SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

the Securities Exchange Act of 1934

For the month of August 2019

Commission File Number: 001-06439

SONY CORPORATION

(Translation of registrant’s name into English)

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

(Address of principal executive offices)

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

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

Form 20-F  X Form 40-F    

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

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

SIGNATURE

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

SONY CORPORATION
(Registrant)
By:	/s/ Hiroki Totoki
	(Signature)
Hiroki Totoki
Senior Executive Vice President and
Chief Financial Officer

Date: August 5, 2019

Quarterly Securities Report

For the three months ended June 30, 2019

(TRANSLATION)

Sony Corporation

CONTENTS

	Page
Note for readers of this English translation		1
Cautionary Statement		1
I   Corporate Information		3
(1)   Selected Consolidated Financial Data		3
(2)   Business Overview		4
II   State of Business		5
(1)   Risk Factors		5
(2)   Management’s Discussion and Analysis of Financial Condition, Results of Operations and Status of Cash Flows		5
(3)   Material Contracts		12
III   Company Information		13
(1)   Information on the Company’s Shares		13
(2)   Directors and Corporate Executive Officers		17
IV  Financial Statements		18
(1)   Consolidated Financial Statements		19
(2)   Other Information		43

Note for readers of this English translation

On August 5, 2019, Sony Corporation (the “Company” or “Sony Corporation,” and together with its consolidated subsidiaries, “Sony” or “Sony Group”) filed its Japanese-language Quarterly Securities Report (Shihanki Houkokusho) for the three months ended June 30, 2019 with the Director-General of the Kanto Local Finance Bureau in Japan pursuant to the Financial Instruments and Exchange Act of Japan. This document is an English translation of the Quarterly Securities Report in its entirety, except for (i) information that had been previously filed with or submitted to the U.S. Securities and Exchange Commission (the “SEC”) in a Form 20-F, Form 6-K or any other form and (ii) a description of differences between generally accepted accounting principles in the U.S. (“U.S. GAAP”) and generally accepted accounting principles in Japan (“J-GAAP”), which are required to be described in the Quarterly Securities Report under the Financial Instruments and Exchange Act of Japan if the Company prepares its financial statements in conformity with accounting principles other than J-GAAP.

Cautionary Statement

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

(i) Sony’s ability to maintain product quality and customer satisfaction with its products and services;

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

(iii) Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;

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

(v) changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility;

(vi) Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity;

(vii) Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, marketing and distribution of its products, and its other business operations;

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

(ix) Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade;

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

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

(xii) Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel;

(xiii) Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others;

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

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

(xvi) risks related to catastrophic disasters or similar events;

(xvii) the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and

(xviii) the outcome of pending and/or future legal and/or regulatory proceedings.

Risks and uncertainties also include the impact of any future events with material adverse impact. Important information regarding risks and uncertainties is also set forth in Sony’s most recent Form 20-F, which is on file with the SEC.

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I    Corporate Information

(1) Selected Consolidated Financial Data

	Yen in millions, Yen per share amounts
	Three months ended     June 30, 2018		Three months ended     June 30, 2019		Fiscal year ended     March 31, 2019
Sales and operating revenue		1,953,624		1,925,724		8,665,687
Operating income		195,006		230,925		894,235
Income before income taxes		312,086		231,018		1,011,648
Net income attributable to Sony Corporation’s stockholders		226,447		152,122		916,271
Comprehensive income		252,186		153,287		995,542
Total equity		3,863,789		4,545,273		4,436,690
Total assets		19,563,341		21,607,483		20,981,586
Net income attributable to Sony Corporation’s stockholders per share of common stock, basic (yen)		178.66		121.78		723.41
Net income attributable to Sony Corporation’s stockholders per share of common stock, diluted (yen)		174.80		119.22		707.74
Ratio of stockholders’ equity to total assets (%)		16.5		17.8		17.9
Net cash provided by (used in) operating activities		96,771		(823)		1,258,738
Net cash used in investing activities		(197,361)		(323,153)		(1,307,445)
Net cash provided by (used in) financing activities		(22,096)		86,656		(122,884)
Cash and cash equivalents at end of the period		1,509,451		1,210,507		1,470,073

  Notes:

  1. The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP.

  2. The Company reports equity in net income of affiliated companies as a component of operating income.

  3. Consumption taxes are not included in sales and operating revenue.

  4. Total equity is presented based on U.S. GAAP.

  5. Ratio of stockholders’ equity to total assets is calculated by using total equity attributable to the stockholders of the Company.

  6. The Company prepares consolidated financial statements. Therefore parent-only selected financial data is not presented.

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(2) Business Overview

There was no significant change in the business of Sony during the three months ended June 30, 2019.

As of June 30, 2019, the Company had 1,590 subsidiaries and 146 affiliated companies, of which 1,553 companies are consolidated subsidiaries (including variable interest entities) of the Company. The Company has applied the equity accounting method for 132 affiliated companies.

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II    State of Business

(1) Risk Factors

Note for readers of this English translation:

There was no significant change from the information presented in the Risk Factors section of the Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on June 18, 2019. Any forward-looking statements included in the descriptions below are based on management’s current judgment.

URL: The Annual Report on Form 20-F filed with the SEC on June  18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

(2) Management’s Discussion and Analysis of Financial Condition, Results of Operations and Status of Cash Flows

i) Results of Operations

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2020 to reflect modifications to the organizational structure of certain segments and a change in the Senior Executives in charge of certain segments as of April 1, 2019. In connection with this decision, the former Home Entertainment & Sound, Imaging Products & Solutions and Mobile Communications segments have been realigned as the Electronics Products & Solutions (“EP&S”) segment. The sales and operating revenue and operating income (loss) of each segment for the fiscal year ended March 31, 2019 have been reclassified to conform to the presentation for the fiscal year ending March 31, 2020.

The former Semiconductors segment has been renamed the Imaging & Sensing Solutions (“I&SS”) segment effective from the first quarter of the fiscal year ending March 31, 2020.

All amounts are presented on the basis of U.S. GAAP. “Sales and operating revenue” (“sales”) in each business segment represents sales and operating revenue recorded before intersegment transactions are eliminated. “Operating income (loss)” in each business segment represents operating income (loss) reported before intersegment transactions are eliminated and excludes unallocated corporate expenses. For details regarding each segment’s product categories, please refer to “IV Financial Statements – Notes to Consolidated Financial Statements – 8. Business segment information.”

Consolidated Financial Results

	(Billions of yen)
	Three months ended June 30
	2018		2019
Sales and operating revenue	¥	1,953.6	¥	1,925.7
Operating income		195.0		230.9
Income before income taxes		312.1		231.0
Net income attributable to Sony Corporation’s stockholders		226.4		152.1

Sales for the three months ended June 30, 2019 (“the current quarter”) decreased 27.9 billion yen compared to the same quarter of the previous fiscal year (“year-on-year”) to 1 trillion 925.7 billion yen. This decrease was primarily due to a significant decrease in sales in the EP&S segment, partially offset by significant increases in sales mainly in the I&SS and Music segments. Sales in the current quarter also include 7.9 billion yen in patent royalty revenue resulting from the signing of a licensing agreement, recorded within Corporate and elimination.

Operating income in the current quarter increased 35.9 billion yen year-on-year to 230.9 billion yen. This increase was primarily due to a significant increase in operating income in the I&SS segment.

During the current quarter, restructuring charges, net, increased 2.3 billion yen year-on-year to 3.6 billion yen. Restructuring charges are recorded as an operating expense and are included in operating income.

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Equity in net income (loss) of affiliated companies in the current quarter, recorded within operating income, was income of 1.3 billion yen, compared to a loss of 4.5 billion yen in the same quarter of the previous fiscal year. This improvement was mainly due to the absence of equity in net loss for DH Publishing, L.P. (“EMI”), which owned and managed EMI Music Publishing, recorded in the Music segment in the same quarter of the previous fiscal year. For details, please refer to the operating performance analysis of the Music segment below.

The net effect of other income and expenses decreased 117.0 billion yen year-on-year to income of 0.1 billion yen. This was mainly due to the absence of the 112.8 billion yen gain on equity securities, net, recorded in the same quarter of the previous fiscal year as a result of Spotify Technology S.A.’s (“Spotify”) public listing.

Income before income taxes decreased 81.1 billion yen year-on-year to 231.0 billion yen.

During the current quarter, Sony recorded 65.0 billion yen of income tax expense, resulting in an effective tax rate of 28.1%, which was higher than the effective tax rate of 24.1% in the same quarter of the previous fiscal year. This higher effective tax rate was mainly due to Sony no longer having valuation allowances recorded against a significant portion of the deferred tax assets in the U.S. consolidated tax group.

Net income attributable to Sony Corporation’s stockholders decreased 74.3 billion yen year-on-year to 152.1 billion yen.

Operating performance by business segment for the current quarter is as follows:

Game & Network Services (G&NS)

Sales decreased 14.6 billion yen year-on-year to 457.5 billion yen. This decrease was primarily due to a year-on-year decrease in the contribution from first-party software titles, the impact of foreign exchange rates and a decrease in sales of non-first-party software titles, partially offset by an increase in PlayStation^®4 (“PS4”) hardware sales as well as network services revenue, including sales for PlayStation^®Plus (“PS Plus”). Operating income decreased 9.6 billion yen year-on-year to 73.8 billion yen, primarily due to the impact of the above-mentioned decrease in sales of software including highly-profitable first party software titles, as well as the negative impact of foreign exchange rates. These negative factors were partially offset by the impact of the above-mentioned increase in PS4 hardware sales and an improvement in profitability, as well as the increase in network services revenue, including sales for PS Plus.

Music

On November 14, 2018, Sony acquired the entirety of the approximately 60% equity interest held by the investor consortium led by Mubadala Investment Company in EMI, resulting in EMI becoming a wholly-owned subsidiary of Sony. Financial results of EMI included in the Music segment for the fiscal year ended March 31, 2019 include equity earnings (loss) from April 1 through November 13, 2018 and sales and operating income (loss) from November 14, 2018 through March 31, 2019. Sales and operating income (loss) for the Music segment in the fiscal year ending March 31, 2020 include the financial results of EMI from April 1, 2019 onward.

The Music segment results include the yen-translated results of Sony Music Entertainment (“SME”), Sony/ATV Music Publishing (“Sony/ATV”) and EMI, all U.S.-based operations which aggregate the results of their worldwide subsidiaries on a U.S. dollar basis, and the results of Sony Music Entertainment (Japan) Inc., a Japan-based music company which aggregates its results in yen.

Sales increased 20.8 billion yen year-on-year to 202.3 billion yen. This significant increase was primarily due to higher sales for Music Publishing resulting from the consolidation of EMI, as well as higher sales for Recorded Music primarily due to an increase in streaming revenues, partially offset by lower Visual Media and Platform sales primarily due to lower sales for Fate/Grand Order, a game application for mobile devices. Operating income increased 6.2 billion yen year-on-year to 38.3 billion yen, primarily due to the absence of equity in net loss for EMI that was recorded in the same quarter of the previous fiscal year due to an increase in expenses incurred for EMI’s warrant and management equity plans, resulting from an appreciation in the EMI valuation as a result of Sony’s agreement to acquire the approximately 60% interest in EMI. The operating results of the Music segment were also positively impacted by the above-mentioned increase in overall segment sales.

Pictures

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

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Sales increased 11.0 billion yen, a 6% increase year-on-year (an approximate 6% increase on a U.S. dollar basis), to 186.1 billion yen. The increase in sales on a U.S. dollar basis was primarily due to higher sales for Motion Pictures, resulting primarily from higher theatrical revenues as the current year benefited from the theatrical release of Men in Black: International and Spider-Man: Far From Home, as well as higher television licensing revenues for catalog titles. Operating results improved from an operating loss of 7.6 billion yen to operating income of 0.4 billion yen. This improvement, primarily in Media Networks, was due to lower sports programming and marketing costs in India, higher home entertainment revenues at Funimation, as well as improved operating results for channels in other territories reflecting the benefit of the channel portfolio review that began in the previous fiscal year. The contribution to operating income from the higher Motion Pictures sales was more than offset by higher theatrical marketing costs in support of the above-mentioned theatrical releases.

Electronics Products & Solutions (EP&S)

Sales decreased significantly by 84.2 billion yen year-on-year to 483.9 billion yen, mainly due to a decrease in unit sales of televisions, smartphones and digital cameras. Operating income decreased 7.6 billion yen year-on-year to 25.1 billion yen, primarily due to the above-mentioned decrease in unit sales and the negative impact of foreign exchange rates, partially offset by reductions in operating costs mainly within Mobile Communications.

Imaging & Sensing Solutions (I&SS)

Sales increased 28.4 billion yen year-on-year to 230.7 billion yen, mainly due to a significant increase in sales of image sensors for mobile products. Operating income increased 20.4 billion yen year-on-year to 49.5 billion yen. This significant increase was mainly due to the impact of the above-mentioned increase in sales, partially offset by an increase in depreciation and amortization expenses as well as research and development expenses.

Financial Services

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

Financial Services revenue was 336.9 billion yen, essentially flat year-on-year, mainly due to an increase in net gains from investment securities at Sony Bank as well as an increase in net premiums written at Sony Assurance, substantially offset by a decrease in revenue at Sony Life. Revenue at Sony Life decreased 2.1 billion yen year-on-year to 299.4 billion yen, mainly due to a decrease in net gains on investments in the separate account, partially offset by higher insurance premium revenue reflecting an increase in the policy amount in force. Operating income increased 5.5 billion yen year-on-year to 46.1 billion yen, primarily due to increases in operating income at Sony Life and Sony Bank. Operating income at Sony Life increased 2.9 billion yen year-on-year to 39.4 billion yen, mainly due to an improvement in foreign exchange gains and losses in U.S. dollar-denominated insurance. Operating income at Sony Bank increased primarily due to the recording of a gain on the valuation of securities.

Operating Performance by Geographic Area

For operating performance by geographic area, please refer to “sales and operating revenue attributed to countries and areas based on location of external customers” in “IV Financial Statements – Notes to Consolidated Financial Statements – 8. Business segment information”.

*    *    *    *    *

Foreign Exchange Fluctuations and Risk Hedging

Note for readers of this English translation:

Except for the information set forth below, there was no significant change from the information presented in the Foreign Exchange Fluctuations and Risk Hedging section of the Annual Report on Form 20-F filed with the SEC on June 18, 2019. Although foreign exchange rates have fluctuated during the three-month period ended June 30, 2019, there has been no significant change in Sony’s risk hedging policy as described in the Annual Report on Form 20-F.

URL: The Annual Report on Form 20-F filed with the SEC on June 18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

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During the current quarter, the average rates of the yen were 109.9 yen against the U.S. dollar and 123.5 yen against the euro, which were 0.8 yen lower and 6.6 yen higher year-on-year, respectively.

For the current quarter, sales were 1 trillion 925.7 billion yen, a decrease of 1% year-on-year, while on a constant currency basis sales also decreased approximately 1% year-on-year. For further details about the impact of foreign exchange rate fluctuations on sales and operating income, please refer to the below Note.

Consolidated operating income increased 35.9 billion yen year-on-year to 230.9 billion yen for the current quarter. Most of the foreign exchange rate impact was attributable to the impact of foreign exchange rates in the G&NS, EP&S and I&SS segments.

The table below indicates the impact of changes in foreign exchange rates on sales and operating results of each of the above-mentioned three segments. Also, please refer to the “Results of Operations” section, which discusses the impact of foreign exchange rates within segments and categories where foreign exchange rate fluctuations had a significant impact.

		(Billions of yen)
						Impact of changes in foreign exchange rates
		Three months ended         June 30
		2018		2019
G&NS	Sales		472.1		457.5	-6.9
	Operating income		83.5		73.8	-4.2
EP&S	Sales		568.2		483.9	-9.4
	Operating income		32.7		25.1	-6.9
I&SS	Sales		202.2		230.7	+1.2
	Operating income		29.1		49.5	+0.9

In addition, sales for the Music segment increased 12% year-on-year to 202.3 billion yen, an approximate 11% increase on a constant currency basis. In the Pictures segment, sales increased 6% year-on-year to 186.1 billion yen, an approximate 6% increase on a U.S. dollar basis. As most of the operations in Sony’s Financial Services segment are based in Japan, Sony’s management analyzes the performance of the Financial Services segment on a yen basis only.

Note:

Sales on a Constant Currency Basis and the Impact of Foreign Exchange Rate Fluctuations

The descriptions of sales on a constant currency basis reflect sales calculated by applying the yen’s monthly average exchange rates from the same period of the previous fiscal year to local currency-denominated monthly sales in the relevant period of the current fiscal year. For SME, Sony/ATV and EMI in the Music segment, the constant currency amounts are calculated by applying the monthly average U.S. dollar / yen exchange rates after aggregation on a U.S. dollar basis.

Results for the Pictures segment are described on a U.S. dollar basis as the Pictures segment reflects the operations of SPE, a U.S.-based operation that aggregates the results of its worldwide subsidiaries in U.S. dollars.

The impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s periodic weighted average exchange rate for the same period of the previous fiscal year from the relevant period of the current fiscal year to the major transactional currencies in which the sales are denominated. The impact of foreign exchange rate fluctuations on operating income (loss) is calculated by subtracting from the impact on sales the impact on cost of sales and selling, general and administrative expenses calculated by applying the same major transactional currencies calculation process to cost of sales and selling, general and administrative expenses as for the impact on sales. The I&SS segment enters into its own foreign exchange hedging transactions, and the impact of those transactions is included in the impact of foreign exchange rate fluctuations on operating income (loss) for that segment. Additionally, the impact of foreign exchange hedging transactions entered into by Mobile Communications during the previous fiscal year is included in the impact of foreign exchange rate fluctuations on operating income (loss) for the EP&S segment.

This information is not a substitute for Sony’s consolidated financial statements measured in accordance with U.S. GAAP. However, Sony believes that these disclosures provide additional useful analytical information to investors regarding the operating performance of Sony.

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Status of Cash Flows*

Operating Activities: Net cash outflow from operating activities during the current quarter was 0.8 billion yen, compared to a net cash inflow of 96.8 billion yen in the same quarter of the previous fiscal year.

For all segments excluding the Financial Services segment, there was a net cash outflow of 85.0 billion yen, an increase of 84.2 billion yen year-on-year. This increase was primarily due to a smaller increase in notes and accounts payable, trade, and a larger increase in inventories, as well as a larger increase in notes and accounts receivable, trade and contract assets. This increase in net cash outflow was partially offset by the positive impact of a year-on-year increase in net income after taking into account non-cash adjustments (including depreciation and amortization, other operating (income) expense, net and (gain) loss on securities investments, net).

The Financial Services segment had a net cash inflow of 101.6 billion yen, a decrease of 12.4 billion yen year-on-year. This decrease was primarily due to a year-on-year decrease in net income after taking into account non-cash adjustments such as depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs.

Investing Activities: During the current quarter, Sony used 323.2 billion yen of net cash in investing activities, an increase of 125.8 billion yen year-on-year.

For all segments excluding the Financial Services segment, there was a 87.7 billion yen net cash outflow, compared to an 11.5 billion yen net cash inflow in the same quarter of the previous fiscal year. This change was mainly due to an increase in payments for fixed asset purchases, as well as cash outflow resulting from the subscription of M3, Inc. (“M3”) shares, which were issued by M3 to Sony via third-party allotment. Additionally, the same quarter of the previous fiscal year included net cash inflow resulting from the sale of certain shares of Spotify.

The Financial Services segment used 235.4 billion yen of net cash in investing activities, an increase of 26.6 billion yen year-on-year. This increase was mainly due to a year-on-year increase in payments for investments and advances at Sony Life and Sony Bank.

Financing Activities: Net cash inflow by financing activities during the current quarter was 86.7 billion yen, compared to a net cash outflow of 22.1 billion yen in the same quarter of the previous fiscal year.

For all segments excluding the Financial Services segment, there was a 161.5 billion yen net cash outflow, a decrease of 44.6 billion yen year-on-year. This decrease was mainly due to a year-on-year decrease in the redemption of straight bonds. Additionally, there was a payment related to the repurchase of shares of Sony’s own common stock (4,746,100 shares for a total purchase price of 25.3 billion yen, as of June 30, 2019) which was approved at the meeting of its Board of Directors held on May 16, 2019.

In the Financial Services segment, there was a 230.8 billion yen net cash inflow, an increase of 63.2 billion yen year-on-year. This increase was primarily due to an increase in short-term borrowings at Sony Life.

Total Cash and Cash Equivalents: Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents at June 30, 2019 was 1 trillion 210.5 billion yen. Cash and cash equivalents of all segments excluding the Financial Services segment was 604.0 billion yen at June 30, 2019, a decrease of 356.5 billion yen compared with the balance as of March 31, 2019, and a decrease of 439.5 billion yen compared with the balance as of June 30, 2018. Within the Financial Services segment, the outstanding balance of cash and cash equivalents was 606.5 billion yen at June 30, 2019, an increase of 96.9 billion yen compared with the balance as of March 31, 2019, and an increase of 140.6 billion yen compared with the balance as of June 30, 2018.

*Sony’s disclosure includes information regarding cash flow for all segments excluding the Financial Services segment. This information is derived from the following condensed statement of cash flows. The condensed statement of cash flows, which includes the above-mentioned cash flow information, is not prepared in accordance with U.S. GAAP, which Sony uses to prepare its consolidated financial statements. However, because the Financial Services segment is different in nature from Sony’s other segments, Sony believes that a comparative presentation may be useful in understanding and analyzing Sony’s consolidated financial statements. Transactions between the Financial Services segment and Sony without the Financial Services segment, including noncontrolling interests, are included in those respective presentations, but are eliminated in the consolidated figures shown below.

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Condensed Statements of Cash Flows

	(Yen in millions)
	Three months ended June 30
	Financial Services					Sony without Financial Services					Consolidated
		2018		2019			2018		2019			2018		2019
Cash flows from operating activities:
Net income (loss)		29,032		32,077			224,275		151,620			236,864		166,006
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs		17,906		22,151			68,337		71,261			86,243		93,412
Amortization of film costs		-		-			58,001		56,546			58,001		56,546
Other operating (income) expense, net		25		36			(350	)	(3,593	)		(325	)	(3,557	)
(Gain) loss on marketable securities and securities investments, net		(43,547	)	(9,172	)		(114,778	)	(329	)		(158,325	)	(9,501	)
Changes in assets and liabilities:
(Increase) decrease in notes and accounts receivable, trade and contract assets		217		(298	)		(45,734	)	(84,822	)		(46,041	)	(85,901	)
(Increase) decrease in inventories		-					(7,206	)	(51,976	)		(7,206	)	(51,976	)
(Increase) decrease in film costs		-					(82,734	)	(91,680	)		(82,734	)	(91,680	)
Increase (decrease) in notes and accounts payable, trade		-					109,783		55,807			109,783		55,807
Increase (decrease) in future insurance policy benefits and other		173,976		138,925			-		-			173,976		138,925
(Increase) decrease in deferred insurance acquisition costs		(23,352	)	(22,185	)		-		-			(23,352	)	(22,185	)
(Increase) decrease in marketable securities held in the life insurance business		(21,421	)	(59,080	)		-		-			(21,421	)	(59,080	)
Other		(18,837	)	(891	)		(210,426	)	(187,856	)		(228,692	)	(187,639	)
Net cash provided by (used in) operating activities		113,999		101,563			(832	)	(85,022	)		96,771		(823	)
Cash flows from investing activities:
Payments for purchases of fixed assets		(5,722	)	(5,388	)		(67,466	)	(72,875	)		(73,179	)	(78,264	)
Payments for investments and advances		(267,217	)	(302,434	)		(3,916	)	(22,969	)		(271,133	)	(325,403	)
Proceeds from sales or return of investments and collections of advances		64,074		72,375			83,102		303			147,176		72,678
Other		35		22			(260	)	7,814			(225	)	7,836
Net cash provided by (used in) investing activities		(208,830	)	(235,425	)		11,460		(87,727	)		(197,361	)	(323,153	)
Cash flows from financing activities:
Increase (decrease) in borrowings, net		130,449		200,622			(157,429	)	(109,983	)		(26,980	)	90,313
Increase (decrease) in deposits from customers, net		63,798		57,354			-		-			63,798		57,354
Dividends paid		(26,100	)	(27,189	)		(19,013	)	(25,035	)		(19,013	)	(25,035	)
Other		(534	)	(1	)		(29,654	)	(26,477	)		(39,901	)	(35,976	)
Net cash provided by (used in) financing activities		167,613		230,786			(206,096	)	(161,495	)		(22,096	)	86,656
Effect of exchange rate changes on cash and cash equivalents		-		-			44,311		(23,451	)		44,311		(23,451	)
Net increase (decrease) in cash and cash equivalents including restricted		72,782		96,924			(151,157	)	(357,695	)		(78,375	)	(260,771	)
Cash and cash equivalents, including restricted, at beginning of the fiscal year		393,133		509,595			1,199,805		964,218			1,592,938		1,473,813
Cash and cash equivalents, including restricted, at end of the period		465,915		606,519			1,048,648		606,523			1,514,563		1,213,042
Less – restricted cash and cash equivalents, included in other current assets and other assets		-		-			5,112		2,535			5,112		2,535
Cash and cash equivalents at end of the period		465,915		606,519			1,043,536		603,988			1,509,451		1,210,507

- 10 -

ii) Issues Facing Sony and Management’s Response to those Issues

Note for readers of this English translation:

There was no significant change from the information presented in the Trend Information section of the Annual Report on Form 20-F filed with the SEC on June 18, 2019. Any forward-looking statements included in the descriptions below are based on management’s current judgment.

URL: The Annual Report on Form 20-F filed with the SEC on June 18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

iii) Research and Development

Note for readers of this English translation:

There was no significant change from the information presented as the Research and Development in the Annual Report on Form 20-F filed with the SEC on June 18, 2019.

URL: The Annual Report on Form 20-F filed with the SEC on June 18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

Research and development costs for the three months ended June 30, 2019 totaled 113.6 billion yen. There were no significant changes in research and development activities for the period.

iv) Liquidity Management and Market Access

Note for readers of this English translation:

Except for the information related to the committed lines of credit and others set forth below, there was no significant change from the information presented in the Annual Report on Form 20-F filed with the SEC on June 18, 2019. The changes are indicated by underline below. Any forward-looking statements included in the descriptions below are based on management’s current judgment.

URL: The Annual Report on Form 20-F filed with the SEC on June 18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

An important financial objective of Sony is to maintain the strength of its balance sheet, while securing adequate liquidity for business activities. Sony defines its liquidity sources as the amount of cash and cash equivalents (“cash balance”) (excluding restrictions on capital transfers mainly due to national regulations) and the unused amount of committed lines of credit.

Funding requirements that arise from maintaining liquidity are principally covered by cash flow from operating and investing activities (including asset sales) and by the available cash balance; however, Sony also raises funds as needed from financial and capital markets through means such as corporate bonds, commercial paper (“CP”) and bank loans.

Sony Corporation, Sony Global Treasury Services Plc (“SGTS”), a subsidiary in the U.K., and Sony Capital Corporation (“SCC”), a finance subsidiary in the U.S., maintain CP programs with access to the Japanese, U.S. and European CP markets. The borrowing limits under these CP programs, translated into yen, were 1,039.0 billion yen in total for Sony Corporation, SGTS and SCC as of June 30, 2019. Sony issued CP in the U.S. during the fiscal year ended March 31, 2019. The largest month-end outstanding balance of the CP programs during the fiscal year ended March 31, 2019 was approximately 19.0 billion yen in November 2018, and there were no amounts outstanding under the CP programs as of March 31, 2019.

- 11 -

If disruption and volatility occur in financial and capital markets and Sony becomes unable to raise sufficient funds from these sources, Sony may also draw down funds from contractually committed lines of credit from various financial institutions. Sony has a total, translated into yen, of 514.8 billion yen in unused committed lines of credit, as of June 30, 2019. Details of those committed lines of credit are: a 275.0 billion yen committed line of credit contracted with a syndicate of Japanese banks, a 1.7 billion U.S. dollar multicurrency committed line of credit also contracted with a syndicate of Japanese banks and a 525 million U.S. dollar multi-currency committed line of credit contracted with a syndicate of foreign banks. Sony currently believes that it can sustain sufficient liquidity through access to committed lines of credit with financial institutions, together with its available cash balance, even in the event that financial and capital markets become illiquid.

In the event of a downgrade in Sony’s credit ratings, there are no financial covenants in any of Sony’s material financial agreements with financial institutions that would cause an acceleration of the obligation. Even though the cost of borrowing for some committed lines of credit could change according to Sony’s credit ratings, there are no financial covenants that would cause any impairment on the ability to draw down on unused facilities.

(3) Material Contracts

There were no material contracts executed or determined to be executed during the three months ended June 30, 2019.

Note for readers of this English translation:

There was no significant change from the information presented in the Annual Report on Form 20-F (“Patents and Licenses” in Item 4) filed with the SEC on June 18, 2019.

URL: The Annual Report on Form 20-F filed with the SEC on June 18, 2019

https://www.sec.gov/Archives/edgar/data/313838/000119312519175182/d870848d20f.htm

- 12 -

  III    Company Information

  (1) Information on the Company’s Shares

  i) Total Number of Shares

  1) Total Number of Shares

Class	Total number of shares authorized to be issued
Common stock	3,600,000,000
Total	3,600,000,000

  2) Number of Shares Issued

Class	Number of shares issued		Name of Securities Exchanges where the shares are listed or authorized Financial Instruments Firms Association where the shares are registered	Description
	As of the end of the     first quarterly period     (June 30, 2019)	As of the filing date of     the Quarterly     Securities Report     (August 5, 2019)
Common stock	1,271,525,040	1,271,743,740	Tokyo Stock Exchange New York Stock Exchange	The number of shares constituting one full unit is one hundred (100).
Total	1,271,525,040	1,271,743,740	—	—

  Notes:

  1. The Company’s shares of common stock are listed on the First Section of the Tokyo Stock Exchange in Japan.

  2. The number of shares issued as of the filing date of this Quarterly Securities Report (Shihanki Houkokusho) does not include shares issued upon the exercise of stock acquisition rights (“SARs”) (including the exercise of unsecured convertible bonds with SARs (6th series)) during August 2019, the month in which this Quarterly Securities Report was filed.

  3. The number of shares issued as of the filing date of this Quarterly Securities Report includes the 168,900 new shares of restricted stock issued by the Company on July 23, 2019 as compensation pursuant to the decision of the Representative Corporate Executive Officer dated July 1, 2019, which was made under the authority delegated by resolutions of the Board of Directors.

ii) Stock Acquisition Rights

    ①Description of Stock Option

Not applicable.

    ②Other Stock Acquisition Rights

Not applicable.

  Note for readers of this English translation:

  The above means that there was no issuance of SARs during the three months ended June 30, 2019.

iii) Status of the Exercise of Moving Strike Convertible Bonds

   Not applicable.

- 13 -

iv) Changes in the Total Number of Shares Issued and the Amount of Common Stock, etc.

Period	Change in the   total number of shares issued   (Thousands)	Balance of the    total number of shares issued (Thousands)	Change in   the amount of   common stock   (Yen in Millions)	Balance of   the amount of   common stock   (Yen in Millions)	Change in the   legal capital   surplus   (Yen in Millions)	Balance of the   legal capital   surplus   (Yen in Millions)
From April 1 to June 30, 2019	295	1,271,525	597	874,887	597	1,088,581

Notes:

1. The increase mentioned above is due to the exercise of SARs (including the exercise of unsecured convertible bonds with SARs (6th series)).

2. Upon the exercise of SARs (including the exercise of unsecured convertible bonds with SARs (6th series)) during the period from July 1, 2019 to July 31, 2019, the total number of shares issued increased by 219 thousand shares, and the amount of common stock and the legal capital surplus each increased by 629 million yen.

3. Upon the issuance of new shares of restricted stock as compensation on July 23, 2019, the total number of shares issued increased by 169 thousand shares, and the amount of common stock and the legal capital surplus each increased by 477 million yen.

Outline of the issuance of new shares of restricted stock as compensation on July 23, 2019 is as follows:

Issue Price	Amount of paid-in capital	Allotees
5,648 yen per share	2,824 yen per share	5 Corporate Executive Officers of the Company, 11 Non-Executive Directors of the Company, 7 Executives of the Company and 1 Executive of the subsidiary of the Company

- 14 -

v) Status of Major Shareholders

(As of June 30, 2019)

Name	Address	Number of shares held (Thousands)	Percentage of shares held to total shares (Excluding treasury shares) issued (%)
Citibank as Depositary Bank for Depositary Receipt Holders *1 (Local Custodian: MUFG Bank, Ltd.)	New York, U.S.A. (2-7-1, Marunouchi, Chiyoda-ku, Tokyo)	122,571	9.83
The Master Trust Bank of Japan, Ltd. (Trust account) *2	2-11-3, Hamamatsu-cho, Minato-ku, Tokyo	81,550	6.54
Japan Trustee Services Bank, Ltd. (Trust account) *2	1-8-11, Harumi, Chuo-ku, Tokyo	61,648	4.95
JP Morgan Chase Bank 380055 *3 (Local Custodian: Mizuho Bank, Ltd.)	New York, U.S.A. (Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)	33,631	2.70
Japan Trustee Services Bank, Ltd. (Trust account 5) *2	1-8-11, Harumi, Chuo-ku, Tokyo	26,330	2.11
State Street Bank West Client - Treaty 505234 *3 (Local Custodian: Mizuho Bank, Ltd.)	North Quincy, U.S.A. (Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)	22,734	1.82
Japan Trustee Services Bank, Ltd. (Trust account 7) *2	1-8-11, Harumi, Chuo-ku, Tokyo	21,598	1.73
JP Morgan Chase Bank 385151 *3 (Local Custodian: Mizuho Bank, Ltd.)	London, United Kingdom (Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)	20,595	1.65
J.P. Morgan Bank Luxembourg S.A. 1300000 *3 (Local Custodian: Mizuho Bank, Ltd.)	Senningerberg, Luxembourg (Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)	19,443	1.56
GIC Private Limited - C (Local Custodian: MUFG Bank, Ltd.)	Singapore (2-7-1, Marunouchi, Chiyoda-ku, Tokyo)	19,412	1.56
Total		429,512	34.46

Notes:

*1. Citibank as Depositary Bank for Depositary Receipt Holders is the nominee of Citibank, N.A.

*2. The shares held by each shareholder are held in trust for investors, including shares in securities investment trusts.

*3. Each shareholder provides depositary services for shares owned by institutional investors, mainly in Europe and North America. They are also the nominees for these investors.

- 15 -

  4. Sumitomo Mitsui Trust Bank, Limited filed its “Amendment to the Bulk Shareholding Report” with the Kanto Financial Bureau in Japan as of June 20, 2019 and reported that Sumitomo Mitsui Trust Asset Management Co., Ltd. and 1 joint holder held shares of the Company as of June 14, 2019 as provided in the below table. As of June 30, 2019, the Company has not been able to confirm the entry of such parties in the register of shareholders.

Name	Number of shares, etc. held   (Thousands)	Percentage of shares, etc. held to total shares issued (%)
Sumitomo Mitsui Trust Asset Management Co., Ltd. and 1 Joint Holder	71,016	5.59

  5. BlackRock Japan Co., Ltd. filed its “Amendment to the Bulk Shareholding Report” with the Kanto Financial Bureau in Japan as of March 22, 2017 and reported that it held shares of the Company as of March 15, 2017 as provided in the below table. As of June 30, 2019, the Company has not been able to confirm such entry of BlackRock Japan Co., Ltd. in the register of shareholders.

Name	Number of shares, etc. held   (Thousands)	Percentage of shares, etc. held to total shares issued (%)
BlackRock Japan Co., Ltd. and the 8 Joint Holders	79,185	6.27

vi) Status of Voting Rights

1) Shares Issued

(As of June 30, 2019)

Classification	Number of shares of     common stock	Number of voting rights   (Units)	Description
Shares without voting rights	—	—	—
Shares with restricted voting rights (Treasury stock, etc.)	—	—	—
Shares with restricted voting rights (Others)	—	—	—
Shares with full voting rights (Treasury stock, etc.)	25,235,300	—	—
Shares with full voting rights (Others)	1,244,343,100	12,443,431	—
Shares constituting less than one full unit	1,946,640	—	Shares constituting     less than one full unit     (100 shares)
Total number of shares issued	1,271,525,040	—	—
Total voting rights held by all shareholders	—	12,443,431	—

Note: Included in “Shares with full voting rights (Others)” under “Number of shares of common stock” are 19,000 shares of common stock held under the name of Japan Securities Depository Center, Incorporated. Also included in “Shares with full voting rights (Others)” under “Number of voting rights (Units)” are 190 units of voting rights relating to the shares of common stock with full voting rights held under the name of Japan Securities Depository Center, Incorporated.

- 16 -

2) Treasury Stock, etc.

(As of June 30, 2019)

Name of shareholder	Address of shareholder	Number of   shares held   under own   name	Number of   shares held   under the names   of others	Total number   of shares   held	Percentage of   shares held to   total shares   issued (%)
Sony Corporation (Treasury stock)	1-7-1, Konan, Minato-ku,  Tokyo	25,235,300	—	25,235,300	1.98
Total	—	25,235,300	—	25,235,300	1.98

Note: In addition to the 25,235,300 shares listed above, there are 300 shares of common stock held in the name of the Company in the register of shareholders that the Company does not beneficially own. These shares are included in “Shares with full voting rights (Others)” in Table 1) “Shares Issued” above.

(2)    Directors and Corporate Executive Officers

There was no change in directors or corporate executive officers in the period from the filing date of the Securities Report (Yukashoken Houkokusho) for the fiscal year ended March 31, 2019 to the filing date of this Quarterly Securities Report (Shihanki Houkokusho).

- 17 -

IV        Financial Statements

	Page
(1) Consolidated Financial Statements	19
(i)         Consolidated Balance Sheets	19
(ii)        Consolidated Statements of Income	21
(iii)       Consolidated Statements of Comprehensive Income	22
(iv)       Consolidated Statements of Cash Flows	23
(2) Other Information	43

- 18 -

(1) Consolidated Financial Statements

(i)    Consolidated Balance Sheets (Unaudited)

Sony Corporation and Consolidated Subsidiaries

	Yen in millions
	At March 31,         2019			At June 30,         2019
ASSETS
Current assets:
Cash and cash equivalents		1,470,073			1,210,507
Marketable securities		1,324,538			1,398,196
Notes and accounts receivable, trade and contract assets		1,091,242			1,130,271
Allowance for doubtful accounts		(25,440	)		(24,734	)
Inventories		653,278			693,646
Other receivables		223,620			237,201
Prepaid expenses and other current assets		509,301			561,846
Total current assets		5,246,612			5,206,933
Film costs		409,005			431,761
Investments and advances:
Affiliated companies		163,365			182,839
Securities investments and other		11,561,286			11,926,259
		11,724,651			12,109,098
Property, plant and equipment:
Land		83,992			83,102
Buildings		664,157			645,274
Machinery and equipment		1,585,382			1,528,937
Construction in progress		39,208			62,152
		2,372,739			2,319,465
Less – Accumulated depreciation		1,595,686			1,543,732
		777,053			775,733
Other assets:
Operating lease right-of-use assets		-			300,626
Finance lease right-of-use assets		-			37,406
Intangibles, net		917,966			892,702
Goodwill		768,552			751,204
Deferred insurance acquisition costs		595,265			598,631
Deferred income taxes		202,486			189,891
Other		339,996			313,498
		2,824,265			3,083,958
Total assets		20,981,586			21,607,483

  (Continued on following page.)

- 19 -

          Consolidated Balance Sheets (Unaudited)

	Yen in millions
	At March 31,         2019			At June 30,         2019
LIABILITIES
Current liabilities:
Short-term borrowings		618,618			817,188
Current portion of long-term debt		172,461			102,571
Current portion of long-term operating lease liabilities		-			66,335
Notes and accounts payable, trade		492,124			543,250
Accounts payable, other and accrued expenses		1,693,048			1,469,123
Accrued income and other taxes		135,226			156,211
Deposits from customers in the banking business		2,302,314			2,339,871
Other		666,024			749,452
Total current liabilities		6,079,815			6,244,001
Long-term debt		568,372			528,124
Long-term operating lease liabilities		-			259,072
Accrued pension and severance costs		384,232			380,183
Deferred income taxes		531,421			530,743
Future insurance policy benefits and other		5,642,671			5,751,239
Policyholders’ account in the life insurance business		3,048,202			3,099,644
Other		281,382			260,579
Total liabilities		16,536,095			17,053,585
Redeemable noncontrolling interest		8,801			8,625
Commitments and contingent liabilities
EQUITY
Sony Corporation’s stockholders’ equity:
Common stock, no par value –
At March 31, 2019–Shares authorized: 3,600,000,000, shares issued: 1,271,230,341		874,291
At June 30, 2019–Shares authorized: 3,600,000,000, shares issued: 1,271,525,040					874,887
Additional paid-in capital		1,266,874			1,268,568
Retained earnings		2,320,586			2,465,236
Accumulated other comprehensive income –
Unrealized gains on securities, net		135,035			152,148
Unrealized gains (losses) on derivative instruments, net		(19	)		745
Pension liability adjustment		(310,457	)		(307,550	)
Foreign currency translation adjustments		(435,229	)		(477,470	)
		(610,670	)		(632,127	)
Treasury stock, at cost
Common stock
At March 31, 2019–20,483,474 shares		(104,704	)
At June 30, 2019–25,235,303 shares					(130,057	)
		3,746,377			3,846,507
Noncontrolling interests		690,313			698,766
Total equity		4,436,690			4,545,273
Total liabilities and equity		20,981,586			21,607,483

  The accompanying notes are an integral part of these statements.

- 20 -

  (ii)    Consolidated Statements of Income (Unaudited)

Sony Corporation and Consolidated Subsidiaries

	Yen in millions
	Three months ended June 30
	2018			2019
Sales and operating revenue:
Net sales		1,602,195			1,558,646
Financial services revenue		333,240			334,820
Other operating revenue		18,189			32,258
		1,953,624			1,925,724
Costs and expenses:
Cost of sales		1,112,487			1,061,038
Selling, general and administrative		349,761			350,167
Financial services expenses		292,156			288,493
Other operating income, net		(325	)		(3,557	)
		1,754,079			1,696,141
Equity in net income (loss) of affiliated companies		(4,539	)		1,342
Operating income		195,006			230,925
Other income:
Interest and dividends		4,734			5,805
Gain on equity securities, net		114,779			323
Foreign exchange gain, net		1,011			-
Other		733			1,119
		121,257			7,247
Other expenses:
Interest expenses		3,318			4,880
Foreign exchange loss, net		-			1,696
Other		859			578
		4,177			7,154
Income before income taxes		312,086			231,018
Income taxes		75,222			65,012
Net income		236,864			166,006
Less - Net income attributable to noncontrolling interests		10,417			13,884
Net income attributable to Sony Corporation’s stockholders		226,447			152,122
	Yen
	Three months ended June 30
	2018			2019
Per share data:
Net income attributable to Sony Corporation’s stockholders
– Basic		178.66			121.78
– Diluted		174.80			119.22

The accompanying notes are an integral part of these statements.

- 21 -

  (iii)    Consolidated Statements of Comprehensive Income (Unaudited)

Sony Corporation and Consolidated Subsidiaries

	Yen in millions
	Three months ended June 30
	2018		2019
Net income		236,864		166,006
Other comprehensive income, net of tax —
Unrealized gains on securities		3,271		26,301
Unrealized gains on derivative instruments		1,478		764
Pension liability adjustment		2,276		2,914
Foreign currency translation adjustments		8,297		(42,698	)
Total comprehensive income		252,186		153,287
Less – Comprehensive income attributable to noncontrolling interests		7,917		22,622
Comprehensive income attributable to Sony Corporation’s stockholders		244,269		130,665

  The accompanying notes are an integral part of these statements.

- 22 -

  (iv)     Consolidated Statements of Cash Flows (Unaudited)

Sony Corporation and Consolidated Subsidiaries

	Yen in millions
	Three months ended June 30
	2018			2019
Cash flows from operating activities:
Net income		236,864			166,006
Adjustments to reconcile net income to net cash provided by (used in) operating activities–
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs		86,243			93,412
Amortization of film costs		58,001			56,546
Accrual for pension and severance costs, less payments		(1,881	)		5
Other operating income, net		(325	)		(3,557	)
Gain on securities investments, net (other than financial services business)		(114,778	)		(329	)
Gain on marketable securities and securities investments held in the financial services business, net		(43,547	)		(9,172	)
Deferred income taxes		1,215			(1,352	)
Equity in net loss of affiliated companies, net of dividends		6,642			1,196
Changes in assets and liabilities:
Increase in notes, accounts receivable, trade and contract assets		(46,041	)		(85,901	)
Increase in inventories		(7,206	)		(51,976	)
Increase in film costs		(82,734	)		(91,680	)
Increase in notes and accounts payable, trade		109,783			55,807
Increase in accrued income and other taxes		26,307			6,836
Increase in future insurance policy benefits and other		173,976			138,925
Increase in deferred insurance acquisition costs		(23,352	)		(22,185	)
Increase in marketable securities held in the life insurance business		(21,421	)		(59,080	)
Increase in other current assets		(34,211	)		(39,226	)
Decrease in other current liabilities		(162,437	)		(205,943	)
Other		(64,327	)		50,845
Net cash provided by (used in) operating activities		96,771			(823	)

(Continued on following page.)

- 23 -

             Consolidated Statements of Cash Flows (Unaudited)

	Yen in millions
	Three months ended June 30
	2018			2019
Cash flows from investing activities:
Payments for purchases of fixed assets		(73,179	)		(78,264	)
Proceeds from sales of fixed assets		3,923			7,409
Payments for investments and advances by financial services business		(267,217	)		(302,434	)
Payments for investments and advances (other than financial services business)		(3,916	)		(22,969	)
Proceeds from sales or return of investments and collections of advances by financial services business		64,074			72,375
Proceeds from sales or return of investments and collections of advances (other than financial services business)		635			303
Proceeds related to sales of Spotify Technology S.A. Shares		82,467			-
Other		(4,148	)		427
Net cash used in investing activities		(197,361	)		(323,153	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		20,300			5,775
Payments of long-term debt		(175,444	)		(114,297	)
Increase in short-term borrowings, net		128,164			198,835
Increase in deposits from customers in the financial services business, net		63,798			57,354
Dividends paid		(19,013	)		(25,035	)
Payments for purchase of treasury stock		(41	)		(25,354	)
Other		(39,860	)		(10,622	)
Net cash provided by (used in) financing activities		(22,096	)		86,656
Effect of exchange rate changes on cash and cash equivalents, including restricted		44,311			(23,451	)
Net decrease in cash and cash equivalents, including restricted		(78,375	)		(260,771	)
Cash and cash equivalents, including restricted, at beginning of the fiscal year		1,592,938			1,473,813
Cash and cash equivalents, including restricted, at end of the period		1,514,563			1,213,042
Less - restricted cash and cash equivalents, included in other current assets and other assets		5,112			2,535
Cash and cash equivalents at end of the period		1,509,451			1,210,507

  The accompanying notes are an integral part of these statements.

- 24 -

    Index to Notes to Consolidated Financial Statements

Sony Corporation and Consolidated Subsidiaries

Notes to Consolidated Financial Statements	Page
1.   Summary of significant accounting policies		26
2.   Marketable securities and securities investments		28
3.   Fair value measurements		30
4.   Supplemental equity and comprehensive income information		32
5.   Reconciliation of the differences between basic and diluted EPS		34
6.   Revenue		35
7.   Commitments, contingent liabilities and other		36
8.   Business segment information		37

- 25 -

Notes to Consolidated Financial Statements (Unaudited)

Sony Corporation and Consolidated Subsidiaries

1. Summary of significant accounting policies

The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), except for certain disclosures which have been omitted. Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform with U.S. GAAP. These adjustments were not recorded in the statutory books and records as Sony Corporation and its subsidiaries in Japan maintain their records and prepare their statutory financial statements in accordance with accounting principles generally accepted in Japan while its foreign subsidiaries maintain their records and prepare their financial statements in conformity with accounting principles generally accepted in the countries of their domiciles.

(1) Recently adopted accounting pronouncements:

Leases -

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, which amends current leasing guidance. The ASU requires substantially all leases to be recognized on the balance sheet.

Sony has applied this ASU as of April 1, 2019, on a modified retrospective basis with no restatement of comparative periods. Sony has applied the package of practical expedients for leases that expired or existed prior to the adoption date. As a result, Sony did not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, or whether initial direct costs for any existing leases qualify for capitalization. In addition, Sony has applied the short-term lease exception.

As a result of the adoption of this ASU, Sony recognized 316,923 million yen of operating lease right-of-use assets and 341,251 million yen of lease liabilities for operating leases on the consolidated balance sheets at April 1, 2019. This impact is mainly due to operating leases of real estate. The difference of 24,328 million yen between right-of-use assets and lease liabilities represents deferred rent for leases that existed as of the date of adoption, which was offset against the opening balance of operating lease right-of-use assets. Finance lease right-of-use assets which is included in property, plant and equipment in the consolidated balance sheets for the fiscal year ended March 31, 2019, is now presented as finance lease right-of-use assets from April 1, 2019 onward.

Premium amortization on purchased callable debt securities -

In March 2017, the FASB issued ASU 2017-08. This ASU requires certain premiums on callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be affected. This ASU was effective for Sony as of April 1, 2019. The adoption of this ASU did not have a material impact on Sony’s results of operations and financial position.

Targeted improvements to accounting for hedging activities -

In August 2017, the FASB issued ASU 2017-12, which made targeted improvements to the accounting for hedging activities. The amendments in this update simplify certain aspects of hedge accounting for both non-financial and financial risks and better align the recognition and measurement of hedge results with an entity’s risk management activities. This ASU also amends certain presentation and disclosure requirements for hedging activities and changes how an entity assesses hedge effectiveness. This ASU was effective for Sony as of April 1, 2019. The adoption of this ASU did not have a material impact on Sony’s results of operations and financial position.

- 26 -

(2) Accounting methods used specifically for interim consolidated financial statements:

Income Taxes -

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

(3) Reclassifications:

Certain reclassifications of the financial statements and accompanying footnotes for the three months ended June 30, 2018 have been made to conform to the presentation for the three months ended June 30, 2019.

- 27 -

2. Marketable securities and securities investments

Marketable securities and securities investments, primarily held in the Financial Services segment, include debt securities for which the aggregate cost, gross unrealized gains and losses and fair value pertaining to available-for-sale securities and held-to-maturity securities are as follows.

	Yen in millions
	March 31, 2019								June 30, 2019
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value		Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Debt securities:
Available-for-sale securities:
Japanese national government bonds		1,422,620		220,989		(20)		1,643,589		1,444,456		246,959		(23)		1,691,392
Japanese local government bonds		67,461		70		(34)		67,497		66,437		71		(49)		66,459
Japanese corporate bonds		202,433		17,178		(223)		219,388		200,742		21,476		(114)		222,104
Foreign government bonds		153,429		8,669		(603)		161,495		159,862		14,693		(328)		174,227
Foreign corporate bonds		360,299		944		(376)		360,867		375,252		836		(164)		375,924
Securitized products		190,111		1		-		190,112		211,861		2		-		211,863
Other		2,286		2,402		-		4,688		2,286		2,292		-		4,578
		2,398,639		250,253		(1,256)		2,647,636		2,460,896		286,329		(678)		2,746,547
Held-to-maturity securities:
Japanese national government bonds *1		6,042,635		2,016,786		-		8,059,421		6,100,190		2,271,791		(3)		8,371,978
Japanese local government bonds		3,518		388		-		3,906		3,086		385		-		3,471
Japanese corporate bonds		409,329		44,348		(5,845)		447,832		427,585		66,252		(1,995)		491,842
Foreign government bonds *2		386,392		18,609		(13,742)		391,259		542,599		39,840		(4,830)		577,609
Foreign corporate bonds		198		11		-		209		198		10		-		208
		6,842,072		2,080,142		(19,587)		8,902,627		7,073,658		2,378,278		(6,828)		9,445,108
Total		9,240,711		2,330,395		(20,843)		11,550,263		9,534,554		2,664,607		(7,506)		12,191,655

*1. As of June 30, 2019, held-to-maturity securities include 278,496 million yen of pledged Japanese national government bonds as collateral for short-term lending transactions.

*2. As of June 30, 2019, held-to-maturity securities include 164,116 million yen of pledged Foreign government bonds as collateral for short-term repurchase agreements.

- 28 -

During the three months ended June 30, 2019, with respect to equity securities included in marketable securities and securities investments, Sony recorded net realized gains of 287 million yen due to the sale of equity securities and net unrealized gains of 8,408 million yen due to revaluation of equity securities held at the end of the period for the first quarter of the fiscal year ending March 31, 2020. Gains or losses arising from equity securities held in the Financial Services segment are recorded in financial services revenue, and gains or losses arising from equity securities held in all segments other than the Financial Services segment are recorded in gain on equity securities, net in the consolidated statement of income. Included in the gains noted above were gains recorded by Sony with respect to the equity securities held by Sony in Spotify Technology S.A. (“Spotify”).

On April 3, 2018, Spotify was publicly listed for trading on the New York Stock Exchange. Sony owned 5.707% of Spotify’s shares at the time of the public listing.

During the three months ended June 30, 2018, Sony sold a portion of the Spotify shares that it owned for aggregate consideration of 82,616 million yen (768 million U.S. dollars) in cash proceeds. The sale of such shares, offset by costs to be paid to Sony’s artists and distributed labels and other transaction costs which directly related to the gains recognized from the sale of Spotify shares, resulted in a net pre-tax realized gain of 54,179 million yen (504 million U.S. dollars) recorded in gain on equity securities, net in the consolidated statement of income. The payments to Sony’s artists and distributed labels are included within Other in the investing activities section in the consolidated statements of cash flows.

The remaining Spotify shares retained as of June 30, 2018 had a gross fair value of 95,275 million yen (862 million U.S. dollars), and resulted in a pre-tax unrealized gain, net of costs to be paid to its artists and distributed labels and other costs which directly related to the gains recognized from the Spotify shares, of 58,908 million yen (547 million U.S. dollars) recorded in gain on equity securities, net in the consolidated statement of income.

The revaluation of the remaining Spotify shares retained as of June 30, 2019 resulted in a pre-tax unrealized gain, net of costs to be paid to Sony’s artists and distributed labels, of 2,752 million yen (25 million U.S. dollars) recorded in gain on equity securities, net in the consolidated statements of income.

- 29 -

3. Fair value measurements

The fair value of Sony’s assets and liabilities that are measured at fair value on a recurring basis are as follows.

	Yen in millions
	March 31, 2019
									Presentation in the consolidated balance sheets
	Level 1		Level 2		Level 3		Total		Marketable   securities		Securities investments   and other		Other current assets/   liabilities		Other noncurrent assets/ liabilities
Assets:
Debt securities
Trading securities		22,105		212,012		-		234,117		234,117		-		-		-
Available-for-sale securities
Japanese national government bonds		-		1,643,589		-		1,643,589		18,719		1,624,870		-		-
Japanese local government bonds		-		67,497		-		67,497		7,768		59,729		-		-
Japanese corporate bonds		-		219,388		-		219,388		11,472		207,916		-		-
Foreign government bonds		-		161,495		-		161,495		3,984		157,511		-		-
Foreign corporate bonds		-		338,163		22,704		360,867		90,801		270,066		-		-
Securitized products		-		25,029		165,083		190,112		-		190,112		-		-
Other		-		4,688		-		4,688		-		4,688		-		-
Equity securities		1,037,100		135,794		-		1,172,894		951,390		221,504		-		-
Other investments *1		5,489		1,507		6,918		13,914		-		13,914		-		-
Derivative assets *2, *3		444		10,042		-		10,486		-		-		9,431		1,055
Total assets		1,065,138		2,819,204		194,705		4,079,047		1,318,251		2,750,310		9,431		1,055
Liabilities:
Derivative liabilities *2, *3		136		32,686		-		32,822		-		-		19,852		12,970
Total liabilities		136		32,686		-		32,822		-		-		19,852		12,970

- 30 -

	Yen in millions
	June 30, 2019
									Presentation in the consolidated balance sheets
	Level 1		Level 2		Level 3		Total		Marketable   securities		Securities investments   and other		Other current assets/   liabilities		Other noncurrent assets/ liabilities
Assets:
Debt securities
Trading securities		22,295		227,568		-		249,863		249,863		-		-		-
Available-for-sale securities
Japanese national government bonds		-		1,691,392		-		1,691,392		15,006		1,676,386		-		-
Japanese local government bonds		-		66,459		-		66,459		10,859		55,600		-		-
Japanese corporate bonds		-		222,104		-		222,104		19,178		202,926		-		-
Foreign government bonds		-		174,227		-		174,227		2,156		172,071		-		-
Foreign corporate bonds		-		355,884		20,040		375,924		88,947		286,977		-		-
Securitized products		-		31,213		180,650		211,863		-		211,863		-		-
Other		-		4,578		-		4,578		-		4,578		-		-
Equity securities		1,084,058		136,485		-		1,220,543		1,005,112		215,431		-		-
Other investments *1		5,488		1,746		6,441		13,675		-		13,675		-		-
Derivative assets *2, *3		-		12,794		-		12,794		-		-		12,205		589
Total assets		1,111,841		2,924,450		207,131		4,243,422		1,391,121		2,839,507		12,205		589
Liabilities:
Derivative liabilities *2, *3		441		21,004		-		21,445		-		-		7,499		13,946
Total liabilities		441		21,004		-		21,445		-		-		7,499		13,946

*1 Other investments include certain hybrid financial instruments and certain private equity investments.

*2 Derivative assets and liabilities are recognized and disclosed on a gross basis.

*3 The potential effect of offsetting on assets and liabilities, which primarily consists of derivatives subject to master netting agreements and/or collateral, is insignificant.

- 31 -

4. Supplemental equity and comprehensive income information

(1) Stockholders’ Equity

A reconciliation of the beginning and ending carrying amounts of Sony Corporation’s stockholders’ equity, noncontrolling interests and the total equity for the three months ended June 30, 2018 and 2019 are as follows:

	Yen in millions
	Sony Corporation’s     stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2018		2,967,366			679,791			3,647,157
Cumulative effect of newly adopted ASUs		(7,550	)		5,432			(2,118)
Exercise of stock acquisition rights		9,058			-			9,058
Conversion of convertible bonds		2			-			2
Stock-based compensation		1,308			-			1,308
Comprehensive income:
Net income		226,447			10,417			236,864
Other comprehensive income, net of tax —
Unrealized gains (losses) on securities		4,837			(1,566	)		3,271
Unrealized gains on derivative instruments		1,478			-			1,478
Pension liability adjustment		2,214			62			2,276
Foreign currency translation adjustments		9,293			(996	)		8,297
Total comprehensive income		244,269			7,917			252,186
Dividends declared		-			(27,818	)		(27,818)
Transactions with noncontrolling interests shareholders and other		9,499			(25,485	)		(15,986)
Balance at June 30, 2018		3,223,952			639,837			3,863,789
	Yen in millions
	Sony Corporation’s     stockholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2019		3,746,377			690,313			4,436,690
Cumulative effect of ASU 2016-02		(7,472	)		-			(7,472)
Exercise of stock acquisition rights		1,191			-			1,191
Conversion of convertible bonds		2			-			2
Stock-based compensation		1,018			-			1,018
Comprehensive income:
Net income		152,122			13,884			166,006
Other comprehensive income, net of tax —
Unrealized gains on securities		17,113			9,188			26,301
Unrealized gains on derivative instruments		764			-			764
Pension liability adjustment		2,907			7			2,914
Foreign currency translation adjustments		(42,241	)		(457	)		(42,698)
Total comprehensive income		130,665			22,622			153,287
Dividends declared		-			(11,438	)		(11,438)
Transactions with noncontrolling interests shareholders and other		(25,274	)		(2,731	)		(28,005)
Balance at June 30, 2019		3,846,507			698,766			4,545,273

There was no material effect of changes in Sony Corporation’s ownership interest in its subsidiaries on Sony Corporation’s stockholders’ equity for the three months ended June 30, 2018 and 2019.

- 32 -

(2) Other Comprehensive Income

Changes in accumulated other comprehensive income, net of tax by component for the three months ended June 30, 2018 and 2019 are as follows:

	Yen in millions
	Unrealized     gains (losses)     on securities			Unrealized gains (losses) on derivative instruments			Pension liability adjustment			Foreign currency translation adjustments			Total
Balance at March 31, 2018		126,191			(1,242	)		(296,444	)		(445,251	)		(616,746)
Cumulative effect of ASU2016-01		(15,526	)		-			-			-			(15,526)
Other comprehensive income before reclassifications		3,308			2,074			(46	)		10,804			16,140
Amounts reclassified out of accumulated other comprehensive income		(37	)		(596	)		2,322			(2,507	)		(818)
Net current-period other comprehensive income		3,271			1,478			2,276			8,297			15,322
Less: Other comprehensive income attributable to noncontrolling interests		(1,566	)		-			62			(996	)		(2,500)
Balance at June 30, 2018		115,502			236			(294,230	)		(435,958	)		(614,450)
	Yen in millions
	Unrealized     gains (losses)     on securities			Unrealized gains (losses) on derivative instruments			Pension liability adjustment			Foreign currency translation adjustments			Total
Balance at March 31, 2019		135,035			(19	)		(310,457	)		(435,229	)		(610,670)
Other comprehensive income before reclassifications		26,375			884			(194	)		(42,698	)		(15,633)
Amounts reclassified out of accumulated other comprehensive income		(74	)		(120	)		3,108			-			2,914
Net current-period other comprehensive income		26,301			764			2,914			(42,698	)		(12,719)
Less: Other comprehensive income attributable to noncontrolling interests		9,188			-			7			(457	)		8,738
Balance at June 30, 2019		152,148			745			(307,550	)		(477,470	)		(632,127)

- 33 -

5. Reconciliation of the differences between basic and diluted EPS

Reconciliation of the differences between basic and diluted net income attributable to Sony Corporation’s stockholders per share (“EPS”) for the three months ended June 30, 2018 and 2019 is as follows:

	Yen in millions
	Three months ended June 30
	2018	2019
Net income attributable to Sony Corporation’s stockholders for basic and diluted EPS computation	226,447	152,122
	Thousands of shares
Weighted-average shares outstanding	1,267,499	1,249,160
Effect of dilutive securities:
Stock acquisition rights	3,967	2,843
Zero coupon convertible bonds	23,968	24,011
Weighted-average shares for diluted EPS computation	1,295,434	1,276,014
	Yen
Basic EPS	178.66	121.78
Diluted EPS	174.80	119.22

Potential shares of common stock that were excluded from the computation of diluted EPS for the three months ended June 30, 2018 and 2019 were 2,921 thousand shares and 5,724 thousand shares, respectively. The potential shares related to stock acquisition rights were excluded as anti-dilutive for the three months ended June 30, 2018 and 2019 when the exercise price for those shares was in excess of the average market value of Sony Corporation’s common stock for the period. The zero coupon convertible bonds issued in July 2015 were included in the diluted EPS calculation under the if-converted method beginning upon issuance.

- 34 -

6. Revenue

(1) Contract balances

Contract assets and contract liabilities are composed of the following:

	Yen in millions
	March 31, 2019		June 30, 2019
Contract assets		19,147		18,379
Contract liabilities *		254,646		240,058

* Contract liabilities are included in the consolidated balance sheets as Other, both current and non-current.

Contract liabilities principally relate to customer advances received prior to performance. Revenues of 103,299 million yen were recognized during the three months ended June 30, 2019, which were included in the balance of contract liabilities at March 31, 2019.

(2) Performance obligations

Remaining (unsatisfied or partially unsatisfied) performance obligations represent future revenues not yet recorded for firm orders that have not yet been performed. Sony applies practical expedients to exclude certain information about the remaining performance obligations, primarily related to contracts with an expected original duration of less than one year, and sales-based or usage-based royalty revenue on licenses of intellectual property. After applying practical expedients, revenue from contracts with remaining performance obligations, which primarily relate to licensing of theatrical and television content in the Pictures segment, is expected to be recognized primarily within three years.

(3) Disaggregation of revenue

For the breakdown of sales and operating revenue by segments, product categories and geographies, refer to Note 8.

- 35 -

7. Commitments, contingent liabilities and other

(1) Loan commitments

Subsidiaries in the Financial Services segment have entered into loan agreements with their customers in accordance with the condition of the contracts. As of June 30, 2019, the total unused portion of the lines of credit extended under these contracts was 38,710 million yen. Based upon the information currently available, it is not possible to estimate the aggregate amounts of future year-by-year payments for these loan commitments.

(2) Purchase commitments and other

Purchase commitments and other outstanding as of June 30, 2019 amounted to 582,086 million yen. The major components of these commitments are as follows:

Certain subsidiaries in the Pictures segment have entered into agreements with creative talent for the development and production of motion pictures and television programming as well as agreements with third parties to acquire completed motion pictures, or certain rights therein, and to acquire the rights to broadcast certain live action sporting events. These agreements cover various periods mainly within three years. As of June 30, 2019, these subsidiaries were committed to make payments under such contracts of 108,759 million yen.

Certain subsidiaries in the Music segment have entered into contracts with recording artists, songwriters and companies for the future production, distribution and/or licensing of music product. These contracts cover various periods mainly within five years. As of June 30, 2019, these subsidiaries were committed to make payments of 125,087 million yen under such contracts.

Sony has entered into purchase contracts for fixed assets. As of June 30, 2019, Sony has committed to make payments of 146,252 million yen under such contracts.

Sony has entered into purchase contracts for materials. As of June 30, 2019, Sony has committed to make payments of 123,303 million yen under such contracts.

Sony has entered into sponsorship contracts related to advertising and promotional rights. These contracts cover various periods mainly within two years. As of June 30, 2019, Sony has committed to make payments of 8,796 million yen under such contracts.

(3) Litigation

Beginning in 2009, the U.S. Department of Justice (“DOJ”), the European Commission and certain other governmental agencies outside the United States have conducted investigations relating to competition in the optical disk drives market. Sony Corporation and/or certain of its subsidiaries have been subject to these investigations. Sony understands that these investigations have ended. However, proceedings initiated by the European Commission as a result of its investigation continue. In October 2015, the European Commission adopted a decision in which it fined Sony Corporation and certain of its subsidiaries 31 million euros; however, Sony filed an appeal against the decision with the European Union’s General Court. In July 2019, the General Court upheld the European Commission’s decision. Sony is reviewing the judgment carefully and will decide whether to file an appeal. In addition, a number of direct and indirect purchaser lawsuits, including class actions, have been filed in certain jurisdictions in which the plaintiffs allege that Sony Corporation and certain of its subsidiaries violated antitrust laws and seek recovery of damages and other remedies. Most of these lawsuits have been settled, including the class actions brought by the direct and indirect purchasers in the United States; however, one lawsuit continues. Based on the stage of the pending proceedings, it is not possible to estimate the amount of losses or range of possible losses, if any, that might ultimately result from adverse judgments, settlements or other resolution of all of these matters.

Since 2011, in relation to the secondary batteries business that was operated by Sony and certain of its subsidiaries, a number of direct and indirect purchaser lawsuits, including class actions, have been filed in certain jurisdictions in which the plaintiffs allege that Sony Corporation and certain of its subsidiaries violated antitrust laws and seek recovery of damages and other remedies. Most of these lawsuits have been settled, including the class actions brought by the direct and indirect purchasers in the United States; however, certain lawsuits are still pending. Based on the stage of the pending proceedings, it is not possible to estimate the amount of losses or range of possible losses, if any, that might ultimately result from adverse judgments, settlements or other resolution of all of these matters.

In addition, Sony Corporation and certain of its subsidiaries are defendants or otherwise involved in other pending legal and regulatory proceedings. However, based upon the information currently available, Sony believes that the outcome from such legal and regulatory proceedings would not have a material impact on Sony’s results of operations and financial position.

- 36 -

(4) Guarantees

Sony has issued guarantees that contingently require payments to guaranteed parties if certain specified events or conditions occur. The maximum potential amount of future payments under these guarantees as of June 30, 2019 amounted to 2,411 million yen.

8. Business segment information

The reportable segments presented below are the segments of Sony for which separate financial information is available and for which operating profit or loss amounts are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM does not evaluate segments using discrete asset information. Sony’s CODM is its Chief Executive Officer and President.

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2020 to reflect modifications to the organizational structure of certain segments and a change in the Senior Executives in charge of certain segments as of April 1, 2019. In connection with this decision, the former Home Entertainment & Sound, Imaging Products & Solutions and Mobile Communications segments have been realigned as the Electronics Products & Solutions (“EP&S”) segment. In connection with this realignment, the sales and operating revenue and operating income (loss) of each segment for the fiscal year ended March 31, 2019 have been reclassified to conform to the presentation for the fiscal year ending March 31, 2020. In addition, the former Semiconductors segment has been renamed the Imaging & Sensing Solutions (“I&SS”) segment effective from the first quarter of the fiscal year ending March 31, 2020.

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

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Business segments -

Sales and operating revenue:

	Yen in millions
	Three months ended June 30
	2018		2019
Sales and operating revenue:
Game & Network Services -
Customers		449,980		441,750
Intersegment		22,121		15,711
Total		472,101		457,461
Music -
Customers		177,708		200,038
Intersegment		3,763		2,215
Total		181,471		202,253
Pictures -
Customers		173,227		185,759
Intersegment		1,854		329
Total		175,081		186,088
Electronics Products & Solutions -
Customers		564,794		480,656
Intersegment		3,364		3,259
Total		568,158		483,915
Imaging & Sensing Solutions -
Customers		176,673		211,175
Intersegment		25,566		19,503
Total		202,239		230,678
Financial Services -
Customers		333,240		334,820
Intersegment		1,965		2,115
Total		335,205		336,935
All Other -
Customers		74,447		60,632
Intersegment		8,477		8,959
Total		82,924		69,591
Corporate and elimination		(63,555)		(41,197)
Consolidated total		1,953,624		1,925,724

G&NS intersegment amounts primarily consist of transactions with All Other.

I&SS intersegment amounts primarily consist of transactions with the G&NS segment and the EP&S segment.

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

Corporate and elimination includes certain brand and patent royalty income.

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Segment profit or loss:

	Yen in millions
	Three months ended June 30
	2018		2019
Operating income (loss):
Game & Network Services		83,450		73,804
Music		32,104		38,277
Pictures		(7,601)		376
Electronics Products & Solutions		32,710		25,066
Imaging & Sensing Solutions		29,137		49,528
Financial Services		40,581		46,105
All Other		294		(2,602)
Total		210,675		230,554
Corporate and elimination		(15,669)		371
Consolidated operating income		195,006		230,925

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

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Sales to Customers by Product Category:

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

	Yen in millions
	Three months ended June 30
Sales and operating revenue:	2018		2019
Game & Network Services
Digital Software and Add-on Content		224,942		215,964
Network Services		75,444		83,606
Hardware and Others		149,594		142,180
Total		449,980		441,750
Music
Recorded Music		99,739		111,962
Music Publishing		21,464		39,290
Visual Media and Platform		56,505		48,786
Total		177,708		200,038
Pictures
Motion Pictures		68,568		80,870
Television Productions		45,415		46,486
Media Networks		59,244		58,403
Total		173,227		185,759
Electronics Products & Solutions
Televisions		186,550		147,761
Audio and Video		84,929		78,743
Still and Video Cameras		113,256		100,254
Mobile Communications		130,354		100,550
Other		49,705		53,348
Total		564,794		480,656
Imaging & Sensing Solutions		176,673		211,175
Financial Services		333,240		334,820
All Other		74,447		60,632
Corporate		3,555		10,894
Consolidated total		1,953,624		1,925,724

Sony has realigned its product category configuration in regard to the new EP&S segment from the first quarter of the fiscal year ending March 31, 2020. In connection with the realignment, all prior period sales amounts by product category in the table above have been reclassified to conform to the current presentation.

In the G&NS segment, Digital Software and Add-on Content includes distribution of software titles and add-on contents through network by Sony Interactive Entertainment; Network Services includes network services relating to game, video and music content; Hardware and Others includes home and portable game consoles, packaged software and peripheral devices. In the Music segment, Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes the production and distribution of animation titles, including game applications based on the animation titles, and various service offerings for music and visual products. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of motion pictures and direct-to-video content; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. In the EP&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices; Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Mobile Communications includes smartphones and an internet-related service business; Other includes display products such as projectors and medical equipment.

Within the EP&S segment, the operating income (loss) of Mobile Communications for the first quarter of the fiscal years ended March 31, 2019 and 2020 was (10,758) million yen and 1,039 million yen, respectively.

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	Yen in millions
	Three months ended June 30
	2018		2019
Depreciation and amortization:
Game & Network Services		7,024		6,812
Music		4,369		6,779
Pictures		5,870		5,753
Electronics Products & Solutions, including contract costs		16,292		15,081
Imaging & Sensing Solutions		25,940		29,439
Financial Services, including deferred insurance acquisition costs		17,906		22,151
All Other		1,209		1,396
Total		78,610		87,411
Corporate		7,633		6,001
Consolidated total		86,243		93,412
	Yen in millions
	Three months ended June 30, 2018
	Total net       restructuring       charges		Depreciation associated with   restructured assets		Total
Restructuring charges and associated depreciation:
Game & Network Services		-		-		-
Music		-		-		-
Pictures		602		-		602
Electronics Products & Solutions		264		-		264
Imaging & Sensing Solutions		-		-		-
Financial Services		-		-		-
All Other and Corporate		443		-		443
Consolidated total		1,309		-		1,309
	Yen in millions
	Three months ended June 30, 2019
	Total net     restructuring     charges		Depreciation associated with restructured assets		Total
Restructuring charges and associated depreciation:
Game & Network Services		-		-		-
Music		-		-		-
Pictures		-		-		-
Electronics Products & Solutions		1,892		-		1,892
Imaging & Sensing Solutions		-		-		-
Financial Services		-		-		-
All Other and Corporate		1,461		245		1,706
Consolidated total		3,353		245		3,598

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

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Geographic Information –

Sales and operating revenue attributed to countries and areas based on location of external customers are as follows:

	Yen in millions
	Three months ended June 30
Sales and operating revenue:	2018		2019
Japan		631,698		627,522
United States		398,867		435,028
Europe		394,651		362,947
China		184,170		201,088
Asia-Pacific		206,993		183,103
Other Areas		137,245		116,036
Total		1,953,624		1,925,724

Major countries and areas in each geographic segment excluding Japan, United States and China are as follows:    

(1) Europe:	United Kingdom, France, Germany, Russia, Spain and Sweden
(2) Asia-Pacific:	India, South Korea and Oceania
(3) Other Areas:	The Middle East/Africa, Brazil, Mexico and Canada

There are no individually material countries with respect to sales and operating revenue included in Europe, Asia-Pacific and Other Areas.

Transfers between reportable business segments or geographic areas are made at individually negotiated prices that are intended to reflect a market-based transfer price.

There were no sales and operating revenue with any single major external customer for the three months ended June 30, 2018 and 2019.

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(2) Other Information

(i) Dividends declared

A year-end cash dividend for Sony Corporation’s common stock was approved at the Board of Directors meeting held on April 26, 2019 as below:

1. Total amount of year-end cash dividends:

25,015 million yen

2. Amount of year-end cash dividends per share:

20.00 yen

3. Payment date:

May 29, 2019

Year-end cash dividends for the fiscal year ended March 31, 2019 have been incorporated in the consolidated financial statements for the fiscal year ended March 31, 2019.

Note: Year-end cash dividends were distributed to the shareholders recorded or registered as the holders or pledgees of shares in Sony Corporation’s register of shareholders at the end of March 31, 2019.

(ii) Litigation

For the legal proceedings, please refer to “IV Financial Statements – Notes to Consolidated Financial Statements – 7. Commitments, contingent liabilities and other”.

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