ContentConsolidated ordinary revenues decreased 8.6% year on year, to ¥326.6 billion.
This is because ordinary revenues from the life insurance business decreased,
while ordinary revenues from the non-life insurance business increased.
Ordinary revenues from the banking business were essentially flat year on year.
Consolidated ordinary profit increased 34.6% year on year, to ¥25.5 billion.
By business segment, ordinary profit from the life insurance and the non-life
insurance businesses increased, whereas ordinary profit from the banking
business decreased.
Profit attributable to owners of the parent was up 37.6% year on year,to ¥17.6 billion due to the increase in ordinary profit.

Sony Life’s ordinary revenues decreased 9.8% year on year, to ¥292.0 billion.
This was due to a decrease in insurance premium revenues led by a decline insales of single premium products and a deterioration in investment performance inthe separate account reflecting the worsened financial market conditions, althoughpolicy amount in force increased steadily during FY16.1Q.
Ordinary profit increased 54.4% year on year, to ¥23.3 billion, due to a significant
decline in provision of policy reserves for minimum guarantees for variable life
insurance owing to a lower acquisition of new policies and a decrease in insurance
claim payments.
Net income increased 62.6% year on year, to ¥16.6 billion.

(Left-hand graph)
New policy amount for the total of individual life insurance and individual annuities
decreased 4.9% year on year, to ¥1.26 trillion. This increase was because oflower sales of variable life insurance despite higher sales of U.S. dollardenominated insurance.
The number of new policies decreased 15.1% year on year, to 149 thousand
policies.
(Right-hand graph)
Annualized premiums from new policies decreased 8.2% year on year,to ¥20.5 billion, due to lower sales of variable life insurance and educational
endowment insurance despite favorable sales of term life insurance and U.S.
dollar-denominated insurance.
Of which, the figure for the third-sector products was up 5.9% year on year,to ¥4.1 billion.

These graphs show Sony Life’s product portfolio of annualized premiums fromnew policies by product.
(Right-hand graph)
Sony Life has been strengthening sales of U.S. dollar-denominated whole life
insurance and term life insurance under the low interest rate environment.
In FY16.1Q, U.S. dollar-denominated whole life insurance accounts for 5% andprotection-type products including term life insurance accounts for 44% on total
product portfolio, showing a change in product portfolio.

Sony Life’s policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individualannuities increased 4.9% year on year, to ¥43.6 trillion. The number of policies inforce increased 5.1% year on year, to 7.13 million polices.
(Right-hand graph)
Annualized premiums from insurance in force increased 5.8% year on year, to¥790.8 billion. Of which, the figure for third-sector products was up 4.2% year onyear, to ¥182.2 billion.

The lapse and surrender rate decreased 0.10 percentage points year on year,to 1.11%.

(Left-hand graph)
Income from insurance premiums decreased 5.3% year on year, to ¥241.1 billion
led by a decline in sales of single premium products such as variable annuities,
variable life insurance and Single Premium Payment Whole Life Insurance(Non-notification type).
(Right-hand graph)
Investment assets increased due to business expansion. However, theimpact on earnings growth of the allotment of gains on the IPO of private
equity fund in FY15.1Q was absent, which holds the rise in interest incomeand dividends to 1.7% year on year, to ¥35.9 billion.

(Left-hand graph)Core profit rose 5.4% year on year, to ¥14.0 billion due to a decrease ininsurance claim payments, despite a fall in the positive spread and anincrease in the provision of policy reserves for minimum guarantees
for variable life insurance due to a worsening market.
(Right-hand graph)
Ordinary profit increased 54.4% year on year, to ¥23.3 billion.
Changes in the provision of policy reserves for minimum guarantees forvariable life insurance accompanying market fluctuations were offset by gains
or losses on hedges, which are included in capital gains and losses.
The total of gains or losses on hedges and gains or losses related to policy
reserves for minimum guarantees for variable life insurance amounted to a
¥4.6 billion year-on-year improvement, as the provision of policy reserves
decreased due to the acquisition of new policies. This factor, plus a decline ininsurance claim payments, promoted an increase in ordinary profit.

The number of Lifeplanner sales employees as of June 30, 2016, was 4,682,
up 70 from March 31, 2016 and up 330 from June 30, 2015.
The number of Lifeplanner sales employees steadily increased, reflecting
Sony Life’s initiatives to promote skilled personnel to office managers responsible
for recruiting new Lifeplanner sales employees.

Here is a breakdown of Sony Life’s general account assets as of June 30, 2016,
compared with that as of March 31, 2016.
Sony Life had begun investing in ultralong-term Financial Investment and Loan
Program (FILP) agency bonds and corporate bonds under the negative interest
rate environment.

As of June 30, 2016, Sony Life’s non-consolidated solvency margin ratio was
2,831.3%, up 108.5 percentage points from March 31, 2016, remaining at a highlevel.

Sony Assurance’s ordinary revenues increased 5.2% year on year,to ¥26.0 billion, owing to an increase in net premiums written primarily formainstay automobile insurance and an increase in gains on sale of securities.
Ordinary profit increased 35.0% year on year, to ¥2.8 billion.
Net income increased 37.8% year on year, to ¥2.0 billion.

(Left-hand graph)
The number of policies in force for the total of automobile insurance and medicaland cancer insurance increased 4.7% year on year, to 1.81 million policies.
Net premiums written increased 2.8% year on year, to ¥25.0 billion, due to astable sale of automobile insurance.
(Right-hand graph)
Ordinary profit increased year on year as described before.
Adjusted ordinary profit is an profit indicator on a managerial accounting basis.
The figure is calculated by adjusting the amount of provision(reversal) for
catastrophe reserve to ordinary profit.
Adjusted ordinary profit was ¥3.6 billion.

(Left-hand graph)
The Earned/Incurred (E.I.) loss ratio was up 0.6 percentage points year on year,to 59.0%. This is because Sony Assurance recorded the reversal of reserve foroutstanding losses in FY15.1Q.
The car accident ratio remained at low levels in FY16.1Q.
The net expense ratio declined 0.1 percentage points year on year, to 26.2%,
due to a proper control on overall operating expenses.
Consequently, the sum of the E.I. loss ratio and the net expense ratio was up
0.5 percentage points year on year, to 85.2%.
(Right-hand graph)
The net loss ratio was up 0.7 percentage points year on year, to 54.1%.
This is different from the E.I. loss ratio, which reflects an increase or a decreasein provision for reserve for outstanding losses.
The combined ratio (the sum of the net loss ratio and the net expense ratio) was
up 0.7 percentage points year on year, to 80.3%.

As of June 30, 2016, Sony Assurance’s non-consolidated solvency margin ratio
was 732.9%, up 39.4 percentage points from March 31, 2016, showing thatSony Assurance has maintained a financial soundness.

Sony Bank’s consolidated ordinary revenues decreased 1.3% year on year,to ¥9.2 billion. This is because interest income on loans increased in line witha favorably growing balance of mortgage loans, whereas interest income anddividends on securities decreased.
Consolidated ordinary profit decreased 58.6% year on year, to ¥0.7 billion.
This is due to an increase in up-front expenses incurred by investment onmeasures to expand the customer base mainly on advertising expenses
related to card loans.
Moreover, the balance of card loans steadily expanded.
On a non-consolidated basis, Sony Bank’s ordinary revenues and ordinary
profit decreased year on year as the same reasons as in the consolidatedresults.

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenue and profits.
(Left-hand table)
Net interest income increased 5.2% year on year, to ¥4.7 billion, led by thegrowing balance of mortgage loans.
Net fees and commissions decreased ¥0.3 billion year on year. This is due tolower gains on foreign exchange transactions compared with active transactions
in FY15.1Q, in addition to an increase in fees on guarantee commission.
Consequently, gross operating profit on a core profit basis decreased 1.9% year
on year, to ¥4.7 billion. Net operating profit on a core profit basis also decreased
64.4% year on year, to ¥0.4 billion, owing to an increase in up-front investment
expenses to enact measures aimed at expanding the customer base.
( Right-hand graph)
The yield on investment for FY16.1Q was 1.19%, reflecting higher yield on
investment into foreign currency-based assets.
The yield on financing for FY16.1Q was 0.27%.
Consequently, interest spread for FY16.1Q was 0.92%.

(Left-hand graph)
As of June 30, 2016, deposits (the sum of Japanese yen and foreign currencydeposits) amounted to ¥1,908.1 billion, down ¥15.3 billion from March 31, 2016.
Of which, yen deposit balance amounted to ¥1,580.6 billion, down ¥7.3 billion
from March 31, 2016, due to a decrease in yen time deposit balance, partially
offset by an increase in yen ordinary deposit balance.
The yen-denominated balance of foreign currency deposits amounted to¥327.4 billion, down ¥8.0 billion from March 31, 2016, due to yen appreciation
despite higher foreign currency purchases.
(Right-hand graph)
Loan balance as of June 30, 2016 expanded to ¥1,395.6 billion, up ¥51.4 billion
from March 31, 2016, reflecting higher demand of refinancing mortgage loans.

(Left-hand graph)
As of June 30, 2016, the balance of securities amounted to ¥583.2 billion,
down ¥37.7 billion from March 31, 2016. Sony Bank continuously invests inhighly rated bonds.
(Right-hand graph)
As of June 30, 2016, Sony Bank’s non-consolidated capital adequacy ratio(domestic criteria) was almost flat year on year, at 9.90%, maintaining financialsoundness.

Forecast of consolidated financial results for FY16 is unchanged from theforecast announced on April 28, 2016.

From FY16, Sony Life has changed to the method of using ultimate forward rates (UFR)
as its extrapolation method for ultralong-term interest rates to obtain the risk-free rateused in calculating MCEV and ESR.
The reasons for this change are as follows.
When evaluating ESR, which indicates capital sufficiency, we consider it appropriate toreflect the status of deliberations on international capital regulations. However, as noevaluation method is established at present, taking market consistency into account wehave set the start of extrapolation beyond the 40th year.
Also, we judge it desirable at present to maintain consistency with MCEV and ESR,an important indicator for the company. We have taken into consideration the compliancewith MCEV Principles and such factors as the disclosure status of European andJapanese life insurers.
For interest rates up to the 40th year, we use rates on Japanese government bonds,
which can be obtained in the market. For interest rates beyond the 40th year, we use
extrapolation in which the 60-year forward rate converges on the UFR (3.5%).
As a result, whereas the 40-year interest rate as of March 31, 2016, is 0.63%, based onmarket data, the 60- and 80-year rates are 1.23% and 1.47%, for which market data is
not available. Please refer to the appendix page for details.
In line with this change, we disclose revalued key indicators as of March 31, 2016.

Sony Life’s MCEV as of March 31, 2016 (after restated) was ¥1,330.1 billion.
Please refer to the appendix page for details of adjusted net worth and value ofexisting business.
For FY15.4Q (3M), the new business value was ¥3.9 billion, and the new businessmargin was 1.2%.

The risk amount based on economic value as of March 31, 2016 (after restated)amounted to ¥972.4 billion.
In addition to this change, Sony Life has changed ESR numerator to the total amountof MCEV and frictional costs.
Consequently, Sony Life’s ESR as of March 31, 2016 (after restated) is 141%.

Sony Life’s interest rate sensitivities as of March 31, 2016 (after restated) areshown here, as they are largely affected by this change.
Regarding sensitivities to MCEV, changes in 50bp decrease is minus ¥159.7 billion
and negative 12%, while changes in 50bp increase is ¥68.6 billion and 5%.

Sony Life’s MCEV as of June 30, 2016 decreased ¥253.7 billion from March 31,
2016, to ¥1,076.4 billion due to a significant decline in interest rates in Japanese yen.
From FY16, Sony Life has changed to the calculation method of new business value
and new business margin.
The method has been changed to one of accumulating new business value fromat the end of each quarter to the end of each month.
For FY16.1Q (3M), new business value was negative ¥0.2 billion, and the newbusiness margin was negative 0.0%.
This was because of a significant decline in interest rates in Japanese yen,which offset the improvement in profitability stemming from product revisions andchanges in the product portfolio for protection-type products.
By responding promptly with measure, Sony Life is working to improve
profitability to ensure steady growth in MCEV even under the low interest rateenvironment.

The risk amount based on economic value as of June 30, 2016 amounted to¥1,141.8 billion, up ¥169.4 billion from March 31, 2016, owing to an increase ininsurance risk reflecting a significant decline in interest rates in Japanese yen.
ESR as of June 30, 2016 was 95%, down sharply from March 31, 2016,
due to a significant decline in interest rates in Japanese yen.

In May 2016, we discontinued sales of some savings-type products. In October
2016, we also plan to revise insurance premium rates on variable life insurance(whole life type) and other whole life insurance, and discontinue sales of interest
rate-sensitive whole life insurance.
In addition, we will continue to reinforce our ability to offer U.S. dollardenominated insurance and term life insurance, in an effort to steadily improve
profitability.
ESR fell below 100% as of June 30, 2016.
However, by revising our products and reinforcing our sales capabilities,
we expect to accumulate new business value from the second half of FY16.
As a result, we believe that current ESR levels will recover. Accordingly, atpresent we do not believe an increase in capital is necessary.