Consolidated Financial Summary
for the Year Ended March 31, 2014
May 20, 2014
Sony Financial Holdings Inc.
(URL: http://www.sonyfh.co.jp/web/index_en.html)
Stock exchange listing: Tokyo Stock Exchange (code number: 8729)
Representative:
Katsumi Ihara, President and Representative Director
Inquiries:
Masaaki Konoo, General Manager—Corporate Communications & Investor Relations Dept.
(Fractional amounts of less than ¥1 million are discarded.)Company name:

1. Consolidated financial results for the year ended March 31, 2014
(1) Operating results
Ordinary Revenues
For the year ended
March 31, 2014
For the year ended
March 31, 2013

Ordinary Profit

Net Income

Millions of yen% change

Millions of yen% change

Millions of yen% change

1,319,766

4.8

76,136(3.9)

40,504(10.1)

1,259,041

16.8

79,252

6.2

45,06437.3

Note: Comprehensive Income:For the year ended March 31, 2014: ¥44,794 million:
For the year ended March 31, 2013: ¥96,225 million:

Net Income per
Share

Net Income per
Share(Fully Diluted)

Yen

For the year ended
March 31, 2014
For the year ended
March 31, 2013(53.4)％
59.4％

Net Income on
Shareholders'EquityYen

Ordinary Profit on
Total Assets

Ordinary Profit on
Ordinary Revenues

%

%

%

93.11

—

9.0

0.9

5.8

103.60

—

11.5

1.0

6.3

Notes: Equity in earnings (losses) of affiliates:

For the year ended March 31, 2014: ¥(1,538) million
For the year ended March 31, 2013: ¥(1,718) million(2) Financial conditions
Total Assets

Total Net Assets

Net Asset Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

As of March 31, 2014

8,841,382

467,050

5.3

1,070.75

As of March 31, 2013

8,096,164

435,4445.4

997.94

Notes: 1. Shareholders' equity:

As of March 31, 2014: ¥465,775 million
As of March 31, 2013: ¥434,105 million(3) Cash flows

For the year ended
March 31, 2014
For the year ended
March 31, 2013

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Millions of yen

Millions of yen

Millions of yen

Cash and Cash
Equivalents at end of
fiscal year
Millions of yen

601,738(549,346)(13,522)240,279

580,882(550,159)(5,017)201,404

2. Dividends
1st quarter2nd quarter3rd quarter

Year-end

Annual Total

AnnualDividend
Amount

Yen

Yen

Yen

Yen

Yen

Millions of yen

Dividend per Share

Record date
For the year ended
March 31, 2013
For the year ended
March 31, 2014
For the year ending
March 31, 2015
(forecast)

Dividend
Payout
Ratio

Dividend on
Net Assets

%

%

—

0.00

—

25.00

25.00

10,875

24.1

2.8

—

0.00

—

30.00

30.00

13,049

32.2

2.9

—

0.00

—

40.00

40.00

35.5

3. Forecast of consolidated financial results for the year ending March 31, 2015
(Percentage figures represent changes from the results of the previous fiscal year.)Ordinary Revenues
For the year ending
March 31, 2015

Ordinary Profit

Net Income per
Share

Net Income

Millions of yen% change

Millions of yen% change

Millions of yen% change

1,191,000(9.8)

77,0001.1

49,00021.0

Yen

112.64

4. Notes(1) Changes in scope of consolidation during the period under review (changes in specified subsidiaries accompanying changes inscope of consolidation): None
(2) Changes in accounting policies, accounting estimates and restatements of the consolidated financial statements(a) Changes in accounting policies resulting from the revision of the accounting standards and other regulations: Yes(b) Changes in accounting policies due to other reasons: None(c) Changes in accounting estimates: None(d) Restatements of the consolidated financial statements: None
Notes: For details, please refer to the section entitled “Ⅳ．Consolidated Financial Statements” under “5. Notes to the Consolidated Financial
Statements” under “ 2) Changes in accounting policies.” on page on 20.

(3) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of March 31, 2014:
As of March 31, 2013:(b) Number of treasury shares
As of March 31, 2014:
As of March 31, 2013:(c) Weighted-average number of shares
For the year ended March 31, 2014:
For the year ended March 31, 2013:

435,000,000 shares
435,000,000 shares
1 share— shares434,999,999 shares
435,000,000 shares

Audit of Quarterly Financial Statements
This earnings report is exempt from audit procedure based upon the Financial Instruments and Exchange Act. Audit procedures areunderway as of the date of this report.

Content of Supplemental Materials
I.

Qualitative Information and Financial Statements

II.
III.

IV.

1.

Qualitative Information on Consolidated Operating Performance・・・・・・・・・・・・・・

3

2.

Qualitative Information on Consolidated Financial Position・・・・・・・・・・・・・・・・

6

3.

Basic Policy on Returns to Shareholders and Dividends for the Fiscal
Year Ended March 31, 2014, and the Fiscal Year Ending March 31, 2015・・・・・・・・・・・・

6

Status of the Corporate Group・・・・・・・・・・・・・・・・・・・・・・・・・・
Management Policies

61.

Company’s Basic Management Policies・・・・・・・・・・・・・・・・・・・・・・・・・・・

8

2.

Key Management Benchmarks・・・・・・・・・・・・・・・・・・・・・・・・・・・

8

3.

Mid- to Long-Term Management Strategies・・・・・・・・・・・・・・・・・・・・・・

9

4.

Tasks Ahead for the Company・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 10

Consolidated Financial Statements
1.

Consolidated Balance Sheets・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 112.

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income) ・・・・・・・・・・・・・・・・・・・・・・・・・・・13(Consolidated Statements of Comprehensive Income) ・・・・・・・・・・・・・・・・・・・16
3.

Consolidated Statements of Changes in Net Assets・・・・・・・・・・・・・・・・・・・・17

4.

Consolidated Statements of Cash Flows・・・・・・・・・・・・・・・・・・・・・・・・・・・19

5.

Notes to the Consolidated Financial Statements
1) Changes in scope of consolidation during the period under review・・・・・・・・・・・・・21
2) Changes in accounting policies・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21
3) Segment Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21
4) Financial Instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・・26
5) Investments in Securities･・・・・・・・・・・・・・・・・・・・・・・・・・・・29
6) Investments in Monetary Trusts・・・・・・・・・・・・・・・・・・・・・・・・・・・31
7) Derivative financial instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・32
8) Subsequent Events・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 33

V.

Attachment
Consolidated Financial Results for the Year Ended March 31, 2014 and Sony Life’s PreliminaryMarket Consistent Embedded Value as of March 31, 2014・・・・・・・・・・・・・・・・・・ 35* We will upload the press releases on Sony Life’s Market Consistent Embedded Value as of March 31, 2014,
scheduled as below.
・ Preliminary summary: Scheduled to be uploaded on May 20, 2014 at 15:00 (Tokyo)
・ Full report: Scheduled to be uploaded on May 26, 2014 at 15:00 (Tokyo)
Please see further details at our website: http://www.sonyfh.co.jp/index_en.html

1* The Conference Call for explaining the Sony Financial Group financial results for the fiscal year ended
March 31, 2014, will be held at 11:30 (Tokyo), May 21, 2014.
We are sorry for any inconvenience that our Conference Call will be held only in Japanese.
We will upload the Presentation Materials with speech text on May 20, 2014 after 15:00, and its Q&A
summary at a later date on Earnings Releases and Presentation Materials page on our website:
http://www.sonyfh.co.jp/en/financial_info/results* On May 20, 2014, SFH’s significant subsidiaries: Sony Life Insurance Co., Ltd. (Sony Life), Sony Assurance
Inc. (Sony Assurance) and Sony Bank Inc. (Sony Bank) will announce its financial results for the fiscal year
ended March 31, 2014. SFH prepared English-language summaries of those Japanese announcements madeby the above subsidiaries, solely for convenience of non-Japanese readers.

2I. Qualitative Information and Financial Statements
1. Qualitative Information on Consolidated Operating Performance
1) Analysis of Operating Performance
During the fiscal year under review (from April 1, 2013, to March 31, 2014), the Japanese economy recovered gradually.
Measures to pull the economy out of deflation took effect, corporate performance recovered steadily, and employment andincome situations improved. In the financial markets, Japanese stock market prices were steady following the introduction ofqualitative and quantitative monetary easing by the Bank of Japan. In foreign exchange markets, Japanese yen continued todepreciate. Long-term domestic interest rates remained generally low after rising temporarily.
Against this backdrop, the Sony Financial Group provided high-quality services with the aim of becoming one of the mosthighly trusted financial services groups. The Group also implemented various measures to satisfy increasingly diverse
customer needs.
Consequently, as for its operating results, consolidated ordinary revenues rose 4.8% compared with the previous fiscal
year, to ¥1,319.7 billion, owing to increases in ordinary revenues from all the businesses: life insurance, non-life insurance
and banking. Consolidated ordinary profit decreased 3.9% year on year, to ¥76.1 billion. By business segment, ordinary
profit from the life insurance business fell, whereas ordinary profit from the non-life insurance and banking businesses roseyear on year.
Extraordinary losses were ¥9.5 billion during the fiscal year ended March 31, 2014, compared with a ¥9.2 billion during
the previous fiscal year. The primary reason for these losses was due to the provision of a reserve for price fluctuations.
After accounting for extraordinary losses, provision for reserve for policyholders’ dividends and income taxes, net income
for the fiscal year ended March 31, 2014, was down 10.1% year on year, to ¥40.5 billion, reflecting the decline in ordinary
profit.
Segment Information by Business< Life insurance business >Income from insurance premiums increased 3.8% year on year, to ¥960.9 billion, due mainly to steady growth in policy
amount in force. Investment income increased 6.1% year on year, to ¥212.3 billion due to higher interest income anddividends on general account assts. As a result, ordinary revenues increased 4.8% year on year, to ¥1,196.6 billion. Ordinary
profit decreased 7.6% year on year, to ¥67.2 billion, due to an increase in provision of policy reserves resulting from arevision in the discount rate used for calculating policy reserves and the provision of policy reserves for minimum
guarantees for variable life insurance, despite the positive effect of an increase in the positive spread.

< Non-life insurance business >Net premiums written increased 6.0% year on year, to ¥88.6 billion, mainly to an increase in the number of policies in force
for mainstay automobile insurance. Consequently, ordinary revenues rose 6.1% year on year, to ¥89.8 billion. Ordinary profit
increased 26.7% year on year, to ¥3.0 billion, due to a decline in the loss ratio mainly led by the revision of premium rates forautomobile insurance and a lower car accident ratio owing to the introduction of a new bonus-malus system (non-fleet driver
rating system), as well as the rise in ordinary revenues.

< Banking business >Ordinary revenues increased 4.3% year on year, to ¥35.7 billion, due to higher gains on foreign exchange transactions
stemming from active foreign currency trading by customers and a rise in interest income on loans led by the growing balanceof mortgage loans. Ordinary profit rose 42.6% year on year, to ¥5.6 billion, due mainly to lower interest expenses and an
improvement in net gains on bond-dealing transactions, in addition to the increase in ordinary revenues..

3

Ordinary Revenues(Millions of yen)
Year ended
March 31, 2013

Year ended
March 31, 2014

(Apr. 1, 2012, to Mar. 31, 2013)(Apr. 1, 2013, to Mar. 31, 2014)

Life insurance business
Non-life insurance businessBanking business
SubtotalIntersegment adjustments
Consolidated

Change (%)

1,142,397
84,711
34,3291,196,690
89,86435,796

4.8
6.1
4.3

1,261,438

1,322,352

4.8(2,396)(2,585)－

1,259,041

1,319,766

4.8

Year ended
March 31, 2013

Year ended
March 31, 2014

(Apr. 1, 2012, to Mar. 31, 2013)(Apr. 1, 2013, to Mar. 31, 2014)

Ordinary Profit(Millions of yen)Life insurance business
Non-life insurance businessBanking business
SubtotalIntersegment adjustments*
Consolidated

Change (%)

72,7702,371
3,953

67,247
3,004
5,637

(7.6)
26.7
42.6

79,095156

75,889
247

(4.1)
57.8

79,252
76,136*Amounts in the Ordinary profit in the “Intersegment adjustments” are mainly from SFH.

(3.9)2) Consolidated Financial Forecast for the Fiscal Year Ending March 31, 2015
For the fiscal year ending March 31, 2015 (April 1, 2014, to March 31, 2015), stable and sustainable business growth isexpected in all the businesses: life insurance, non-life insurance and banking.
The consolidated financial forecast for the fiscal year ending March 31, 2015, as follows, is unchanged from the forecast
announced on May 14, 2014.
(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2014

Financial forecast
for the year ending
March 31, 2015

Ordinary revenues

1,319.7

1,191.0(9.8)

Ordinary profit

76.1

77.0

1.1

Net income

40.5

49.0

21.0

Net income per share
(Yen)

93.11

112

－

Change (%)

We do not consider the effects of market fluctuations after April 2014 within our forecast. Therefore, the figures stated above
may differ from actual results for a variety of reasons.

4Business segment forecasts for the fiscal year ending March 31, 2015 (April 1, 2014, to March 31, 2015) are as follows.
Forecast figures from each business reflect corporate and eliminations.
<Life insurance business>
Ordinary revenues for the fiscal year ending March 31, 2015, are expected to decrease because we do not expect such anincrease in lump-sum payment insurance premiums and investment income on separate account due to market recovery as
recorded in the previous fiscal year. However, we expect steady growth in policy amount in force. Ordinary profit is expected
to be nearly at the same level as in the previous fiscal year. This is because we expect a higher provision for policy reserves
related to minimum guarantees for variable life insurance policies, as well as an increase in operating expenses due to theconsumption tax rate rise. We do not expect any negative impact from a rise in provision of policy reserves resulting from therevision of the discount rate used for calculating policy reserves in the previous fiscal year.
(Billions of yen)
Financial forecast(Reference)for the year ending
Actual results for the year
Change (%)
March 31, 2015
ended March 31, 2014
Ordinary revenues

1,196.6

1,061.9(11.3)

Ordinary profit

67.2

67.4

0.2

<Non-life insurance business>
Ordinary revenues for the fiscal year ending March 31, 2015, are expected to increase in line with growth in net premiums
written, primarily for mainstay automobile insurance. Operating profit is expected to rise stemming from the rise in ordinary
revenues and a decline in the loss ratio although we expect higher operating expenses.
(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2014

Financial forecast
for the year ending
March 31, 2015

Change (%)

Ordinary revenues

89.8

92.4

2.8

Ordinary profit

3.0

3.9

29.8

<Banking business>
Ordinary revenues for the fiscal year ending March 31, 2015, are expected to rise year on year, because we regard to stable
and sustainable business growth even in an environment characterized by persistently low interest rates. Ordinary profit isexpected to decrease because we do not believe that foreign exchange transactions will be as vigorous as in the previous
fiscal year, and we expect higher operating expenses as we pursue initiatives designed to strengthen our settlement function
with an eye to future growth, while we expect higher ordinary revenues to lead to an increase in gross operating profit.
(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2014

Financial forecast
for the year ending
March 31, 2015

Change (%)

Ordinary revenues

35.7

36.6

2.2

Ordinary profit

5.6

5.3

(6.0)

5

2. Qualitative Information on Consolidated Financial Position
1) Assets, Liabilities and Net Assets
As of March 31, 2014, total assets amounted to ¥8,841.3 billion, up 9.2% from March 31, 2013. Among major components ofassets, securities, mostly Japanese government bonds, amounted to ¥6,822.1 billion, up 10.0% from March 31, 2013. Loanscame to ¥1,211.6 billion, up 8.6%, and monetary trusts amounted to ¥325.8 billion, up 0.5%.
Total liabilities were ¥8,374.3 billion, up 9.3% from March 31, 2013. Major components of liabilities included policy
reserves and others of ¥6,263.3 billion, up 11.8%, and deposits totaled ¥1,889.9 billion, up 1.8%.
Total net assets were ¥467.0 billion, up 7.3% from March 31, 2013. This included net unrealized gains on other securities,
net of taxes, which increased ¥3.6 billion, to ¥92.0 billion.
2) Cash FlowsNet cash provided by operating activities for the fiscal year ended March 31, 2014, was ¥601.7 billion, due mainly to higher
income from insurance premiums in the life insurance business, up ¥20.8 billion from the previous fiscal year. The primaryreason for this rise was smaller increase in interest income on loans, including mortgages, despite a smaller growth in deposits
in the banking business.
Net cash used in investing activities was ¥549.3 billion, due mainly to increased payments to acquire marketable securities
in the life insurance business, down ¥0.8 billion, at almost the same level as in the previous fiscal year. This is due mainly to
an increase in inflows from the sale and redemption of securities in the banking business, partially offset by the increased
payments to acquire marketable securities in the life insurance business.
Net cash used in financing activities came to ¥13.5 billion due primarily to dividend payments, up ¥8.5 billion from theprevious fiscal year.
As a result of the above factors, cash and cash equivalents at March 31, 2014, were ¥240.2 billion, up ¥38.8 billion fromMarch 31, 2013.

3. Basic Policy on Returns to Shareholders and Dividends for the Fiscal Year Ended March 31, 2014,
and the Fiscal Year Ending March 31, 2015
For the fiscal year ended March 31, 2014, taking this period’s overall operating performance into consideration, we plan to
pay a year-end dividend of ¥30 per share (total amount of dividend: ¥13.049 billion), up ¥5 from the previous period of ¥25.
Our basic dividend policy is to maintain stable dividend payments while securing sufficient internal reserves to ensure thefinancial soundness of the Group companies and invest in growing fields. Based on this policy, SFH aims for steadyincreases in dividends in line with earnings growth over the medium and long terms. Our medium-term target for thedividend payout ratio is 30% to 40% of consolidated net income. Management will determine specific dividend amounts foreach fiscal year by taking into account a comprehensive range of factors, including the capital adequacy of each Group
company relative to risk, investment opportunities, business forecasts and legal and regulatory developments worldwide.
For the fiscal year ending March 31, 2015, we plan to pay a year-end dividend of ¥40 per share (total amount of dividend:¥ 17.399 billion). We will continue to make dividend payments once a year, following the resolution of the general meetingof shareholders, with the dividend record date at the end of each fiscal year.
Please refer to the attached presentation materials for non-consolidated operating results of SFH’s principal subsidiaries,
Sony Life, Sony Assurance and Sony Bank for the fiscal year ended March 31, 2014.

II. Status of the Corporate GroupOn April 1, 2004, SFH was established as a financial holding company (an insurance holding company and a bankholding company) through a corporate separation from Sony Corporation. On October 11, 2007, SFH listed its common
stock on the First Section of the Tokyo Stock Exchange, by publicly offering its shares to Japanese and overseas
investors, resulting in Sony Corporation’s ownerships to account for 60% of the total outstanding shares of SFH.

6

As of March 31, 2014, Sony Financial Group included as direct subsidiaries Sony Life, Sony Assurance and Sony
Bank, and SmartLink Network, Inc. and SmartLink Network Hong Kong Limited, subsidiaries of Sony Bank. It also
includes AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd., as affiliated companies accounted for underthe equity method.
 Sony Financial Holdings Inc. (Management control of its subsidiaries and all duties incidental to that role)[Directly held, indirectly held subsidiaries and affiliated companies accounted for under the equity method]<Life insurance business> Sony Life Insurance Co., Ltd. (Wholly-owned by SFH)
 AEGON Sony Life Insurance Co., Ltd. (50%-owned by Sony Life)
 SA Reinsurance Ltd. (50%-owned by Sony Life)<Non-life insurance business> Sony Assurance Inc. (Wholly-owned by SFH)
<Banking business> Sony Bank Inc. (Wholly-owned by SFH)
 SmartLink Network, Inc. (57% -owned by Sony Bank) SmartLink Network Hong Kong Limited. (Wholly-owned by SmartLink Network, Inc.)[Organizational chart] (As of March 31, 2014)

Sony
Corporation

Sony Financial
Holdings Inc.

<Non-life insurance business><Life insurance business>
Sony Life InsuranceCo., Ltd.

<Life insurance
business>
AEGON Sony Life
Insurance Co., Ltd.

Sony Assurance Inc.

<Banking business>
Sony Bank Inc.

<Banking
business>
SmartLink
Network, Inc.

<Life insurance
business>
SA Reinsurance
Ltd.

<Banking business>
SmartLink Network
Hong Kong Limited.

Consolidated subsidiaries

Trade name and trademark license

Affiliated companies
accounted for under theequity method

Sales and referrals of
the other’s products

7

Management control fee
Shareholding

III. Management Policies
1. Company’s Basic Management Policies
The Sony Financial Group positions its corporate vision and philosophy as the basic policy for setting management
strategy and expediting management decision-making. The Group’s corporate vision and philosophies are described
below.
a. Corporate Vision
The Sony Financial Group seeks to become the most highly trusted financial services group by customers. To thisend, the Sony Financial Group will combine many different financial functions (savings, investment, borrowing, andprotection) to provide high-value-added financial products and high-quality services that meet every customer’s
financial needs.
b. Corporate Philosophy
Put the Customer FirstWe will provide financial products and services that satisfy customers by embracing their individual views, to ensurethat we help them lead prosperous lives with financial security.
Give Back to Society
We believe that a special commitment to the public good is demanded of a financial services enterprise. Conscious ofthis, we will realize our vision by upholding the highest ethics and a strong sense of purpose, and thereby give backto society. In addition, we will fulfill our responsibilities as a good corporate citizen and member of society.
Strive for Originality
We will constantly strive to come up with fresh ideas from basic principles as we pursue creativity and innovation,
instead of merely following custom and convention.
Foster an Open Corporate Culture
We believe that every employee’s contribution is important to develop our ideal of a financial services enterprise. We
will thus foster an open corporate culture where employees can freely express their individuality and demonstrate
their abilities to the fullest.

2. Key Management Benchmarks
SFH closely follows the following management benchmarks aiming at raising its corporate value.
■ Consolidated ordinary revenues■ Consolidated ordinary profit■ Consolidated net income■ Consolidated adjusted ROE
Consolidated adjusted ROE is calculated as follows.
Consolidated adjusted ROE = consolidated adjusted profit divided by consolidated adjusted capital
Consolidated adjusted profit is calculated as the sum of the following:
1) Sony Life:The amount of increase in Embedded Value (EV* : adjusted net worth plus value ofexisting business) during the fiscal year plus dividends paid
2) Sony Assurance: The net income plus provision for catastrophe reserve and its provision for reserve for pricefluctuations, in each case after taxes
3) Sony Bank:
Net income
Consolidated adjusted capital is calculated as the sum of the following:
1) Sony Life:
EV* as of the beginning of the fiscal year less dividends paid plus EV* as of the end of
the fiscal year, divided by two
2) Sony Assurance: The average amount of net assets plus the sum of catastrophe reserve and its reserve for83) Sony Bank:

price fluctuations, in each case after taxes
The average amount of net assets*Sony Life discloses Market Consistent Embedded Value (“MCEV”). Sony Life’s MCEV is calculated in compliancewith the European Insurance Chief Financial Officers (CFOs) Forum Market Consistent Embedded Value Principles©
(“MCEV Principles”), the international standard in disclosing MCEV published by the CFO Forum comprised of CFOs
from major insurance companies in Europe.
Consolidated adjusted profit and consolidated adjusted capital take into consideration dividends from the Group subsidiaries and otherspecial factors.

3. Mid- to Long-Term Management Strategies
The Sony Financial Group aims to maximize the corporate value of the Group over the medium to long term byimplementing the management strategies outlined below.
(a) Sustainable and Stable Growth of Group Companies
Sony Life:
Sony Life provides detailed tailored consulting and follow-up services through life insurance
professionals—Lifeplanner sales employees and Partners (independent agencies)—who havebroad-ranging expertise and extensive experience in such areas as economics, finance andtaxation. Sony Life strives to strengthen its capabilities and hone its competitive edge in theindividual life insurance market by providing value in a way that only Sony Life can.
Sony Assurance: Capitalizing on the strengths of its position as a direct insurance provider that communicateswith each of its customers directly via the Internet and the telephone, Sony Assurance precisely
understands customer opinions and needs, and provides products and services from a customer
viewpoint. Sony Assurance aims to increase its income from insurance premiums by offering
reasonably priced insurance premiums realized by risk-segmented products and operational
efficiency.
Sony Bank:
Sony Bank is an Internet bank focused on the needs of individual customers. By maximizing
information technologies, the bank works to provide fair and highly convenient financial
products and services. By ensuring its trustworthiness in such ways, the bank is working to
expand its operations further.
(b) Fostering Synergy among Group Companies
In addition to the growth of each company within the Group, we seek to enhance synergies among the companiesof the Sony Financial Group. Such efforts include the joint offering of products and services, the sharing of
distribution channels and infrastructure and other forms of collaboration. By increasing intra-group synergies, SFH
aims to offer customers attractive and high-value-added products and services that are unmatched by conventional
financial institutions.
(c) Expanding into New Business Fields, Outside the Existing Framework
Sony Financial Group entered nursing care business in November 2013, and Sony Lifecare Inc. was established in
April 2014 as a holding company to oversee the Group’s operations in the nursing care business, aiming tocontributing to the realization of a society that help elderly people live fulfilled and securely throughout their lives
through nursing care services.
Through the growth of Group companies and increased synergies within the Group, we aim to move beyond theexisting framework of the Sony Financial Group. We are examining active advancements into new business fields
that will raise our corporate value even further.

94. Tasks Ahead for the Company
In the fiscal year ending March 31, 2015, we expect Japanese economic performance to register a fallback inpersonal consumption in comparison with the surge in demand prior to implementation of the consumption tax rise.
Nevertheless, we believe that overall the economy will remain in a state of gradual recovery, buoyed by higher
corporate earnings and improvements in the employment and income situation. We will need to continue monitoringoverseas economic conditions and government measures to stimulate the economy, however, as uncertainty remains
on the corporate management horizon.
Regardless, the insurance and banking industries must serve their role in providing proper and stable financial
services, while consistently executing growth strategies.
The Sony Financial Group seeks to become the financial services group that is most highly trusted by customers. To
this end, the Group has redoubled its internal control efforts focused on compliance, risk management, eradicating
anti-social influences and ensuring the protection of personal information. The Sony Financial Group has also
explored its ideal of providing financial services for individual customers from various perspectives. We are working
to realize our vision and achieve ongoing increases in corporate value by executing the above management strategies.
At the same time, we identify our social role and mission as a financial institution as contributing to the realization ofa sustainable society. We will fulfill our responsibilities to our stakeholders accordingly.

10

Ⅳ. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2013

As of March 31, 2014

Cash and due from banks¥104,142¥204,546

Call loans and bills bought

107,088

40,628

Monetary trusts

324,305

325,831

Securities

6,202,333

6,822,151

Loans

1,115,330

1,211,638

73,21771,565Land

31,08930,103

Buildings

AssetsTangible fixed assets

39,69637,030

Leased assets

302

106

Construction in progress

672

947

Other tangible fixed assets

1,456

3,376

Intangible fixed assets

38,232

36,774

Software37,94436,571

Goodwill

258

179

Other intangible fixed assets

29

24

Due from reinsurers

110

158

Foreign exchanges

7,954

7,752

107,345

100,503–

1,730

Deferred tax assets

17,98019,872

Reserve for possible loan losses(1,877)(1,769)¥8,096,164¥8,841,382

Other assets
Net defined benefit asset

Total Assets

11

(Millions of yen)
As of March 31, 2013

As of March 31, 2014

¥5,601,060¥6,263,315

53,246

57,4005,543,540

6,201,676

4,273

4,237

Due to agencies

2,431

2,169

Due to reinsurers

600

650

1,857,302

1,889,970

Call money and bills sold

10,0006,000

Borrowed money

2,000

20,000Foreign exchanges

87

40

Bonds payable

20,00020,000

Other liabilities

106,365

95,725Reserve for employees' bonuses

3,085

3,204

Reserve for employees' retirement benefits

24,216––30,272411

250

Liabilities
Policy reserves and others
Reserve for outstanding claims
Policy reserves
Reserve for policyholders' dividends

Deposits

Net defined benefit liability
Reserve for directors' retirement benefits
Special reserves

32,34441,65732,34441,657

Deferred tax liabilities

275

539

Deferred tax liabilities on land revaluation

536

536

7,660,719

8,374,332

Reserve for price fluctuations

Total Liabilities
Net Assets
Common stock

19,90019,900Capital surplus

195,277

195,277

Retained earnings

135,160

164,790–(0)Treasury Stock350,337

379,967

Net unrealized gains on other securities, net of taxes

Total shareholders' equity

88,32992,002

Net deferred losses on hedging instruments, net of taxes(3,047)(2,388)Land revaluation, net of taxes(1,513)(1,513)Foreign currency translation adjustments–

0Remeasurements of defined benefit plans, net of taxes–(2,292)

83,76785,807

Minority interests

1,339

1,275

Total Net Assets

435,444467,050¥8,096,164¥8,841,382

Total accumulated other comprehensive income

Total Liabilities and Net Assets

122. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
For the year ended
March 31, 2013

For the year ended
March 31, 2014

Ordinary Revenues¥1,259,041¥1,319,766

Ordinary Revenues from the Life Insurance Business

1,140,184

1,194,315

925,075

959,911

923,672

958,585

Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions

1,402

1,325

199,549

211,829

Interest income and dividends

108,153

121,666

Income from monetary trusts, net

5,259

5,311

Gains on sale of securities

Investment income

2,522

773

Gains on redemption of securities–

2

Gains on derivatives, net–

172

Foreign exchange gains, net

–

1,183

Other investment income

13

47

83,601

82,67015,55922,57584,71189,863

83,61588,63983,582

88,600

33

39

1,021

1,199

1,027

1,209

Gains on sale of securities

26

25

Gains on redemption of securities

–

3

(33)

(39)

74

24

34,14535,58625,954

26,328Interest income on loans

13,877

14,134

Interest income and dividends on securities

12,007

12,077

Gains on separate accounts, net
Other ordinary income
Ordinary Revenues from the Non-life Insurance Business
Underwriting income
Net premiums written
Interest and dividends on deposits of premiums
Investment income
Interest income and dividends

Transfer to interest and dividends on deposits of premiums
Other ordinary income
Ordinary Revenues from the Banking Business
Interest income

Interest income on call loans and bills bought

13

8Interest income on deposits with banks

55

107

Other interest income

00Fees and commissions

5,260

4,928

Other operating income
Gains on foreign exchange transactions, net
OthersOther ordinary income

2,815

4,174

1,874

2,782

940

1,391

114

155
(Continued)

13

(Millions of yen)
For the year ended
March 31, 2013

For the year ended
March 31, 2014

Ordinary Expenses¥1,179,789¥1,243,629

Ordinary Expenses from the Life Insurance Business

1,069,007

1,128,787

293,938

327,257

Insurance claims

71,06577,413

Annuity payments

9,571

10,768Insurance claims and other payments

Insurance benefits

46,80955,510Surrender payments

161,873

178,402

Other payments

2,649

3,203

Reinsurance premiums

1,968

1,959

630,575

650,764607

55

629,955

650,70312

5Investment expenses

11,4508,182

Interest expenses

43

48

1,587

528

327

–

Losses on derivatives, net

226–

Foreign exchange losses, net

1,253

–

Provision for reserve for possible loan losses

21

6

Depreciation of real estate for rent and others

2,000

1,952

Provision for policy reserves and others
Provision for reserve for outstanding claims
Provision for policy reserves
Interest portion of reserve for policyholders' dividends

Losses on sale of securities
Devaluation losses on securities

5,990

5,646

Operating expenses

Other investment expenses

108,849

113,442

Other ordinary expenses

24,192

29,14081,70486,189Underwriting expenses

61,40165,030Net losses paid

47,153

46,183

Loss adjustment expenses

5,656

6,367

945

948

Provision for reserve for outstanding losses

4,407

4,098

Provision for underwriting reserves

3,238

7,433

0

0

7

7

3

5

Ordinary Expenses from the Non-life Insurance BusinessNet commission and brokerage fees

Other underwriting expenses
Investment expenses
Losses on sale of securities
Losses on redemption of securities
Operating, general and administrative expenses
Other ordinary expenses

32

20,27921,15016

0(Continued)

14

(Millions of yen)
For the year ended
March 31, 2013
Ordinary Expenses from the Banking Business

For the year ended
March 31, 2014

¥29,077¥28,652

7,811

6,286

6,296

4,905

Interest expenses on call money and bills sold

10

6Interest on borrowed money

86

26

Interest expenses on bonds

61

119

1,355

1,227

0

0

Interest expenses
Interest expenses on deposits

Interest expenses on interest rate swaps
Other interest expenses
Fees and commissions

1,546

1,735

Other operating expenses

2,568

3,411

General and administrative expenses

16,76016,920389

298

Ordinary Profit

79,252

76,136Extraordinary Losses

9,257

9,508

Losses on disposal of fixed assets

113

137

Impairment losses

962

36

6,964

9,312

Provision for reserve for price fluctuations

6,964

9,312

Loss on sales of shares of subsidiaries and affiliates

1,216

–

0

20

Provision for Reserve for Policyholders' Dividends

2,104

2,232

Income Before Income Taxes

67,89064,396

Income Taxes

22,74623,933- Current

29,366

26,451- Deferred(6,620)(2,517)45,14340,46278(42)¥45,064

40,504

Other ordinary expenses

Provision for special reserves

OthersIncome Before Minority Interests
Minority interests in income(losses)
Net Income152. Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Comprehensive Income)(Millions of yen)
For the year ended
March 31, 2013
Income Before Minority Interests¥45,143

For the year ended
March 31, 2014
¥40,462

Other comprehensive income
Net unrealized JDLQs on other securities, net of taxes

51,381,672

Net deferred JDLQV losses on hedging instruments, net of taxes

(633)

659

Land revaluation, net of taxes

(118)

–

Foreign currency translation adjustments

453

0

Share of other comprehensive income of affiliates accounted
for using equity method(1)

0

51,082

4,332

96,22544,794Comprehensive income attributable to parent company

96,14644,837

Comprehensive income attributable to minority interests

78

(42)

Total other comprehensive income
Comprehensive income(Details)

16

3. Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2013
(Millions of yen)
Shareholders' Equity
Common stock

Balance at the beginningof the fiscal year
Changes during theperiodCapital surplus

Retained earnings

Treasury stock

Total shareholders' equity¥19,900¥195,277¥98,677–¥313,854

Dividends from surplus––(8,700)–(8,700)Net income––

45,064–45,064

–

–

–

–

–

–

–

118

–

118

–

–

–

–

–

–

–

36,482–

36,482¥19,900¥195,277¥135,160–¥350,337

Purchase of treasury
stock
Reversal of land
revaluation
Net changes of items
other than shareholders'equityTotal changes during theperiodBalance at the end of thecurrent period

Total accumulated other comprehensive income
Net unrealized
gains on othersecurities, net oftaxes

Net deferredlosses on
hedging
instruments, netof taxes

Land
revaluation, netof taxes¥36,949¥(2,414)¥(1,395)

Dividends from surplus––

Net income–

Balance at the beginningof the fiscal year
Changes during theperiodPurchase of treasury
stock
Reversal of land
revaluation
Net changes of items
other than shareholders'equityTotal changes during theperiodBalance at the end of thecurrent period

Remeasurementsof defined
benefit plans, netof taxes

Total
accumulated
othercomprehensive
income¥(453)

–

–

–

–

–

–

–

–

Foreigncurrencytranslation
adjustments

Minority interests

Total Net Assets¥32,685¥1,260¥347,800–––(8,700)

–

–

–

–

45,064

–

–

–

–

–

–

–

–

–

–

–

–

118

51,380

(633)

(118)

453

–

51,08278

51,161

51,380

(633)

(118)

453

–

51,08278

87,643¥88,329¥ (3,047)¥ (1,513)––¥83,767¥1,339¥435,444

17

For the year ended March 31, 2014
(Millions of yen)
Shareholders' Equity
Common stock

Balance at the beginningof the fiscal year
Changes during theperiodCapital surplus

Retained earnings

Treasury stock

Total shareholders' equity¥19,900¥195,277¥135,160–¥350,337

Dividends from surplus––(10,875)–(10,875)

Net income––

40,504–40,504

–

–

–

(0)

(0)

–

–

–

–

–

–

–

29,629(0)

29,629¥19,900¥195,277¥164,790¥ (0)¥379,967

Purchase of treasurystock
Net changes of items
other than shareholders'equityTotal changes during theperiodBalance at the end of thecurrent period

Total accumulated other comprehensive income
Net unrealized
gains on othersecurities, net oftaxes

Net deferredlosses on
hedging
instruments, netof taxes

Land
revaluation, netof taxes¥88,329¥ (3,047)¥ (1,513)

Dividends from surplus––

Net income–

Purchase of treasury
stock

Balance at the beginningof the fiscal year
Changes during theperiodNet changes of items
other than shareholders'equityTotal changes during theperiodBalance at the end of thecurrent period

Remeasurementsof defined
benefit plans, netof taxes

Total
accumulated
othercomprehensive
income

–

–

–

–

–

–

–

–

3,672

Foreigncurrencytranslation
adjustments

Minority interests

Total Net Assets¥83,767¥1,339¥435,444–––(10,875)

–

–

–

–

40,504

–

–

–

–

–

(0)

659

–

0

(2,292)

2,039

(64)

1,975

3,672

659

–

0

(2,292)

2,039

(64)

31,605¥92,002¥(2,388)¥ (1,513)¥0¥(2,292)¥85,807¥1,275¥467,050

18

4. Consolidated Statements of Cash Flows(Millions of yen)
For the year ended
March 31, 2013

For the year ended
March 31, 2014

Cash flows from operating activities
Income before income taxes¥67,890¥64,396

Depreciation of real estate for rent and others

2,000

1,952

Depreciation and amortization

7,784

9,147

Impairment losses

962

36

Amortization of goodwill

580

79

Increase (decrease) in reserve for outstanding claims
Increase in policy reserve
Increase in interest portion of reserve for policyholders'
dividends
Increase (decrease) in reserve for policyholders' dividends
Increase in reserve for possible loan losses
Increase in reserve for employees' retirement benefits

5,015

4,153

633,193658,136

12

5

2,104

2,232

28

(108)

2,913

–

Increase (decrease) in net defined benefit liability

–

2,865

Increase (decrease) in reserve for directors' retirement benefits

57

(161)

6,964

9,312

Increase (decrease) in reserve for price fluctuations
Increase in reserve for financial products transaction liabilities

0–Interest income and dividends(135,136)(149,204)(Gains) losses on securities(87,294)(74,996)

Interest expenses

7,855

6,334

Exchange losses(35,508)(30,559)

69

146

1,718

1,538

(134,664)(87,193)

96,40833,559–20,000–4,000

Net increase (decrease) in call money and bills sold–

(4,000)Net (increase) decrease in foreign exchange (assets)

981

202

Losses on disposal of tangible fixed assets
Equity in losses of affiliates
Net increase in loans
Net increase in deposits
Net increase (decrease) in borrowed money (excluding
subordinated borrowings)
Net (increase) decrease in call loans and bills bought

Net increase (decrease) in foreign exchange (liabilities)

51

(47)

Others, net

27,437

7,043

Subtotal

471,428

478,874

Interest and dividends received

146,015

160,737

Interest paid

(8,330)(6,465)

Policyholders' dividends paid

(1,966)(2,273)

Income taxes paid

(26,264)(29,134)

Net cash provided by operating activities

580,882

601,738(Continued)

19

(Millions of yen)
For the year ended
March 31, 2013

For the year ended
March 31, 2014

Cash flows from investing activities
Investments in monetary trusts¥(4,942)¥(2,301)

5,300

5,100

Purchases of securities(973,738)(990,899)

Proceeds from sale and redemption of securities

462,518

480,946

Investments in loans(47,927)(54,102)

Collections of loans

21,14425,405(53)–(537,698)(535,850)

Total of net cash provided by (used in) operating activities andinvestment transactions

43,18465,887Purchases of tangible fixed assets(1,599)(3,326)–

2,021(11,869)(7,707)

1,035

–

(30)

(1,058)Purchase of securities of affiliates–(3,500)

Others2

75(550,159)(549,346)

Proceeds from sale of monetary trusts

OthersTotal of net cash used in investment transactions

Proceeds from sale of tangible fixed assets
Purchases of intangible fixed assets
Proceeds from sales of investments in subsidiaries resulting inchange in scope of consolidation
Purchase of securities of a subsidiary

Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of bonds

9,965

–

Cash dividends paid

(8,697)(10,878)

Net decrease in subordinated borrowings–(2,000)Purchase of treasury stock–(0)(6,500)

(600)

214

(43)

(5,017)(13,522)47

5

Net increase (decrease) in cash and cash equivalents

25,75238,875

Cash and cash equivalents at beginning of the fiscal year

175,651

201,404

Cash and cash equivalents at end of the fiscal year

¥201,404¥240,279

Balance from securitization of lease receivables
OthersNet cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

Note: Cash flows from investing activities include cash flows from lending operations of the insurance business.

20

5. Notes to the Consolidated Financial Statements
1) Changes in scope of consolidation during the period under review
SmartLink Network Hong Kong Limited has been included in the scope of consolidation during the fiscal year.

2) Changes in accounting policies(Application of Accounting Standards for Consolidated Financial Statements)
From the fiscal year under review, the Sony Financial Group has begun applying the “Accounting Standard for Consolidated
Financial Statements” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 22 (March 25, 2011), the “Guidance on
Disclosures about Certain Special Purpose Entities” (ASBJ Guidance No. 15, March 25, 2011), the “Guidance on Determining a
Subsidiary and an Affiliate” (ASBJ Guidance No. 22, March 25, 2011) and the “Practical Solution on Application of the Control
Criteria and Influence Criteria to Investment Associations” (ASBJ PITF No. 20, March 25, 2011).
This application has no impact on retained earnings at the beginning of the fiscal year under review.
(Application of Accounting Standards for Retirement Benefits)
The Sony Financial Group has applied the “Accounting Standard for Retirement Benefits” (ASBJ Statement No.26, May 17, 2012)
and the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No.25, May 17, 2012) from the fiscal year
ended March 31, 2014 (except for Clause 35 of the “Accounting Standard for Retirement Benefits” and Clause 67 of the“Guidance on Accounting Standard for Retirement Benefits”). The Company has changed its accounting method to post
retirement benefit obligations less plan assets as net defined benefit liability, and posts unrecognized actuarial gains, unrecognized
past service costs due to the change in accounting standard as net defined benefit liability. If plan assets exceed retirement benefit
obligations, the Company posts the difference as net defined benefit asset.
Following Clause 37 of the “Accounting Standards for Retirement Benefits”, which stipulates transitional treatment of the newstandard, the effect of the application of the new standard is adjusted in remeasurements of defined benefit plans of total
accumulated other comprehensive income at the end of the fiscal year ended March 31, 2014.
As a result, net defined benefit asset was recognized as ¥1,730 million and net defined benefit liability was recognized as¥30,272 million at the end of the fiscal year ended March 31, 2014. Total accumulated other comprehensive income decreased by¥2,292 million.

3) Segment Information(1) Outline of reporting segments
The Sony Financial Group's reporting segments are components of the Group whose operating results are regularly
reviewed by the Board of Directors to make decisions about resources to be allocated to the segments and assess theirperformance, for which discrete financial information is available.
SFH is the financial holding company of Sony Life Insurance Co., Sony Assurance Inc., and Sony Bank Inc., and pursues
financial group strategies. The subsidiaries make their own business plans and engage in business activities from which
they may earn revenues and incur expenses, under the Insurance Business Law of Japan, the Banking Law of Japan, andother regulations.
The Sony Financial Group consists of three reporting segments: the life insurance business, the non-life insurance businessand the banking business.
●The life insurance business consists of Sony Life Insurance Co., Ltd., AEGON Sony Life Insurance Co., Ltd.
and SA Reinsurance Ltd.
●The non-life insurance business consists of Sony Assurance Inc.
●The banking business consists of Sony Bank Inc., SmartLink Network, Inc. and SmartLink Network Hong
Kong Limited.

21

(2) Segment Information by reporting segment
For the year ended March 31, 2013
Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income anddividends
Interest expenses
Equity in earnings(losses) of affiliates
Investments in affiliates
Increase in tangible
fixed assets andintangible fixed assets

Millions of yen
Non-life
Banking
insurancebusinessbusiness

Total¥1,140,184
2,213
1,142,397
72,7705,948,190¥84,7110
84,711
2,371
127,421¥34,145
183
34,3293,953
2,012,627¥1,259,041
2,396
1,261,438
79,095
8,088,238

6,265

1,697

2,082

10,046108,614
43

1,027
－

25,954
7,886

135,596
7,930(1,718)
7,830

－
－

－
－

(1,718)
7,830¥6,322¥3,174¥2,729¥12,227

For the year ended March 31, 2014
Life insurance
business
Ordinary revenues
External customers
Intersegment
Total
Segment profit
Segment assets
OthersDepreciation
Interest income anddividends
Interest expenses
Equity in earnings(losses) of affiliates
Investments in affiliates
Increase in tangible
fixed assets andintangible fixed assets

Millions of yen
Non-life
Banking
insurancebusinessbusiness

Total¥1,194,315
2,375
1,196,690
67,247
6,619,364¥89,8631
89,864
3,004
142,728¥35,586
209
35,796
5,637
2,068,713¥1,319,766
2,585
1,322,352
75,8898,830,807

7,141

2,137

2,240

11,520122,141

1,209

26,328

149,679

48

－

6,400

6,449

(1,538)
9,369

－
－

－
－

(1,538)9,369¥3,267¥4,936¥2,511¥10,71622

(3) Reconciliations of the totals of each segment item to corresponding enterprise amounts

Totals of reporting segments
Adjustments for intersegment transactions
Ordinary revenues in statement of income

Millions of yen
For the year ended
For the year ended
March 31, 2014
March 31, 2013
¥1,261,438¥1,322,352(2,396)(2,585)¥1,259,041¥1,319,766

Totals of reporting segments
Adjustments for intersegment transactions
Amount not allocated to reporting segments
Ordinary profit in statement of income

Millions of yen
For the year ended
For the year ended
March 31, 2014
March 31, 2013
¥79,095¥75,8897
7
149
239¥79,252¥76,136

Totals of reporting segments
Adjustments for intersegment transactions
Amount not allocated to reporting segments
Assets in balance sheets

Millions of yen
For the year ended
For the year ended
March 31, 2013
March 31, 2014
¥8,088,238¥8,830,807(20,978)(21,025)
28,90331,600¥8,096,164¥8,841,382

Millions of yen
For the year ended
For the year ended
March 31, 2013
March 31, 2014
Consolidated
Consolidated
financial
Total
Adjustments financial
Total
Adjustments
statements
statements
Depreciation¥10,046¥8¥10,054¥11,520¥11¥11,531

Interest income and dividends
Interest expenses
Equity in earnings (losses) ofaffiliates
Investments in affiliates
Increase in tangible fixed assets
and intangible fixed assets

135,596
7,930

(460)
(74)

135,136
7,855

149,679
6,449

(475)
(114)

149,204
6,334(1,718)－(1,718)(1,538)－(1,538)

7,830

－

7,830

9,369

－

9,369

¥12,227¥4¥12,231¥10,716¥220¥10,93623

Relative information
For the year ended March 31, 2013
1. Information by business segment
Life insurance
business
Ordinary revenues from
External customers¥1,140,184

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥84,711¥34,145

Total¥1,259,041

2. Geographic segment information(1) Ordinary revenues
Ordinary revenues information by geographic segment is not shown, as ordinary revenues from external customers inJapan accounted for more than 90% of ordinary revenues in the consolidated statements of income.
(2) Tangible fixed assets
Information on tangible fixed assets by geographic segment is not shown, as tangible fixed assets in Japan accounted
for more than 90% of tangible fixed assets in the consolidated balance sheets.
3. Information by major client
Information by major client is not shown, as ordinary revenues from external customers who are major clients
accounted for less than 10% of ordinary revenues in the consolidated statements of income.
For the year ended March 31, 2014
1. Information by business segment
Life insurance
business
Ordinary revenues from
External customers¥1,194,315

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥89,863¥35,586

Total¥1,319,766

2. Geographic segment information(1) Ordinary revenues
Ordinary revenues information by geographic segment is not shown, as ordinary revenues from external customers inJapan accounted for more than 90% of ordinary revenues in the consolidated statements of income.
(2) Tangible fixed assets
Information on tangible fixed assets by geographic segment is not shown, as tangible fixed assets in Japan accounted
for more than 90% of tangible fixed assets in the consolidated balance sheets.
3. Information by major client
Information by major client is not shown, as ordinary revenues from external customers who are major clients
accounted for less than 10% of ordinary revenues in the consolidated statements of income.

24

Information on impairment losses on fixed assets by business segment
For the year ended March 31, 2013
Millions of yen
Reporting segments
Life insurance
business
Impairment losses¥962

Non-life
insurancebusiness－

OthersBankingbusiness

Consolidated

Total
¥962

－

－

¥962

For the year ended March 31, 2014
Millions of yen
Reporting segments
Life insurance
business
Impairment losses¥36

Non-life
insurancebusiness－

OthersBankingbusiness

Consolidated

Total
¥36

－

－

¥36

Information on amortization of goodwill and unamortized balance by business segment
For the year ended March 31, 2013
Millions of yen
Reporting segments
Life insurance
business
Amortization of
goodwill
Balance at end of
periodNon-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

－

－

¥580

¥580

－

¥580

－

－

¥258

¥258

－

¥258

For the year ended March 31, 2014
Millions of yen
Reporting segments
Life insurance
business
Amortization of
goodwill
Balance at end of
periodNon-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

－

－

¥79

¥79

－

¥79

－

－

¥179

¥179

－

¥179

Information on negative goodwill by business segment
No applicable items to be reported.

254) Financial Instruments
Fair value information on financial instruments
Below is fair value information on financial instruments as of March31,2014, excluding securities whose fair values are notreadily determinable.
Financial assets
Millions of yen
As of March 31, 2014

Cash and due from banks
Call loans and bills bought
Monetary trusts
Monetary trusts for trading
purposes
Other monetary trusts
Securities
Trading securities
Held-to-maturity securities
Available-for-sale securities
Loans
Reserve for possible loan
losses*Total Financial Assets

Consolidatedbalance sheet
amount¥204,546
40,628Fair value

Difference¥204,546
40,628

－
－

484

484

－

325,346

325,346－

620,666
4,492,273
1,674,372
1,211,638

620,666
4,927,696
1,674,372－¥435,422－

1,315,979¥9,109,721

105,682¥541,105(1,341)
1,210,297¥8,568,615* Excludes general and specific reserves for possible loan losses.
Financial liabilities
Millions of yen
As of March 31, 2014

Deposits
Call money and bills soldBonds payable
Total Financial Liabilities

Consolidatedbalance sheet
amount¥1,889,970
6,000
20,000¥1,915,970

Fair value¥1,890,799
6,000
20,096¥1,916,895

Difference
¥829
－
96
¥925

Derivative financial instruments
Millions of yen
As of March 31, 2014

Hedge accounting not applied*
Hedge accounting applied
Total Derivative Financial
Instruments

Consolidatedbalance sheet
amount¥1,239(14,254)

Fair value¥(13,015)

Difference¥1,239(14,254)－－¥(13,015)－* Figures are totals resulting from derivatives transactions, which are accounted for as other assets and liabilities on the
consolidated balance sheets. If the total is a debt amount, the above figure is negative.

26

Calculation of the fair value of financial instruments
Financial Assets
Cash and due from banks, call loans and bills bought
The fair value is regarded as the carrying amount, as they are approximately equal.
Monetary trusts
In individual monetary trusts mainly for investment purposes, the fair value of bonds is the market price on financial
instrument exchanges or the price indicated by a financial institution. Please see “investment in monetary trust, ”whichindicates fair values by purpose.
Securities
The fair value of stocks is the market price on stock market or financial instrument exchanges. The fair value of bonds
and investment funds is the market price or the price indicated by a financial institution. Please see “investment insecurities, ”which indicates fair values by purpose.
Loans(i) Loans in the banking business
The value of these loans is calculated by estimating their future cash flows and then applying a prescribed discountrate. The discount rate is determined by adding to the Libor-based yield curve a premium corresponding to theallowance rate of general provision for loan losses.
(ii) Policy loans in the life insurance business
Policyholder loans are valued by discounting future cash flows to their current value.
(iii) General loans in the life insurance business
The fair value is regarded as the carrying amount, as they are approximately equal.

Financial Liabilities
Deposits
The value of deposits is calculated by type, by estimating their future cash flows and then applying a prescribed discountrate. The discount rate is determined by adding to the Libor-based yield curve a premium corresponding to the banking
subsidiary's cumulative default rate by rating.
Call money and bills sold
The fair value is regarded as the carrying amount, as they are approximately equal.
Bonds payable
The fair value of bonds payable is the market price on bond and other markets.

27

Derivative Transactions
Please see “derivative financial instruments”,which indicates calculations of fair value.
Securities whose fair values are not readily determinable
Millions of yen
As of March 31, 2014
Non-consolidated subsidiaries and affiliates¥10,428
that are unlisted*1*2
Investment in partnership
24,410Total¥34,838*1. Unlisted stocks have no market prices and fair values are not readily determinable.
*2. Assets included in“investment in partnership”are stocks in unlisted companies.
Note: Impairment losses on investment in partnership was recognized as ¥193 million for the year ended March 31, 2014.
Impairment losses are principally recorded when their fair value as of the end of the fiscal year has declined by 50% ormore from the acquisition cost.
The future redemption schedule of monetary claims and securities with maturities

1 year or less
Cash and due from banks
Call loans and bills bought
Securities
Held-to-maturity securities
Bonds
Japanese government andmunicipal bonds
Japanese corporate bonds
OthersAvailable-for-sale securities
Bonds
Japanese government andmunicipal bonds
Japanese corporate bonds
OthersLoans*
Total¥204,546
40,628Millions of yen
As of March 31, 2014
More than 1
More than 5
year to 5 years
years to 10 years－－－－

Over 10 years
－
－

9,265
9,265

¥14,001
14,001¥43,687
43,487¥4,434,108
4,327,751

8,158

12,232

39,7984,306,490

1,107－
216,042
102,901

1,769－
419,816
112,5303,689
200
208,248
165,785

21,261
106,357
697,900
697,900

37,746

70,835

106,696

697,850

65,155
113,141
17,597¥488,079

41,695
307,286
75,693¥509,512

59,08942,46359,917¥311,853

50－
902,637¥6,034,646* This figure excludes loans of ¥154,180 million that have no fixed redemption period such as policyholder loans.

The future return schedule of deposits and other liabilities with interest

1 yearor less
Deposits*
Call money and bills soldBonds payable
Total¥1,793,166
6,000－¥1,799,166

More than
1 yearto 2 years¥21,603－－¥21,603*Demand deposits are included in“1 year or less.”

28

Millions of yen
As of March 31, 2014
More than More than
3 years
2 years
to 4 years
to 3 years¥14,837¥3,248－－10,00010,000¥24,837¥13,248More than
4 years
to 5 years¥4,811－－¥4,811More than
5 years¥52,303－－¥52,303

5)Investments in Securities
Trading securities
Millions of yen
For the year ended
March 31,2014
Valuation gains
charged to income¥50,776

Held-to-maturity securities

Fair values exceeding the consolidatedbalance sheet amount
Consolidated
Grossbalance sheet unrealized
Fair value
amountgains
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Others
Total

Millions of yen
As of March 31, 2014
Fair values not exceeding the consolidatedbalance sheet amountGross
Consolidated
unrealizedbalance sheet
Fair value
lossesamountTotal
Consolidatedbalance sheet
amountNet
unrealized
gains

Fair value¥4,430,770¥422,547¥4,853,318

¥873

¥(3)

¥869

－

－

－

4,402,886

419,838

4,822,724

732

(2)

729

－

－

－

27,884

2,709

30,593

140

(0)

140

－

－

－

55,288¥4,486,059

12,952¥435,500

68,240¥4,921,559

5,341¥6,214

(73)
¥(77)

5,267
¥6,136－¥4,492,273－¥435,422－¥4,927,696

Available-for-sale securities
Millions of yen
As of March 31, 2014
Fair values exceeding the acquisition cost Fair values not exceeding the acquisition cost
Consolidated
Gross
Consolidated
Gross
Acquisition
Acquisition
balance sheet unrealizedbalance sheet
unrealized
cost
cost
gains
amountamountlosses
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Equity securities
Others
Total

Consolidatedbalance sheet
amountTotal
Net
unrealized
gains

Acquisition
cost¥1,113,507¥80,466¥1,033,040¥56,959¥(25)¥56,985－－－¥947,221

78,605

868,616

53,994(24)

54,018－－－166,285

1,861

164,424

2,964

(1)

2,966

－

－

－

22,029367,146¥1,502,684

9,259
10,619¥100,345

12,770356,526¥1,402,338

191
114,536¥171,688(3)(548)¥(577)

195
115,085¥172,265－－¥1,674,372－－¥99,767－－¥1,574,604

Note: This chart as of March 31, 2014, excludes an investment in partnership of ¥24,410 million (consolidated balance sheet amounts).

29

Available-for-sale securities sold during the period

Bonds
Japanese government andmunicipal bonds
Japanese corporate bonds
Equity securities
Others
Total

Millions of yen
For the year ended March 31, 2014
Sales
Gains on sales
Losses on sales¥88,419¥415¥354
82,498

399

308

5,920
4,716
101,277¥194,413

15
673
1,065
¥2,154

45
487
62
¥904

Impairment of available-for-sale securities:
Available-for-sale securities with market value are considered impaired if the market value decreases materially below theacquisition cost and such decline is considered non-recoverable. The market value is recognized as the consolidated balance
sheet amount and the write-down is accounted for as a devaluation loss for the fiscal year.
No impairment loss was recognized for the year ended March 31, 2014.
“Material decline”is indicated when the market value is 30% or less than the acquisition cost.

306) Investments in Monetary Trusts
Monetary trusts for trading purposes
Millions of yen
As of March 31, 2014
Consolidated balance
Valuation gains
sheet amountcharged to income¥484¥－
Other monetary trusts

Other monetary trusts

Consolidatedbalance sheet
amount¥325,346

Millions of yen
As of March 31, 2014
Gross
Gross
unrealized
unrealized
gains
losses¥37,253－

Acquisition
cost¥288,093

Note: Jointly invested monetary trusts included in the table above amount to ¥50 million for the year ended March 31, 2014.

Impairment of other monetary trusts
Securities with market values that are included in monetary trusts for purposes other than trading, holding to maturity or policy
reserve matching are considered impaired if their market value decreases materially below the acquisition cost and suchdecline is considered non-recoverable. Their market value is recognized as the consolidated balance sheet amount and thewrite-down is accounted for as a devaluation loss for the fiscal year.
No impairment loss was recognized for the year ended March 31, 2014.
“Material decline”is indicated when the market value is 30% or less than the acquisition cost.

317) Derivative Financial Instruments(1) Hedge accounting not applied
Below is a summary of contractual or notional amounts, current market or fair values, valuation gains or losses, and themethod of calculating the fair values of derivatives, classified by transaction, to which hedge accounting is not applied.
Notional amounts do not indicate exposure to credit loss.
Currency derivatives
Millions of yen
As of March 31, 2014
Notional amount
Over
Total
Fair value
1 yearOver-the-counter transactions:
Forward foreign exchanges:
Sold
BoughtForeign exchange margintransactions
Sold
BoughtCurrency options
Sold
BoughtCurrency forward contracts
Sold
BoughtTotal

Valuation
gains (losses)¥75,611
126,400

－
－

¥(14)
585

¥(14)
585

41,601
25,375－－(1,266)
1,585(1,266)
1,585

1,682
2,570

－
－

(6)
18

2
(2)

45
9,560

－
－

(0)
337
¥1,239(0)337¥1,226－－

Notes:
1. The above transactions are valued at market, and valuation gains and losses are recorded in the consolidated statements of income.
2. Market values are calculated using discounted present value, option pricing models.

32

(2) Hedge accounting applied
The following provides a summary of contractual or notional amounts, current market or fair values, valuation gains orlosses, and the method of calculating the fair values of derivatives, classified by transactions, to which hedge accounting isapplied. Notional amounts do not indicate exposure to credit loss.
(i) Interest rate derivatives
Millions of yen
As of March 31, 2014
Notional amount
Over
Total
1 yearDeferred hedge accounting
Interest rate swaps
Fair value hedge accounting
Interest rate swaps
Total

Fair value

Hedged item

¥46,974¥45,292¥(1,446) Loans

366,597

313,539－(14,149) Available-for-sale securities (bonds)¥(15,595)－

Notes:
1. SFH applies deferred hedge accounting and fair value hedge accounting in accordance with“Accounting and Auditing Treatments on Application of
Accounting Standard for Financial Instruments in the Banking Industry”(Industry Audit Committee of Japanese Institute of Certified Public
Accountants No. 24).
2. Market value is calculated using discounted present value.

(ii) Currency derivatives
Millions of yen
As of March 31, 2014
Notional amount
Over
Total
1 yearFair value hedge accounting
Currency swaps
Total¥12,209－¥522－

Notes:
1. SFH applies mainly fair value hedge accounting.
2. Market value is calculated mainly using discounted present value and other methods.

8) Subsequent Events
There were no applicable subsequent events.

33

Fair value

Hedged item

¥1,340 Available-for-sale securities (bonds)¥1,340

SFH’s consolidated results* are prepared in accordance with Japanese GAAP. As such, these figures differ insignificant respects from the financial information reported by Sony Corporation, the SFH’s parent company,
which prepares its financial statements in accordance with U.S. GAAP.
*SFH’s scope of consolidation includes Sony Financial Holdings Inc., Sony Life Insurance Co. Ltd., Sony Assurance Inc., Sony Bank Inc., SmartLink
Network Inc. and SmartLink Network Hong Kong Limited.*1 It also includes AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd., asaffiliated companies accounted for under the equity method. Sony Life Insurance (Philippines) Corporation*2 and Sony Bank Securities Inc.*3 were
included in the scope of consolidation for the year ended March 31, 2013 (April 1, 2012, to March 31, 2013).
*1
SmartLink Network Hong Kong Limited was established as a wholly owned subsidiary of SmartLink Network Inc., and was included in the scope of
consolidation from the fourth quarter of the year ended March 31, 2014.
*2
Sony Life Insurance (Philippines) Corporation has been excluded from SFH’s scope of consolidation since the third quarter of the year ended March
31, 2013, due to the sale of all its shares in the company.
*3
Sony Bank Securities Inc. was excluded from SFH’s scope of consolidation since the second quarter of the year ended March 31, 2013, due to thesale of all its shares in the company.

On May 14, 2014, Sony Corporation announced its consolidated financial results for the year ended March 31,
2014 (April 1, 2013, to March 31, 2014). Sony Financial Group companies constitute Sony Group’s Financial
Services segment in the current year ending March 31, 2014. However, the scope of Sony Group’s Financial
Services segment differs from the scope of SFH’s consolidation for the period ended on or before March 31, 2013.
Statements made in this press release with respect to Sony Financial Holdings’ current plans, estimates, strategies and beliefs andother statements that are not historical facts are forward-looking statements about the future performance of Sony Financial Holdings.
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 orconditions. 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 Financial Holdings 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 Financial Holdings to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Sony Financial Holdings disclaims any such obligation. The
information contained in this statements does not constitute or form part of any offer for sale or subscription of or solicitation or
invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it from the basis of or be relied on in connection
with any contract or commitment whatsoever.

For inquiries:
Masaaki Konoo or Hiroko Hanakura
Corporate Communications & Investor Relations Dept.
Sony Financial Holdings Inc.
Telephone: +81-3-5785-1074
E-mail: press@sonyfh.co.jp
Website of Sony Financial Holdings Inc.
http://www.sonyfh.co.jp/index_en.html

34

V. Attachment
Content of Presentation Material

Consolidated Financial Results for the Year Ended March 31, 2014 andSony Life’s Preliminary Market Consistent Embedded Value as of March 31, 2014
・Consolidated Operating Results for the Year Ended March 31, 2014・・・・・・・・・・・・・・Consolidated Financial Forecast for the Year Ending March 31, 2015・・・・・・・・・・・
・Dividend Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・Sony Life’s Preliminary MCEV and Risk Amount Based on Economic Value as of March
31, 2014・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・Appendix・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

35

3
29
31
33
36

Presentation Material

Consolidated Financial Results for theYear Ended March 31, 2014
andSony Life’sLife s PreliminaryMarket Consistent Embedded Valueas of March 31,, 2014

Sony Financial Holdings Inc.
M 20
May20, 2014
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Year Ended March 31, 2014

P. 3

 Consolidated
C
Financial Forecast ffor the Year Ending March 31
31, 201
2015

P. 29

 Dividend Forecast

P. 31

 Sony Life’s Preliminary MCEV and Risk Amount Based on Economic

Value as of March 31, 2014
 Appendix

P. 33
P 36
P.

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that pertain to future operating performance and that are not historic facts are forward-looking statements . Forwardlooking statements may include —but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,”“expect,” “forecast,” “predict,” and“possibility
possibility ” that describe future operating activities
activities, business performance
performance, events or conditions.
conditions Forward-looking statements
statements, whether spoken or
written, are based on judgments made by the management of the Sony Financial Group, based on information that is currently available to it. As
such, these forward-looking statements are subject to various risks and uncertainties, and actual business results may vary substantially from theforecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not to place undue reliance on forwardlooking statements. The Sony Financial Group disclaims any obligation to revise forward-looking statements in light of new information, future
events or other findings. The information contained in this presentation does not constitute or form part of any offer for sale or subscription of orsolicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection
with any contract or commitment whatsoever.

Sony Financial Holdings Inc. All Rights Reserved2Consolidated Operating Results for
the Year Ended March 31, 2014

Sony Financial Holdings Inc. All Rights Reserved

3

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2014 (1)Consolidated ordinary revenuesLife
insurancebusiness

1 259 01,259.0

+4 8%
+4.8%

Non-life
insurancebusiness

1,319.7

Bankingbusiness

Intersegment
adjustments*

76.1
79.2

(3.9%)FY2013

1,142.3

1,196.6

+54.2

+4.8%

Ordinary profit

72.7

67.2

(5.5)

(7.6%)

Ordinary revenues

84.7

89.8

+5.1

+6.1%

Ordinary profit

23
2.3

30
3.0

+0 6
+0.6

+26 7%+26.7%

Ordinary revenues

34.3

35.7

+1.4

+4.3%

Ordinary profit

3.9

5.6

+1.6

+42.6%

(2 3)
(2.3)

(2 5)
(2.5)

(0 1)
(0.1)

－

0.1

0.2

+0.0

+57.8%

1,259.0

1,319.7

+60.7

+4.8%

Ordinary profit

79.2

76.1

(3.1)

(3.9%)Net income

45.0

40.5

(4.5)

(10.1%)

13 3 3113.3.31

14 3 3114.3.31

Total assets

8,096.1

8,841.3+745.2+9.2%

Net assets

435.4

467.0

+31.6

+7.3%

Ordinary revenues

O diOrdinary
revenues
Ordinary profit
Ordinary revenues

Consolidated

FY2012FY2012(Billions of yen)

Consolidated ordinary profit(Billi(Billions
off yen))

FY2013(Billions of yen)

Consolidated

ChangeChange from
13.3.31*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY2012: ¥96.2 billion, FY2013: ¥44.7billion
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

4Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2014 (2) Life Insurance Business: Ordinary revenues increased year on year, due mainly to a rise in income frominsurance premiums associated with steady growth in policy amount in force, and higher interest income
and dividends on general account assets. Ordinary profit decreased year on year due to an increase inprovisioni i off policy
li reserves resulting
lti ffrom theth revisioni i off didiscountt ratet usedd ffor calculatingl l ti policylireserves and the provision of policy reserves for minimum guarantees for variable life insurance, despite
the positive effect of an increase in the positive spread.
 Non-life Insurance Business: Ordinary
y revenues expandedpyyear on yyear, owing
g to an increase in net

premiums written primarily for mainstay automobile insurance. Ordinary profit grew year on year due to a
decline in the loss ratio mainly led by the revision of premium rates for automobile insurance and a lower
car accident ratio owing to the introduction of a new bonus-malus system (non-fleet driver rating system),as well as the rise in ordinaryy revenues.
 Banking Business: Ordinary revenues increased year on year, due to higher gains on foreign exchangetransactions stemming from active foreign currency trading by customers and a rise in interest income onloans led by the growing balance of mortgage loans. Ordinary profit expanded year on year, due mainly
to lower interest expenses and an improvement in net gains on bond-dealing
bond dealing transactions,transactions in addition to
the increase in ordinary revenues.
 Consolidated ordinary revenues rose 4.8% compared with the previous fiscal year, to ¥1,319.7 billion,

owing to increases in ordinary revenues from all businesses: life insurance, non-life insurance andb kibanking.
C
Consolidated
lid t d ordinarydiprofitfit ddecreased
d3
3.9%9% year on year, tto ¥76¥76.1
1 billibillion. B
By bbusinessisegment, ordinary profit from the life insurance business fell, whereas ordinary profit from the non-life
insurance and banking businesses rose year on year. Consolidated net income declined 10.1% year on
year, to ¥40.5 billion.

Line item amounts are truncated below ¥100 million; percentage change figures are roundedSony Financial Holdings Inc. All Rights Reserved

5Highlights of Operating Performance:
Sony Life (Non-consolidated)
Ordinary revenues(Billions of yen)

Ordinary profit（億円）

1,197.1+4.8%

1,197.1

+54.8

+4.8%

925.8

960.9

+35.1

+3.8%

Investment income

199.8

212.3

+12.4

+6.3%

Interest income and dividends

108.5

122.1

+13.6

+12.5%

Income from monetary trusts, net

5.2

5.3

+0.0

+1.0%

Gains on sale of securities

2.4

0.7

(1.6)

(68.0%)

Ordinary expenses

74.6

FY2012(7.3%)FY2013 (Billions of yen)

◆ Ordinary revenues increased while ordinary profit
decreased year on year.
◆ Income from insurance premiums increased due to asteady growth in policy amount in force.
◆ Investment income increased due mainly to higher
interest income and dividends on general account assets.
◆ Ordinary profit decreased year on year due to anincrease in provision of policy reserves resulting from therevision of discount rate used for calculating policy
reserves and the provision of policy reserves forminimum guarantees for variable life insurance, despite
the positive impact from an increase in the positive
spreadspread.

Change1,142.2

Gains on separate accounts,
accounts net

69.2

FY2013

Income from insurance premiums

Ordinary revenues

1,142.2

FY2012

83 6
83.6

82 6
82.6

(0 9)
(0.9)

(1 1%)(1.1%)

1,067.6

1,127.9

+60.2

+5.6%
+11.3%

Insurance claims and other payments

293.9

327.2

+33.3

Provision for policy reserves and others

630.5

650.7

+20.2

+3.2%

Investment expenses

11.6

8.5

(3.1)

(27.2%)

Losses on sale of securities

1.5

0.5

(1.0)

(66.7%)

Losses on separate accounts, net

0.3

－

(0.3)

(100.0%)

109.0

113.8

+4.8

+4.4%

Ordinary profit

Operating expenses

74.6

69.2

(5.4)

(7.3%)Net income

42.4

37.0

(5.3)

(12.7%)(Billions of yen)

13.3.3114.3.31

Change from 13.3.31

Securities

5 211 55,211.5

5,954.7

+743
743.1
1

+14
14.3%
3%

Policy reserves

5,472.9

6,123.6+650.7+11.9%

Total net assets

342.3

369.2

+26.8

+7.9%

80.2

83.4

+3.1

+3.9%

5 952 7
5,952.7

6 624 96,624.9+672.1672 1+11.3%
11 3%

550.6

640.5

+89.9

+16.3%Net unrealized gains on other securities
T t l assets
Totalt
Separate account assets

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

6Overview of Operating Performance:
Sony Life (Non-consolidated)
FY2012FY2013

ChangeNew policy amount

4,454.6

3,889.3(12.7%)

Lapse and surrender amount

1,911.9

1,739.4(9.0%)

Lapse and surrender rate

5.31%

4.61%

(0.70pt)

Policy amount in force(Billions of yen)

37,779.0

39,095.0+3.5%Annualized premiums from new policies

73.2

63.9

(12.7%)Of which,hi h third-sectorthi dt products
d t

18 3
18.3

13 4
13.4

(26 7%)(26.7%)

669.9

696.9

+4.0%

158.6

167.0

+5.3%

(Billions of yen)

FY2012FY2013

ChangeGains from investment, net (General account)

104.5

121.1

+15.9%

Core profit

80.0

72.3

(9.6%)

Positive spread

21
2.1

84
8.4

+300 0%+300.0%13.3.3114.3.31

Changefrom
13.3.312,281.8%

2,358.7%+76.9pt

Annualized premiums from insurance in force
Of which, third-sector products

Non-consolidated solvency margin ratio

Notes:
1. Figures for new policy amount, lapse and surrender amount, lapse and surrender rate, policy amount in force,
annualized premiums from new policies and annualized premiums from insurance in force are calculated as thetotal of individual life insurance and individual annuities.
2 . The lapse and surrender rate shows the ratio derived by dividing the amount of lapses and surrenders, notadjusted for policy amount decreases, increases, and reinstatements, by the policy amount in force at the
beginning of the fiscal year.

<Reasons for changes>◆ Decreased due to lower sales of family
income insurance and interest ratesensitive whole life insurance despite
higher sales of U
U.S.
S dollar denominatedinsurance and lump-sum payment
endowment insurance.

◆ Decreased mainly in term-life insurance.
◆ Decreased due to lower sales of interest
rate-sensitive whole life insurance andeducational endowment insurance despite
higher sales U.S. dollar denominatedinsurance and of lump-sum
lump sum payment
endowment insurance. Of which, in thirdsector products, sale of lump-sum
payment whole life nursing-care insurance
decreased.
◆ Decreased due to an increase in provisionof policy reserves resulting from therevision of discount rate used for
calculating policy reserves and theprovision of policy reserves for minimum
guarantees for variable life insurance,
despite the positive impact from anincrease in the positive spread.

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

7

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies

Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

New policy amount

591

Annualized premiums from new policies

Number of new policies(Thousands of policies)

620(Billions of yen)

533

(Trillions of yen)

600

4.20

500

4.45

3 88
3.88

4.0

80

70.8

(14.0%)

5.0

Of which, third-sector

73.2
63.9

70

(12 7%)(12.7%)

60
400
50(12.7%)

3.0

300

2.0

200

10
1.0

100

40
30

(26.7%)

20
10

0

0

FY2011FY2012FY201317.1

18.3

FY2011FY201213.4

0FY2013

Line item amounts are truncated below ¥10 billion; numbers of policies aretruncated below 1,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

8Operating Performance :Sony Life (Non-consolidated) (2)
Number and Amount of Policies in Force

Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)(Individual Life Insurance + Individual Annuities)

Policy amount in force

Annualized premiums from insurance in force

Number of policies in force

Of which,which third-sector
third sector(Millions of policies)(Trillions of yen)

50

40

5 67
5.67
36.0

6.04

700
6
5
4

400

3

300

2

200

1

100

0

0

20

10

0
2012.3.31

2013.3.31

+4.0%

500

+3.5
35%

30

635 4
635.4

669.9

600

39.0

37.7

696.9

(Billions of yen)

6.33

+4.8%

148.9

2012.3.31

2014.3.31

Line item amounts are truncated below ¥100 billion; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

158 6
158.6

+5 3%
+5.3%

2013.3.31

167 0
167.0

2014.3.31

Line item amounts are truncated below ¥100 billion;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

9Operating Performance :Sony Life (Non-consolidated) (3)Lapse and Surrender Rate*(Individual Life Insurance + Individual Annuities)

(%)

8

6

5.93

5.31

(0.70pt)

4.61

4

2

0
FY2011FY2012FY2013*The lapse and surrender rate shows the ratio derived by dividing the amount oflapses and surrenders, not adjusted for policy amount decreases, increases, andreinstatements, by the policy amount in force at the beginning of the fiscal year.

Sony Financial Holdings Inc. All Rights Reserved

10Operating Performance :Sony Life (Non-consolidated) (4)Income from Insurance Premiums(Billions of yen)

1 000
1,000

Interest Income and Dividends

960.9

925.8

(Billions of yen)

122.1

120

816.1

108.5

+3.8%

800

97.9

100

+12.5%

80

600

60
400
40
200

20
0

0
FY2011FY2012FY2011FY2013

FY2012FY2013

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

11

Operating Performance :Sony Life (Non-consolidated) (5)Core Profit

Ordinary Profit((Billions of yyen)) *Included ¥3.9 billion of a reversal of reserve for outstanding(Billions of yen)claims related to the Great East Japan Earthquake.

80

80.0
*

80

72.3

71.6

74.6

69.2

69.4

(9.6%)(7.3%)

60

60

40

40

20

20

0

0
FY2011FY2012FY2011FY2013(Reference) Impact on core profit(Billions of yen)

FY2011 FY2012 FY2013
(1.5)
2.1
8.4
(7.5)
－
－

Positive (Negative) spread
Effects by the revision of policy reserve discount rate
Reversal of policy reserves for minimum guarantees
for variable life insurance in the general account assets*The minus amount in positive spread indicates negative spread.

(2.8)

1.3

(4.2)

FY2012(Reference) Main differences from Core Profit
Capital gains (losses)
Provision of contingency reserve

FY2011
1.7(3.7)

FY2013(Billions of yen)

FY2012(0.9)(4.2)

FY20131.1(4.1)*“Provision of policy reserves for minimum guarantees for variable life insurance inthe general account assets” and “Provision of contingency reserve” are describedas negative amount.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

12

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees+83(Number)

4,500
4,121
[76]

4,105
[86]

4,085
[96]

4,046
[102]

4,133
[[105]]

4,127[[109]]

4,125[[110]]

4,000

4,216
[138]

4,092
[121]
+124

3,500

3,000
, 0
12.3.3112.6.30

12.9.30 12.12.31 13.3.31

13.6.30

13.9.30 13.12.31 14.3.31

Note: Figures in [ ] show the numbers of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement) included in the overall
numbers, those who have reached retirement age but who continue to work as Lifeplanner sales employees that meet certain sales conditions
and other requirement.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
13.3.31<Asset management review>

14.3.31(Billions of yen)Amount%Japanese governmentand corporate bonds

4,561.0

84.4%

5,190.0

86.7%

Japanese stocks

31.1

0.6%

33.2

0.6%

Foreign securities

62.0

1.1%

79.8

1.3%

Foreign stocks

25.4

0.5%

26.9

0.4%

Monetary trusts

306.1

5.7%

305.3

5.1%

Policy loans

145.0

2.7%

154.1

2.6%

Real estate

70.3

1.3%

66.5

1.1%

Cash and call loans

103.3

1.9%

32.6

0.5%

Others

97.7

1.8%

95.6

1.6%

5 402 1
5,402.1

100 0%
100.0%

5 984 3
5,984.3

100 0%
100.0%

Amount%On the asset side, we lengthened the duration of
securities held to match the liability characteristics of
insurance policies with long-term maturities with theaim of reducing interest rate risk.
Japanese government and corporate bonds:
Continue to accumulate ultralong-term bonds in FY13.

<Bond duration>

Total

Mar. 31, 2012: 19.2 years
Mar. 31, 2013: 19.9 years
Mar. 31, 2014: 19.7 years■Investment in the monetary trusts is mainly into
Japanese government and corporate bonds■The holding ratio on the real status
status, of Japanese
government and corporate bonds including thoseinvested in monetary trusts in the general accountassets: As of Mar. 31, 2014: 91.8%(As of Mar. 31, 2013: 90.1%)

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

14

Operating Performance :Sony Life (Non-consolidated) (8)Average Assumed Interest Rate andInvestment Yield for Core Profit

Positive Spread
(%)

3.00

Average assumed interest rate
Investment yield for core profit(Billions of yen)
10

8.4

9

2.35

8

2.31

2.35

2 27
2.27

2.18
8

2.31

7
6

2.00

+300.0%

5
4
3

2.1

2
1

(1.5)
1 00
1.00

0

FY2011-1-2

FY2011FY2012FY2012FY2013

FY2013*The minus amount in positive spread indicates negative spread.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

15

Operating Performance :Sony Life (Non-consolidated) (9)Non-consolidated Solvency Margin Ratio

(%)

3,000

+76.9pt

2,500

2,358.7

2,281.8

2,000

1,980.4
1,500

0
1,000

12.3.3113.3.3114.3.31Sony Financial Holdings Inc. All Rights Reserved

16

Operating Performance :AEGON Sony Life Insurance*AEGON Sony Life Insurance sells individual variable annuities.

Number and Amount of Policies in Force

Number and Amount of New Policies
New policy amount(Billions of yen)

Number of new polices [ ](Th(Thousands
d offpolicies)

167.5[28.8]

180

Policyy amount in force(Billions of yen)

32

160

Number of policies in force [ ]236.4[38.2]

250(Th(Thousands
d offpolicies)

40.0

28

140

35.0
200

24

120

20

30.0
25.0

150

100
16
80

51.1
[7.3]

60
40
20

20 0
20.0
100

12
8

17.5
[2.4]

76.1
[10.2]FY20125.0

00
FY2011

10.0

30.4
[3.6]
[3
6]

50

4

0

15.0

0.0
12.3.31

FY201313.3.3114.3.31

Net income (losses) for AEGON Sony Life Insurance and SA Reinsurance
FY2012(Billions of yen)

ChangeFY2013

AEGON Sony Life Insurance

(2.5)

(3.4)

(0.9)

SA Reinsurance

(0.9)

0.4

+1.3

AEGON SSony Lif
Life IInsurance andd SA R
Reinsuranceiare equity
it method
th d companies,
i
50
50-50
50 joint
j i t venturetestablishedt bli h d byb SonyS
Life
Lif andd AEGON Group.
G
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP.
Line item amounts are truncated below ¥ 100 million;
50% of the net income (losses) for AEGON Sony Life Insurance and SA Reinsurance are recognized as
numbers of policies are truncated below 100 policies;
percentage change figures are rounded.
investment profit (losses) on equity method in the SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

17

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit

FY2012FY2013

84.7

89.8

+5.1

+6.1%

Underwriting income

83.6

88.6

+5.0

+6.0%

Investment income

1.0

1.1

+0.1

+17.4%

82.3

86.8

+4.5

+5.5%

Underwriting expenses

61.8

65.4

+3.6

+5.9%

Investment expenses

0.0

0.0

(0.0)

(2.4%)

Operating general andOperating,administrative expenses

20.4

21.3

+0.8

+4.4%

Ordinary profit

2.3

3.0

+0.6

+26.7%Net income

1.4

1.6

+0.2

+14.4%(Billions of yen)

89.8
84.7

Ordinary revenues+6.1%

Ordinaryy expenses
p

3.0

2.3
FY2012+26.7%
26 %FY2013(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues increased year on year, due toan increase in net premiums written primarily for its
mainstay automobile insurance.
◆ Ordinary profit grew year on year due to a decline in
the loss ratio mainly led by the revision of premium
rates for automobile insurance and a lower car
accident ratio owing to the introduction of a new
bonus-malus system (non-fleet driver rating system),as well as the rise in ordinary revenues
revenues.

(Billions of yen)

13.3.3114.3.31

ChangeChange from
13.3.31

Underwriting reserves

70.6

78.0

+7.4

+10.5%

Total net assets

19.9

21.4

+1.4

+7.4%

Total assets

127.4

142.7

+15.2

+12.0%

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Operating Performance:
Sony Assurance

FY2012((Billions of yyen))<Reasons for changes>

ChangeFY2013

Direct premiums written

82.5

87.3

+5.9%

Net premiums written

83.5

88.6

+6.0%

Net losses paid

47 1
47.1

46 1
46.1

(2 1%)(2.1%)

Underwriting profit

1.3

1.8

+34.0%Net loss ratio

63.2%

59.3%

(3.9pt)Net expense ratio

26 0%
26.0%

25 6%
25.6%

(0 4pt)(0.4pt)Combined ratio

89.2%

84.9%

(4.3pt)◆ Increased primarily in its mainstay
automobile insurance.
◆ Decreased mainly led by the revision ofpremium rates for automobile insurance
and a lower car accident ratio owing to
the introduction of a new bonus-malus
system.

◆ Declined due to a proper control of
insurance acquisition cost, in addition to arise in automobile insurance premiums.

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written.
Net expense ratio = Expenses related to underwriting / Net premiums written

Number of policies in force

13.3.3114.3.31

Change from 13.3.31

1 55 million
1.55

1 61 million
1.61+0 06 million+0.06

504.2%

527.6％

Non-consolidated
solvency margin ratio

+4 0%
+4.0%

+23.4pt

Note: The number of policies in force is the total of automobile insurance and medical and cancer insurance
insurance,
which accounts for 99% of net premiums written.

Line item amounts are truncated below ¥ 100 million;
numbers of policies are truncated below 10,000 policies;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

19Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written(Millions of yen)

Net Premiums Written

FY2012FY2012FY2013

Change

Fire

86

104

+19.9%

Marine

142

153

+8.0%

Change(Millions of yen)

236

Fire

FY2013275+16.4%－－－

Personal accident

7,898

8,360

+5.8%

Personal accident

8,138

8,613

+5.8%

Voluntary automobile

74,40678,735+5.8%

Voluntary automobile

74,14078,473+5.8%

Compulsory
automobile liability

1,075

1,255

+16.8%

83 582
83,58288 60088,600

+6 0%
+6.0%

MarineCompulsory
automobile liability
Total

－

－

－

82 54182,54187 37087,370

+5 9%
+5.9%

Net losses paid
(Millions of yen)Fire

FY2012FY2013

Change13+207.2%185

129(30.4%)

Personal accident

1 957
1,957

2 066
2,066

+5 5%
+5.5%

Voluntary automobile

44,00442,860(2.6%)

Compulsory
automobile liability

1,004

1,123

+11.8%

47,153

46,183(2.1%)

Marine

Total

Total

*SURE, medical and cancer insurance is included in personal accident.

Line item amounts are truncated below ¥ 1 million;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

20

Operating Performance:
Sony Assurance (1)Ordinary Profit andAdjusted Ordinary Profit

Net Premiums Written andNumber of Policies in Force
Voluntary automobile insurance
Others(Billions of yen)

1.49

120

(Billions of yen)
5(Millions of policies)
4.5

Personal accident insurance

Number of policies in force

1.55

+4.0%

1.61
1.6

Ordinary profit

Adjusted ordinary profit

4.2

4
3.5

100

79.1

88.6

83.5

80

1.4
1.2

+6.0 %

60

2

0.8

1.5

0.4

2.3

2.5

1

0.6

40

3.0
2.8

3

+26.7%

1

0.3

0.5

0.1

0

20

02
0.2

0

0
FY2011FY2012FY2011FY2012(Reference) Provision for catastrophe reserve
FY2011FY2013The number of policies in force is the total of automobile insurance and medical
and cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

FY2013*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

Provision for catastrophe reserve(Billions of yen)

FY2012(2.4)

FY2013(2.2)

1.2*Reversal for catastrophe reserve is described as negative amount.
Line item amounts are truncated below ¥100 million; numbers of policies aretruncated below 10,000 policies; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

21

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio

(%)

100

98.1

(Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)
Net loss ratio

Net expense ratio

Net expense
p
ratio

(%)

98.9

93.8

100

89 0
89.0

89 2
89.2

84 9
84.9

( 5.1pt)

80

80

60

72.4

72.9

68.2

(4.7pt)60(4.3pt)

63.2
63.3

59.3

(3.9pt)

40

40

20

25.7

26.0

FY2011FY2012(0.4pt)

20
25.6

25.7

26.0

FY2011FY2012(0.4pt)25.6

00FY2013

Notes:
Earned/Incurred loss ratio = (Net losses paid + Provision for reserve for outstanding
losses + Loss adjustment expenses) / Earned premiums[Earthquake insurance and compulsory automobile liability insurance are excluded
from the above calculation.]

FY2013

Notes:Net loss ratio = (Net losses paid + Loss adjustment expenses ) / Net premiums written
Net expense ratio = Expenses related to underwriting / Net premiums writtenSony Financial Holdings Inc. All Rights Reserved

22

Operating Performance:
Sony Assurance (3)Non-consolidated Solvency Margin Ratio

(%)

800

557.8%

527.6%

504 2%
504.2%+23.4pt

400

012.3.3113.3.3114.3.31Sony Financial Holdings Inc. All Rights Reserved

23

Highlights of Operating Performance:
Sony Bank (Consolidated/Non-consolidated)
Consolidated ordinary revenues
Consolidated ordinary profit

34.3<Consolidated>(Billions of yen)

35.7

+4 3%
+4.3%

5.6

FY2012FY2013

ChangeConsolidated ordinary revenues

34.3

35.7

+1.4

+4.3%

Consolidated ordinary profit

44
4.4

5.6

+1
1.1
1

+26
26.5%
5%

Consolidated net income

3.2

3.4

+0.1

+5.2%

FY2012FY2013

31.3

33.3

+1.9

+6.2%

Gross operating profit

18.5

20.7

+2.1

+11.7%Net interest income

18.1

19.9

+1.8

+10.1%Net fees and commissions

01
0.1

(0 0)
(0.0)

(0 1)
(0.1)

―

Net other operating income<Non-consolidated>+26.5%(Billions of yen)

4.4

FY2012

Ordinary revenues

FY2013(Billions of yen)<Consolidated>◆Ordinary revenues increased year on year, due to higher
gains on foreign exchange transactions stemming from
active foreign currency trading by customers and a rise ininterest income on loans led by the growing balance ofmortgage loans. Ordinary profit expanded year on year, due
mainly to lower interest expenses and an improvement in net
gains on bond-dealing transactions, in addition to theincrease in ordinary revenues.
Non consolidated<Non-consolidated>◆Both gross operating profit and net operating profit increased
year on year.
-Net interest income increased owing to a rise in interest
income on loans led by the growing balance of mortgage
loans, and a decrease in interest expenses.
-Net other operating income increased due mainly to higher
gains on foreign exchange transactions stemming from
active foreign currency trading by customers, in addition toan improvement in net gains on bond-dealing transactions.

Change

0.2

0.7

+0.4

+171.1%

General and administrative
expenses

13.9

14.6

+0.7

+5.2%

Net operating profit

4.5

6.0

+1.4

+32.5%

Ordinary profit

4.2

5.8

+1.5

+36.5%Net income

0.8

3.5

+2.7

+307.8%13.3.3114.3.31

67.8

72.7

+4.9

+7.3%

6.5

7.2

+0.7

+11.0%

2,005.0

2,056.7

+51.6

+2.6%

(Billions of yen)
Total net assets
Net unrealized gains onother securities,, net of taxes

Total assets

Change ffrom
Ch
13.3.31

Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

24Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
Change from
13.3.3113.3.3114.3.31

Customer assets

1,974.3

2,007.5

+33.1

+1.7%

Deposits

1,857.4

1,890.0

+32.5

+1.8%

Yen

1 467 2
1,467.2

1,526.4

+59
59.2
2

+4
4.0%
0%

390.2

363.5

(26.7)(6.8%)

116.9

117.4

+0.5

+0.5%

L
Loans
outstandingt t di

970 2
970.2

1 057 4
1,057.4

+87 1
+87.1

+9 0%
+9.0%

Mortgage loans

860.3

949.3

+88.9

+10.3%

Others109.8

108.1*1(1.7)(1.6%)

92

97

+4

+5.3%

0.41%

0.35%

(0.06pt)

11 98%
11.98%

11 72%
11.72%(0 26pt)(0.26pt)(Billions of yen)

Foreign currency
Investment trusts

Number of accounts(10 thousands)

Non-performing assets ratio *2(Based on Financial Reconstruction Law)

Capital adequacy ratio *3(domestic criteria)◆ Yen deposits increased from March 31,
2013 due to an effect of converting fromforeign currencies to yen.

◆ Foreign currency deposit balance
decreased due to an increase in selling tolock in profits led by yen depreciation.

◆ Loan balance increased due to anincrease in the balance of mortgage loans.

*1 Loans in others include corporate loans of ¥102.2 billion*2 Balance of problem assets based on the Financial Reconstruction Law / Total credit exposure*3 PleasePlrefer
f tto ththe graphh off ththe non-consolidated
lid t d capital
it l adequacy
d
ratio
ti (d
(domesticti criteria)
it i ) on P28
P28.
Line item amounts are truncated below ¥100 million;
numbers of accounts are truncated below 10 thousands accounts;
percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

25

Overview of Operating Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis<Reference> Interest Spread(Managerial Accounting Basis)

FY2012FY2013

18 5
18.5

20 6
20.6

17.6

18.2

+0.5

+3.2%

1.0

1.0

+0.0

+7.4%

((0.1))

1.3

+1.5

―

Gross operating profit (core profit) (A)
＝①＋②

18.6

19.2

+0.6

+3.4%

Operating expenses and otherexpenses
③

13.9

14.6

+0.6

+4.9%

Net operating profit (core profit)＝(A)－③

4.6

4.6

(0.0)

(0.9%)(Billions of yen)

Gross operating profit
Net interest income*1①

Net fees and commissions*2②

g income**3
Net other operating

Change+2 1+2.1■Managerial accounting basis
The following adjustments are made to the figures on a financial accounting basis toaccount for profits and losses more appropriately.
*1: Net interest income: Includes profits and losses associated with fund investment
recorded in net other operating income, including gains or losses from currency
swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings inforeign currency transactions recorded in net other operating income.
*3 Net other operating income:*3:
income After the above
abo e adjustments
adj stments (*1 and *2)*2), consists ofprofits and losses for bond and derivative dealing transactions.
■Core profit
Profits and losses exclude net other operating income, which includes those on
bond and derivative dealing transactions, and stands for Sony Bank’s basic profits.

Yield on investment
Interest spread+11 7%+11.7%

Yield on financing

(%)

1.5

1 27
1.27
0.92

1

0.5

0.35

1.20
+0.01pt

0.93
0.93

0 28
0.28

0
FY2012FY2013

Note: Interest spread=(Yield on investment)-(Yield on financing)Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved

26

Operating Performance:
Sony Bank (Non-consolidated) (1)Loans

Deposits
Yen depositspForeigng currency
y depositspMortgageg g loans

Others(Billions of yen)
1,200(Billions of yen)

1,057.4

2,000

1,762.2

1,890.0

1,857.4

970.2

1,000

363.5

of ¥102.2 billion.

+87.1

835.5

+32.5

108.1 *Corporate loans

800

1,500

949.3
600
1,000

1,526.4
400

500

200

0

0

12.3.3113.3.3112.3.3114.3.3113.3.3114.3.31

Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

27

Operating Performance:
Sony Bank (Non-consolidated) (2)Non-Consolidated Capital Adequacy Ratio

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(Domestic Criteria)

(%)

15

(Billions of yen)

1,200

1,000

11.98
912.9

11.58

908.8
773.8

800

(0 26pt)(0.26pt)

11.72

10

(135.0)

600
5
400

200
0
12.3.310
12 3 3112.3.31

13 3 3113.3.31

14 3 3114.3.3113.3.3114.3.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14
14-2
2 of the Banking Act of Japan for determining thecapital adequacy of a bank in light of the assets held by the bank.
Sony bank calculates this ratio based on Basel III from March 31, 2014.
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved28

Consolidated Financial Forecast
for the Year Ending March 31, 2015

Sony Financial Holdings Inc. All Rights Reserved

29

Consolidated Financial Forecast
for the Year Ending March 31, 2015
Consolidated ordinary revenues are expected to decrease, ordinary profit is expected to remain at the same levels,and net income is expected to grow significantly.
(Billions of yen)

FY2013(Actual)

FY2014(Forecast)

Change1,191.0(9.8%)

1,196.6
89.8
35.7

1,061.9
92.4
36.6(11.3%)
+2.8%
+2.2%

Consolidated ordinary profit

76.1

77.0

+1.1%

Life insurance businessBanking business

67.2
3.0
5.6

67.4
3.9
5.3

+0.2%
+29.8%(6.0%)

Consolidated net income

40.5

49.0

+21.0%

Consolidated ordinary revenues
Life insurance business
Non-life insurance businessBanking business

Non-life insurance business

1,319.7<Segment information for ordinary revenues and ordinary profit>■ Life Insurance Business
Ordinary revenues are expected to decrease because we do not expect such an increase in lump-sum payment insurance premiums and investment income on separate
accountt due
d tot marketk t recovery as recorded
d d iin th
the previousififiscall year. H
However, we expectt steadyt d growthth iin policy
li amountt iin force.
f
O diOrdinary
profitfit isi expectedt d tto bebnearly at the same level as in the previous fiscal year. This is because we expect a higher provision for policy reserves related to minimum guarantees for variable life
insurance policies, as well as an increase in operating expenses due to the consumption tax rate rise. We do not expect any negative impact from a rise in provision ofpolicy reserves resulting from the revision of the discount rate used for calculating policy reserves in the previous fiscal year.
■ Non-life Insurance Business
Ordinary revenues are expected to increase in line with growth in net premiums written, primarily for mainstay automobile insurance. Operating profit is expected to risestemming from the rise in ordinary revenues and a decline in the loss ratio although we expect higher operating expenses
expenses.
■ Banking Business
Ordinary revenues are expected to rise year on year, because we regard to stable and sustainable business growth even in an environment characterized by persistently
low interest rates. Ordinary profit is expected to decrease because we do not believe that foreign exchange transactions will be as vigorous as in the previous fiscal year,
and we expect higher operating expenses as we pursue initiatives designed to strengthen our settlement function with an eye to future growth, while we expect higher
ordinary revenues to lead to an increase in gross operating profit.
Consolidated net income
income><Consolidated
Net income is expected to grow significantly year on year. This is because Sony Life has changed its calculation policy of the reserve for price fluctuations to accumulate
reserves up to required levels from this fiscal year while it had accumulated reserves in excess of the required levels until the previous fiscal year.
Line item amounts are truncated below ¥100 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved30

Dividend Forecast

Sony Financial Holdings Inc. All Rights Reserved

31

Dividend Forecast forfor the Year Ending March 31, 2015
 The proposed dividend for FY2013 is ¥30 per share, up ¥5 year on year.
 Given the substantial increase in net income forecast for FY2014
FY2014, we expect toincrease the dividend by ¥10 per share, to ¥40. This would correspond to thethird consecutive year of dividend increases, since FY2012.
 SFH’s
SFH s dividend policy is to pay stable dividends
dividends, steadily increasing their levelin line with earnings growth over the medium to long term, thereby enhancing
ongoing shareholder returns.

■ Consolidated Net Income and Dividend Result/Forecast
FY2010
Dividend per share

FY2011FY2012FY2013

FY2014(Expected)(Forecast)

¥20

¥20

¥25

¥30

¥40

Annual dividend amount¥8.7 billion¥8.7 billion¥10.875 billion¥13.049 billion¥17.399 billion

Consolidated net income¥41.7 billion¥32.8 billion¥45.0 billion¥40.5 billion¥49.0 billion

20.9%

26.5%

24.1%

32.2%

35.5%

Dividend payout ratio(consolidated)

Note: Annual dividend amounts are truncated below ¥1 million,
million consolidated net income
amounts are truncated below ¥100 million, and dividend payout ratios are rounded.

Sony Financial Holdings Inc. All Rights Reserved32Sony Life’s Preliminary MCEV
andd
Risk Amount Based on Economic Valueas of March 31
31, 2014

Please keep in mind that the validity of these calculations of MCEV as of March 31, 2014, has not been verified by outside specialists.
The calculation of MCEV as of March 31, 2014, in accordance with the MCEV principles and verified by outside specialists, is scheduled to
be announced on May 26, 2014.
A part of the calculations of MCEV as of December 31, 2013, adopted simplified method and has not been verified by outside specialists.

Sony Financial Holdings Inc. All Rights Reserved

33Sony Life’s Preliminary MCEV as of March 31, 2014
(Billions of yen)

13.3.31

13.12.31

14.3.31

Changefrom 13.3.31

Change from
13.12.31

1,064.7

1,186.9

1,221.3+156.6+34.4

Adjusted net worth

770.8

698.5

722.1

(48.7)+23.7

Value of existing business

293.9

488.4

499.1

+205.3

+10.7

MCEV

(Billions of yen)

13.3.31

13.12.31

14.3.31

New business value

41.6(12M)

45.2(9M)

55.2(12M)

New business margin

3.5%

5.5%

5.2%

Notes:
1. New business margin equals new business value divided by present value of premium income.
2. Calculated MCEV as of December 31, 2013 by using updated lapse and surrender rate and economic assumptions as of March 31, 2013.

 Reasons for changes in MCEV・Preliminary MCEV as of March 31,
31 2014,2014 increased ¥156.6¥156 6 billion from March 31
31, 2013
2013, due mainly to an acquisition of newpolicies, assumption changes in mortality rates and lapse and surrender rates and higher interest rates.
・Preliminary MCEV as of March 31, 2014, increased ¥34.4 billion from December 31, 2013, due to changes in assumptions, mainlymortality rates and lapse and surrender rates.
 Reasons for changes in new business margin
・New business margin as of March 31, 2014, was up 1.7% from March 31, 2013, due mainly to the revision of Sony Life’s
Insurance premium rates in April 2013 and higher interest rates.
・New business margin as of March 31, 2014, was down 0.3% from December 31, 2013, due mainly to an increase in operating
expenses driven by higher inflation rate in future.

*Please see page 44 for trend on JGB yields.

Sony Financial Holdings Inc. All Rights Reserved34Sony Life’s Risk Amount Based on Economic Valueas of March 31, 2014
(after tax)
(Billions of yen)

13.3.31

13.12.31

14.3.31 *2

Insurance risk

605.6

621.1

654.5

Market-related risk

289.9

260.8

240.0

Of which, interest rate risk*1

234.2

198.3

180.9

Operational risk

26 0
26.0

27 9
27.9

26.3

Counter party risk

2.3

2.0

1.3

Variance effect(262.5)(256.9)(257.8)The risk amount based on economic value

661.3

654.8

664.3

*1 Interest amount excluding the variance effect within market-related risk
*2 Sony Life revised its method of measuring interest rate risk in Japanese yen on March 31, 2014. Please see page 43.

(Billions of yen)

MCEV

13.3.31

13.12.31

1,064.7

1,186.9

14.3.311,221.3

 Maintained capital adequacy by controlling market-related risk.
risk
Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance risk and market-related risk.
2. The solvency risk capital on an economic value basis is calibrated at VaR (99.5) over one year and based on the internal model, which is a similar but modified model based on the
EU Solvency II (QIS5) standard method.
3. Calculated MCEV as of December 31, 2013 by using updated lapse and surrender rate and economic assumptions as of March 31, 2013.

Sony Financial Holdings Inc. All Rights Reserved

35

AppendixSony Financial Holdings Inc. All Rights Reserved36

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥24 billion (including capital surplus of ¥12 billion)
Equity ownership: Sony Life insurance Co.,
Co Ltd.
Ltd 50%,50% AEGON international B.V.
B V 50%Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (20*) *As of May 20, 2014
SA Reinsurance Ltd
Established： October 29, 2009
Common stock: ¥8 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance business* AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint ventures established by Sony Life and AEGON Group.

Sony Bank’s Mortgage Loans through Sony Life
■ Sony Life accounts for 24% of the balance of mortgage loans as of Mar. 31, 2014
Sony Life accounts for 17% of the amount of new mortgage loans for FY13
*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■ Sony Life accounts for approx. 5% of new automobile policies for FY13
*Sonyy Life started handlingg automobile insurance in May
y 2001.

* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved

37

Recent Topics 2<Highlights for FY2013>2013-04-01
2013-04-02

Sony Assurance revised its automobile insurance policy details. (including an increased discount of ¥8,000
for new customers who conclude contracts on line, introduction of new bonus-malus system and the revision on
automobile insurance premium rates.)Sony Life revised insurance premium rates on some of its products in line with the reduction in discount rateused for calculating policy reserves.

2013-05-01

Sony Bank set service charge free on inward foreign currency remittances.

2013-05-02

Sony Life commenced sale of a new product: “ U.S. Dollar Denominated Insurance.”

2013-08-01

Sony Assurance enhanced special benefit service for its policyholders with renewal contract.

2013-10-28

Sony Bank launched new service: automatic saving plans for foreign currency deposits.

2013-10-31

Sony Bank closed its representative office in Sydney.

2013-11-11

The Sony Financial Group entered the nursing care business, acquiring Senior Enterprise Corporation as awholly owned subsidiary of SFH.

2013-12-02
2013-12-19
2014-01-02
2014-01-10

Sony Bank introduced paperless procedures to open bank accounts.
Sony Bank announced plans to issue the new Sony Card with an enhanced credit and settlement function
through a tie-up with Sumitomo Mitsui Card Company, with this credit card being offered to customers fromFebruary 7, 2014.
Sony Life started selling new educational endowment insurance (non-participating type).
Sony Bank enhanced its settlement function by starting withdrawal services for credit card payments for
Sumitomo Mitsui Card holders
holders.

2014-02-12

Sony Life dissolved tie-up with Watami Co., Ltd. in the nursing care business.

2014-04-01"Sony Lifecare Inc." is established as a holding company to oversee the Group’s operations in the nursing carebusiness.

2014-05-02

Sony Life commenced sale of a new product: “Specialty Endowment Insurance.”

Sony Financial Holdings Inc. All Rights Reserved38Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair Value Information on Securities(Billions of yen)

Valuation gains (losses) on trading-purpose securities(Billions of yen)

Notes: 1)) Line item amounts are truncated below ¥100 million. 2)) Amounts above include those categorizedgas “monetary
y trusts.”

Sony Financial Holdings Inc. All Rights Reserved

39Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY2012

ChangeFY2013

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

00(39.8%)

87,634

98,588

12.5%

536

397

(25.9%)

Foreign securities

3,746

6,740

79.9%

Other securities

251

460

83.6%

Loans

5 450
5,450

5 691
5,691

4 4%
4.4%

Real estate

10,854

10,250(5.6%)

6731(53.7%)

108,539

122,160

12.5%

Others
Total

Line item amounts are truncated below ¥1 million; percentage change figures are rounded.

Sony Financial Holdings Inc. All Rights Reserved40Sony Life’s Quarterly Trend on New Policies Amount

Quarterly Trend on New Policy Amount

New policy amount(Billions of yen)

1,201.9

1,175.4

1,200.0
1,054.4
1,000.0

1 238 71,238.7
1,128.3

1,066.5
997.3

976.1

1,033.3
947.4

886 2
886.2

841.4
800.0
600 0
600.0
400.0
200.0
0.0

FY11.1Q
Q FY11.2Q
Q FY11.3Q
Q FY11.4Q
Q FY12.1Q
Q FY12.2Q
Q FY12.3Q
Q FY12.4Q
Q FY13.1Q
Q FY13.2Q
Q FY13.3Q
Q FY13.4Q
Q
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved

41Sony Life’s Quarterly Trend on
Annualized Premiums from New Policies
Quarterly Trend on Annualized Premiums from New Policies
Annualized premiums from new policies

Of which, third-sector((Billions of yyen))

24.0

22.0

22.0

19.8

20.0
18.0

17.1

16.0

19.0
17.6

18.5

17.4

16.8

16.0

15.2

14.6
13.2

14.0
12.0
10.0
8.0
6.0
4.0
2.0

4.2

3.8

4.9

4.0

4.4

5.0

5.2

3.6

3.9

3.0

3.6

2.9

00
0.0
FY11.1Q FY11.2Q FY11.3Q FY11.4Q FY12.1Q FY12.2Q FY12.3Q FY12.4Q FY13.1Q FY13.2Q FY13.3Q FY13.4Q
Line item amounts are truncated below ¥100 million.

Sony Financial Holdings Inc. All Rights Reserved42Sony Life: Revision of Method of Measuring
Interest Rate Risk in Japanese Yen
 For interest rate risk in Japanese yen, Sony Life revised the risk measure at the end of March 2014, having
observed significant changes in ultra-long term interest rates during the year 2013. More specifically, Sony Life
revised the previous methodology which measured the shock by dropping interest rates by at least 1% for all(parallel shift)) and introduced pprincipal
p componentpanalysis,y , where yyield curve changes
g arematurities (pdisaggregated into three components, parallel shift, twist and butterfly, and the yield curve is shocked by eachcomponent, to capture the risk of yield curve changes more precisely. The risk amount would be larger than theprevious risk measure when ultra-long term interest rates are high and there is room for yield curve flattening(such as on December 31, 2012), while the risk amount would be smaller than the previous risk measure whenultra-long term interest rates are sufficiently low and there is little room for further decline in yield curve (such as
on March 31, 2014). Interest rate risk at the end of March 31, 2014, prior to revising the risk measure was¥233.6 billion (post-revision: ¥180.9 billion) and the solvency risk capital on an economic value basis was¥697.5 billion (post-revision: ¥664.3 billion).

 Sony Life confirms its risk measure at least oncea year. Not only the above risk measure revision
for interest rate risk
risk, Sony Life modified risk
factors specified in QIS5 standard methodology
appropriately to make them more suitable in lightof the market risk attribute to which Sony Life is
exposed, where risk factors specified in QIS5 or
its previous risk measure are considered unable
to capture enough risk amount at a 99.5%
confidence level.

Sony Financial Holdings Inc. All Rights Reserved

43Sony Financial Holdings Inc. All Rights Reserved

44

JGB Yields

Contact:
Corporate Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL： +81-3-5785-1074

Sony Financial Holdings Inc. All Rights Reserved

45