Financial Statements [PDF:335KB]

Quarterly Financial Statements

for the First Quarter Ended June 30, 2020

And

Outlook for the Fiscal Year Ending March 31, 2021

		August 4, 2020
		Sony Corporation
Quarterly Financial Statements (Unaudited)	F-1
Consolidated Balance Sheets	F-1
Consolidated Statements of Income (Three months ended June 30)	F-2
Consolidated Statements of Comprehensive Income (Three months ended June 30)	F-2
Consolidated Statements of Cash Flows (Three months ended June 30)	F-3
Notes to Consolidated Financial Statements	F-4
-	Business Segment Information	F-4
-	Going Concern Assumption	F-9
- Significant Changes in Shareholders' Equity	F-9
- Accounting Policies and Other Information	F-9

Current View Regarding the Impact on the Business from the Spread of the Coronavirus Disease 2019 ("COVID-19")	1
Outlook for the Fiscal Year Ending March 31, 2021	3
Outlook for the Fiscal Year Ending March 31, 2021	3
Cautionary Statement	7

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".

(Unaudited)

Consolidated Financial Statements

Consolidated Balance Sheets

					(Millions of yen)
		March 31			June 30			Change from
ASSETS		2020			2020		March 31, 2020
Current assets:
Cash and cash equivalents		1,512,357		1,448,614		-63,743
Marketable securities		1,847,772			2,105,977			+258,205
Notes and accounts receivable, trade and contract assets		1,028,793			1,005,429			-23,364
Allowance for credit losses		(25,873)			(26,060)			-187
Inventories		589,969			588,797			-1,172
Other receivables		188,106			179,568			-8,538
Prepaid expenses and other current assets		594,021			608,271			+14,250
Total current assets		5,735,145			5,910,596			+175,451
Film costs		427,336			417,646			-9,690
Investments and advances:
Affiliated companies		207,922			210,800			+2,878
Securities investments and other		12,526,210			12,937,934			+411,724
Allowance for credit losses		－			(7,677)			-7,677
		12,734,132			13,141,057			+406,925
Property, plant and equipment:
Land		81,482			79,860			-1,622
Buildings		659,556			658,911			-645
Machinery and equipment		1,725,720			1,792,832			+67,112
Construction in progress		76,391			71,599			-4,792
		2,543,149			2,603,202			+60,053
Less-Accumulated depreciation		1,634,505			1,677,282			+42,777
		908,644			925,920			+17,276
Other assets:
Operating lease right-of-use assets		359,510			351,828			-7,682
Finance lease right-of-use assets		33,100			31,778			-1,322
Intangibles, net		906,310			902,575			-3,735
Goodwill		783,888			783,453			-435
Deferred insurance acquisition costs		600,901			617,899			+16,998
Deferred income taxes		210,372			202,880			-7,492
Other		340,005			340,724			+719
		3,234,086			3,231,137			-2,949
Total assets
	23,039,343		23,626,356		+587,013
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings		810,176		977,414		+167,238
Current portion of long-term debt		29,807			28,516			-1,291
Current portion of long-term operating lease liabilities		68,942			72,275			+3,333
Notes and accounts payable, trade		380,810			391,223			+10,413
Accounts payable, other and accrued expenses		1,630,197			1,461,252			-168,945
Accrued income and other taxes		145,996			148,208			+2,212
Deposits from customers in the banking business		2,440,783			2,558,346			+117,563
Other		733,732			692,863			-40,869
Total current liabilities		6,240,443			6,330,097			+89,654
Long-term debt		634,966			654,145			+19,179
Long-term operating lease liabilities		314,836			304,647			-10,189
Accrued pension and severance costs		324,655			320,439			-4,216
Deferred income taxes		549,538			556,206			+6,668
Future insurance policy benefits and other		6,246,047			6,331,757			+85,710
Policyholders' account in the life insurance business		3,642,271			3,843,393			+201,122
Other		289,285			283,852			-5,433
Total liabilities		18,242,041			18,624,536			+382,495
Redeemable noncontrolling interest		7,767			9,916			+2,149
Equity:
Sony Corporation's stockholders' equity:
Common stock		880,214			880,214			－
Additional paid-in capital		1,289,719			1,290,992			+1,273
Retained earnings		2,768,856			2,997,579			+228,723
Accumulated other comprehensive income		(580,980)			(612,648)			-31,668
Treasury stock, at cost		(232,503)			(225,287)			+7,216
		4,125,306			4,330,850			+205,544
Noncontrolling interests		664,229			661,054			-3,175
Total equity		4,789,535			4,991,904			+202,369
Total liabilities and equity		23,039,343			23,626,356			+587,013

F-1

Consolidated Statements of Income

		(Millions of yen, except per share amounts)
		Three months ended June 30
Sales and operating revenue:		2019			2020			Change
Net sales		1,558,646		1,504,870		-53,776
Financial services revenue		334,820			444,916			+110,096
Other operating revenue		32,258			19,133			-13,125
		1,925,724			1,968,919			+43,195
Costs and expenses:
Cost of sales		1,061,038			1,052,673			-8,365
Selling, general and administrative		350,167			301,166			-49,001
Financial services expenses		288,493			397,659			+109,166
Other operating income, net		(3,557)			(11,248)			-7,691
		1,696,141			1,740,250			+44,109
Equity in net income (loss) of affiliated companies		1,342			(274)			-1,616
Operating income		230,925			228,395			-2,530
Other income:
Interest and dividends		5,805			2,836			-2,969
Gain on equity securities, net		323			96,900			+96,577
Other		1,119			1,273			+154
		7,247			101,009			+93,762
Other expenses:
Interest expenses		4,880			1,805			-3,075
Foreign exchange loss, net		1,696			5,054			+3,358
Other		578			2,626			+2,048
		7,154			9,485			+2,331
Income before income taxes		231,018			319,919			+88,901
Income taxes		65,012			72,878			+7,866
Net income
	166,006			247,041			+81,035
Less - Net income attributable to noncontrolling interests		13,884			13,790			-94
Net income attributable to Sony Corporation's		152,122						+81,129
stockholders			233,251
Per share data:
Net income attributable to Sony Corporation's
stockholders
- Basic		121.78		191.09		+69.31
- Diluted		119.22			186.94			+67.72
Consolidated Statements of Comprehensive Income				(Millions of yen)
		Three months ended June 30
		2019			2020			Change
Net income		166,006		247,041		+81,035
Other comprehensive income, net of tax -
Unrealized gains (losses) on securities		26,301			(32,111)			-58,412
Unrealized gains (losses) on derivative instruments		764			(260)			-1,024
Pension liability adjustment		2,914			566			-2,348
Foreign currency translation adjustments		(42,698)			(11,483)			+31,215
Debt valuation adjustments		－			(1,650)			-1,650
Total comprehensive income
	153,287			202,103			+48,816
Less - Comprehensive income attributable
to noncontrolling interests		22,622			520			-22,102
Comprehensive income attributable
to Sony Corporation's stockholders		130,665			201,583			+70,918

F-2

Consolidated Statements of Cash Flows

		(Millions of yen)
		Three months ended June 30
Cash flows from operating activities:		2019				2020
Net income		166,006			247,041
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization, including amortization of
deferred insurance acquisition costs and contract costs		93,412				90,101
Amortization of film costs		56,546				56,858
Accrual for pension and severance costs, less payments		5				355
Other operating income, net		(3,557)				(11,248)
Gain on securities investments, net (other than financial services business)		(329)				(96,891)
Gain on marketable securities and securities investments held in the financial
services business, net		(9,172)				(154,558)
Deferred income taxes		(1,352)				26,114
Equity in net loss of affiliated companies, net of dividends		1,196				3,518
Changes in assets and liabilities:
(Increase) decrease in notes, accounts receivable, trade and contract assets		(85,901)				19,100
Increase in inventories		(51,976)				(26,318)
Increase in film costs		(91,680)				(20,747)
Increase in notes and accounts payable, trade		55,807				10,513
Increase in accrued income and other taxes		6,836				15,501
Increase in future insurance policy benefits and other		138,925				255,401
Increase in deferred insurance acquisition costs		(22,185)				(22,269)
Increase in marketable securities held in the life insurance business		(59,080)				(46,580)
Increase in other current assets		(39,226)				(25,561)
Decrease in other current liabilities		(205,943)				(173,983)
Other		50,845				(20,162)
Net cash provided by (used in) operating activities		(823)				126,185
Cash flows from investing activities:
Payments for purchases of fixed assets		(78,264)				(132,868)
Proceeds from sales of fixed assets		7,409				3,945
Payments for investments and advances by financial services business		(302,434)				(416,809)
Payments for investments and advances
(other than financial services business)		(22,969)				(47,958)
Proceeds from sales or return of investments and collections of advances
by financial services business		72,375				99,782
Proceeds from sales or return of investments and collections of advances
(other than financial services business)		303				12,680
Proceeds from sales of businesses		－			1,313
Other		427				4,642
Net cash used in investing activities		(323,153)				(475,273)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		5,775				44,214
Payments of long-term debt		(114,297)				(25,615)
Increase in short-term borrowings, net		198,835				164,911
Increase in deposits from customers in the financial services business, net		57,354				146,465
Dividends paid		(25,035)				(30,094)
Payments for purchase of treasury stock		(25,354)				(29)
Other		(10,622)				(9,600)
Net cash provided by financing activities		86,656				290,252
Effect of exchange rate changes on cash and cash equivalents, including restricted		(23,451)				(6,517)
Net decrease in cash and cash equivalents, including restricted		(260,771)				(65,353)
Cash and cash equivalents, including restricted, at beginning of the fiscal year		1,473,813				1,515,295
Cash and cash equivalents, including restricted, at end of the period
	1,213,042				1,449,942
Less - restricted cash and cash equivalents, included in other current assets and		2,535				1,328
other assets
Cash and cash equivalents at end of the period		1,210,507				1,448,614

F-3

Notes to Consolidated Financial Statements
Business Segment Information
(Business Segments)				(Millions of yen)
Sales and operating revenue			Three months ended June 30
		2019			2020			Change
	Game & Network Services			441,750						+157,299
	Customers			599,049
	Intersegment			15,711			7,060			-8,651
	Total			457,461			606,109			+148,648
	Music
	Customers			200,038			173,735			-26,303
	Intersegment			2,215			3,380			+1,165
	Total			202,253			177,115			-25,138
	Pictures
	Customers			185,759			174,441			-11,318
	Intersegment			329			648			+319
	Total			186,088			175,089			-10,999
	Electronics Products & Solutions
	Customers			480,656			327,393			-153,263
	Intersegment			3,259			4,453			+1,194
	Total			483,915			331,846			-152,069
	Imaging & Sensing Solutions
	Customers			211,175			198,371			-12,804
	Intersegment			19,503			7,815			-11,688
	Total			230,678			206,186			-24,492
	Financial Services
	Customers			334,820			444,916			+110,096
	Intersegment			2,115			1,844			-271
	Total			336,935			446,760			+109,825
	All Other
	Customers			60,632			46,097			-14,535
	Intersegment			8,959			7,998			-961
	Total			69,591			54,095			-15,496
	Corporate and elimination			(41,197)			(28,281)			+12,916
	Consolidated total			1,925,724			1,968,919			+43,195

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

Imaging & Sensing Solutions ("I&SS") intersegment amounts primarily consist of transactions with the G&NS segment and the Electronics Products & Solutions ("EP&S") segment.

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

Corporate and elimination includes certain brand and patent royalty income.

					(Millions of yen)
Operating income (loss)			Three months ended June 30
		2019			2020			Change
	Game & Network Services		73,804		124,037		+50,233
	Music			38,277			34,892			-3,385
	Pictures			376			24,742			+24,366
	Electronics Products & Solutions			25,066			(9,121)			-34,187
	Imaging & Sensing Solutions			49,528			25,426			-24,102
	Financial Services			46,105			47,203			+1,098
	All Other			(2,602)			3,532			+6,134
	Total			230,554			250,711			+20,157
	Corporate and elimination			371			(22,316)			-22,687
	Consolidated total			230,925			228,395			-2,530

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

F-4

(Sales to Customers by Product Category)

The following table is a breakdown of sales and operating revenue to external customers by product category for each segment. Sony management views each segment as a single operating segment.

					(Millions of yen)
Sales and operating revenue (to external customers)			Three months ended June 30
		2019			2020			Change
	Game & Network Services
	Digital Software and Add-on Content		215,964		394,637		+178,673
	Network Services			83,606			93,295			+9,689
	Hardware and Others			142,180			111,117			-31,063
	Total			441,750			599,049			+157,299
	Music
	Recorded Music - Streaming			66,482			68,900			+2,418
	Recorded Music - Others			45,480			29,186			-16,294
	Music Publishing			39,290			31,096			-8,194
	Visual Media and Platform			48,786			44,553			-4,233
	Total			200,038			173,735			-26,303
	Pictures
	Motion Pictures			80,870			65,077			-15,793
	Television Productions			46,486			64,303			+17,817
	Media Networks			58,403			45,061			-13,342
	Total			185,759			174,441			-11,318
	Electronics Products & Solutions
	Televisions			147,761			106,568			-41,193
	Audio and Video			78,743			47,081			-31,662
	Still and Video Cameras			100,254			46,405			-53,849
	Mobile Communications			100,550			94,229			-6,321
	Other			53,348			33,110			-20,238
	Total			480,656			327,393			-153,263
	Imaging & Sensing Solutions			211,175			198,371			-12,804
	Financial Services			334,820			444,916			+110,096
	All Other			60,632			46,097			-14,535
	Corporate			10,894			4,917			-5,977
	Consolidated total			1,925,724			1,968,919			+43,195

Sony has realigned its product category configuration in the Music segment with a more detailed breakdown in Recorded Music from the fourth quarter of the fiscal year ended March 31, 2020. 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, Digital Software and Add-on Content includes distribution of software titles and add-on content through network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home gaming consoles, packaged software and peripheral devices. In the Music segment, Recorded Music - Streaming includes the distribution of digital recorded music by streaming; Recorded Music - Others includes the distribution of recorded music by physical media and digital download as well as 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 the production and distribution of animation titles, including game applications based on the animation titles, and various service offerings for music and visual products. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of live-action and animated motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. In the EP&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.

Within the EP&S segment, the operating income of Mobile Communications for the first quarter of the fiscal years ended March 31, 2020 and 2021 was 1,039 million yen and 11,036 million yen, respectively.

F-5

(Condensed Financial Services 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)
		Financial Services		Sony without		Consolidated
			Financial Services
		March 31		June 30		March 31		June 30		March 31		June 30
ASSETS		2020		2020		2020		2020		2020		2020
Current assets:				559,770				888,844				1,448,614
Cash and cash equivalents		550,039			962,318			1,512,357
Marketable securities		1,847,772		2,105,977		－		－		1,847,772		2,105,977
Notes and accounts receivable, trade and contract assets		10,532		13,053		999,976		979,756		1,002,920		979,369
Inventories		－		－		589,969		588,797		589,969		588,797
Other receivables		73,117		61,098		115,100		118,584		188,106		179,568
Prepaid expenses and other current assets		181,247		202,134		413,496		406,870		594,021		608,271
Total current assets		2,662,707		2,942,032		3,080,859		2,982,851		5,735,145		5,910,596
Film costs		－		－		427,336		417,646		427,336		417,646
Investments and advances		12,457,977		12,697,326		351,936		519,122		12,734,132		13,141,057
Investments in Financial Services, at cost		－		－		153,968		153,968		－		－
Property, plant and equipment		18,247		18,243		890,640		907,933		908,644		925,920
Other assets:				58,414				325,224				383,606
Right-of-use assets		58,897			333,753			392,610
Intangibles, net		49,871		48,492		856,439		854,083		906,310		902,575
Goodwill		10,834		10,834		773,054		772,619		783,888		783,453
Deferred insurance acquisition costs		600,901		617,899		－		－		600,901		617,899
Deferred income taxes		10,365		6,260		200,021		196,631		210,372		202,880
Other		38,949		35,863		305,028		308,834		340,005		340,724
		769,817		777,762		2,468,295		2,457,391		3,234,086		3,231,137
Total assets		15,908,748		16,435,363		7,373,034		7,438,911		23,039,343		23,626,356
LIABILITIES AND EQUITY
Current liabilities:				933,153				72,777				1,005,930
Short-term borrowings		758,737			81,246			839,983
Short-term operating lease liabilities		9,363		9,407		59,595		62,881		68,942		72,275
Notes and accounts payable, trade		－		－		380,810		391,223		380,810		391,223
Accounts payable, other and accrued expenses		40,457		30,314		1,591,072		1,432,082		1,630,197		1,461,252
Accrued income and other taxes		22,825		10,871		123,171		137,337		145,996		148,208
Deposits from customers in the banking business		2,440,783		2,558,346		－		－		2,440,783		2,558,346
Other		226,455		228,491		514,368		477,518		733,732		692,863
Total current liabilities		3,498,620		3,770,582		2,750,262		2,573,818		6,240,443		6,330,097
Long-term debt		240,143		260,874		398,793		397,240		634,966		654,145
Long-term operating lease liabilities		41,192		39,875		273,668		264,791		314,836		304,647
Accrued pension and severance costs		34,211		34,270		290,444		286,169		324,655		320,439
Deferred income taxes		391,883		375,961		173,022		195,613		549,538		556,206
Future insurance policy benefits and other		6,246,047		6,331,757		－		－		6,246,047		6,331,757
Policyholders' account in the life insurance business		3,642,271		3,843,393		－		－		3,642,271		3,843,393
Other		21,843		20,451		289,574		285,167		289,285		283,852
Total liabilities		14,116,210		14,677,163		4,175,763		4,002,798		18,242,041		18,624,536
Redeemable noncontrolling interest		－		－		7,767		9,916		7,767		9,916
Equity:
Stockholders' equity of Financial Services		1,790,333		1,755,921		－		－		－		－
Stockholders' equity of Sony without Financial Services		－		－		3,159,071		3,386,984		－		－
Sony Corporation's stockholders' equity		－		－		－		－		4,125,306		4,330,850
Noncontrolling interests		2,205		2,279		30,433		39,213		664,229		661,054
Total equity		1,792,538		1,758,200		3,189,504		3,426,197		4,789,535		4,991,904
Total liabilities and equity		15,908,748		16,435,363		7,373,034		7,438,911		23,039,343		23,626,356

F-6

Condensed Statements of Income

(Millions of yen)

Three months ended June 30

		Financial Services		Sony without		Consolidated
			Financial Services
		2019		2020		2019		2020		2019		2020
Financial services revenue		336,935		446,760		－	－	334,820		444,916
Net sales and operating revenue		－		－		1,592,343		1,525,480		1,590,904		1,524,003
		336,935		446,760		1,592,343		1,525,480		1,925,724		1,968,919
Cost of sales		－		－		1,063,869		1,055,315		1,061,038		1,052,673
Selling, general and administrative		－		－		348,777		300,012		350,167		301,166
Financial services expenses		290,606		399,503		－		－		288,493		397,659
Other operating (income) expense, net		36		54		(3,593)		(11,302)		(3,557)		(11,248)
		290,642		399,557		1,409,053		1,344,025		1,696,141		1,740,250
Equity in net income (loss) of affiliated companies		(188)		－		1,530		(274)		1,342		(274)
Operating income
	46,105		47,203		184,820		181,181		230,925		228,395
Other income (expenses), net		(46)		(20)		17,830		111,359		93		91,524
Income before income taxes
	46,059		47,183		202,650		292,540		231,018		319,919
Income taxes		13,982		13,187		51,030		59,695		65,012		72,878
Net income		32,077		33,996		151,620		232,845		166,006		247,041
Less - Net income attributable to noncontrolling interests		86		75		2,624		1,864		13,884		13,790
Net income of Financial Services		31,991		33,921		－	－	－	－
Net income of Sony without Financial Services		－	－	148,996		230,981		－	－
Net income attributable to Sony Corporation's stockholders		－	－	－	－	152,122		233,251

F-7

Condensed Statements of Cash Flows

(Millions of yen)

Three months ended June 30

		Financial Services		Sony without		Consolidated
			Financial Services
Cash flows from operating activities:		2019		2020		2019		2020		2019		2020
Net income (loss)		32,077		33,996		151,620		232,845		166,006		247,041
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization, including amortization of
deferred insurance acquisition costs and contract costs		22,151		8,853		71,261		81,248		93,412		90,101
Amortization of film costs		－		－		56,546		56,858		56,546		56,858
Other operating (income) expense, net		36		54		(3,593)		(11,302)		(3,557)		(11,248)
(Gain) loss on marketable securities and
securities investments, net		(9,172)		(154,558)		(329)		(96,891)		(9,501)		(251,449)
Changes in assets and liabilities:
(Increase) decrease in notes, accounts receivable, trade
and contract assets		(298)		(2,521)		(84,822)		15,769		(85,901)		19,100
(Increase) decrease in inventories		－		－		(51,976)		(26,318)		(51,976)		(26,318)
(Increase) decrease in film costs		－		－		(91,680)		(20,747)		(91,680)		(20,747)
Increase (decrease) in notes and accounts
payable, trade		－		－		55,807		10,513		55,807		10,513
Increase (decrease) in future insurance policy
benefits and other		138,925		255,401		－		－		138,925		255,401
(Increase) decrease in deferred insurance
acquisition costs		(22,185)		(22,269)		－		－		(22,185)		(22,269)
(Increase) decrease in marketable securities held
in the life insurance business		(59,080)		(46,580)		－		－		(59,080)		(46,580)
Other		(891)		(50,957)		(187,856)		(117,329)		(187,639)		(174,218)
Net cash provided by (used in) operating activities		101,563		21,419		(85,022)		124,646		(823)		126,185
Cash flows from investing activities:
Payments for purchases of fixed assets		(5,388)		(4,922)		(72,875)		(128,010)		(78,264)		(132,868)
Payments for investments and advances		(302,434)		(416,809)		(22,969)		(47,958)		(325,403)		(464,767)
Proceeds from sales or return of investments and
collections of advances		72,375		99,782		303		12,680		72,678		112,462
Other		22		46		7,814		9,854		7,836		9,900
Net cash provided by (used in) investing activities		(235,425)		(321,903)		(87,727)		(153,434)		(323,153)		(475,273)
Cash flows from financing activities:
Increase (decrease) in borrowings, net		200,622		194,206		(109,983)		(10,697)		90,313		183,510
Increase (decrease) in deposits from customers, net		57,354		146,465		－		－		57,354		146,465
Dividends paid		(27,189)		(30,453)		(25,035)		(30,095)		(25,035)		(30,094)
Other		(1)		(3)		(26,477)		1,013		(35,976)		(9,629)
Net cash provided by (used in) financing activities		230,786		310,215		(161,495)		(39,779)		86,656		290,252
Effect of exchange rate changes on cash and cash equivalents		－		－		(23,451)		(6,517)		(23,451)		(6,517)
Net increase (decrease) in cash and cash equivalents,
including restricted		96,924		9,731		(357,695)		(75,084)		(260,771)		(65,353)
Cash and cash equivalents, including restricted,
at beginning of the fiscal year		509,595		550,039		964,218		965,256		1,473,813		1,515,295
Cash and cash equivalents, including restricted,
at end of the period		606,519		559,770		606,523		890,172		1,213,042		1,449,942
Less - restricted cash and cash equivalents,
included in other current assets and other assets		－		－		2,535		1,328		2,535		1,328
Cash and cash equivalents at end of the period		606,519		559,770		603,988		888,844		1,210,507		1,448,614

F-8

Going Concern Assumption

Not Applicable

Significant Changes in Shareholders' Equity

Not Applicable

Accounting Policies and Other Information (Recently adopted accounting pronouncements)

Measurement of credit losses on financial instruments

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, which amends the accounting guidance for credit losses on financial instruments. The ASU requires the consideration of all available relevant information when estimating expected credit losses, including past events, current conditions and forecasts and their implications for expected credit losses. This ASU was effective for Sony as of April 1, 2020. The adoption of this ASU did not have a material impact on Sony's results of operations and financial position.

Improvements to Accounting for Costs of Films and License Agreements for Program Materials

In March 2019, the FASB issued ASU 2019-02, which updates the guidance for the capitalization of film costs associated with episodic television series, requires the use of fair value rather than net realizable value when determining potential impairments of broadcasting rights, and modifies the presentation and disclosure requirements for films and broadcasting rights. In addition, upon capitalization of film costs entities are required to determine qualitatively whether the predominant monetization strategy is on a title-by-title basis or together with other films and/or broadcast rights as part of a film group, such as in the case of a release of a film as part of a library of content on a streaming service. In the case of a film group, impairments are evaluated at the overall film group level rather than the individual title level. This ASU was effective for Sony as of April 1, 2020 and was applied on a prospective basis. Upon adoption, Sony reclassified broadcasting rights in the Pictures segment and animation film production costs in the Music segment included in inventories to film costs.

Changes to the opening balances resulting from the adoption of the above ASUs were as follows:
					Yen in millions
		March 31,	Impact of Adoption				April 1,
		2020		ASU 2016-13	ASU 2019-02	Total		2020
ASSETS
Current assets:
Notes and accounts receivable, trade and contract	1,028,793		-	-	-	1,028,793
assets
Allowance for credit losses *	(25,873)		(280)	-	(280)	(26,153)
Inventories	589,969		-	(31,517)	(31,517)	558,452
Other receivables	188,106		(30)	-	(30)	188,076
Prepaid expenses and other current assets		594,021		(12)	-	(12)		594,009
Total current assets		5,735,145		(322)	(31,517)	(31,839)		5,703,306
Film costs		427,336		-	31,517	31,517		458,853
Investments and advances:
Securities investments and other	12,526,210		780	-	780	12,526,990
Allowance for credit losses		-		(6,341)	-	(6,341)		(6,341)
Total investments and advances		12,734,132		(5,561)	-	(5,561)	12,728,571
Other assets:
Deferred income taxes	210,372		45	-	45	210,417
Other		340,005		(721)	-	(721)		339,284
Total other assets		3,234,086		(676)	-	(676)		3,233,410
Total assets		23,039,343		(6,559)	-	(6,559)		23,032,784

F-9

					Yen in millions
		March 31,	Impact of Adoption				April 1,
		2020		ASU 2016-13	ASU 2019-02	Total		2020
LIABILITIES
Deferred income taxes		549,538		(1,504)	-	(1,504)		548,034
Total liabilities		18,242,041		(1,504)	-	(1,504)	18,240,537
EQUITY
Sony Corporation's stockholders' equity:
Retained earnings		2,768,856		(3,669)	-	(3,669)		2,765,187
Total Sony Corporation's stockholders' equity		4,125,306		(3,669)	-	(3,669)		4,121,637
Noncontrolling interests		664,229		(1,386)	-	(1,386)		662,843
Total equity		4,789,535		(5,055)	-	(5,055)		4,784,480
Total liabilities and equity		23,039,343		(6,559)	-	(6,559)		23,032,784

• Under ASU 2016-13, Sony changed the presentation from "Allowance for doubtful accounts" to "Allowance for credit losses" on the consolidated balance sheets.

(Number of Consolidated Subsidiaries and Affiliated Companies)

As of June 30, 2020, Sony had 1,402 consolidated subsidiaries (including variable interest entities) and 141 affiliated companies accounted for under the equity method.

(Weighted-average Number of Outstanding Shares Used for the Computation of EPS of Common Stock)

	(Thousands of shares)
	Three months ended June 30
Net income attributable to Sony Corporation's stockholders	2019	2020
- Basic	1,249,160	1,220,629
- Diluted	1,276,014	1,247,718

The dilutive effect in the weighted-average number of outstanding shares for the three months ended June 30, 2019 and 2020 primarily resulted from convertible bonds which were issued in July 2015.

(Segmentation)

The G&NS segment includes network services businesses, the manufacture and sales of home gaming products and production and sales of software. The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The EP&S segment includes the Televisions business, the Audio and Video business, the Still and Video Cameras business, the smartphone business and Internet-related service business. The I&SS segment includes the image sensors business. The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and a bank business in Japan. All Other consists of various operating activities, including the disc manufacturing and recording media businesses. Sony's products and services are generally unique to a single operating segment.

(Accounting Methods Used Specifically for Interim Consolidated Financial Statements) Income Taxes -

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 infrequent items. Such income tax provision is separately reported from the provision based on the ETR in the interim period in which it occurs.

F-10

(Reclassifications)

Certain reclassifications of the financial statements and accompanying footnotes for the three months ended June 30, 2019 have been made to conform to the presentation for the three months ended June 30, 2020.

(Subsequent events)

Tender Offer for Common Shares and Stock Acquisition Rights of Sony Financial Holdings Inc.

Sony Corporation resolved, at the meeting of its Board of Directors held on May 19, 2020, to offer to acquire the common shares of Sony Financial Holdings Inc. ("SFH"), a consolidated subsidiary of Sony Corporation, not held by Sony Corporation and the related stock acquisition rights through a tender offer ("Tender Offer"), with the aim of making SFH a wholly-owned subsidiary of Sony Corporation, and Sony Corporation undertook the Tender Offer from May 20, 2020 through July 13, 2020. Because the aggregate number of shares (including shares subject to stock acquisition rights) tendered through the Tender Offer (the "Tendered Share Certificates, Etc.") was equal to or greater than the minimum number of shares to be purchased through the Tender Offer, all of the Tendered Share Certificates, Etc. have been purchased by Sony Corporation. In order to procure the funds necessary to acquire the target shares and the related stock acquisition rights for the Tender Offer, Sony Corporation borrowed 322.5 billion yen from a Japanese private bank.

As a result of the Tender Offer, Sony Corporation has commenced the procedures pursuant to the provisions of Article 179 of the Companies Act of Japan, for the mandatory purchase of all of SFH's remaining common shares not held by Sony Corporation.

1. Shares and Stock Acquisition Rights to be purchased: Common shares (excluding SFH's common shares owned by Sony Corporation and the treasury shares owned by SFH) and the related stock acquisition rights
2. Period: From May 20, 2020 through July 13, 2020
3. Price: 2,600 yen per common share

259,900 yen per unit of stock acquisition right

1. Number of Shares purchased (including the number of shares subject to stock acquisition rights): 123,655,138 shares
2. Percentage of Ownership of Share Certificates, Etc. After Purchase, Etc.: 93.46%

Borrowing Funds for Acquisition of EMI Music Publishing

In July 2020, in order to enhance liquidity, Sony Corporation executed an approximate 2 billion U.S. dollar bank loan from a group of lenders with eight- to ten-year maturity terms in connection with Sony's acquisition of the remaining approximately 60% equity interest in DH Publishing, L.P., which owns EMI Music Publishing, in November 2018. This bank loan utilizes the Japan Bank for International Cooperation ("JBIC") Facility, which was established to facilitate overseas mergers and acquisitions by Japanese companies. Approximately 60%, or 1.2 billion U.S. dollars, is from the JBIC Facility and borrowed in U.S. dollars and approximately 40%, or 86 billion yen (approximately 0.8 billion U.S. dollars), is from Japanese private banks and borrowed in yen.

Setting of parameters for repurchase of shares of its own common stock

Sony Corporation approved on August 4, 2020 by resolution of the Board of Directors the setting of the following parameters for repurchase of its own common stock pursuant to the Companies Act and Sony Corporation's Articles of Incorporation:

1. Total number of shares for repurchase: 20 million shares (maximum)
2. Total purchase price for repurchase of shares: 100 billion yen (maximum)
3. Period of repurchase: August 5, 2020 to March 31, 2021

F-11

Current View Regarding the Impact on the Business from the Spread of the Coronavirus Disease 2019 ("COVID-19")

Conditions at Sony's Manufacturing Plants Resulting from the Spread of COVID-19

Sony has a total of six in-house manufacturing plants located in China and Malaysia. Although these plants were shut down for a period of time between January and April 2020, they have since resumed operations and are currently operating at the levels they were before the spread of the virus. Sony shut down its manufacturing plant in the U.K. (Wales) from March 26, 2020 in accordance with a mandate from the local government. From March 31, 2020, Sony has resumed its U.K. manufacturing operations after receiving approval from local authorities, and operations are returning to the level they were before the spread of the virus. Business has been impacted by factors such as restrictions on the movement of people across national borders, making it difficult for Sony to send engineers to manufacturing hubs such as China and countries in Southeast Asia for the purpose of helping with new product launches or giving instructions on manufacturing.

Game & Network Services (G&NS)

Although production of PlayStation®4 hardware was slightly impacted due to issues in the component supply chain, these issues have now been addressed. Sales of game software that is downloaded from the network, as well as PlayStation®Plus ("PS Plus") and PlayStationTMNow subscriber numbers, have significantly increased. Regarding the launch of PlayStation®5 ("PS5™"), although factors such as constraints due to employees working from home and restrictions on international travel remain, necessary measures are being taken and preparations are underway with the launch of the console scheduled for the 2020 holiday season. At this time, no major problems have arisen in the game software development pipeline for Sony's own first-party studios or its partners' studios.

Music

Around the world, the release of new music is being delayed primarily due to some artists being unable to record songs and music videos. The impact on profitability from the delays in new music is limited at this time in the U.S. and other countries where the proportion of music that is streamed is high. However, in countries like Japan where the proportion of music that is streamed is relatively low, CDs and other packaged media sales are decreasing due to restrictions on going outside. Ticket and merchandising revenues are also decreasing, as concerts and other events are being postponed and cancelled in Japan and other areas. Due to a global reduction in advertising spending, revenue from advertising-supported streaming services and revenue from the licensing of music in TV commercials is decreasing. Additionally, delays in the production of motion pictures and TV shows are causing a decline in music licensing revenue.

Pictures

Although some movie theaters are reopening around the world, a large number are still closed or must limit the number of patrons, leading to box office revenue being impacted. For this reason, Sony generally has not been able to release its already completed films in theaters. Due to restrictions on people's movement, the production schedules of new motion pictures and television shows by Sony are significantly delayed around the world, especially in the U.S. As a result, in Motion Pictures, theatrical revenues and revenues generated after theatrical release, including home entertainment and television licensing sales, are expected to decrease. On the other hand, digital rental and sell-through revenues for films which Sony released theatrically prior to the spread of COVID-19 have been strong. In Television Productions, revenues are beginning to be impacted by delays in the delivery of shows to TV networks and digital distribution services. Due to a global reduction in advertising spending, advertising revenue in Media Networks is decreasing significantly, especially in India.

1

Electronics Products & Solutions (EP&S)

The four major in-house and outsourcing manufacturing sites for Sony's TV business, as well as the factories owned by Sony in China and Thailand that make digital cameras and smartphones, are currently operating as usual. Retail sales have decreased significantly due to the closure of retail stores globally, the impact of which is continuing to affect markets like Asia and Latin America. Conversely, in Japan, Europe, North America and China, retail stores are gradually reopening. In addition, although sales and profit from digital cameras were significantly impacted by a substantial slowdown in demand around the world, this business is beginning to show signs of recovery, albeit at a relatively slower pace compared to other product categories.

Imaging & Sensing Solutions (I&SS)

There has been no major impact on Sony's manufacturing plants in Japan, which are operating as usual. Sony also understands that factory operations and supply chains at most of its major mobile customers, to whom it sells its image sensors, have been recovering. On the other hand, image sensor sales are decreasing primarily due to a slowdown in the smartphone market, which is the final outlet for Sony's products, and a change in the overall composition of sales in that market resulting from a shift from high-end to mid-range and moderately priced models.

Financial Services

All in-person sales activity of the Lifeplanner® sales employees at Sony Life Insurance Co., Ltd. ("Sony Life") was temporarily suspended pursuant to the announcement of a state of emergency by the Japanese government, which began in April 2020. After the state of emergency was fully lifted on May 25, 2020, Sony Life resumed these sales activities from June 1, 2020, and is also expanding its remote consulting services. Despite a gradual recovery, acquisitions of new insurance policies have decreased compared to the previous fiscal year, and the segment is being impacted by an increase in various expenses including compensation for sales employees. It is possible that fluctuations in the financial market could impact the financial results of this segment going forward.

Financial results for the three months ended June 30, 2020 are disclosed in the Presentation, Speech Transcript, Quarterly Securities Report (to be furnished on August 11, 2020) and other materials, all of which are available at Sony's homepage: https://www.sony.net/SonyInfo/IR/.

2

Outlook for the Fiscal Year Ending March 31, 2021

The forecast for consolidated results for the fiscal year ending March 31, 2021 is as follows:

	(Billions of yen)	Change from
	March 31, 2020	March 31, 2021
	Results	August Forecast	March 31, 2020 Results
Sales and operating revenue	¥8,259.9	8,300.0	+40.1	+0.5%
Operating income	845.5	620.0	-225.5	-26.7%
Income before income taxes	799.5	685.0	-114.5	-14.3%
Net income attributable to	582.2	510.0	-72.2	-12.4%
Sony Corporation's stockholders
For all segments excluding the Financial	(Billions of yen)	Change from
March 31, 2020	March 31, 2021
Services segment *	Results	August Forecast	March 31, 2020 Results
Net cash provided by operating activities	¥762.9	550.0	-212.9	-27.9%

• Cash flow for all segments excluding the Financial Services segment is not a measure in accordance with U.S. GAAP. However, Sony believes that this disclosure may be useful information to investors. Please refer to page F-6 for details about the preparation of the Condensed Statements of Cash Flows.

Assumed foreign exchange rates for the fiscal year ending March 31, 2021 are the following:

		(For your reference)	Assumed foreign currency exchange rates
		Average foreign currency exchange rates for the
		fiscal year ended March 31, 2020	for the nine months ending March 31, 2021
1	U.S. dollar	108.7 yen	approximately 107 yen
1	Euro	120.8 yen	approximately 120 yen

Consolidated sales and operating revenue ("sales") for the fiscal year ending March 31, 2021 are expected to be essentially flat year-on-year due to expected increases in sales in the Game & Network Services ("G&NS") and Financial Services segments, substantially offset by decreases in sales in the Pictures, Electronics Products & Solutions, Imaging & Sensing Solutions ("I&SS") and Music segments.

Consolidated operating income is expected to decrease significantly year-on-year due to expected decreases in operating income in I&SS and all other segments, with the exception of the Financial Services and G&NS segments, where operating income is expected to increase. Restructuring charges are expected to be approximately 25 billion yen in the fiscal year ending March 31, 2021, essentially flat year-on-year. This amount will be recorded as an operating expense included in the above-mentioned forecast for operating income.

Income before income taxes is expected to decrease due to the impact of the above-mentioned decrease in consolidated operating income, partially offset by an expected increase in other income primarily resulting from the recording of unrealized gains on securities.

Net income attributable to Sony Corporation's stockholders is expected to decrease due to the impact of the above-mentioned expected decrease in income before income taxes, partially offset by an expected reduction in tax expense and a decrease in net income attributable to non-controlling interests as a result of Sony Financial Holdings Inc. ("SFH") becoming a wholly-owned subsidiary.

The above forecast includes an expected increase in net income attributable to Sony Corporation's stockholders that is based on the assumption that SFH will become a wholly-owned subsidiary of Sony Corporation as of September 2, 2020. Please also refer to the Note "Tender Offer for Common Shares and Stock Acquisition Rights of Sony Financial Holdings Inc." on page F-11.

3

As of March 31, 2020, Sony had an approximately 270 billion yen valuation allowance recorded against its Japan national net deferred tax assets that are attributable to Sony Corporation and its national tax filing group in Japan. Because Sony's Japan businesses are gradually recovering profitability despite the unfavorable impact from the spread of COVID-19, and because additional profit is expected in the national tax filing group in Japan due to making SFH a wholly-owned subsidiary during the second quarter of the fiscal year ending March 31, 2021, it is reasonably possible that a significant portion of this valuation allowance could be reversed in the near future. The potential reduction in income taxes that may result from such reversal has not been included in the above forecast as Sony continues to monitor the possibility of such reversal.

4

The forecast for each business segment for the fiscal year ending March 31, 2021 is as follows:

(Billions of yen)	(Billions of yen)
	March 31, 2020	March 31, 2021
	Results	August Forecast
Game & Network Services (G&NS)		¥2,500
Sales and operating revenue	¥1,977.6
Operating income	238.4	240
Music		790
Sales and operating revenue	849.9
Operating income	142.3	130
Pictures		760
Sales and operating revenue	1,011.9
Operating income	68.2	41
Electronics Products & Solutions (EP&S)		1,870
Sales and operating revenue	1,991.3
Operating income	87.3	60
Imaging & Sensing Solutions (I&SS)		1,000
Sales and operating revenue	1,070.6
Operating income	235.6	130
Financial Services		1,400
Financial services revenue	1,307.7
Operating income	129.6	142
All Other, Corporate and elimination		(123)
Operating loss	(55.9)
Consolidated		8,300
Sales and operating revenue	8,259.9
Operating income	845.5	620

Game & Network Services (G&NS)

Sales are expected to increase significantly year-on-year mainly due to an expected significant increase in sales of game software and hardware as a result of the launch of PS5. Operating income is expected to be essentially flat year-on-year primarily due to the above-mentioned expected significant increase in game software sales and PS Plus sales, substantially offset by an expected increase in selling, general and administrative expenses related to the introduction of PS5 and an expected increase in the cost of sales ratio for hardware.

Music

Sales are expected to decrease year-on-year primarily due to the impact of COVID-19, partially offset by an expected increase in revenues from paid subscription streaming services. This is mainly due to an expected decrease in sales of physical media in Recorded Music, the expected impact of the postponement and cancellation of live events in Visual Media and Platform, and an expected decrease in music licensing revenues in Music Publishing. Operating income is expected to decrease year-on-year primarily due to the impact of the above-mentioned expected decrease in sales, partially offset by the recording of a 6.5 billion yen gain on the sale of a portion of shares of Pledis Entertainment Co., Ltd. during the three months ended June 30, 2020.

Pictures

Sales are expected to decrease significantly year-on-year across all categories mainly due to a decrease in the number of theatrical releases resulting from the impact of theater closures as a result of COVID-19. In addition, the prior fiscal year also benefited from the strong performances of several major theatrical releases. Operating income is expected to decrease significantly due to the decrease in sales, partially offset by an expected decrease in marketing costs resulting from the above-mentioned decrease in the number of theatrical releases.

5

Electronics Products & Solutions (EP&S)

Sales are expected to decrease mainly due to a decrease in sales in the first quarter, resulting from COVID-19, as well as the impact of foreign exchange rates. Operating income is expected to decrease significantly year-on-year primarily due to the above-mentioned decrease in sales as well as the negative impact of foreign exchange rates, partially offset by significant reductions in operating costs, including cost reductions resulting from restructuring initiatives undertaken prior to the start of the fiscal year ending March 31, 2021 in Mobile Communications.

Imaging & Sensing Solutions (I&SS)

Sales are expected to decrease primarily due to a decrease in sales of image sensors mainly resulting from a deterioration of the product mix of image sensors for mobile products and a decrease in unit sales of image sensors for digital cameras, primarily resulting from the impact of COVID-19. Operating income is expected to decrease significantly year-on-year primarily due to the impact of the above-mentioned decrease in sales, and an expected increase in research and development expenses as well as in depreciation and amortization expenses.

Financial Services

Financial services revenue is expected to increase due to an increase in net gains on investments in the separate account, as well as an improvement in valuation gains and losses on securities at Sony Bank Inc. ("Sony Bank"), partially offset by a decrease in premiums from single premium insurance. Operating income is expected to increase year-on-year primarily due to an improvement in valuation gains and losses on securities at Sony Bank, partially offset by expenses for various provisions related to COVID-19.

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 above forecast.

The above forecast for each segment 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.

Notes about Financial Performance of the Music, Pictures and Financial Services segments

The Music segment results include the yen-based results of Sony Music Entertainment (Japan) Inc. and the yen-translated results of Sony Music Entertainment, Sony/ATV Music Publishing LLC and EMI Music Publishing Ltd., which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis.

The results presented in Pictures are a yen-translation of the results of Sony Pictures Entertainment Inc., which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

The Financial Services segment results include SFH and SFH's consolidated subsidiaries such as Sony Life, Sony Assurance Inc. and Sony Bank. The results discussed in the Financial Services segment differ from the results that SFH discloses separately on a Japanese statutory basis.

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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:

1. Sony's ability to maintain product quality and customer satisfaction with its products and services;
2. 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 image sensors, game and network platforms, smartphones and televisions, 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 customer preferences;
3. Sony's ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;
4. the effectiveness of Sony's strategies and their execution, including but not limited to the success of Sony's acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives;
5. changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility;
6. Sony's continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;
7. Sony's reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations;
8. the global economic and political environment in which Sony operates and the economic and political conditions in Sony's markets, particularly levels of consumer spending;
9. Sony's ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;
10. Sony's ability to forecast demands, manage timely procurement and control inventories;
11. 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, liabilities and operating results are denominated;
12. Sony's ability to recruit, retain and maintain productive relations with highly skilled personnel;
13. Sony's ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others;
14. the impact of changes in interest rates and 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;
15. 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;
16. risks related to catastrophic disasters, pandemic disease or similar events;
17. the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony's business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and
18. the outcome of pending and/or future legal and/or regulatory proceedings.

Risks and uncertainties also include the impact of any future events with material adverse impact. The continued impact of COVID-19 could heighten many of the risks and uncertainties noted above. Important information regarding risks and uncertainties is also set forth in Sony's most recent Form 20-F, which is on file with the U.S. Securities and Exchange Commission.

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