Consolidated Financial Summary (Japanese GAAP)
for the Year Ended March 31, 2016
May 16, 2016
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:
Yasuo Hasegawa, 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, 2016
(1) Operating results
Ordinary Revenues
For the year ended
March 31, 2016
For the year ended
March 31, 2015

Profit Attributable to Owners of
the Parent

Ordinary Profit

Millions of yen% change

Millions of yen% change

Millions of yen% change

1,362,044

0.7

71,103(21.1)

43,355(20.3)

1,352,325

2.4

90,062

18.3

54,41934.4

Note: Comprehensive Income:For the year ended March 31, 2016: ¥71,105 million:
For the year ended March 31, 2015: ¥90,707 million:

Net Income per
Share

Net Income per
Share(Fully Diluted)

Yen

For the year ended
March 31, 2016
For the year ended
March 31, 2015

(21.6)％
102.5 ％Net Income on
Shareholders’EquityYen

Ordinary Profit on
Total Assets

Ordinary Profit on
Ordinary Revenues

%

%

%

99.67

—

7.5

0.7

5.2

125.10

—

10.7

1.0

6.7

Notes: Equity in earnings (losses) of affiliates:

For the year ended March 31, 2016: ¥(718) million
For the year ended March 31, 2015: ¥(1,506) 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, 2016

10,352,114

604,377

5.8

1,386.32

As of March 31, 2015

9,545,868

550,672

5.8

1,262.94

Notes: Shareholders’ equity:

As of March 31, 2016: ¥603,048 million
As of March 31, 2015: ¥549,380 million(3) Cash flows

For the year ended
March 31, 2016
For the year ended
March 31, 2015

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

602,475(558,825)(17,437)

233,620425,656(445,431)(13,087)

207,422

2. Dividends
Dividend per Share

Record date
For the year ended
March 31, 2015
For the year ended
March 31, 2016
For the year ending
March 31, 2017
(forecast)

1st quarter2nd quarter3rd quarter

Year-end

Annual Total

Yen

Yen

Yen

Yen

Yen

AnnualDividend
AmountDividend
Payout
Ratio

Dividend on
Net Assets

Millions of yen

%

%

—

0.00

—

40.00

40.00

17,399

32.0

3.4

—

0.00

—

55.00

55.00

23,924

55.2

4.2

—

0.00

—

55.00

55.00

52.0

3. Forecast of consolidated financial results for the year ending March 31, 2017
(Percentage figures represent changes from the results of the previous fiscal year.)Ordinary Revenues
For the year ending
March 31, 2017

Profit Attributable to
Owners of the Parent

Ordinary Profit

Millions of yen% change

Millions of yen% change

Millions of yen% change

1,450,000

6.5

71,000(0.1)

46,000

6.1

Net Income per
Share
Yen

105.75

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 “V．Consolidated Financial Statements” under “5. Notes to the Consolidated Financial
Statements” under “1) Changes in accounting policies” on page on 21.

(3) Number of shares outstanding (common stock)(a) Number of shares outstanding (including treasury shares)
As of March 31, 2016:
As of March 31, 2015:(b) Number of treasury shares
As of March 31, 2016:
As of March 31, 2015:(c) Weighted-average number of shares
For the year ended March 31, 2016:
For the year ended March 31, 2015:

435,000,000 shares
435,000,000 shares
75 shares
55 shares
434,999,933shares
434,999,945shares

Audit of 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.

II.
III.

IV.
V.

Qualitative Information and Financial Statements
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, 2016, and the Fiscal Year Ending March 31, 2017・・・・・・・・・・・・

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

Basic Views on Selection of Accounting Standards・・・・・・・・・・・・・・・・ 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 accounting policies・・・・・・・・・・・・・・・・・・・・・・・・21
2) Segment Information・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21
3) Financial Instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・・26
4) Investments in Securities･・・・・・・・・・・・・・・・・・・・・・・・・・・・29
5) Investments in Monetary Trusts・・・・・・・・・・・・・・・・・・・・・・・・・・・31
6) Derivative financial instruments・・・・・・・・・・・・・・・・・・・・・・・・・・・31
7) Subsequent Events・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 33

VI.

Attachment
Consolidated Financial Results for the Year Ended March 31, 2016 and Sony Life’s PreliminaryMarket Consistent Embedded Value as of March 31, 2016・・・・・・・・・・・・・・・・・・35* The Conference Call for explaining the Sony Financial Group financial results for the fiscal year ended
March 31, 2016, will be held at 16:30 (Tokyo), May 16, 2016.
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 16, 2016 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/index.html

1

* We will upload the press releases on Sony Life’s Market Consistent Embedded Value as of March 31, 2016,
scheduled as below.
･Full report: Scheduled to be uploaded on May 23, 2016 at 15:00 (Tokyo)
Please see further details at our website: http://www.sonyfh.co.jp/index_en.html* On May 16, 2016, Sony Financial Holdings Inc.’s (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, 2016. SFH prepared English-language summaries of
those Japanese announcements made by the above subsidiaries, solely for convenience of non-Japanesereaders.

2

I. Qualitative Information and Financial Statements
1. Qualitative Information on Consolidated Operating Performance
1) Analysis of Operating Performance
During the fiscal year ended March 31, 2016 (from April 1, 2015 to March 31, 2016), the Japanese economy was in a stateof modest economic recovery, buttressed by higher corporate earnings and improvements in the employment and income
situation. However, the year was also characterized by concerns about the economic downturn stemming from overseas
economic issues, such as decelerating growth in Chinese and other emerging market economies and falling crude oil prices,
as well as volatile movements in the financial markets. As a result, the outlook was uncertain.
Looking at financial conditions, the Japanese stock market performed solidly in the first half of the fiscal year, but thenturned downward due to a drop in the Chinese stock market. Thereafter, the Japanese stock market remained largely volatile,reflecting emerging and U.S. market fluctuations. In the bond markets, long-term interest rates that were already low due tothe Bank of Japan (BOJ)’s monetary easing fell further when the BOJ decided in January 2016 on the introduction of apolicy of qualitative and quantitative monetary easing incorporating negative interest rates. Even in foreign currency markets
which had generally demonstrated a trend toward yen depreciation, investors’ behavior to shed risk and purchase yen as asafe-haven currency led to sharp yen appreciation.
Amid these circumstances, the Sony Financial Group sought to become the financial services group most highly trusted bycustomers. To this end, we undertook a variety of measures to maintain a sound financial base, reinforce and expand our
product and service offerings in order to deliver high-value-added products and high-quality services to each of ourcustomers, and enhance our internal control system.
Consequently, as for its operating results, consolidated ordinary revenues rose 0.7% compared with the previous fiscal
year, to ¥1,362.0 billion, owing to increases in ordinary revenues from the life insurance and the non-life insurance
businesses, whereas ordinary revenues from the banking business decreased. Consolidated ordinary profit decreased 21.1%
year on year, to ¥71.1 billion, owing to decreases in ordinary profit from the life insurance and the banking businesses,
whereas ordinary profit from the non-life insurance business increased. Profit attributable to owners of the parent, after
accounting for extraordinary losses, provision for reserve for policyholders’ dividends and income taxes, was down 20.3%
year on year, to ¥43.3 billion due to the decrease in ordinary profit.
Operating results by business segment are as described below.
Ordinary Revenues(Billions of yen)Life insurance business
Non-life insurance businessBanking business
SubtotalIntersegment adjustments
Consolidated

Year ended
March 31, 2015

Year ended
March 31, 2016

(Apr. 1, 2014, to Mar. 31, 2015)(Apr. 1, 2015, to Mar. 31, 2016)

Change (%)

1,223.9
93.0
38.4

1,230.2
96.9
37.9

0.5
4.2
(1.3)

1,355.4

1,365.1

0.7

(3.1)

(3.0)

-

1,352.3

1,362.0

0.7Year ended
March 31, 2015

Year ended
March 31, 2016

(Apr. 1, 2014, to Mar. 31, 2015)(Apr. 1, 2015, to Mar. 31, 2016)

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

Change (%)

78.3
4.2

60.2
4.6

(23.1)
11.2

7.3

5.9

(18.3)

89.8
0.2

70.8
0.2

(21.1)
3.7

90.0

71.1

(21.1)

3

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

2) Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2017
For the fiscal year ending March 31, 2017 (April 1, 2016, to March 31, 2017), stable and sustainable business growth isexpected in all the businesses: life insurance, non-life insurance and banking.
Consolidated ordinary revenues are expected to increase because we anticipate higher revenues in the life insurance
business. Consolidated ordinary profit is expected to be almost flat because we anticipate an increase in profit in the life
insurance business, offset by a decrease in profit in the banking business.
Profit attributable to owners of the parent is expected to increase due to the impact of a reduction in the effective corporate
income tax rate for FY2016, compared with FY2015’s negative impact of the reversal of deferred tax assets, accompaniedby the cut in corporate income tax.
*We do not consider the effects of market fluctuations after April 2016 within our forecast.
The forecast of consolidated financial results for the fiscal year ending March 31, 2017 below remains unchanged fromthe forecast announced on April 28, 2016.
(Billions of yen)
(Reference)
Forecast
Actual results for the year
for the year ending
Change (%)
ended March 31, 2016
March 31, 2017
Ordinary revenues

1,362.0

1,450.0

6.5

Ordinary profit

71.1

71.0

(0.1)

Profit attributable toowners of the parent

43.3

46.0

6.1

Net income per share
(Yen)

99.67

105.75－

Forecast by business segment is as follows.
Forecast figures from each business reflect corporate and eliminations.
<Life insurance business>
Ordinary revenues are expected to increase year on year because we anticipate stable increases in insurance premium
revenues and investment income. Ordinary profit is expected to increase year on year because we expect a positive impact ofa decline in provision of policy reserves for minimum guarantees for variable life insurance to be offset by lower gains onsale of securities.
(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2016

Forecast
for the year ending
March 31, 2017

Ordinary revenues

1,230.2

1,309.8

6.5

Ordinary profit

60.2

62.5

3.8

Change (%)<Non-life insurance business>
Ordinary revenues are expected to increase year on year in line with growth in net premiums written primarily for automobile
insurance. Ordinary profit is expected to decrease year on year because we expect the loss ratio to be higher than the ratio in
FY2015.

4

(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2016

Forecast
for the year ending
March 31, 2017

Ordinary revenues

96.9

101.6

4.8

Ordinary profit

4.6

4.4

(6.0)

Change (%)<Banking business>
Although we anticipate stable growth in business scale, ordinary revenues are expected to be flat year on year due to lower
interest rates associated with the BOJ’s introduction of negative interest rates. Ordinary profit is expected to decrease due toan increase in up-front expenses incurred by investment on measures to expand the customer base over the medium term, in
addition to an expected lower interest spread.
(Billions of yen)
(Reference)
Actual results for the year
ended March 31, 2016

Forecast
for the year ending
March 31, 2017

Ordinary revenues

37.9

37.9

(0.1)

Ordinary profit

5.9

4.5

(24.9)

5

Change (%)

2. Qualitative Information on Consolidated Financial Position
1) Assets, Liabilities and Net Assets
As of March 31, 2016, total assets amounted to ¥10,352.1 billion, up 8.4% from March 31, 2015. Among major components
of assets, securities, mostly Japanese government bonds, amounted to ¥8,021.4 billion, up 8.7% from March 31, 2015. Loanscame to ¥1,515.8 billion, up 12.3%, and monetary trusts amounted to ¥303.9 billion, down 9.8%.
Total liabilities were ¥9,747.7 billion, up 8.4% from March 31, 2015. Major components of liabilities included policy
reserves and others of ¥7,504.4 billion, up 9.1%, and deposits totaled ¥1,912.5 billion, up 2.1%.
Total net assets were ¥604.3 billion, up 9.8% from March 31, 2015. This included net unrealized gains on other securities,
net of taxes, which increased ¥30.1 billion, to ¥157.3 billion.
2) Cash FlowsNet cash provided by operating activities for the fiscal year ended March 31, 2016, was ¥602.4 billion, up ¥176.8 billion
from the previous fiscal year. The primary reason for this increase was an increase in revenue from insurance premiums in
the life insurance businessNet cash used in investing activities was ¥558.8 billion, down ¥113.3 billion, from the previous fiscal year. This was due
mainly to expenditures for payments to acquire securities in the life insurance business, which exceeded proceeds from saleand redemption of securities in the life insurance and banking businesses.
Net cash used in financing activities came to ¥17.4 billion due primarily to dividend payments, up ¥4.3 billion from theprevious fiscal year.
As a result of the above factors, cash and cash equivalents at March 31, 2016, were ¥233.6 billion, up ¥26.1 billion fromMarch 31, 2015.

3. Basic Policy on Returns to Shareholders and Dividends for the Fiscal Year Ended March 31, 2016,
and the Fiscal Year Ending March 31, 2017
For the fiscal year ended March 31, 2016, taking this period’s overall operating performance into consideration, we plan to
pay a year-end dividend of ¥55 per share (total amount of dividend: ¥23.924 billion), which means the 4th consecutive yearof dividend increases from the fiscal year ended March 31, 2013.
SFH aims for steady increases in dividends in line with earnings growth over the medium and long terms while securing
sufficient internal reserves to ensure the financial soundness of the Group companies and invest in growing fields.
Our target for the dividend payout ratio is the range of 40% to 50%. Management will determine specific dividend amounts
for each 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, 2017, we plan to pay a year-end dividend of ¥55 per share, unchanged from FY2015,
after taking into account our business environment and our forecast of consolidated financial results. We will continue tomake dividend payments once a year, following the resolution of the general meeting of 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, 2016.

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.
As of March 31, 2016, Sony Financial Group included as direct subsidiaries Sony Life, Sony Assurance and Sony

6

Bank, and Sony Payment Services 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)
 Sony Payment Services Inc. (57% -owned by Sony Bank) SmartLink Network Hong Kong Limited (Wholly-owned by Sony Payment Services Inc.)[Organizational chart] (As of March 31, 2016)
Sony
Corporation

Sony Financial
Holdings Inc.

<Life insurance business>
Sony Life InsuranceCo., Ltd.

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

<Non-life insurance business>

Sony Assurance Inc.

<Banking business>
Sony Bank Inc.

<Banking
business>Sony Payment
Services Inc.

<Life insurance
business>
SA Reinsurance
Ltd.

<Banking business>
SmartLink Network
Hong Kong Limited
Consolidated subsidiaries

Shareholding

Affiliated companies
accounted for under theequity method

Sales and referrals of
the other’s products

7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.
■ Consolidated ordinary revenues■ Consolidated ordinary profit■ Profit attributable to owners of the parent
Since Sony Financial Group’s company differs by industry such as insurance and banking, each group company
calculates its “Adjusted ROE” based on adjusted profit and adjusted capital to realize its corporate value and capitalefficiency.
Adjusted ROE is calculated as following:
1) Sony Life:( Numerator ) The amount of increase in Embedded Value (EV) during the fiscal year plus
dividends paid
(Denominator) EV as of the beginning of the fiscal year less dividends paid plus EV as ofthe end of the fiscal year, divided by two*Sony Life uses Market Consistent Embedded Value for the EV calculation.

2) Sony Assurance:

3) Sony Bank:( Numerator ) Net income plus provision amount for catastrophe reserve and its provision
amount for reserve for price fluctuations, in each case after taxes(Denominator) The average amount of net assets plus the sum of catastrophe reserve and its
reserve for price fluctuations during the fiscal year, in each case after taxes( Numerator ) Profit attributable to owners of the parent

8

(Denominator) The average amount of net assets during the fiscal year
We calculated Consolidated adjusted ROE as follows.
Consolidated adjusted ROE = consolidated adjusted profit divided by consolidated adjusted capital.
Consolidate adjusted profit is calculated as the sum of the following:
1) Sony Life:The amount of increase in EV during the fiscal year plus dividends paid
2) Sony Assurance: Net income plus provision amount for catastrophe reserve and its provision amount forreserve for price fluctuations during the fiscal year, in each case after taxes
3) Sony Bank:
Profit attributable to owners of the parent
Consolidate 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 forprice fluctuations, in each case after taxes
3) Sony Bank:
The average amount of net assets during the fiscal year

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 revenue 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. In May 2015, Sony Lifecare Inc. entered capital participation in Yuuai Holdings Co.,

9

Ltd. (YHD), which is involved in the operation of nursing care homes and other businesses under its umbrella, by
acquiring a portion of YHD’s common stock. (14.5% of total shares issued) In April 2016, Lifecare Design Inc.,
wholly-owned by Sony Lifecare Inc. opened its first newly built nursing care home “SONARE Soshigaya-Okura”
in Tokyo.
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.

4. Tasks Ahead for the Company
In the fiscal year ending March 31, 2017, we believe the Japanese economy will remain generally in a moderate
recovery phase, buoyed by a gradual increase in domestic demand and a gradual uptick in exports as emerging market
economies shake off their deceleration. At the same time, we anticipate a decline in interest rates due to the BOJ’s
introduction of a negative interest rate policy, and we will need to remain vigilant with respect to potential downside
risks from overseas economies. From the corporate management perspective, we expect the outlook to remain opaque.
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.
IV. Basic Views on Selection of Accounting Standards
SFH’s consolidated financial statements are prepared in accordance with accounting principles generally acceptedin Japan. SFH is considering whether to adopt International Financial Reporting Standards (“IFRS”) while closely
monitoring the development of new accounting standards and the stance of regulatory bodies at home and abroad.

10

V. Consolidated Financial Statements
1. Consolidated Balance Sheets(Millions of yen)
As of March 31, 2015

As of March 31, 2016

Cash and due from banks¥134,803¥144,364

Call loans and bills bought

77,23488,200

Monetary claims purchased–

884

AssetsMonetary trusts

336,842

303,973

Securities

7,377,545

8,021,493

Loans

1,349,586

1,515,833

123,083

121,376Land

83,00783,007

Buildings

35,32333,215

74

40

1,666

213

Tangible fixed assets

Leased assets
Construction in progress
Other tangible fixed assets

3,010

4,900

33,36629,887

Software33,24529,836

Goodwill

99

19

Intangible fixed assets

21

31

Due from reinsurers

Other intangible fixed assets

297

399

Foreign exchanges

2,224

1,139

102,756

115,474

Net defined benefit asset

3,005

2,216

Deferred tax assets

6,545

8,181

Reserve for possible loan losses(1,422)(1,308)¥9,545,868¥10,352,114

Other assets

Total Assets

11

(Millions of yen)
As of March 31, 2015

As of March 31, 2016

¥6,879,055¥7,504,420

61,114

67,177

6,813,749

7,432,237

4,191

5,006

Due to agencies

2,450

2,455

Due to reinsurers

675

626

1,872,860

1,912,592

Call money and bills sold

6,000

–

Borrowed money

20,00040,000Foreign exchanges

46

87

Bonds payable

20,00020,000

Other liabilities

122,340

183,835

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

Deposits

Reserve for employees’ bonuses

3,395

3,557

Net defined benefit liability

24,55829,263338

351

42,96944,41042,96944,410

–

5,647

503

488

8,995,195

9,747,736

Common stock

19,90019,900Capital surplus

195,277

195,277

Retained earnings

212,124

238,079(0)(0)

427,301

453,256

Net unrealized gains (losses) on other securities, net of taxes

127,166

157,364

Net deferred gains (losses) on hedging instruments, net of taxes(2,086)(2,347)

Land revaluation, net of taxes(1,480)(1,465)0–Reserve for directors’ retirement benefits
Special reserves
Reserve for price fluctuations
Deferred tax liabilities
Deferred tax liabilities on land revaluation
Total Liabilities
Net Assets

Treasury Stock
Total shareholders’ equity

Foreign currency translation adjustments
Remeasurements of defined benefit plans, net of taxes(1,522)(3,760)Total accumulated other comprehensive income

122,078

149,791

1,292

1,329

550,672

604,377¥9,545,868¥10,352,114

Non-controlling interests
Total Net Assets
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, 2015

For the year ended
March 31, 2016

Ordinary Revenues¥1,352,325¥1,362,044

Ordinary Revenues from the Life Insurance Business

1,221,077

1,227,409

912,605

1,026,615

911,068

1,024,974

Income from insurance premiums
Insurance premiums
Ceded reinsurance commissions

1,537

1,640

279,691

170,048

Interest income and dividends

133,135

140,981

Income from monetary trusts, net

5,283

11,973

Investment income

Gains on trading securities, net

507

98

8,899

12,204

Gains on redemption of securities

1–

Gains on derivatives, net

–

4,768

Gains on sale of securities

Foreign exchange gains, net

5,068

–

7

21

126,789–

28,78030,74593,022

96,904

91,761

95,612

91,712

95,549Interest and dividends on deposits of premiums

48

62

Other underwriting income

0

0

1,235

1,264

1,268

1,313

Gains on sale of securities

15

12

Transfer to interest and dividends on deposits of premiums

(48)

(62)

Other investment income
Gains on separate accounts, net
Other ordinary income
Ordinary Revenues from the Non-life Insurance Business
Underwriting income
Net premiums written

Investment income
Interest income and dividends

Other ordinary income

25

27

38,22437,731

26,132

25,481

Interest income on loans

14,07014,739Interest income and dividends on securities

Ordinary Revenues from the Banking Business
Interest income

11,96010,671

Interest income on call loans and bills bought

7

7Interest income on deposits with banks

93

61

Other interest income

02Fees and commissions

5,880

6,679

Other operating income

5,997

5,189

Gains on foreign exchange transactions, net

3,906

4,263

Others

2,090

926

213

379

Other ordinary income(Continued)

13

(Millions of yen)
For the year ended
March 31, 2015

For the year ended
March 31, 2016

Ordinary Expenses¥1,262,262¥1,290,941

Ordinary Expenses from the Life Insurance Business

1,145,087

1,169,419

382,902363,370

Insurance claims

79,622

84,283

Annuity payments

11,28011,496

Insurance claims and other payments

Insurance benefits

63,166

74,842

Surrender payments

223,130

184,936

Other payments

3,675

5,711

Reinsurance premiums

2,027

2,099

604,357

613,480

746

4,185

603,607609,2913

2

Investment expenses

9,439

23,095Interest expenses

31

53

Losses on sale of securities

0–

Losses on redemption of securities

01

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 derivatives, net

2,099

–

Foreign exchange losses, net

–

2,798

Provision for reserve for possible loan losses

32

5

Depreciation of real estate for rent and others

1,833

1,825

Other investment expenses

5,441

3,675

–

14,735

Operating expenses

115,237

132,896

Other ordinary expenses

33,14936,57888,11591,522Losses on separate accounts, net

Ordinary Expenses from the Non-life Insurance Business
Underwriting expenses

65,206

67,326Net losses paid

45,985

48,111

Loss adjustment expenses

6,857

7,098

929

1,043

Provision for reserve for outstanding losses

2,966

1,877

Provision for underwriting reserves

8,465

9,195

0

0

1

4

Net commission and brokerage fees

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

1

4

22,90024,188

7

3(Continued)

14

(Millions of yen)
For the year ended
March 31, 2015
Ordinary Expenses from the Banking Business

For the year ended
March 31, 2016

¥29,060¥29,999

9,407

8,884

5,012

4,827

Interest expenses on call money and bills sold6

5

Interest on borrowed money

22

32

Interest expenses on bonds

97

98

4,268

3,921

0

0

Fees and commissions

1,948

2,437

Other operating expenses

135

181

17,517

18,34750

147

Ordinary Profit

90,062

71,103Extraordinary Losses

1,927

2,793

Losses on disposal of fixed assets

511

882

Impairment losses

71

470

1,311

1,440

1,311

1,440

Interest expenses
Interest expenses on deposits

Interest expenses on interest rate swaps
Other interest expenses

General and administrative expenses
Other ordinary expenses

Provision for special reserves
Provision for reserve for price fluctuations

32–

Provision for Reserve for Policyholders’ Dividends

Losses on transfer of business

2,153

3,564

Income Before Income Taxes

85,98164,744

Income Taxes – Current

32,207

26,191

Income Taxes – Deferred(668)(4,856)

Total Income Taxes

31,53821,335

Profit54,442

43,409Profit Attributable to Non-controlling Interests
Profit Attributable to Owners of the Parent

15

23

54

¥54,419¥43,355

(Consolidated Statements of Comprehensive Income)(Millions of yen)
For the year ended
March 31, 2015

For the year ended
March 31, 2016

¥54,442¥43,409

Net unrealized gains (losses) on other securities, net of taxes

35,16430,198Net deferred gains (losses) on hedging instruments, net of taxes

302

(261)

Land revaluation, net of taxes

33

14

Foreign currency translation adjustments

1

(1)

762

(2,254)0–36,264

27,695¥90,707¥71,105

90,69071,068

16

37

ProfitOther comprehensive income

Remeasurements of defined benefit plans, net of taxes
Share of other comprehensive income of affiliates accounted
for using equity method
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests163. Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2015
(Millions of yen)
Shareholders’ equity
Common stock

Balance at the beginningof the fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance at the
beginning of the fiscal
year
Changes during theperiodRetained earnings

Treasury stock

Total shareholders’ equity¥19,900¥195,277¥164,790¥ (0)¥379,967

–

–

5,965

–

5,965

19,900195,277

170,755(0)385,932––(13,049)–(13,049)––

54,419–54,419

–

–

–

(0)

(0)

–

–

–

–

–

–

–

41,369(0)41,369¥19,900¥195,277¥212,124¥ (0)¥427,301

Dividends from surplus
Profit attributable toowners of the parent
Purchase of treasurystock
Net changes of items
other thanshareholders’ equity
Total changes during theperiodBalance at the end of thecurrent period

Capital surplus

Total accumulated other comprehensive income
Net unrealized
gains (losses) onother securities,
net of taxes

Net deferredgains (losses) on
hedging
instruments,
net of taxes

Landrevaluation, netof taxes

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans, netof taxes

Total
accumulated
othercomprehensive
income¥92,002¥ (2,388)¥ (1,513)¥0¥ (2,292)

–

–

–

–

92,002(2,388)(1,513)

Dividends from surplus––

Profit attributable toowners of the parent–

Balance at the beginningof the fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance at the
beginning of the fiscal
year
Changes during theperiodPurchase of treasurystock
Net changes of items
other thanshareholders’ equity
Total changes during theperiodBalance at the end of thecurrent period

Non-controllinginterests

Total net assets¥85,807¥1,275¥467,050

–

–

–

5,965

0

(2,292)85,8071,275

473,015

–

–

–

–

–

(13,049)

–

–

–

–

–

–

54,419

–

–

–

–

–

–

–

(0)

35,164

302

33

0

769

36,27016

36,28735,164

302

33

0

769

36,27016

77,657¥127,166¥ (2,086)¥ (1,480)¥0¥ (1,522)¥122,078¥1,292¥550,672

17

For the year ended March 31, 2016
(Millions of yen)
Shareholders’ equity
Common stock

Balance at the beginningof the fiscal year
Changes during theperiodRetained earnings

Treasury stock

Total shareholders’ equity¥19,900¥195,277¥212,124¥ (0)¥427,301––(17,399)–(17,399)––

43,355–43,355

–

–

–

(0)

(0)

–

–

–

–

–

–

–

25,955(0)25,954¥19,900¥195,277¥238,079¥ (0)¥453,256

Dividends from surplus
Profit attributable toowners of the parent
Purchase of treasurystock
Net changes of items
other thanshareholders’ equity
Total changes during theperiodBalance at the end of thecurrent period

Capital surplus

Total accumulated other comprehensive income

Balance at the beginningof the fiscal year
Changes during theperiodDividends from surplus
Profit attributable toowners of the parent
Purchase of treasurystock
Net changes of items
other thanshareholders’ equity
Total changes during theperiodBalance at the end of thecurrent period

Net unrealized
gains (losses) onother securities,
net of taxes

Net deferredgains (losses) on
hedging
instruments,
net of taxes

Landrevaluation, netof taxes

Foreign currencytranslation
adjustments

Remeasurementsof defined
benefit plans, netof taxes

Total
accumulated
othercomprehensive
income¥127,166¥(2,086)¥(1,480)¥0¥(1,522)

–

–

–

–

–

–

–

–

–

30,198Non-controllinginterests

Total net assets¥122,078¥1,292¥550,672–––(17,399)

–

–

–

–

43,355

–

–

–

–

–

(0)

(261)

14

(0)

(2,237)

27,71337

27,75030,198

(261)

14

(0)

(2,237)

27,71337

53,705¥157,364¥ (2,347)¥ (1,465)–¥ (3,760)¥149,791¥1,329¥604,37718

4. Consolidated Statements of Cash Flows(Millions of yen)
For the year ended
March 31, 2015

For the year ended
March 31, 2016

Cash flows from operating activities
Income before income taxes¥85,981¥64,744

Depreciation of real estate for rent and others

1,833

1,825

Depreciation and amortization

9,686

10,067

Impairment losses

71

470

Amortization of goodwill

79

79

Increase (decrease) in reserve for outstanding claims

3,713

6,063

612,072

618,487

3

2

2,153

3,564

Increase (decrease) in reserve for possible loan losses

(116)

(113)

Increase (decrease) in net defined benefit liability

2,954

2,469

88

69

1,311

1,440

Interest income and dividends(160,536)(167,777)(Gains) losses on securities(134,394)

7,620

9,438

8,938

(32,341)

22,924

42

18

Increase in policy reserve
Increase in interest portion of reserve for policyholders’dividends
Increase (decrease) in reserve for policyholders’ dividends

Increase (decrease) in reserve for directors’ retirement benefits
Increase (decrease) in reserve for price fluctuations

Interest expenses
Exchange (gains) losses
Losses on disposal of tangible fixed assets
Equity in losses of affiliates

1,506

718

Net (increase) decrease in loans(129,767)(156,996)

Net increase in deposits
Net increase (decrease) in borrowed money (excluding
subordinated borrowings)
Net (increase) decrease in call loans and bills bought(16,093)

39,935–20,000–5,115

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

(6,000)Net (increase) decrease in foreign exchange (assets)

5,528

1,085

6

40

Others, net

27,714(16,020)

Subtotal

290,938

468,773

Interest and dividends received

172,736

180,527

Interest paid

(9,117)(9,196)

Policyholders’ dividends paid

(2,202)(2,752)

Income taxes paid

(26,698)(34,875)

Net cash provided by operating activities

425,656

602,475

Net increase (decrease) in foreign exchange (liabilities)(Continued)

19

(Millions of yen)
For the year ended
March 31, 2015

For the year ended
March 31, 2016

Cash flows from investing activities
Investments in monetary trusts¥(3,081)–

5,300¥48,465

Purchases of securities(943,359)(1,327,890)

Proceeds from sale and redemption of securities

588,936

698,310Investments in loans(54,199)(56,782)

Collections of loans
Net increase (decrease) in collateral for securities lendingtransactions
Others24,61828,761–62,804(1,626)(567)(383,413)(546,898)

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

42,24355,576

Purchases of tangible fixed assets(54,563)(2,049)Purchases of intangible fixed assets(4,712)(6,927)Purchase of securities of a non-consolidated subsidiary(1,000)(1,500)Purchase of securities of affiliates(2,500)(1,450)758–(445,431)(558,825)(13,050)(17,401)

Proceeds from sale of monetary trusts

Total of net cash used in investment transactions

OthersNet cash used in investing activities
Cash flows from financing activities
Cash dividends paid
Purchase of treasury stock

(0)

(0)

Others(36)(36)(13,087)(17,437)

4(13)

Net increase (decrease) in cash and cash equivalents(32,857)

26,197

Cash and cash equivalents at beginning of the fiscal year

240,279

207,422

Cash and cash equivalents at end of the fiscal year

¥207,422¥233,620

Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents

205. Notes to the Consolidated Financial Statements
1) Changes in accounting policies(Application of Accounting Standards for Business Combinations)
The Sony Financial Group has applied the “Revised Accounting Standards for Business Combinations” (ASBJ Statement No. 21,
September 13, 2013), the “Revised Accounting Standards for Consolidated Financial Statements” (ASBJ Statement No. 22,
September 13, 2013), the “Revised Accounting Standards for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013)
and related standards from the beginning of the fiscal year ending March 31, 2016. Accordingly, the method of presenting net
income and other items was amended, and “minority interests” was changed to “non-controlling interests.” These reclassificationsof the consolidated financial statements for the fiscal year ended March 31, 2015 have been made to conform to the presentation
for the year ended March 31, 2016.

2) 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., Ltd., Sony Assurance Inc., and Sony Bank Inc., andpursues financial group strategies. The subsidiaries make their own business plans and engage in business activities fromwhich they may earn revenues and incur expenses, under the Insurance Business Law of Japan, the Banking Law of Japan,
and other 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., Sony Payment Services Inc. and SmartLink Network Hong
Kong Limited.

21

(2) Segment Information by reporting segment
For the year ended March 31, 2015
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¥1,221,077
2,910
1,223,988
78,3207,301,055¥93,022
1
93,023
4,210
157,946¥38,224
201
38,426
7,329
2,074,623¥1,352,325
3,113
1,355,438
89,8609,533,625

7,199

2,480

2,250

11,929133,610
31

1,268
－

26,132
9,543

161,0119,574(1,506)
10,510－－－－(1,506)
10,510¥56,098¥2,195¥2,416¥60,711For the year ended March 31, 2016
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¥1,227,409
2,882
1,230,292
60,224
8,033,369¥96,904
1
96,905
4,680
172,370¥37,731206
37,9375,988
2,140,286¥1,362,044
3,090
1,365,135
70,893
10,346,027

7,279

2,645

2,449

12,373

141,468

1,313

25,482

168,264

53

－

9,022

9,076

(718)
11,389

－
－

－
－

(718)
11,389¥3,214¥2,898¥2,706¥8,81822

(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, 2016
March 31, 2015
¥1,355,438¥1,365,135(3,113)(3,090)¥1,352,325¥1,362,044

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, 2016
March 31, 2015
¥89,860¥70,89378
194
200¥90,062¥71,103

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, 2015
March 31, 2016
¥9,533,625¥10,346,027(26,345)(35,143)
38,58841,230¥9,545,868¥10,352,114

Millions of yen
For the year ended
For the year ended
March 31, 2015
March 31, 2016
Consolidated
Consolidated
financial
Total
Adjustments financial
Total
Adjustments
statements
statements
Depreciation¥11,929¥18¥11,948¥12,373¥16¥12,390

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

161,011
9,574

(475)
(135)

160,536
9,438

168,264
9,076

(486)
(137)

167,777
8,938(1,506)－(1,506)

(718)

－

(718)

10,510－10,51011,389－11,389¥60,711¥4¥60,716¥8,818¥0¥8,81923

Relative information
For the year ended March 31, 2015
1. Information by business segment
Life insurance
business
Ordinary revenues fromexternal customers¥1,221,077

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥93,022¥38,224

Total¥1,352,325

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, 2016
1. Information by business segment
Life insurance
business
Ordinary revenues fromexternal customers¥1,227,409

Millions of yen
Non-life
Banking
insurancebusinessbusiness¥96,904¥37,731

Total¥1,362,044

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, 2015
Millions of yen
Reporting segments
Life insurance
business
Impairment losses¥10

Non-life
insurancebusiness－

OthersBankingbusiness

Consolidated

Total

¥60

¥71

－

¥71

For the year ended March 31, 2016
Millions of yen
Reporting segments
Life insurance
business
Impairment losses¥362

Non-life
insurancebusiness－

OthersBankingbusiness

Consolidated

Total
¥362

－

¥107

¥470

Information on amortization of goodwill and unamortized balance by business segment
For the year ended March 31, 2015
Millions of yen
Reporting segments
Life insurance
business
Amortization of
goodwill
Balance at end of
periodNon-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

－

－

¥79

¥79

－

¥79

－

－

¥99

¥99

－

¥99

For the year ended March 31, 2016
Millions of yen
Reporting segments
Life insurance
business
Amortization of
goodwill
Balance at end of
periodNon-life
insurancebusiness

OthersBankingbusiness

Consolidated

Total

－

－

¥79

¥79

－

¥79

－

－

¥19

¥19

－

¥19

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

25

3) Financial Instruments
Fair value information on financial instruments
Below is fair value information on financial instruments as of March 31, 2016, excluding securities whose fair values are notreadily determinable.
Financial assets
Millions of yen
As of March 31, 2016

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

Consolidatedbalance sheet
amount¥144,364
88,200Fair value

Difference¥144,364
88,200－－303,973

303,973－796,241
5,463,440

796,241
7,511,682－¥2,048,241

251,260

292,566

41,305

1,477,548
1,515,833

1,477,548－

1,664,235¥12,278,812

149,437¥2,238,984(1,035)
1,514,797¥10,039,827* Excludes general and specific reserves for possible loan losses.
Financial liabilities
Millions of yen
As of March 31, 2016

Deposits
Bonds payable
Collateral for securities lendingtransactions
Total Financial Liabilities

Consolidatedbalance sheet
amount¥1,912,592
20,000Fair value

Difference¥1,915,960
20,081¥3,36881

62,80462,804－¥1,995,397¥1,998,847¥3,449Derivative financial instruments
Millions of yen
As of March 31, 2016

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

Consolidatedbalance sheet
amount¥4,541(29,289)

Fair value¥(24,748)

Difference¥4,541(29,289)－－¥(24,748)－* 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 type, by estimating their future cash flows and then applying a prescribeddiscount rate. The discount rate is determined by adding to the LIBOR-based yield curve a premium corresponding to
the allowance rate of general provision for loan losses.
(ii) Policy loans in the life insurance business
The fair value of policyholder loans is valued by discounting future cash flows to their current value.

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.
Bonds payable
The fair value of bonds payable is the market price or the price indicated by a financial institution.
Collateral for securities lending transactions
The fair value is regarded as the carrying amount, as they are approximately equal.
Derivative Transactions
Please see “derivative financial instruments”,which indicates calculations of fair value.

27

Securities whose fair values are not readily determinable
Millions of yen
As of March 31, 2016
Non-consolidated subsidiaries and affiliates¥14,949that are unlisted*1*2
Investment in partnership
18,052
Total¥33,001*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 ¥153 million for the year ended March 31, 2016.
Impairment losses are principally recorded when their actual value as of the end of the fiscal year has declined by 50%
or more 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
Others
Policy-reserve-matching
securities
Bonds
Japanese government andmunicipal bonds
Japanese corporate bonds
OthersAvailable-for-sale securities
Bonds
Japanese government andmunicipal bonds
Japanese corporate bonds
OthersLoans*
Total¥144,364
88,200Millions of yen
As of March 31, 2016
More than 1
More than 5
year to 5 years
years to 10 years－－－－

Over 10 years
－
－

2,835
2,835

¥22,551
22,451¥236,260
236,160¥5,239,435
5,125,853

2,565

19,464

234,110

5,069,780

270
－

2,987
100

2,050
100

56,073
113,581

20,086

3,659－

218,130

20,086

3,659－

218,130

－

3,100

－

177,830

20,086－143,665
17,224559－
361,150
117,747－－
198,405
136,687

40,300－566,501
555,600

11,53082,757

108,383

555,550

5,694
126,440
29,591¥428,743

34,990243,403
61,525¥448,886

28,30461,71774,535¥509,20050
10,901
1,177,256¥7,201,323* This figure excludes loans of ¥171,649 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*
Bonds payable
Total¥1,796,872
10,000¥1,806,872

More than
1 yearto 2 years¥18,290
10,000¥28,290* Demand deposits are included in “1 year or less.”

28

Millions of yen
As of March 31, 2016
More than More than More than
4 years
3 years
2 years
to 5 years
to 4 years
to 3 years¥9,981¥13,750¥13,244－－－¥13,244¥9,981¥13,750More than
5 years¥60,452－¥60,452

4)Investments in Securities
Trading securities
Millions of yen
For the year ended
March 31, 2016
Valuation gains
charged to income¥(75,945)
Held-to-maturity securities
Millions of yen
As of March 31, 2016
Fair values exceeding the consolidatedbalance sheet amount
Consolidated
Grossbalance sheet unrealized
Fair value
amountgains

Consolidatedbalance sheet
amountTotal
Net
unrealized
gains

Fair value

Bonds
Japanesegovernment andmunicipal bonds
Japanese corporate
bonds¥5,418,387 ¥2,039,507 ¥7,457,895

Others53,786－－－45,053
8,733¥5,463,440 ¥2,048,241 ¥7,511,682 ¥5,463,440 ¥2,048,241 ¥7,511,682

Total

5,356,583

2,022,119

7,378,702－－－

61,804

17,38879,192－－－

Note: There were no fair values that did not exceed their consolidated balance sheet amount.

Policy-reserve-matching 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, 2016
Fair values not exceeding the consolidatedbalance sheet amount
Consolidated
Grossbalance sheet unrealized
Fair value
amountlosses

Total
Consolidatedbalance sheet
amountNet
unrealized
gains

Fair value¥245,519¥41,306¥286,826¥5,741¥(0)¥5,740－－－190,11130,131

220,242

－

－

－

－

－

－

55,408

11,17566,583

5,741

(0)

5,740

－

－

－

－
¥245,519－¥41,306－¥286,826－¥5,741－¥(0)－¥5,740－¥251,260－¥41,305－¥292,566

Available-for-sale securities
Millions of yen
As of March 31, 2016
Fair values exceeding the acquisition cost Fair values not exceeding the acquisition cost
Consolidated
Gross
Consolidated
Gross
Consolidated
Acquisition
Acquisition
balance sheet
balance sheet unrealizedbalance sheet unrealized
cost
cost
amountgains
amountlossesamount
Bonds
Japanese government
and municipal bonds
Japanese corporate
bonds
Equity securities
Others
Total

Total
Net
unrealized
gains

Acquisitioncost¥979,725 ¥148,449¥831,276¥6,790¥(11)¥6,801－－－

909,832

146,494

763,337

5,026

(7)

5,034

－

－

－

69,893

1,955

67,938

1,763

(3)

1,766

－

－

－

29,20915,027
14,181
310,742
11,992
298,750¥1,319,678 ¥175,469 ¥1,144,208

163
151,801¥158,754

(10)
(809)
¥(830)

173－－
152,610－－¥159,585 ¥1,478,433 ¥174,639－－¥1,303,793

Note: This chart as of March 31, 2016, excludes an investment in partnership of ¥18,052 million (consolidated balance sheet amounts).
Monetary claims purchased (trust beneficial interests) is included in the table above (consolidated balance sheet amounts and acquisition cost).

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, 2016
Sales
Gains on sales
Losses on sales¥161,541¥11,422¥26
127,256

11,392

4

34,285
1,292
35,120¥197,954

30
702
551
¥12,676

21
－
160
¥186

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, 2016.
“Material decline” is indicated when the market value is 30% or less than the acquisition cost.

305) Investments in Monetary Trusts
Other monetary trusts

Other monetary trusts

Millions of yen
As of March 31, 2016
Gross
Gross
unrealized
unrealized
gains
losses¥48,431－

Consolidatedbalance sheet
amount¥303,973

Acquisition
cost¥255,542

Note: Jointly invested monetary trusts included in the table above amount to ¥50 million for the year ended March 31, 2016.

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, 2016.
“Material decline” is indicated when the market value is 30% or less than the acquisition cost.

6) 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.
(i) Interest rate derivatives
Millions of yen
As of March 31, 2016
Notional amountOver
Fair value
Total
1 yearOver-the-counter transactions:Interest rate swaps:
fixed-rate receivable/floating-rate payable
floating-rate receivable/fixed-rate payable
Total¥26,921¥26,92125,921－

25,921－¥448

Valuation
gains (losses)

¥448

(25)

(25)

¥422

¥422

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 and the price indicated by a financial institution.

31

(ii) Currency derivatives
Millions of yen
As of March 31, 2016
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
BoughtTotal

Valuation
gains (losses)¥130,658
146,481

－
－

¥714
239

¥714
239

54,68820,508

－
－

1,920
794

1,920
794

210
211

－
－

(2)
2

0
0

－

680
¥4,349680¥4,35012,735－－

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 and other methods.

(iii) Stock derivatives
Millions of yen
As of March 31, 2016
Notional amount
Over
Total
Fair value
1 yearFinancial Instruments Exchange
Stock index futures
Sold
Total

¥72,793－－－¥(230)¥(230)

Valuation
gains (losses)¥(230)¥(230)

Notes:
1. The above transactions are valued at market, and valuation gains and losses are recorded in the consolidated statements of income.
2. The fair value is the closing price of the exchange at the end of the fiscal year.

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, 2016
Notional amount
Over
Total
1 yearDeferred hedge accounting
Interest rate swaps
floating-rate receivable/fixed-rate-payable
Fair value hedge accounting
Interest rate swaps
floating-rate receivable/fixed-rate-payable
Total

Fair value

Hedged item

¥50,111¥49,942¥(2,048) Loans, deposits

333,785

286,112(26,945) Available-for-sale securities (bonds)－¥(28,993)－

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 and other methods.

(ii) Currency derivatives
Millions of yen
As of March 31, 2016
Notional amount
Over
Total
1 yearFair value hedge accounting
Currency swaps
Total¥15,206－

Fair value－－

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

7) Subsequent Events
There were no applicable subsequent events.

33

Hedged item¥(296) Available-for-sale securities (bonds)¥(296)

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 following companies
Consolidated subsidiaries:
Sony Financial Holdings Inc.
Sony Life Insurance Co. Ltd.
Sony Assurance Inc.
Sony Bank Inc.
Sony Payment Services Inc.
SmartLink Network Hong Kong Limited.
Affiliated companies accounted for under the equity method:
AEGON Sony Life Insurance Co., Ltd.
SA Reinsurance Ltd.
Sony Lifecare Inc. and Lifecare Design Inc. are included in the scope of consolidation from the forecast of
consolidated financial results for the year ending March 31, 2017.

Statements made in this press release concerning the current plans, expectations, strategies and beliefs of theSony Financial Group. Any statements contained herein that are not historical facts are forward-looking
statements or pro forma information. Forward-looking statements may include—but are not limited to—words
such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “assume,” “forecast,” “predict,” “propose,”“intend” and “possibility” that describe future operating activities, business performance, events or conditions.
Forward-looking statements, whether spoken or written, may also be included in other materials released tothe public. These forward-looking statements and pro forma information are based on assumptions, decisions
and judgments made by the management of Sony Financial Group companies, and are based on informationthat is currently available to them. As such, they 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 to place undue reliance on forward-looking statements. SonyFinancial Group companies are under no obligation to revise forward-looking statements or pro forma
information in light of new information, future events or other findings. The information contained in thispresentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitationof any offer to buy or subscribe to any securities, nor shall it or any part of it form the basis of or be relied onin connection with any contract or commitment whatsoever in Japan or abroad.

For inquiries:
Corporate Communications & Investor Relations Dept.
Sony Financial Holdings Inc.
Telephone: +81-3-5785-1070
E-mail: press@sonyfh.co.jp
Website of Sony Financial Holdings Inc.
http://www.sonyfh.co.jp/index_en.html

34

VI. Attachment
Content of Presentation Material

Consolidated Financial Results for the Year Ended March 31, 2016 andSony Life’s Preliminary Market Consistent Embedded Value as of March 31, 2016
･ Consolidated Operating Results for the Year Ended March 31, 2016・・・・・・・・・・・・･ Consolidated Financial Forecast for the Year Ending March 31, 2017・・・・・・・・・・・・･ Dividend Forecast・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・･ Sony Life’s Preliminary MCEV and Risk Amount Based on Economic Value as ofMarch 31, 2016・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・･ Appendix・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・

35

3
29
31
33
37

Attachment

Presentation Material

Consolidated Financial Results for theYear Ended March 31, 2016
andSony Life’s PreliminaryMarket Consistent Embedded Valueas of March 31, 2016

Sony Financial Holdings Inc.
May 16, 2016
Sony Financial Holdings Inc. All Rights Reserved

Content
 Consolidated Operating Results for the Year Ended March 31, 2016

P.3



Forecast of Consolidated Financial Results for the Year Ending March 31, 2017 P.29



Dividend Forecast

P.31



Sony Life’s Preliminary MCEV and Risk Amount Based on

P.33

Economic Value as of March 31, 2016
Appendix

P.37

Disclaimers:
This presentation material contains statements concerning the current plans, expectations, strategies and beliefs of the Sony Financial Group. Anystatements contained herein that are not historical facts are forward-looking statements or pro forma information. Forward-looking statements may
include—but are not limited to—words such as “believe,” “anticipate,” “plan,” “strategy,” “expect,” “assume,” “forecast,” “predict,” “propose,” “intend” and“possibility” that describe future operating activities, business performance, events or conditions. Forward-looking statements, whether spoken or
written, may also be included in other materials released to the public. These forward-looking statements and pro forma information are based onassumptions, decisions and judgments made by the management of Sony Financial Group companies, and are based on information that is currently
available to them. As such, they 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 to place undue reliance on forward-looking statements.
Sony Financial Group companies are under no obligation to revise forward-looking statements or pro forma information 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 to any securities, nor shall it or any part of it form the basis of or be relied on in connection withany contract or commitment whatsoever in Japan or abroad.
*Unless otherwise indicated, in these materials figures less than the indicated unit have been truncated, while ratios and percentage changes have been rounded.
Also, a “–” is used where percentage changes exceed 1,000% and in cases where one or both comparisons are negative.
* “Lifeplanner” is a registered trademark of Sony Life.

Sony Financial Holdings Inc. All Rights Reserved2

Attachment

Consolidated Operating Results for
the Year Ended March 31, 2016

Sony Financial Holdings Inc. All Rights Reserved

3Management Message


In FY2015, Sony Life’s new policy amount surpassed ¥5 trillion, reaching the highest
level to date. Sony Bank also performed favorably, thanks to the introduction of Sony
Bank WALLET and other new products. As a result, the Group’s business volumecontinued to expand steadily. However, consolidated ordinary profit declined year on
year, owing to a rise in provision of policy reserves for minimum guarantees for variable
life insurance stemming from an increase in new policies and the worsened financial
market conditions at Sony Life.

In FY2016, we expect the business environment to worsen somewhat with negativeinterest rates continuing, but we anticipate that each Group company will continue to
steadily expand its field of business. Consequently, we forecast a 6.5% increase inconsolidated ordinary revenues year on year, essentially flat consolidated ordinary profit
and a rise in profit attributable to owners of the parent owing to a reduction in thecorporate tax rate.



As of March 31, 2016, Sony Life’s MCEV was down from a year earlier due to a significant
decline in yen interest rates. By responding promptly with measures including premium
revisions, Sony Life is working to improve profitability to ensure steady growth in MCEV
even under low interest rates environment.



For FY2015, we plan to pay a year-end dividend of ¥55 per share, up ¥15 year on year (forthe 4th consecutive year of dividend increases). For FY2016, we expect to maintain thislevel of dividends (¥55 per share) from FY2015, after taking into account our businessenvironment surrounding the Group and our forecast of consolidated financial results.
Sony Financial Holdings Inc. All Rights Reserved

4Attachment

Highlights of Consolidated Operating Performance (1)Consolidated ordinary revenues(Billions of yen)

Consolidated ordinary profit

1,352.3+0.7%

1,362.0

FY2015

Change1,223.9

1,230.2

+6.3

+0.5%
(23.1%)

Life
Insurancebusiness

Ordinary revenues
Ordinary profit

78.3

60.2

(18.0)

Non-life
Insurancebusiness

Ordinary revenues

93.0

96.9

+3.8

+4.2%

Ordinary profit

4.2

4.6

+0.4

+11.2%

Ordinary revenues

38.4

37.9

(0.4)

(1.3%)

Ordinary profit

7.3

5.9

(1.3)

(18.3%)

(3.1)

(3.0)

+0.0

－

0.2

0.2

+0.0

+3.7%

1,352.3

1,362.0

+9.7

+0.7%

Ordinary profit

90.0

71.1

(18.9)(21.1%)

Profit attributableto owners of theparent54.4

43.3(11.0)(20.3%)

Bankingbusiness
Intersegment
adjustments*(21.1%)

90.0

FY2014

71.1

Ordinary revenues
Ordinary profit
Ordinary revenues

Consolidated*Ordinary profit in “Intersegment adjustments” is mainly from SFH.
*Comprehensive income: FY2014: ¥90.7billion, FY2015: ¥71.1 billion

FY2014FY2015(Billions of yen)

Consolidated

Change from
15.3.3115.3.31

16.3.31

Net assets

550.6

604.3

+53.7

+9.8%

Total assets

9,545.8

10,352.1+806.2+8.4%(Billions of yen)Sony Financial Holdings Inc. All Rights Reserved

5Highlights of Consolidated Operating Performance (2) Life Insurance Business: Ordinary revenues were almost flat year on year. This was due to an increase ininsurance premium revenues reflecting a favorable acquisition of new policies and an increase in gains onsale of securities in the general account, substantially offset by a deterioration in investment performancein the separate account, driven by the worsened financial market conditions. Ordinary profit decreased
year on year. This was due to a significant increase in provision of policy reserves for minimum guarantees
for variable life insurance as a result of an increase in new policies and the worsened financial market
conditions. Moreover, increased expenses incurred by strong sales of new policies also contributed to thedecrease in profit.
 Non-life Insurance Business: Ordinary revenues rose year on year, owing to an increase in net premiums

written primarily for mainstay automobile insurance. Ordinary profit increased year on year. This was due
to a decline in provision for reserve for outstanding losses led by a lower car accident ratio, as well as therise in ordinary revenues.
 Banking Business: Ordinary revenues decreased year on year, mainly due to a decline in gains on sale ofbonds despite higher revenues related to mortgage loans. Ordinary profit decreased year on year due toan increase in operating expenses, as well as the decline in ordinary revenues.
 Consolidated ordinary revenues increased 0.7% year on year, to ¥1,362.0 billion, owing to increases inordinary revenues from the life insurance and the non-life insurance businesses, whereas ordinary
revenues from the banking business decreased. Consolidated ordinary profit decreased 21.1% year on
year, to ¥71.1 billion, owing to decreases in ordinary profit from the life insurance and the banking
businesses, whereas ordinary profit from the non-life insurance business increased. Profit attributable toowners of the parent was down 20.3% year on year, to ¥43.3 billion due to the decrease in ordinary profit.

Sony Financial Holdings Inc. All Rights Reserved

6

Attachment

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

Ordinary profit(Billions of yen)

1,230.1

1,223.8

1,230.1

+6.3

+0.5%

1,028.0+114.0+12.5%

Investment income

280.1

170.5

(109.6)(39.1%)

60.7

133.5

141.4

+7.8

+5.9%

Income from monetary trusts, net

5.2

11.9

+6.6

+126.6%

Gains on sale of securities

8.8

12.2

+3.3

+37.1%(126.7)(100.0%)126.7－

1,144.1

1,169.3

+25.1

+2.2%

Insurance claims and other payments

382.9

363.3

(19.5)(5.1%)

Provision for policy reserves and others

604.3

613.4

+9.1

+1.5%

9.7

23.3

+13.6

+140.6%

－

14.7

+14.7

－

115.6

133.3

+17.7

+15.3%

Ordinary profit

79.6

60.7

(18.8)(23.7%)Net income

42.5

37.0

(5.4)

(12.8%)

15.3.31

16.3.31

Gains on separate accounts, net
Ordinary expenses(Billions of yen)

◆ Ordinary revenues were almost flat but ordinary profit
decreased year on year.
◆ Income from insurance premiums increased year on
year, reflecting a steady increase in policy amount inforce.
◆ Investment income decreased due to a deterioration in
investment performance in the separate account, driven
by the worsened financial market conditions.
◆ Ordinary profit decreased year on year. This was due toa significant increase in provision of policy reserves forminimum guarantees for variable life insurance as aresult of an increase in new policies and the worsened
financial market conditions, partially offset by anincrease on gains on sale of securities in the generalaccount . Moreover, increased expenses incurred bystrong sales of new policies also contributed to thedecrease in profit.

Change914.0

79.6 (23.7%)

FY2015FY2015

1,223.8

Interest income and dividends

FY2014FY2014

Income from insurance premiums

Ordinary revenues

+0.5%

（億円）

Investment expenses
Losses on separate accounts, net
Operating expenses(Billions of yen)

Change from 15.3.31

Securities

6,543.7

7,273.3+729.6

Policy reserves

6,727.2

7,336.5+609.2

+9.1%

432.5

482.1

+49.6

+11.5%Net assets
Net unrealized gains on other securities
Total assets
Separate account assets+11.2%

118.1

150.6

+32.5

+27.5%

7,301.3

8,035.4+734.0+10.1%

793.3

850.3

+56.9

+7.2%

Sony Financial Holdings Inc. All Rights Reserved

7

Overview of Operating Performance:
Sony Life (Non-consolidated)
FY2014FY2015

New policy amount

4,771.6

5,151.3+8.0%

Lapse and surrender amount

2,088.4

1,931.4(7.5%)

Lapse and surrender rate

5.35%

4.72%

(0.63pt)

Policy amount in force

40,988.7

43,149.8+5.3%

Annualized premiums from new policies

76.6

85.0

+11.0%Of which, third-sector products

15.2

15.7

+2.8%

735.7

781.3

+6.2%

172.8

179.7

+4.0%

(Billions of yen)

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

ChangeFY2014FY2015

ChangeGains from investment, net (General account)

143.6

161.8

+12.7%

Core profit

76.5

43.0

(43.8%)

Positive spread

13.0

15.3

+17.7%(Billions of yen)

Non-consolidated solvency margin ratio

15.3.31

16.3.31

Change from
15.3.312,555.0%

2,722.8%+167.8pt

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
the total 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.

Sony Financial Holdings Inc. All Rights Reserved<Reasons for changes>◆ Increased due to higher sales ofvariable life insurance andvariable annuities.

◆ Increased due to higher sales ofvariable life insurance, lump-sum
payment whole life insurance andvariable annuities.

◆ Decreased year on year due toa significant increase inprovision of policy reserves forminimum guarantees forvariable life insurance as aresult of an increase in newpolicies and the worsened
financial market conditions,despite higher positive spread.
Moreover, increased expenses
incurred by strong sales of newpolicies also contributed to thedecrease in profit.

8

Attachment

Operating Performance :Sony Life (Non-consolidated) (1)
Number and Amount of New Policies(Individual Life Insurance + Individual Annuities)
New policy amount(Individual Life Insurance + Individual Annuities)

Number of new policies

+3.8%

606
(Trillions of yen)

Annualized Premiums from New Policies
Annualized premiums from new policies

629(Thousands ofpolicies)(Billions of yen)

600

533

500

6
+8.0%

4.77

5

Of which, third-sector

85.0
76.6

80

5.15
400

+11.0%

63.9
60

3.88

4

300
40

3
200
2
100

1
0

20

+2.8%

13.4
0
FY20130

FY201415.2

15.7

FY2014FY20150

FY2015FY2013

Sony Financial Holdings Inc. All Rights Reserved

9Operating 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(Trillions of yen)

50

40

6.67

+5.6%

40.9

+5.3 %

6.33
39.0

Annualized premiums from insurance in force

Number of policies in force

7.04(Millions of policies)

7

43.1

30

(Billions of yen)

781.3

800

696.9

6
5

Of which, third-sector

735.7

+6.2%

600

4
400
3

20

2
10
1
0

0
14.3.3115.3.31

16.3.31

+4.0%

200
167.0

172.8

179.7

14.3.3115.3.31

16.3.310Sony Financial Holdings Inc. All Rights Reserved

10Attachment

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

(%)

8

5.35

6

(0.63pt)

4.61

4.72

4

2

0
FY2013

FY2014FY2015*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

11

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

1,028.0
1,000Interest Income and Dividends

960.9

150

914.0

122.1

+12.5%

133.5

+5.9%

141.4

800
100
600

400

50

200

0

0
FY2013

FY2014FY2015FY2013

Sony Financial Holdings Inc. All Rights Reserved

FY2014FY2015

12

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

Ordinary Profit(Billions of yen)

80

72.3

(Billions of yen)

76.5

79.6

80

(23.7%)

69.2
60.7(43 8%)(43.8%)

60

60

43.0
40

40

20

20

0

0
FY2013

FY2014FY2013

FY2015(Reference) Impact on core profit(Billions of yen)

FY2014FY2015(Reference) Main differences from Core Profit(Billions of yen)

FY2013

FY2014FY2015FY2013

FY2014FY2015

8.4

13.0

15.3

1.1

10.7

Provision of policy reserves for minimum guarantees
for variable life insurance (*1)

Capital gains (losses) excluding gains or losses onhedges (*1)

(4.2)

(10.6)(34.7)

Gains (losses) on hedges of variable life insurance

－

(2.3)

3.9

Effects by the revision of policy reserve discount rate
(Interest rate-sensitive whole life insurance) (*2)

(5 7)
(5.7)

－

－

(4 1)
(4.1)

(5 0)
(5.0)

(6 4)
(6.4)

Positive spread

Provision of contingency reserve (*1)
( 1)

20.4

*1: “Provision of policy reserves for minimum guarantees for variable life insurance” and “Provision of contingency reserve” are described as negative amount.
Capital gains (losses) exclude gains or losses on hedges of variable life insurance.
*2: The effected amount of a surge of sales of interest rate-sensitive whole life insurance due to a delay in rising insurance premiums (May 2013) against the revision of policy reserve discount rate.

Sony Financial Holdings Inc. All Rights Reserved

13

Operating Performance :Sony Life (Non-consolidated) (6)
Number of Lifeplanner Sales Employees
+283

4,612
[206]

(Number)

4 00
4,500

4,216
[138]

4,228
[146]

14.3.3114.6.30

4,248
[150]

4,216
[155]

4,329
4
329
[161]

4,352
4
352
[174]

15.3.3115.6.30

4,415
[183]

4,376
,
[194]
+236

4,000

3,500

3,000
0
14.9.30

14.12.31

15.9.30

15.12.31

16.3.31

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.

Sony Financial Holdings Inc. All Rights Reserved

14

Attachment

Operating Performance :Sony Life (Non-consolidated) (7)Breakdown of General Account Assets
15.3.31(Billions of yen)

<Asset management review>

16.3.31

Amount%Amount

%5,606.8

86.2%

6,351.1

88.4%

Japanese stocks

42.4

0.7%

33.3

0.5%

Foreign bonds

105.5

1.6%

70.1

1.0%

Japanese governmentand corporate bonds

26.0

Foreign stocks

23.0

0.4%

<Bond duration>
Mar. 31, 2014: 19.7 years

0.3%

Monetary trusts

313.2

4.8%

280.9

3.9%

Policy loans

162.3

2.5%

171.6

2.4%

Real estate*

117.7

1.8%

115.8

1.6%

Cash and call loans

56.8

0.9%

52.5

0.7%

Others

76.7

1.2%

86.4

1.2%

6,508.0

100.0%

7,185.0

100.0%Total

We have continued to accumulate ultralongterm bonds to match the liability
characteristics of insurance policies withlong-term maturities with the aim of reducing
interest rate risk.

Mar. 31, 2015: 20.3 years
Mar. 31, 2016: 21.8 years■ Investment in the monetary trusts is mainly into
Japanese government and corporate bonds.
■ The holding ratio on the real status of Japanese
government and corporate bonds including
those invested in monetary trusts in the generalaccount: As of Mar. 31, 2016: 92.3%(As of Mar. 31, 2015: 91.0%)*Real estate is the total of land, buildings, and construction in progressSony Financial Holdings Inc. All Rights Reserved

15

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

Positive Spread(%)(Billions of yen)

15.3

15

3.00

Average assumed interest rate

+17.7%

Investment yield for core profit

13.0
2.35
10

8.4
2.00

2.18

2.35

2.12

2.31
2.06

5

0

1.00
FY2013

FY2014FY2015FY2013

Sony Financial Holdings Inc. All Rights Reserved

FY2014FY2015

16

Attachment

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

(%)

3,000

2,722.8
2,555.0
2,500

2,358.7+167.8pt

2,000

1,500

1,000014.3.3115.3.31

16.3.31Sony Financial Holdings Inc. All Rights Reserved

17

Attachment

Highlights of Operating Performance:
Sony Assurance
Ordinary profit

Ordinary revenues

FY2014FY2015

93.0

96.9

+3.8

+4.2%

Underwriting income

91.7

95.6

+3.8

+4.2%

Investment income

1.2

1.2

+0.0

+2.3%

88.8

92.2

+3.4

+3.8%

Underwriting expenses

65.6

67.7

+2.1

+3.2%

Investment expenses

0.0

0.0

+0.0

+372.7%

Operating general andadministrative expenses

23.1

24.4

+1.2

+5.5%

Ordinary profit

4.2

4.6

+0.4

+11.2%Net income

2.2

2.5

+0.3

+15.8%

15.3.31

16.3.31

Underwriting reserves

86.5

95.7

+9.1

+10.6%Net assets

24.7

28.3

+3.5

+14.4%

Total assets

157.9

172.3

+14.4

+9.1%

(Billions of yen)

+4.2%

93.0

Ordinary revenues

96.9

Ordinary expenses+11.2%

4.6

4.2

FY2014FY2015

Change(Billions of yen)

◆ Ordinary revenues and ordinary profit increased
year on year.
◆ Ordinary revenues rose year on year, owning toan increase in net premiums written primarily formainstay automobile insurance.
◆ Ordinary profit increased year on year, due to a
decline in provision for reserve for outstanding
losses led by a lower car accident ratio, as well as
the rise in ordinary revenues.

(Billions of yen)

Change from
15.3.31Sony Financial Holdings Inc. All Rights Reserved

18

Overview of Operating Performance:
Sony Assurance(Billions of yen)

FY2014FY2015<Reasons for changes>

ChangeDirect premiums written

90.4

94.3

+4.2%

Net premiums written

91.7

95.5

+4.2%

Net losses paid

45.9

48.1

+4.6%

Underwriting profit

3.0

3.4

+14.0%Net loss ratio

57.6%

57.8%

+0.2ptNet expense ratio

26.7%

27.1%

+0.4ptCombined ratio

84.3%

84.8%

+0.5pt◆ Increased mainly in its mainstay
automobile insurance.

◆ Increased mainly due to higher
advertising expenses.

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

FY2014FY2015

ChangeE.I. loss ratio

64.3%

63.3%

(1.0pt)E.I. loss ratio +Net expense ratio

91.0%

90.4%

(0.6pt)◆ Declined reflecting lower car
accident ratio.

Notes:
Earned/Incurred (E.I.) 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.]

Number of policies in force
Non-consolidated
solvency margin ratio

15.3.31

16.3.31

Change from 15.3.31

1.70 million

1.79 million+0.09 million

629.6%

693.5%+5.8%+63.9pt

Note: 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.

Sony Financial Holdings Inc. All Rights Reserved

19

Attachment

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

Net Premiums Written

FY2014FY2015

Change

Fire

332

348

+4.6%

Marine－－－Personal accident

8,576

8,679

+1.2%

Voluntary automobile

81,58585,308+4.6%(Millions of yen)Compulsory
automobile liability
Total

－

－

－

90,49594,336+4.2%

FY2014FY2015

ChangeFire31(46.1%)

Marine90

46(48.9%)

Personal accident

2,265

2,472

+9.1%

Voluntary automobile

42,41444,320+4.5%

Compulsory
automobile liability

1,212

1,270

+4.8%

45,985

48,111

+4.6%

Total

FY2015

Change

Fire

45

44

(2.8%)

Marine11044(59.7%)

Personal accident

8,845

8,953

+1.2%

Voluntary automobile

81,375

85,123+4.6%

Compulsory
automobile liability

1,335

1,384

+3.6%

91,712

95,549

+4.2%

Total

*Medical and cancer insurance is included in personal accident.

Net losses paid
(Millions of yen)

FY2014(Millions of yen)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
Personal accident insurance
OthersNumber of policies in force(Billions of yen)
120

1.61

100

88.6

1.70

+5.8%

1.79

(Billions of yen)

7.6

8

7.1

(Millions ofpolicies)

6

91.7+4.2 %

95.5

1.4

1.5

4.2

8.9

4.6

4.2

4

80
1

60

+11.2%

3.0

85.1
2

40
0.5

20

0
FY2013

FY2014FY2015*Adjusted ordinary profit = Ordinary profit + Provision for catastrophe reserve

00

FY2013

FY2014FY2015(Reference) Provision for catastrophe reserve(Billions of yen)

FY2013The 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.

Provision for catastrophe reserve

FY2014
1.2

FY20152.8

3.0*Provision for catastrophe reserve is described as positive amount.

Sony Financial Holdings Inc. All Rights Reserved21

Attachment

Operating Performance:
Sony Assurance (2)Earned/Incurred Loss Ratio +Net Expense Ratio
Earned/Incurred loss ratio＜参考＞ (Reference) Combined Ratio(Net Loss Ratio+ Net Expense Ratio)

Net loss ratio

Net expense ratio

(%)

(%)

100

100

93.8

84.9

(0.6pt)

80

60

90.4

91.0

68.2

64.3

(1.0 pt)

Net expense ratio

84.3+0.5pt57.6+0.2pt

84.8

80

60

63.3

59.3

57.8

40

40

+0.4pt

20

25.6

26.7

FY2013

FY2014+0.4pt

20

27.1

25.6

26.7

FY2013

FY201427.1

00
FY2015

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.]

FY2015

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

693.5%
629.6%

600

527.6%+63.9pt

400

200

0
14.3.3115.3.31

16.3.31Sony Financial Holdings Inc. All Rights Reserved

23

Attachment

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

Consolidated ordinary revenues
Consolidated ordinary profit

38.4

5.9

7.3

FY2014FY2015

Consolidated ordinary revenues

38.4

37.9

(0.4)

(1.3%)

Consolidated ordinary profit

7.3

5.9

(1.3)

(18.3%)

Profit attributable to owners of
the parent

4.5

3.9

(0.6)

(14.8%)FY2014FY2015

Ordinary revenues

35.7

34.8

(0.8)

(2.3%)

Gross operating profit

22.5

21.6

(0.8)

(3.9%)Net interest income

16.6

16.5

(0.1)

(0.8%)Net fees and commissions

0.0

0.1

+0.1

+448.7%

Net other operating income(Billions of yen)

37.9

(1.3%)(18.3%)

Change<Non-consolidated>(Billions of yen)

FY2014FY2015(Billions of yen)<Consolidated>◆Ordinary revenues decreased year on year, mainly
due to a decline in gains on sale of bonds despite
higher revenues related to mortgage loans. Ordinary
profit decreased year on year due to an increase inoperating expenses, as well as the decline inordinary revenues.
<Non-consolidated＞◆ Both gross operating profit and net operating profit
decreased year on year.
・Net interest income decreased due to lower
interest income and dividends on securities.
・Net fees and commissions improved due to higher
fees on mortgage loans.
・Net other operating income decreased due to a
decline in gains on sale of bonds.

Change

5.8

5.0

(0.8)

(14.6%)

General and administrative
expenses

15.3

15.9

+0.6

+4.2%

Net operating profit

7.2

5.7

(1.4)

(19.6%)

Ordinary profit

7.2

5.8

(1.4)

(19.8%)Net income

4.6

3.9

(0.7)

(15.6%)

15.3.31

16.3.31

77.0

77.4

+0.3

+0.5%

6.6

3.3

(3.2)

(49.7%)

2,062.5

2,126.5

+64.0

+3.1%

(Billions of yen)

Net assets
Net unrealized gains onother securities, net of taxes
Total assets

Change from
15.3.31Sony Financial Holdings Inc. All Rights Reserved

24

Overview of Operating Performance:
Sony Bank (Non-consolidated) (1)<Reasons for changes>
15.3.31

16.3.31

Customer assets

2,007.9

2,034.4

+26.5

+1.3%

Deposits

1,878.2

1,923.5

+45.2

+2.4%

Yen

1,551.0

1,587.9

+36.9

+2.4%

327.2

335.5

+8.3

+2.5%

Investment trusts

129.6

110.9

(18.7)(14.4%)

Loans outstanding

1,187.1

1,344.1+156.9+13.2%

Mortgage loans

1,074.3

1,237.1+162.7+15.1%(Billions of yen)

Foreign currency

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

Capital adequacy ratio*3(domestic criteria)*1Change

112.8

107.0

(5.7)

(5.1%)

1.05
million

1.13
million+0.07
million

+7.3%

0.28%

0.23%

(0.05pt)

10.66%

9.90%(0.76pt)◆ Yen deposit balance increased
reflecting special interest rates
offerings for yen time deposits in thesecond half.
◆The yen-denominated balance of
foreign currency deposits increased
due to higher foreign currency
purchases, driven by rising market
sentiment that yen depreciation had
nearly stopped.
◆ Loan balance expanded reflecting a
growing balance of mortgage loans.

◆ Number of accounts increased due toa launch of Sony Bank WALLET
service in Jan. 2016.
◆ Sony Bank maintained an extremely
low non-performing assets ratio.

*1 Loans in others include corporate loans of ¥96.4billion*2 Non-performing loans (loans based on the Financial Reconstruction Act) /Total loan exposure*3 Please refer to the graph of the non-consolidated capital adequacy ratio (domestic criteria) on P28.

Sony Financial Holdings Inc. All Rights Reserved25

Attachment

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

FY2014FY2015

22.4

21.6

(0.8)

(3.8%)

18.2

18.8

+0.5

+3.0%

0.9

0.9

(0.0)

(1.6%)Net other operating income

3.2

1.8

(1.3)

(43.0%)

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

19.2

19.7

+0.5

+2.7%

Operating expenses and otherexpenses ③

15.2

15.9

+0.6

+4.5%

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

4.0

3.8

(0.1)

(3.8%)(Billions of yen)

Gross operating profit
Net interest income*1①

Net fees and commissions

*2

②

*3

ChangeYield on investment

Yield on financing

Interest spread

(%)

1.5

1.0

1.20

1.20

0.92

0.93
0.93
+0.01pt■Managerial accounting basis

0.5

The following adjustments are made to the figures on a financial account for profits and

0.28

0.27

FY2014FY2015losses 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 in foreign
currency transactions recorded in net other operating income.

0.0*3: Net other operating income: After the above adjustments (*1 and *2), consists of profits andlosses for bond and derivative dealing transactions.
■Core profit

Note: Interest spread=(Yield on investment)-(Yield on financing)

Profits and losses exclude net other operating income, which includes those on bond andderivative dealing transactions, and stands for Sony Bank’s basic profits.

Sony Financial Holdings Inc. All Rights Reserved

26

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

Deposits
Yen deposits

Foreign currency deposits

Mortgage loans

Others(Billions of yen)

1,500(Billions of yen)

2,000

1,344.1

1,890.0

1,878.2

363.5

327.2

1,923.5+45.2

1,057.4

335.5

1,000

1,500

107.0

1,187.1
112.8*corporate loansof ¥96.4billion+156.9108.1

1,237.1

1,000

949.3
1,526.4

1,551.0

1,587.9

14.3.3115.3.31

16.3.311,074.3

500

500

0

0

14.3.31Sony Financial Holdings Inc. All Rights Reserved

15.3.31

16.3.3127

Attachment

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

Balance of Securities by Credit Rating
AAA
BBB

AA
A
Others(%)(Billions of yen)

800

773.8

(Domestic Criteria)

15

730.0

11.72
10.66 (0.76pt)

620.9
600

9.90

10

(109.0)

400
5

200

0
14.3.310
14.3.3115.3.31

16.3.3115.3.31

16.3.31*Calculated based on the standard FSA Notification No. 19 (2006), which establishes
standards based on Article 14-2 of the Banking Act of Japan for determining thecapital adequacy of a bank in light of the assets held by the bank.

Sony Financial Holdings Inc. All Rights Reserved28

Attachment

Forecast of Consolidated Financial Results
for the Year Ending March 31, 2017

Sony Financial Holdings Inc. All Rights Reserved

29

Forecast of Consolidated Financial Results for FY2016
Consolidated ordinary revenues are expected to increase, consolidated ordinary profit is expected to be almost flat,and profit attributable to owners of the parent is expected to increase.
(Billions of yen)

FY2015 (Actual)

FY2016 (Forecast)

Change1,362.0

1,450.0+6.5%

1,230.2
96.9
37.9

1,309.8
101.6
37.9

+6.5%
+4.8%
(0.1%)

Consolidated ordinary profit

71.1

71.0

(0.1%)

Life insurance business

60.2
4.6
5.9

62.5
4.4
4.5

+3.8%
(6.0%)(24.9%)

43.3

46.0

+6.1%

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

Non-life insurance businessBanking businessProfit attributable to owners of the parent

For FY2016, stable and sustainable business growth is expected in all the businesses.
Consolidated ordinary revenues are expected to increase because we anticipate higher revenues in the life insurance business. Consolidated ordinary profit is expected
to be almost flat because we anticipate an increase in profit in the life insurance business, offset by a decrease in profit in the banking business. Profit attributable toowners of the parent is expected to increase due to the impact of a reduction in the effective corporate income tax rate for FY2016, compared with FY2015’s negative
impact of the reversal of deferred tax assets, accompanied by the cut in corporate income tax.
<Segment information for ordinary revenues and ordinary profit＞■Life insurance business
Ordinary revenues are expected to increase year on year because we anticipate stable increases in insurance premium revenues and investment income.
Ordinary profit is expected to increase year on year because we expect a positive impact of a decline in provision of policy reserves for minimum guarantees forvariable life insurance to be offset by lower gains on sale of securities.
■Non-life insurance business
Ordinary revenues are expected to increase year on year in line with growth in net premiums written primarily for automobile insurance.
Ordinary profit is expected to decrease year on year because we expect the loss ratio to be higher than the ratio in FY2015.
■Banking businessAlthough we anticipate stable growth in business scale, ordinary revenues are expected to be flat year on year due to lower interest rates associated with the BOJ’s
introduction of negative interest rates.
Ordinary profit is expected to decrease year on year due to an increase in up-front expenses incurred by investment on measures to expand the customer base overthe medium term, in addition to an expected lower interest spread.
*Please see page 40 for the detail of Life insurance business forecast.

Sony Financial Holdings Inc. All Rights Reserved30

Attachment

Dividend Forecast

Sony Financial Holdings Inc. All Rights Reserved

31

Dividend Forecast for FY2016
The dividend forecast for FY2016 is ¥55 per share, unchanged from
FY2015, after taking into account our business environment and ourforecast of consolidated financial results.
<Medium-term Dividend Policy> Our basic dividend policy is to steadily increase dividends in line with earnings growth over the
medium and long terms.
 Our target for the dividend payout ratio is 40% to 50% of profit attributable to owners of the parent.
Note: We will determine specific dividend amounts for each fiscal year by taking into account a comprehensive range of factors,
including capital adequacy, investment opportunities, business forecasts and legal and regulatory developments.

■ Profit attributable to owners of the parent and dividend results/forecast
FY2012FY2013

FY2014FY2015FY2016(Forecast)Profit attributable to owners of the parent

Net income per share
Dividend per share
Dividend payout ratio (consolidated)¥45.0 billion¥40.5 billion¥54.4 billion¥43.3 billion¥46.0 billion¥103.60¥93.11¥125.10¥99.67¥105.75

¥25

¥30

¥40

¥55(Expected)

¥55

24.1%

32.2%

32.0%

55.2%

52.0%

Sony Financial Holdings Inc. All Rights Reserved

32

Attachment

Sony Life’s Preliminary MCEV and
Risk Amount Based on Economic Valueas of March 31, 2016

Please keep in mind that the validity of the calculation of MCEV as of March 31, 2016 has not been verified by outside specialists.
The calculation of MCEV as of March 31, 2016, in accordance with the MCEV principles and verified by outside specialists, is scheduled
to be announced on May 23, 2016.
A part of the calculation of MCEV as of December 31, 2015 adopted simplified method and has not been verified by outside specialists.
*In this part, figures, ratios and percentages changes have been rounded.

Sony Financial Holdings Inc. All Rights Reserved

33Sony Life’s MCEV(Billions of yen)

MCEV
Adjusted net worth
Value of existing business(Billions of yen)

New business value
New business margin15.3.3115.12.31

16.3.31

Change from
15.3.31

Change from
15.12.31

1,322.9

1,386.9

1,063.7(259.2)(323.3)

1,119.2

1,229.5

2,074.4

955.2

844.9

203.7

157.4

(1,010.7)(1,214.4)(1,168.2)

Previous method

New method

New method

FY14
(12M)
48.6

FY15.3Q
(9M)
37.0

FY15
(12M)
35.2

3.8%

3.2%

2.4%

Notes:
1. Calculated MCEV as of December 31, 2015 by using updated economic assumptions and lapse and surrender rate from March 31, 2015.
2. The method of calculating new business value and new business margin for FY15.3Q (9M) and FY15 (12M) has been changed from the previous method based on
economic assumptions as of the valuation date to a method of accumulating new business value for each quarter.

 Reasons for changes in MCEV

・MCEV as of March 31, 2016 decreased ¥323.3 billion from December 31, 2015 and decreased ¥259.2 billion from March
31, 2015 due to a significant decline in interest rates in Japanese yen. While the value of existing business decreased
significantly, most of the decrease was offset by an increase in the adjusted net worth with the benefit of ALM.
 New business value / new business margin
・For new business value, the method was changed to one of accumulating new business value for each quarter (3M).
・For FY15.4Q (3M), the new business value was negative ¥1.7 billion, and the new business margin was negative 0.5%.
・For FY15 (12M), the new business value was ¥35.2 billion, including ¥37.0 billion for FY15.3Q (9M) and negative ¥1.7
billion for FY15.4Q (3M).
 By responding promptly with measures including premium revisions, Sony Life is working to improve profitability
to ensure steady growth in MCEV even under low interest rates environment.
*Please see page 48 for trend on JGB yield.

Sony Financial Holdings Inc. All Rights Reserved34

Attachment

Changes on Sony Life’s Calculation Method
for New Business Value
Difference between previous
and new method+9.7(Billions of yen)

(1.7)*[ (0.5%)]**

15.2*[3.9%]**

37.0*[3.2%]**

9.3*[2.5%]**

35.2*[(2.4%)]**

27.3[2.4%]**
12.5*[3.2%]**

FY15.1Q(3M)

FY15.2Q(3M)

FY15.3Q(3M)

40 year JGB yield

40 year JGB yield

40 year JGB yield

40 year JGB yield

40 year JGB yield

1.39%

1.57%

1.51%

1.39%

0.63%

FY15.3Q(9M)

FY15.4Q(3M)

FY15.3Q
(9M)

FY15
(12M)

New method

Previous method* New business value for each of the quarter is calculated using economic assumptions at the end of that quarter.
** Figures in [ ] shows new business margin.

【Reference】 Product revisions and sales suspensions in FY2015
May 2015：Discontinued sales of Educational Endowment Insurance (Non-participating)
Aug. 2015：Funding limits on Variable life insurance (Whole life type)Jan. 2016：Premium revision on Variable life insurance (Whole life type) and premium revision andrecommenced sales of Educational Endowment Insurance (Non-participating)Sony Financial Holdings Inc. All Rights Reserved

35Sony Life’s Risk Amount Based on Economic Value(after tax)
(Billions of yen)

15.3.3115.12.31

16.3.31

Insurance risk*

724.2

782.6

1,097.6

Market-related risk

287.0

301.1

256.3

Of which, interest rate risk**

218.5

232.0

183.6

Operational risk

25.9

26.7

31.4

Counter party risk

1.8

2.8

2.0

Variance effect(293.4)(313.3)(368.1)

The risk amount based on economic value

745.5

799.9

1,019.2(* ) Insurance risk excluding the variance effect within Life module and Health module.
(**) Interest rate risk excluding the variance effect within market-related risk.
(Billions of yen)

15.3.3115.12.31

16.3.31

MCEV

1,322.9

1,386.9

1,063.7

ESR

177%

173%

104%

Notes:
1. The risk amount based on economic value refers to the total amount of Sony Life’s risks comprehensively examined by a market consistent approach, 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 standard method.
3. ESR=MCEV / Risk amount based on economic value.

 ESR fell sharply, but going forward Sony Life will monitor interest rate fluctuations and consider response
measures aimed at improving soundness.
Sony Financial Holdings Inc. All Rights Reserved36

Attachment

AppendixSony Financial Holdings Inc. All Rights Reserved

37

Recent Topics 1
AEGON Sony Life Insurance
Launch of sales: December 1, 2009
Common stock: ¥14 billion
Equity ownership: Sony Life insurance Co Ltd 50%, AEGON international B.V. 50%
Marketing products: Individual Variable Annuities
Sales Channels: Lifeplanner sales employees and partner Banks (26*) *As of May 16, 2016
SA Reinsurance Ltd
Established： October 29, 2009
Common stock: ¥13.4 billion
Equity ownership: Sony Life insurance Co., Ltd. 50%, AEGON international B.V. 50%
Business： Reinsurance businessNote) 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 21% of the balance of mortgage loans as of March 31, 2016
Sony Life accounts for 14% of the amount of new mortgage loans for FY2015*Sony Life started handling banking agency business in January 2008.

Sony Assurance’s Auto Insurance Sold by Sony Life
■Sony Life accounts for 4% of new automobile policies for FY2015*Sony Life started handling automobile insurance in May 2001.

Sony Financial Holdings Inc. All Rights Reserved38

Attachment

Recent Topics 2
2015-04-01<Highlights for FY2015>

Sony Life changed its President, Representative Director.

2015-04-01

Sony Life opened its new sales office in Fukui prefecture.

2015-04-01

SmartLink Network, Sony Bank’s subsidiary, changed its corporate name to Sony Payment Services Inc.

2015-04-30

Sony Lifecare entered into an agreement to enter capital participation in Yuuai Holdings Co., Ltd.
Sony Life commenced sale of a new product: “Lump-sum Payment Whole Life Insurance (No-notification Type) “

2015-05-02*Discontinued sales from March 20162015-06-01

Sony Bank began offering “Yen Time Deposits plus+ ”

2015-06-24

Sony Bank changed its President, Representative Director.

2015-07-01

Sony Assurance commenced operations at “Kumamoto Contact Center”

2015-07-13

Sony Bank began handling a new type of card loans.

2015-10-01

Sony Assurance introduced a system for the direct payment to medical institutions of advance medical insurance claims.

2015-11-02

Sony Life commenced sale of a new product: “Living Benefit Term Life Insurance (living Standard Type)"

2016-01-04

Sony Bank commenced service of “Sony Bank WALLET,” a cash card with a Visa debit function.

2016-03-16

Sony Life began immediate underwriting of new policies, the first in the Japan’s Life insurance industry.

2016-04-01

Sony Life opened its new sales office in Akita and Yamaguchi prefecture.

2016-04-01

Sony Lifecare Group opened its first newly built nursing care home “SONARE Soshigaya-Okura” in Tokyo

2016-04-28

Sony Life announced an opening of a Representative Office in Singapore in July 1, 20162016-05-02

Sony Life commenced sale of a new product: “Level Premium Plan Term Life Insurance with Reduced Surrender Value(Disability/Nursing Care Type)” and “Level Premium Plan Term Life Insurance with No Surrender Value (Disability/Nursing
Care Type)”

2016-05-12

Sony Lifecare Group announced an opening of the second SONARE newly built nursing care home in Saitama prefecture in
Spring 2017.

Sony Financial Holdings Inc. All Rights Reserved

39

Analysis on Ordinary Profit for Life Insurance Business(Billions of yen)

+12.0

(12.0)
+6.0

(3.0)
(0.5)

60.2

OthersDecrease in interest income
and dividends in lower
interest rates

Increase in profit owing to
growing policy amount in force

Lower gains on sale of securities

Positive impact from lower salesof variable life insurance andothers (*)

FY15

62.5

FY16 (Forecast)*Including changes in provision of policy reserves for minimum guarantees for valuable life insurance and gains (losses) on hedges of variable
life insurance, and changes in product mix for new policies and others.

Sony Financial Holdings Inc. All Rights Reserved40

Attachment

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)

Notes:
1. The above table includes monetary trusts other than trading-purpose securities.
2. Derivative financial products such as principal protected 30 year notes with Nikkei 225 index-linked coupons are included in the “Held-to-maturity-securities” above.
Principal protected 30 year notes with Nikkei 225 index-linked coupons
As of Mar. 31, 2014; Carrying amount: ¥43.8 billion, Fair market value: ¥56.0 billion, Net unrealized gain (losses): ¥12.2 billion
As of Mar. 31, 2015; Carrying amount: ¥44.2 billion, Fair market value: ¥57.5 billion, Net unrealized gain (losses): ¥13.2 billion
As of Mar. 31, 2016; Carrying amount: None

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

Note: The above chart includes trading-purpose securities included in “monetary trusts,” etc

Sony Financial Holdings Inc. All Rights Reserved

41Sony Life’s Interest Income and Dividends (Details)(Millions of yen)

FY2014FY2015

Change00+219.0%107,383

115,655

+7.7%

464

522

+12.5%

Foreign securities

8,998

7,246

(19.5%)

Other securities

430

1,519

+253.1%

Loans

5,921

6,174

+4.3%

Real estate

10,327

10,261(0.6%)

66

71

+7.5%

133,592

141,450+5.9%

Cash and deposits
Japanese governmentand corporate bonds
Japanese stocks

Others
Total

Sony Financial Holdings Inc. All Rights Reserved42

Attachment

Sony Life’s Quarterly Trend on New Policy Amount
Quarterly Trend on New Policy Amount(Billions of yen)

1,491.6

1,500

1,437.4
1,324.2

1,250

1,152.5

1,135.8

1,128.3
1,033.3

1,290.7
1,098.9

991.5

1,000

886.2

841.4
750
500
250
0

FY13.1Q FY13.2Q FY13.3Q FY13.4Q FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q

Sony Financial Holdings Inc. All Rights Reserved

43Sony 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 yen)

25

20

18.9

18.5

22.7

22.3

21.8

20.6
19.1

18.5
17.2

16.8
15.2

15

13.2

10

5

5.1
3.9

3.0

3.6

2.9

3.7

2.8

3.5

3.9

3.4

4.6

3.6

0
FY13.1Q FY13.2Q FY13.3Q FY13.4Q FY14.1Q FY14.2Q FY14.3Q FY14.4Q FY15.1Q FY15.2Q FY15.3Q FY15.4Q

Sony Financial Holdings Inc. All Rights Reserved

44

Attachment

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

Number of new polices [ ]Policy amount in force(Billions of yen)(Thousands ofpolicies)(Billions of yen)

200

167.5
[28.8]

163.2[26.8]

500[73.4]

80

390.4[63.5]

400

30

Number of policies in force [ ](Thousands of
444.2 policies)

60

150

71.5
[11.8]

100

300
20

236.4
[38.2]

40

200
10

50

20

100

0

0

0
FY2013

FY20140
14.3.31

FY201515.3.31

16.3.31

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

FY2014FY2015

ChangeAEGON Sony Life Insurance

(5.4)

(3.2)

+2.2

SA Reinsurance

2.4

1.8

(0.6)

AEGON Sony Life Insurance and SA Reinsurance are equity method companies, 50-50 joint venture established by Sony Life and AEGON Group.
SA Reinsurance prepares its financial statements in accordance with U.S. GAAP. 50% of the net income (losses) for AEGON Sony Life Insurance andSA Reinsurance are recognized as investment profit (losses) on equity method in the SFH’s consolidated net income.

Sony Financial Holdings Inc. All Rights Reserved

45

Method of Measuring Risk Amount
Based on Economic Value (1) Market-related Risk*1

Interest rate risk
Fluctuations in net asset
value based on economic
value in response to theshocks in the right columns.
The same applies below.

Sony Life(Reference) EU Solvency II Implementing
Measures (Delegated Regulation)

Percentage increases or decreases differ for eachcurrency and term.
As for measuring interest rate risk in Japanese yen,introduced principal component analysis, where yield
curve changes are disaggregated into threecomponents, parallel shift, twist and butterfly, and theyield curve is shocked by each component.

Different percentage changes in interest rates areset for each term, from one year to 20 years.
For terms longer than 20 years and through 90
years, percentage changes are set using linear
interpolation, with negative 29% as the percentagechange for 20 years and negative 20% as thepercentage change for 90 years.

(Example)
For Yen 30-year, 33% decrease (parallel shift),
28% decrease (twist), 8% decrease (butterfly)

Equity risk

Listed equities 45%, Other securities 70%

Global 39%, Others 49%*2

Real estate risk

Actual real estate 25%

Same as on the left

Credit risk = (market value) x (risk coefficient for eachcredit rating) x duration

Credit risk = (market value) x (risk coefficient foreach credit rating and duration)

Credit risk

Currency risk

Note that durations have caps and floors, depending
on credit ratings.

(Example)
Rating A: Duration (Dur): 5-10 years(Example)
Rating A: Risk coefficient (1.4%), cap (23), floor (1)Risk coefficient=7.0% + 0.7% x (Dur – 5 )35% downside fluctuation

25% downside fluctuation

Notes
1. Principal items as of Mar. 31, 2016.
2. Symmetric adjustment (an adjustment of±10% of the average value of the stock price index during a defined period in the past) is applied.

Sony Financial Holdings Inc. All Rights Reserved

46

Attachment

Method of Measuring Risk Amount
Based on Economic Value (2) Insurance Risk*1

Sony Life(Reference) EU Solvency II Implementing
Measures (Delegated Regulation)

Mortality risk

Mortality rate increases by 15% for each year elapsed Same as on the leftLongevity risk

Mortality rate decreases by 20% for each year
elapsed

Lapse risk

The largest amount of these; *2

The largest amount of these;•Lapse rate increases by 50% for each year elapsed• Increases by 50% in the assumed rates of• Lapse rate decreases by 50% for each year elapsed• 30% of policies on which surrender value is inexcess of best estimate liability are immediately
surrendered

Same as on the left

lapsation for Life module, 50% for Health module•Decreases by 50% in the assumed rates oflapsation for Life module, 50% for Health module• 40% of policies (70% for group annuities, etc.) on

which surrender value is in excess of best
estimate liability are immediately surrendered
Expense risk

Operating expenses increase by 10% for each year
elapsedRate of inflation rises by 1%

Same as on the left

Disability risk

Rate of occurrence increases by 35% in the first fiscal Rate of occurrence increases by 35% in the firstyear, rising by 25% for each year thereafter
fiscal year, rising by 25% for each year thereafter.
Recovery rate decreases by 20%.

Notes
1. Principal items as of Mar. 31, 2016.
2. At Sony Life, lapse risk is calculated by computing and adding together the largest amount of three options for each insurance policy

Sony Financial Holdings Inc. All Rights Reserved

47

JGB Yields

As of the end of each monthSony Financial Holdings Inc. All Rights Reserved48

Attachment

Contact:
Communications & Investor Relations Department
Sony Financial Holdings Inc.
TEL： +81-3-5785-1070

Sony Financial Holdings Inc. All Rights Reserved

49