Sonyar08 e

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7 2:22:12 PM
A nnua l R epor t 2008

Year Ended March 31, 2008
Annual Report 2008

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Contents
Financial Highlights
Business Overview
Letter to Shareholders
Mid-Term Corporate Strategy
Review of Operations
14
Special Features
OLED Television
16
FIFA Partnership Program
22
Blu-ray Disc
36
Corporate Governance/New Directors

and Corporate Executive Officers
40
Corporate Social Responsibility
44
Financial Section
A Message from the CFO
Operating and Financial Review
49
Consolidated Financial Statements
92
Stock Information
100
Stock Acquisition Rights and

Bond Information
101
Investor Information
102
Cover page design concept:

Represents the joy and excitement inspired by Sonys diversified businesses, products and services, as well as Sonys global presence and innovation.
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48
Cautionary Statement
Statements made in this annual report with respect to Sonys current plans, estim
of Sony. Forward-looking statements include, but are not limited to, those statem
might and words of similar meaning in connection with a discussion of future o
other materials released to the public. These statements are based on manage
uncertainties could cause actual results to differ materially from those discussed
Sony to update or revise any forward-looking statements, whether as a result of
are not limited to (i) the global economic environment in which Sony operates, as
and the U.S. dollar, the euro and other currencies in which Sony makes significan
as well as achieve sufficient cost reductions for, its products and services, inclu
product introductions, rapid development in technology and subjective and chang
to recoup large-scale investments required for technology development and incre
ability to implement successfully its network strategy for its Electronics, Game an
in its Pictures segment and the music business in light of the Internet and other
capital expenditures, to correctly prioritize investments (particularly in the Electro
joint ventures and alliances; (x) the outcome of pending legal and/or regulatory p
Management in the Financial Services segment; and (xii) the impact of unfavorabl
of the Financial Services segment. Risks and uncertainties also include the impac
Financial Highlights
Sales and operating revenue
Operating income
6.9%
8,871.4 billion +
374.5 billion
Rose 6.9%, owing to increased sales in the Electronics and Game

businesses, achieving a fiscal-year record
5.2 times
More than five times the previous years level, bolstered by operating income gains in the Electronics and Pictures businesses and a
decrease in the operating loss in the Game business
(Yen in trillions)
10
(Yen in billions)
200
100
300
400
500
3.0%
7.5
2006
226.4
2006
0.9%
8.3
2007
71.8
2007
4.2%
8.9
2008
374.5
2008
0
*Years ended March 31
2
Operating income
4
6
Operating margin
10
()
Net income
Free cash flow (excluding Financial Services)
369.4 billion
2.9 times
504.2 billion
A fiscal year record, reflecting higher operating income, as well as

an improvement in net non-operating income and an increase in
equity in net income of affiliated companies
Substantial increase in free cash flow, a result of higher net income

and gains on the sale of shares in a financial services subsidiary
(Yen in billions)
100
200
300
400
4.1%
123.6
2006
(Yen in billions)
-800
-400
0
(44.4)
800
252.0
(296.4)
2006
400
3.8%
126.3
2007
(431.1)
2007
305.6
(125.5)
10.8%
369.4
2008
0
3
Net income
12
Cash flows from operating activities

Cash flows from investing activities
Free cash flow
()
ROE
519.1
504.2
(14.9)
2008
(Combined total of cash flows from operating and investing activities)
Capital expenditures
R&D investment
335.7 billion
520.6 billion
(Yen in billions)
200
400
600
384.3
2006
414.1
2007
335.7
2008
800
(Yen in billions)
200
2006
400
600
800
531.8
2007
543.9
2008
520.6
08SonyE_P1_P13_0804.indd 1
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Business Overview (Fiscal Year in Review)
Proportion of sales* by business segment
Proportion of sales* by region
and Electronics sales by product category

Audio (9%)
3.5%
6.2%
Video (22%)
9.7%
Electronics
Game
Pictures
Financial Services
All Other
Televisions (23%)
2008
13.7%
Information and
Communications (19%)
Semiconductors (4%)
Components (14%)
66.9%
25.5%
Japan
U.S.A.
Europe
Other
23.2%
2008
26.2%
25.1%
Other (9%)
*Year ended March 31
*Percentage of sales and
operating revenue to outside customers
*Year ended March 31

*Percentage of sales and operating revenue to outside customers
*Sales and operating revenue accounted for by customers in each
particular region
Electronics
Electronics
Sales:
6,613.8 billion (+8.9%)
Operating income: 356.0 billion (+121.8%)
Sales
Operating income
Operating margin (%)

(Yen in billions)
6,613.8
6,072.4
5,190.2
Sales in the Electronics business increased 8.9%.

Higher unit sales of BRAVIA LCD televisions, VAIO PCs and Cyber-shot compact
digital cameras in all regions contributed to higher segment sales.
Operating income was 2.2 times higher than in fiscal year 2006.
The sharp increase in operating income was primarily due to higher segment sales and
the positive impact of the yens depreciation against the euro.
5.4%
Also contributing to the increase in operating income was a 51.2 billion provision
2.6%
0.1%
8.8
2006
recorded in the previous fiscal year for charges related to the notebook PC battery
356.0
160.5
2007
2008
pack recalls and subsequent global replacement program, and a 15.7 billion reversal
of the same provision recorded in the period under review.
Game
Sales:
Operating loss:
Sales
1,284.2 billion (+26.3%)

124.5 billion ( )
Operating income (loss)
(Yen in billions)
1,284.2
Hardware sales increased, due to higher sales of PLAYSTATION3 (PS3) and PSP
(PlayStationPortable). Sales of PS3 software contributed to an increase in software
sales.
Operating loss reduced by 107.8 billion.
1,016.8
958.6
Sales in the Game business rose 26.3%.
The reduction in the operating loss reflects decreased operating losses in the PS3
businessa result of successful PS3 hardware cost reductions and increased sales
0.9%
8.7
2006
of PS3 softwareas well as the strong performance of the PSP business.

(232.3)
2007
(124.5)
2008
08.8.7 2:17:38 PM
Pictures
Sales:
Operating income:
Sales
857.9 billion (11.2%)

54.0 billion (+26.5%)
Operating income

(Yen in billions)
966.3
857.9
745.9
6.3%
released during the period.

Operating income rose 26.5%.
the home entertainment and television markets, as well as the sale of a bankruptcy
claim against a former licensee of film and television product.
3.7%
54.0
42.7
27.4
The decline in sales reflected lower worldwide motion pictures sales as fewer films were
Higher operating income was the result of the strong performance of prior year films in
4.4.%
2006
Sales in the Pictures business decreased 11.2%.
2007
2008
Financial Services
Revenue:
Operating income:
Revenue
581.1 billion (10.5%)

22.6 billion (73.1%)
Operating income

(Yen in billions)
743.2
25.3%
649.3
Revenue in the Financial Services business declined 10.5%.

Sony Life Insurance Co., Ltd. (Sony Life) reported a decrease in revenue due to a net
loss from investments in its separate account, a deterioration of net valuation gains
from convertible bonds and an impairment loss on equity securities in its general
account, all of which resulted from a sharp decline in the Japanese stock market.
581.1
Operating income fell 73.1%.

The deterioration of net valuation gains from convertible bonds and an impairment loss
13.0%
on equity securities in Sony Lifes general account led to a decrease in overall segment
188.3
84.1
3.9%
22.6
2006
2007
operating income.
2008
All Other
Sales:
382.2 billion (+7.6%)
Operating income: 50.2 billion (+73.9%)
Sales
Operating income

(Yen in billions)
411.5
Aggregate sales from businesses in this category increased 7.6%.

Higher sales were largely due to the contribution from sales at a U.S. music publishing
company acquired during the period, the receipt of a settlement payment related to
copyright infringement claims, an increase in sales at Sony Music Entertainment
382.2
355.1
(Japan), Inc., and higher fee revenue from broadband connection services, particularly
13.1%
fiber-optic, at So-net Entertainment Corporation.

Operating income climbed 73.9%.
4.8%
18.8
2006
8.1%
Operating income increased mainly as a result of a gain on the sale of the Sony Center
28.9
2007
50.2
2008
am Potsdamer Platz in Berlin, the receipt of payment related to copyright infringement

claims and an increase in trademark royalty income from Sony Ericsson Mobile
Communications AB.
Notes: 1. Sales = Sales and operating revenue 2. Operating margin = Operating income Sales and operating revenue 3. Includes intersegment transactions
08.8.7 2:17:38 PM
Letter to Shareholders: A Message from Howard Stringer, CEO
I am pleased to report the results of fiscal year 2007, ended March 31,
2008, and outline our growth prospects and strategies for the future.
As I wrote in my letter to you one year ago, fiscal year 2007 represented
the culmination of our three-year restructuring initiative. I would like to
report that we achieved nearly every goal that we had set for ourselves
three years ago. We successfully re-engineered our company by dramatically reducing operating costs, streamlining our operations, and reducing
headcount and the number of our product categoriesall of which
contributed to a significant improvement in operating results. As a result,
on an annual basis and compared to three years prior, sales and operating
revenue rose 23% to nearly 9 trillion, and both operating income and
net income more than doubled to 375 billion and 369 billion,
respectively.
Success was achieved across many of our businesses. Notably, Sony
Group worked together to successfully make Blu-ray Disc the de facto
standard for high definition recording and playback. To date, more than
15 million Blu-ray Disc players, recorders and Blu-ray Disc-enabled
PLAYSTATION3 (PS3) systems have been sold.
In the Electronics segment, which represents approximately two-thirds
of our consolidated sales, operating income rose from approximately zero
three years ago to more than 350 billion in the most recent fiscal year.
The operating profit margin achieved in fiscal year 2007 was 5.4%, far
exceeding the 4% goal which we had established in 2005. From a product
perspective, Sonys LCD television business has moved from having a
limited presence three years ago to being one of the market leaders
today on the strength of the BRAVIA brand, and it is in a position to
strive for significantly improved profitability. In addition, we were the first
to market with the next generation televisionthe organic light-emitting
diode, or OLED, TVwhich is a sleek 3 millimeters in thickness. These
are but a few examples of the successes achieved.
In the Game segment, over the past three years we have benefited from
the continued strength of the PlayStation2 platform and a resurgence
in sales of the PSP (PlayStationPortable) platform, as well as the launch
of the PS3 platform. While the segment recorded a loss for the most
recent fiscal year, it was an improvement of more than 100 billion versus
the previous fiscal year, and we are expecting further improvements. With
50 million users of network-enabled PSP and PS3 units worldwide,
we have an enormous global base upon which we can build a video
delivery service.
Our Pictures segment recorded more than 50 billion of operating income
in the most recent fiscal year, benefiting from the strength of the home
entertainment releases of a number of successful titles and the continued
vitality of our television business. Over the past three years Sony Pictures
08.8.7 2:17:38 PM
Entertainment Inc. (SPE) has expanded its theatrical, home entertainment

and local language production businesses into markets across the globe,
and has set the stage for future growth. In fiscal year 2008 a number of
exciting new releases, including Hancock starring Will Smith and Quantum
of Solace, the latest James Bond film starring Daniel Craig, are expected
to contribute to our results.
Sony Financial Holdingswhich accounts for a majority of the revenue
of our Financial Services segmentlaunched a successful initial public
offering in fiscal year 2007, despite a very challenging market environment.
The life insurance, non-life insurance and banking businesses all continued
to grow steadily. However, valuation losses on the portfolio in the life
insurance businesses, caused by the significant decline in the Japanese
stock market, negatively impacted segment results.*
Finally, our key joint ventures, including Sony Ericsson Mobile
Communications AB and SONY BMG MUSIC ENTERTAINMENT
contributed significantly to net income for the year.
On a consolidated basis, Sony recorded operating income of 375
billion, which was five times the prior years results of 72 billion. The
operating profit margin achieved was 4.2%, shy of the companys 5%
goal, primarily as a result of the portfolio valuation losses in the life insurance businesses noted above. We achieved net income of 369 billion
for fiscal year 2007, a 192% improvement over the prior fiscal year and
a record high.
In short, over the past three years, we have successfully restructured
our company by exiting businesses, eliminating costs and creating a strong
foundation going forward. Our job, however, is not complete. We must
continue our transformation into a company that successfully grows and
innovatesand does so profitably. In doing so, we need to keep Sonys
strengths while, at the same time, embracing new business models,
developing new technologies and delivering new products and services
that our increasingly savvy customer base demands. To do this, Sony
must establish a reputation for software and services that matches our
reputation for hardware and content. Our mission is to be the leading
global provider of networked consumer electronics and entertainment.
As we will outline in more detail in the pages that follow, there are many
opportunities that lie before us, and we must aggressively pursue them.
We have the talent, the resources, the experience and the will. We intend
to make significant investments in growing our businesses, and we will
do so in a measured and disciplined way.
As you will read, we are undertaking three priority actions.
* Specifically, the deterioration of net valuation gains from convertible bonds and an impairment loss on equity securities
in Sony Lifes general account, which negatively impacted our consolidated operating income on a U.S. GAAP basis.
08.8.7 2:17:39 PM
First, we will strengthen our core businesses through improving profitability in our Television and Game businesses, strategically investing
approximately 1.8 trillion for future growth and revamping our R&D efforts,
as well as continuing to focus on operating performance.
Second, we will launch network initiatives. These include providing
network connectivity across our devicesspecifically, 90% of our key
device categories by fiscal year 2010and undertaking a number of
network initiatives to deliver content from SPE and other providers to Sony
devices, both in the home and on the go. Among consumer electronics
companies, Sony is unique in its ownership of content, and we intend to
leverage this competitive advantage.
And third, we plan to capitalize on growth in developing markets and
emerging economies such as Brazil, Russia, India and China (the BRIC
countries), with the specific goal of doubling revenues in the BRIC countries
by fiscal year 2010.
Additionally, we have targeted a consolidated annual return on equity of
10% by the end of fiscal year 2010 and identified 5% operating profit
margin as a baseline of profitability.
Many factors set Sony apart, and they are the reasons we have confidence in our ability to succeed in our mission. Today we stand on a strong
foundation of innovation, experience, talent, capital and desire. We will
leverage our unique competitive advantages. We will create exciting new
products and services that customers will crave. We will be leaders in both
our existing markets and in new, emerging markets. We have the will to
compete and to succeed versus the competition. As we demonstrated
with Blu-ray Disc, when Sony is United, Sony is Unbeatable.
We thank you for your continued support of the company.
June 26, 2008
Howard Stringer
Chairman and CEO
Representative Corporate Executive Officer
08.8.7 2:17:39 PM
Howard Stringer
Chairman and CEO, Representative Corporate Executive Officer
Originally from the United Kingdom, Howard Stringer was a director and producer
at CBS (one of the top four TV networks in the United States) before becoming
president of CBS News in 1986 and president of CBS Broadcast Group, CBS
Inc. in 1988. He joined Sony Corporation of America in 1997, and became its
Chairman and CEO the following year, as well as Sonys COO in charge of the
Entertainment division, where he brought the Pictures and Music businesses to
new heights. In 1999, he received the title of Knight Bachelor from Her Majesty
Queen Elizabeth II in recognition of his contribution to the broadcast industry. He
became Chairman and CEO of Sony Corporation in June of 2005.
Ryoji Chubachi
President and Electronics CEO, Representative Corporate Executive Officer
Ryoji Chubachi entered Sony Corporation after obtaining his Ph.D. in Resource
Engineering in 1977. He was involved in developing recording media, and in
1989 was transferred to Sony Magnetic Products Inc. of America. Upon returning
to Japan in 1992, he was placed in charge of the recording media business, including magnetic tapes and optical discs. In 2002, he was given command of the
entire device/component business. The following year, he became NC President
of the Micro Systems Network Company. In 2004, he was promoted to Executive
Deputy President and COO (in charge of the Device Business and Production
Strategy). He became Electronics CEO in April 2005, and subsequently President 7
of Sony Corporation in June, and currently serves in these two capacities.
08.8.7 2:17:41 PM
Sony Group Corporate Strategy

To be the leading global provider of networked
consumer electronics and entertainment
Following the formation of Sonys management
team, led by Chairman and CEO Howard Stringer
and President and Electronics CEO Ryoji Chubachi,
Sony conducted an extensive business review that
formed the basis of the revitalization plan
announced in September 2005. Nearly all of the
announced goals and targets were achieved,
resulting in a significantly restructured cost base
and restored profitability that have allowed us to
pursue growth opportunities while also aiming for
even greater financial performance.
In June 2008, Howard Stringer was joined by
Ryoji Chubachi and Kazuo Hirai, President and
Group CEO of Sony Computer Entertainment Inc.,
at Sony Groups Corporate Strategy Meeting to
report on the accomplishments of the past three
years and to announce a new strategy. This new
strategy will guide the Sony Group over the next
three years in its efforts to complete a new mission:
To be the leading global provider of networked
consumer electronics and entertainment.
Improvement in Consolidated Results

Revenue
(Yen in billions)
+23%
Goals achieved under

the Revitalization Plan
Operating Income
(Yen in billions)
8,871.4
374.5
Net Income
(Yen in billions)
369.4
15 product categories eliminated/
downsized
7,191.3
+157%
+125%
10,000 person headcount
reduction
163.8
145.6
120 billion in asset sales

11 manufacturing sites closed/
consolidated
200 billion annual expenses
2005
2008
* Years ended March 31
2005
2008
2005
2008
reduction
08.8.7 2:17:44 PM
Results of Revitalization Plan

Fiscal year 2005 2007
Financial Results
A few of the highlights are as follows:
On a consolidated basis we targeted a 5% operating profit margin
Succeeded in making Blu-ray Disc the de facto industry stan-
for the year ended March 31, 2008 (fiscal year 2007), and nearly
dard, achieved by Sonys electronics, game, pictures, music,
achieved this goal, recording a 4.2% margin. External factors
disc manufacturing and marketing teams working together
primarily the effect of the decline in the Japanese stock market*
alongside our partners in the Blu-ray Disc Association
prevented us from attaining our 5% goal, but on an operational
Eliminated the constraints in our corporate structure that kept
basis we have created a structure through which we believe a 5%
Sony employees and technology from achieving their full

potential
margin can be reached.

The Electronics segment represents approximately two-thirds of
our consolidated sales, and due to its previous struggle for profitability, the revitalization plan announced in 2005, focused on
achieving a 4% operating profit margin target in fiscal year 2007.
Launched the BRAVIA brand of LCD televisions, and took a

strong position in each major market
Became the first to bring to market organic light-emitting diode
(OLED) televisions
Thanks to a review and comprehensive overhaul of our products,
Greatly enhanced our digital imaging business through signifi-
technology and operations, very strong profit contributions from
cantly improved market share and profitability from Cyber-shot
compact digital cameras,
compact digital cameras, a continued leading position with
Handycam camcorders and VAIO PCs helped us to achieve
Handycam camcorders and the launch of our (alpha) line
an operating profit margin of 5.4% for the Electronics segment.
of digital SLR cameras
such products as Cyber-shot
This significantly surpassed our target and is a notable achieve-
Executed our Asset Light strategy for semiconductors, specifi-
ment given that the business had nearly zero profit just three
cally the sale of certain production equipment while maintaining
years prior.
semiconductor design functions
We achieved all of the other goals we set for the three-year
Sony Ericsson Mobile Communications AB (Sony Ericsson)
period, including our asset sales and cost reduction targets, as
increased its market share and brand image through the sale of
well as reductions in our product categories, headcount, and
hundreds of millions of phones, including many Walkman- and
manufacturing sites.
Cyber-shot-branded phones
These successes, as well as the divisional successes discussed
Continued success with the PlayStation2 platform, renewed
below, have had tangible results. Over three years Sonys revenues
success with the PSP (PlayStationPortable) platform, and the
increased 23% to nearly 9 trillion, and both operating income and
launch of the PLAYSTATION3 (PS3) platformwhich repre-
net income more than doubled to 375 billion and 369 billion,
sents a group-wide effort and significant contributor to the
respectively.
acceptance of Blu-ray Disc

Built core franchises in the Pictures segment and strengthened
* Specifically, the deterioration of net valuation gains from convertible bonds and
an impairment loss on equity securities in Sony Lifes general account, which
negatively impacted our consolidated operating income on a U.S. GAAP
basis.
home entertainment, television programming and local language

production to diversify revenue streams
Improved our position in the music business through expanded
artist rosters, streamlined operations and expanded digital distribution models as well as strategic acquisitions of music pub-
Highlights by Business
In addition to the success in restructuring our cost base, each of
our businessesindependently and togetherachieved notable
lishing businesses
And finally, the very successful initial public offering of a minority
stake in Sony Financial Holdings
accomplishments over the past three years.
08.8.7 2:17:46 PM
Overview of Corporate Strategy

Fiscal Year 2008 2010
Following the success of our 2005 revitalization
plan, Sony is now in a position to aim for further
growth and greater efficiency; and has the flexibility
to navigate in todays uncertain markets and invest
for tomorrows growth.
In addition to a restructured cost base and united
organizational structure, Sonys global scale,
superior design and engineering and worldrenowned brands will allow us to handle economic
uncertainty and evolving consumer demands to
become even stronger. With this in mind, we have
set a new mission: To be the leading global
provider of networked consumer electronics and
entertainment.
We believe Sony is uniquely positioned to
achieve this mission, and we are undertaking
strategic initiatives to accomplish it, specifically
by strengthening our core businesses, providing
network connectivity services across our devices,
and capitalizing on international growth, particularly in the BRIC countriesBrazil, Russia, India
and China.
Further Strengthen Our Core Businesses

Trillion Yen Businesses
One method of strengthening our core businesses is to grow our
number of trillion yen businessesthose with annual sales
exceeding 1 trillion. We have already achieved this milestone in
our LCD television and digital imaging businesses, as well as the
mobile phones business of Sony Ericsson. In addition to these three
Electronics categories, our Game segment has already passed the
trillion yen milestone. Furthermore, by fiscal year 2010, we plan to
grow our VAIO PCs, Blu-ray Disc-related products and devices,
and external components/semiconductor sales each into trillion
yen businesses.
TV and Game Business Profitability

While increasing sales are essential to expanding our presence in
strategic markets, profitability in all of these businesses is
imperativein particular our TV category and Game segment, which
recorded losses in fiscal year 2007.
In fiscal year 2008, we plan to improve profitability substantially
in the TV category, and we have a number of initiatives in place to
do this. First, we exited the rear-projection and cathode ray tube
(CRT) TV business and expect losses associated with these
Expand 1 Trillion Yen Business Categories
LCD TVs
PC
Digital Imaging
Blu-ray
Mobile Phones
Components/Semiconductors
Game
10
08.8.7 2:17:46 PM
Sony Group Corporate Strategy Fiscal Year 2008 to Fiscal Year 20101
To be the leading global provider of networked consumer electronics and entertainment
Expand our PC, Blu-ray Disc-related products and component/semiconductor businesses
into trillion yen businesses,2 joining LCD TVs, digital imaging, game and mobile phones
and raising the total number of trillion yen businesses to seven
Ensure that 90% of our electronics product categories are network-enabled and wirelesscapable by the fiscal year ending March 31, 2011 (fiscal year 2010)
Roll out video services across key Sony products by fiscal year 2010, starting with service
launch on the PLAYSTATIONNetwork in summer 2008
Double the annual revenue from BRIC countries to 2 trillion3 by fiscal year 2010
1 Three-year period ending March 31, 2011
2 Businesses each generating 1 trillion or more of annual sales to outside customers, except for Blu-ray Discrelated business which includes intersegment sales
3 Includes Sony Ericsson Mobile Communications AB and SONY BMG MUSIC ENTERTAINMENT
as allocated
categories to shrink substantially. Second, we expect sales of our
Sony also expects to achieve improved profitability in our Game
LCD TVs to grow dramatically, which will allow us to better cover
segment in fiscal year 2008, which recorded a loss in fiscal year
our fixed costs.
2007. The most important initiative is reducing the cost of PS3
Next, we will further differentiate our products from our
hardware through such measures as continual reductions in the
competitors through the use of internally produced key components
number of components and decreasing the size of key
such as advanced films, LED backlights and specialized
semiconductors, such as RSX graphics processor, by switching
semiconductors. We will also offer models with ultrathin designs,
from a 90-nanometer to a 65-nanometer manufacturing process.
lower power consumption and high frame rates. Also very important
Increasing sales of PS3 software titles is the other key to
are cost minimization initiatives such as efficient LCD panel
improving profitability. We are off to a strong start for software in
procurement through our two joint ventures (with Samsung
fiscal year 2008, and we also have an exciting lineup of game
Electronics Co., Ltd. and with Sharp Corporation) and outside
software and non-game services ready to be launched.
sources, further reductions in design lead times and the number of
As a result of these initiatives, in fiscal year 2008 we expect to
chassis, and the acceleration of local production. These initiatives
achieve improved profitability in both our TV category and Game
are expected to result in increased flexibility in the market and
segment.
profitability.
11
08.8.7 2:17:49 PM
Investing for the Future
Further Optimization
Only through continued investment can Sony continue to deploy
On top of all of the above initiatives, we will continue to further
its innovative technologies to achieve growth and create sustained
optimize our operating performance. In order to remain competitive,
product differentiation. Accordingly, we have allocated
we must continue to rigorously scrutinize our supply chain activities
approximately 1.8 trillion for these strategic investments over the
and exit businesses that have not yielded a satisfactory return.
next three years.

In addition to entertainment- and network-related investments,
Network Initiatives
we will use half of this investmentor approximately 900 billion
As a leading producer of consumer electronicsfrom PSP and
to strengthen core focus areas within components and
Walkman to BRAVIA TVs, VAIO PCs and phones from Sony
semiconductors such as image sensors, batteries, display devices
Ericssonand as one of the worlds premiere holders of video,
and Blu-ray Disc-related components.
music, and game-related entertainment content, Sony is uniquely

positioned to deliver new entertainment experiences to its
Open Innovation
customers.
Consumers are demanding increasingly sophisticated and
Our customers increasingly demand the ability to enjoy their
integrated products and services, and through our R&D efforts
entertainment content when, how and wherever they want. Two
we can achieve innovative technology that differentiates us from
steps are required to make this a reality. First, on the hardware front,
our competitors. In addition to the recent reorganization of our
products need to be connected to content seamlessly, without the
R&D laboratories, we are accelerating what we call open
need for cables and clumsy data transfer. To this end, we have a
innovation, or the introduction of internal and external
mid-term goal of making 90% of our product categories in the
technologies, to offer the most attractive products and achieve
Electronics business network-enabled and wireless-capable by
maximum R&D efficiency.
fiscal year 2010. Second, regarding content distribution, we are

launching a video service platform that will expand the delivery of
Accelerate Innovation
Commericialization
content across our devicesin the home or on the go.

Carve-out
We plan to launch a video service this summer in North America

on the PLAYSTATIONNetwork, which will make feature movie and
television content from Sony Pictures and other major studios
Alliances
Sony
Corporate R&D
available on both PS3 and PSP.

Joint Ventures
By the end of fiscal year 2010, we plan to extend the availability

of our video servicesfirst to PCs and consumer electronics for
Drive growth through disciplined investment

(Yen in trillions)
1.8
Invest in and build-out entertainment and network services

(e.g. Gracenote, 2waytraffic)
Expand and reinforce TV Business
LCD panel production expansion
Increase OLED panel production
1.4
Invest aggressively into Core components

Image Sensor, Li-ion Battery and Blu-ray Disc, etc
Implement Asset Light strategy
System LSI for Game
2005-2007
2008-2010
12
08.8.7 2:17:50 PM
Video Service Rollout Strategy

Rollout video service across key Sony products by fiscal year 2010
Summer 2008
(Key Phases)
PlayStation
Fiscal year 2010
PCs and consumer electronics for the home
Key mobile products
the home, and then to key mobile products such as Walkman and
Financial Strategies
Sony Ericsson phones.
We have targeted a 5% operating profit margin as a baseline of
This initiative is expected to generate new revenue streams and
profitability needed to generate funds and continue to lead and
is one of the clearest opportunities for Sony to leverage its
innovate. We consider this to be the minimum acceptable level
entertainment assets to differentiate our electronic products.
going forward. In addition, return on invested capital (ROIC) has

been formally established as a fundamental framework for evaluating
International Expansion
all capital investments across the Sony Group. We will thoroughly
Sonys products and services are already available around the world.
review the expected return on capital before implementing
However, the bulk of our salesapproximately 74% in fiscal year
investments or making acquisitions. Sony is also targeting a return
2007came in roughly equal proportion from our traditional sales
on equity (ROE) of 10% by fiscal year 2010.
strongholds of Japan, North America and Europe. Our largest

regional growth economic opportunities exist outside these
The business environment in which Sony operates is chang-
comparatively mature markets, led by the BRIC countriesBrazil,
ing rapidly and, with advances in digital technology and
Russia, India and China. These four nations are some of the worlds
broadband networks, technological innovation is moving at
fastest-growing economies and represent over 40% of its
a pace never experienced before. To be a leading company
population. We have already achieved great success in India, with
in the digital age, Sony aims to leverage its unique com-
the strong presence of our film, television and music content
petitive advantage of producing both hardware and content,
complementing our Electronics business. We can leverage this
and continue to offer cutting-edge products together with
model in the other BRIC countries and other emerging markets.
superior content and services to meet the needs and expec-
Another goal we have set is to double our revenues from the
tations of our customers. We are also committed to achiev-
BRIC countries over the next three years. We achieved 1 trillion
ing our missionto become the leading global provider of
in revenues from the BRIC countries (including Sony Ericsson and
networked consumer electronics and entertainment.
SONY BMG MUSIC ENTERTAINMENT) in fiscal year 2007, and we

aim to achieve 2 trillion in revenues by fiscal year 2010.
June 26, 2008
13
08.8.7 2:17:51 PM
Review of Operations
During the fiscal year ended March 31, 2008, Sony

reported operating results that highlight its revitalization while simultaneously demonstrating its technological prowess and united group strength. In addition
to solidifying our market position in such areas as
LCD televisions, camcorders and compact digital
cameras, we mobilized to combine our technologies
and launched an organic light-emitting diode (OLED)
television that realizes both an astonishing thinness
and extraordinary image quality.
Sony also made progress in expanding the HD
World. This concept represents the integration of
Sony productsfrom electronics to motion pictures,
games and other entertainment contentenabling
users to view, shoot, edit and enjoy images with
the same dazzling high definition (HD) quality.
Collaboration among Sony Group companies contributed to the success of the movie Spider-Man 3,
as well as increasing market penetration for
PLAYSTATION3 and advancing the adoption of the
Blu-ray Disc format. Such achievements are inspired
by Sonys position as both a hardware and content
provider.
In this section, we take a look at Sonys efforts and
achievements during the period under review.
14
08SonyE_P14_27_0802.indd 14
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Sony launched XEL-1, the worlds rst OLED
In February 2008, we announced plans to
television, in Japan in December 2007.
invest approximately 22 billion to establish
LCD television sales and market share

(Millions of units)
(%)
12
Defying accepted ideas, XEL-1 features an
production technologies for medium-sized
11-inch display that measures only 3mm at
and large OLED panels. Although LCD televi-
its thinnest point, as well as a high contrast
sions remain the mainstay of our television
ratio of 1,000,000:1, high peak brightness,
business, we have positioned the OLED
excellent color reproduction and rapid
panel as a new device that will expand
response time, resulting in unprecedented
potential applications for televisions and
picture quality.
other audiovisual (AV) products. We plan to
In commercializing XEL-1, we leveraged
continue producing new applications espe-
many of our proprietary advanced technolo-
cially suited to OLEDs as we steadily develop
gies, including high-resolution display tech-
this business.
20
10.6
15
14%
12%
6.3
12%
10
2.8
2006
2007
2008
period, Sony recorded unit sales of 10.6
nologies developed since the era of the

cathode ray tube (CRT) televisions and high-
During the scal year ended March 31, 2008,
million BRAVIA LCD televisionsan
density mounting technologies from our
the global market for LCD televisions
increase of 68% from the previous scal year
mobile product development.
expanded rapidly to 85 million units. For this
and well exceeding the growth rate for the
The worlds first OLED television has opened a new chapter in the innovation of display
technology. BRAVIA has emerged as one of the worlds top LCD television brands.
By linking its displays and electronics products, Sony is creating new digital
entertainment experiences.
15
08SonyE_P14_27_0802.indd 15
08.8.7 2:18:31 PM
global marketowing to robust sales of
current scal year, we are taking steps to
shrink, we will continue to focus on the LCD
large-screen and Full HD models. In spring
further increase unit sales and implement
television business, which is expected to
2008, we reinforced the BRAVIA lineup by
cost reductions, with the aim of achieving a
experience continued growth.
introducing new medium and small-sized
substantial improvement in protability. With
With the market for LCD televisions
modelssome with thinner pro les and
sales of LCD rear projection and CRT televi-
expanding rapidly, ensuring a stable supply
others with different color variations. In the
sions continuing to decrease as markets
of LCD panels is becoming increasingly
New Technology:
The Worlds First

OLED Television
Extraordinary image quality,
Extra
Ex
ele
egan
ant des
elegant
design and
ast
a
onishing th
an aston
astonishing
thinness of only 3mm
16
08SonyE_P14_27_0802.indd 16
08.8.7 2:18:34 PM
important. In August 2007, S-LCD
of 50,000 panels, one of the highest in the
In addition, in February 2008 we announced
Corporation (S-LCD), our joint venture with
industry for eighth-generation panels.
plans to establish a joint venture with Sharp
Samsung Electronics Co., Ltd., began
Additionally, S-LCD has bolstered the
Corporation to produce large LCD panels. In
production of eighth-generation amorphous
monthly production capacity of its seventh-
scal year 2009, the joint venture is expected
thin-lm transistor (TFT) LCD panels. The
generation LCD panel line, and is currently
to begin production at a panel plant that will
new production line has a monthly capacity
producing 120,000 panels monthly.
use the industrys first 10th-generation
What was your initial impression of the OLED panel?

When I rst saw the images displayed by the prototype, I was absolutely astounded. The image quality was
inspiring, and unlike anything I had ever seen before. Even if we started with an 11-inch model, I just knew
we had to show this technology to the world. As a television engineer, I remember being unable to contain
my excitement.
Ken Kikuchi
Engineer, E Products &
Business Development Dept,
TV Business Group,
Sony Corporation
Ken Kikuchi has been involved
in Sonys OLED project since
its inauguration in the summer
of 2006. In his capacity as an
engineer in charge of panels for
televisions, Ken brought his
considerable experience in
CRT and LCD televisions to
bear in helping to realize the
commercialization of XEL-1.
What are the advantages of the OLED as a next-generation display?

The XEL-1 has attracted a great deal of attention because of its sleek proleabout 3mm at the thinnest
pointbut what I think is truly impressive is the displays expressiveness and its unparalleled ability to reproduce black. OLEDs reproduce subtle gradations of black more accurately than any other display. What this
means, for example, is that they convey beautifully the gleam of a black sofa in a dark room or the luster of
a piano. Another unique attribute of OLEDs is the ability to deliver high peak brightness, which ensures faithful reproduction of the glittering surface of water, the sheen of metal or the explosive are of reworks. This
new level of picture quality has taken the lead over existing display technologies.
What were the most challenging aspects of development?
Development efforts were focused on optimizing the color gamut, contrast and other features, as well as
on developing a display driver that would accurately reproduce black. It was also important to establish a
stable mass production capability that would ensure uniform quality and otherwise draw out and leverage
the exceptional panel quality. Initially yield was a major issue, but the collective efforts of those involved in
the production processes have led to steady improvements. Our success in commercializing this product
was propelled by the coordinated efforts of all the teams involved: device, set design and development,
production and marketing.
What efforts are being made to produce larger panels?
Huge crowds gathered to see the OLED prototypes we exhibited recently at trade shows in Japan and the
United States. Both times, I was impressed by the level of anticipation regarding this latest Sony innovation.
It was clear that if we were to continue bringing the superb image quality of OLED to market, we would have
to nd a way to make the panels bigger. We must proceed with R&D that will enable us to realize necessary
innovations and move us closer to the commercialization of larger panels.
What are some of the notable features of the XEL-1s design?

I knew I wanted to design a television that would immediately inspire in users the same feelings of surprise
and excitement as I had when I rst saw the incredibly thin OLED panel. I sought to create a simple and
denitive form that reinforced the impression of sleekness. In its simplest form, the television would have a
base and a central arm supporting the panel. However, as long as the arm was centered, the result would
be a familiar silhouette similar to any other monitor or television, not the innovative look I was after. Realizing
this, I made the bold decision to move the arm to one side. By using an offset aluminum arm, I sought to
make the ultrathin panel appear to be oating on air.
Hiroaki Yokota
Product Designer,
Creative Center,
Sony Corporation
Designer of the worlds first
OLED television, Hiroaki Yokota
sought to develop an iconic
design by creating a new form
factor and distinctive style.
What facets of the design process did you find particularly difficult?
The most difcult challenge was to create a design that was denitive, so that no matter how small the
picture, and no matter who or from where the TV is seen, anyone would immediately recognize it as a Sony
OLED television. Of course, I also sought to design a set that would accentuate the outstanding image quality and one that would stand on its own as a work of art even when switched off, no matter what angle you
look at it from. OLED panels have a particular sheen when they are off that is quite unlike LCD panels. We
chose glossy black for the main body color, which integrates the screen, bezel and base nicely and helps
the set blend into the surrounding decor as light reects off it.
17
08SonyE_P14_27_0802.indd 17
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mother glass substrate. Having secured a
The key to realizing the world of HD envi-
disc recording media, and the XDCAM EX,
supply of LCD panels through S-LCD and
sioned by Sony is high-quality HD content.
which uses a memory card. Also, we have
the joint venture with Sharp, we expect to
In the area of broadcasting equipment and
developed HD solutions for customers in a
be assured of a steady volume of LCD
other professional-use devices, we are
panels in a broad range of sizes, enabling
introducing a vast array of cutting-edge HD
us to establish a stable, cost-competitive
equipment especially for the production of
(Millions of units)
procurement structure.
HD programming that addresses the needs
BRAVIA LCD televisions play a central role
of professional users. Sony HD cameras and
in our HD World initiative. Going forward,
videotape recorders have already been
we will continue to promote the HD World
adopted by broadcasters around the world
by offering a variety of hardware, as well as
and are being used to generate an unprec-
movies and other HD content, all of which
edented array of high-quality HD content.
share a common linkthe LCD television.
We have also released professional-use
This will enable us to deliver powerfully vivid
products that respond to the random access
and detailed HD images that will inspire an
and other needs of the digital age, including
increasing number of users.
XDCAM camcorders, which use optical
PC sales
5.2
3.7
4.0
2006
2007
2008
Sonys vast range of electronics products and content enables us to expand the realm
of high definition from the movie and broadcasting business to television, games and
other home entertainment.
18
08SonyE_P14_27_0802.indd 18
08.8.7 2:18:41 PM
HD World
XDCAM
HD camcorder and stationary deck
HD Handycam
Filming
Broadcasting
CineAlta digital cinema cameras
and the 4K SXRD film projector
Cinema
Fun
HD TV and
Blu-ray Disc player
VAIO PC with built-in
Blu-ray Disc drive
Viewing
Content
wide range of other elds. For example, in
record, edit and otherwise freely manipulate
the area of digital cinema equipment, we
HD content while retaining superb HD image
PLAYSTATION3
Storage/
Editing
offer CineAlta digital cinema cameras and
quality. Looking ahead to this era, we have
the 4K SXRD lm projector, which are being
taken steps to bolster our lineup of Blu-ray
deployed in movie theaters.
Disc-compatible models. In the scal year

ended March 31, 2008, our PCsnotably
VAIO PCs play a crucial role in the HD
the VAIO C series, which allows consumers
World by enabling users to edit and store
to color-coordinate their notebooksper-
content. The age of high definition has
formed strongly, with unit sales rising 30%,
arrived, and soon people will be able to
to 5.2 million units.
Camcorder sales and market share

(Millions of units)
(%)
10.0
80
7.6
7.7
7.5
7.5
42%
60
41%
43%
5.0
40
2.5
20
2006
2007
2008
19
08SonyE_P14_27_0802.indd 19
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Camcorders and compact digital cameras are major profit pillars for Sony while digital
single-lens reflex (SLR) cameras offer particular promise for future market growth.
These products are supported by Sonys image sensor technologies.
We have consistently led the industry by
with HDDs registering particularly robust
lightest* camcorder, which records to
developing format standards ranging from
results. We also launched a number of
Memory Stick. Reecting solid support for
8mm video to digital video (DV) and high
groundbreaking new models, including a
our broad lineup of camcorders, which are
definition video (HDV), and by commercial-
hybrid Handycam camcorder with a
tailored to the needs of customers around
izing Handycam camcorders that deliver
face-detection function that is capable of
As of April 2008
improved image quality and convenience.
HD recording to three separate media
In the fiscal year ended March 31, 2008,
inter nal memory, Memory Stick and
DVDas well as the worlds smallest and
we further enhanced our Handycam
Compact digital camera sales and

market share
(Millions of units)
(%)
25
portfolio with Full HD-compatible models

that record on hard disc drives (HDDs),
23.5
20
30
17.0
DVDs and Memory Stick recording media,

15
thereby accelerating efforts to realize the
22%
13.5 21%
40
23%
20
HD World.
10
In the period under review, camcorder
10
sales progressed favorably to 7.7 million

units, with HD-compatible models mounted
Compact digital camera DSC-W110
2006
2007
2008
20
08SonyE_P14_27_0802.indd 20
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the world, Sony camcorders consistently
introduced products that respond to
compact digital cameras increased 38%
maintain a global market share of approxi-
different consumer needs, including new
year on year to 23.5 million units, signi-
mately 40%, and are a major prot pillar of
models in the affordably priced Cyber-shot
cantly outpacing global market growth and
Sonys Electronics segment.
W- and S-series and the advanced, slim-
contributing to earnings.
design T-series.
Within the digital imaging domain, the global
Recently, we launched models equipped
A newcomer to digital SLR cameras, Sony
market for compact digital cameras
with newly developed functions such as
entered this highly promising market in 2006.
showed a dramatic growth of 27% in the
Smile Shutter, which ensures users never
Following on the heels of our rst model, the
scal year ended March 31, 2008. This was
miss those natural smiles, and a face-
100, we unveiled several new models in a
due to replacement demand and continued,
detection capability, where focus, exposure
bid to expand our product portfolio during
robust new demand in emerging markets.
and skin tone are automatically detected
the period under review. These included the
For these and other markets, Sony has
and adjusted. As a result, unit sales of Sony
200, which offers enhanced basic features;
21
08SonyE_P14_27_0802.indd 21
08.8.7 2:18:47 PM
the 350, featuring Quick AF Live View,
realizing superb image quality. Going forward,
and digital SLR cameras is made possible
which enables users to shoot from various
we will strive to continue to enhance the
by our image sensor technologies. We
angles by using the LCD monitor; and the
(alpha) series, enabling us to offer a wide
have positioned digital image sensors
700, which is mounted with the newly
range of attractive, easy-to-use cameras.
already the key device in our digital imaging
developed Exmor
businessas a focus of our semiconductor
complementary metal
oxide semiconductor (CMOS) sensor that
The outstanding image quality delivered by
business. We are also working to strengthen
delivers 12.24-megapixel resolution, thus
Sony camcorders, compact digital cameras
our technological capabilities for CMOS
Global Branding:
Sony FIFA
An initiative to strengthen the Sony brand through a partnership with FIFA
Sony has signed a global partnership program contract with Fdration Internationale de
Football Association (FIFA) making it a FIFA Partner, the highest level of FIFA sponsorship.
During the eight-year period of the contract (20072014), Sony will exercise a broad array
of rights in the Digital Life categorywhich covers a wide range of businesses, from
electronics to entertainmentat the FIFA World Cup in 2010 (South Africa) and in 2014
(Brazil), as well as at more than 50 other FIFA competitions.
As it continues to expand its presence around the world, Sony recognizes that it is increasingly important to enhance the corporate value of the Sony Group. Accordingly, Sony is
strengthening its technologies and product appeal, enabling it to offer competitive products
and services, as well as conducting effective marketing activities that enhance brand afnity and customer trust.
Through a variety of initiatives as a FIFA Partner, Sony aims to develop new businesses and reinforce and broaden global
awareness of the Sony brand. At the same time, the Sony Group will work as one to deliver dreams, happiness and excitement
to people everywhere through soccer, the worlds most popular sport.
FIFA Partnership Rights and Initiatives

Marketing
Media
Display of logos on stadium advertising boards, FIFA publications and

ofcial websites
Advertising and display of logos at FIFA-sponsored events
Preferential negotiation rights for television broadcasting
On-screen ID (sponsor tag displayed on television screen)
Stadium advertising boards used in the ofcial FIFA video game
Use of ofcial FIFA marks and designations

Use of FIFA archival footage for promotional purposes
Rights to produce and use premium goods
Displays and sales of products in and around stadiums
Others
Preferential negotiation rights for the production, distribution and commercial use of the ofcial music for FIFA World Cup competitions
Use of PLAYSTATION3 (PS3) as ofcial hardware for the ofcial FIFA video game (FIFA Interactive World Cup)
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08SonyE_P14_27_0802.indd 22
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image sensors to accommodate expanding
Kumamoto Technology Center. Over the next
with advanced processing speeds, for use
applications.
three years, while maintaining an industry-
in growth-market products, such as cameraequipped mobile phones.
We have allocated approximately 60
leading position in charge-coupled device
billion over three yearsscal years 2007,
(CCD) image sensors, we will work to con-
2008 and 2009to invest in expanding the
tinue to strengthen our CMOS image sensor
In our semiconductor business, we plan to
image sensor fabrication capacity of Sony
manufacturing with the aim of developing
continue to invest actively in the develop-
Semiconductor Kyushu Corporations
sensors that combine superb image quality
ment and production of image sensors,
Tomoyo Ouchi
FIFA Partnership Project
Office,
Brand Management
Department,
Sony Corporation
A PR and communications
ofcer in the FIFA Partnership
Project Ofce, Tomoyo Ouchi is
responsible for distributing
information to the public and
promoting information sharing
within the Sony Group.
Why become a FIFA partner?

Our principal objective is to enhance the brand value of the Sony
Group worldwide. The FIFA partnership encompasses Sonys core
business categories, including electronics, games, mobile phones,
music and movies. We will make practical use of the partnership
as a common, group-wide platform, rallying the capabilities of Sony
as a whole for maximum impact. Through partnership initiatives,
we are seeking to highlight the unity and collective strengths of the
Sony Group.
Another objective is to further strengthen the Sony brand. To this
end, we are striving to replicate soccers stylish, exciting and active
image in our various activities.
What are the merits of the FIFA partnership?
The FIFA World Cup is the worlds single biggest sporting event.
The 2006 competition in Germany was broadcast to more than 200
countries and regions and had a cumulative viewing audience of
approximately 30 billion people. As such, the greatest benet of this
partnership is that it provides us with essentially exclusive access
to this massive audience for our global advertising, promotional and
marketing activities.
Another important merit is that soccer is an especially popular
and appealing sport among the digital generation and residents
of strategically important emerging marketsboth of which are
crucial to Sonys future growth. We are already seeing results, with
a greater afnity for the Sony brand and an improvement in our brand
image in Central and South America.
The partnership has also given rise to new business opportunities.
We are creating new ways to enjoy soccer by leveraging HD and
other technologies, as well as the entertainment expertise accumulated through involvement in the motion pictures business, among
others. FIFA has high expectations that we will add new value that
is distinctly Sony, while our hope is that the partnership will serve as
An in-stadium promotional activity (Commercial display)
a catalyst for the development of new businesses. This is why the

term partner is used, rather than simply sponsor.
Can you tell us a little about the FIFA partnership activities
throughout the Sony Group?
SONY BMG MUSIC ENTERTAINMENT and Sony Music Entertainment
(Japan) Inc.(SMEJ) wrote the theme songs for many competitions,
including the FIFA World Cup, while in the Electronics business we
are offering comprehensive support by, for example, providing HD
footage and audiovisual equipment. We are also actively developing
promotions for various businesses that make use of HD content.
In Japan, a television program about soccer called SThe Stories
is being aired that uses archival FIFA footage. A production of Sony
Corporation and Sony Pictures Entertainment, the program also
features music by SMEJ and is sponsored by Sony Marketing
(Japan), thus illustrating the advantages of collaboration among
Sony Group companies in a common branding effort. Also, PS3
has been chosen as the official platform for FIFA Interactive
World Cup, the official FIFA video game.
These and other FIFA partnership efforts reect the teamwork
and cooperation inherent in the concept of Sony United. Going
forward, we will continue to take on the challenge of capitalizing on
the attractive opportunity provided by FIFA and soccer in a way
that only Sony can.
23
08SonyE_P14_27_0802.indd 23
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A comprehensive array of cutting-edge device technologies allows Sony to create

unique products for a new world of entertainment.
which give us a competitive advantage.
established between Toshiba Corporation,
By focusing attention on image sensors
Conversely, we have implemented a number
Sony and Sony Computer Entertainment Inc.
and other core areas, we will strive to
of measures in the area of system LSIs in
(SCE) to produce semiconductors using the
improve the efciency of investment in our
line with our Asset Light strategy for
above-mentioned production equipment.
semiconductor business.
reducing in-house production. In March
This will enable us to outsource the manu-
2008, we sold certain semiconductor pro-
facture of system LSIs to the joint venture,
R&D continues to yield a wealth of revolu-
duction equipment to Toshiba Corporation,
while keeping system LSI development and
tionary technologies that allow us to develop
and in April 2008 a joint venture was
engineering in-house.
products which are unique to Sony. Recent
TransferJet
TransferJet is a close proximity wireless transfer technology that facilitates the high-speed transfer of
photographs, videos and other large files from a cellular phone, digital camera or video camera to a PC or
television simply by touching the two devices together. Straightforward enough for anyone to use, this
revolutionary technology is expanding the world of wireless communication.
What prompted you to develop TransferJet?
Cell phones, compact digital cameras and other mobile devices are popular across all age groups, but for many
people printing their photographs or watching home videos on a television is still not as easy as they would like.
We wanted to create a wireless system that would be easy for anyone to useeven people who are not entirely
comfortable with PCs and networks. This was what prompted us to develop TransferJet. Sonys superior
craftsmanship consistently inspires new lifestyles. Just as the development of FeliCa has given rise to the touch
& go style of electronic ticketing for public transportation, we believe that our new wireless technology has the
potential to signicantly transform the way people live.
Jun Iwasaki
Deputy General Manager,
TransferJet Business
Promotion Department,
Corporate R&D, Sony
Corporation
A wireless engineer, Jun Iwasaki
has been involved in technology
developmentincluding ultrawideband wireless technology
for many years. Building on his
considerable experience and
expertise, Iwasaki leads the
t e a m re s p o n s i b l e f o r t h e
development of the TransferJet
close proximity wireless transfer
technology.
What is so revolutionary about TransferJet?

Wireless communication generally requires authentication and other complex settings. Even I nd such systems
counterintuitive, and Im an engineer. Our idea was to make wireless recognition between devices possible
simply by touching them together. It was this new concept that allowed us to develop a revolutionary interface
using low-intensity radio waves that only travel a maximum of 3cm, making it possible to transfer large volumes
of data easily and quickly. By intentionally limiting the communication distance to 3cm, we prevent crossed
signals and ensure the radio waves only reach the device with which they are intended to communicate. The
merits of this are that it reduces the need for security and data encryption circuits, as well as minimizing power
consumption, which will make it easier to promote global adoption of the system. With a maximum transmission
rate of 375Mbps, this system facilitates things like stress-free downloading of video from a camcorder to an
LCD television for easy viewing.
How do you anticipate this technology being used?
The chip used in the TransferJet technology is miniscule, so it can be easily mounted in compact digital cameras
and PCs, as well as in cell phones and other mobile devices. Mounting it together with FeliCa, for example,
would allow the user to touch & get music, videos and information via TransferJet while using FeliCa to settle
payment. This mechanism will also make it possible to develop business models for offering a variety of new
services. We will make the technological specications available while promoting TransferJet as a universal
interface and accelerating development efforts with the aim of achieving commercialization in scal year 2009.
24
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The market for digital music players is expanding together with the digital music
distribution industry. As developers of the Walkman brand and technologies, which
have inspired a range of products since the launch of the first Walkman in 1979, we
are working to create a new chapter in Sonys audio history.
achievements in the area of CMOS image
digital SLR camera. We also announced
sensorsa key focus for semiconductors
the commercialization of a 35mm full-frame
include a high-speed Exmor CMOS image
CMOS image sensor with 24.81 effective
sensor with 12.24 effective megapixel
megapixel resolution.
resolution, which is mounted in the 700
From technology that supports product

differentiation to technology that creates
Sound entertainment player

Rolly
new markets, we continue to actively
We recently unveiled Rolly , a newly
pursue R&D in a variety of fields. These
developed sound entertainment player that
activities range from the development of a
integrates Sonys accumulated audio tech-
thin, light and bendable OLED display
nologies with motion control-related robot
made with plastic film to TransferJet, a new
technologies. As a music player that dances
close proximity wireless transfer technol-
to the rhythm of the music being played,
ogy that facilitates the high-speed transfer
Rolly is bursting with a uniquely Sony sense
of content from a mobile device to a com-
of fun, and has won acclaim as a music
puter or a television just by touching the
player that offers a new way of listening to
two together.
music and an innovative user interface.
Full-color OLED display using thin-lm transistors

mounted on a plastic substrate
25
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Digital music player sales and

market share
(Millions of units)
(%)
12
5.8
8%
4.5
4.5
7%
6
6%
2006
2007
2008
With the trend in televisions shifting toward
intense sound to life, allowing users to create
models with large screens and HD compat-
an environment for enjoying high-quality
ibility, demand is increasing for easy-to-enjoy
sound in the comfort of their own home.
full-scale home theater systems that deliver
We have also enhanced our lineup of NET
more realistic sound to enrich the viewing
JUKE hard disk component stereo systems.
experience. The Sony S-Master is a compact,
NET JUKE allows users to download music
fully digital amplier that facilitates the digital
and store it on the systems hard drive without
signal processing of the entire audio chain,
a PC, and transfer it easily to a Walkman,
from sound input through to speaker output,
thus making it possible for them to take their
generating highly efficient, high-fidelity
music wherever they go.
sound. Incorporated into products ranging

from home theater systems to golf ball-sized
In the digital music player category, sales
speakers, S-Master technology brings
of Walkman units with noise canceling
26
08SonyE_P14_27_0802.indd 26
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functions and compatibility with one-seg
to create a new, exible environment for
of music-enabled handsets reaching 145
(terrestrial digital broadcasting) were strong
enjoying music.
million units at 2007 year-end, including

more than 57 million Walkman-branded
in Japan. In the U.S. and European markets,

we expanded our business by introducing
Sony Ericsson Mobile Communications
units, Sony Ericsson continues to enjoy a
new models that responded to consumer
AB (Sony Ericsson)established as a
leading position globally in this key market.
demand for WMA/WMT (Windows Media
joint venture between Sony Corporation
In calendar year 2008, Sony Ericsson
Audio/Windows Media Technology) com-
and LM Ericssonshipped more than 100
plans to launch XPERIA, a new brand of
patibility. As a consequence, in the scal
million handsets in calendar year 2007 at
high-performance handsets that will offer
year ended March 31, 2008, total unit sales
a growth rate of more than double that of
not only music and camera functions, but
of digital music players increased 29%, to
the global market. During the year, Sony
also the abilitycomparable with that of
5.8 million units.
Ericsson established a solid business
a PCto enjoy a wide range of additional
In the Japanese market, we also kicked
foundation in order to strategically position
content.
off the auSony MUSIC PROJECT, in
itself to capture market share with an
collaboration with KDDI Corporation. This
expanded product portfolio, in line with its
In fiscal year 2007, the SONY BMG
new service allows subscribers to download
goal of becoming one of the top three
MUSIC ENTERTAINMENT (SONY BMG)
music to their mobile phones for listening
players in the industry. Investments are
joint venture focused on identifying and
on a Walkman or NET JUKE hard disk
currently being made in both R&D and
developing talented new artists, as well as
component stereo system, thereby bridging
brand-building with the aim of strengthen-
on expanding the fan bases of its estab-
the traditionally separate platforms of
ing Sony Ericssons presence in new and
lished and superstar artists. SONY BMG
mobile phones, PCs and audio equipment
emerging markets. With cumulative sales
earned a total of 21 GRAMMY awards in
27
08SonyE_P14_27_0802.indd 27
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Artists from SONY BMG & SMEJ
Alicia Keys
Bruce Springsteen
Leona Lewis
Chris Brown
Avril Lavigne
Celine Dion
YUI
Ken Hirai
LArc-en-Ciel
28
08SonyE_P28_39_0724.indd 28
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calendar year 2007 and enjoyed success
launched MusicPass, a series of MP3 gift
Sony is also focusing efforts on expanding
with a wide range of both new and car-
cards that provide consumers with access
its music publishing business. Sony/ATV
ryover releases, including multimillion-selling
to digital albums and bonus material. A
Music Publishing (Sony/ATV)a joint
albums from artists such as Daughtry,
similar product, musicbon, was launched
venture between Sony and Michael
Alicia Keys, Avril Lavigne, Celine Dion,
in Germany.
Jacksonowns or administers more than
Bruce Springsteen and Foo Fighters.
Moving ahead, SONY BMG plans to
500,000 copyrights and has achieved
Breakthrough artist development success
develop new products, explore additional
considerable success in capitalizing on
stories included Leona Lewis, Sara Bareilles
distribution channels and develop a wide
these copyrights. In the period under
and Sean Kingston.
range of business models.
review, Sony/ATV bolstered its business by
SONY BMG also continued to assert its
increasing its focus on signing artists and
presence in the Internet and mobile phone
Primarily within the music production
acquiring catalogs. Two key acquisitions
arenas, with digital sales representing 31%
industry, Sony Music Entertainment
were Famous Music, which includes
The era of digital distribution has arrived, as music, films, games and other content
can now be delivered to a variety of hardware through networks. Sony aims to
maximize the potential of the digital distribution age.
of SONY BMGs revenues in the U.S., and
(Japan) Inc. (SMEJ) conducts artist man-
classics such as Footloose, Moon River,
18% of revenues worldwide.
agement, and video and media production,
Take My Breath Away, It Dont Mean a
During the period under review, SONY
among others. In fiscal year 2007, top SMEJ
Thing (If It Aint Got That Swing), Satin
BMG began providing music via global social
artists including ORANGE RANGE, Ken Hirai,
Doll, Silver Bells, and Thats Amore, and
networking website MySpace and formed
YUI, LArc-en-Ciel, Mika Nakashima and
the LeiberStoller catalog, which includes
MySpace Music with other major music
YUKI contributed significantly to both sales
many of Elvis Presleys greatest hits.
companiesa joint venture that aims to serve
and income, while CDs by artists such as
as an interactive online platform for music
Aqua Timez, ikimono-gakari, Yuna Ito,
Digital distribution is also expanding as
sales, subscription services and ad-supported
UVERworld and chatmonchy recorded
a sales channel for publications. Sony
entertainment. SONY BMG also participated
favorable sales.
has offered Portable Reader System in
in Comes With Music, a concept which
In addition to CD sales, SMEJ is also
the U.S. market since 2006. A single
offers mobile phones bundled with access
focusing on digital distribution, and in the
device allows the user to download
to music, enabling users to download and
period under review the Chaku-Uta and
hundreds of e-books for easy portability
listen to as many celebrated recordings by
Chaku-Uta Full master ringtone download
and an innovative reading experience.
legendary SONY BMG artists as they like.
services continued to perform extremely well,
To encourage interoperability across the
and contributed significantly to earnings. In
Internet protocol television (IPTV) service
music market, SONY BMG also announced
addition, the animation-focused video pro-
uses an Internet protocol to deliver digital
an agreement with Amazon for the sale of
duction business has undertaken new initia-
content over a broadband connection.
music MP3s that can play on computers as
tives, and in April 2008 released Ano Sora
Subscribers to Sonys IPTV service can
well as all MP3 playersincluding the iPod.
wo Oboeteru in collaboration with Sony
enjoy such content simply by connecting
In the U.S. and Canada, SONY BMG
Pictures Entertainment (Japan).
the receiver directly to a BRAVIA LCD

television.
29
08SonyE_P28_39_0724.indd 29
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Although still new, Sonys IPTV service
Already popular for downloading music,
an online store selling and distributing
offers tremendous potential as a new digital
films and other content, online services are
game titles for PLAYSTATION3 (PS3) and
content distribution format. Sony will strive
also rapidly becoming a major part of the
PSP (PlayStationPortable), as well as vir-
to further develop its IPTV service business
gaming market.
tual items for use in games, and video
by emphasizing the unique advantages of

both its hardware and content.
PLAYSTATIONNetwork delivers a wide
content. PLAYSTATIONNetwork also offers
variety of functions and services to on-line
online games and AV chat features. Indicative
users. One of these is PLAYSTATION Store,
of its growing popularity, PLAYSTATION
PLAYSTATION3the ultimate computer entertainment systemis made possible

as a result of Sonys cutting-edge technologies. In addition to full high definition
gaming enjoyment, the system is creating a new world of entertainment through
network services.
30
08SonyE_P28_39_0724.indd 30
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Network currently has more than 9.8 million
PS3 is a computer entertainment system
Cumulative sales of PlayStation2 (PS2)
registered accounts worldwide, as of June
that brings together Sonys considerable
reached approximately 130 million units,
2007, while downloads to date exceed
know-how and cutting-edge technologies
making it the worlds best-selling game
170 million.
including those used in Cell Broadband
platform. PS2 continues to perform well,
In fall 2008, SCE plans to introduce the
Open Beta service for PLAYSTATION Home,
the online community that allows PS3 users

to meet, interact and play games.
Engine and other high-performance semi-
particularly in Europe and North America. In
conductors, and advanced devices such as
fiscal year 2007the eighth year since its
the Blu-ray Disc drive.
launchglobal sales of PS2 totaled 13.73
With the aim of achieving strong growth
million units, highlighting its long-standing
for the PS3 platform, in fiscal year 2007 SCE
contribution to profits in Sonys Game busi-
introduced a new 40GB model and expanded
ness. SCE will continue to promote PS2 in
the PS3 software lineup. As a result of these
emerging markets, such as those in Eastern
and other measures targeting both software
Europe, the Middle East and Asia, as well as
and hardware, sales of the platform rose
by expanding the PS2 software lineup.
worldwide after the year-end holiday sales
PLAYSTATION3
season, boosting sales for the fiscal year to
Cumulative global sales of PSP handheld
9.24 million units.
entertainment system surpassed 37 million
Going forward, SCE will cultivate even
units and have also given rise to million-
broader market acceptance by continuing to
selling hit software titles in Japan, North
enhance its software lineup and expand its
America and Europe.
network-related services. At the same time,
In September 2007, SCE unveiled a new
SCE will endeavor to continue to implement
PSP that is slimmer and lighter than the
cost reductions to improve profitability.
original model. SCE also enhanced the range
31
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PlayStation Software Titles

PLAYSTATION3 software titles*
*Some titles are yet to be released.
Gran Turismo 5 Prologue
SOCOM: Confrontation
LittleBigPlanet
SingStar
AFRIKA
AQUANAUTS HOLIDAY (working title)
PSP (PlayStationPortable) software titles*
Secret Agent Clank
*Some titles are yet to be released.
Hot Shots Golf: Open Tee 2
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08SonyE_P28_39_0724.indd 32
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PlayStation hardware sales

(Millions of units)
40
9.2
30
released a steady stream of hit titles,
breaking the $1 billion mark for the sixth
including MotorStorm , Gran Turismo 5
consecutive year. The studio was the only
Prologue and Uncharted: Drakes Fortune
one in Hollywood to exceed $8 billion in
for PS3 , and God of War : Chains of
3.6
9.5
American box office in calendar year 2007,
14.1
20
software title development grouphas
13.9
Olympus and Ratchet & Clank : Size
North American box office revenues for

the 20022007 timeframe.1
Matters for PSP. To reinforce SCE WWSs
New releases included Spider-Man 3,
development capabilities, in September
an explosive hit that was the No. 1 film at
2007, SCE acquired two U.K.-based
the North American box office in calendar
software developers that are regarded
year 2007 2 and generated ticket sales of
highly worldwide. In addition, SCE added
nearly $900 million worldwide. The film
to its group Sony Online Entertainment
set the all-time record for the biggest
(SOE), a U.S. online game development
opening 3-day weekend at the North
and services company previously part of
American box office.3 Other hits in calendar
of PSP software titles and introduced such
Sony Pictures Entertainment, in April 2008.
year 2007 included Superbad, Ghost Rider
new features as a one-seg tuner for the
SCE will step up efforts to reinforce its
and This Christmas.
Japanese market, and Skype compatibility
software development business by pro-
SPE expanded its international motion
worldwide. This move succeeded in expand-
moting shared access to SCEs global
picture production business in calendar
ing customer support for the platform and
software development resources and
year 2007 in India and Russia and other
contributed to sales of 13.89 million units in
know-how, as well as cooperation among
nations around the world. SPE released its
fiscal year 2007. In addition to bolstering its
SCE WWS studios in Japan, North America
first Bollywood musical, Saawariya, in
lineup of appealing software titles available
and Europe.
November.
10
16.2
14.7
2006
PS3
2007
PSP
13.7
2008
PS2
only for PSP , SCE will endeavor to add new
To improve the efficiency and accommo-
functionsincluding linkage with PS3and
date the various development styles of
services in an effort to accelerate the market
PlayStation third party software developers,
penetration of PSP .
1 Daily Variety, January 2003-2008

2 Hollywood Reporter, January 3, 2008
3 Daily Variety, January 28, 2007
SCE is taking steps to enhance the game

development environment. These include
Enhancing the lineup of software titles is
enhancing programming tools and building
a crucial aspect of SCEs efforts to expand
a stronger support framework.
the PS3 , PS2 and PSP businesses. Sony

Computer Entertainment World Wide
Sony Pictures Entertainment (SPE) had
Studios (SCE WWS)SCEs in-house
a very successful year at the North
PSP (PlayStationPortable)
Sony Computer Entertainment Inc. Manufacturers, cars, names, brands and associated imagery featured in this game in some cases include trademarks and/or copyrighted materials of their respective owners. All rights reserved. Any
depiction or recreation of real world locations, entities, businesses, or organizations is not intended to be or imply any sponsorship or endorsement of this game by such party or parties. SOCOM U.S. Navy SEALs Confrontation 2008
Sony Computer Entertainment America Inc. Developed by Slant Six Games Inc. Published by Sony Computer Entertainment Inc. Sony Computer Entertainment Europe. Developed by Media Molecule Ltd. SingStar is a trademark of
Sony Computer Entertainment Europe. 2007 Sony Computer Entertainment Europe. Published by Sony Computer Entertainment America Inc. Developed by SCEE London Studio. All rights reserved. Sony Computer Entertainment Inc.
All Rights Reserved. Clank and Ratchet is a trademark of Sony Computer Entertainment Inc. Developed by High Impact Games. 2008 Sony Computer Entertainment America Inc. All Rights Reserved. 2007 Sony Computer Entertainment Inc. All Rights Reserved.
33
08SonyE_P28_39_0724.indd 33
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Titles from Sony Pictures
Columbia Pictures Industries, Inc.
30 Days of Night
Superbad
The Other Boleyn Girl
Vantage Point
Surfs Up
The Water Horse: Legend of the Deep
2008 Sony Pictures Television Inc.
2008 Jeopardy Productions Inc.
21
10 Items or Less
Jeopardy!
34
08SonyE_P28_39_0724.indd 34
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Sony Pictures Television International
Rescue Me and Damages. SPT also produced
with the release of hit titles on Blu-ray. Since
(SPTI) has established a leading position
several made-for-television movies, including
the inception of the Blu-ray format in North
among Hollywood studios in the international
A Raisin in the Sun for ABC, and launched
America in June 2006, SPHE has released
distribution of current and classic films and
The Minisode Network, which airs four-to-six
more than 110 titles and maintains a market
television programs in all media, as well as
minute versions of popular television shows
share in excess of 20 percent.5
in the production of local language television
over the Internet and via mobile devices.
programming. The division also has a port-
This achievement provided a vital contribution to SPHEs overall business in calen-
folio of nearly 50 cable and satellite television
Sony Pictures Imageworks Inc. is a leader
dar year 2007, which enjoyed a 16 percent
networks in Europe, Asia, Latin America, the
in the field of digital animation. The company
increase in the year-over-year retail value
Sony Pictures Enter t ainment dist ributes mot ion pictures and television
programming to more than 100 countries. It is also a leader in the production and
distribution of digital entertainment, from the creation of world-class visual effects
for motion pictures to the development of content for the Internet, mobile phones
and other devices.
Middle East and Africa. SPTI is expanding
used state-of-the-art computer graphics
of consumer sales, primarily driven by
its international network business, and
imaging (CGI) to create the visual effects for
blockbuster titles such as Casino Royale,
currently broadcasts in 21 languages into
Spider-Man 3.
Spider-Man 3 and Superbad.

Of the major studios, for the calendar year
more than 130 countries reaching some 375

million households.
Sony Pictures Animation (SPA) is involved
2007, SPHE realized the highest year-on-
in the creation of CGI animated features from
year increase in overall unit sales and catalog
Sony Pictures Television (SPT) makes the
planning to production. SPAs critically
performance.6
Studios considerable entertainment library
acclaimed full-length feature, Surfs Up,
4 Nielsen VideoScan, September 2007May 2008

5 Nielsen VideoScan, March 30, 2008
6 Nielsen VideoScan for the year ending
December 30, 2007
available for broadcast, cable and digital
received an Academy Award nomination for
distribution across all platforms. The library
Best Animated Feature in 2008. SPA is
encompasses more than 3,500 films and
currently producing its next animated film,
150,000 episodes of more than 500 television
Cloudy With a Chance of Meatballs, and a
series, including Seinfeld.
direct-to-video sequel to its 2006 feature
SPT continues to have the No.1 and No.2
film, Open Season.
daytime television dramas (The Young and

the Restless and Days of Our Lives), as well
Sony Pictures Home Entertainment
the No.1 and No.2 syndicated game shows
(SPHE) is a worldwide leader in the sale and
(Wheel of Fortune and Jeopardy!) in the
distribution of home entertainment content
United States. During the fiscal year ended
on DVD and Blu-ray Disc. SPHE was one of
March 31, 2008, SPT produced a number of
the first to bring Blu-ray Disc to the world-
series for U.S. broadcast and cable networks,
wide market. Over the past year, SPHE has
including til Death, RULES OF ENGAGEMENT,
continued to create consumer excitement
35
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Sony United:
Blu-ray Disc
A new technology made possible through a group-wide effort
Akira Shimazu
Senior General Manager,
BD Strategy Office, Sony Corporation
Taking on the challenge of developing cutting-edge
technology and cultivating new markets is part of
Sonys DNA. Sony began Blu-ray development
immediately after the launch of DVD. We enlisted the cooperation of
leading companies in the AV, IT, game and content fields and worked
together with them to perfect the optimal standards for a variety
of applications. As a result of our uncompromising efforts, many
companies, retailers and consumers joined us in our support of
the Blu-ray format. Blu-ray completes your home theater. For
example, you can even record the FIFA World Cup with the
same quality of the original broadcast, keeping the resolution
as crisp and sharp as your memories. In addition, you can
enjoy interactive and network features on Blu-ray. From
where we now stand, at the dawn of the networked, high
definition age, it is clear that Blu-ray has a bright future
ahead.
Andrew House
Group Executive,
Chief Marketing Officer,
Sony Corporation
Sony was uniquely placed among
the Blu-ray companies in that we
could see the whole of the value chainin hardware, in
games and, of course, in movies. Sony leveraged this
insight to ensure Blu-ray was delivering the best
proposition to consumers as well as to hardware and
content partners.
From a marketing perspective, Sonys operating divisions
successfully collaborated for the greater good of the
initiative. For example, the electronics organization
packaged movie content with hardware, the studio and
the electronics divisions established a united approach to
retail and Sony Computer Entertainment America, in
conjunction with Sony Corporation, promoted PS3s Bluray capability alongside its game and network offerings in a
major U.S. consumer campaign.
Sony proved itself a leader, not only in technology and content
but also in communication, collaboration and alliance-building.
The company played a pivotal role as a founding member of the
Tru Blu Blu-ray promotions group that succeeded in building a
powerful joint marketing communications campaign to convey the
benefits of Blu-ray.
Players/Recorders
VAIO
Disc Manufacturing
36
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At the core of Sonys success is its ongoing commitment to exploring new technologies and developing
products and services that provide unique experiences for the customer. The development of the Blu-ray Disc
in association with our Blu-ray Disc Association partners is the latest example of a leading technology making
a significant impact on our customers entertainment experience.
Blu-ray presents an enormous opportunity for Sony. Total sales* of Blu-ray-related products such as Blu-ray
Disc players and recorders, VAIO PCs and components of Electronics business, as well as PS3 and various
contents, are expected to reach approximately 1 trillion, in the fiscal year ended March 2009. With each
core business supporting this effort, Blu-ray is a prime example of what a united Sony can achieve.
* Includes intersegment transactions
Kazuo (Kaz) Hirai

PLAYSTATION3
Home
Entertainment
President and Group CEO,

Sony Computer Entertainment Inc.
PS3 is a state-of-the-art entertainment system
mounted with a Blu-ray Disc drive. PlayStation
consumers are fans of cutting-edge technology
and crave HD quality in games, movies and other entertainment.
While the majority of PS3 consumers invest in our system with a
primary interest in gaming, they soon discover that Blu-ray also
offers a quantum leap from their previous movie-viewing
experiences. The sales momentum of HD televisions is proof of
how many consumersnot only PS3 userswant the HD
viewing experience. Having both the most advanced gaming
system and the definitive HD movie playback solution enables us
to offer a complete entertainment system that will be at the center
of consumers living rooms for years to come.
Blu-rays massive storage capacity gives game developers the
largest palette to create on, leading to previously unimagined
creative expression. The intense realism of games and such
sophisticated features would never have been possible without
Blu-ray.
David Bishop
President, Worldwide,
Sony Pictures Home
Entertainment
2006 Danjaq, LLC, United Artists Corporation and

Columbia Pictures Industries, Inc. All Rights Reserved.
Components
Sony is in a unique position to deliver a

complete entertainment experience to
consumers. Sony Pictures Home Entertainment (SPHE) has
worked closely with its sister electronics and game companies
to package Blu-ray titles such as Spider-Man 3, Talladega
Nights: The Ballad of Ricky Bobby and Casino Royale with their
Blu-ray Disc-enabled products to reinforce the HD movie
message and drive future Blu-ray title unit sales.
Through a variety of technical advancements, Blu-ray delivers a
true theatrical experience at home with approximately six times
more picture information than that of DVD, original master audio
tracks, more bonus content and greatly expanded interactivity,
all thanks to its increased storage capacity.
SPHE has been instrumental in bringing the Blu-ray technical
advancements to market, from the first 50GB disc to picture-inpicture functionality, and the latest and most exciting feature
BD-Live. BD-Live enables the consumer to access additional
content via their Internet-connected PS3 or compatible set top
player. In turn, SPHE benefits from a new and unique ability to have
a direct marketing and promotional relationship with consumers.
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Blu-ray Disc: A pillar of Sonys HD World initiative

A high-capacity recording media that enables users to get the most enjoyment from
high definition video content, Blu-ray is a key driver in the future evolution of Sony.
Thanks to the great number of Blu-ray titles
its rich film library. This ever growing content
scope of its businesses in related areas
already available worldwide, the Blu-ray Disc
further serves to enhance demand for Sonys
from Blu-ray Disc players and recorders to
format is rapidly gaining consumer accep-
lineup of Blu-ray Disc players and recorders,
PS3 and VAIO PCs equipped with Blu-ray
tance. Sony Pictures continues to release
sales of which remain strong.
Disc, software and disc production.
Blu-ray titles on a regular basis from both its
Having positioned Blu-ray as a key tech-
exciting slate of current films as well as from
nology in the HD era, Sony is expanding the
38
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Advances in digital technology and broadband

communications have spurred an unprecedented
and rapid pace of technological innovation. These
trends continue to drive the rapid evolution of Sonys
operating environment.
Sony will continue to maximize the competitive
advantage it enjoys in both hardware and content,
by identifying user needs and responding with
superior-quality products, outstanding services and
exceptional content. Through these efforts, Sony will
strive to achieve dynamic growth as a leader of the
digital age.
39
9
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Corporate Governance/New Directors and Corporate Executive Officers
Corporate Governance
Sony is committed to strong corporate governance. As a part
from the execution of business, and to advance the proper
of this effort, Sony adopted a Company with Committees
functioning of the statutory committees. The main provisions are as
corporate governance system under the Japanese Company
follows:
Law. In addition to complying with the requirements of laws
separating the roles of the Board chairperson/vice chairperson
and regulations, Sony has introduced its own system to help

improve the soundness and transparency of its governance by
strengthening the separation of the Directors function from
that of management and advancing the proper functioning of
the statutory committees. Under Sonys system, the Board of
Directors defines the respective areas for which each of the
Corporate Executive Officers is responsible and delegates to
and Representative Corporate Executive Officers;

limiting the number of terms of outside Directors and rotating
committee memberships;
appointing chairs of statutory committees from the ranks of
outside Directors;
setting forth qualifications for Directors for the purpose of eliminating conflicts of interest and ensuring independence;
them decision-making authority to manage the business,
raising the minimum number of Nominating Committee members
thereby promoting the prompt and efficient management of the
(five or more) and requiring that at least two Directors of the
Sony Group.
Committee be Corporate Executive Officers;

suggesting that, as a general rule, at least one Director of the
Governance Structure
Compensation Committee be a Corporate Executive Officer,
Sony Corporation is governed by its Board of Directors, which is
while prohibiting the appointment of the CEO or COO of the Sony
appointed by resolution at the shareholders meeting. The Board
Group (or persons in any equivalent position) to serve on the
has three committees (the Nominating Committee, Audit Committee
Committee; and
and Compensation Committee), consisting of Directors named by

the Board of Directors. Corporate Executive Officers are appointed
discouraging the concurrent appointment of Audit Committee

members to other committees.
by resolution of the Board of Directors. In addition to these statutory

bodies and positions, Sony has Corporate Executives who carry
out business operations within designated areas.
Sony Initiatives
To strengthen its governance structure beyond legal requirements,
Sony Corporation includes several provisions in its Charter of the
Board of Directors to ensure the separation of the Board of Directors
(For more information)

Board of Directors determination regarding internal control and governance
framework pursuant to the Japanese Company Law:
http://www.sony.net/SonyInfo/IR/library/control.html
Significant differences between the New York Stock Exchanges corporate governance standards and Sonys corporate governance practices (including the
explanation of outside Directors):
http://www.sony.net/SonyInfo/IR/NYSEGovernance.html
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Governance Related to the U.S. SarbanesOxley Act
ensure compliance with this requirement, Sony formed a cross-
The United States adopted the SarbanesOxley Act (SOX) in 2002
functional steering committee comprised of headquarters
in response to a series of U.S. accounting scandals and corporate
management to monitor necessary actions including documentation,
governance abuses. Sony is subject to the SOX regulations because
testing and evaluation of controls and to perform oversight and
it is a foreign private issuer of equity securities registered with the
assessment of the global evaluation. Based on their evaluation,
U.S. Securities and Exchange Commission (SEC) and subject to
management has concluded that Sony maintained effective internal
SEC reporting requirements.
control over financial reporting as of March 31, 2008.
Among other requirements, SOX requires the CEO and the

CFO of Sony Corporation to sign certain certifications to accom-
Corporate Governance Structure

Appointment/
dismissal
pany the Sony Annual Report on Form 20-F filed with the SEC,
relating to the fair presentation of the consolidated financial statements, disclosure controls and procedures, and internal control
over financial reporting.
Make proposals to
appoint/dismiss Directors
Appointment/
dismissal
Board of Directors
Determine
committee
members
through which potentially material information is reported from

important business units, subsidiaries, affiliated companies and
Audit report
Report
Monitor
performance
of their duties
Determine
compensation
corporate divisions and is reviewed and considered for disclosure

Nominating Committee
Committee, comprised of officers and senior management of the
Delegation
Compensation Committee
OverDetermine
compensation sight
Sony Group who oversee investor relations, accounting, corporate

planning, legal, corporate communications, finance, internal audit
Make proposals to appoint/

dismiss independent auditor
Oversight
Sony has established Disclosure Controls and Procedures,
in light of its materiality to the Sony Group. The Disclosure
Independent
Auditor
Shareholders Meeting
Monitor
performance
of their duties
Audit Committee
Oversight/
evaluation
Coordination
Management
Corporate Executive Officers
and human resources, supervises the preparation of Sonys annual

reports, current reports, quarterly earnings releases and other
Delegation
Internal Audit Division
material disclosure, and assists the CEO, the President and the CFO
in the establishment and implementation of this system and also in
Corporate Executives
assuring the accuracy of financial reporting.

Effective for the fiscal year ended March 31, 2007, SOX also
requires the inclusion of a management report on the companys
internal control over financial reporting in the Form 20-F. In order to
(For more information about Sonys corporate governance, please refer to the
following website: http://www.sony.net/SonyInfo/IR/governance.html)
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Structure of Sony Corporate Governance System
Supervision
Board of Directors
Determines the fundamental management policies of the Sony Group.

Oversees the management of Sony Groups business operations.
Appoints and dismisses the statutory committee members.
Appoints and dismisses Corporate Executive Officers.
Chairman of the Board: Yotaro Kobayashi*

Vice Chairman of the Board: Yoshihiko Miyauchi*
Sir Howard Stringer
Sony Corporation Chairman and Chief Executive
Officer
Ryoji Chubachi
Sony Corporation President and Electronics CEO
Katsumi Ihara
Sony Corporation Executive Deputy President,
Officer in charge of Consumer Product Group
Yotaro Kobayashi*
Chief Corporate Advisor, Fuji Xerox Co., Ltd.
Sakie T. Fukushima* Representative Director & Regional Managing
DirectorJapan, Korn/Ferry International
Yoshihiko Miyauchi* Director, Representative Executive Officer,
Chairman and Chief Executive Officer,
ORIX Corporation
Yoshiaki Yamauchi*
Director, Sumitomo Mitsui Financial Group, Inc.
Sir Peter Bonfield*
Member of the Board, Telefonaktiebolaget

LM Ericsson
Fueo Sumita*
Chief of Sumita Accounting Office
Fujio Cho*
Chairman, Toyota Motor Corporation
Ryuji Yasuda*
Professor, Graduate School of International
Corporate Strategy, Hitotsubashi University
Yukako Uchinaga*
Director, Vice Chairman, Benesse Corporation
Chairman and Chief Executive Officer,
Berlitz International, Inc.
Mitsuaki Yahagi*
Chairman of the Board,
The Japan Research Institute, Limited
Tsun-Yan Hsieh*
Special Consultant, McKinsey & Company
Roland A. Hernandez* Retired Chairman and CEO,
Telemundo Group, Inc.
Nominating Committee
Audit Committee
Compensation Committee
Determines the content of
Monitors the performance of duties by Directors and
Sets policy on the contents of individual
proposals regarding the

appointment/dismissal of
Directors.
Yotaro Kobayashi* (Chairman)
Yoshihiko Miyauchi*
Sir Peter Bonfield*
Fujio Cho*
Yukako Uchinaga*
Roland A. Hernandez*
Sir Howard Stringer
Ryoji Chubachi
Corporate Executive Officers (with regard to the preparation

process of financial statements, disclosure controls and
procedures, internal controls, compliance structure, risk
management structure, internal audit structure, internal
hotline system, and other matters).
Determines the content of proposals regarding the
appointment/dismissal or non-reappointment of, approves
the compensation of, and oversees and evaluates the work
of Sonys independent auditors.
Reviews with Sonys independent auditors the scope and
results of their audit including their evaluation of Sonys
internal controls, compatibility with generally accepted
accounting principles in the U.S., and the overall quality
of financial reporting.
compensation for Directors, Corporate

Executive Officers, Corporate Executives
and Group Executives and determines
the amount and content of individual
compensation of Directors and Corporate
Executive Officers in accordance with
the policy.
Sakie T. Fukushima* (Chairman)
Mitsuaki Yahagi*
Tsun-Yan Hsieh*
Yoshiaki Yamauchi* (Chairman)

Fueo Sumita*
Ryuji Yasuda*
* An outside director who satisfies the requirements under Item 15, Article 2 of the Japanese Company Law
Execution
Corporate Executive Officers
Make decisions regarding the execution of Sony Group business activities within the scope of the authority delegated to them by the Board
of Directors.
Sir Howard Stringer** Chairman and Chief Executive Officer
Ryoji Chubachi**
President and Electronics CEO
Katsumi Ihara**
Executive Deputy President, Officer in charge of
Consumer Product Group
Yutaka Nakagawa
Executive Deputy President, Officer in charge of
Semiconductor & Component Group, Production
Strategy, Procurement and Supply Chain
Nobuyuki Oneda
Keiji Kimura
Nicole Seligman
Executive Vice President and Chief Financial Officer

Executive Vice President, Officer in charge of
Technology Strategies, Intellectual Property,
Information Systems and Electronics Business
Strategies
Executive Vice President and General Counsel
** Representative Corporate Executive Officer concurrently serving as Director
Corporate Executives
Carry out business operations within designated areas, including business units, research and development, and/or headquarters functions, in
accordance with the fundamental policies determined by the Board of Directors and the Corporate Executive Officers.
(Names and positions of new Directors and Corporate Executive Officers as of June 20, 2008)
42
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Compliance
Ethical business conduct and compliance with applicable laws
Internal Hotline System
and regulations are fundamental aspects of Sonys corporate
With the adoption of the Sony Group Code of Conduct, Sony also
culture. To this end, Sony has established a Compliance Office
established the Sony Group Compliance Hotline system as a
at its corporate headquarters and regional offices around the
resource for employees to report concerns or seek guidance about
world, adopted and implemented the Sony Group Code of
possible violations of laws or internal policies, and to allow the Sony
Conduct, and set up Compliance Hotline systems through its
Group to respond swiftly to potential risks of such possible viola-
global compliance networkall in order to reinforce the
tions. The Sony Group Compliance Hotline system is available in
companys worldwide commitment to integrity and help assure
the Americas, Europe, Japan, East Asia and Pan-Asia, and is ready
resources are available for employees to raise concerns or
to receive the concerns of any Sony Group employee in any part
seek guidance about legal and ethical matters.
of the world through a telephone call, e-mail or letter.
Strengthening the Compliance System
340 hotline contacts covering issues relating to employment, labor,
In July 2001, Sony Corporation established the Compliance Office,
work environment, information management, environmental
charged with exercising overall control over compliance activities
protection, possible conflicts of interest and thefts. All contacts
across the Sony Group, to emphasize the importance of business
received are investigated for the purpose of verification and appro-
ethics and compliance with applicable laws, regulations and internal
priate action. In certain cases, these contacts have led to a review
policies. The Compliance Office establishes compliance policies
of internal procedures and the strengthening or enforcement of
and structures for the Sony Group and performs crisis management
internal rules.
During fiscal 2007, the Sony Group received approximately
functions.
In July 2003, Sony established a regional compliance network
comprised of offices in the Americas, Europe, Japan,1 East Asia2
3
Educating Employees about the Sony Group Code of Conduct

and the Internal Hotline System
and Pan-Asia, which are charged with assisting the Compliance
To ensure that all employees are aware of the Sony Group Code of
Office at Sony Corporation and exercising regional control over
Conduct and the internal hotline system, Sony Group companies
compliance activities to strengthen the compliance system
inform their employees about the Code and hotline through the
throughout the Sony Group. Officers responsible for compliance in
ongoing dissemination of e-mails, booklets, wallet cards, posters,
each region have the authority to issue instructions concerning
postings on the companys intranet and/or feature articles in internal
compliance to Sony Group companies in their respective regions
newsletters.
and, by cooperating with one another, are working to establish and
Education and training sessions that use e-learning, case
maintain a comprehensive global compliance structure.
studies and other approaches presenting real-life examples also
1 Coverage area of Japan compliance office: Japan, South Korea and Taiwan
2 Coverage area of East Asia compliance office: Mainland China and Hong Kong
3 Coverage area of Pan-Asia compliance office: Southeast Asia, Middle East,
Africa and Oceania
provide instruction both on business ethics generally and on

individual aspects of the Sony Group Code of Conduct that are
crucial to some or all of the Sony Group. Examples include education programs regarding fairness in competition and business
Sony Group Code of Conduct
dealings, and training to avoid discrimination and harassment in
In May 2003, Sony adopted the Sony Group Code of Conduct,
the workplace.
which sets the basic internal standards to be observed by all

directors, officers and employees of the Sony Group in order to
emphasize and further strengthen corporate governance, business
ethics and compliance systems throughout the entire Sony Group.
This Code of Conduct sets out, in addition to legal and compliance
standards, the Sony Groups basic policies concerning ethical
business practices and activities on such topics as respect for
human rights, safety of products and services, environmental
conservation and information disclosure.
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Corporate Social Responsibility
Environmental Initiatives
The environment is one of the most critical issues of corporate
2008 to raise awareness of the importance of fighting climate
social responsibility. Climate change, in particular, has received
change. We invited industry, government and media representa-
a great deal of attention in recent years. To minimize our own
tives for the first time to join WWF and members of Climate Savers
impact on the environment, Sony acts responsibly in all areas
at the annual conference. Member companies shared their
and strives to resolve environmental issues together with our
successful initiatives and experts joined a panel discussion to
peers and business partners while taking full advantage of
forecast future trends.
Sonys unique capabilities.
Sony Chairman and CEO Howard Stringer presented the Tokyo

Declaration, signed by 12 companies. The signatories declared that
Reducing the Absolute Amount of Greenhouse Gas Emissions
we will try to widen the scope of emission reduction activities in
from All Sites
partnering with business partners, and that we will promote a
When we joined the Climate Savers Programme, organized by the
low-carbon lifestyle to consumers and customers. As stated in the
world-renowned environmental NGO the World Wide Fund for
Declaration, member companies, including Sony, will continue
Nature (WWF), Sony set a target of achieving an absolute reduction
communicating with consumers about conservation and specific
in greenhouse gas emissions from all sites of 7% by 2010 compared
energy-saving steps they can take while using our products, as
with the 2000 level. In fiscal 2007, Sonys greenhouse gas emissions
these goals cannot be achieved by businesses on our own.
totaled approximately 2,070,000 tons. Consequently, Sony had

reduced its emissions by 6.7% compared to 2000.
Reducing Power Consumption of Products

Under the agreement Sony signed with the WWF, we have
Calling for the Prevention of Global Warming as a Global
committed to reducing CO2 emissions from products in use by
Leader
lowering the annual energy consumption of major Sony products.
To address the global issue of climate change, in February 2008
Sony is working to promote energy saving products by employing
Sony and WWF co-hosted the Climate Savers Tokyo Summit
our technical capabilities and know-how.
44
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Television, with larger size and multifunction in demand, is the
stable power that is not reliant on the weather. As the energy
top priority product category. We recognize that we must address
conversion efficiency of test cells has registered an industry leading
the increase in power consumed by televisions accompanying the
10% efficiency level, we will accelerate our research.
shift to larger multifunctional models. In spring 2008, Sony released

11 models in its BRAVIA series of LCD televisions. The maximum
Sony is also engaged in research on a bio battery that uses

sugar, another renewable source of energy.
level of power reduction is 179%* under the energy reduction

achievement rate set out under Japans Law Concerning the Rational
Use of Energy, and all of these new BRAVIA models, except for one
model, earned a five-star rating for energy efficiency.
With the BRAVIA KDL-32JE1 released in July 2008 in Japan,
Sony has succeeded in cutting the annual energy consumption to
86 kilowatt hours, which is equivalent to a reduction of 232% under
the energy reduction standards. By raising the light-emitting
efficiency of Sonys proprietary backlight system and the light transmissivity of optical film, Sony succeeded in reducing the annual
energy consumption from the 194 kilowatt hours of KDL-32S1000,
which was introduced in 2005.
Supply Chain Management Initiative

* This percentage represents power reduction when applied to the fiscal 2008
standards set out under the Law Concerning the Rational Use of Energy.
In the electronics industry, manufacturers of finished products share

the same subcontractors and parts suppliers.
In 2004, Sony, IBM and a number of other companies launched
the Electronic Industry Citizenship Coalition (EICC) to promote social
responsibility and shared efficiencies in the electronics industry
supply chain. As of June 2008, the EICC consisted of 42 members,
including manufacturers, production contractors and retailers, from
Europe, the United States, Asia and Japan.
Sony established the Sony Supplier Code of Conduct and, as
part of efforts to assess supplier compliance, we have introduced
supplier self-assessment to approximately 3,500 suppliers region
Technical Innovation to Prevent Global Warming
by region globally in 2007.
Renewable energy sources, such as solar power, have an important
Certain suppliers also received joint audits based on the EICC
role to play in helping to prevent global warming. Sony is engaged
standards of the code of conduct. Sony continues to work in
in research on a dye-sensitized solar cell that uses an electro-
partnership with our suppliers to improve their activities.
chemical mechanism and photosensitive organic dyes to convert

solar energy to electrical energy.
Unlike conventional silicon-based solar cells, a dye-sensitized
solar cell does not require a large vacuum process machine in
fabrication. Also, because it can be fabricated using coating and
printing processes, the cell allows low-cost production. Furthermore,
the cell manufacturing process has less impact on the environment
due to the need for fewer materials and less energy. It has the
additional advantages of providing excellent power generation
performance, even indoors with poor lighting, and of generating
45
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UNICEF/Giacomo Pirozzi
Social Contribution Activities
Sonys support of future generations, which began with science
SEE III, held in 2007, 40 children from Liberia and Rwanda learned
education, has expanded in scope over the years. As Sony is
about basic photographic technology, composition, subject
involved in the music and film businesses, as well as in electronics,
selection and expression through workshops led by professional
we believe Sony can and should make a valuable contribution by
photographers. Using cameras donated by Sony, the children took
encouraging creativity, in addition to inspiring curiosity in science
approximately 2,000 photographs.
and the arts. Sony Corporations Social Contribution Committee
Sony and UNICEF co-sponsored an EYE SEE III photographic
implements a broad range of activities through six Sony foundations
exhibition to coincide with the Tokyo International Conference on
and Sony Group companies around the world. The Committees
African Development (TICAD), a conference sponsored by the
guiding principle is to donate funds and use Sonys expertise to
Japanese government and held every five years, which took place
help address the needs of communities in regions where Sony
in Yokohama in May 2008. The exhibition succeeded in provoking
conducts business.
visitors to think about the various issues represented in the
In fiscal 2007, Sonys expenditure on social contribution activities
photographs.
totaled approximately 4.5 billion.*

In 2006, we launched the Sony Student Project Abroad (China)
(SSPA). Under the program, Sony invites Chinese high school
* In addition to donations, sponsorships and independent program expenses

(facility operation expenses), this amount includes the market prices of products
donated.
students to Japan, where they stay with the families of Sony

employees, take part in Sony technology workshops with Japanese
high school students and learn about Japanese environmental
initiatives, including a visit to a recycling plant. The SSPA reflects
Sonys belief that acknowledging and understanding different
cultures and diversity is an important attribute for children growing
up in todays global era.
Since 2006, Sony has continued to support the UNICEF EYE
SEE Project by donating digital cameras and providing financial
assistance. The aim of the project is to give children living in societies
Sony CSR Report 2008
http://www.sony.net/csr/
that face disaster, poverty, infectious diseases and other difficulties
Please refer to the Sony CSR Report
the opportunity to express themselves through photography. In EYE
2008 for full details of our CSR activities.
46
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Financial Section
Contents
48
49
Five-Year Summary of
Selected Financial Data
88
Quarterly Financial and

Stock Information
89
Segment Information
90
Consolidated Balance Sheets
92
Consolidated Statements
of Income
94
Consolidated Statements
of Cash Flows
96
Consolidated Statements of Changes in

Stockholders Equity
98
For the notes to Sonys consolidated financial statements for the fiscal year ended
March 31, 2008, visit Sonys website:
http://www.sony.net/SonyInfo/IR/financial/ar/2008/
47
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In the fiscal year 2005, Sony launched a three-year

mid-term corporate strategy to improve profitability
and strengthen its corporate structure. These efforts
allowed us to achieve record-high results in consolidated sales and operating revenue, income before
income taxes, equity in net income of affiliated
companies and net income in the fiscal year ended
March 31, 2008.
Sales in the Electronics segment increased from
the previous fiscal year, reflecting robust sales of
such products as LCD televisions, PCs and compact
digital cameras. Higher sales, together with the
positive impact of foreign currency exchange rate
fluctuations, resulted in a sharp increase in operating
income. Both sales and operating income results
set records for the segment.
In the Game segment, an enhanced software
lineup for PLAYSTATION3 (PS3) and the introduction of a new model helped to further expand the
PS3 platform. The segments operating loss was
substantially reduced, owing to PS3 hardware cost
reductions and increased sales of PS3 software.
A decline in motion pictures salesdue primarily

to fewer film releases during the periodled to a
decrease in sales in the Pictures segment. Operating
income increased, reflecting the strong performance
of films from previous years released for the in-home
entertainment and television markets.
In the Financial Services segment, the life insurance, casualty insurance and banking businesses
are expanding steadily. However, a significant decline
in the Japanese stock market caused a deterioration
of net valuation gains from convertible bonds at Sony
Life Insurance Co., Ltd., which led to a decrease in
overall segment revenue and operating income.
Based on careful consideration of various factors,
including our results for fiscal year 2007, we plan to
increase the regular annual dividend by 15 from
25 to 40 per share, for the fiscal year ended March
31, 2009. We also plan to distribute a special dividend of 10 per share, to be paid in December 2008.
This is in recognition of the successful initial public
offering of shares in Sony Financial Holdings on the
Tokyo Stock Exchange, and of Sonys record consolidated net income in fiscal year 2007. As a result,
we plan to pay a total annual dividend for fiscal year
2008 of 50 per share, comprising an interim dividend of 30 and a year-end dividend of 20.
Sony will continue to focus on establishing an even
stronger corporate structure that will position us to
respond with greater flexibility to changes in the
business environment. At the same time we will
devote our best efforts to further enhance our
operating results.
Nobuyuki Oneda
Corporate Executive Officer,
Executive Vice President and CFO
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Sony Corporation and Consolidated Subsidiaries
TREND INFORMATION
This section contains forward-looking statements about the
possible future performance of Sony and should be read in light
of the cautionary statement on that subject, which appears on
the inside back cover page and applies to this entire document.
Issues Facing Sony and Managements Response
to those Issues
Below is a description of the issues management believes each
segment continues to face and an explanation as to how each
segment is approaching those issues.
Electronics
Although the Electronics segment continues to hold a very

strong position in the worldwide consumer audio visual products
market, that position has become increasingly threatened as a
result of the entrance of new manufacturers and distributors.
These new entrants are threatening Sonys position due to the
industry shift from analog to digital technology. In the analog era,
complicated functionality of electronics products was made
possible through the combination of several complex parts, and
Sony held a competitive advantage in the design and manufacture of those parts as a result of its accumulated expertise. In
the digital era, however, complicated functionality has become
concentrated in semiconductors and other key digital devices.
Since these semiconductors and key devices can be mass
produced, they have become readily available to new market
entrants, and the functionality that once commanded a high
premium has become more affordable. This has led to intense
price erosion in the consumer audio visual products market.
Also, Sony is exposed to the pressure of declines in selling
prices as a result of a concentration of market share among a
limited number of dealers and retailers. To respond to these
challenges, Sony is striving to keep pace with price erosion by
reducing its manufacturing and other costs. It is seeking to
maintain the premium pricing it enjoys on many of its end-user
products by adding functionality to those products and developing new applications and uses that appeal to the consumer. In
addition, it is taking steps to increase its competitive edge by
developing high value-added semiconductors and other key
digital devices in-house.
Sony considers improving the profitability of the television
business, which recorded a loss in the fiscal year ended March
31, 2008, as the most pressing issue facing the Electronics
segment. As such during the fiscal year ended March 31, 2008,
Sony decided to exit the cathode ray tube (CRT) television and
LCD rear-projection television businesses due to the shrinking
market for these products, and concentrate management

resources on the LCD television business. In order to improve
profitability in the LCD television business, Sony will continue
cost reduction plans through the standardization of panels and
chassis and the reduction in the number of components used
in production. In addition, Sony is targeting unit sales growth
exceeding that of the market by continuing to focus on largesize and high value-added models, while at the same time
expanding the line-up of lower priced models and actively
developing emerging markets.
In anticipation of an increase in unit sales of LCD televisions,
Sony recognizes the importance of a stable supply of LCD
panels. S-LCD Corporation (S-LCD), Sonys joint venture with
Samsung Electronics Co., Ltd. (Samsung), which is based in
South Korea, started its 7th generation amorphous thin-film
transistor (TFT) LCD panel production line operation in April
2005 and has a current production capacity of 120,000 substrates of mother glass per month. S-LCD also started its 8th
generation amorphous TFT LCD panel production line operation in August 2007 and has a current production capacity of
50,000 substrates per month. Furthermore, S-LCD plans to
construct a new 8th generation LCD panel production line and
start production during the second quarter of calendar year
2009 with an initial production capacity of 60,000 substrates
per month. Also, Sony, together with Sharp Corporation
(Sharp), signed a non-binding memorandum of intent in
February 2008 to establish a joint venture to manufacture
amorphous TFT LCD panels and modules on a 10th generation
production line. Sony and Sharp aim to enter into legally binding joint venture documentation by September 30, 2008.
Production capacity is planned to be 72,000 substrates per
month. Sony plans to receive a supply of 50 percent of the LCD
panels produced by S-LCD and 34 percent of the LCD panels
produced by the joint venture with Sharp.
Sony has reviewed its investment policy in the semiconductor
business. In the future, Sony will carefully select investments
and adopt a strategy to more clearly focus on the chargecoupled devices (CCDs) and complementary metal oxide
semiconductor (CMOS) image sensors and television- and
video-related businesses. As part of this strategy, in March
2008, Sony sold to Toshiba Corporation (Toshiba) production
equipment for high-performance semiconductors such as the
Cell Broadband Engine processor and the RSX graphics
engine for PLAYSTATION3 (PS3), installed in the Nagasaki
Technology Center of Sony Semiconductor Kyushu
Corporation. Nagasaki Semiconductor Manufacturing
Corporation was established by Toshiba, Sony and Sony
Computer Entertainment and commenced operations on
49
April 1, 2008 to produce such high-performance semiconductors with the above-mentioned production equipment made
available to the joint venture by Toshiba. In addition, on March
31, 2008, upon the expiration of their contract, Sony and
Toshiba terminated Oita TS Semiconductor Corporation,
a manufacturing joint venture located within Toshibas Oita
Operations. Following the termination of the joint venture,
Sony sold the related manufacturing equipment to Toshiba
on April 1, 2008.
Game
In the Game segment, Sony will continue to strive to significantly

improve the profitability of the PS3 business through an
enhanced line-up of software, expansion of the platform and
hardware cost reductions. At the same time, in order to expand
the business domain of PS3, Sony will actively engage in the
upgrade and expansion of networked service and content. As
for PLAYSTATION2 (PS2), which is in its ninth year since
release, Sony expects a decrease in unit sales volume, including
hardware and software, in comparison to the previous fiscal
year. However, on the back of worldwide hardware expansion,
there are plans for a diversified portfolio of software titles to be
released, and, thus, Sony will strive to maintain the scale of this
business. In addition, Sony will promote the further expansion of
the PSP (PLAYSTATION Portable) (PSP) platform, for which
hardware unit sales increased significantly compared to the
previous fiscal year, by improving the breadth of software titles,
functionality and services in the fiscal year ending March 31, 2009.
Pictures
In the Pictures segment, Sony faces intense competition, rising

expenses, including advertising and promotion expenses, and a
growing trend toward digital piracy. In addition, the DVD format
is 11 years old and is showing signs of maturation. To meet
these challenges, Sony is working to produce and acquire a
diversified portfolio of motion pictures with broad worldwide
appeal for distribution including those existing and new home
entertainment formats, such as Blu-ray, and other emerging
platforms, including digital download.
Financial
Services
In the Financial Services segment, the value of assets accumulated by businesses has grown continuously over the past
several years, resulting in a large portion (approximately 45
percent as of March 31, 2008) of Sonys total assets being
accounted for by the Financial Services segment. To strengthen
asset management and risk management in parallel with this
growing asset value, enhance disclosure of business details,
50
and offer customers integrated financial services tailored to their

individual needs, Sony established Sony Financial Holdings Inc.
(SFH) in April 2004. SFH functions as a holding company
overseeing Sony Life Insurance Co., Ltd. (Sony Life), Sony
Assurance Inc. (Sony Assurance) and Sony Bank Inc. (Sony
Bank), with the aim of increasing the synergies among these
businesses.
Sony is confronted by changes in the financial services
industry as a result of the deregulation and liberalization of
additional insurance premiums, postal privatization, the
complete lifting of the ban on the sale of insurance products
by banks, and the lifting of the ban on the securities intermediary services by banks and others. Sony also faces macroeconomic challenges including Japans declining population,
low birthrate and growing proportion of elderly citizens. In
response to this changing environment, each of Sonys
financial services businesses, which are latecomers to the life
insurance, non-life insurance and banking industries, make
use of distinctive, individual industry-specific business models
and plan to achieve further business expansion and even
higher levels of customer satisfaction.
On October 11, 2007, in conjunction with the global initial
public offering of shares of SFH, the shares of SFH were listed
for trading on the First Section of the Tokyo Stock Exchange
(TSE). This offering aimed to achieve the efficient redistribution
of management resources within Sony Group as a whole, and
establish SFHs self financing, which is necessary for the further
expansion of its financial businesses and independent growth.
Following this global offering, SFH remains a consolidated
subsidiary with Sony Corporation as the majority shareholder,
holding 60 percent of shares issued by SFH.
OPERATING RESULTS
Operating Results for the Fiscal Year Ended March 31, 2008
compared with the Fiscal Year Ended March 31, 2007
Overview
Sonys sales and operating revenue (sales) for the fiscal year
ended March 31, 2008 increased 6.9 percent compared with
the previous fiscal year. Sales within the Electronics segment
and the Game segment increased while sales for the Pictures
segment and revenue for the Financial Services segment
decreased. In the Electronics segment, while there was a
decline in sales of such products as LCD rear-projection
televisions, sales to outside customers increased 9.0 percent
compared with the previous fiscal year mainly due to an increase
in sales of LCD televisions, PCs and compact digital cameras.
Sales within the Game segment increased 26.3 percent compared to the previous fiscal year primarily as a result of a significant increase in sales of PS3. In the Pictures segment, sales
decreased 11.2 percent compared to the previous fiscal year as
motion pictures sales decreased primarily due to fewer films
being released during the current fiscal year. Revenues
decreased 10.5 percent within the Financial Services segment
primarily due to net losses from investments in the separate
account and the deterioration in net valuation gains from convertible bonds in the general account reflecting a significant
decline in the Japanese stock market partially offset by an
increase in insurance premium revenue at Sony Life.
Operating income increased 421.9 percent compared with
the previous fiscal year. Operating income within the Electronics
segment increased 121.8 percent mainly as a result of an
increase in sales and the positive impact from the depreciation
of the yen against the euro. In the previous fiscal year, a 51.2
billion yen provision was recorded for charges related to recalls
by certain notebook computer makers and the subsequent
global replacement program by Sony and certain notebook
computer makers involving battery packs containing Sonymanufactured battery cells. A portion of the provision totaling
15.7 billion yen was reversed in the fiscal year ended March 31,
2008 based on the actual results of recalls and replacements as
compared to original estimates. In the Game segment, operating
losses decreased by 107.8 billion yen to 124.5 billion yen primarily due to a decrease in the operating losses of the PS3
business as a result of successful PS3 hardware cost reductions
and increased sales of PS3 software. In the Pictures segment,
operating income increased 26.5 percent compared with the
previous fiscal year primarily due to the strong performance of
prior year films in the home entertainment and television markets
as well as the benefit from the sale of a bankruptcy claim against
Kirch Media GmbH & Co. KGaA (Kirch Media), a former
licensee of film and television product. In the Financial Services
segment, operating income decreased 73.1 percent as compared to the previous fiscal year as a result of deterioration in net
valuation gains from convertible bonds and an impairment loss
on equity securities in the general account of Sony Life reflecting
a significant decline in the Japanese stock market.
Operating income in the fiscal year ended March 31, 2008
included one-time gains primarily from a gain on the sale of a
portion of the site of Sonys former headquarters of 60.7 billion
yen which was recorded in Corporate, a 15.6 billion yen gain
which was recorded in the operating income of the Electronics
segment relating to the sale of a portion of Sonys semiconductor operations in Nagasaki, Japan, including machinery and
equipment, and a 10.0 billion yen gain on the sale of The Sony
Center am Potsdamer Platz in Berlin which was recorded in the

operating income of All Other. Operating income in the previous
fiscal year included a gain on the sale of a portion of the site of
Sonys former headquarters of 21.7 billion yen, of which 2.6
billion yen was recorded within All Other and the remaining
amount was recorded in Corporate.
Operating income in the fiscal year ended March 31, 2008
included a gain from the reversal of a portion of a legal provision
as a result of the resolution of a legal matter, while a comparable
gain was recorded in the previous fiscal year attributed to the
reversal of a portion of patent-related provisions.
Restructuring
In the fiscal year ended March 31, 2008, Sony recorded
restructuring charges of 47.3 billion yen, an increase from the
38.8 billion yen recorded in the previous fiscal year. The primary
restructuring activities were in the Electronics segment. Of the
total 47.3 billion yen incurred, Sony recorded 12.6 billion yen in
personnel-related costs.
Restructuring charges in the Electronics segment amounted
to 45.6 billion yen for the fiscal year ended March 31, 2008,
compared with 37.4 billion yen in the previous fiscal year.
Sony made the decision to exit the LCD rear-projection television business in the fiscal year ended March 31, 2008 due to
the shrinking market for these products. In association with this
action, Sony recorded 19.7 billion yen of restructuring charges
consisting mainly of inventory write downs. Of this amount, 11.9
billion yen was recorded in cost of sales and 6.7 billion yen was
recorded in loss on sale, disposal or impairment of assets, net in
the consolidated statements of income. This phase of the
restructuring program was completed in the fiscal year ended
March 31, 2008, and the remaining liability balance as of March
31, 2008 was 1.6 billion yen, which is expected to be paid
during the fiscal year ending March 31, 2009.
In addition to the restructuring efforts described above, Sony
has undergone several headcount reduction programs to further
reduce operating costs within its Electronics segment. As a
result of these programs, Sony recorded restructuring charges
totaling 11.0 billion yen for the fiscal year ended March 31,
2008, and these charges were included in selling, general and
administrative expenses in the consolidated statements of
income. The remaining liability balance as of March 31, 2008
was 9.4 billion yen and will be paid throughout the fiscal year
ending March 31, 2009.
Refer to Note 17 of Notes to Consolidated Financial
Statements for more information on restructuring. (For the Notes
to Consolidated Financial Statements, visit Sonys website:
http://www.sony.net/SonyInfo/IR/financial/ar/2008/)
51
Operating Performance

Yen in billions
Years ended March 31
2007
Sales and operating revenue . . . 8,295.7
2008
8,871.4
Percent change
2008/2007
+6.9%
Operating income. . . . . . . . . . . .
71.8
374.5
+421.9
Income before income taxes . . .
102.0
466.3
+357.0
Equity in net income of

affiliated companies. . . . . . . . .
78.7
100.8
+28.2
Net income . . . . . . . . . . . . . . . .
126.3
369.4
+192.4
Sales
Sales for the fiscal year ended March 31, 2008 increased by
575.7 billion yen, or 6.9 percent, to 8,871.4 billion yen compared with the previous fiscal year. A further breakdown of sales
figures is presented under Operating Performance by Business
Segment below.
Sales in this analysis of the ratio of cost of sales, including
research and development costs, and selling, general and
administrative expenses to sales refers only to the net sales
and other operating revenue portions of consolidated sales
and operating revenue, and excludes financial service revenue.
This is because financial service expenses are recorded separately from cost of sales and selling, general and administrative
expenses. The calculations of all ratios below that pertain to
business segments include intersegment transactions.
and operating income
(Yen in trillions)
(Yen in billions)
10.0
1,000
7.5
750
5.0
4.2%
500
3.0%
2.5
250
0.9%
2006
2007
2008
Sales and operating revenue (left)

Operating income (right)
Operating margin
52
Cost of Sales and Selling, General and

Administrative Expense
Cost of sales for the fiscal year ended March 31, 2008 increased
by 400.4 billion yen, or 6.8 percent, to 6,290.0 billion yen compared with the previous fiscal year, and decreased from 76.8
percent to 75.6 percent as a percentage of sales. Year on year,
the cost of sales ratio decreased from 78.8 percent to 77.9
percent in the Electronics segment, decreased from 102.8 percent to 93.9 percent in the Game segment, and decreased from
60.3 percent to 58.6 percent in the Pictures segment.
In the Electronics segment, there was an improvement in the
cost of sales ratio for several products, in particular PCs, compact digital cameras and video cameras. The cost of sales ratio
in the Game segment improved primarily as a result of PS3
hardware cost reductions and increased sales of PS3 software.
In the Pictures segment, the cost of sales ratio decreased compared to the previous fiscal year mainly due to the higher home
entertainment and television revenues from prior year films.
Personnel-related costs included in cost of sales were 487.8
billion yen, an increase of 30.5 billion yen, primarily recorded
within the Electronics segment.
Research and development costs (all research and development costs are included within cost of sales) for the fiscal year
ended March 31, 2008 decreased by 23.4 billion yen to 520.6
billion yen compared with the previous fiscal year. The ratio of
research and development costs to sales was 6.3 percent
compared to 7.1 percent in the previous fiscal year.
Selling, general and administrative expenses for the fiscal year
ended March 31, 2008 decreased by 74.0 billion yen, or 4.1
percent, to 1,714.4 billion yen compared with the previous fiscal
year. The ratio of selling, general and administrative expenses to
sales decreased from 23.3 percent in the previous fiscal year to
20.6 percent. Year on year, the ratio of selling, general and
administrative expenses to sales decreased from 18.2 percent
to 16.2 percent in the Electronics segment. This improvement is
due to the recording of the provision for charges related to the
notebook computer battery pack recalls and subsequent global
replacement program in the previous fiscal year and a reversal of
the portion of the provision in the fiscal year ended March 31,
compared to original estimates. The ratio of selling, general and
administrative expenses to sales decreased from 20.0 percent
to 15.8 percent in the Game segment and from 35.2 percent to
35.1 percent in the Pictures segment.
Personnel-related costs in selling, general and administrative

expenses increased by 19.8 billion yen compared with the previous fiscal year mainly within the Electronics and the Pictures
segment. Advertising and publicity expenses for the fiscal year
decreased by 46.2 billion yen compared with the previous fiscal
year primarily due to decreased advertising and publicity
expenses within the Pictures segment.
Gain on sale, disposal or impairment of assets, net was 37.8
billion yen, compared with a 5.8 billion yen loss on sale, disposal
or impairment of assets, net recorded in the previous fiscal year.
The gain recorded in the fiscal year ended March 31, 2008 is
primarily from a gain on the sale of a portion of the site of Sonys
former headquarters of 60.7 billion yen and gain on the sale of
The Sony Center am Potsdamer Platz in Berlin of 10.0 billion
yen. A gain on the sale of a portion of the site of Sonys former
headquarters of 21.7 billion yen was recorded in the previous
fiscal year.
Research and development
expenses and as a percentage
of sales
Cost of sales and selling, general

and administrative (SGA) expenses
as a percentage of sales
(%)
(%)
80
450
60
300
40
150
20
(Yen in billions)
7.8%
600
7.1%
2006
75.9%
76.8%
22.5%
23.3%
2006
2007
75.6%
6.3%
2007
2008
Research and development

expenses
Percentage of sales
* E xcluding the Financial
Services segment
20.6%
2008
Cost of sales/sales
SGA/sales
* E xcluding the Financial
Services segment
Operating Income
Operating income for the fiscal year ended March 31, 2008
increased by 302.7 billion yen, or 421.9 percent, to 374.5 billion
yen compared with the previous fiscal year. The operating
income margin increased from 0.9 percent to 4.2 percent. In
descending order by yen amount, the Electronics segment, the
Pictures segment, All Other and the Financial Services segment
contributed to operating income. An operating loss was

recorded within the Game segment. Refer to Operating
Performance by Business Segment below for a further
breakdown of operating income (loss) for each segment.
Other Income and Expenses
For the fiscal year ended March 31, 2008, other income
increased by 54.3 billion yen, or 57.0 percent, to 149.4 billion
yen, while other expenses decreased by 7.3 billion yen, or 11.2
percent, to 57.6 billion yen, compared with the previous fiscal
year. The net amount of other income and other expenses was
net other income of 91.8 billion yen, an increase of 61.5 billion
yen, compared with the previous fiscal year.
The gain on change in interest in subsidiaries and equity
investees increased by 50.5 billion yen, or 160.4 percent
compared to the previous fiscal year, to 82.1 billion yen. This
increase is due to the recording of a gain of 81.0 billion yen for
the change in interest in subsidiaries and equity investees as
a result of the global initial public offering of shares of SFH in
connection with the listing of shares on the First Section of the
TSE in October 2007. During the fiscal year ended March 31,
2007, there was a gain on change in interest in subsidiaries and
equity investees recorded on the sale of a portion of the stock
held in StylingLife Holdings Inc.
Interest and dividends in other income of 34.3 billion yen was
recorded in the fiscal year ended March 31, 2008, an increase of
6.0 billion yen, or 21.4 percent, compared with the previous fiscal
year. For the fiscal year ended March 31, 2008, interest expense
totaling 22.9 billion yen was recorded, a decrease of 4.3 billion yen,
or 15.9 percent, compared with the previous fiscal year.
In addition, net foreign exchange income of 5.6 billion yen was
recorded in the fiscal year ended March 31, 2008, compared to
a net foreign exchange loss of 18.8 billion yen in the previous
fiscal year. Net foreign exchange income was recorded due to
the value of the yen, especially during the second through fourth
quarters of the fiscal year ended March 31, 2008, appreciating
in value against other currencies from the time that Sony entered
into foreign exchange forward contracts and foreign currency
option contracts. These contracts are entered into by Sony to
mitigate the foreign exchange rate risk to cash flows that arises
from settlements of foreign currency denominated accounts
receivable and accounts payable, as well as foreign currency
denominated transactions between consolidated subsidiaries.
53
Income before Income Taxes

Income before income taxes for the fiscal year ended March 31,
2008 increased 364.3 billion yen, or 357.0 percent, to 466.3
billion yen compared with the previous fiscal year, primarily as
a result of the increase in operating income and the gain on
the change in interest in subsidiaries and equity investees
mentioned above.
Income Taxes
During the fiscal year ended March 31, 2008, Sony recorded
203.5 billion yen of income taxes resulting in an effective tax rate
of 43.6 percent. In the previous fiscal year, the effective tax rate
was 52.8 percent and exceeded the Japanese statutory tax rate
as a result of losses recorded by certain overseas subsidiaries
with tax rates that are lower than the rate in Japan.
Results of Affiliated Companies Accounted for
under the Equity Method
Equity in net income of affiliated companies during the fiscal
year ended March 31, 2008 was 100.8 billion yen, an increase
of 22.2 billion yen, or 28.2 percent compared to the previous
fiscal year. Equity in net income of affiliated companies reported
for Sony Ericsson Mobile Communications AB (Sony Ericsson)
was 79.5 billion yen, a decrease of 5.8 billion yen compared to
the previous fiscal year, due to higher research and development expenses as a percentage of sales. Sony recorded equity
in net income of 10.0 billion yen for SONY BMG MUSIC
ENTERTAINMENT (SONY BMG), an increase of 5.0 billion yen
compared to the previous fiscal year primarily due to a reduction in restructuring costs compared to the previous fiscal year,
lower marketing costs, a reduction in overhead costs from continued restructuring, a gain on the sale of an interest in a joint
venture of SONY BMG and the favorable impact of currency
fluctuations. Sony recorded equity in net income of 7.4 billion
yen, a 2.4 billion yen increase compared to the prior fiscal year,
for S-LCD, a joint-venture with Samsung for the manufacture of
amorphous TFT LCD panels.
Sony did not record any equity gain or loss for MetroGoldwyn-Mayer Inc. (MGM) in the current fiscal year compared
to equity in net loss of 18.9 billion yen recorded in the prior fiscal
year. As of March 31, 2007, Sony no longer had any book basis
in MGM and, accordingly, no additional losses were recorded
during the fiscal year ended March 31, 2008.
Refer to Note of Critical Accounting Policies.
54
Minority Interest in Income (Loss) of

Consolidated Subsidiaries
In the fiscal year ended March 31, 2008, minority interest in loss
of consolidated subsidiaries of 5.8 billion yen was recorded
compared to minority interest in income of 0.5 billion yen in the
previous fiscal year. Minority interest in loss was recorded mainly
due to the loss recorded at SFH subsequent to the change in
Sony Corporations ownership. Sony Corporations ownership
percentage in SFH was reduced from 100 percent to 60 percent
after the global initial public offering of SFH shares during the
fiscal year ended March 31, 2008. The operating results of SFH
in the second half of the fiscal year ended March 31, 2008 were
negatively impacted mainly by the deterioration in net valuation
gains from convertible bonds and an impairment loss on equity
securities at Sony Life.
Net Income
Net income for the fiscal year ended March 31, 2008 increased
by 243.1 billion yen, or 192.4 percent, to 369.4 billion yen compared with the previous fiscal year. As a percentage of sales, net
income increased from 1.5 percent to 4.2 percent. Return on
stockholders equity increased from 3.8 percent to 10.8 percent.
(This ratio is calculated by dividing net income by the simple
average of stockholders equity at the end of each fiscal year
and the previous fiscal year.)
Basic net income per share was 368.33 yen compared with
126.15 yen in the previous fiscal year, and diluted net income
per share was 351.10 yen compared with 120.29 yen in the
previous fiscal year. Refer to Notes 2 and 21 of Notes to
Consolidated Financial Statements.
Net income and ROE
Net income per share of

common stock
(Yen in billions)
(%)
(Yen)
400
16
400
12
300
200
100
300
10.8%
200
4.1%
100
3.8%
2006
2007
2008
2006
2007
Net income
ROE
Basic
Diluted
2008
Operating Performance by Business Segment

The following discussion is based on segment information.
Sales and operating revenue in each business segment include
intersegment transactions. Refer to Note 24 of Notes to
Consolidated Financial Statements.
Business Segment Information

Yen in billions
2007

Electronics . . . . . . . . . . . . . 6,072.4
Game. . . . . . . . . . . . . . . . . 1,016.8
Pictures . . . . . . . . . . . . . . .
966.3
Financial Services. . . . . . . .
649.3
All Other. . . . . . . . . . . . . . .
355.1
Elimination . . . . . . . . . . . . .
2008
6,613.8
1,284.2
857.9
581.1
382.2
Percent change
2008/2007
+8.9%
+26.3
11.2
10.5
+7.6
(764.2)
(847.9)
Consolidated. . . . . . . . . . . . . 8,295.7
8,871.4
+6.9
Operating income (loss)

Electronics . . . . . . . . . . . . .
Game. . . . . . . . . . . . . . . . .
Pictures . . . . . . . . . . . . . . .
Financial Services. . . . . . . .
All Other. . . . . . . . . . . . . . .
compared to the previous fiscal year. Regarding sales to outside

customers by geographical area, sales decreased by 2 percent
in Japan, but increased by 2 percent in the U.S., by 11 percent
in Europe, and by 19 percent in non-Japan Asia and other
geographic areas (Other Areas).
In Japan, sales of products such as CCDs and CMOS imaging sensors increased while sales of mobile phones produced
for wireless customers decreased. In the U.S., sales of products
such as LCD rear-projection and CRT televisions decreased
while sales of products such as LCD televisions, compact digital
cameras and PCs increased. In Europe, sales of products such
as LCD televisions and PCs increased while sales of mobile
phones produced for wireless customers decreased. In Other
Areas, sales of LCD televisions, compact digital cameras and
PCs increased while sales of CRT televisions decreased.
Sales and operating income
in the Electronics segment
160.5
(232.3)
42.7
84.1
28.9
356.0
(124.5)
54.0
22.6
50.2
+121.8%
+26.5
73.1
+73.9
(Yen in trillions)
Sub-Total. . . . . . . . . . . . . . . .
83.9
358.4
+327.0
Elimination and unallocated

corporate expenses/
gains. . . . . . . . . . . . . . . . .
(12.2)
16.1
Consolidated. . . . . . . . . . . . .
71.8
374.5
+421.9
(Yen in billions)
400
5.4%
300
200
2.6%
100
0.1%
2006
2007
2008
Sales (left)
Operating margin
Shares of sales and operating revenue by business segment

Electronics
Game
Pictures
Financial Services
All Other
3.9%
6.0%
8.8%
13.2%
68.1%
* Year ended March 31, 2008

* Including intersegment transactions
Electronics
Sales and operating revenue for the fiscal year ended March 31,
2008 increased 541.4 billion yen, or 8.9 percent, to 6,613.8
billion yen compared with the previous fiscal year. Operating
income increased by 195.5 billion yen, or 121.8 percent, to
356.0 billion yen compared with the previous fiscal year and the
operating income to sales ratio increased from 2.6 percent to
5.4 percent. Sales to outside customers increased 9.0 percent
Performance
by Product Category
Sales and operating revenue by product category discussed
below represent sales to outside customers, which do not
include intersegment transactions. Refer to Note 24 of Notes
to Consolidated Financial Statements.
Audio sales increased by 35.7 billion yen, or 6.8 percent, to
558.6 billion yen. Sales of flash memory digital audio players
increased as worldwide unit shipments increased by approximately 1.3 million units to approximately 5.8 million units. Sales
of home audio, headphones and personal navigation systems
also increased. On the other hand, due to a shift in market
demand, sales of CD format headphone stereos decreased.
Video sales increased by 136.1 billion yen, or 11.9 percent,
to 1,279.2 billion yen. Sales of compact digital cameras
increased as worldwide unit shipments increased by approximately 6.5 million units to approximately 23.5 million units.
55
Sales of home-use video cameras increased as worldwide

unit shipments increased by approximately 250,000 units to
approximately 7.7 million units. Sales of Blu-ray Disc
recorders and players also increased. On the other hand,
sales of DVD recorders and players decreased, with unit
shipments of DVD recorders decreasing by approximately
150,000 units to approximately 1.7 million units and unit
shipments of DVD players decreasing by approximately
900,000 units to approximately 7.0 million units.
Televisions sales increased by 140.1 billion yen, or 11.4
percent, to 1,367.1 billion yen. There was a significant
increase in worldwide sales of LCD televisions, as worldwide
shipments increased by approximately 4.3 million units, to
approximately 10.6 million units. On the other hand, there was
a decrease in sales of LCD rear-projection and CRT televisions
as Sony decided to exit these businesses due to the shrinking
market for these products.
Information and Communications sales increased by
148.1 billion yen, or 15.6 percent, to 1,098.6 billion yen.
Sales of PCs increased as worldwide unit shipments
increased by approximately 1.2 million units to approximately
5.2 million units. Sales of broadcast- and professional-use
products increased as a result of favorable sales of highdefinition (HD) related products.
Semiconductors sales increased by 23.0 billion yen, or 11.2
percent, to 228.7 billion yen. The increase was primarily due to
an increase in sales of CCDs and CMOS image sensors.
Components sales decreased by 5.9 billion yen, or 0.7
percent, to 847.1 billion yen. Sales of lithium-ion batteries and
low-temperature polysilicon TFT LCD panels for mobile devices
increased. On the other hand, sales of DVD+/-R/RW drives
decreased due to a decline in unit selling prices, although unit
sales increased in association with an expansion of the market.
Other sales increased by 11.2 billion yen, or 2.1 percent, to
552.4 billion yen. Although sales of mobile phones produced for
wireless customers in Japan and Europe decreased, sales of the
disc manufacturing business increased.
In the Electronics segment, cost of sales for the fiscal year
ended March 31, 2008 increased by 372.4 billion yen, or 7.8
percent to 5,154.6 billion yen compared with the previous fiscal
year. The cost of sales ratio improved by 0.9 percentage points
to 77.9 percent compared to 78.8 percent in the previous fiscal
year. While the cost of sales ratio of such products as PCs,
compact digital cameras and home-use video cameras
improved, the cost of sales ratio of products such as LCD
televisions deteriorated. Restructuring charges recorded in cost
of sales amounted to 19.5 billion yen, an increase of 7.0 billion
yen compared with the 12.6 billion yen recorded in the previous
fiscal year. Research and development costs decreased 1.6
billion yen, or 0.4 percent, from 440.4 billion yen in the previous
fiscal year to 438.7 billion yen.
56
Selling, general and administrative expenses decreased by

34.0 billion yen, or 3.1 percent to 1,072.2 billion yen compared
with the previous fiscal year. Although advertising and marketing
expenses and personnel expenses increased for the fiscal year
ended March 31, 2008, selling, general and administrative
expenses decreased as a provision of 51.2 billion yen was
recorded in the previous fiscal year for charges related to the
notebook computer battery pack recalls and subsequent global
replacement program, while a portion of the provision totaling
15.7 billion yen was reversed in the fiscal year ended March 31,
compared to original estimates. An additional provision was
recorded during the fiscal year for free repair expenses relating
to Sony products and the products of other companies containing Sony-made CCDs, but this amount was less than in the
previous year. Of the restructuring charges recorded in the
Electronics segment, the amount recorded in selling, general
and administrative expenses decreased by 1.4 billion yen from
14.0 billion yen in the previous fiscal year to 12.6 billion yen. This
12.6 billion yen was for headcount reductions, including reductions through the early retirement program. The ratio of selling,
general and administrative expenses to sales decreased 2.0
percentage points from the 18.2 percent recorded in the
previous fiscal year to 16.2 percent.
Loss on sale, disposal or impairment of assets, net
increased 2.6 billion yen to 13.5 billion yen compared with
the previous fiscal year. This amount includes a 6.7 billion
yen loss on sale, disposal or impairment of assets, net on
LCD rear-projection televisions.
The amount of operating income recorded in the Electronics
segment for the fiscal year ended March 31, 2008 increased
significantly due to the impact of the provision recorded in the
previous fiscal year for charges related to the notebook computer battery pack recalls and subsequent global replacement
program, the reversal of a portion of the provision in the fiscal
year ended March 31, 2008, increased sales of the segment,
and the positive impact of the depreciation of the yen against
the euro. Also contributing to the increase in Electronics
segment profit was the recording of a 15.6 billion yen gain
relating to the sale of a portion of Sonys semiconductor
operations in Nagasaki, Japan, including machinery and
equipment. Regarding profit performance by product, profitability of products such as LCD televisions worsened due to
unit selling price declines while profit increased mainly for PCs
and compact digital cameras, which experienced higher sales,
for system large-scale integration (LSIs), which saw an
increase in sales of semiconductors for the Game segment,
and for home-use video cameras, which experienced increased
sales of high value-added models.
Manufacturing
by Geographic Area
Approximately 50 percent of the Electronics segments total
annual production during the fiscal year ended March 31, 2008
took place in Japan, including the production of compact digital
cameras, video cameras, LCD televisions, PCs, semiconductors and components such as batteries and Memory Sticks.
Approximately 60 percent of the annual production in Japan
was destined for other regions. China accounted for approximately 15 percent of total annual production, approximately 70
percent of which was destined for other regions. Asia, excluding Japan and China, accounted for approximately 10 percent
of total annual production, with approximately 60 percent
destined for Japan, the U.S. and Europe. The Americas and
Europe together accounted for the remaining balance of
approximately 25 percent of total annual production, most of
which was destined for local distribution and sale.
The operating loss decreased significantly compared with the

previous fiscal year. Although there was a loss arising from the
strategic pricing of PS3 hardware at points lower than its
production cost, the operating losses of the PS3 business
decreased as a result of successful hardware cost reductions
and increased sales of software. The strong performance of the
PSP business with the introduction of a new model also
contributed to the decrease in the operating loss of the overall
Game segment.
Due to these reasons, the cost of sales to sales ratio
decreased 8.9 percentage points, from 102.8 percent in the
previous fiscal year, to 93.9 percent. The ratio of selling,
general and administrative expenses to sales decreased 4.2
percentage points from 20.0 percent in the previous fiscal year,
to 15.8 percent mainly due to decreased advertising and
marketing expenses.
Game

(loss) in the Game segment
Sales for the fiscal year ended March 31, 2008 increased by
267.5 billion yen, or 26.3 percent, to 1,284.2 billion yen compared with the previous fiscal year. An operating loss of 124.5
billion yen was recorded for the fiscal year ended March 31,
2008, which was a decrease of 107.8 billion yen from the fiscal
year ended March 31, 2007.
By region, although sales decreased slightly in Japan, there
was an increase in sales in North America and Europe.
Overall hardware sales increased as a result of a significant
increase in sales of PS3, as well as an increase in sales of PSP,
for which a new slimmer, lighter model was released. Sales of
PS2 decreased compared to the previous fiscal year. Overall
software sales increased as a result of an increase in PS3
software sales compared to the previous fiscal year.
Total worldwide unit sales of hardware and software were
as follows:
(Yen in billions)
(Yen in billions)
1,500
300
1,000
200
500
100
0.9%
0
124.5
2006
2007
2008
232.3
Sales (left)
Operating income (loss) (right)
Operating margin
Pictures
Worldwide hardware unit sales

(increase/decrease year-on-year ):*
PS2: 13.73 million units (a decrease of 0.98 million units)
PSP: 13.89 million units (an increase of 4.36 million units)
PS3:
9.24 million units (an increase of 5.63 million units)
Worldwide software unit sales

(increase/decrease year-on-year ):*/**
PS2: 154.0 million units (a decrease of 39.5 million units)
PSP: 55.5 million units (an increase of 0.8 million units)
PS3:
57.9 million units (an increase of 44.6 million units)
* For the fiscal year ended March 31, 2008, the method of reporting hardware and
software unit sales has been changed from production shipments to recorded
sales. In accordance with this change, the numbers for the fiscal year ended
March 31, 2007 have been restated.
** Including those both from Sony and third parties under Sony licenses.
Sales for the fiscal year ended March 31, 2008 decreased by
108.3 billion yen, or 11.2 percent, to 857.9 billion yen compared
to the previous fiscal year. Operating income increased by 11.3
billion yen, or 26.5 percent, to 54.0 billion yen and the operating
margin increased from 4.4 percent to 6.3 percent. The results in
the Pictures segment consist of the results of Sony Pictures
Entertainment Inc. (SPE), a U.S.-based subsidiary.
On a U.S. dollar basis, sales for the fiscal year in the Pictures
segment decreased approximately 9 percent and operating
income increased by approximately 40 percent. Sales
decreased primarily due to lower worldwide theatrical and
home entertainment revenues as fewer films were released in
the current fiscal year, as compared to the number of films
released in the previous fiscal year. Major films released in the
57
fiscal year that contributed to both theatrical and home entertainment revenues included Spider-Man 3 and Superbad. Sales
for the fiscal year release slate decreased approximately 1.2
billion U.S. dollars as compared to the previous fiscal year. The
decrease in revenues from current year films was partially offset
by an approximately 300 million U.S. dollar increase in home
entertainment and television revenues from prior year films (i.e.,
films that had their initial U.S. theatrical release in the prior fiscal
year). Total revenues for the Pictures segment also benefited
from the sale of a bankruptcy claim against Kirch Media, a
former licensee of film and television product. Television product
revenues increased by approximately 29 million U.S. dollars
primarily as a result of higher advertising and subscription sales
from several international channels.
Operating income for the segment increased primarily due to
the strong performance of prior year films in the home entertainment and television markets. Operating income from prior
year films increased approximately 225 million U.S. dollars, due
to the strong performance from a number of films including
Ghost Rider, Stomp the Yard and Casino Royale. Operating
income also benefited from the sale of the bankruptcy claim
and the higher television business revenues referred to above.
As of March 31, 2008, unrecognized license fee revenue at
SPE was approximately 1.3 billion U.S. dollars. SPE expects to
record this amount in the future having entered into contracts
with television broadcasters to provide those broadcasters with
completed motion picture and television products. The license
fee revenue will be recognized in the fiscal year in which the
product is made available for broadcast.
Sales and operating income in
the Pictures segment
(Yen in billions)
(Yen in billions)
1,000
100
750
75
6.3%
4.4%
500
50
3.7%
250
25
2006
2007
2008
Sales (left)
Operating margin
58
Financial
Services
Note that the revenue and operating income at Sony Life,
Sony Assurance and Sony Bank discussed below on the
basis of generally accepted accounting principles in the
U.S. (U.S. GAAP) differ from the results that Sony Life,
Sony Assurance and Sony Bank disclose on a Japanese
statutory basis.
Financial Services segment revenue for the fiscal year
ended March 31, 2008 decreased by 68.2 billion yen, or
10.5 percent, to 581.1 billion yen compared with the previous
fiscal year. Operating income decreased by 61.5 billion yen,
or 73.1 percent, to 22.6 billion yen and the operating income
margin decreased to 3.9 percent compared with 13.0 percent
in the previous fiscal year.
At Sony Life, revenue decreased by 81.0 billion yen, or
fiscal year. Although revenue from insurance premiums
increased due to an increase in insurance-in-force, revenue
decreased due to a net loss from investments in the separate
account, a deterioration in net valuation gains from convertible bonds and an impairment loss on equity securities in the
general account reflecting a significant decline in the
Japanese stock market this fiscal year. Operating income at
Sony Life decreased by 70.1 billion yen, or 85.9 percent, to
11.5 billion yen. This decrease was mainly due to a deterioration in net valuation gains from convertible bonds and an
impairment loss on equity securities in the general account
which more than offset the contribution from increased
insurance premium revenue.
At Sony Assurance, revenue increased due to higher
insurance revenue brought about by a steady expansion in
the number of automobile policies-in-force. Despite higher
insurance revenue, operating income decreased due to a
deterioration in the net loss ratio and expense ratio (the
ratio of sales, general and administrative expenses and
commissions to net premiums written).
At Sony Bank, revenue increased mainly due to foreign
exchange valuation gains from part of Sony Banks
foreign currency deposits brought about by a significant
appreciation of the yen. As a result, operating income
significantly increased.
At Sony Finance International, Inc. (Sony Finance), a leasing and credit financing business subsidiary in Japan, revenue
increased overall mainly due to revenue increases from the
electronic settlement business and the credit card business.
The operating loss at Sony Finance decreased overall primarily
due to increased profit at the electronic settlement business
and the leasing business, as well as a decrease in losses at the
credit card business.
Revenue and operating income in
the Financial Services segment
(Billions of yen)
25.3%
800
(Billions of yen)
240
600
180
13.0%
400
200
2007
of Operations Separating Out the Financial

Services Segment (Unaudited)
The following charts show Sonys unaudited information of

operations for the Financial Services segment alone and for all
segments excluding the Financial Services segment. These
separate condensed presentations are not required under U.S.
GAAP, which is used in Sonys consolidated financial statements. However, because the Financial Services segment is
different in nature from Sonys other segments, Sony utilizes this
information to analyze its results without Financial Services and
believes that these presentations may be useful in understanding and analyzing Sonys consolidated financial statements.
Transactions between the Financial Services segment and all
other segments excluding Financial Services are eliminated in
the consolidated figures shown below.
120
3.9%
2006
Information
2008
60
Financial Services revenue (left)

Operating margin
Condensed Statements of Income
Yen in millions

Financial Services
2007
Sony without
Financial Services
2007
2008
Consolidated
2007
2008
2008
Financial Service revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
649,341
581,121
624,282
553,216
Net sales and operating revenue . . . . . . . . . . . . . . . . . . . . . . . . .
7,680,578
8,324,828
7,671,413
8,318,198
Sales and operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . .
649,341
581,121
7,680,578
8,324,828
8,295,695
8,871,414
Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
565,199
558,488
7,694,375
7,974,630
8,223,945
8,496,932
Operating income (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84,142
22,633
(13,797)
350,198
71,750
374,482
Other income (expenses), net. . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,886
(383)
27,917
100,479
30,287
91,835
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94,028
22,250
14,120
450,677
102,037
466,317
Income taxes and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
33,536
11,908
(57,991)
93,373
(24,291)
96,882
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60,492
10,342
72,111
357,304
126,328
369,435
ALL
Other
During the fiscal year ended March 31, 2008, sales within
All Other were comprised mainly of sales from Sony Music
Entertainment (Japan) Inc. (SMEJ), a Japanese domestic
recorded music business; Sony Music Entertainment Inc.s
music publishing business; So-net Entertainment Corporation
(So-net), an Internet-related service business subsidiary
operating mainly in Japan; and an advertising agency
business in Japan. Trademark royalty income from Sony
Ericsson is also included in sales and operating income of

All Other.
Sales for the fiscal year ended March 31, 2008 increased
by 27.1 billion yen, or 7.6 percent, to 382.2 billion yen,
compared with the previous fiscal year. Of total sales, 82
percent were sales to outside customers. In terms of profit
performance, operating income for All Other increased by
21.3 billion yen, or 73.9 percent from the previous fiscal year,
to 50.2 billion yen.
59
The increase in sales is mainly due to the contribution of sales

from Famous Music LLC (Famous Music), a U.S.-based
music publishing company that was acquired by Sonys U.S.based music publishing subsidiary Sony/ATV Music Publishing
LLC (Sony/ATV) and consolidated in the current fiscal year,
the receipt of a settlement payment related to copyright
infringement claims and an increase in sales at SMEJ and
So-net. An increase in trademark royalty income from Sony
Ericsson also contributed to the increase in sales.
Sales at SMEJ increased compared with the previous fiscal
year mainly due to an increase in music download sales. Best
selling albums that contributed to sales during the fiscal year
included ORANGE RANGEs ORANGE and RANGE, Ken Hirais
FAKIN POP and YUIs CANT BUY MY LOVE.
Sales at So-net increased compared to previous fiscal year
primarily due to higher fee revenue from broadband connections,
especially fiber-optic.
Operating income for All Other increased compared to the
previous fiscal year, primarily due to recording a 10.0 billion
yen gain on the sale of The Sony Center am Potsdamer
Platz in Berlin, the receipt of a settlement payment related to
copyright infringement claims, an increase in trademark royalty
income from Sony Ericsson and an increase in operating
income at So-net.
Operating income at SMEJ increased approximately 4
percent, compared with the previous fiscal year, mainly due
to an increase in animation DVD sales as well as the abovementioned increase in music download sales.
Part of the gain on the sale of a portion of Sonys former
headquarters site in the amount of 2.6 billion yen was included
in operating income within All Other in the previous fiscal year.
in All Other
(Yen in billions)
(Yen in billions)
600
60
13.1%
450
45
8.1%
300
30
4.8%
150
15
2006
2007
2008
Sales (left)
Operating margin
60
Foreign Exchange Fluctuations and Risk

Hedging
During the fiscal year ended March 31, 2008, the average value
of the yen was 113.3 yen against the U.S. dollar, and 160.0 yen
against the euro, which was 2.4 percent higher against the U.S.
dollar and 7.1 percent lower against the euro, respectively,
compared with the average of the previous fiscal year.
In the Pictures segment, Sony translates into yen the U.S.
dollar consolidated results of SPE (a U.S.-based operation that
has worldwide subsidiaries). Therefore, analysis and discussion
of certain portions of the operating results of SPE are specified
as being on a U.S. dollar basis. Results on a U.S. dollar basis
are not on the same basis as Sonys consolidated financial
statements and do not conform with U.S. GAAP. Sony does
not believe that these measures are a substitute for U.S. GAAP
measures. However, Sony believes that results presented on a
local currency basis provide additional useful information to
investors regarding operating performance.
Sonys consolidated results are subject to foreign currency
rate fluctuations largely because the countries where manufacturing takes place may be different from those where such
products are sold. In order to reduce the risk caused by such
fluctuations, Sony employs derivatives, including foreign
exchange forward contracts and foreign currency option
contracts, in accordance with a consistent risk management
strategy. Such derivatives are used primarily to mitigate the
effect of foreign currency exchange rate fluctuations on cash
flows generated by anticipated intercompany transactions and
intercompany accounts receivable and payable denominated in
foreign currencies.
Sony Global Treasury Services Plc (SGTS) in London
provides integrated treasury services for Sony Corporation and
its subsidiaries. Sonys policy is that Sony Corporation and all
subsidiaries with foreign exchange exposures should enter into
commitments with SGTS for hedging their exposures. Sony
Corporation and most of its subsidiaries utilize SGTS for this
purpose. The concentration of foreign exchange exposures at
SGTS means that, in effect, SGTS hedges most of the net
foreign exchange exposure of Sony Corporation and its subsidiaries. SGTS in turn enters into foreign exchange transactions
with creditworthy third-party financial institutions. Most of the
transactions are entered into against projected exposures before
the actual export and import transactions take place. In general,
SGTS hedges the projected exposures on average three months
before the actual transactions take place. However, in certain
cases SGTS partially hedges the projected exposures one
month before the actual transactions take place when business

requirements such as shorter production-sales cycles for
certain products arise. Sony enters into foreign exchange
transactions with financial institutions primarily for hedging
purposes. Sony does not use these derivative financial instruments for trading or speculative purposes except for certain
derivatives in the Financial Services segment. In the Financial
Services segment, Sony uses derivatives for Asset Liability
Management (ALM), a method of managing interest rate
fluctuation risk through the comprehensive identification of
differences in duration and cash flow between assets and
liabilities, and trading.
To minimize the adverse effects of foreign exchange fluctuations on its financial results, particularly in the Electronics
segment, Sony seeks, when appropriate, to localize material
and parts procurement, design, and manufacturing operations
in areas outside of Japan.
Changes in the fair value of derivatives designated as cash
flow hedges are initially recorded in other comprehensive
income and reclassified into earnings when the hedged transaction affects earnings. For the fiscal years ended March 31,
2007 and 2008, these cash flow hedges were fully effective.
Foreign exchange forward contracts, foreign currency option
contracts and other derivatives that do not qualify as hedges
are marked-to-market with changes in value recognized in
Other Income and Expenses. The notional amounts of foreign
exchange forward contracts, currency option contracts purchased and currency option contracts written as of March 31,
2008 were 2,019.8 billion yen, 215.7 billion yen and 25.9 billion
yen, respectively.
Assets, Liabilities and Stockholders

Equity
Assets
Total assets as of March 31, 2008 increased by 836.4 billion
yen, or 7.1 percent, to 12,552.7 billion yen compared with the
previous fiscal year-end. Total assets as of March 31, 2008 in all
segments excluding the Financial Services segment increased
by 86.9 billion yen, or 1.2 percent, to 7,185.0 billion yen compared with the previous fiscal year-end. Total assets as of March
31, 2008 in the Financial Services segment increased by 648.0
billion yen, or 13.0 percent, to 5,625.7 billion yen compared with
the previous fiscal year-end.
Current
Assets
Current assets as of March 31, 2008 increased by 462.9
billion yen, or 10.2 percent, to 5,009.7 billion yen compared
with the previous fiscal year-end. Current assets as of March
31, 2008 in all segments, excluding the Financial Services
segment, increased by 341.7 billion yen, or 9.8 percent, to
3,836.7 billion yen.
Cash and cash equivalents as of March 31, 2008 in all
segments, excluding the Financial Services segment, increased
425.9 billion yen, or 81.4 percent, to 948.7 billion yen compared
with the previous fiscal year-end. This was primarily due to the
sale of a portion of the shares Sony Corporation held in SFH
pursuant to the global initial public offering of SFH in connection
with its listing on the TSE. Refer to Cash Flows.
Notes and accounts receivable, trade (net of allowance for
doubtful accounts and sales returns) as of March 31, 2008,
excluding the Financial Services segment, decreased 259.6
billion yen, or 19.3 percent, compared with the previous fiscal
year-end to 1,083.5 billion yen. This was primarily the result of a
decrease in sales of PS3 near the end of the fiscal year compared with the previous fiscal year-end when PS3 had just
begun shipping in Europe.
Inventories as of March 31, 2008 increased by 80.7 billion
previous fiscal year-end. This increase was primarily due to an
increase in Electronics segment inventory resulting from a
worldwide expansion of the LCD television business. The
inventory to cost of sales turnover ratio (based on the average
of inventories at the end of each fiscal year and the previous
fiscal year) was 1.87 months compared to 1.78 months at the
end of the previous fiscal year. Sony considers this level of
inventory to be appropriate in the aggregate.
Other in current assets as of March 31, 2008 in all segments, excluding the Financial Services segment, increased
175.6 billion yen, or 10.8 percent, to 1,801.5 billion yen
compared with the previous fiscal year-end. This was primarily due to the recording of a receivable within the Electronics
segment relating to the sale of a portion of Sonys semiconductor operations in Nagasaki, Japan, including machinery
and equipment.
Current assets as of March 31, 2008 in the Financial
Services segment increased by 115.9 billion yen, or 10.6
percent, to 1,205.1 billion yen compared with the previous
fiscal year-end. This increase was primarily due to an
expansion of banking businesses.
61
IInvestments
and Advances
Investments and advances as of March 31, 2008 increased
by 446.9 billion yen, or 11.5 percent, to 4,335.6 billion yen
compared with the previous fiscal year-end.
Investments and advances as of March 31, 2008 in all
segments, excluding the Financial Services segment, decreased
by 104.8 billion yen, or 16.8 percent, to 518.5 billion yen. This
was primarily due to the receipt of a capital redemption payment
and dividends from Sony Ericsson.
Investments and advances as of March 31, 2008 in the
Financial Services segment increased by 532.0 billion yen, or
15.9 percent, to 3,879.9 billion yen compared with the previous
fiscal year-end. This increase was primarily due to investments
mainly in Japanese fixed income securities by Sony Life, which
increased assets as a result of an expansion of its business, and
an increase in mortgage loans outstanding at Sony Bank.
in Nagasaki, including machinery and equipment, The Sony

Center am Potsdamer Platz in Berlin and a portion of the site of
Sonys former headquarters.
Property, plant and equipment as of March 31, 2008 in the
Financial Services segment decreased by 0.2 billion yen, or 0.4
percent, to 38.5 billion yen compared with the previous fiscal
year-end. Capital expenditures in the Financial Services segment
decreased by 0.5 billion yen, or 6.7 percent, to 6.4 billion yen
compared with the previous fiscal year.
Consolidated capital expenditures for the fiscal year ending
March 31, 2009 are expected to increase 28 percent to 430
billion yen primarily within the Electronics segment. For the
Electronics segment, capital expenditures in the semiconductor business during the fiscal year are expected to increase by
approximately 20 billion yen to approximately 110 billion yen
due to an increase in the amount invested in image sensors.
Property,
Other
Plant and Equipment (after deduction

of accumulated depreciation)
Property, plant and equipment as of March 31, 2008 decreased
Property, plant and equipment as of March 31, 2008 in all
segments, excluding the Financial Services segment, decreased
Capital expenditures (additions to property, plant and
equipment) for the fiscal year ended March 31, 2008
decreased by 78.4 billion yen, or 18.9 percent, to 335.7
billion yen compared with the previous fiscal year. Capital
expenditures in the Electronics segment decreased by 44.8
billion yen, or 12.7 percent, to 306.7 billion yen. Of this
amount, approximately 90 billion yen was used for capital
expenditures in the semiconductor business, including CCDs
and CMOS imaging sensors. Capital expenditures decreased
in the Game segment by 11.1 billion yen, or 66.4 percent, to
5.6 billion yen. In the Pictures segment, capital expenditures
decreased by 1.0 billion yen, or 9.5 percent to 9.9 billion yen.
In All Other, which includes the part of Sonys music business
which is consolidated, 3.0 billion yen of capital expenditures
were recorded, a decrease of 2.7 billion yen, or 47.4 percent
compared with the previous fiscal year.
Other changes resulting in a decrease in property, plant and
equipment as of March 31, 2008 compared to March 31, 2007
include the sale of a portion of Sonys semiconductor operations
62
Assets
Other assets as of March 31, 2008 increased by 109.2 billion
previous fiscal year end.Deferred tax assets as of March 31,
2008 decreased by 18.3 billion yen, or 8.4 percent, to 198.7
billion yen compared with the previous fiscal year end.
Liabilities
Total current and long-term liabilities as of March 31, 2008
increased by 504.1 billion yen, or 6.1 percent, to 8,810.8 billion
yen compared with the previous fiscal year-end. Total current and
long-term liabilities as of March 31, 2008 in all segments, excluding the Financial Services segment, decreased by 173.4 billion
yen, or 4.2 percent, to 3,967.5 billion yen. Total current and
long-term liabilities in the Financial Services segment as of March
31, 2008 increased by 646.7 billion yen, or 14.9 percent, to
4,984.4 billion yen compared with the previous fiscal year-end.
Current
Liabilities
Current liabilities as of March 31, 2008 increased by 471.5
with the previous fiscal year-end. Current liabilities as of
March 31, 2008 in all segments excluding the Financial
percent, to 2,698.5 billion yen.
Short-term borrowings and the current portion of long-term
debt as of March 31, 2008 in all segments, excluding the
Financial Services segment, increased by 258.5 billion yen, or

fiscal year-end. This was principally due to the change from
long-term to current liabilities of the 250 billion yen tranche of
bonds with stock acquisition rights which will come due during
the fiscal year ending March 31, 2009.
Notes and accounts payable, trade as of March 31, 2008
in all segments, excluding the Financial Services segment,
decreased by 261.0 billion yen, or 22.4 percent, to 906.3
billion yen compared with the previous fiscal year-end. This
was primarily due to the same reason for the decrease in
notes and accounts receivable, trade, discussed above:
a decrease in sales of PS3 near the end of the fiscal year
compared with the previous fiscal year-end when PS3 had
just begun shipping in Europe.
Current liabilities as of March 31, 2008 in the Financial
percent, to 1,363.0 billion yen, mainly due to an increase in
deposits from customers at Sony Bank.
Long-term
Liabilities
Long-term liabilities as of March 31, 2008 increased by 32.6
the previous fiscal year-end.
Long-term liabilities as of March 31, 2008 in all segments,
excluding the Financial Services segment, decreased by 231.4
billion yen, or 15.4 percent, to 1,269.0 billion yen. In addition,
long-term debt as of March 31, 2008 in all segments, excluding the Financial Services segment, decreased by 274.3 billion
yen, or 29.6 percent, to 651.0 billion yen. This was primarily
due to the change to current liabilities of the bonds with stock
acquisition rights described above.
Long-term liabilities as of March 31, 2008 in the Financial
Services segment increased by 241.2 billion yen, or 7.1 percent,
to 3,621.4 billion yen. This was primarily due to an increase in
insurance-in-force at Sony Life.
Interest-bearing liabilities
(Yen in billions)
1,200
900
600
300
Interest-bearing Debt
Total interest-bearing debt as of March 31, 2008 decreased
by 12.3 billion yen, or 1.1 percent, to 1,084.2 billion yen,
compared with the previous fiscal year-end. Total interestbearing debt as of March 31, 2008 in all segments, excluding
the Financial Services segment, decreased by 15.7 billion
yen, or 1.6 percent, to 990.5 billion yen.
2007
2008
Short-term (including the current

portion of long-term debt)
Long-term
* As of March 31
Stockholders Equity
Stockholders equity as of March 31, 2008 increased by 94.4
the previous fiscal year-end. Retained earnings increased 339.9
with the previous fiscal year-end, primarily due to net income of
369.4 billion yen. Unfavorable foreign currency translation
adjustments of 212.5 billion yen, dividends declared of 25.1
billion yen and pension liability adjustments of 26.1 billion yen
decreased shareholders equity by a total of 263.7 billion yen.
The ratio of stockholders equity to total assets decreased 1.2
percentage points compared to the end of the previous fiscal
year, from 28.8 percent to 27.6 percent.
Stockholders equity per share
of common stock
Stockholders equity and

stockholders equity ratio
(Yen in billions)
(%)
(Yen)
4,000
40
4,000
3,000
30
3,000
2,000
20
2,000
1,000
10
1,000
30.2%
Total
2006
2006
28.8%
2007
27.6%
2008
Stockholders equity
Stockholders equity ratio
Stockholders equity ratio =
Stockholders equity/Total assets
2006
2007
2008
* As of March 31
* As of March 31
63
Information of Financial Position Separating

Out the Financial Services Segment (Unaudited)
The following charts show Sonys unaudited information of
financial position for all segments excluding the Financial
Services segment and for the Financial Services segment alone.
These separate condensed presentations are not required
under U.S. GAAP, which is used in Sonys consolidated financial
statements. However, because the Financial Services segment
is different in nature from Sonys other segments, Sony utilizes

this information to analyze its results without Financial Services
and believes that these presentations may be useful in understanding and analyzing Sonys consolidated financial statements. Transactions between the Financial Services segment
and all other segments excluding Financial Services are
eliminated in the consolidated figures shown below.
Condensed Balance Sheets Separating Out the Financial Services Segment (Unaudited)

Financial Services
March 31
2007
Yen in millions
Sony without
Financial Services
2007
2008
Consolidated
2007
2008
2008
Assets
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,089,254
1,205,119
3,494,971
3,836,667
4,546,723
5,009,663
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . .
277,048
137,721
522,851
948,710
799,899
1,086,431
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
490,237
424,709
3,078
3,000
493,315
427,709
Notes and accounts receivable, trade. . . . . . . . . . . . . . . . . . . . .
29,163
14,143
1,343,128
1,083,489
1,369,777
1,090,285
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
292,806
628,546
1,625,914
1,801,468
1,883,732
2,405,238
Film costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
308,694
304,243
308,694
304,243
Investments and advances . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,347,897
3,879,877
623,342
518,536
3,888,736
4,335,648
187,400
116,843
Investments in Financial Services, at cost . . . . . . . . . . . . . . .
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . .
38,671
38,512
1,382,860
1,204,837
1,421,531
1,243,349
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
501,820
502,151
1,100,795
1,203,849
1,550,678
1,659,836
Deferred insurance acquisition costs. . . . . . . . . . . . . . . . . . . . .
394,117
396,819
394,117
396,819
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
107,703
105,332
1,100,795
1,203,849
1,156,561
1,263,017
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,977,642
5,625,659
7,098,062
7,184,975 11,716,362 12,552,739
Liabilities and stockholders equity

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
957,459
1,362,956
2,640,601
2,698,522
3,551,852
4,023,367
Short-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,688
44,408
80,944
339,485
95,461
355,103
Notes and accounts payable, trade . . . . . . . . . . . . . . . . . . . . . .
13,159
16,376
1,167,324
906,281
1,179,694
920,920
Deposits from customers in the banking business . . . . . . . . . . .
752,367 1,144,399
752,367
1,144,399
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
143,245
157,773
1,392,333
1,452,756
1,524,330
1,602,945
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,380,240
4,787,434
3,621,407
1,500,314
1,268,951
4,754,836
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
129,484
111,771
925,259
650,969
1,001,005
729,059
Accrued pension and severance costs. . . . . . . . . . . . . . . . . . . .
8,773
8,034
164,701
223,203
173,474
231,237
Future insurance policy benefits and other . . . . . . . . . . . . . . . . . 3,037,666
3,298,506
3,037,666
3,298,506
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
204,317
203,096
410,354
394,779
542,691
528,632
Minority interest in consolidated subsidiaries . . . . . . . . . . . .
5,145
919
32,808
37,509
38,970
276,849
Stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
634,798
640,377
2,924,339
3,179,993
3,370,704
3,465,089
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,977,642
5,625,659
7,098,062
7,184,975 11,716,362 12,552,739
64
Investments
The following table contains available-for-sale and held to maturity securities, breaking out the unrealized gains and losses by
investment category.

Yen in millions

March 31, 2008
Cost
Unrealized
gain
Unrealized
loss
Fair market
value
Financial Services Business:

Available for sale
Debt securities
Sony Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,564,845
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
77,456
(2,644) 2,639,657
481,159
998
(10,412)
471,745
Sony Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
181,256
47,557
(14,513)
214,300
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,452
1,036
(1,504)
10,984
Equity securities
Held to maturity
Debt securities
Sony Life. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
56,737
773
(34)
57,476
Total Financial Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,295,449
127,820
(29,107) 3,394,162
Non-Financial Services:
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,935
26,992
(3,574)
76,353
Held to maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,103
1,103
Total Non-Financial Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54,038
26,992
(3,574)
77,456
Consolidated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,349,487
154,812
The most significant portion of these unrealized losses relate to

investments held by Sony Life and Sony Bank.
As of March 31, 2008, Sony Life had debt and equity
securities which had gross unrealized losses of 2.6 billion yen
and 14.5 billion yen, respectively. Of the unrealized loss amounts
recorded by Sony Life, approximately 1.5 percent relate to
securities being in an unrealized loss position for periods greater
than 12 months as of March 31, 2008. Sony Life principally
invests in debt securities in various industries. Almost all of these
securities were rated BBB or higher by Standard and Poors
Rating Services (S&P), Moodys Investors Service (Moodys)
or other rating agencies. The percentage of non-investment
grade securities held by Sony Life represents approximately
0.2 percent of Sony Lifes total investment portfolio, while the
percentage of unrealized losses that relate to those noninvestment grade securities was 0.7 percent of Sony Lifes
total unrealized losses as of March 31, 2008.
(32,681) 3,471,618
As of March 31, 2008, Sony Bank had debt securities which

had gross unrealized losses of 10.4 billion yen. Of the unrealized
loss amounts recorded by Sony Bank, approximately 60.2
percent relate to securities being in an unrealized loss position for
periods greater than 12 months as of March 31, 2008. These
unrealized losses related principally to Japanese government
bonds. Sony Bank principally invests in Japanese national
government bonds, Japanese corporate bonds and foreign
bonds. Almost all of these securities were rated BBB or higher
by S&P, Moodys or other rating agencies. These unrealized
losses related to numerous investments, with no single investment being in a material unrealized loss position for abovementioned periods. In addition, there was no individual security
with unrealized losses that met the test for impairment as the
declines in value were observed to be small both in amounts
and percentage, and therefore, the decline in value for those
investments was still determined to be temporary in nature.
65
For fixed maturity securities with unrecognized losses held by

Sony Life as of March 31, 2008 (2.6 billion yen), maturity dates
vary as follows:

Within
1 year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8%
to 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9%
5 to 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.6%
Above 10 years. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.7%
In the ordinary course of business, Sony maintains long-term

investment securities, included in securities investments and
other issued by a number of non-public companies. The
aggregate carrying amount of the investments in non-public
companies at March 31, 2008 was 62.1 billion yen. A non-public
equity investment is valued at cost as fair value is not readily
determinable. If the value is estimated to have declined and
such decline is judged to be other-than-temporary, the impairment of the investment is recognized immediately and the
carrying value is reduced to its fair value.
For the fiscal years ended March 31, 2007 and 2008, total
impairment losses were 7.4 billion yen and 37.1 billion yen of
which 6.1 billion yen and 24.0 billion yen, respectively, were
recorded by Sony Life in Financial Services revenue. Impairment
losses other than at Sony Life in each of the three fiscal years
were reflected in non-operating expenses and primarily relate to
certain strategic investments in non-financial services businesses. These investments primarily relate to certain strategic
investments in Japan and the U.S. with which Sony has
strategic relationships for the purposes of developing and
marketing new technologies. Impairment losses were recorded
for each of the three fiscal years as certain companies failed to
successfully develop and market such technology, resulting in
the operating performance of these companies being more
unfavorable than previously expected. As a result the decline in
the fair value of these companies was judged as other-thantemporary. None of these impairment losses were individually
material to Sony.
Upon determination that the value of an investment is
impaired, the value of the investment is written down to its fair
value. For publicly traded investments, fair value is determined
by the closing stock price as of the date on which the impairment determination is made. For non-public investments, fair
value is determined through the use of various methodologies
such as discounted cash flows, valuation of recent financings
66
and comparable valuations of similar companies. The impairment losses that were recorded in each of the three fiscal
years related to the unique facts and circumstances of each
individual investment and did not significantly impact other
investments.
Sony Life and Sony Banks investments constitute the
majority of the investments in the Financial Services segment.
Sony Life and Sony Bank account for approximately 84 percent
and 14 percent of the investments of the Financial Services
segment, respectively.
Sony Lifes fundamental policy in managing the investments
of its general account assets is to maintain the soundness of
its assets and build an investment portfolio capable of ensuring stable mid- to long-term returns, taking into account
anticipated risks and returns and responding quickly to
changes in financial market conditions and the investment
environment. Moreover, Sony Life utilizes basic idea of ALM
and considers the long-term balance between assets and
liabilities in an effort to ensure stable and sustainable returns.
Sony Lifes investment policy places emphasis on risk management and seeks to achieve the goals of quality, liquidity,
stability and profitability. In the fiscal year ended March 31,
2008, considering the investment environment and its liabilities, Sony Life invested mainly in long-term (10 years) and
super long-term (more than 10 years) Japanese government
bonds. As for its investments in convertible bonds, Sony Life
diversified its portfolio by responding to changes in market
condition and issue status.
Sony Bank seeks to build a portfolio that will maintain the
strength and stability of its financial base while ensuring profitability, taking into account appropriate risk management
activities in light of the relevant risks associated with its investments. Sony Banks securities portfolio consists mainly of
Japanese government bonds, Japanese corporate bonds and
foreign bonds. In addition, Sony Bank invests in non-yendenominated foreign bonds as a means of matching its exposure to foreign exchange risk with respect to a portion of the
foreign currency deposits of its account holders. Separately,
Sony Bank also holds other non-yen-denominated foreign
bonds as a means of diversifying its portfolio, and hedges the
majority of those investments against foreign exchange risk by
using derivative instruments. With respect to loans, Sony Bank
mainly offers mortgage loans to individuals and does not have
any corporate loan exposure.
Contractual obligations, commitments, and contingent liabilities

The following table summarizes Sonys contractual obligations and major commitments as of March 31, 2008. The references to the
Notes below refer to the corresponding note within the Notes to Consolidated Financial Statements.

Yen in millions
Payments due by period

Total
Less than
1 year
1 to 3 years
3 to 5 years
After 5 years
Contractual Obligations and Major Commitments:*

Long-term debt (Note 11)
Capital lease obligations (Notes 8 and 11) . . . . . . . . . . . . . . . . . . . . . . . . . .
51,889
9,328
11,636
6,341
24,584
Other long-term debt (Note 11).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
969,049
282,551
372,314
148,357
165,827
Minimum rental payments required under operating leases (Note 8). . . . . . .
189,313
42,736
57,750
29,095
59,732
62,044
61,869
175
57,258
44,841
11,928
452
37
Fdration Internationale de Football Association (Note 23) . . . . . . . . . . . .
22,944
3,306
7,389
8,166
4,083
Gross unrecognized tax benefits** (Note 20). . . . . . . . . . . . . . . . . . . . . . . . .
282,098
666
Purchase commitments for property, plant and equipment and

other assets (Note 23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected cost for the production or purchase of films and

television programming or certain rights (Note 23) . . . . . . . . . . . . . . . . . . .
Partnership program contract with

* The total amount of expected future pension payments is not included in either the above table or the total amount of commitments outstanding at March 31, 2008 discussed below as such amount is not currently determinable. Sony expects to contribute approximately 34.0 billion yen to Japanese pension plans and approximately 5.0
billion yen to foreign pension plans during the fiscal year ending March 31, 2009 (Note 14).
* The total unused portion of the line of credit extended under loan agreements in the Financial Services segment is not included in either the above table or the amount of
commitments outstanding at March 31, 2008 discussed below as it is not foreseeable how many loans will be executed. The total unused portion of the line of credit
extended under these contracts was 298.8 billion yen as of March 31, 2008 (Note 23).
* The five-year Revolving Credit Agreement with SONY BMG, which matures on August 5, 2009 and initially provided for a base commitment of 300 million U.S. dollars,
which was decreased to 200 million U.S. dollars on August 5, 2007, and additional incremental borrowings of up to 150 million U.S. dollars, are not included either in the
above table or the amount of commitments outstanding at March 31, 2008 discussed below as such amount is not currently determinable. Sonys outstanding commitment under this Credit Agreement as of March 31, 2008 was 17.5 billion yen (Note 23).
A second Revolving Credit Agreement with SONY BMG, which matures on August 5, 2011 and provides for a base commitment of 138 million U.S. dollars is not
included either in the above table or the amount of commitments outstanding at March 31, 2008 discussed below as such amount is not currently determinable. Sonys
outstanding commitment under this Credit Agreement as of March 31, 2008 was 13.8 billion yen (Note 23).
** The total amounts represent the liability for gross unrecognized tax benefits in accordance with FIN No. 48. Sony estimates 666 million yen of the liability is expected to be
settled within one year. The settlement period for the remaining portion of the liability, which totaled 281.4 billion yen, cannot be reasonably estimated due to the uncertainty associated with the timing of settlements with the various taxing authorities (Note 20).
The total amount of commitments outstanding at March 31,

2008 was 261.1 billion yen (Note 23). The commitments include
major purchase obligations as shown above.
In the ordinary course of business, Sony makes commitments
for the purchase of property, plant and equipment. As of March
31, 2008, such commitments outstanding were 62.0 billion yen.
Certain subsidiaries in the Pictures segment have entered
into agreements with creative talent for the development and
production of films and television programming as well as
agreements with third parties to acquire completed films, or
certain rights therein. As of March 31, 2008, the total amount
of the expected cost for the production or purchase of films
and television programming or certain rights under the above
commitments was 57.3 billion yen.
Sony Corporation has entered into a partnership program
contract with Fdration Internationale de Football Association
(FIFA). Through this program Sony Corporation will be able to
exercise various rights as an official sponsor of FIFA events

from 2007 to 2014. As of March 31, 2008, Sony Corporation
has committed to make payments under such contract of
22.9 billion yen.
In order to fulfill its commitments, Sony will use cash generated by its operating activities, intra-group loans and borrowings
from subsidiaries with excess funds to subsidiaries that are short
of funds through its finance subsidiaries, and raise funds from
the global capital markets and from banks when necessary.
The following table summarizes Sonys contingent liabilities as
of March 31, 2008.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen in millions
Contingent Liabilities (Note 23):

Loan guarantees to related parties. . . . . . . . .
9,762
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40,043
Total contingent liabilities . . . . . . . . . . . . . . . . . .
49,805
67
Off-Balance Sheet Arrangements

Sony has certain off-balance sheet arrangements that provide
liquidity, capital resources and/or credit risk support.
Sony set up several accounts receivable sales programs that
provide for the accelerated receipt of up to 50.0 billion yen of
eligible trade accounts receivable of Sony Corporation. Through
these programs, Sony can sell receivables to qualified special
purpose entities owned and operated by banks. These transactions are accounted for as a sale in accordance with Financial
Accounting Standards (FAS) No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities, because Sony has relinquished control of the
receivables. Accordingly, accounts receivable sold under these
transactions are excluded from receivables in the accompanying
consolidated balance sheets. Total receivables sold for the
fiscal years ended March 31, 2007 and 2008 were 152.5 billion
yen and 181.4 billion yen, respectively. Losses from these
transactions were insignificant. Although Sony continues
servicing the sold receivables, no servicing liabilities are
recorded because costs regarding collection of the sold
receivables are insignificant.
During the fiscal year ended March 31, 2008, a subsidiary of
the Financial Services segment set up several receivable sales
programs that provide for the accelerated receipt of up to 18.0
billion yen of eligible receivables. Through these programs, Sony
can sell receivables to qualified special purpose entities owned
and operated by banks. These transactions are accounted for
as a sale in accordance with FAS No. 140, because Sony has
relinquished control of the receivables. Accordingly, receivables
sold under these transactions are excluded from receivables in
the accompanying consolidated balance sheets. Total receivables sold for the fiscal year ended March 2008 were 113.8
billion yen. Losses from these transactions were insignificant.
Although Sony continues servicing the sold receivables, no
servicing liabilities are recorded because costs regarding
collection of the sold receivables are insignificant.
Sony has, from time to time, entered into various arrangements with Variable Interest Entities (VIEs). In several of the
arrangements in which Sony holds a significant variable interest,
Sony is the primary beneficiary and therefore consolidates these
VIEs. These arrangements include facilities which provide for
the leasing of certain property, the financing of film production
and the U.S.-based music publishing business. In addition,
Sony holds a significant variable interest in VIEs in which Sony
is not the primary beneficiary and therefore does not consolidate. These VIEs include the film production/co-financing
arrangements noted as follows.
68
On December 30, 2005, a subsidiary in the Pictures segment

entered into a production/co-financing agreement with a VIE to
co-finance 11 films that were released over the 15 months
ended March 31, 2007. The subsidiary received 376 million
U.S. dollars over the term of the agreement to fund the production or acquisition cost of films (including fees and expenses).
The subsidiary is responsible for the marketing and distribution
of the product through its global distribution channels. The VIE
shares in the net profits, as defined, of the films after the
subsidiary recoups a distribution fee, its marketing and distribution expenses, and third party participation and residual costs,
each as defined. The subsidiary did not make any equity
investment in the VIE nor issue any guarantees with respect to
the VIE. On April 28, 2006, the subsidiary entered into a second
production/co-financing agreement with a VIE to co-finance
additional films. Eight films are anticipated to be released under
this financing arrangement. The subsidiary will receive approximately 190 million U.S. dollars over the term of the agreement
to fund the production or acquisition cost of films (including fees
and expenses). Similar to the first agreement, the subsidiary is
responsible for the marketing and distribution of the product
through its global distribution channels. The VIE shares in the
net profits, as defined, of the films after the subsidiary recoups
a distribution fee, its marketing and distribution expenses, and
third party participation and residual costs, each as defined. As
of March 31, 2008, seven co-financed films have been released
by the subsidiary and 110 million U.S. dollars has been received
from the VIE under this agreement. The subsidiary did not make
any equity investment in the VIE nor issue any guarantees with
respect to the VIE. On January 19, 2007, the subsidiary entered
into a third production/co-financing agreement with a VIE to
co-finance a majority of the films to be submitted through
March 2012. The subsidiary has received a commitment from
the VIE that the VIE will fund up to 525 million U.S. dollars on a
revolving basis to fund the production or acquisition cost of
films (including fees and expenses). As of March 31, 2008, no
films of the subsidiary have been funded by this VIE. Similar to
the first two agreements, the subsidiary is responsible for
marketing and distribution of the product through its global
distribution channels. The VIE shares in the net profits, as
defined, of the films after the subsidiary recoups a distribution
fee, its marketing and distribution expenses, and third party
participation and residual costs, each as defined. The subsidiary did not make any equity investment in the VIE nor issue any
guarantees with respect to the VIE.
Statements for more information on VIEs.
Cash Flows
Operating Activities: During the fiscal year ended March 31,
2008, Sony generated 757.7 billion yen of net cash from
operating activities, an increase of 196.7 billion yen, or 35.1
percent compared with the previous fiscal year. Of this total, all
segments excluding the Financial Services segment generated
519.1 billion yen of net cash from operating activities, an
increase of 213.5 billion yen, or 69.9 percent, compared with
the previous fiscal year, and the Financial Services segment
generated 242.6 billion yen of net cash from operating activities,
a decrease of 13.9 billion yen, or 5.4 percent, compared with
the previous fiscal year.
During the fiscal year, a variety of factors had a positive impact
on operating cash flow, including the contribution of net income
from the Electronics segment, after taking into account depreciation and amortization, and an increase in insurance premium
revenue reflecting a steady increase in insurance-in-force at
Sony Life. Partially offsetting these contributions was an increase
in inventory, primarily within the Electronics segment.
Compared with the previous fiscal year, net cash provided by
operating activities increased during the fiscal year mainly as a
result of the increase in net income after taking into account
depreciation and amortization.
Investing Activities: During the fiscal year, Sony used 910.4
billion yen of net cash in investing activities, an increase of 195.0
billion yen, or 27.3 percent, compared with the previous fiscal
year. Of this total, all segments, excluding the Financial Services
segment, used 14.9 billion yen of net cash in investing activities,
a decrease of 416.2 billion yen, or 96.5 percent, compared with
the previous fiscal year. The Financial Services segment used
873.6 billion yen in net cash, an increase of 596.9 billion yen, or
215.7 percent compared with the previous fiscal year.
During the fiscal year, semiconductor fabrication equipment
was purchased and Sony/ATV acquired Famous Music, a
U.S.-based music publishing company. Partially offsetting these
uses of net cash were proceeds from the sale of a portion of
SFH shares, the sale of The Sony Center am Potsdamer Platz
in Berlin and the sale of a portion of the site of Sonys former
headquarters. Within the Financial Services segment, payments
for investments and advances, carried out primarily at Sony Life,
and at Sony Bank where operations are expanding, exceeded
proceeds from the maturities of marketable securities, sales of
securities investments and collections of advances.
Compared with the previous fiscal year, net cash used in
investing activities decreased significantly within all segments
excluding the Financial Services segment, primarily due to the
sale of a portion of SFH shares. On the other hand, net cash
used in investing activities within the Financial Services segment
increased significantly compared to the previous fiscal year
primarily because the increase in payments for investments and

advances, carried out primarily at Sony Life and Sony Bank,
exceeded the increase in proceeds from the maturities of
marketable securities, sales of securities investments and
collections of advances compared with the previous fiscal year.
In all segments excluding the Financial Services segment, net
cash provided by operating and investing activities combined
was 504.2 billion yen, an increase of 629.7 billion yen as
compared to net cash used of 125.5 billion yen in the previous
fiscal year.
Financing Activities: During the fiscal year ended March 31,
2008, 505.5 billion yen of net cash was provided by financing
activities. Of the total, 12.1 billion yen of net cash was used in
financing activities within all segments excluding the Financial
Services segment, a decrease of 71.7 billion yen compared to
the 59.6 billion yen in net cash generated by financing activities
in the previous fiscal year. This was primarily due to the fact that
straight bonds were redeemed during the 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 in the banking business, financing activities
generated 491.7 billion yen of net cash.
Accounting for all these factors and the effect of exchange
rate changes, the total outstanding balance of cash and cash
equivalents at the end of the fiscal year increased by 286.5
billion yen, or 35.8 percent, to 1,086.4 billion yen, compared
with the end of the previous fiscal year. The total outstanding
balance of cash and cash equivalents of all segments, excluding
the Financial Services segment, increased by 425.9 billion yen,
or 81.4 percent, to 948.7 billion yen, and for the Financial
Services segment, decreased by 139.3 billion yen, or 50.3
percent, to 137.7 billion yen, compared with the end of the
previous fiscal year.
Cash flows
(Yen in billions)
1,000
500
500
1,000
2006
2007
2008
Cash flows from operating activities

Cash flows from investing activities
Cash flows from financing activities
69
Information of Cash Flows Separating Out the

Financial Services Segment (Unaudited)
The following charts show Sonys unaudited cash flow information for all segments excluding the Financial Services segment
and for the Financial Services segment alone. These separate
condensed presentations are not required under U.S. GAAP,
which is used in Sonys consolidated financial statements.
However, because the Financial Services segment is different
in nature from Sonys other segments, Sony utilizes this

information to analyze its results without Financial Services and
believes that these presentations may be useful in understanding and analyzing Sonys consolidated financial statements.
Transactions between the Financial Services segment and all
other segments excluding the Financial Services segment are
eliminated in the consolidated figures shown below.
Condensed Statements of Cash Flows
Yen in millions

Financial Services
2007
Sony without
Financial Services
2007
2008
Consolidated
2007
2008
2008
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . .
256,540
242,610
305,571
519,112
561,028
757,684
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . .
(276,749)
(873,646)
(431,086)
(14,925)
(715,430)
(910,442)
Net cash provided by (used in) financing activities . . . . . . . . . . . . .
179,627
491,709
59,598
(12,100)
247,903
505,518
Effect of exchange rate changes on cash and cash equivalents. . .
3,300
(66,228)
3,300
(66,228)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . .
159,418
(139,327)
(62,617)
425,859
96,801
286,532
Cash and cash equivalents at beginning of the fiscal year . . . . . . .
117,630
277,048
585,468
522,851
703,098
799,899
Cash and cash equivalents at end of the fiscal year . . . . . . . . . . . .
277,048
137,721
522,851
948,710
799,899
1,086,431
LIQUIDITY AND CAPITAL RESOURCES

(The description below covers financial basic policy and figures
for Sonys consolidated operations except for the Financial
Services segment and So-net, which secure liquidity on their
own. Furthermore, the Financial Services segment is described
separately at the end of this section.)
An important financial objective of Sony is to maintain the
strength of its balance sheet, while securing adequate liquidity
for business activities.
Sony intends to continue various investments for future
growth. Funding requirements that arise from its business
strategy are principally covered by free cash flow generated
from business operations and by cash and cash equivalents
(cash balance); however, as needed, Sony has demonstrated the ability to procure funds from the financial and
capital markets. In addition, to sustain sufficient liquidity,
70
Sony has committed lines of credit with financial institutions,

together with its cash balances.
Depreciation and amortization
(additions to property,
plant and equipment)
(Yen in billions)
(Yen in billions)
480
480
360
360
240
240
120
120
2006
2007
2008

* Including amortization
expenses for intangible assets
and for deferred insurance
acquisition costs
2006
2007
2008
Liquidity Management and Market Access

Sony defines its liquidity sources as the amount of cash balance
(excluding restrictions on capital transfers due mainly to country
regulations) and the unused amount of committed lines of credit.
Sonys basic liquidity management policy is to secure sufficient
liquidity throughout the relevant fiscal year, covering such factors
as 50 percent of monthly consolidated sales and repayments on
debt which comes due within six months.
Sony has a total, translated into yen, of 597.2 billion yen in
committed lines of credit, of which the unused amount was
597.1 billion yen as of March 31, 2008. Major committed lines of
credit include a total, translated into yen, of 428.8 billion yen of
Global Commitment Facilities contracted with a syndicate of
global banks effective until March 2009, and a 150 billion yen
committed line of credit contracted with Japanese financial
institutions, effective until July 2009 where Sony Corporation
and SGTS are defined as the borrowers.
Sonys working capital needs grow significantly in the third
quarter (from October to December) as a result of the general
seasonality of Sonys business. In order to meet such short-term
capital requirements, SGTS maintains commercial paper (CP)
programs for the U.S., Europe and Japan CP markets. As of
March 31, 2008, the total amount to be issued under these CP
programs, translated into yen, was 1,201.3 billion yen. During
the fiscal year ended March 31, 2008, the largest month-end
outstanding balance of CP was 200.0 billion yen in September
2007. There was no outstanding balance of CP as of March 31,
2008. Sony controls the outstanding CP amount, as part of its
debt risk management, so that it does not exceed the unused
amount of committed lines of credit. In addition, SGTS maintains
a euro medium-term note (MTN) program with a program limit
amount that translates into 501.0 billion yen. There was no
outstanding balance as of March 31, 2008.
In the event of a downgrade in Sonys credit ratings, even
though the cost of borrowing could increase, there are no
financial covenants in any of Sonys material financial agreements that would cause an acceleration of the obligation.
Furthermore, there are no restrictions on the uses of most
proceeds except that some borrowings may not be used to
acquire securities listed on a U.S. exchange or traded overthe-counter in the U.S., and the use of such borrowings must
comply with the rules and regulations issued by authorities
such as the Board of Governors of the Federal Reserve Board.
Statements for more information on short-term borrowings
and long-term debt.
Ratings
Sony considers one of managements top priorities to be the
maintenance of stable and appropriate credit ratings in order to
ensure financial flexibility for liquidity and capital management
and continued adequate access to sufficient funding resources
in the financial and capital markets.
In order to facilitate access to global capital markets, Sony
obtains credit ratings from two rating agencies, Moodys and
S&P. In addition, Sony maintains a rating from Rating and
Investment Information, Inc. (R&I), a rating agency in Japan,
for access to the Japanese capital market.
Sonys current debt ratings from each agency as of June 2, 2008
are noted below:

Moodys
S&P
R&I
Long-term debt A2 (Outlook: A (Outlook: AA (Outlook:

Positive)
Stable)
Stable)
Short-term debt
P-1
A-2
a-1+
Cash Management
Sony is centralizing and working to make more efficient its
global cash management activities through SGTS. The excess
or shortage of cash at most of Sonys subsidiaries is invested
or funded by SGTS on a net basis, although Sony recognizes
that fund transfers are limited in certain countries and geographical areas due to restrictions on capital transactions. In
order to pursue more efficient cash management and in the
event of surplus capital generation among Sonys subsidiaries,
uneven cash distribution is managed directly or indirectly
through SGTS so that Sony can reduce unnecessary cash
and cash equivalents and borrowings.
Financial Services segment
In the Financial Services segment, the management of SFH,
Sony Life, Sony Assurance and Sony Bank recognize the
importance of securing sufficient liquidity to cover the payment
of obligations that they incur in the ordinary course of business, and these companies abide by the regulations imposed
by regulatory authorities and establish and operate under company guidelines that comply with these regulations. Their purpose in doing so is to maintain sufficient cash and cash
equivalents and secure sufficient means to pay their obligations. For instance, cash inflows for Sony Life and Sony
Assurance come mainly from policyholders insurance premiums and Sony Life and Sony Assurance keep sufficient liquidity
in the form of investments primarily in various securities. Sony
71
Bank, on the other hand, uses its cash inflows, which come
mainly from customers deposits in local or foreign currencies,
in order to offer mortgage loans to individuals or to make bond
investments, and establish a necessary level of liquidity for the
smooth settlement of transactions.
Sony Life currently obtains ratings from five rating agencies:
A+ by S&P for insurer financial strength rating, Aa3 by Moodys
for insurance financial strength rating, A+ by AM Best Company
Inc. for financial strength rating, AA by R&I for insurance claims
paying ability and AA by the Japan Credit Rating Agency Ltd.
for ability to pay insurance claims. Sony Bank obtained an Arating from S&P for its long-term local/foreign currency issuer
ratings and an A-2 rating from S&P for its short-term local/
foreign currency issuer rating.
RESEARCH AND DEVELOPMENT

It is necessary for Sony to continue technological innovation in
order to maintain group-wide growth. Sony believes that technology made possible by our research and development activities is key to the differentiation of products in existing businesses
and the source of creating value in new businesses.
Research and development is focused in four key domains:
a common development platform technology for home and
mobile electronics, and semiconductor, device, and software
technologies which are essential for product differentiation and
for creating value-added products.
Research and development costs for the fiscal year ended
March 31, 2008 decreased 23.4 billion yen, or 4.3 percent, to
520.6 billion yen, compared with the previous fiscal year. The
ratio of research and development costs to sales (which
excludes Financial Services segment revenue) decreased
from 7.1 percent to 6.3 percent. The bulk of research and
development costs were incurred in the Electronics and Game
segments. Expenses in the Electronics segment decreased
1.6 billion yen, or 0.4 percent, to 438.7 billion yen and
expenses in the Game segment decreased 20.8 billion yen, or
21.2 percent, to 77.1 billion yen. In the Electronics segment,
approximately 65 percent of expenses were for the development of new product prototypes while the remaining 35 percent were for the development of mid- to long-term new
technologies in such areas as semiconductors, communications and displays. In the Game segment, research and development costs decreased mainly due to the decline in costs
related to PS3. Consolidated research and development costs
for the fiscal year ending March 31, 2009 are expected to
increase by 4 percent to 540 billion yen.
72
Dividend Policy
Sony believes that continuously increasing corporate value
and providing dividends are essential to rewarding shareholders.
It is Sonys policy to utilize retained earnings, after ensuring
the perpetuation of stable dividends, to carry out various
investments that contribute to an increase in corporate value
such as those that ensure future growth and strengthen
competitiveness.
A fiscal year-end cash dividend of 12.5 yen per share of
Sony Corporation Common Stock was approved at the Board
of Directors meeting held on May 14, 2008 and was paid on
June 2, 2008. Sony Corporation has already paid an interim
dividend for Common Stock of 12.5 yen per share to each
shareholder; accordingly, the total annual cash dividend per
share of Common Stock is 25.0 yen.
In regards to the annual dividend for the fiscal year ending
March 31, 2009, upon careful consideration of Sonys results in
that fiscal year and other factors, Sony Corporation plans to
increase its regular dividend per share by 15 yen to 40 yen per
annum. Sony Corporation also plans to distribute a special cash
dividend of 10 yen per share as part of the interim dividend,
which would be paid in December 2008. This special dividend
would reward our shareholders for the successful global initial
public offering of shares of SFH and be in appreciation of their
support during the implementation of our three-year restructuring
program and other corporate initiatives which resulted in record
consolidated net income during the fiscal year ended March 31,
2008. As a result, Sony Corporation plans to pay a total annual
dividend for the fiscal year ending March 31, 2009 of 50 yen per
share, comprising an interim dividend of 30 yen per share and a
year-end dividend of 20 yen per share.
Employees
As of March 31, 2008, Sony had approximately 180,500
employees, an increase of approximately 17,500 employees
from March 31, 2007. The total number of employees increased
as a result of a significant increase of employees at manufacturing sites in East Asia and East Europe with an expansion of
business in the Electronics segment.
Risk Factors
This section contains forward-looking statements that are
subject to the Cautionary Statement appearing on the inside
back cover page of this annual report. Risks to Sony are also
discussed elsewhere in this annual report, including without

limitation in the other sections of this annual report referred to
in the Cautionary Statement.
Sony must overcome increasingly intense pricing competition,
especially in the Electronics and Game segments.
Sonys Electronics segment produces consumer products that
compete against products sold by an increasing number of
competitors on the basis of several factors including price. In
order to produce products that appeal to changing and increasingly diverse consumer preferences, and to overcome the fact
that a relatively high percentage of consumers already possess
products similar to those that Sony offers, Sonys Electronics
and Game segments must develop superior technology,
anticipate consumer tastes and rapidly develop attractive
products. In the Electronics segment, Sony faces increasingly
intense pricing pressure and shorter product cycles in a variety
of consumer product categories. Sonys sales and operating
income depend on Sonys ability to continue to develop efficiently and offer Electronics and Game products at competitive
prices that meet changing and increasingly diverse consumer
preferences. If we are unable to effectively anticipate and
counter the price erosion that frequently accompanies our
products, or if the average selling prices of our products
decrease faster than we are able to reduce our manufacturing
costs, our gross margins will decrease and our results of
operations and financial condition may be negatively impacted.
To remain competitive and stimulate customer demand,
Sony must successfully manage frequent product and
service introductions and transitions.
Due to the highly volatile and competitive nature of the PC,
consumer electronics and mobile communication industries,
Sony must continually introduce new products, services and
technologies, enhance existing products and services, and
effectively stimulate customer demand for new and upgraded
products and services. The success of new product and service
introductions depends on a number of factors, including timely
and successful completion of development efforts, market
acceptance, Sonys ability to manage the risks associated with
new products and production ramp-up issues, the availability of
application software for new products, the effective management of purchase commitments and inventory levels in line with
anticipated product demand, the availability of products in
appropriate quantities and costs to meet anticipated demand,
and the risk that new products and services may have quality
or other defects in the early stages of introduction. Accordingly,
Sony cannot determine in advance the ultimate effect that new
product introductions and transitions will have on financial

condition and operating results.
Sony is subject to competition from firms that may be more
specialized or have greater resources.
Sony has several business segments in different industries and
has many product categories within the Electronics segment,
which causes it to face a broad range of competitors ranging
from large international companies to highly specialized entities
that are focused on only a few businesses. As a result, Sony
may not fund or invest in certain of its businesses to the same
degree that its competitors do, and these competitors may have
greater financial, technical, and marketing resources available to
them than the businesses of Sony. Sonys financial services
businesses may not be able to compete effectively, especially
against established competitors with greater financial, marketing
and other resources.
Sonys investments in research and development may not
yield the results expected.
Sonys businesses, particularly the Electronics and Game
segments, operate in intensely competitive markets characterized by changing consumer preferences and rapid technological
innovation. Due to technological innovation and ease of imitation, new products tend to become standardized rapidly, leading
to intense competition and price declines. In order to strengthen
the competitiveness of its products in this environment, Sony
is continuing to invest heavily in research and development.
However, these investments in research and development
may not yield the results expected, hindering Sonys ability to
commercialize in a timely manner new and competitive products
that meet the needs of the market, which consequently, may
negatively impact Sonys results.
Sony may not be able to recoup the large capital
expenditures or investments it makes to increase
production capacity.
Sony continues to invest heavily in production equipment in
the Electronics segment. Sony also invests in productionrelated joint ventures. One recent example is the investment
Sony and Samsung made in connection with 8th generation
production capacity for amorphous TFT LCD panel production, following investments in 7th generation production
capacity, at S-LCD, a joint venture of the two companies.
The accumulated total amount of the investment in S-LCD by
Sony and Samsung for 7th and 8th generation production
capacity is approximately 400 billion yen (approximately 50
percent of which was contributed by Sony). Sony may not be
73
able to recover these capital expenditures or investments, in

part or in full, or the recovery of these capital expenditures or
investments may take longer than expected. As a result, the
carrying value of the related assets may be subject to an
impairment charge, which could adversely affect Sonys
mid-term profitability. (Refer to Electronics section of Trend
Information.)
Sonys utilization of joint ventures and alliances within
strategic business areas may not be successful.
During the last several years Sony has moved increasingly
toward the establishment of joint ventures and strategic
alliances in order to supplement or replace functions that
were previously performed by divisions of Sony Corporation
or wholly-owned subsidiaries.
Sony currently has investments in several joint ventures,
including Sony Ericsson, S-LCD and SONY BMG. In February
2008, Sony and Sharp signed a non-binding memorandum of
intent to establish a joint venture to manufacture 10th generation
amorphous TFT LCD panels and modules. If Sony and its
partners are not able to reach their common financial objectives
successfully, Sonys financial performance as a whole may be
adversely affected. Sonys financial performance may also be
adversely affected temporarily or in the short- and medium-term
during the investment period of alliances, joint ventures and
strategic investments even if Sony and its partners remain on
course to achieve their common objectives.
Sony may not adequately manage the growing number of
joint ventures and strategic alliances, and, in particular, may not
deal effectively with the legal and cultural differences that can
arise in such relationships or changes in the relationships with or
financial status of partners. In addition, by participating in joint
ventures or strategic alliances, Sony may encounter conflicts of
interest, may not maintain sufficient control over the joint venture
or strategic alliance, including over cash flow, and may be faced
with an increased risk of the loss of proprietary technology or
know-how. Sonys reputation could be harmed by the actions or
activities of a joint venture that uses the Sony brand.
Sonys business reorganization efforts are costly and may
not attain their objectives.
Sony implemented restructuring initiatives in relation to its
mid-term corporate strategy for the three fiscal years ended
March 31, 2008 that focused on the reduction of the number
of business categories and product models, the rationalization
of manufacturing sites, streamlining of administrative and
headquarter functions, and the sale of non-core assets. In
association with these restructuring initiatives, 38.8 billion yen
and 47.3 billion yen of restructuring charges were recorded
for the fiscal years ended March 31, 2007 and 2008,
74
respectively. Sony anticipates the recording of approximately

20 billion yen of restructuring charges for the fiscal year
ending March 31, 2009.
Restructuring charges are recorded in cost of sales, selling,
general and administrative expenses and loss on sale, disposal
or impairment of assets, net and thus decrease Sonys consolidated operating and net income. Moreover, due to internal or
external factors, the improved efficiencies and projected cost
savings may not be realized as scheduled and, even if those
benefits are realized, Sony may not be able to achieve the level
of profitability expected due to the worsening of market
conditions beyond expectations. Such possible internal factors
could include, for example, a decision to implement new
restructuring initiatives not already planned or a decision to
increase research and development outlays or other expenditures beyond currently projected levels, either of which might
increase total costs. Possible external factors could include, for
example, increased burdens from regional labor regulations
and labor union agreements that could prevent Sony from
executing its restructuring initiatives as planned. Therefore,
such reorganizations may not result in improved efficiency,
increased ability to respond to market changes or the reallocation of resources to more profitable activities. The inability to
fully and successfully implement restructuring programs may
cause Sony to have insufficient financial resources to carry out
its research and development plans and to invest in targeted
growth areas for its businesses.
Foreign exchange rate fluctuations can affect financial
results because a large portion of Sonys sales and assets
are denominated in currencies other than the yen.
Sonys consolidated statements of income are prepared from
the local currency-denominated financial results of Sony
Corporations subsidiaries around the world, which are then
translated into yen at the monthly average currency exchange
rate. Sonys consolidated balance sheets are prepared using
the local currency-denominated assets and liabilities of Sony
Corporations subsidiaries around the world, which are
translated into yen at the market exchange rate at the end of
each financial period. A large proportion of Sonys consolidated financial results, assets and liabilities is accounted for
in currencies other than the Japanese yen. For example, only
23.2 percent of Sonys sales and operating revenue in the
fiscal year ended March 31, 2008 were originally recorded in
Japan. Accordingly, Sonys consolidated financial results and
the assets and liabilities in Sonys businesses that operate
internationally, principally in its Electronics, Game and
Pictures segments, may be materially affected by changes in
the exchange rates of foreign currencies when translating into
Japanese yen. Foreign exchange rate fluctuations may have a
negative impact on Sonys results in the future, especially if

the yen strengthens significantly against the U.S. dollar, the
euro or other foreign currencies.
Foreign exchange fluctuations can affect Sonys results of
operations due to sales and expenses in different currencies.
Exchange rate fluctuations affect Sonys operating profitability
because many of Sonys products are sold in countries other
than the ones in which they were manufactured. The concentration of research and development, administrative functions
and manufacturing activities within the Electronics segment in
Japan, makes this segment particularly sensitive to the yens
appreciation as the ratio of yen-denominated costs to total
costs is higher than the ratio of yen-denominated revenue to
total revenue. Volatile mid- to long-term changes in exchange
rate levels may interfere with Sonys global allocation of
resources and hinder Sonys ability to engage in research and
development, procurement, production, logistics, and sales
activities in a manner that is profitable after the effect of such
exchange rate changes.
Although Sony hedges most of the net foreign currency
exposure resulting from import and export transactions shortly
before they are projected to occur, such hedging activity cannot
entirely eliminate the risk of adverse exchange rate fluctuations.
Sony must efficiently manage its procurement of parts,
the market conditions for which are volatile, and control
its inventory of products and parts, the demand for which
is volatile.
In the Electronics and Game segments, Sony places orders for
components, determines production and plans inventory in
advance based on its forecast of consumer demand, which is
highly volatile and difficult to predict. Sony consumes a tremendous volume of parts and components such as semiconductors
and LCD panels for its products. Consequently, market fluctuations may cause a shortage of parts and components, and may
affect Sonys production or the cost of goods sold, as could
price fluctuations of the underlying raw or basic materials. In the
past, for example, Sony has experienced both a shortage of
certain semiconductors, which resulted in Sonys inability to
meet demand for its PCs and audio visual products, as well
as a surplus in certain other semiconductors that resulted in the
recognition of losses when semiconductor prices fell.
Sonys profitability may also be adversely affected by inventory
adjustments that, as a result of efforts to reduce inventory by
adjusting production or by reducing the price of finished goods,
will lead to an increase in the ratio of cost of sales to sales. Sony
writes down the value of its inventory when components or
products have become obsolete, when inventory exceeds the
amount expected to be used, or when the value of the inventory
is otherwise recorded at a higher value than net realizable value.

Such inventory adjustments have had and, if Sony is not
successful in managing its inventory in the future, will have a
material adverse effect on Sonys operating income and
profitability.
Sonys sales and profitability are sensitive to economic and
other trends in Sonys major markets.
A consumers decision to purchase products such as those
offered by Sony is discretionary to a very significant extent.
Accordingly, weakening economic conditions or outlook can
reduce consumption in any of Sonys major markets, causing
material declines in Sonys sales and operating income. In the
fiscal year ended March 31, 2008, 23.2 percent, 25.1 percent
and 26.2 percent of Sonys sales and operating revenue were
attributable to Japan, the U.S. and Europe, respectively. If
economic conditions in Japan, the U.S. or Europe deteriorate, or if the effects of international political and military
instability or natural disasters depress consumer confidence,
Sonys short- to mid-term sales and profitability may be
significantly adversely affected. In addition, since Sonys
sales in Other Areas are growing, its sales and profitability
may also be affected by future political, economic and
military uncertainties surrounding those areas.
Sony is subject to the risks of operations in different
countries.
Most of Sonys activities are conducted outside of Japan, and
international operations bring challenges. For example, in the
Electronics and Game segments, production and procurement
of products and parts in Asian countries such as China are
increasing, and this creates a risk that production and shipping
of products and parts could be interrupted by a natural
disaster or pandemic in the region, similar to the spread of
Severe Acute Respiratory Syndrome (SARS). In addition,
production of electronics products in China and other Asian
countries increases the time necessary to supply products to
Europe and the U.S., which can make it more difficult to meet
changing customer demand. Further, Sony may encounter
difficulty in planning and managing operations due to unfavorable political or economic factors, such as cultural and religious conflicts, non-compliance with expected business
conduct, unexpected legal or regulatory changes such as
foreign exchange, import or export controls, nationalization of
assets or restrictions on the repatriation of returns from foreign
investments and the lack of adequate infrastructure. As
emerging markets are becoming increasingly important in our
operations, the above mentioned risks are also expected to
grow and could have an adverse impact on our financial
condition and operating results.
75
The large-scale investment required during the development

and introductory period of a new gaming platform may not
be fully recovered.
Within the Game segment, developing and providing products
that maintain competitiveness over an extended life-cycle
requires large-scale investment relating to research and development, particularly during the development and introductory
period of a new platform. In the past, large-scale investment
relating to capital expenditures and research and development
for the manufacture of key components, including semiconductors supplied for PS3, was also recorded within the Electronics
segment. Moreover, it is particularly important in the Game
segment that these products are provided to consumers at
competitive prices to ensure the favorable market penetration of
the platform. Should the platform fail to achieve such favorable
market penetration, there is a risk that this investment, or a part
thereof, will not be recouped, resulting in a significant negative
impact on Sonys profitability. In addition, even if Sony is able to
sufficiently recoup its investment, significant negative impact on
Sonys operating results could occur during the introductory
period of the platform. Further, even if the platform is ultimately
successful, it may take longer than expected to recoup the
investment, resulting in a negative impact on Sonys profitability.
An example of such a significant negative impact during the
introductory period of a platform are PS3-related charges that
resulted in losses of 232.3 billion yen and 124.5 billion yen within
the Game segment for the fiscal years ended March 31, 2007
and 2008, respectively. These losses arose from the strategic
pricing of PS3 hardware at points lower than its production cost.
(Refer to Electronics section of Trend Information and Game
section of Operating Performance by Business Segment at
Operating Results.)
Sonys Game and Electronics segments are particularly
sensitive to year-end holiday season demand.
Since the Game segment offers a relatively small range of
hardware products (including PS2, PSP and PS3) and a
significant portion of overall demand is weighted towards the
year-end holiday season, factors such as changes in the
competitive environment, changes in market conditions,
delays in the release of highly anticipated software titles and
insufficient supply of hardware during the year-end holiday
season can negatively impact the financial performance of
both the Game and the Electronics segments. The Electronics
segment is also dependent upon year-end holiday season
demand and, to a lesser extent than the Game segment, is
susceptible to weak sales as well as supply shortages that
may prevent it from meeting demand for its products during
this season.
76
The sales and profitability of Sonys Game segment

depends on the penetration of its gaming platforms,
which is sensitive to software line-ups, including software
produced by third parties.
In the Game segment, the penetration of gaming platforms is a
significant factor driving sales and profitability, which may be
affected by the ability to provide customers with sufficient
software line-ups, including software produced by third parties.
Software line-ups affect not only software sales and profitability,
as in many other content businesses, but also affect the
penetration of gaming platforms, which can affect hardware
sales and profitability.
Operating results for Sonys Pictures segment vary according
to the cost of productions, customer acceptance, timing of
releases or syndication sales, and competing products.
Operating results for the Pictures segments motion picture
and television productions can materially fluctuate depending
primarily upon the cost of such productions and acceptance
of such productions by the public, both of which are difficult
to predict, as well as the timing of new motion picture
releases and the syndication of television productions. In
addition, the commercial success of the Pictures segments
motion picture and television productions depends upon the
publics acceptance of other competing productions, and the
availability of alternative forms of entertainment and leisure
activities.
Sonys Pictures segment is subject to labor interruption.
The Pictures segment is dependent upon highly specialized
union members who are essential to the production of motion
pictures and television programs. A strike by one or more of
these unions could delay or halt production activities. Such a
delay or halt, depending on the length of time involved, could
cause delay or interruption in the release of new motion pictures
and television programs and thereby could adversely affect
revenues and cash flows in the Pictures segment.
Sonys Financial Services segment operates in highly
regulated industries and new rules, regulations and
regulatory initiatives by government authorities could
adversely affect the flexibility of its business operation.
Sonys Financial Services segment operates in industries subject
to comprehensive regulation and supervision, including the
Japanese insurance and banking industries. Future developments or changes in laws, regulations or policies and their
effects are unpredictable and could lead to increased compliance expenses or limitations on operations. For example,
Japans Financial Services Agency (FSA) has recently
strengthened its regulatory supervision relating to non-payment

of insurance claims. The FSA requires all life and non-life
insurance companies to perform and report on the results of a
systematic review of non-payment of insurance claims. Based
on the results of such review, the FSA has issued business
improvement orders and other administrative sanctions to
non-life insurance companies, and it is considering issuing
certain administrative sanctions to life insurance companies.
Compliance with multiple regulatory regimes is challenging and,
due to our common branding strategy, compliance failures in
any of our businesses within our Financial Services segment
could have a negative impact on the overall business reputation
of the Financial Services segment.
Declines in the value of equity securities could have a
material adverse impact on the financial results of Sonys
Financial Services segment.
In the Financial Services segment, Sony Life holds both convertible bonds and equity securities. The convertible bonds are
required to be marked to market at the end of each accounting
period on the income statement under U.S. generally accepted
accounting principles. Declines in equity prices, such as those
due to recent problems in the United States residential mortgage
market that have resulted in large fluctuations in global equity
prices, may result in valuation losses on the convertible bonds
as well as impairment losses on the equity securities held by
Sony Life.
Changes in interest rates may significantly affect Sonys
Financial Services segments financial condition and results.
We engage in ALM in an effort to manage the investment
assets within the Financial Services segment in a manner
appropriate to our liabilities, which arise from both the insurance policies we underwrite in both our life insurance and
non-life insurance businesses and the deposits, borrowings
and other liabilities in our banking business. ALM considers
the long-term balance between assets and liabilities in an
effort to ensure stable returns. Any failure to appropriately
conduct our ALM activities, or any significant changes in
market conditions beyond what our ALM could reasonably
address, could have a material adverse effect on the financial
condition and results of operations of our Financial Services
segment. In particular, because Sony Lifes liabilities to
policyholders generally have longer durations than its investment assets, lower interest rates tend to reduce yields on
Sony Lifes investment portfolio while premiums remain
generally unchanged on outstanding policies. As a result,
Sony Lifes profitability and long-term ability to meet policy
commitments could be materially and adversely affected.
The investment portfolio within Sonys Financial Services

segment exposes Sony to a number of additional risks other
than the risks related to declines in the value of equity
securities and changes in interest rates.
In Sonys Financial Services segment, generating stable investment income is important to our operations and we invest in a
variety of asset classes, including Japanese government and
corporate bonds, foreign government and corporate bonds,
Japanese stocks, loans and real estate. In addition to risks
related to changes in interest rates and the value of equity
securities, the Financial Services segments investment portfolio
exposes Sony to a variety of other risks, including foreign
exchange risk, credit risk and real estate investment risk, any or
all of which may have an adverse effect on the financial condition and results of operations of our Financial Services segment.
Differences between actual and assumed policy benefits
and claims may require Sonys Financial Services segment
to increase policy reserves in the future.
Sonys life insurance and non-life insurance businesses establish
policy reserves for future benefits and claims based on regulatory guidelines and estimates of future payment obligations
made by qualified actuaries. These reserves are calculated
based on many assumptions and estimates, including the
frequency and timing of the event covered by the policy, the
amount of benefits or claims to be paid and the investment
returns on the assets these businesses purchase with the
premiums received. These assumptions and estimates are
inherently uncertain, and we cannot determine with precision the
ultimate amounts that we will be required to pay for, or the
timing of payment of, actual benefits and claims or whether the
assets supporting the policy liabilities will grow at the level we
assume prior to the payment of benefits or claims. The frequency and timing of the event covered by the policy and the
amount of benefits or claims to be paid are subject to a number
of risks and uncertainties, many of which are outside of our
control, including:
changes in trends underlying our assumptions and estimates,
such as mortality and morbidity rates;
the availability of sufficient reliable data and our ability to
correctly analyze the data;
our selection and application of appropriate pricing and rating
techniques; and
changes in legal standards, claim settlement practices and
medical care expenses.
If the actual experience of our insurance businesses is less
favorable than our assumptions or estimates, our policy reserves
77
may be inadequate. In addition, any changes in regulatory

guidelines or standards with respect to the required level of
policy reserves may require that we establish policy reserves
based on more stringent assumptions, estimates or actuarial
calculations. Such events could result in a need to increase
provisions for policy reserves, which may have a significant
adverse effect on the financial condition and results of
operations of the Financial Services segment.
Sonys music business, including its investment in SONY
BMG, and the Pictures segment are subject to digital piracy,
which may become increasingly prevalent with the development of new technologies.
The development of digital technology has created new risks
with respect to Sonys ability to protect its copyrights in its
music business, including its investment in SONY BMG, as well
as in the Pictures segment. Advances in technology that enable
the transfer and downloading of digital audio and video files
from the Internet without authorization from the owners of rights
to such content threaten the conventional copyright-based
business model by making it easier to create and redistribute
unauthorized audio and video files. These technological
advances include new digital devices such as hard disk drive
video and audio recorders, CD, DVD, and Blu-ray Disc
recorders and peer-to-peer digital distribution services. Such
unauthorized distribution has adversely affected sales and
operating income within the music business, and returns from
Sonys investment in SONY BMG, and threatens to adversely
affect sales and operating income in the Pictures segment. As a
result, Sony has incurred and will continue to incur expenses to
develop new services for the authorized digital distribution of
music, movies and television programs and to combat unauthorized digital distribution of its copyrighted content. These
initiatives will increase Sonys near-term expenses and may not
achieve their intended result.
Sonys music business and Sonys investment in SONY
BMG are dependent on establishing new artists, and
together with Sonys Pictures segment are subject to
increases in talent-related costs.
The success of Sonys music business and Sonys investment
in SONY BMG is highly dependent on establishing artists that
appeal to customers, and the competition with other entertainment companies for such talent is intense. If the music
business and SONY BMG are unable to find and establish
new talented artists, sales, operating income and the returns
from Sonys investment in SONY BMG may be adversely
affected. In addition, with respect to the music business and
the Pictures segment, as well as SONY BMG, Sony has
experienced and may continue to experience significant
increases in talent-related spending.
78
SONY BMG may be subject to renewed judicial review by

the European Court.
In August 2004, Sony combined its recorded music business
outside of Japan with the recorded music business of
Bertelsmann AG, forming SONY BMG, after receiving antitrust
approval from, among others, the European Commission. On
December 3, 2004, Impala, an international association of
2,500 independent recorded music companies, appealed the
European Commissions clearance decision to the EU Court
of First Instance (CFI). On July 13, 2006, the CFI annulled
the Commissions decision to allow the merger to go forward,
requiring the Commission to re-examine the transaction. In
October 2006, Sony Corporation of America and Bertelsmann
AG filed an appeal of the CFIs judgment to the Court of Justice
of the European Communities (ECJ). The ECJ is scheduled to
render judgment on that appeal on July 10, 2008. On October
3, 2007, following its re-examination of the merger, the
Commission rendered a second clearance decision reaffirming the conclusion reached in 2004 that the transaction raised
no competition concerns. That decision may be appealed to
the CFI until June 26, 2008 and on June 16, 2008 Impala
announced it had filed an appeal. If the ECJ were to affirm the
CFIs judgment annulling the Commissions original clearance
decision and the CFI (and upon a further appeal, the ECJ) were
to annul that second clearance decision, then, should the
Commission following a further investigation reverse the
position it had taken in 2004 and 2007, the previously combined company could be forced to unwind the merger in whole
or in part. In such circumstance, Sony might incur significant
costs and might not be able to achieve its objectives with
respect to its recorded music business.
Sony may not be successful in implementing its hardware,
software and content integration strategy.
Sony believes that utilizing broadband networks to facilitate the
integration of hardware, software and content is essential for
differentiating itself in the marketplace. Sony also believes that
this strategy will eventually lead to consistent revenue streams.
However, this strategy depends on the development (both inside
and outside of Sony) of certain network technologies, coordination among Sonys various business units, and the standardization of technological and interface specifications across
business units and within industries. If Sony is not successful in
implementing this strategy, it could adversely affect Sonys
competitiveness and profitability.
Sonys physical facilities and information systems are
subject to damage as a result of disasters, outages,
malfeasance or similar events.
Sonys headquarters, some of Sonys major data centers and
many of Sonys most advanced device manufacturing facilities,
including those for semiconductors, are located in Japan,

where the possibility of disaster or damage from earthquakes
is generally higher than in other parts of the world. In addition,
Sonys offices and facilities, including those used for research
and development, material procurement, manufacturing,
motion picture and television program production, logistics,
sales and services are located throughout the world and are
subject to possible destruction, temporary stoppage or
disruption as a result of any number of unexpected events. If
any of these facilities or offices were to experience a significant
loss as a result of any of the above events, it could disrupt
Sonys operations, delay production, shipments and recording
revenue, and result in large expenses to repair or replace these
facilities or offices. In addition, as network and information
systems have become increasingly important to Sonys
operating activities, network and information system shutdowns caused by unforeseen events such as power outages,
disasters, terrorist attacks, hardware or software defects,
computer viruses and computer hacking pose increasing risks.
Although Sony is developing counter-measures, such events
could result in the disruption of Sonys operations, delay
production, shipments and recognition of revenue, and result in
large expenditures necessary to repair or replace such network
information systems.
Sonys reputation and business could be harmed and Sony
could be subject to legal claims if there is loss, disclosure
or misappropriation of our customers personal information
or other breaches of our security.
Sony makes extensive use of online services and centralized
data processing, including through third-party service providers, particularly in the Financial Services segment. The secure
maintenance and transmission of confidential information is a
critical element of Sonys operations. Sonys customers
personal information may be lost or disclosed or taken without
customers consent. In addition, Sonys information technology
and other systems, or those of service providers or strategic
business partners, may be compromised. If we lose customers personal information or if a malicious third party were to
penetrate the network security of Sony, Sonys business
partners or service providers to misappropriate or acquire
customers personal information, or if there were an advertent
or inadvertent loss, disclosure or misappropriation of customers personal information by Sony employees, Sonys reputation could be damaged and Sony could be subject to lawsuits
or claims.
Any loss, disclosure or misappropriation of customers
personal information or other breach of our security would
likely have a serious impact on our reputation and could
have a significant adverse effect on our businesses and our
results of operations.
Sony is subject to financial and reputational risks due to

product quality and liability issues.
Sony products, such as software and electronic devices
including semiconductors are becoming increasingly sophisticated and complicated as rapid advancements in technologies
occur, and as demand increases for digital equipment. At the
same time, product quality and liability issues present greater
risks. Sonys efforts to manage the rapid advancements in
technologies and increased demand, as well as to control
product quality, may not be successful. If they are not, Sony
may incur expenses in connection with, for example, product
recalls, after-sales service and lawsuits, and Sonys brand image
and reputation as a producer of high-quality products may
suffer. These issues are not only relevant to the final Sony
products that are sold directly to customers but also to the final
products of other companies that are equipped with Sonys
components, such as the semiconductors mentioned above. An
example of these issues is the recording of a 51.2 billion yen
provision during the fiscal year ended March 31, 2007 that
related to the recalls by Dell Inc., Apple Inc. and Lenovo, Inc. of
notebook computer battery packs that use lithium-ion battery
cells manufactured by Sony as well as the subsequent global
replacement program initiated by Sony for certain notebook
computer battery packs used by Sony and several other
notebook computer manufacturers that use lithium-ion battery
cells manufactured by Sony. A portion of the provision totaling
15.7 billion yen was reversed in the current fiscal year based on
the actual results of recalls and replacements as compared to
our original estimates. (Refer to Performance by Product
Category for Electronics within Operating Results.)
Sony may be adversely affected by its employee benefit
obligations.
Sony recognizes the unfunded pension obligation as consisting of
the (i) Projected Benefit Obligation (PBO) less (ii) the fair value of
pension plan assets. Actuarial gains and losses are included in
pension expenses in a systematic manner over employees
average remaining service periods in a manner consistent with
FAS No. 87, Employers Accounting for Pensions, FAS No. 158,
Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans and the related amendments to those
standards. Any decrease of the pension asset value due to low
returns from investments or increases in the PBO due to a lower
discount rate, increases in rates of compensation and certain
other actuarial assumptions would increase the unfunded pension
obligations, and could, subject to the provisions of FAS No. 87,
result in an increase in pension expenses recorded as cost of
sales or as a selling, general and administrative expense. (Refer to
Note 14 of Notes to Consolidated Financial Statements for more
information regarding Sonys pension and severance plans. Also
refer to Critical Accounting Policies.)
79
Most pension assets and liabilities recognized on Sonys

consolidated balance sheets relate to Japanese plans, which are
subject to the Japanese Defined Benefit Corporate Pension Plan
Act pursuant to which Sony is required to meet certain financial
criteria including periodic actuarial revaluation and annual settlement of gains or losses of the plan. In the eventuality that the
actuarial reserve required by law exceeds the fair value of pension
assets, Sony may be required to make an additional contribution
to the plan, which would reduce consolidated cash flow. Similarly,
if Sony is required to make an additional contribution to each
foreign plan to meet any funding requirements in accordance with
local laws and regulations in each country, Sonys consolidated
cash flow might be adversely affected.
Changes in Sonys tax rates or exposure to additional
tax liabilities could adversely affect its earnings and
financial condition.
Sony is subject to income taxes in Japan and numerous other
jurisdictions. Significant judgment is required in determining its
worldwide provision for income taxes. In the ordinary course of
our business, there are many transactions, including intercompany charges, and calculations where the ultimate tax determination is uncertain. Also, Sonys future effective tax rates could
be unfavorably affected by changes in the mix of earnings in
countries with differing statutory rates.
Further, Sony is subject to continuous examination of its
income tax returns by tax authorities. As a result, Sony regularly
assesses the likelihood of adverse outcomes resulting from
these examinations to determine the adequacy of its provision
for income taxes. However, there can be no assurance that the
outcomes of these examinations will not have an adverse effect
on Sonys operating results and financial condition.
In addition, if Sony is unable to generate sufficient future
taxable income in certain jurisdictions, or if there is a significant
change in the actual effective tax rates or the time period within
which the underlying temporary differences become taxable or
deductible, Sony could be required to reduce the amount of its
deferred tax assets or increase its valuation allowances against
its deferred tax assets, resulting in an increase in its effective tax
rate and an adverse impact on future operating results.
Sonys business could suffer as a result of adverse outcomes
of current or future litigation and regulatory actions.
Sony faces the risk of litigation and regulatory proceedings in
connection with its operations. Lawsuits, including regulatory
actions, may seek recovery of very large indeterminate amounts
or limit Sonys operations, and the possibility that they may arise
and their magnitude may remain unknown for substantial
periods of time. A substantial legal liability or adverse regulatory
outcome and the substantial cost to defend the litigation or
80
regulatory proceedings could have a material adverse effect on

Sonys business, results of operations, financial condition, cash
flows and reputation.
Sony may be accused of infringing others intellectual
property rights and be liable for significant damages.
Sonys products incorporate a wide variety of technologies.
Claims have been and could be asserted against Sony that such
technology infringes the intellectual property owned by others.
Such claims might require us to enter into settlement or
licenseagreements, to pay significant damage awards, and/or
to face a temporary or permanent injunction prohibiting Sony
from marketing or selling certain of its products, which could
have a material adverse effect on Sonys business, results of
operations, financial condition, and reputation.
Sony is dependent upon certain intellectual property
rights of others, and Sony may not be able to continue to
obtain necessary licenses to employ technology covered
by such rights
Many of Sonys products are designed under the license of
patents and other intellectual property rights from third parties
who have developed technologies that are protected by such
rights. Based upon past experience and industry practice, Sony
believes that it will be able to obtain or renew licenses relating to
various intellectual properties useful in its business that it needs
in the future; however, such licenses may not be available at all
or on acceptable terms, and Sony may need to redesign or
discontinue marketing or selling such products as a result.
Increased reliance on external suppliers may increase
financial, reputational and other risks to Sony.
With the increasing necessity of pursuing quick business
development and high operating efficiency with limited managerial resources, Sony increasingly procures from third-party
suppliers components (including LCD panels for televisions),
and technologies (such as operating systems for PCs). Sony
has also become more reliant upon the services of third-party
original equipment and design manufacturers in the Electronics
and Game segments. In addition, Sony consigns to external
suppliers extensive activities including procurement, logistics,
sales and other services. Reliance on outside sources
increases the chance that Sony will be unable to prevent
products from incorporating defective or inferior third-party
technology or components. Products with such defects can
adversely affect Sonys consolidated sales and its reputation
for quality products. This reliance on external suppliers may
also expose Sony to the effects of insufficient compliance with
applicable regulations or infringement of third-party intellectual
property rights by external suppliers as well as certain risks,
such as accidents or natural disasters, to which an external

supplier might be exposed.
Sony is subject to environmental and occupational health
and safety regulations that can increase the costs of
operations or limit its activities.
Sony is subject to a broad range of environmental and occupational health and safety laws and regulations, including laws and
regulations relating to air pollution, water pollution, the management, elimination or reduction of the use of hazardous substances, decreases in the level of standby power of certain
products, waste management, recycling of products, batteries
and packaging materials, site remediation and worker and
consumer health and safety. These regulations could become
more stringent or additional regulations could be adopted in the
future, which could cause us to incur additional compliance
costs or limit our activities. Further, a failure to comply with
applicable environmental or health and safety laws could result
in fines, penalties, legal judgments or other costs or remediation
obligations. Such a finding of noncompliance could also injure
our brand image. Such events could adversely affect our
financial performance.
We monitor and evaluate new environmental and health and
safety requirements that may affect our operations. Sony sees
issues related to climate change as a potential risk if we do not
respond or undertake environmental activities appropriately.
Sony recognizes that climate change issues could possibly lead
to an increase in additional costs due to new regulations
including carbon taxes and governmental policies regarding
energy efficiency for electronics products. A new regulation
regarding logistics has already been introduced in Japan and
other countries may introduce similar regulations in the near
future. In addition, in the event that we are unable to respond
appropriately to consumers growing concerns with issues
related to climate change, there is a risk that Sonys reputation
could be harmed and that consumers may choose to purchase
products from companies other than Sony.
The EUs Registration, Evaluation, Authorisation and
Restriction of Chemicals program (REACH) came into effect
as of June 2007. In general, REACH requires manufacturers,
users and importers of a broad range of chemical substances
to register for these chemicals and uses of chemicals up and
down the supply chain and perform a range of tests and
assessments on those substances, making the results
available to the public and the EU regulators. For certain
types of chemical substances, manufacturers, users and
importers of the chemical substance are required to convey
the information about the designated substance in its supply
chain. Going forward, as registrations and test data are
processed and evaluated under the REACH program, actions
could be taken that could affect the cost and availability of

certain chemicals, and users may have to shift to the use of
more expensive and/or less effective substitutes. The various
obligations under REACH are to be phased in over a period
of time, and we will continue to evaluate the potential impact
of these regulations, including whether REACH could directly
or indirectly increase our costs or restrict our activities, which
could have an adverse impact on our results of operations
and financial condition.
Sony has established an internal risk management system in
response to two directives enacted by the EU: The Restriction of
Hazardous Substances Directive (RoHS) and the Waste
Electrical and Electronic Equipment Directive (WEEE). Similar
regulations are being formulated in other parts of the world,
including China. We may incur substantial costs in complying
with other similar programs that might be enacted outside
Europe in the future.
American Depositary Shareholders have fewer rights than
shareholders and may not be able to enforce judgments
based on U.S. securities laws.
The rights of shareholders under Japanese law to take
actions, including voting their shares, receiving dividends and
distributions, bringing derivative actions, examining Sonys
accounting books and records and exercising appraisal rights
are available only to shareholders of record. Because the
depositary, through its custodian agents, is the record holder
of the shares underlying the American Depositary Shares
(ADSs), only the depositary can exercise those rights in
connection with the deposited shares. The depositary will
make efforts to vote the shares underlying ADSs in accordance with the instructions of ADS holders and will pay the
dividends and distributions collected from Sony. However,
ADS holders will not be able to bring a derivative action,
examine Sonys accounting books and records, or exercise
appraisal rights through the depositary.
Sony Corporation is incorporated in Japan with limited
liability. A majority of our directors and corporate executive
officers are non U.S. residents, and a substantial portion of the
assets of Sony Corporation and the assets of our directors and
corporate executive officers are located outside the U.S. As a
result, it may be more difficult for investors to enforce against
Sony Corporation or such persons the judgments obtained in
U.S. courts predicated upon the civil liability provisions of the
federal and state securities laws of the U.S. or judgments
obtained in other courts outside Japan. There is doubt as to
the enforceability in Japanese courts, in original actions or in
actions for enforcement of judgments of U.S. courts, of civil
liabilities predicated solely upon the federal and state securities
laws of the U.S.
81
CRITICAL ACCOUNTING POLICIES

The preparation of the consolidated financial statements in
conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
On an ongoing basis, Sony evaluates its estimates which are
based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The results of these evaluations form the basis for
making judgments about the carrying values of assets and
liabilities and the reported amounts of expenses that are not
readily apparent from other sources. Actual results may differ
from these estimates under different assumptions. Sony
considers an accounting policy to be critical if it is important
to its financial condition and results, and requires significant
judgment and estimates on the part of management in its
application. Sony believes that the following represent its critical
accounting policies.
decline is temporary in nature due to the existence of positive

factors that overcome the duration or magnitude of the decline.
On the other hand, there may be cases where impairment
losses are recognized when the decline in the fair value of the
security is less than 20 percent or such decline has not existed
for an extended period of time, as a result of considering specific
factors that may indicate the decline in the fair value is otherthan-temporary.
The assessment of whether a decline in the value of an
investment is other-than-temporary is often subjective in nature
and involves certain assumptions and estimates concerning the
expected operating results, business plans and future cash
flows of the issuer of the security. Accordingly, it is possible that
investments in Sonys portfolio that have had a decline in value
that Sony currently believes to be temporary may be determined
to be other-than-temporary in the future based on Sonys
evaluation of additional information such as continued poor
operating results, future broad declines in value of worldwide
equity markets and the effect of worldwide interest rate fluctuations. As a result, unrealized losses recorded for investments
may be recognized and reduce income in future periods.
Investments
Valuation
Sonys investments are comprised of debt and equity securities

accounted for under both the cost and equity method of
accounting. If it has been determined that an investment has
sustained an other-than-temporary decline in its value, the
investment is written down to its fair value by a charge to
earnings. Sony regularly evaluates its investment portfolio to
identify other-than-temporary impairments of individual securities. Factors that are considered by Sony in determining whether
an other-than-temporary decline in value has occurred include:
the length of time and extent to which the market value of the
security has been less than its original cost, the financial
condition, operating results, business plans and estimated future
cash flows of the issuer of the security, other specific factors
affecting the market value, deterioration of credit condition of the
issuers, sovereign risk, and whether or not Sony is able to retain
the investment for a period of time sufficient to allow for the
anticipated recovery in market value.
In evaluating the factors for available-for-sale securities whose
fair values are readily determinable, Sony presumes a decline in
value to be other-than-temporary if the fair value of the security
is 20 percent or more below its original cost for an extended
period of time (generally for a period of up to six months). This
criterion is employed as a threshold to identify securities that
may have a decline in value that is other-than-temporary. The
presumption of an other-than-temporary impairment in such
cases may be overcome if there is evidence to support that the
82
of inventory
Sony values its inventory based on the lower of cost or market.
Sony writes down inventory in an amount equal to the difference between the cost of the inventory and the net realizable
valuei.e., less reasonably predictable costs of completion
and disposal. However, if actual market conditions are less
favorable than projected and further price decreases are
needed, additional inventory write-downs may be required.
Additionally, as Sony evaluates its manufacturing cost in yen
while it sets its sales prices in euros and U.S. dollars for some
products, Sonys results may be negatively impacted by future
exchange rate fluctuations.
Impairment
of Long-Lived assets
Sony reviews the recoverability of the carrying value of its
long-lived assets held and used and long-lived assets to be
disposed of whenever events or changes in circumstances
indicate that the carrying value of the assets may not be
recoverable. This review is performed using estimates of future
cash flows by product category (e.g. CRT TV display) or entity
(e.g. entertainment complex in the U.S.). If the carrying value of
the asset is considered impaired, an impairment charge is
recorded for the amount by which the carrying value of the asset
exceeds its fair value. Fair value is determined using the present
value of estimated net cash flows or comparable market values.
Management believes that the estimates of future cash flows
and fair value are reasonable; however, changes in estimates
resulting in lower future cash flows and fair value due to unforeseen changes in business assumptions could negatively affect
the valuations of those long-lived assets.
impairment charges for long-lived assets totaling 59,762 million
yen, which included 25,506million yen for the impairment of
long-lived assets of CRT TV display manufacturing facilities to be
held and used in the U.S. in connection with certain restructuring activities in the Electronics segment. Fair value of these
assets was determined using estimated future discounted cash
flows which were based on the best information available. The
impairment charge also included 8,522 million yen for the
impairment of long-lived assets of Sonys entertainment complex
to be held for sale in the U.S. in connection with restructuring
activities of non-core businesses in All Other. The impairment
charge was based on the negotiated sales price of the complex.
yen, which included 3,572 million yen for the impairment of
long-lived assets of CRT TV display manufacturing facilities to be
held and used in the U.S., East Asia and Southeast Asia in
connection with certain restructuring activities in the Electronics
segment. Fair value of these assets was determined using
estimated future discounted cash flows which were based on
the best information available.
yen, which included 6,457 million for impairment of long-lived
assets of LCD rear-projection television manufacturing facilities
to be held and used worldwide in connection with certain
restructuring activities in the Electronics segment. Fair value of
these assets was determined using estimated future discounted
cash flows which were based on the best information available.
Goodwill
and Other Intangible Assets

Goodwill and certain other intangible assets that are determined
to have an indefinite life are not amortized and are tested
annually for impairment during the fourth quarter of each fiscal
year, and the assets are also tested between the annual tests if
an event occurs or circumstances change that would more likely
than not reduce the fair value of these assets below their
carrying amount. Such an event would include unfavorable
variances from established business plans, significant changes
in forecasted results or volatility inherent to external markets and
industries, which are periodically reviewed by Sonys management. Specifically, goodwill impairment is determined using a
two-step process. The first step of the goodwill impairment test
is used to identify potential impairment by comparing the fair
value of a reporting unit (Sonys operating segments or one level
below the operating segments) with its carrying amount,

including goodwill. If the fair value of a reporting unit exceeds its
carrying amount, goodwill of the reporting unit is considered not
impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit exceeds its fair
value, the second step of the goodwill impairment test is
performed to measure the amount of impairment loss, if any.
The second step of the goodwill impairment test compares the
implied fair value of the reporting units goodwill with the carrying
amount of that goodwill. If the carrying amount of the reporting
units goodwill exceeds the implied fair value of that goodwill, an
impairment loss is recognized immediately in an amount equal
to that excess. The implied fair value of goodwill is determined in
the same manner as the amount of goodwill recognized in a
business combination. That is, the fair value of the reporting unit
is allocated to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit
had been acquired in a business combination and the fair value
of the reporting unit was the purchase price paid to acquire the
reporting unit. Other intangible assets are tested for impairment
by comparing the fair value of the intangible asset with its
carrying value. If the carrying value of the intangible asset
exceeds its fair value, an impairment loss is recognized in an
amount equal to that excess.
Determining the fair value of a reporting unit under the first
step of the goodwill impairment test and determining the fair
value of individual assets and liabilities of a reporting unit
(including unrecognized intangible assets) under the second
step of the goodwill impairment test is judgmental in nature and
often involves the use of significant estimates and assumptions.
Similarly, estimates and assumptions are used in determining
the fair value of other intangible assets. These estimates and
assumptions could significantly impact whether or not an
impairment charge is recognized as well as the magnitude of
any such charge. In its impairment review, Sony performs
internal valuation analyses or utilizes third-party valuations when
management believes it to be appropriate, and considers other
market information that is publicly available. Estimates of fair
value are primarily determined using discounted cash flow
analysis. This approach uses significant estimates and assumptions including projected future cash flows, the timing of such
cash flows, discount rates reflecting the risk inherent in future
cash flows, perpetual growth rates, determination of appropriate
market comparables and the determination of whether a
premium or discount should be applied to comparables.
Management believes that the estimates of future cash flows
and fair value are reasonable; however, changes in estimates
resulting in lower future cash flows and fair value due to unforeseen changes in business assumptions could negatively affect
83
the valuations, which may result in Sony recognizing impairment

charges for goodwill and other intangible assets in the future. In
order to evaluate the sensitivity of the fair value calculations on
the impairment analysis, Sony applied a hypothetical 10 percent
decrease to the fair value of each reporting unit. As of March 31,
2008, a hypothetical 10 percent decrease to the fair value of
each reporting unit would not have resulted in a material impact
on the statement of income.
Pension
Benefits Costs
Employee pension benefit costs and obligations are dependent
on certain assumptions including discount rates, retirement
rates and mortality rates, which are based upon current statistical data, as well as expected long-term rates of return on plan
assets and other factors. Specifically, the discount rate and
expected long-term rate of return on assets are two critical
assumptions in the determination of periodic pension costs and
pension liabilities. Assumptions are evaluated at least annually,
or at the time when events occur or circumstances change and
these events or changes could have a significant effect on these
critical assumptions. In accordance with U.S. GAAP, actual
results that differ from the assumptions are accumulated and
amortized over future periods. Therefore, actual results generally
affect recognized costs and the recorded obligations for
pensions in future periods. While management believes that the
assumptions used are appropriate, differences in actual experience or changes in assumptions may affect Sonys pension
obligations and future costs.
Sonys principal pension plans are its Japanese pension plans.
Foreign pension plans are not significant individually, to total plan
assets and pension obligations.
To determine the benefit obligation of the Japanese pension
plans, Sony used a discount rate of 2.3 percent for its Japanese
pension plans as of March 31, 2008. The discount rate was
determined by using currently available information about rates
of return on high-quality fixed-income investments available and
expected to be available during the period to maturity of the
pension benefit obligation in consideration of amounts and
timing of cash outflows for expected benefit payments. Such
available information about rates of returns is collected from
Bloomberg and credit rating agencies. The 2.3 percent discount
rate remains unchanged from fiscal year ended March 31, 2007
and reflects current market interest rate conditions.
To determine the expected long-term rate of return on pension
plan assets, Sony considers the current and expected asset
allocations, as well as historical and expected long-term rates of
return on various categories of plan assets. For Japanese
pension plans, the expected long-term rate of return on pension
plan assets was 3.7 percent and 4.0 percent as of March 31,
84
2007 and 2008 respectively. The actual loss on pension plan

assets for the fiscal year ended March 31, 2008 was 8.5
percent. Actual results that differ from the expected return on
plan assets are accumulated and amortized as a component of
pension costs over the average future service period, thereby
reducing the year-to-year volatility in pension costs. As of March
31, 2007 and 2008, Sony had net actuarial losses of 200.6
billion yen and 242.1 billion yen, respectively, including losses
related to plan assets. For the fiscal year ended March 31, 2008,
the net actuarial loss increased due to the difference between
the actual rate of return on pension plan assets and the
expected long-term rate of return on pension plan assets. The
net actuarial loss reflects the overall unfavorable return on
investment over the past several years and will result in an
increase in pension costs as they are recognized.
Sony adopted FAS No. 158 in the financial statements for
the year ended March 31, 2007. As a result, Sony recorded
a pension liability adjustment for the prior service cost, net
actuarial loss and obligation existing at transition totaling 9.5
billion yen as of March 31, 2007. This adjustment was established by a charge to stockholders equity, resulting in no
impact to the accompanying consolidated statements of
income. Refer to Note 14 of Notes to Consolidated Financial
Statements for more information regarding Sonys pension and
severance plans.
The following table illustrates the effect of changes in the
discount rate and the expected return on pension plan assets,
while holding all other assumptions constant, for Japanese
pension plans as of March 31, 2008.
Change In Assumption
Yen in billions
Pre-tax
PBO
Pension
costs
Equity
(net of tax)
decrease in discount rate . . . . /+25.4
/+2.0
+/1.2
/+1.2
+/0.7
25 basis point increase /

25 basis point increase /
decrease in expected
return on assets . . . . . . . . . . .
Stock-based
compensation
Sony accounts for stock-based compensation using the fair
value based method. Fair value is measured on the date of grant
using the Black-Scholes option-pricing model. Sony estimates
the forfeiture rate based on its historical experience for the stock
acquisition rights plans, and recognizes this compensation
expense, net of an estimated forfeiture rate, only for the stock
acquisition rights expected to vest over the requisite service
period. The expense is primarily included in selling, general and
administrative expenses.
The Black-Scholes option-pricing model requires various

highly judgmental assumptions including expected stock price
volatility and the expected life of each award. In addition,
judgment is also required to estimate the expected forfeiture rate
and recognize expense only for those rights expected to vest.
Management believes that these estimates are reasonable;
however, if actual results differ significantly from these estimates,
stock-based compensation expense may differ materially in the
future from that recorded in the current period.
Deferred
Tax Asset Valuation

Sony records valuation allowances to reduce deferred tax assets
to the amount that management believes is more likely than not
to be realized. In assessing the likelihood of realization, Sony
considers all currently available evidence for future years, both
positive and negative, supplemented by information of historical
results and future earning plans along with tax planning strategies and future reversals of existing taxable temporary differences for each tax jurisdiction. Sony also considers its ability to
utilize operating loss carryforwards and tax credit carryforwards
prior to expiration in each tax jurisdiction. The estimates and
assumptions used in determining future taxable income are
consistent with those used in Sonys approved forecasts of
future operations. However, if Sony is unable to generate
sufficient future taxable income in certain jurisdictions, or if there
is a significant change in the actual effective tax rates or the
time period within which the underlying temporary differences
become taxable or deductible, Sony could be required to
reduce the amount of its deferred tax assets or increase its
valuation allowances against its deferred tax assets, resulting in
an increase in its effective tax rate and an adverse impact on
future operating results. Although realization is not assured,
management believes it is more likely than not that all of the
deferred tax assets, less valuation allowance, will be realized.
Although Sony Computer Entertainment Inc. (SCEI),
Sony Computer Entertainment America Inc. (SCEA) and
Sony Computer Entertainment Europe Limited (SCEE) have
recorded cumulative losses in recent years, Sony concluded
that it is more-likely-than-not that SCEIs, SCEAs and SCEEs
deferred tax assets will be fully realized based on the consideration of both positive and negative evidence, including the
Game segments projected income from operating activities
and the existence of qualifying tax-planning strategies.
Film
Accounting
An aspect of film accounting that requires the exercise of
judgment relates to the process of estimating the total revenues
to be received throughout a films life cycle. Such estimate of a
films ultimate revenue is important for two reasons. First, while a
film is being produced and the related costs are being capitalized, it is necessary for management to estimate the ultimate
revenue, less additional costs to be incurred, including exploitation costs which are expensed as incurred, in order to determine
whether the value of a film has been impaired and thus requires
an immediate write off of unrecoverable film costs. Second, the
amount of film costs recognized as cost of sales for a given film
as it is exhibited in various markets throughout its life cycle is
based upon the proportion that current period actual revenues
bear to the estimated ultimate total revenues.
Management bases its estimates of ultimate revenue for
each film on several factors including the historical performance of similar genre films, the star power of the lead actors
and actresses, the expected number of theaters at which the
film will be released, anticipated performance in the home
entertainment, television and other ancillary markets, and
agreements for future sales. Management updates such
estimates based on the actual results to date for each film.
For example, a film that has resulted in lower than expected
theatrical revenues in its initial weeks of release would
generally have its theatrical, home entertainment and television
distribution ultimate revenues adjusted downward; a failure to do
so would result in the understatement of amortized film costs for
the period.
Future
Insurance Policy Benefits

Liabilities for future insurance policy benefits are established in
amounts adequate to meet the estimated future obligations of
policies in force. These liabilities are computed by the net level
premium method based upon estimates as to future investment
yield, mortality, morbidity, withdrawals and other factors. Future
policy benefits are computed using interest rates ranging from
1.00 percent to 4.90 percent. Mortality, morbidity and withdrawal assumptions for all policies are based on either the
subsidiarys own experience or various actuarial tables.
Generally these assumptions are locked-in upon the issuance
of new insurance. While management believes that the assumptions used are appropriate, differences in actual experience or
changes in assumptions may affect Sonys future insurance
policy benefits.
Equity
in net income of affiliated companies

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 for the fiscal year ending March 31, 2009,
Sony will report equity in earnings of affiliated companies
as a component of operating income.
85
RECENTLY ADOPTED ACCOUNTING

STANDARDS
Accounting
by insurance enterprises for

deferred acquisition costs in connection with
modifications or exchanges of insurance
contracts
In September 2005, the Accounting Standards Executive
Committee of the American Institute of Certified Public
Accountants issued the Statement of Position (SOP) 05-1,
Accounting by Insurance Enterprises for Deferred Acquisition
Costs in Connection with Modifications or Exchanges of
Insurance Contracts. SOP 05-1 provides guidance on
accounting for deferred acquisition costs on internal replacements of insurance and investment contracts other than
those specifically described in FAS No. 97, Accounting and
Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and for Realized Gains and Losses from the Sales
of Investments. Sony adopted SOP 05-1 on April 1, 2007.
The adoption of SOP 05-1 did not have a material impact on
Sonys results of operations and financial position.
Accounting
for servicing of financial assets

In March 2006, the Financial Accounting Standards Board
(FASB) issued FAS No. 156, Accounting for Servicing of
Financial Assetsan amendment of FASB Statement No. 140.
This statement amends FAS No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities with respect to the accounting for separately recognized servicing assets and servicing liabilities. Sony adopted
FAS No. 156 on April 1, 2007. The adoption of FAS No. 156 did
not have a material impact on Sonys results of operations and
financial position.
Accounting
for uncertainty in income taxes

In June 2006, the FASB issued FASB Interpretation (FIN)
No. 48, Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109. FIN No. 48
clarifies the accounting for uncertainty in income taxes
recognized in an enterprises financial statements in accordance with FAS No. 109, Accounting for Income Taxes.
FIN No. 48 prescribes a minimum recognition threshold and
measurement attribute for the financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. FIN No. 48 also provides
guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and
transition. Effective April 1, 2007, Sony adopted the
86
provision of FIN No. 48. As a result of the adoption, a

charge against beginning retained earnings totaling 4,452
million yen was recorded. As of April 1, 2007, the total
unrecognized tax benefits were 223,857 million yen, of
which 129,632 million yen, if recognized, would affect
Sonys effective tax rate.
How
taxes collected from customers and

remitted to governmental authorities should
be presented in the income statement
In June 2006, the Emerging Issues Task Force (EITF) issued
EITF Issue No. 06-3, How Taxes Collected from Customers and
Remitted to Governmental Authorities Should be Presented in
the Income Statement. EITF Issue No. 06-3 requires disclosure
of the accounting policy for any tax assessed by a governmental
authority that is imposed concurrently on a specific revenueproducing transaction between a seller and a customer. Sony
adopted EITF Issue No. 06-3 on April 1, 2007. The adoption of
EITF Issue No. 06-3 did not have a material impact on Sonys
results of operations.
RECENT PRONOUNCEMENTS
Fair
value measurements
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. FAS No. 157 will be effective for Sony beginning
April 1, 2008. 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. The adoption of FAS No. 157 as it relates to
financial assets and liabilities is not expected to have a
material impact on Sonys consolidated results of operations
and financial position. Sony is currently evaluating the
impact for nonfinancial assets and liabilities.
Fair
value option for financial assets and

financial 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. FAS No. 159 is required to be
adopted by Sony in the first quarter beginning April 1, 2008.
The adoption of FAS No. 159 is not expected to have a
material impact on Sonys consolidated results of operations
and financial position. 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.
Business
combinations
In December 2007, the FASB issued FAS No. 141(R), Business
Combinations, which applies prospectively to business combinations for which the acquisition date is on or after the beginning
of the first fiscal year beginning on or after December 15, 2008.
FAS No. 141(R) requires that the acquisition method of accounting be applied to a broader range of business combinations,
amends the definition of a business combination, provides a
definition of a business, requires an acquirer to recognize an
acquired business at its fair value at the acquisition date and
requires the assets and liabilities assumed in a business combination to be measured and recognized at their fair values as of
the acquisition date, with limited exceptions. Sony will adopt
FAS No. 141(R) as of April 1, 2009, and its effects on future
periods will depend on the nature and significance of any
acquisitions subject to FAS No. 141(R).
presentation and disclosure requirements. Sony is currently

evaluating the impact of adopting FAS No. 160.
Disclosures
about derivative instruments and

hedging activities
In March 2008, the FASB issued FAS No. 161, Disclosures
about Derivative Instruments and Hedging Activitiesan
amendment of FASB Statement No. 133. FAS No. 161 amends
and expands the disclosures required by FAS No. 133 to
provide more information about how and why an entity uses
derivative instruments, how derivative instruments and related
hedged items are accounted for under FAS No. 133 and its
interpretations, and how derivative instruments and related
hedged items affect an entitys financial position, financial
performance, and cash flows. FAS No. 161 is effective for
financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. Sony is currently evaluating
the additional disclosures required by FAS No. 161.
The
hierarchy of generally accepted

accounting principles
In May 2008, the FASB issued FAS No. 162, The Hierarchy
of Generally Accepted Accounting Principles. FAS No. 162
identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of
financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting
principles.
FAS No. 162 will be effective 60 days following the SECs
approval of the Public Company Accounting Oversight Board
amendments to AU Section 411. Sony is currently evaluating
the impact of adopting FAS No. 162.
Financial
Noncontrolling
interests in consolidated
financial statements
In December 2007, the FASB issued FAS No. 160, Noncontrolling Interests in consolidated financial statements
an amendment of ARB No. 51. FAS No. 160 requires that
the noncontrolling interest in the equity of a subsidiary be
accounted for and reported as equity, provides revised guidance on the treatment of net income and losses attributable
to the noncontrolling interest and changes in ownership
interests in a subsidiary and requires additional disclosures
that identify and distinguish between the interests of the
controlling and noncontrolling owners. Pursuant to the transition provisions of FAS No. 160, Sony will adopt the statement as of April 1, 2009, via retrospective application of the
guarantee insurance contracts

In May 2008, the FASB issued FAS No. 163, Accounting for
Financial Guarantee Insurance Contracts. FAS No. 163
clarifies how FAS No. 60, Accounting and Reporting by
Insurance Enterprises, applies to financial guarantee insurance contracts issued by insurance enterprises, including the
recognition and measurement of premium revenue and claim
liabilities. It also requires expanded disclosures about financial
guarantee insurance contracts. FAS No. 163 will be effective
for Sony as of April 1, 2009, except for disclosures about the
insurance enterprises risk-management activities. Disclosures
about the insurance enterprises risk-management activities
will be effective the first period beginning after issuance of
FAS No. 163. Sony is currently evaluating the impact of
adopting FAS No. 163.
87
Five-Year Summary of Selected Financial Data

Sony Corporation and Consolidated SubsidiariesYears ended March 31
2004
Yen in millions
(Yen per share amounts)
2005
2006
2007
2008
FOR THE YEAR

Sales and operating revenue . . . . . . . . . . . . . . . . . .
7,530,635
7,191,325
7,510,597
8,295,695
8,871,414
Operating income. . . . . . . . . . . . . . . . . . . . . . . . . . .
133,146
145,628
Income before income taxes . . . . . . . . . . . . . . . . . .
144,067
157,207
226,416
71,750
374,482
286,329
102,037
466,317
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,774
Equity in net income of affiliated companies. . . . . . . . .
1,714
16,044
176,515
53,888
203,478
29,039
13,176
78,654
100,817
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88,511
163,838
123,616
126,328
369,435
Per share data:

Common stock
Net income
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
95.97
175.90
122.58
126.15
368.33
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . .
87.00
158.07
116.88
120.29
351.10
Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . .
25.00
25.00
25.00
25.00
25.00
923,650
931,125
997,781
1,001,403
1,003,001
(41.80)
17.21
per share data (thousands of shares). . . . . . . .
3,072
3,072
Depreciation and amortization*. . . . . . . . . . . . . . . . .
366,269
372,865
plant and equipment). . . . . . . . . . . . . . . . . . . . . . .
378,264
356,818
384,347
414,138
335,726
Research and development expenses . . . . . . . . . . .
514,483
502,008
531,795
543,937
520,568
Net working capital. . . . . . . . . . . . . . . . . . . . . . . . . .
381,140
746,803
Stockholders equity. . . . . . . . . . . . . . . . . . . . . . . . .
2,378,002
2,870,338
common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,563.67
2,872.21
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9,090,662
9,499,100
10,607,753
11,716,362
12,552,739
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . .
926,418
997,211
1,001,680
1,002,897
1,004,443
Subsidiary tracking stock . . . . . . . . . . . . . . . . . . .
3,072
3,072
Number of weighted-average shares for basic

per share data (thousands of shares). . . . . . . .
Subsidiary tracking stock

Net income (loss)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of weighted-average shares for basic

381,843
400,009
428,010
Capital expenditures (additions to property,
AT YEAR-END
569,296
3,203,852
994,871
3,370,704
986,296
3,465,089
Stockholders equity per share attributable to

3,200.85
3,363.77
3,453.25
Number of shares issued at year-end

(thousands of shares):
* Including amortization expenses for intangible assets and for deferred insurance acquisition costs
Note: Effective April 1, 2006, Sony reclassified royalty income as a component of sales and operating revenue, rather than as a component of other income as previously
recorded. In connection with this reclassification, sales and operating revenue, operating income and other income for the fiscal years ended March 31, 2004, 2005
and 2006 have been reclassified to conform with the presentation of these items for the fiscal year ended March 31, 2007. The amounts of royalty income
reclassified from other income to sales and operating revenue for the fiscal years ended March 31, 2004, 2005 and 2006 were 34,244, 31,709, and 35,161 million
yen, respectively. In addition to the above, certain reclassifications of the financial statements for the fiscal years ended March 31, 2004, 2005 and 2006 have been
made to conform to the presentation for the fiscal year ended March 31, 2007.
88
Quarterly Financial and Stock Information

Sony Corporation and Consolidated SubsidiariesYears ended March 31 (Unaudited)
Yen in billions (Yen per share amounts)
1st quarter
2nd quarter
2007
2008
1,744.2

27.0

54.0

24.8
1,976.5
99.3
83.8
39.7
3.6
32.3
22.0
66.5
Per share data of common stock

Net income (loss)
Basic. . . . . . . . . . . . . . . . . . . . . 32.25
Diluted. . . . . . . . . . . . . . . . . . . .
30.75
66.29
63.14
104.0
3rd quarter
4th quarter
2008
2007
2008
1,854.2
(20.8)
(26.1)
(7.6)
2,083.0
90.5
87.9
34.9
2,607.7
178.9
179.8
61.5
2,859.0
189.4
288.5
135.2
2,089.6
(113.4)
(105.7)
(24.9)
1,952.8
(4.7)
6.2
(6.3)
19.7
1.7
21.1
73.7
43.0
159.9
46.9
200.2
12.3
(67.6)
10.8
29.0
1.68
1.60
73.50
70.09
159.70
152.49
199.60
190.29
(67.44)
(67.44)
28.95
27.63
93.7
100.6
99.9
109.7
115.2
113.8
95.0
126.0
90.0
143.5
75.8
131.7
88.0
133.5
67.1
125.5
102.1
147.6
97.9
137.4
Tokyo Stock Exchange price per

share of common stock:
High. . . . . . . . . . . . . . . . . . . . . . . . . 6,200
Low . . . . . . . . . . . . . . . . . . . . . . . . .
4,660
7,190
5,860
5,360
4,610
6,580
5,050
5,190
4,340
6,410
5,100
6,540
5,120
6,300
3,910
New York Stock Exchange price

per American Depositary Share:
High. . . . . . . . . . . . . . . . . . . . . . . . . $ 52.29
Low . . . . . . . . . . . . . . . . . . . . . . . . .
40.67
$ 59.84
49.77
$ 46.40
39.30
$ 54.12 . $ 43.78
43.86
37.24
$ 56.75
44.57
$ 53.34
42.73
$ 57.19
39.91
Sales and operating revenue . . . . . . . .

Operating income (loss). . . . . . . . . . . .
Income (loss) before income taxes. . . .
Income taxes. . . . . . . . . . . . . . . . . . . .
Equity in net income of affiliated
companies. . . . . . . . . . . . . . . . . . . . .
Net income (loss). . . . . . . . . . . . . . . . .
Depreciation and amortization*. . . . . . . 91.3

134.1
(additions to fixed assets). . . . . . . . . .
R&D expenses. . . . . . . . . . . . . . . . . . .
119.4
2007
2007
2008
* Including amortization expenses for intangible assets and for deferred insurance acquisition costs
89
Segment Information
Sales and Operating Revenue by Business Segment*

Yen in millions
2006
Electronics
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,796,061
Percentage of sales and operating revenue** . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63.9%
Intersegment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
394,167
2007
2008
5,443,336
65.6%
629,042
5,931,708
66.9%
682,102
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,190,228
6,072,378
6,613,810
Game
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
918,252
12.2
40,368
974,218
11.7
42,571
1,219,004
13.7
65,239
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
958,620
1,016,789
1,284,243
Pictures
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
745,859
9.9

966,260
11.7

855,482
9.7
2,452
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
745,859
966,260
857,934
Financial Services
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
720,566
9.6
22,649
624,282
7.5
25,059
553,216
6.2
27,905
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
743,215
649,341
581,121
All Other
Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intersegment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
329,859
4.4
81,676
287,599
3.5
67,525
312,004
3.5
70,194
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
411,535
355,124
382,198
Elimination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(538,860)
(764,197)
(847,892)
Consolidated total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,510,597
8,295,695
8,871,414
* Electronics intersegment amounts primarily consist of transactions with the Game segment, Pictures segment and All Other. All Other intersegment amounts primarily
consist of transactions with the Electronics and Game segments.
** Percentage of sales and operating revenue to outside customers.
Operating Income (loss) by Business Segment*

Electronics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Game. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pictures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yen in millions
2006
2007
2008
8,820
8,748
27,436
188,323
18,837
160,536
(232,325)
42,708
84,142
28,871
356,030
(124,485)
54,011
22,633
50,212
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and elimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
252,164
(25,748)
83,932
(12,182)
358,401
16,081
Consolidated total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
226,416
71,750
374,482
* Commencing with the first quarter ended June 30, 2007, Sony has partly realigned its business segment configuration. In accordance with this change, results of the
previous year have been reclassified to conform to the presentation for the fiscal year ended March 31, 2008.
90
Electronics Sales and Operating Revenue to Customers by Product Category

2006
Audio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 536,187
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.2%
Yen in millions
2007
2008
522,879
9.6%
558,624
9.4%
Video. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,021,325
21.3
1,143,120
21.0
1,279,225
21.6
Televisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
927,769
19.3
1,226,971
22.5
1,367,078
23.0
Information and Communications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
842,537
17.6
950,461
17.5
1,098,574
18.5
Semiconductors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
172,249
3.6
205,757
3.8
228,711
3.9
Components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
800,716
16.7
852,981
15.7
847,131
14.3
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
495,278
10.3
541,167
9.9
552,365
9.3
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,796,061
5,443,336
5,931,708
Note: The above table is a breakdown of Electronics sales and operating revenue to external customers by product category. The Electronics segment is managed as a
single operating segment by Sonys management. Effective for the fiscal year ended March 31, 2007, Sony has partly changed its product category configuration. The
main change is that the low-temperature polysilicon thin film transistor LCD product group has been moved from Semiconductors to Components. Accordingly, sales
and operating revenue for the fiscal year ended March 31, 2006 have been restated to conform to the presentation for the fiscal year ended March 31, 2007.
Sales and Operating Revenue by Geographic Information

2006
Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,203,812
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29.3%
Yen in millions
2007
2008
2,127,841
25.6%
2,056,374
23.2%
U.S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,957,644
26.1
2,232,453
26.9
2,221,862
25.1
Europe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,715,775
22.8
2,037,658
24.6
2,328,233
26.2
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,633,366
21.8
1,897,743
22.9
2,264,945
25.5
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,510,597
8,295,695
8,871,414
Note: Classification of geographic segment information shows sales and operating revenue recognized by location of customers.
91
Consolidated Balance Sheets

Sony Corporation and Consolidated SubsidiariesAs of March 31
Yen in millions
2007
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes and accounts receivable, trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allowance for doubtful accounts and sales returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
799,899
493,315
1,490,452
(120,675)
940,875
243,782
699,075
1,086,431
427,709
1,183,620
(93,335)
1,021,595
237,073
1,146,570
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,546,723
5,009,663
Film costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
308,694
304,243
Investments and advances:

Affiliated companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Securities investments and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
448,169
3,440,567
381,188
3,954,460
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,888,736
4,335,648
Property, plant and equipment:

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167,493
978,680
2,479,308
64,855
158,289
903,116
2,483,016
55,740
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LessAccumulated depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,690,336
2,268,805
3,600,161
2,356,812
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,421,531
1,243,349
Other assets:
Intangibles, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred insurance acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
233,255
304,669
394,117
216,997
401,640
263,490
304,423
396,819
198,666
496,438
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,550,678
1,659,836
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,716,362
12,552,739
(Continued on following page)
92
2008
Yen in millions
2007
LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
Short-term borrowings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes and accounts payable, trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable, other and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued income and other taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deposits from customers in the banking business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
52,291
43,170
1,179,694
968,757
70,286
752,367
485,287
2008
63,224
291,879
920,920
896,598
200,803
1,144,399
505,544
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,551,852
4,023,367
Long-term liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued pension and severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Future insurance policy benefits and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,001,005
173,474
261,102
3,037,666
281,589
729,059
231,237
268,600
3,298,506
260,032
Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,754,836
4,787,434
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8,306,688
8,810,801
Minority interest in consolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38,970
276,849
Stockholders equity:
Common stock, no par value
2007Shares authorized 3,600,000,000, shares issued 1,002,897,264 . . . . . . . . . . . . . . . . . . . .
2008Shares authorized 3,600,000,000, shares issued 1,004,443,364 . . . . . . . . . . . . . . . . . . . .
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income
Unrealized gains on securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized losses on derivative instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension liability adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
626,907

1,143,423
1,719,506
630,576
1,151,447
2,059,361
86,096
(1,075)
(71,459)
(129,055)
70,929
(3,371)
(97,562)
(341,523)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(115,493)
(371,527)
Treasury stock, at cost

Common stock (2007 834,859 shares). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Common stock (20081,015,596 shares). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,639)

(4,768)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,370,704
3,465,089
Commitments and contingent liabilities

Total liabilities and stockholders equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11,716,362
12,552,739
93
Consolidated Statements of Income

Yen in millions
2006
Sales and operating revenue:

Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,692,776
Financial service revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
720,566
Other operating revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
97,255
2007
2008
7,567,359
624,282
104,054
8,201,839
553,216
116,359
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,510,597
8,295,695
8,871,414
Costs and expenses:

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial service expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on sale, disposal or impairment of assets, net. . . . . . . . . . . . . . . . . . . . . .
5,151,397
1,527,036
531,809
73,939
5,889,601
1,788,427
540,097
5,820
6,290,022
1,714,445
530,306
(37,841)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,284,181
8,223,945
8,496,932
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
226,416
71,750
374,482
Other income:
Interest and dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange gain, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on sale of securities investments, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on change in interest in subsidiaries and equity investees. . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,937

9,645
60,834
23,039
28,240

14,695
31,509
20,738
34,272
5,571
5,504
82,055
22,045
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118,455
95,182
149,447
28,996
3,878
3,065
22,603
27,278
1,308
18,835
17,474
22,931
13,087
21,594
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58,542
64,895
57,612
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
286,329
102,037
466,317
Income taxes:
Current. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96,400
80,115
67,081
(13,193)
183,438
20,040
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
176,515
53,888
203,478
Income before minority interest, equity in net income of affiliated

companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minority interest in income (loss) of consolidated subsidiaries. . . . . . . . . . . . . . . . . . .
Equity in net income of affiliated companies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
109,814
(626)
13,176
48,149
475
78,654
262,839
(5,779)
100,817
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,616
126,328
369,435
Other expenses:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on devaluation of securities investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange loss, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
94
Yen
Per share data:

Common stock
Net income
Basic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006
2007
2008
122.58
116.88
25.00
126.15
120.29
25.00
368.33
351.10
25.00
95
Consolidated Statements of Cash Flows

Yen in millions
2006
Cash flows from operating activities:

Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization, including amortization of deferred insurance
acquisition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of film costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual for pension and severance costs, less payments . . . . . . . . . . . . . . . . . .
Gain on the transfer to the Japanese government of the substitutional
portion of employee pension fund, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Gain) loss on sale, disposal or impairment of assets, net . . . . . . . . . . . . . . . . . .
(Gain) loss on sale or devaluation of securities investments, net . . . . . . . . . . . . .
(Gain) loss on revaluation of marketable securities held in the financial service
business for trading purpose, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on change in interest in subsidiaries and equity investees. . . . . . . . . . . . . .
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in net (income) losses of affiliated companies, net of dividends. . . . . . . . .
Changes in assets and liabilities:
(Increase) decrease in notes and accounts receivable, trade . . . . . . . . . . . . . .
Increase in inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in film costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in notes and accounts payable, trade. . . . . . . . . . . . . . . .
Increase (decrease) in accrued income and other taxes. . . . . . . . . . . . . . . . . .
Increase in future insurance policy benefits and other. . . . . . . . . . . . . . . . . . . .
Increase in deferred insurance acquisition costs. . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in marketable securities held in the financial service
business for trading purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
2008
123,616
126,328
369,435
381,843
286,655
150
(7,563)
400,009
368,382
3,838
(22,759)
428,010
305,468
4,130
(17,589)
(73,472)
73,939
(5,767)
5,820
(13,387)
(37,841)
7,583
(44,986)
(60,834)
80,115
9,794
(11,857)
(31,509)
(13,193)
(68,179)
56,543
(82,055)
20,040
(13,527)
17,464
(164,772)
(339,697)
(9,078)
29,009
143,122
(51,520)
(357,891)
(119,202)
(320,079)
362,079
(14,396)
172,498
(61,563)
185,651
(140,725)
(353,343)
(235,459)
138,872
166,356
(62,951)
(35,346)
(8,792)
105,865
(49,887)
31,732
(35,133)
73,222
86,268
(57,271)
(24,312)
51,838
48,831
399,858
561,028
757,684
Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . .

2007
Yen in millions
2006
Cash flows from investing activities:

Payments for purchases of fixed assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for investments and advances by financial service business . . . . . . . . . .
Payments for investments and advances (other than financial service business). . . .
Proceeds from maturities of marketable securities, sales of securities
investments and collections of advances by financial service business. . . . . . . . . . .
Proceeds from maturities of marketable securities, sales of securities
investments and collections of advances (other than financial service business). . . .
Proceeds from sales of subsidiaries and equity investees stocks. . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(462,473)

38,168
(1,368,158)

(36,947)
2007
2008
(527,515)
87,319
(914,754)
(100,152)
(474,552)
144,741
(2,283,491)
(103,082)
857,376
679,772
1,441,496
24,527
75,897
346
22,828
43,157
(6,085)
51,947
307,133
5,366
Net cash used in investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(871,264)
(715,430)
(910,442)
Cash flows from financing activities:

Proceeds from issuance of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments of long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in short-term borrowings, net. . . . . . . . . . . . . . . . . . . . . . . . . .
Increase in deposits from customers in the financial service business, net. . . . . . . .
Increase (decrease) in call money and bills sold in the banking business, net . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from issuance of shares under stock-based compensation plans . . . . . .
Proceeds from issuance of shares by subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
246,326
(138,773)
(11,045)
190,320
86,100
(24,810)
4,681
6,937
128
270,780
(182,374)
6,096
273,435
(100,700)
(25,052)
5,566
2,217
(2,065)
31,093
(34,701)
15,838
485,965
(25,098)
7,484
28,943
(4,006)
Net cash provided by financing activities. . . . . . . . . . . . . . . . . . . . . . . . . .
359,864
247,903
505,518
Effect of exchange rate changes on cash and cash equivalents. . . . . . . . . . . . . . . . .
35,537
3,300
(66,228)
Net increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . .

Cash and cash equivalents at beginning of the fiscal year . . . . . . . . . . . . . . . . . . . . .
(76,005)
779,103
96,801
703,098
286,532
799,899
Cash and cash equivalents at end of the fiscal year. . . . . . . . . . . . . . . . . . . . . . . . . .
703,098
799,899
1,086,431
Supplemental data:
Cash paid during the fiscal year for
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,019
24,651
104,822
23,000
126,339
18,817
Non-cash investing and financing activities

Obtaining assets by entering into capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,682
13,784
7,017
97
Consolidated Statements of Changes in Stockholders Equity


Yen in millions

Accumulated

Subsidiary
Additional
other
Treasury

tracking
Common
paid-in
Retained comprehensive stock, at

stock
stock
capital
earnings
income
cost
Total
Balance at March 31, 2005 . . . . . . . . . . . . . . . . .

3,917 617,792 1,134,222 1,506,082 (385,675)
(6,000) 2,870,338
Exercise of stock acquisition rights. . . . . . . . . . . .
931
932
1,863
Conversion of convertible bonds . . . . . . . . . . . . .
1,484
1,484
2,968
Conversion of subsidiary tracking stock. . . . . . . .
(3,917)
3,917
Comprehensive income:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . .
123,616
Other comprehensive income, net of tax
Unrealized gains on securities:
Unrealized holding gains (losses) arising
during the period . . . . . . . . . . . . . . . . . . .
79,630
Less: Reclassification adjustment
Less: included in net income . . . . . . . . . . .
(41,495)
Unrealized losses on derivative instruments:
during the period. . . . . . . . . . . . . . . . . . .
7,865
(7,424)
Minimum pension liability adjustment. . . . . . .
50,206
Foreign currency translation adjustments
Translation adjustments arising during
the period . . . . . . . . . . . . . . . . . . . . . . . .
140,473

(17)
Total comprehensive income. . . . . . . . . . . . . . .
123,616
79,630
(41,495)
7,865
(7,424)
50,206
140,473
(17)
352,854
Stock issue costs, net of tax . . . . . . . . . . . . . . . .

(780)
(780)
Dividends declared. . . . . . . . . . . . . . . . . . . . . . . .
(24,968)
(24,968)
Purchase of treasury stock . . . . . . . . . . . . . . . . .

(394)
(394)
Reissuance of treasury stock . . . . . . . . . . . . . . . .

(1,296)
3,267
1,971
Balance at March 31, 2006 . . . . . . . . . . . . . . . . .
624,124 1,136,638 1,602,654 (156,437)
(3,127) 3,203,852
2,175
2,175
4,350
608
608
1,216
Stock-based compensation . . . . . . . . . . . . . . . .

3,993
3,993
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . .
126,328
Cumulative effect of an accounting change,
net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3,785)
6,963
(21,671)
6,907
(5,933)
Minimum pension liability adjustment. . . . . . .
(2,754)
the period . . . . . . . . . . . . . . . . . . . . . . . .
86,313
126,328
(3,785)
6,963
(21,671)
6,907
(5,933)
(2,754)
86,313
192,368

(22)
(22)
(25,042)
(25,042)

(558)
(558)
Reissuance of treasury stock. . . . . . . . . . . . . . . .
9
46
55
Adoption of FAS No. 158, net of tax . . . . . . . . . .
(9,508)
(9,508)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19,373
(19,373)
Balance at March 31, 2007 . . . . . . . . . . . . . . . . .

626,907 1,143,423 1,719,506 (115,493)
(3,639) 3,370,704
98
Yen in millions

Accumulated

Subsidiary
Additional
other
Treasury

tracking
Common
paid-in
Retained comprehensive stock, at

stock
stock
capital
earnings
income
cost
Balance at March 31, 2007 . . . . . . . . . . . . . . . . .

Stock-based compensation . . . . . . . . . . . . . . . .
Total
626,907 1,143,423 1,719,506 (115,493)

(3,639) 3,370,704
3,538
3,685
7,223
131
131
262

4,192
4,192
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . .
369,435
Cumulative effect of an accounting change,
net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4,452)
3,043
(18,210)
(1,807)
(489)
Pension liability adjustment . . . . . . . . . . . . . .
(26,103)
the period . . . . . . . . . . . . . . . . . . . . . . . . (213,160)
692
369,435
(4,452)
3,043
(18,210)
(1,807)
(489)
(26,103)
(213,160)
692
108,949

(48)
(48)
(25,080)
(25,080)

(1,231)
(1,231)
Reissuance of treasury stock. . . . . . . . . . . . . . . .
16
102
118
Balance at March 31, 2008 . . . . . . . . . . . . . . . . .
630,576 1,151,447 2,059,361 (371,527)
(4,768) 3,465,089
99
Stock Information
Ownership and Distribution of Shares

2006

Number of
shares held
Foreign institutions and individuals. . . . . . . . . .

Japanese financial institutions . . . . . . . . . . . . .
Japanese individuals and others. . . . . . . . . . . .
Other Japanese corporations. . . . . . . . . . . . . .
Japanese securities firms. . . . . . . . . . . . . . . . .
502,219,220
184,831,560
270,118,452
35,031,017
9,479,415
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,001,679,664
2006
2007
Number of
shareholders
Number of
shares held
1,375
293
712,033
4,650
98
Number of
shares held
1,380
269
624,770
4,054
81
Number of
shareholders
508,166,485
216,107,606
234,246,294
31,101,417
14,821,562
1,371
297
633,045
4,108
124
630,554 1,004,443,364
638,945
Foreign institutions and individuals
Japanese financial institutions
Japanese individuals and others
50.1%
18.5%
27.0%
19.8%
21.5%
50.6%
2008
528,218,332
198,775,896
231,442,469
33,163,266
11,297,301
718,449 1,002,897,264
52.7%
2007
2008
Number of
shareholders
Other
Japanese
corporations
3.5%
Japanese
securities
firms
0.9%
23.1%
3.3%
1.1%
23.3%
3.1%
1.5%
Stock Price Range and Trading Volume on the Tokyo Stock Exchange
Nikkei stock average
Stock price and

Nikkei stock average
(Yen)
Closing price of Sony Corporation stock
20,000
15,000
10,000
5,000
Trading volume
(Million shares)
300
200
100
0
2004
2005
2006
2008
2007
Notes: 1. This trading volume shows the monthly volume of trade on the Tokyo Stock Exchange. Each fiscal year starts in April and ends in March.

2. Stock prices and the Nikkei stock average is based on a simple average of daily closing prices for each day of every month at the Tokyo Stock Exchange.

Stock price (Yen)

At year-end. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
High. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Low . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual increase/decrease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2004
4,360
4,670
2,720
+3.8%
2005
4,270
4,710
3,550
2.1%
2006
5,450
6,040
3,660
+27.6%
2007
5,990
6,540
4,340
+9.9%
2008
3,970
7,190
3,910
33.7%
Number of shares outstanding at year-end (Thousands of shares). . . .
926,418
997,211
1,001,680
1,002,897
1,004,443
Market capitalization at year-end (Yen in trillions). . . . . . . . . . . . . . . . .
4.04
4.26
5.46
6.01
3.99
Per share of common stock data (Yen)

Cash dividends applicable to the year. . . . . . . . . . . . . . . . . . . . . . . .
Net Income (diluted). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25.0
87.00
2,563.67
25.0
158.07
2,872.21
25.0
116.88
3,200.85
25.0
120.29
3,363.77
25.0
351.10
3,453.25
100
Stock Acquisition Rights and Bond Information

As of March 31, 2008
Stock Acquisition Rights (SARs)

Name
Date of issue
(Exercise period)
Total number of Number of shares to be

SARs issued
issued or transferred
Exercise price
The first series of common stock acquisition rights
December 9, 2002
(December 8, 2012)
The third series of common stock acquisition rights
March 31, 2003
(March 31, 2013)
The fourth series of common stock acquisition rights
November 14, 2003 (November 13, 2013)
The sixth series of common stock acquisition rights
March 31, 2004
The seventh series of common stock acquisition rights
The ninth series of common stock acquisition rights
March 31, 2005
The tenth series of common stock acquisition rights

The eleventh series of common stock acquisition rights
The twelfth series of common stock acquisition rights
9,878
Percentage of
SARs exercised (%)
987,800
5,396
9,374
937,400
U.S.$36.57
35.2
8,216
821,600
4,101
41.2
8,980
898,000
U.S.$40.90
26.6
9,798
979,800
3,782
31.2
8,294
829,400
U.S.$40.34
17.8
10,239
1,023,900
4,060
8.9
10,814
1,081,400
U.S.$34.14
20.9
10,579
1,057,900
4,756
1.1
The thirteenth series of common stock acquisition rights November 16, 2006 (November 16, 2016)
13,792
1,379,200
U.S.$40.05
4.9
(March 31, 2014)

(March 31, 2015)
The fourteenth series of common stock acquisition rights November 14, 2007 (November 13, 2017)
The fifteenth series of common stock acquisition rights
17.7
7,962
796,200
5,514
15,844
1,584,400
U.S.$48.15
Note: All series of Stock Acquisition Rights were issued for the purpose of granting stock options. Accordingly, no cash payment was required for the allocation.
BONDS with Stock Acquisition Rights

Name
Date of issue
Years
Bonds with stock acquisition rights
December 18, 2003
Total number of
SARs issued
Number of shares to be
issued or transferred
Exercise price
50,000
44,603,033
5,605
Percentage of
SARs exercised (%)
Note: Bonds with Stock Acquisition Rights (total amount of issue being 250 billion yen) were issued in overseas markets mainly in Europe in order to raise funds for the
development of and equipment expenditures for the next-generation semiconductors and key devices in Sony Group.
Convertible Bonds

Name
Date of issue
Years
Interest rate
(%)
Total amount
of issue
Conversion
price
Outstanding balance
(Percentage of bonds converted)
U.S. dollar convertible bonds

April 17, 2000
10
0
U.S.$57,331.thousand
13,220

(0%)

April 16, 2001
10
0
8,814

(0%)

April 15, 2002
10
0
6,931

(6.2%)
Note: All convertible bonds were issued to provide equity-based compensation to certain executives in Sonys U.S. subsidiary companies. The outstanding balance of each
series is not equal to the total amount of issue of such series since Sony Corporation repurchased and canceled certain portion of each series which were not used for
such purpose.
Straight Bonds

Years
Interest rate (%)
Total amount of issue
Outstanding balance
The eighth (2) series of unsecured bonds
Name
July 26, 2000
Date of issue
10
(Note 2)
5,000 million
4,900 million
The ninth series of unsecured bonds
September 13, 2000
10
2.04
50,000 million
50,000 million
The twelfth series of unsecured bonds
September 17, 2001
10
1.52
50,000 million
50,000 million
The fifteenth series of unsecured bonds
September 8, 2005
0.80
50,000 million
50,000 million
The sixteenth series of unsecured bonds
September 8, 2005
1.16
40,000 million
40,000 million
The seventeenth series of unsecured bonds
September 8, 2005
10
1.57
30,000 million
30,000 million
The eighteenth series of unsecured bonds
February 28, 2006
1.01
40,000 million
40,000 million
The nineteenth series of unsecured bonds
February 28, 2006
1.52
35,000 million
35,000 million
The twentieth series of unsecured bonds
February 28, 2006
10
1.75
25,000 million
25,000 million
Notes: 1. Sony Corporation assumed responsibility for the eighth (2) series of unsecured bonds as a result of its merger with AIWA Corporation. Sony Corporation
repurchased and canceled 100 million yen of the eighth (2) series of unsecured bonds.

2. The interest rate of the eighth (2) series of unsecured bonds is calculated by subtracting 2-year interest rate swap from 20-year interest rate swap and then adding
1.00 percent. (If the result of this calculation is negative, the interest rate is 0 percent.)
101
Investor Information
SONY CORPORATION
7-1, Konan 1-chome, Minato-ku,
Tokyo 108-0075, Japan
INVESTOR RELATIONS OFFICES
If you have any questions or would like a copy of our Form 20-F,
filed with the U.S. Securities and Exchange Commission, or our
Annual Report to shareholders, please direct your request to:
Japan
SONY CORPORATION
IR Department
7-1, Konan 1-chome, Minato-ku,
Tokyo 108-0075
Phone: 81-(0)3-6748-2111
Facsimile: 81-(0)3-6748-2244
U.S.A.
SONY CORPORATION OF AMERICA

Investor Relations
550 Madison Avenue, 27th Floor,
New York, NY 10022-3211
Phone: U.S. and Canada 800-556-3411

International
1-402-573-9867
Facsimile:
1-212-833-6938
U.K.
SONY GLOBAL TREASURY SERVICES PLC.

Investor Relations
11th Floor, St. Helens, 1 Undershaft,
London EC3A 8EE
Phone: 44-(0)20-7444-9713
Facsimile: 44-(0)20-7444-9763
SONY ON THE INTERNET

Sonys Investor Relations Home Pages on the World Wide Web
offer a wealth of corporate information, including the latest
annual report and financial results.
http://www.sony.net/IR/
ORDINARY GENERAL MEETING OF SHAREHOLDERS
The Ordinary General Meeting of Shareholders is held in June.
INDEPENDENT Registered Public Accounting Firm
PricewaterhouseCoopers Aarata
Tokyo, Japan
102
DEPOSITARY, TRANSFER AGENT AND REGISTRAR

FOR AMERICAN DEPOSITARY RECEIPTS
JPMorgan Chase Bank N.A.
4 New York Plaza, New York, NY 10004, U.S.A
Contact
Address:
JPMorgan Service Center
P.O. Box 64504
St. Paul, MN 55164-0504
U.S.A.
Phone: U.S.
1-800-990-1135

International 1-651-453-2128
CO-TRANSFER AND CO-REGISTRAR AGENT

CIBC Mellon Trust Company
2001 University Street, 16th Floor,
Montreal, Quebec, H3A 2A6, Canada
Phone: 1-514-285-3600
TRANSFER AGENT
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Department
10-11, Higashisuna 7-chome, Koto-ku,
Tokyo 137-8081, Japan
Phone: 81-(0)3-3212-1211
OVERSEAS STOCK EXCHANGE LISTINGS
New York and London stock exchanges
JAPANESE STOCK EXCHANGE LISTINGS
Tokyo and Osaka stock exchanges
NUMBER OF SHAREHOLDERS
(As of March 31, 2008)
638,945
Information regarding CSR
(Corporate Social Responsibility)
Sonys CSR Report and information about Sony CSR and
environmental activities can be accessed at the following
website.
http://www.sony.net/csr/
Inquiries concerning the aforementioned activities can be
directed to:
Sony Corporation
Corporate Social Responsibility Department
Phone: 81-(0)3-6748-2111
Facsimile: 81-(0)3-6748-2244
(1,1) -2- 184295.indd 08.8.8 11:45:52 AM
Cautionary Statement
Statements made in this annual report with respect to Sonys 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 managements 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 Sonys markets, particularly levels of consumer spending; (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 Sonys assets and liabilities are denominated; (iii) Sonys 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) Sonys ability and timing
to recoup large-scale investments required for technology development and increasing production capacity; (v) Sonys ability to implement successfully business reorganization activities in its Electronics segment; (vi) Sonys
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) Sonys 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) Sonys ability to maintain product quality (particularly in the Electronics and Game segments); (ix) the success of Sonys
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 Sonys 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.
Printed with volatile organic chemical (VOC)-free

vegetable oil-based ink.
SGS-COC-004300
08.8.8 11:45:52 AM
(1,1) -1- 184295.indd 08.8.7 2:21:52 PM
A nnua l R epor t 2008

Annual Report 2008

Sony Corporation
Printed in Japan
Annual R
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A nnua l R epor t 2008

Annual Report 2008

(1,1) -2- 184295.indd 08.8.7 2:21:53 PM

Mid-Term Corporate Strategy

FIFA Partnership Program

Corporate Governance/New Directors

Corporate Social Responsibility

Consolidated Financial Statements

Stock Acquisition Rights and

Cover page design concept:

Sales and operating revenue

Rose 6.9%, owing to increased sales in the Electronics and Game

*Years ended March 31

*Years ended March 31

Free cash flow (excluding Financial Services)

A fiscal year record, reflecting higher operating income, as well as

Substantial increase in free cash flow, a result of higher net income

Cash flows from operating activities

*Years ended March 31

(Combined total of cash flows from operating and investing activities)

*Years ended March 31

Business Overview (Fiscal Year in Review)

Proportion of sales* by business segment

Proportion of sales* by region

and Electronics sales by product category

*Year ended March 31

Operating margin (%)

Sales in the Electronics business increased 8.9%.

*Years ended March 31

1,284.2 billion (+26.3%)

Operating income (loss)

Operating margin (%)

Sales in the Game business rose 26.3%.

of PS3 softwareas well as the strong performance of the PSP business.

*Years ended March 31

857.9 billion (11.2%)

Operating margin (%)

released during the period.

Sales in the Pictures business decreased 11.2%.

*Years ended March 31

581.1 billion (10.5%)

Operating margin (%)

Revenue in the Financial Services business declined 10.5%.

Operating income fell 73.1%.

*Years ended March 31

Operating margin (%)

Aggregate sales from businesses in this category increased 7.6%.

fiber-optic, at So-net Entertainment Corporation.

am Potsdamer Platz in Berlin, the receipt of payment related to copyright infringement

*Years ended March 31

Letter to Shareholders: A Message from Howard Stringer, CEO

Entertainment Inc. (SPE) has expanded its theatrical, home entertainment

Sony Group Corporate Strategy

Improvement in Consolidated Results

Goals achieved under

15 product categories eliminated/

10,000 person headcount

120 billion in asset sales

* Years ended March 31

* Years ended March 31

* Years ended March 31

Results of Revitalization Plan

A few of the highlights are as follows: