Presentation Material

Consolidated Financial Results for theYear Ended March 31, 2012
andSony Life’s Preliminary
M k tC
MarketConsistenti t t Embedded
E b dd d Value
V lSony Financial Holdings Inc.
May 18, 2012

Content■Consolidated Operating Results for the Year Ended March 31, 2012
P.3
■Consolidated Financial Forecast for the Year Ending March 31, 2013
P.27
■Dividend Policies
P.29■ Sony Life’sLife s Preliminary MCEV as of March 31, 2012,
and Risk Amount Based on Economic Value

P.31■ Appendix

P.33

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the SonyFinancial Holdings Group (the “SFH Group”). Any statements contained herein that pertain to future operating performance andthat are not historic facts are forward
forward-looking
looking statements.
statements Forward-looking
Forward looking statements may include
include—but
but are not limited to—towords such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “forecast,” “predict,” and “possibility” that describe future
operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or written, arebased on judgments made by the management of the SFH 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 the forecasts expressed or implied in forward-looking statements. Consequently, investors are cautioned not toplace undue reliance on forward-looking statements. The SFH 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 notconstitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any
p of it form the basis of or be relied on in connection with anyy contract or commitment
securities,, nor shall it or anyy partwhatsoever.

2Consolidated Operating Results for
the Year Ended March 31, 20123

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2012 (1)Ordinary revenues

Ordinary profit(Billions of yen)

1 002 2
1,002.2+7.6%(2.9%)

1,078.0

74.6

76.8

Life
insurancebusiness

Ordinary revenues

Change

967.5

+67.2

+7.5%

Ordinary profit

72.1

68.1

(3.9)

(5.5%)

Non-life
insurancebusiness

Ordinary revenues

74.1

80.0

+5.9

+8.0%

2.1

2.8

+0.7

+33.3%

Bankingbusiness

Ordinary revenues

29.5

32.5

+2.9

+10.1%

2.4

3.4

+1.0

+43.9%

Intersegment

Ordinary revenues

(1.8)

(2.1)

(0.2)

－

adjustments*
adjustments

Ordinary profit

0.1

0.1

(0.0)

(14.0%)

1,002.2

1,078.0

+75.8

+7.6%

Ordinary profit

76.8

74.6

(2.2)

(2.9%)

N t income
Net
i

41 7
41.7

32 8
32.8

(8 9)
(8.9)

(21 3%)(21.3%)

Ordinary profit

Ordinary profit

Consolidated

FY2011FY2011

900.3

Ordinary revenues

FY2010FY2010*Amounts in the Ordinary profit in the “Intersegment adjustments” are mainly from SFH.

(Billions of yen)
11.3.3112.3.31

Change from 11.3.31

Total assets

6,597.1

7,241.4+644.2+9.8%

Net assets

294.8

347.8

+52.9

+17.9%(Billions of yen)

Consolidated(Note) Comprehensive income: FY2010: ¥31.9 billion, FY2011: ¥60.3 billion

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

4

Highlights of Consolidated Operating Performancefor the Year Ended March 31, 2012 (2)<Comparison with the previous year>Life Insurance: Ordinary revenues increased, due mainly to higher income from insurance premiums associated withsteady increases in the policy amount in force, as well as an increase in investment income accompanied with market
recovery towards the end of the fiscal year
year. Ordinary profit decreased
decreased, due to lower gains on sale of securities
securities,
reflecting the process of shifting bond holdings to ultralong-term bonds to reduce interest rate risk, whereas insurance
claims and other payments relating to the Great East Japan Earthquake were lower than our estimates as of the end of
the previous fiscal year.

Non-life Insurance: Ordinaryy revenues increased,, due to an increase in net premiumspwritten,, as the number of
insurance policies in force grew primarily for our automobile insurance. Ordinary profit increased, due mainly to theincrease in ordinary revenues and a reversal of catastrophe reserve, although a rise in net losses paid for automobile
insurance resulted in the higher loss ratio.

Banking: Ordinary revenues increased, due to an increase in net fees and commissions resulting from Sony Bank’s
acquisition
i iti off S
SmartLinktLi k N
Network,tk IInc. on JJuly
l 1
1, 2011 as itits consolidated
lid t d subsidiary.
b idiOOrdinarydiprofitfit rose ddue tto a riseiin gross operating profit resulting from an increase in net interest income. The net interest income increased due mainly
to higher interest income on loans led by the growing balance of mortgage loans and a decrease in interest expenses
on yen deposits.

Consolidated ordinary revenues increased 7
7.6%,
6% to ¥1
¥1,078.0
078 0 billion
billion, however
however, consolidated ordinary profit
decreased 2.9%, to ¥74.6 billion. Consolidated net income decreased 21.3%, to ¥32.8 billion due to the decline inconsolidated ordinary profit and an increase in income taxes owing to a reversal of deferred tax assets associated withthe reduction in the corporate tax rate.

<Comparison with Our Original Financial Forecast> In February, 2012, SFH revised upward consolidated ordinary revenues and consolidated ordinary profit on its FY11
forecast from the original announcement in May 2011. The major reasons for the revision were the lower insurance
claims and other payments relating to the Great East Japan Earthquake than we had estimated at the end of March2011 as well as gains on sale of securities during the third quarter
2011,
quarter.
The actual results of consolidated operating profit exceeded the revised forecast, due mainly to the market
recovery during the fourth quarter.

5

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

Ordinary profit
Ordinary revenues

967.4
900.0

+7.5%

FY2010FY2011 (Billions of yen)Ordinary revenues increased but ordinary profit decreased
year on year.
Income from insurance premiums increased owing to steady growthin the policy amount in force.
 Investment income increased due mainly to higher interest income
and dividends, and an improved investment performance on
separate accounts, which offset the negative impact of lower gains
on sale of securities.
Ordinary profit decreased due to lower gains on sale of securities,
and lower insurance claims and other payments relating to theGreat East Japan Earthquake than we had estimated as of the end
off theth previousifiscalfi
l year.

Change

967.4

+67.3

+7.5%

Income from insurance premiums

770.3

816.1

+45.7

+5.9%

Investment income

119.5

133.9

+14.4

+12.1%

Interest income and dividends

87.5

97.9

+10.4

+11.9%

Income from monetary trusts, net

6.9

5.2

(1.7)

(24.4%)

Gains on sale of securities

24.9

7.5

(17.4)(69.8%)

－

23.1

+23.1

－

826.9

897.9

+71.0

+8.6%

Insurance claims and other payments

297.9

287.4

(10.5)(3.5%)

Provision for policy reserve and others

392.7

471.5

+78.8

+20.1%

Investment expenses

19.3

14.3

(4.9)

(25.6%)

Losses on sale of securities

1.8

2.6

+0.7

+39.7%

Losses on separate accounts, net

7.4

-

(7.4)

(100.0%)

99 3
99.3

105 4
105.4

+6 1
+6.1

+6 2%
+6.2%

Ordinary profit

73.1

69.4

(3.7)

(5.1%)Net income

40.2

31.4

(8.7)

(21.9%)

Ordinary expenses

69.4

FY2011

900.0

Gains on separate accounts, net

73.1 (5.1%)

FY2010Operating expenses(Billions of yen)

11.3.3112.3.31

Change from 11.3.31

Securities

4,017.5

4,545.0+527.4+13.1%

Policy reserves

4,371.4

4,843.0+471.5+10.8%

Total net assets

215.3

264.8

+49.4

+23.0%

7.0

34.0

+27.0

+385.3%

4,723.3

5,222.8+499.5+10.6%

398.1

444.2

+46.1

+11.6%Net unrealized gains on other securities
Total assets
Separate account assets

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

6

Overview of Performance:
Sony Life (Non-consolidated)(Billions of yen)

FY2010FY2011

ChangeNew policy amount

4,199.0

4,203.3+0.1%

Lapse and surrender amount2 143 6
2,143.6

2,056.2(4 1%)(4.1%)

Lapse and surrender rate

6.41%

5.93%

(0.48pt)

Policy amount in force

34,748.5

36,077.0+3.8%

Annualized premiums from new policies

71.2

70.8

(0.5%)Of which, third-sector products

16.6

17.1

+2.5%

604.7

635.4

+5.1%

140.7

148.9

+5.8%

Annualized premiums from insurance in force
Of which, third-sector products(Billions of yen)

FY2010FY2011

ChangeGains from investment, net (General account)

107.6

96.4

(10.4%)

Core profit

56.2

71.6

+27.3%

Negative spread

63
6.3

15
1.5

(76 2%)(76.2%)

Solvencyy Marging Ratio11.3.3112.3.311,720.0%,

1,980.4%,

Changefrom
11.3.31(Reasons for changes)
 Remained flat, due mainly to increased sales of termlife insurance,, which offset a decrease in familyy
income insurance, which is life insurance with disability
benefit.
 Decreased due to the lowering lapse and surrender
rates in most products, mainly in family income
insurance, which is life insurance with disability benefit.
 Decreased due mainly to decreased sales of
educational endowment insurance and medical
insurance which offset increased sales of living benefit
insurance and term life insurance.
 Decreased due to lower gains in sale of securities inline with the shift from investing in bonds with shortterms to maturity to those with ultralong-terms, thoughinterest income and dividends increased.

 Increased,
Increased mainly reflecting lower insurance claims
and other payments relating to the Great East Japan
Earthquake than we had estimated as of the end of theprevious fiscal year, and a decease in negative spread
as well as a decrease in provision of policy reserve forminimum guarantee for variable life insurance.

+260.4ptpNotes:*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 theb i i off th
beginning
the fifiscall year.
*3 The solvency margin ratio has been calculated according to the new standard, which became effective as ofthe end of fiscal 2011 (March 31, 2012).

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

7

Sony Life Operating Performance (1)Annualized Premiums from New Policies(Individual Life Insurance + Individual Annuities)

Number and Amount of New Policies(Individual Life Insurance + Individual Annuities)
New policy amount

Annualized premiums from new policies

Number of new policies

Of which, third-sector(Thousands of policies)

582

591

599

600

534

500

5.0

4.0

80

(1.3%)(Trillions of yen)

3.87

4 04
4.04

68.7

70

(0.5%)

60

400+0.1 %

50

3.0

300

2.0

200

40
30
+2.5%

20

100

10
1.0
0

0
FY2008FY2009

70.8

71.2

61.6

4.20

4.19

(Billions of yen)

FY2010FY2011

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

10

13.4

16.2

16.6

17.1

FY2008FY2009FY2010FY20110Line item amounts are truncated below ¥100 million; percentage figures are rounded.

8

Sony Life Operating Performance (2)Annualized Premiums from Insurance in Force(Individual Life Insurance + Individual Annuities)

Number and Amount of Policies in Force(Individual Life Insurance + Individual Annuities)
Policy amount in force

Annualized premiums from insurance in force

Number of policies in force(Millions of policies)(Trillions of yen)
+6.2%

50

5.67

40

4.70
32 5
32.5

(Billions of yen)

635.4

6

5.34

600

5.01
5

33 4
33.4

36.0

34.7

Of which, third-sector

604 7
604.7
547.8

573.3

+5.1 %

500

4+3.8 %

30

400

3
300

20
2
10

0
2009.3.31

2010.3.31

2011.3.31

2012.3.31

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

200

1

100

0

0

126.6

133 0
133.0

140.7

2009.3.31

2010.3.31

2011.3.31

+5 8%
+5.8%

148.9

2012.3.31

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

9Sony Life Operating Performance (3)Lapse and Surrender Rate*

Income from Insurance Premiums(Individual Life Insurance + Individual Annuities)(Billions of yen)

816.1
770.3

800

（ ）
（％）

662.0
8

6.79

7.21

700.1

+5.9 %

600

6 41
6.41

5.93

6
(0.48pt)

400
4

200

2

0

0
FY2008FY2009FY2010FY2011*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.

FY2008FY2009FY2010FY2011

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

10

Sony Life Operating Performance (4)Ordinary Profit

Core Profit(Billions of yen)(Billions of yen)

80 0
80.0

80

71.6

80

73.1

69.4

64.5
(5.1%)

56 2
56.2

60

60
+27.3%

40

38.0

40

20

32 4
32.4

20

0

0
FY2008FY2009FY2010FY2011

FY2008FY2009FY2010FY2011

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

11

Sony Life Operating Performance (5)Average Assumed Interest Rate,
Investment Yield for Core Profit andInvestment yield in General Account

Negative Spread(Billions of yen)

Average assumed interest rate

4.00%

30

Investment yield in general accountInvestment yield for core profit
25

21.3

3.00%
2.54%

20

2.68%
2.43%

2.59%
15

2.00%

11.5

2.35%

2.51%

2.31%

2.17%

2.26%

FY2009FY2010

2.17%

1.90%

10

6.3

(76.2 %)

1.00%

5

1.11%

15
1.5
0

FY2008FY2009FY2010FY2011

0.00%
FY2008FY2011

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

12

Sony Life Operating Performance (6)Number of Lifeplanner Sales Employees(N b )(Number)

4,036
4,000

4,045

4,017

3,891
+28

3,500

3,000
0
09.3.3110.3.3111.3.3112.3.31

Reference: Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement)(Number)

09.3.3110.3.3111.3.3112.3.31

Lifeplanner*

30

39

49

71

* The table above indicates the number of Lifeplanner sales employees (rehired on a fixed-term contract basis after retirement); these are not included in the graph above.
* “Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

13

Sony Life Operating Performance (7)Breakdown of General Account Assets(Billions of yen)

2011.3.31

2012.3.31

Amount%3,499.980.9%

3,975.7

83.2%

Japanese stocks

64.0

1.5%

45.0

0.9%

Foreign securities

44.2

1.0%

59.6

1.2%

Foreign stocks

30.0

0.7%

30.5

0.6%

Japanese government
andd corporatet bondsb dAmount<Asset management review>%

On the asset side, we lengthened the duration of
securities held to match the liability characteristics
of insurance policies with long-term maturities withth aimthei off reducing
d i interesti t
t ratet risk.
i kJapanese government and corporate bonds:
Continue to accumulate ultralong-term bonds
in FY11.

<Lengthened asset duration>
10.3.31 17.6 years

Monetary trusts

276.4

6.4%

288.2

6.0%

11.3.31 18.5 years
12 3 31 19
12.3.31
19.2
2 years

Policy loans

134.4

3.1%

138.7

2.9%

Real estate

75.1

1.7%

72.9

1.5%

Cash and call loans

80.0

1.9%

64.8

1.4%

Others

120.9

2.8%

102.6

2.1%

■Investment in the monetary trusts are mainly into Japanese
government and corporate bonds
bonds.
■The holding ratio on the real status, of Japanese governmentand corporate bonds including those invested in monetarytrusts in the general account assets:
As of March 31, 2012: 89.2%, (As of March 31, 2011: 87.3%)

Total

4,325.2

100.0％

4,778.5

100.0%

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

14

Sony Life Operating Performance (7)Adjusted Net Assets

Solvency Margin Ratio（％）(Billions of yen)

3,000

1,000

[715.5]

900

871 4
871.4

2,500
+260.4pt

2,000

800

1,980.4[629.1]700

1,720.0
,

600

1,500

[505.9]532.6[583 8][583.8]

563.4

606 9
606.9
+43.6%

500
400

1,000
300
200

500

100

0

0

2011.3.31

2012.3.31

2009.3.31

Note:
The solvency margin ratio has been calculated according to the new standard, whichbecame effective as of the end of fiscal 2011 (March 31, 2012).

2010.3.31

2011.3.31

2012.3.31

Note:
Amount in [ ] excludes unrealized gains (losses) on held-to-maturity securities
and on policy reserve matching bonds.

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

15

Highlights of Operating Performance:
Sony Assurance
Ordinary revenues

Ordinary profit(Billions of yen)

80.0
74.1

2.1

+5.9

+8.0%

Underwriting income

73.3

79.1

+5.7

+7.9%

Investment income

0.7

0.8

+0.1

+13.8%

72.0

77.2

+5.2
5.2

+7.2%
7.2%

Underwriting expenses

54.4

58.0

+3.5

+6.6%

Investment expenses

0.0

0.0

+0.0

+77.6%

17 4
17.4

19 0
19.0

+1.5
15

+9.1%
9 1%

Ordinary profit

2.1

2.8

+0.7

+33.3%Net income

1.2

1.2

+0.0

+0.2%

33.3%
Operating general andOperating,administrative expenses

FY2010FY2011(Billions of yen)Ordinary revenues and ordinary profit increased
year on year.
Ordinary revenues increased, due to an increase in
net premiums written led by a growing number ofin force policies primarily in automobile insurance
in-force
insurance.
◆Ordinary profit increased, due mainly to the increasein ordinary revenues as well as a reversal ofcatastrophe reserve, although a rise in net losses
paid for automobile insurance resulted in the higher
loss ratio
ratio.

Change80.0

Ordinaryy expensesp

2.8

FY2011

74.1

Ordinary revenues

+8.0%
8.0%

FY2010(Billions of yen)

2011.3.31

2012.3.31

Change from 11.3.31

Underwriting reserves

64.0

67.3

+3.2

+5.1%

Total net assets

16 7
16.7

18 0
18.0

+1 2
+1.2

+7 4%
+7.4%

109.3

118.6

+9.2

+8.4%

Total assets

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

16

Overview of Performance:
Sony Assurance(Reasons for changes)(Billions of yen)

FY2010FY2011

ChangeDirect premiums written

72.8

78.3

+7.5%

 Increased owing to an increase in the

Net premiums written

73.3

79.1

+7.9%

number of policies in force primarily in
automobile insurance.

Net losses paid

39 2
39.2

45 0
45.0

+14 7%+14.7%

Underwriting profit

1.4

2.1

+43.5%Net loss ratio

60.0%

63.3%

+3.3ptNet expense ratio

25 5%
25.5%

25 7%
25.7%

+0 2pt+0.2ptCombined ratio

85.6%

89.0%

+3.4ptN b off policies
Numberli i
in force
Solvency margin ratio

2012.3.31

1.38 million

1.49 million

631.0%

557.8％

increase in the number of policies inforce in automobile insurance, as wellas rising unit cost of insurance claims.

 Increased due to an increase in the

Net expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses to net premiums written.

2011.3.31

 Increased owing mainly to an

number of policies in force primarily
in automobile insurance.
insurance

Change from 11.3.31+0.10 million+7.6%(73.2pt)

The number of policies in force is the total of automobile insurance and medical and cancer insurance, which accounts for 99% of net premiums written.
The solvency margin ratio has been calculated according to the new standard,
standard which became effective as of the end of fiscal 2011 (March 31,
31 2012).
2012)Line item amounts are truncated below ¥ 100 million; numbers of policies are truncatedbelow 10,000 policies; percentage change figures are rounded.

17

Sony Assurance’s Underwriting Performanceby Type of Policy
Direct Premiums Written
FY2010Net Premiums Written
FY2011

ChangeFY2010((Millions of yyen))
Fire

185

176

(4.8%)

Marine－－－Personal accident*

7,135

7,424

+4.0%
4.0%

Voluntary automobile

65,51670,712

+7.9%

－

－

－

72,83778,313+7.5%

FY2011

ChangeCompulsory
automobile liability
Total

FY2011

Change((Millions of yyen))
Fire

8

72

+780.1%Marine590－Personal accident*
accident

7 369
7,369

7 626
7,626

+3 5%
+3.5%

Voluntary automobile

65,24570,457

+8.0%

714

893

+25.1%

73,343

79,141+7.9%

Compulsory
automobile liability
Total

Net losses paid
*SURE, medical and cancer insurance is included in personal accident.
FY2010(Millions of yen)
Fire

0

40

－

Marine11138－

Personal accident*

1,620

1,796

+10.9%

Voluntary automobile

36,941

42,193+14.2%

683

862+26.3%

39,25645,032+14.7%

Compulsory
automobile liability
Total

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

18

Sony Assurance Operating Performance (1)Net Premiums Written andNumber of Policies in Force
V l t
Voluntary
automobilet
bil iinsurance

Personal accident insurance(Millions of policies)

Number of policies in force

Other(Billions of yen)
+7.6%

100

1.15

(Billions of yen)

3

2.8

14
1.4

79.1
73.3

67.4
60

1.49

1.38
1.27

80

Ordinary Profit

2.5

1.2
2.1

+7.9 %

1

61.1

2.1

+33.3%

2

0.8
40

06
0.6
1

0.4
20
0.2
0

0
FY2008FY2009FY2010FY2011

The numberTh
b off policies
li i iin fforce iis theh totall off automobile
bil iinsurance andd medical
di land cancer insurance policies, which account for 99% of net premiums written.
More than 90% of personal accident insurance is medical and cancer insurance.

0
FY2008FY2009FY2010FY2011

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

19

Sony Assurance Operating Performance (2)Reference

Combined Ratio(Net Expense Ratio + Net Loss Ratio)

Net Expense Ratio +Earned/Incurred Loss Ratio
Net expense ratio

Earned/Incurred loss ratio

Net expense ratio

（％）

100

90.2

91.9

98.1

95.2

Net loss ratio

（％）

100

81.7

+2.9pt83.3+3.4pt

80

80

89.0

85 6
85.6

72.4
60
63.5

65.8

69.7

63 3
63.3

60

57.2
55.0

+2.7pt60.0+3.3pt

40

40

20

26.7

20
26.1

25.5

+0.2pt

26.7

26.1

25.7

0

25.5

+0.2pt 25.7

0FY2008FY2009FY2010FY2011

Earned/Incurred loss ratio is equal to the ratio of the sum of net losses paid, loss
adjustment expenses and accumulation in provision for reserve for outstandingllossesto earnedd premiums.
i

FY2008FY2009FY2010FY2011Net expense ratio is equal to the ratio of total underwriting costs to net premiums written.
Net loss ratio is equal to the ratio of net losses paid and loss adjustment expenses toiwritten.
itt
nett premiums*Note that earthquake insurance and compulsory automobile liability
insurance are excluded from the above calculation.

20

Sony Assurance Operating Performance (3)Solvency Margin Ratio
（％）

1,200

800
(73.2pt)

631.0%

557.8%

400

02011.3.31

2012.3.31

Note:
The solvency margin ratio has been calculated according to the new standard, whichbecame effective as of the end of fiscal 2011 (March 31, 2012).

21

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

32.5(Billions of yen)

29.5
+10.1%

3.9

FY2010FY2011

ChangeConsolidated ordinary revenues

29.5

32.5

+2.9

+10.1%

Consolidated ordinary profit

2.9

3.9

+1.0

+36.3%

Consolidated net income

1.5

1.7

+0.1

+10.4%<Non-consolidated>(Billions of yen)

2.9

+36.3%(Billions of yen)<Consolidated>
Consolidated ordinary revenues and profit both increased year on
year, due to Sony Bank’s acquisition of SmartLink network, Inc.
as consolidated
lid d subsidiary,b idi
iin addition
ddi i to S
Sony BBank’sk’ bbusinessi
expansion.
<Non-consolidated>Gross operating profit increased ¥1.8 billion year on year due
mainly to an increases in net interest income.
【Net interest income】
I
Increasedd ¥2.8¥2 8 billi
billion owing
i tto an increasei
iin iinteresttt iincome onloans and a decrease in interest expenses on yen deposits.
【Net other operating income】
Decreased ¥1.3 billion reflecting a decrease in gains on foreignexchange transactions.
Net operating profit increased ¥0.7 billion, owing to the abovementioned increase in gross operating profit,
profit which offset
negative impact of higher general and administrative expenses
led primarily by personal reinforcement of the full scale entry into
credit card business.

FY2010FY2011

Ordinary revenues

29.5

30.0

+0.5

+1.9%

Gross operating profit

16.4

18.3

+1.8

+11.4%Net interest income

13.2

16.1

+2.8

+21.6%Net fees and commissions

(0.1)

0.1

+0.3

－

Net other operating income

3.3

2.0

(1.3)

(39.8%)

General andadministrative expenses

12.6

13.8

+1.2

+9.6%

Ordinary profit

3.3

4.0

+0.6

+19.4%Net income

2.0

2.3

+0.2

+13.9%Net operating profit

3.6

4.3

+0.7

+21.2%

2011.3.3
2011
33
1

2012.3.31

59.9

62.7

+2.8

+4.7%

0.4

1.7

+1.3

314.5%

1,761.8

1,890.5+128.6+7.3%(Billions of yen)
Total net assets
Net unrealized gains
on other securities (net of taxes)
Total assets

ChangeChange from 2011.3.31

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

22

Overview of Performance:
Sony Bank (Non-consolidated) (1)(Reasons for changes)
2011.3.31

2012.3.31

Customer assets

1,755.5

1,864.3+108.7+6.2%

Deposits

1,649.1

1,762.2+113.1+6.9%

Yen

1,289.8

1,390.5+100.6
100.6

+7.8%
7.8%

359.2

371.7

+12.4

+3.5%

106.4

102.0

(4.4)

(4.2%)

722.4

835.5

+113.1+15.7%

Mortgage loans

656.0

749.6

+93.5

+14.3%

Others66.4

85.9(*1)+19.5+29.4%

Number of accounts(10 thousands)

85

89

+4

+4.7%

(Billions of yen)

Foreign currency
Investment trusts
Loans outstanding

Changeg*11Capital adequacy ratio(*2)(domestic criteria)

10.84%

11.58%+0.74pt

Tier 1 ratio

10.41%

9.63%(0.78pt)*1
1. Loans in others include corporate loans of ¥78.7billion.
¥78 7billion*2. Excludes accounts that have been dormant for a long period of time.



Yen deposit increased due to an effectof special offer for winter 2011 bonus
season.



Foreign currency deposit increased,
owing to stable demand of foreign
currency based investment backed bycurrency-based
the ongoing yen appreciation
throughout the fiscal year.

Investment trusts decreased reflecting
a decline in reference p
price.

 Loan balance increased due toincreases in mortgage loans andcorporate lending centering on
syndicated loans.

 In October 2011, Sony Bank borrowed
funds(¥10 billion) from SFH as
subordinated loan to reinforce its
financial base.The Tier 1 ratio was also
kept at a highlevel.
.

*3. Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P26.

Line item amounts are truncated below ¥100 million; numbers of accounts are truncated below 10 thousands accounts; percentage change figures are rounded.

23

Overview of Performance:
Sony Bank (Non-consolidated) (2)<Reference> On Managerial Accounting Basis(Billions of yen)

FY2010FY2011<Reference> Interest Spread(Managerial Accounting Basis)

Change

16.4

18.3

+1.8

+11.5%

15.1

17.7

+2.6

+17.5%Net fees andcommissions *2 ②

0.8

1.1

+0.3

+40.8%Net other operating
income *3

0.4

(0.6)

(1.0)

-

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

15.9

18.9

+2.9

+18.7%

Operating expenses andother expenses ③

12.8

13.9

+1.1

+8.6%

3.0

4.9

+1.8

+60.9%

Gross operating profit

Yield on investment

Yield on financing

Interest spread
Net interest income *1 ①

Net operating profit(core profit)= (A)－③(%)+0.08pt●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
income, including gains or losses from currency
swap transactions.
*2: Net fees and commissions: Includes profits and losses for customer dealings in foreign
currency transactions recorded in net other operating income.
*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits
and losses for bond and derivative dealing transactions.
●Core profit
Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Note: Interest spread=(Yield on investment)-(Yield on financing)
Yield on investment includes primarily gains or losses from currency swap
transactions in net other operating income.

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

24

Operating Performance:
Sony Bank (Non-consolidated) (1)
Deposits
Yen depositspLoansMortgageg g loans

Foreigng currency
y depositsp

Others*I l di corporate*Including
t lloans off ¥78.7¥78 7 billion.
billi(Billions of yen)(Billions of yen)

835 5
835.5

1,762.2
1,649.1
1,510.0+113.1

85.9*

722.4

371.7

+113.1

1 326 3
1,326.3

586.6
477.0
749.6
1,390.5

Line item amounts are truncated below ¥100 million

25

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

Balance of Securities by Credit Ratings
AAA
BBB

AA
Other

A
Capital Adequacy Ratio

Tier1 Ratio(Billions of yen)
(%)

13.37
940.1

12.09

912.9

880.1
823.1

(27.1)+0.74pt

11.58

10.84

12.88
11.64

10.41 (0.78pt)

9.63<Reference>
In October 2011
Sony Bank borrowed funds (¥10.0 billion) from
SFH as subordinated loan to reinforce its financial base.

* Sony Bank’s non-consolidated capital adequacy ratio was calculated based on the standard
stipulated by Article 14-2 of the Banking Act, in accordance with FSA Notification No. 19(2006). The capital adequacy ratio newly adopted the special exception of the standard
mentioned above, in accordance with the FSA Notification No. 79 (2008).
Amounts are truncated below ¥100 million.

26

Consolidated Financial Forecast
for the Year Ending
g March 31,, 201327

Consolidated Financial Forecast
for the Year Ending March 31, 2013
■Consolidated financial forecast for the year ending March 31, 2013
FY2011(Billions of yen)

Consolidated ordinary revenues

FY2012
Forecast

ActualChange1,078.0

1,115.0+3.4％

Banking business

967.5
80.0
32.5

994.5
86.8
34.5

+2.8％
+8.4％
+6.0％

Consolidated ordinary profit

74.6

67.0

(10.2％)

Life insurance businessBankingg business

68.1
2.8
3.4

61.5
2.6
3.6

(9.8％)(9.1％)+3.9％

Consolidated net income

32.8

37.0

+12.8％

Life insurance business
Non-life insurance business

Non-life insurance business<Reference>
Consolidated financial results for the year ended March 31, 2012
FY2011
Original
Forecast((Announcedon
May 20, 2011)(Billions of yen)■Life insurance business
Ordinary revenues for FY2012 are expected to increase year on year. In the current fiscal
year, we do not expect to record an increase in investment income that we posted at theprevious year-end due to the market, although we do anticipate that income frominsurance premiums will increase in line with steady growth of the policy amount in force.
Ordinary profit is expected to decrease, since we do not anticipate the profit recorded in
the previous fiscal year. In the previous fiscal year, Sony Life recorded a profit due tolower insurance claims and other payments relating to the Great East Japan Earthquake
than we had estimated at the end of March 2011, as well as gains on sale of securities,
reflecting the process of shifting bond holdings to ultralong-term bonds. However, we do
not anticipate such gains for FY2012.
■Non-life insurance business
Ordinary revenues for FY2012 are expected to increase year on year, owing to anincrease in net premiums written, primarily for automobile insurance.
Ordinary profit is expected to slightly decrease, mainly because we expect the loss
ratio to stay at a high level and the expense ratio to slightly increase resulting from anincrease in system-related expenses
expenses.
■Banking Business
Ordinary revenues for FY2012 are expected to rise year on year, owing mainly to a
growing balance of loans, especially mortgages.
Ordinary profit is expected to rise, as we anticipate a steady increase in grossoperating profit, driven by business expansion.

<Reasons for the revision of the forecast>
FY2011
Revised Forecast(Announced on
Feb. 2, 2012)

FY2011
Actual- Also in the life insurance business, gains on sale of securities, reflecting theprocess of shifting its bond holdings to ultralong-term bonds, were recorded.

1,022.0

1,047.
0

1,078.0

Consolidated ordinary
y profit

59.0

67.0

74.6

Consolidated net income

29.0

29.0

32.8

Consolidated ordinary
revenues- In the life insurance business, insurance claims and other payments relating
to the Great East Japan Earthquake were lower than we had estimated at theend of March 2011.

<Reason for a change from the revised forecast>- Due to the market recovery for the forth quarter.

(Amounts are truncated below ¥100 million; percentage changes are rounded.)28

Dividend Policies

29

Dividend Policies■Basic Policy on Returns to Shareholders and Dividends
SFH places priority on returning profits to shareholders and raising return on equity. Our basic policyiss to pay a stablestab e ddividendde d to s
shareholdersa e o de s while
ee
ensuring
su g tthee highg financiala c a sousoundnessd ess needed
eeded togain and maintain the confidence of the customers of the group companies as well as the internal
reserves needed for future business development.

■ Consolidated Net Income and Dividend Result/Forecast
FY2010FY2011

Consolidated net income¥41.7 billion¥32.8 billion

Annual dividend amount¥8.7 billion¥8.7 billion

¥20

¥20

Dividend per share*Amounts are truncated below ¥100 million.

We have not decided the level of the annual cash dividend per share for FY2012. We will consider
this leveｌ,, taking
g future operatingpg performancepinto account.

30

Sony Life’s Preliminary MCEV
as of March 31, 2012,
andRisk Amount Based on Economic Value

31

Sony Life’s Preliminary MCEV as of March 31, 2012,
and Risk Amount Based on Economic ValueMCEV results 【Preliminary】

MCEV

2011.3.31

2011.3.31

2012.3.31(Interest swap rate)(JGB yield)(JGB yield)

Change2011.3.31(JGB yield) vs.
2012.3.31(JGB(
yield)
y
)

853.6

913.5

1,041.5+128.1

Adjusted net worth

230.3

230.3

409.2

+178.9

Value of existing business

623.3

683.2

632.4

(50.8)

56.8

61.7

65.2

+3.5

Of which, new business value(Billions of yen)

The value of existing business as of March 31, 2012, was down year on year, due mainly to a decline in ultralong-term interest
rates, which offset the positive impact of the addition of new business and a reduction in the corporate tax rate. On the other
hand, adjusted net worth as of March 31, 2012, was up, due primarily to an increase in prices of ultralong-term JGBs held froman ALM perspective. Consequently, MCEV as of March 31, 2012, was up from a year earlier.

 SonyS
Life
Lif usedd JGB yields
i ld as theth risk-free
i kf
rate
t whenh calculatingl l ti MCEV as off March
M h 31,31 2012,2012 rather
th ththan iinteresttt swap rates,twhich were used previously, as JGBs are considered securities with the lowest credit risk. JGBs are also regarded as superior
yen-denominated liabilities in terms of investment availability in keeping with accounting and regulatory constraints andultralong-term liquidity.
 The risk amount based on economic value ((after tax)) as of March 31,, 2012,, was ¥551.5 billion. The risk amount based on

economic value refers to the total amount of Sony Life’s risks, comprehensively examined and including insurance underwriting
risk and market risk. Sony Life ensures financial soundness by keeping these risks within a proper level of MCEV, which is
capital based on economic value.
Note: Measurement of risk based on economic value takes one-year VaR to be 99.5% and is measured using an internal model that refers to the EU
Solvencyy II ((QIS5)) standard model.
* Please keep in mind that the validity of these calculations has not been verified by outside specialists. The calculation of MCEV as of March 31, 2012,in accordance with the MCEV principles and verified by outside specialists, is scheduled to be announced on May 25, 2012.
*Amounts are truncated below ¥100 million.

32

Appendix

33

Negative impact from the Great East Japan
Earthquake (Appendix)Positive impact on FY11 consolidated ordinary
profit of the Great East Japan Earthquake: ¥3.9 billion(Principal Impact on Each Business)
Life Insurance Business・ Profit recorded as insurance claims and other payments relating to the Great East Japan Earthquake werelower than we had estimated as of the end of the previous fiscal year: ¥3.9 billion
Non-life Insurance Business・ Temporally slowdown in the sales of automobile insurance policies in April has recovered from May onward
due to the brisk sales. The sales target of the new policies are back on track from the original projection
Bankingg Business・ Loan losses on mortgage loans in stricken region were limited to the operating results･･･････････････････････････････････････・・・・・・・・・・・・・・･･････････････････････････････・・・・・・・・・・・・・・・・



Negative impact on FY10 consolidated ordinary
profitpo t ofo thet e Great
G eat East
ast Japa
Japan Earthquakea t qua e : ¥5.5
55bbilliono(Principal Impact on Each Business)
Life Insurance Business・ Insurance claims and other payments (including provision for reserve for outstanding claims):¥5.4 billion
Non-life Insurance Business・ Mainstay automobile insurance exempt from earthquakes and tsunamis
Banking Business・ Increased allowance for mortgage loans in stricken region. *Amounts are truncated below ¥100 million

34

Recent Topics 1
AEGON SONY LIFE INSURANCE Sales Update
Launch of sales：December 1, 2009
Common stock
stock：¥20¥20 billion (including capital surplus of ¥10 billion)
Equity ownership：Sony Life insurance Co., Ltd. 50%, AEGON・international B.V. 50%
Marketing products: Variable Individual Annuity (2 types, 3 products)
Sales Channels: Lifeplanner sales employees and affiliated Banks (8*)(8 ) As of May 18
18, 2012
Financial Highlights for FY2011:
Number of new policies: 2,498, New policy amount: ¥17.5 billion(Number of policies in force: 3,669 policies, Policy amount in force: ¥30.4 billion As of March 31, 2012)*Amounts are truncated below ¥100 million.

Sony Bank’s Mortgage Loans through Sony Life
Sony Life accounts for 25% of the balance ofmortgage loans as of March 31, 2012
Sony Life accounts for 27% of the amount of
new mortgage loans for FY2011*Sony
Sony Life started handling banking agency business in January 2008
2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
Sony Life accounts for approx. 5% of new automobile policies for FY2011
g automobile insurance in May
y 2001.
* Sonyy Life started handling“Lifeplanner” is a registered trademark of Sony Life Insurance Co., Ltd.

35

Recent Topics 2<Highlights for FY2011>
Apri.1, 2011

Sony Assurance declared conformity with the ISO 10002 International Standard for Complaints Management
Systems

Apr. 28, 2011

Sony Assurance began offering a free application, “Trouble Navigation” to smart phone users

May 1, 2011

Sony Bank entered credit card business; began issuing “Sony Card”

May 2, 2011

Sony Life began sales of new income protection insurance to cover three major diseases (Type II)

May 16, 2011

Sony Bank began offering Brazilian real for foreign currency deposits

July 1, 2011

Sony Bank acquired a 57% equity interest in SmartLink Network, Inc., an industry-leading provider of credit card
settlement services

Aug. 3, 2011

Sony Assurance began offering a free application, “Drivers’ Navigation” to smart phone users

Aug. 8, 2011

Sony Bank began offering new mortgage loan, "Variable Select Mortgage Loan"

Aug. 22, 2011

Sony Bank opened representative office in Sydney

Aug. 31, 2011

Sony Assurance became the first company to receive Eco Mark Certification in automobile insurance

Oct. 25, 2011

Sony Financial Holdings issued No. 1 unsecured corporate bonds

Nov. 2, 2011

y Life began
g offeringg new pproduct: Cancer Drugg Therapy
py RiderSony

Mar. 1, 2012

Sony Assurance acquired a part of shares and share options in Anicom Holdings, Inc.

36

Sony Life: FY12 Basic Investment Policy＜Basic Policy＞
 Continue to invest in ultralong-term
ultralong term bonds from the ALM perspective,

with the aim of stable growth of MCEV
 Carefully Invest in risk assets(Billions of yen)Japanese stocks
JGBs, other bonds
Foreign stocks
Foreign bonds
Real estates*Amounts are truncated below ¥100 million.

Results for FY2011 / YoY change
36 6
36.6
(21 6)(21.6)
4,417.8+667.8
26.8
+0.3
62 3
62.3
+14 0
+14.0
79.9
(1.4)

Plans for FY2012
Flat
Increase
Flat
Flat
Flat

Sony Life: Fair Value Information on Securities(General Account Assets)
Fair Value Information on Securities
Fair value information on securities with market value (except trading-purpose securities)(Billions of yen)Valuation gains (losses) on trading-purpose securities(Billions of yen)
2011.3.31

2011.6.30

2011.9.30

2011.12.31

2012.3.31

Net valuation
Net valuation
Net valuation
Net valuation
Net valuation
Balance sheet gains (losses) Balance sheet gains (losses) Balance sheet gains (losses) Balance sheet gains (losses) Balance sheet gains (losses)
amountrecorded inamountrecorded inamountrecorded inamountrecorded inamountrecorded inincomeincomeincomeincomeincome
－

－

－

－

－

－

－

－

－

－

Note: Line item amounts are truncated below ¥100 million.

38

Sony Life’s Breakdown of Net Assets
Net Assets on BS, Real Net Assets and Solvency Margin①Net Assets(B/S)(Billions of yen)

②Real
Net Assets③Solvency
Margin2011.3.31 2012.3.31 2011.3.31 2012.3.31 2011.3.31 2012.3.31

Total shareholders’ equity

209.8

232.2

209.8

232.2

200.7

223.1

Net unrealized gains on other securities, net of taxes

7.0
－
(1.4)
－
－
－

34.0
－
(1.3)
－
－
－

7.0
－
(1.4)
16.7
51.5
－

34.0
－
(1.3)
25.3
55.3
－

－
20.8
－
16.7
51.5
0.0

－
54.6
－
25.3
55.3
0.0

Net unrealized gains (losses) on available-for-sale securities
Land revaluation, net of taxes
Reserve for price fluctuations
Contingency reserve
Reserve for possible loan losses

Net unrealized gains on real estate

－

－

1.9

0.6

1.0

(0.1)

Excess amount of policy reserves based on Zillmer method

－

－

334.2

350.4

270.2

304.4

Unallotted portion of reserve for policyholders' dividends

－
－
－
－
－

－
－
－
－
－

1.1
－
－
(22.1)
8.0

0.7
－
－
155.8
18.3

1.1
－
63.3
－
－

0.7
－
58.7
－
－

215.3

264.8

606.9

871.4

625.7

722.1

Future profits
Deferred tax assets
Unrealized gains (losses) on held-to-maturity bonds
Deferred tax liabilities for available-for-sale securities
Total

Notes
③After estimated distributed
income deducted③Before tax x 90%②Before tax（After revaluation）③Before tax(Before revaluation) X85%
(X100% if losses)l)After excluding nonincludible amount②Before tax

Note: Real net assets excluding net unrealized gains (losses) on held-to-maturity securities and on policy reserve matching bonds, are¥629.1 billion as of March 31, 2011 and ¥715.5 billion as of March 31, 2012.

Amounts are truncated below ¥100 million.

39

Sony Life: New Policy Amount (quarterly trend)
New Policy Amount (quarterly trend)
New Policy Amount(Billions of yen)Amounts are truncated below ¥100 million.

Sony Life: Annualized Premiums from
New Policies (quartery trend)
Annualized Premiums from New Policies (quarterly trend)
Annualized Premiums from New Policies

Of which, Third-sector insurance(Billions of yen)Amounts are truncated below ¥100 million.

41

Contact: CorporatepCommunications & Investor Relations DepartmentpSony Financial Holdings Inc.
TEL： +81-3-5785-1074

42