7	%	$	812

The 2007 segment disclosure above has been revised to reflect the reclassification discussed in Note 5.

F-6

Electronics Sales and Operating Revenue to Customers by Product Category
	(Millions of yen, millions of U.S. dollars)
	Three months ended September 30
Sales and operating revenue	2007		2008		Change			2008
Audio	¥	128,998	¥	121,592		-5.7	%	$	1,169
Video		316,024		297,262		-5.9			2,858
Televisions		309,300		364,492		+17.8			3,505
Information and Communications		269,755		277,749		+3.0			2,671
Semiconductors		56,707		59,123		+4.3			568
Components		216,120		211,631		-2.1			2,035
Other		139,869		129,232		-7.6			1,243
Total	¥	1,436,773	¥	1,461,081		+1.7	%	$	14,049

	Six months ended September 30
Sales and operating revenue	2007		2008		Change			2008
Audio	¥	254,489	¥	235,161		-7.6	%	$	2,261
Video		653,412		612,676		-6.2			5,891
Televisions		544,509		676,030		+24.2			6,500
Information and Communications		502,755		506,817		+0.8			4,873
Semiconductors		116,257		117,873		+1.4			1,134
Components		405,171		400,505		-1.2			3,851
Other		276,229		262,610		-4.9			2,525
Total	¥	2,752,822	¥	2,811,672		+2.1	%	$	27,035

The above table is a breakdown of Electronics sales and operating revenue to customers in the Business Segment Information on page F-5 and F-6.

The Electronics segment is managed as a single operating segment by Sony’s management. However, Sony believes that the information in this table

is useful to investors in understanding the product categories in this business segment.

Commencing April 1, 2008, Sony has partially realigned its product category configuration in the Electronics segment. Accordingly, results for the same

period of the previous fiscal year have been reclassified.

Geographic Segment Information
	(Millions of yen, millions of U.S. dollars)
	Three months ended September 30
Sales and operating revenue	2007		2008		Change			2008
Japan	¥	518,627	¥	418,852		-19.2	%	$	4,027
United States		509,802		495,842		-2.7			4,768
Europe		491,666		519,418		+5.6			4,994
Other Areas		562,942		638,193		+13.4			6,137
Total	¥	2,083,037	¥	2,072,305		-0.5	%	$	19,926

	Six months ended September 30
Sales and operating revenue	2007		2008		Change			2008
Japan	¥	1,035,131	¥	938,165		-9.4	%	$	9,021
United States		978,526		929,342		-5.0			8,936
Europe		967,946		981,107		+1.4			9,433
Other Areas		1,077,944		1,202,735		+11.6			11,565
Total	¥	4,059,547	¥	4,051,349		-0.2	%	$	38,955

Classification of Geographic Segment Information shows sales and operating revenue recognized by location of customers.

F-7

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 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 Financial Services are eliminated in the consolidated figures

shown below.

Condensed Balance Sheet
	(Millions of yen, millions of U.S. dollars)
Financial Services	September 30						March 31
ASSETS	2007		2008		2008		2008
Current assets:
Cash and cash equivalents	¥	171,861	¥	167,266	$	1,608	¥	137,721
Call loan in the banking business		271,638		325,765		3,132		352,569
Marketable securities		492,143		471,873		4,537		424,709
Other		298,279		278,878		2,682		290,120
		1,233,921		1,243,782		11,959		1,205,119

Investments and advances		3,538,870		4,119,099		39,607		3,879,877
Property, plant and equipment		38,217		30,277		291		38,512
Other assets:
Deferred insurance acquisition costs		399,244		401,324		3,859		396,819
Other		102,398		119,410		1,148		105,332
		501,642		520,734		5,007		502,151
	¥	5,312,650	¥	5,913,892	$	56,864	¥	5,625,659
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	¥	75,128	¥	66,297	$	637	¥	44,408
Notes and accounts payable, trade		14,192		15,995		154		16,376
Deposits from customers in the banking business		888,443		1,338,223		12,868		1,144,399
Other		142,004		182,187		1,752		157,773
		1,119,767		1,602,702		15,411		1,362,956

Long-term liabilities:
Long-term debt		119,760		107,103		1,030		111,771
Future insurance policy benefits and other		3,182,692		3,420,503		32,889		3,298,506
Other		225,458		190,330		1,829		211,130
		3,527,910		3,717,936		35,748		3,621,407

Minority interest in consolidated subsidiaries		5,310		1,018		10		919
Stockholders' equity		659,663		592,236		5,695		640,377
	¥	5,312,650	¥	5,913,892	$	56,864	¥	5,625,659

F-8

	(Millions of yen, millions of U.S. dollars)
Sony without Financial Services	September 30						March 31
ASSETS	2007		2008		2008		2008
Current assets:
Cash and cash equivalents	¥	455,123	¥	533,657	$	5,132	¥	948,710
Marketable securities		3,000		3,285		32		3,000
Notes and accounts receivable, trade		1,305,752		1,127,982		10,846		1,083,489
Other		2,033,075		2,273,177		21,856		1,801,468
		3,796,950		3,938,101		37,866		3,836,667

Film costs		319,936		324,118		3,117		304,243
Investments and advances		604,661		458,430		4,408		518,536
Investments in Financial Services, at cost		187,400		116,843		1,123		116,843
Property, plant and equipment		1,374,369		1,198,706		11,526		1,204,837
Other assets		1,220,908		1,294,230		12,445		1,203,849
	¥	7,504,224	¥	7,330,428	$	70,485	¥	7,184,975
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	¥	287,867	¥	434,406	$	4,177	¥	339,485
Notes and accounts payable, trade		1,173,483		1,213,959		11,673		906,281
Other		1,439,763		1,319,743		12,690		1,452,756
		2,901,113		2,968,108		28,540		2,698,522

Long-term liabilities:
Long-term debt		939,223		570,192		5,483		650,969
Accrued pension and severance costs		173,605		213,533		2,053		223,203
Other		422,385		360,443		3,465		394,779
		1,535,213		1,144,168		11,001		1,268,951

Minority interest in consolidated subsidiaries		30,270		41,773		402		37,509
Stockholders' equity		3,037,628		3,176,379		30,542		3,179,993
	¥	7,504,224	¥	7,330,428	$	70,485	¥	7,184,975

	(Millions of yen, millions of U.S. dollars)
Consolidated	September 30						March 31
ASSETS	2007		2008		2008		2008
Current assets:
Cash and cash equivalents	¥	626,984	¥	700,923	$	6,740	¥	1,086,431
Call loan in the banking business		271,638		325,765		3,132		352,569
Marketable securities		495,143		475,158		4,569		427,709
Notes and accounts receivable, trade		1,322,926		1,134,091		10,905		1,090,285
Other		2,277,304		2,493,575		23,976		2,052,669
		4,993,995		5,129,512		49,322		5,009,663

Film costs		319,936		324,118		3,117		304,243
Investments and advances		4,070,400		4,520,940		43,471		4,335,648
Property, plant and equipment		1,412,586		1,228,983		11,817		1,243,349
Other assets:
Deferred insurance acquisition costs		399,244		401,324		3,859		396,819
Other		1,274,699		1,367,539		13,149		1,263,017
		1,673,943		1,768,863		17,008		1,659,836
	¥	12,470,860	¥	12,972,416	$	124,735	¥	12,552,739
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings	¥	327,135	¥	449,528	$	4,322	¥	355,103
Notes and accounts payable, trade		1,186,260		1,228,377		11,811		920,920
Deposits from customers in the banking business		888,443		1,338,223		12,868		1,144,399
Other		1,574,798		1,495,589		14,381		1,602,945
		3,976,636		4,511,717		43,382		4,023,367

Long-term liabilities:
Long-term debt		1,015,239		649,414		6,244		729,059
Accrued pension and severance costs		180,245		221,084		2,126		231,237
Future insurance policy benefits and other		3,182,692		3,420,503		32,889		3,298,506
Other		570,593		475,152		4,570		528,632
		4,948,769		4,766,153		45,829		4,787,434

Minority interest in consolidated subsidiaries		36,597		262,630		2,525		276,849
Stockholders' equity		3,508,858		3,431,916		32,999		3,465,089
	¥	12,470,860	¥	12,972,416	$	124,735	¥	12,552,739

F-9

Condensed Statements of Income
	(Millions of yen, millions of U.S. dollars)
Financial Services	Three months ended September 30
	2007			2008			Change			2008

Financial service revenue	¥	157,504		¥	100,703			-36.1	%	$	968
Financial service expenses		134,367			124,914			-7.0			1,201
Equity in net loss of an affiliated company		—			(1,068	)		—			(10	)
Operating income (loss)		23,137			(25,279	)		—			(243	)
Other income (expenses), net		(72	)		(128	)		—			(1	)
Income (loss) before income taxes		23,065			(25,407	)		—			(244	)
Income taxes and other		11,766			(7,516	)		—			(72	)
Net income (loss)	¥	11,299		¥	(17,891	)		—	%	$	(172	)

	(Millions of yen, millions of U.S. dollars)
Sony without Financial Services	Three months ended September 30
	2007			2008			Change			2008

Net sales and operating revenue	¥	1,934,650		¥	1,976,286			+2.2	%	$	19,003
Costs and expenses		1,867,724			1,942,565			+4.0			18,678
Equity in net income of affiliated companies		21,146			2,213			-89.5			21
Operating income		88,072			35,934			-59.2			346
Other income (expenses), net		(2,067	)		(3,221	)		—			(31	)
Income before income taxes		86,005			32,713			-62.0			315
Income taxes and other		23,590			923			-96.1			9
Net income	¥	62,415		¥	31,790			-49.1	%	$	306

	(Millions of yen, millions of U.S. dollars)
Consolidated	Three months ended September 30
	2007			2008			Change			2008

Financial service revenue	¥	151,109		¥	97,469			-35.5	%	$	937
Net sales and operating revenue		1,931,928			1,974,836			+2.2			18,989
		2,083,037			2,072,305			-0.5			19,926
Costs and expenses		1,992,567			2,062,402			+3.5			19,831
Equity in net income of affiliated companies		21,146			1,145			-94.6			11
Operating income		111,616			11,048			-90.1			106
Other income (expenses), net		(2,546	)		(3,741	)		—			(36	)
Income before income taxes		109,070			7,307			-93.3			70
Income taxes and other		35,355			(13,509	)		—			(130	)
Net income	¥	73,715		¥	20,816			-71.8	%	$	200

F-10

	(Millions of yen, millions of U.S. dollars)
Financial Services	Six months ended September 30
	2007			2008			Change			2008

Financial service revenue	¥	342,344		¥	283,728			-17.1	%	$	2,728
Financial service expenses		285,454			277,362			-2.8			2,667
Equity in net loss of an affiliated company		—			(1,068	)		—			(10	)
Operating income		56,890			5,298			-90.7			51
Other income (expenses), net		(155	)		198			—			2
Income before income taxes		56,735			5,496			-90.3			53
Income taxes and other		25,456			4,077			-84.0			39
Net income	¥	31,279		¥	1,419			-95.5	%	$	14

	(Millions of yen, millions of U.S. dollars)
Sony without Financial Services	Six months ended September 30
	2007			2008			Change			2008

Net sales and operating revenue	¥	3,736,125		¥	3,778,437			+1.1	%	$	36,331
Costs and expenses		3,604,021			3,704,344			+2.8			35,619
Equity in net income of affiliated companies		43,111			4,453			-89.7			43
Operating income		175,215			78,546			-55.2			755
Other income (expenses), net		(10,583	)		(9,839	)		—			(94	)
Income before income taxes		164,632			68,707			-58.3			661
Income taxes and other		49,168			9,742			-80.2			94
Net income	¥	115,464		¥	58,965			-48.9	%	$	567

	(Millions of yen, millions of U.S. dollars)
Consolidated	Six months ended September 30
	2007			2008			Change			2008

Financial service revenue	¥	328,161		¥	275,851			-15.9	%	$	2,652
Net sales and operating revenue		3,731,386			3,775,498			+1.2			36,303
		4,059,547			4,051,349			-0.2			38,955
Costs and expenses		3,869,754			3,970,247			+2.6			38,176
Equity in net income of affiliated companies		43,111			3,385			-92.1			33
Operating income		232,904			84,487			-63.7			812
Other income (expenses), net		(18,111	)		(14,258	)		—			(137	)
Income before income taxes		214,793			70,229			-67.3			675
Income taxes and other		74,623			14,436			-80.7			139
Net income	¥	140,170		¥	55,793			-60.2	%	$	536

F-11

Condensed Statements of Cash Flows
	(Millions of yen, millions of U.S. dollars)
Financial Services	Six months ended September 30
	2007			2008			2008

Net cash provided by operating activities	¥	67,118		¥	116,398		$	1,119
Net cash used in investing activities		(388,669	)		(333,970	)		(3,211	)
Net cash provided by financing activities		216,364			247,117			2,376
Net increase (decrease) in cash and cash equivalents		(105,187	)		29,545			284
Cash and cash equivalents at beginning of the fiscal year		277,048			137,721			1,324
Cash and cash equivalents at the end of the period	¥	171,861		¥	167,266		$	1,608

	(Millions of yen, millions of U.S. dollars)
Sony without Financial Services	Six months ended September 30
	2007			2008			2008

Net cash used in operating activities	¥	(130,514	)	¥	(257,100	)	$	(2,471	)
Net cash used in investing activities		(154,348	)		(170,926	)		(1,644	)
Net cash provided by financing activities		219,355			2,882			28
Effect of exchange rate changes on cash and cash equivalents		(2,221	)		10,091			97
Net decrease in cash and cash equivalents		(67,728	)		(415,053	)		(3,990	)
Cash and cash equivalents at beginning of the fiscal year		522,851			948,710			9,122
Cash and cash equivalents at the end of the period	¥	455,123		¥	533,657		$	5,132

	(Millions of yen, millions of U.S. dollars)
Consolidated	Six months ended September 30
	2007			2008			2008

Net cash used in operating activities	¥	(69,035	)	¥	(144,078	)	$	(1,385	)
Net cash used in investing activities		(548,851	)		(488,106	)		(4,693	)
Net cash provided by financing activities		447,192			236,585			2,275
Effect of exchange rate changes on cash and cash equivalents		(2,221	)		10,091			97
Net decrease in cash and cash equivalents		(172,915	)		(385,508	)		(3,706	)
Cash and cash equivalents at beginning of the fiscal year		799,899			1,086,431			10,446
Cash and cash equivalents at the end of the period	¥	626,984		¥	700,923		$	6,740

F-12

(Notes)

1.	U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥104 = U.S. $1, the approximate Tokyo foreign exchange market rate as of September 30, 2008.

2.	As of September 30, 2008, Sony had 1,029 consolidated subsidiaries (including variable interest entities). It has applied the equity accounting method for 71 affiliated companies.

3.	Weighted-average number of outstanding shares used for computation of earnings per share of common stock are as follows. The dilutive effect in the weighted-average number of outstanding shares mainly resulted from convertible bonds.

Weighted-average number of outstanding shares	(Thousands of shares)
	Three months ended September 30
	2007		2008
Net income
— Basic		1,002,981		1,003,495
— Diluted		1,051,680		1,049,952

Weighted-average number of outstanding shares	(Thousands of shares)
	Six months ended September 30
	2007		2008
Net income
— Basic		1,002,739		1,003,480
— Diluted		1,052,172		1,050,549

Sony’s comprehensive income is comprised of net income, cumulative effect of an accounting change and other comprehensive income. Other comprehensive income includes changes in unrealized gains or losses on securities, unrealized gains or losses on derivative instruments, pension liabilities adjustments and foreign currency translation adjustments. Net income, cumulative effect of an accounting change, other comprehensive income and comprehensive income for the three and six months ended September 30, 2007 and 2008 were as follows:

	(Millions of yen, millions of U.S. dollars)
	Three months ended September 30
	2007			2008			2008
Net income	¥	73,715		¥	20,816		$	200
Other comprehensive income (loss):
Unrealized gains (losses) on securities		11,568			(15,673	)		(151	)
Unrealized gains (losses) on derivative instruments		(233	)		3,211			31
Pension liabilities adjustments		2,060			1,102			11
Foreign currency translation adjustments		(110,842	)		(137,885	)		(1,326	)
		(97,437	)		(149,245	)		(1,435	)
Comprehensive income (loss)	¥	(23,722	)	¥	(128,429	)	$	(1,235	)

	(Millions of yen, millions of U.S. dollars)
	Six months ended September 30
	2007			2008			2008
Net income	¥	140,170		¥	55,793		$	536
Cumulative effect of an accounting change		(4,452	)
Other comprehensive income (loss):
Unrealized gains (losses) on securities		6,668			(29,530	)		(284	)
Unrealized gains on derivative instruments		421			4,809			46
Pension liabilities adjustments		544			1,044			10
Foreign currency translation adjustments		1,318			(37,367	)		(359	)
		8,951			(61,044	)		(587	)
Comprehensive income (loss)	¥	144,669		¥	(5,251	)	$	(51	)

F-13

Sony periodically reviews the presentation of its financial information to ensure that it is consistent with the way management views the consolidated operations. Since Sony considers its equity investments to be integral to its operations, effective April 1, 2008, Sony reports equity in net income of affiliated companies as a component of operating income. Prior to April 1, 2008, equity in net income of affiliated companies was shown below minority interest in income (loss) of consolidated subsidiaries and above net income in Sony’s consolidated results of operations. As a result of the reclassification, both operating income and income before income taxes increased by ¥21,146 million ($203 million) for the three months ended September 30, 2007, by ¥43,111 million ($415 million) for the six months ended September 30, 2007, by ¥1,145 million ($11 million) for the three months ended September 30, 2008, and by ¥3,385 million ($33 million) for the six months ended September 30, 2008. The reclassification did not affect net income for the three and six months ended September 30, 2007 and 2008.

In September 2006, the FASB issued FAS No. 157, “Fair Value Measurements”. FAS No. 157 establishes a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures about the use of fair value measurements. FAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. In February 2008, the FASB issued FASB Staff Positions (“FSP”) FAS 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” and FSP FAS 157-2, “Effective Date of FASB Statement No. 157”. FSP FAS 157-1 removes certain leasing transactions from the scope of FAS No. 157. FSP FAS 157-2 partially delays the effective date of FAS No. 157 for one year for certain nonfinancial assets and liabilities. In October 2008, the FASB issued FSP FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active." FSP FAS 157-3 clarifies the application of FAS No. 157 in a market that is not active. Sony adopted FAS No. 157 on April 1, 2008 with regards to financial assets and liabilities. The adoption of FAS No. 157 as it relates to financial assets and liabilities did not have a material impact on Sony’s consolidated results of operations and financial position. Sony is currently evaluating the impact for nonfinancial assets and liabilities.

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. FAS No. 159 permits companies to choose to measure, on an instrument-by-instrument basis, financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The fair value measurement election is irrevocable and subsequent changes in fair value must be recorded in earnings. Sony adopted FAS No. 159 on April 1, 2008. Sony did not elect the fair value option for any assets or liabilities, which were not previously carried at fair value. Accordingly, the adoption of FAS No. 159 had no impact on Sony’s consolidated financial statements. However, its effects on future periods will depend on the nature of instruments held by Sony and its elections under the provisions of FAS No. 159.

Sony estimates the annual effective tax rate (“ETR”) derived from a projected annual net income before taxes and calculates 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 income tax provision related to significant unusual or extraordinary transactions. Such income tax provision will be separately reported from the provision based on the ETR in the interim period in which they occur.

Other Consolidated Financial Data

	(Millions of yen, millions of U.S. dollars)
	Three months ended September 30
	2007			2008			Change			2008
Capital expenditures (additions to property, plant and equipment)	¥	75,797		¥	107,091			+41.3	%	$	1,030
Depreciation and amortization expenses*		100,572			103,369			+2.8			994
(Depreciation expenses for tangible assets)	(82,311		)		(73,734	)		-10.4			(709	)
Research and development expenses		131,741			132,336			+0.5			1,272

	(Millions of yen, millions of U.S. dollars)
	Six months ended September 30
	2007			2008			Change			2008
Capital expenditures (additions to property, plant and equipment)	¥	170,798		¥	184,751			+8.2	%	$	1,776
Depreciation and amortization expenses*		204,576			195,026			-4.7			1,875
(Depreciation expenses for tangible assets)	(158,587		)		(142,228	)		-10.3			(1,368	)
Research and development expenses		257,724			256,590			-0.4			2,467

* Including amortization expenses for intangible assets and for deferred insurance acquisition costs

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