SON: Sony Corporation: Financial Targets of the Entertainment Businesses

  SON: Sony Corporation: Financial Targets of the Entertainment Businesses

UK Regulatory Announcement

TOKYO

                                                              Sony Corporation

                                                             November 21, 2013

              Financial Targets of the Entertainment Businesses

(Culver City, CA – November 21, 2013) - At the Entertainment Investor Day held
on November 21, 2013, Sony Corporation (“Sony”) announced financial targets
for its Pictures and Music segments for the fiscal year ending March 31, 2015,
and growth rate targets for the period through the fiscal year ending March
31, 2017, as set out in the table below.

  *Financial targets for the fiscal year ending March 31, 2015

          Sales^1                                           8.4 billion U.S.
                                                              dollars
Pictures   Operating income margin before “Depreciation and
segment    amortization^2”                                   9.0%
           and “Restructuring charges”^3
          Operating income margin                           7.5%
           Sales^1                                           4.8 billion U.S.
                                                              dollars
Music      Operating income margin before “Depreciation and
segment    amortization^2”                                   13.0%
           and “Restructuring charges”^3
          Operating income margin                           9.5%
                                                            

  *Growth rate targets for the period through the fiscal year ending March
    31, 2017 (compound annual growth rate (“CAGR”) targets based on the
    results for the fiscal year ended March 31, 2013)

          Segment Sales^1 CAGR                      low to mid-single digit
           - Motion Pictures category sales CAGR     flat to slightly down
           - Television Productions category sales   mid to high single digit
           CAGR
Pictures   - Media Networks category sales CAGR      low to mid teens
segment    Operating income before “Depreciation
           and amortization^2”                       high single digit
           and “Restructuring charges”^3 CAGR
                                                      high single digit to
          Operating income CAGR                    
                                                      low double digit
           Segment Sales^1 CAGR                      flat to slightly up
           - Recorded Music category sales CAGR      essentially flat
           - Music Publishing category sales CAGR    low single digit
Music      - Visual Media and Platform category      flat to slightly up
segment    sales CAGR
           Operating income before “Depreciation
           and amortization^2”                       mid single digit
           and “Restructuring charges”^3 CAGR
          Operating income CAGR                     mid to high single digit
                                                    

The U.S. dollar targets in the Pictures segment are consistent with the U.S.
dollar figures that Sony Pictures Entertainment consolidates from its global
operations prior to reporting them to Sony Corporation in Tokyo, where they
are converted into yen.

The U.S. dollar targets in the Music segment for the fiscal year ending March
31, 2015 are derived by converting the yen target for the segment into U.S.
dollars at a rate of \100 = U.S. $1, which is the foreign currency exchange
rate since the second quarter of the current fiscal year that Sony assumed for
Sony’s consolidated forecast of the current fiscal year. Targeted CAGR for
sales, operating income before depreciation and amortization and restructuring
charges, and operating income for the fiscal year ending March 31, 2017 are
based on the results for the fiscal year ended March 31, 2013 and are derived
by converting Sony Music Entertainment Japan’s yen target for each line item
into U.S. dollars at \83.10 = U.S. $1 (the weighted average exchange rate for
the fiscal year ended March 31, 2013) and adding the product to Sony Music
Entertainment and Sony / ATV Music Publishing’s U.S. dollar target for each
line item.

^1 Includes operating revenue and intersegment sales
^2 “Depreciation and amortization” excludes amortization of film costs.
^3 Operating income before “Depreciation and amortization” and “Restructuring
charges” is not a measure in accordance with U.S. GAAP. Sony does not believe
that this measure is a substitute for operating income in accordance with U.S.
GAAP. However, Sony believes that this supplemental disclosure for the
Pictures and Music segments may provide additional useful analytical
information to investors.

Sony also announced that it is in the process of implementing approximately
250 million U.S. dollars in overhead and procurement savings in its Pictures
segment, which are expected to be fully implemented by the fiscal year ending
March 31, 2016.

Cautionary Statement

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

         the global economic environment in which Sony operates and the
(i)     economic conditions in Sony’s markets, particularly levels of
         consumer spending;
         foreign exchange rates, particularly between the yen and the U.S.
(ii)     dollar, the euro and other currencies in which Sony makes significant
         sales and incurs production costs, or in which Sony’s assets and
         liabilities are denominated;
         Sony’s ability to continue to design and develop and win acceptance
         of, as well as achieve sufficient cost reductions for, its products
         and services, including televisions, game platforms and smartphones,
(iii)    which are offered in highly competitive markets characterized by
         severe price competition and continual new product and service
         introductions, rapid development in technology and subjective and
         changing consumer preferences;
(iv)     Sony’s ability and timing to recoup large-scale investments required
         for technology development and production capacity;
(v)      Sony’s ability to implement successful business restructuring and
         transformation efforts under changing market conditions;
         Sony’s ability to implement successful hardware, software, and
         content integration strategies for all segments excluding the
(vi)     Financial Services segment, and to develop and implement successful
         sales and distribution strategies in light of the Internet and other
         technological developments;
         Sony’s continued ability to devote sufficient resources to research
(vii)    and development and, with respect to capital expenditures, to
         prioritize investments correctly (particularly in the electronics
         businesses);
(viii)   Sony’s ability to maintain product quality;
         the effectiveness of Sony’s strategies and their execution, including
(ix)     but not limited to the success of Sony’s acquisitions, joint ventures
         and other strategic investments;
(x)      Sony’s ability to forecast demands, manage timely procurement and
         control inventories;
(xi)     the outcome of pending and/or future legal and/or regulatory
         proceedings;
         shifts in customer demand for financial services such as life
(xii)    insurance and Sony’s ability to conduct successful asset liability
         management in the Financial Services segment;
         the impact of unfavorable conditions or developments (including
(xiii)   market fluctuations or volatility) in the Japanese equity markets on
         the revenue and operating income of the Financial Services segment;
         and
(xiv)    risks related to catastrophic disasters or similar events.
Risks and uncertainties also include the impact of any future events with
material adverse impact.


Contact:

Sony Corporation
 
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