Content

In FY2014, the Group operating performance reached record high in consolidated
ordinary revenues, ordinary profit and net income, due to the steady expansion ofoperations.
Sony Life posted a record high new policy amount. MCEV steadily increased
thanks to an acquisition of new policies and the benefit of ALM despite theultralow interest rate environment.
We expect FY2015 business volume to expand in a stable and sustainable
manner by each Group company. However, due to the absence of some of themarket factors that were present in FY2014, we expect consolidated ordinary
revenues, ordinary profit to fall year on year, while we anticipate a rise in net
income owing to the reduction in the corporate tax rate.
The proposed dividend for FY2015 is ¥55 per share, up ¥15 per share year onyear. This will be the fourth consecutive year of dividend increases.
We will enhance shareholder returns by revising upward our medium-term target
for the dividend payout ratio into 40% to 50% of consolidated net income.

During the year ended March 31, 2015, consolidated ordinary revenues andordinary profit increased year on year in all the businesses: life insurance, non-life
insurance, and banking.
Consolidated ordinary revenues increased 2.4% year on year, to ¥1,352.3 billion.
Consolidated ordinary profit grew 18.3% year on year, to ¥90.0 billion.
Consolidated net income was up 34.4% year on year, to ¥54.4 billion, reflecting
the rise in ordinary profit, and the change of the calculation policy of the reservefor price fluctuations at Sony Life
Life. The change was to accumulate the reserve up
to required levels from FY2014 while it had accumulated the reserve in excess ofthe required levels until FY2013.
During FY2014, consolidated ordinary revenues, ordinary profit and net income
reached record high.

Sony Life’s ordinary revenues increased 2.2% year on year, to ¥1,223.8 billion,
due to an increase in investment income, which offset a decline in income frominsurance premiums. The decline in income from insurance premiums wasprincipally because of the brisk sale of lump-sum payment endowment insurance
prior to the sales suspension in FY2013.
Despite an increase in provision of policy reserves for minimum guarantees forvariable life insurance, ordinary profit increased 15.1% year on year, to ¥79.6billion,bo , due mainly
a y too three
ee reasons:easo s aan increasec ease in ga
gains
soon sasaleeoof secu
securities
es in
the general account, the absence of the negative impact from the revision of the
discount rate used for calculating policy reserves on the interest rate-sensitive
whole life insurance that was present in FY2013, and an increase in positive
spread.
Net income was up 14.7% year on year, to ¥42.5 billion.
Sonyy LifeSoe has
as cchangeda ged its
ts ca
calculation
cu at o policy
po cy oof tthee reserve
ese e foro pricep ce fluctuations
uctuat o s toaccumulate the reserve up to required levels from FY2014 while it had
accumulated the reserve in excess of the required levels until
FY2013.

(Left-hand graph)
New policy amount for the total of individual life insurance and individual
annuities for the FY2014 increased 22.7% year on year, to ¥4,771.6 billion,
reaching record high. This increase was because of strong sales of family
income insurance and variable life insurance, in line with efforts to strengthen
sales of death protection type products.
In October 2014, Sony Life launched a new type of family income insurance withenhanced scope of protection and revised insurance premiums, which also
contributed to the increase in new policy amount. The number of new policies
increased 13.7% year on year to 606 thousand policies.
(Right-hand graph)
Annualized premiums from new policies for FY2014 increased 19.7% year onyear,, to ¥76.6
yea66bbillion,o , reachingeac g record
eco d high,g , due to higherg e sasales
es oof variablea ab e lifeeinsurance, educational endowment insurance, and living benefit insurance. A newproduct, “Living benefit whole life insurance (living standard type)”, launched inOctober 2014, contributed to the increase in annualized premiums. Of which, thefigure for third-sector insurance products was up 13.3% year on year, to ¥15.2billion.

Sony Life’s policy amount in force which reflects new policy amount and lapse
and surrender amount, is shown here.
(Left-hand graph)
Policy amount in force for the total of individual life insurance and individualannuities increased 4.8% year on year, to ¥40,988.7 billion, due to a strong
acquisition of new policies. The number of policies in force increased 5.4% year
on yeaoyear,, too ¥6.67
6 6 million
o popolicies.
c es(Right-hand graph)
Annualized premiums from insurance in force increased 5.6% year on year, to¥735.7 billion. Of this amount, the figure for third-sector products was up 3.4%
year on year, to ¥172.8 billion.

The lapse and surrender rate for FY2014 increased 0.74 percentage point yearon year, to 5.35%.
This is mainly because during FY14.3Q some policyholders switched over to new
types of family income insurance and living benefit insurance which werelaunched in October 2014.

(Left-hand graph)
Income from insurance premiums decreased 4.9% year on year, to ¥914.0 billion,
due to the brisk sale of lump-sum payment endowment insurance prior to thesales suspension in FY2013.
Income from insurance premiums for level payment insurance has steadily
increased in line with business expansion.
(Right-hand graph)
Interest income and dividends was up 9.4% year on year, to ¥133.5 billion, due toan expansion in investment assets.

(Left-hand graph)Core profit was up 5.7% year on year, to ¥76.5 billion, due mainly to the absenceof the negative impact from the revision of the discount rate used for calculating
policy reserves on interest rate-sensitive whole life insurance that was present inFY2013 and an increase in positive spread, although provision of policy reserves
for minimum guarantees for variable life insurance increased driven by its brisksales.
(Right-hand graph)
Ordinary profit increased 15.1% year on year, to ¥79.6 billion, due mainly to anincrease in gains on sale of securities in general account as well as the increasein core profit.
From FY2014,
FFY2014 S
Sony LifLife hhas added
dd d ““gains
i or llosses on hhedges
doff variable
i bl lif
lifeinsurance.” The provision of policy reserves for minimum guarantees for variable
life insurance, which is included in core profit, is changed by the effect of market
fluctuations. To reduce this fluctuation risk, in Q4 of FY2014 (January–March)
Sony Life introduced a hedge using derivatives.

The number of Lifeplanner sales employees as of March 31, 2015, was 4,329, up
113 ffrom M
Marchh 3131, 2014
2014.
The number of Lifeplanner sales employees steadily increased, reflecting Sony
Life’s initiatives to promote skilled personnel to office managers responsible forrecruiting new Lifeplanner sales employees.

As Sony Life continued its investment in ultralong-term bonds, the holding ratio on
the real status, of Japanese government and corporate bonds including thoseinvested in monetary trusts was 91.0% as of March 31, 2015.

Positive spread for FY2014, increased ¥4.6 billion year on year, to ¥13.0 billion,
due to a lower average assumed interest rate reflecting an acquisition of newpolicies.

As of March 31, 2015, Sony Life’s non-consolidated solvency margin ratio was2,555.0%, up 196.3 percentage points from March 31, 2014, remaining at a highlevel.

AEGON Sony Life Insurance, which sells individual variable annuities, has
steadily expanded its business volume.
New policy amount fluctuates year by year, influenced by stock market
conditions. However, the business scale itself has been expanding, shown as
steady growth in policy amount in force.

Sony Assurance reached record high in ordinary revenues, ordinary profit and netincome.
Sony Assurance’s ordinary revenues increased 3.5% year on year, to ¥93.0
billion, due to an increase in net premiums written primarily for its mainstay
automobile insurance.
Ordinary profit was up 40.1% year on year, to ¥4.2 billion, due to a decline in theloss ratio mainly led by a lower car accident ratio, as well as the rise in ordinary
revenues.
Net income increased 34.2% year on year, to ¥2.2 billion.

(Left-hand graph)
The number of policies in force for the total of automobile insurance and medical
and cancer insurance steadily increased 5.4% year on year, to 1.70 million
policies. Net premiums written increased 3.5% year on year, to ¥91.7 billion due
to a stable sale of automobile insurance.
(Right-hand graph)
Ordinary profit increased 40.1% year on year, to ¥4.2 billion due mainly to a
decline in the loss ratio as described in the previous pages.
We also show you adjusted ordinary profit in addition to ordinary profit on thegraph. Adjusted ordinary profit is an profit indicator on a managerial accounting
basis. The figure is calculated by adjusting the amount of provision(reversal) for
catastrophe reserve to ordinary profit. Adjusted ordinary profit also significantly
increased year on year, to ¥7.1 billion, reaching record high.

(Left-hand graph)
For FY2014, the E.I. loss ratio declined 3.9 percentage points year on year, to64.3%, mainly led by the revision of premium rates for automobile insurance anda lower car accident ratio owing to the introduction of a new bonus-malus system(non-fleet driver rating system). The net expense ratio rose 1.1 percentage points
year on year, to 26.7%, due mainly to higher system-related expenses, a rise ininsurance acquisition cost and a consumption tax rate rise.
Consequently, the sum of the E.I. loss ratio and the net expense ratio declined
2.8 percentage points year on year, to 91.0%.
(Right-hand graph)
The net loss ratio declined 1.7 percentage points year on year, to 57.6%, due toan increase in net premiums written and a decrease in net losses paid forautomobile
autoob e insurance.
su a ce The
e cocombined
b ed ratioat o (t(thee su
sum oof tthee net
et loss
oss ratio
at o aandd tthe
enet expense ratio) declined 0.6 percentage point year on year, to 84.3%.

As of March 31, 2015, Sony Assurance’s non-consolidated solvency margin ratio
was 629.6%, rose significantly from a year earlier, showing that Sony Assurance
has maintained a financial soundness.

Sony Bank reached record high in ordinary revenues, ordinary profit and net
income on a consolidated and a non-consolidated basis.
Consolidated ordinary revenues increased 5.3% year on year, to ¥38.4 billion, due
mainly to higher revenues related to foreign currency transactions and mortgage
loans. Consolidated ordinary profit expanded 30.0% year on year, to ¥7.3 billion,
due to the above-mentioned increase in ordinary revenues and a rise in profit
related to bond-dealing transactions including sale of bonds.
On a non-consolidated basis, Sony Bank’s ordinary revenues and ordinary profit
increased year on year as the same reason as in the consolidated results.
Gross operating profit increased 8.8% year on year, to ¥22.5 billion. This isbecause net other operating income increased due to an improvement in net
gains on bond-dealing transactions and higher gains on foreign exchange
ttransactions,a sact o s, aalthought oug net
et interest
te est income
co e dec
decreased
eased uunderde tthee loweringo e g interest
te estrates.
Net operating profit increased 18.4% year on year, to ¥7.2 billion.

We break down gross operating profit on a managerial accounting basis tofacilitate an understanding of operational sources of revenues and profits.
(Left-hand table)
Net interest income on a managerial accounting basis remained at the same level
as FY2013, amounting to ¥18.2 billion, led by the growing balance of mortgage
loans under such a low interest rate environment.
Net fees and commissions decreased year on yearyear, to ¥0¥0.9
9 billion
billion, due to lower
volume on foreign exchange transactions stemming from passive foreign
currency trading by customers in the first half of this fiscal year despite higher
gains on fees and commissions related to mortgage loan business .
Consequently, gross operating profit on a core profit basis remained at the samelevel as FY2013, to ¥19.2 billion, and net operating profit on a core profit basis
decreased ¥0.6 billion year on year, to ¥4.0 billion owing to higher operating
expenses.
expenses(Right-hand graph)
The interest spread for FY2014 was 0.92%, which maintained a certain level
under such a low interest rate environment.

(Left-hand graph)
As of March 31, 2015, deposits (the sum of Japanese yen and foreign currencydeposits) amounted to ¥1,878.2 billion, down ¥11.7 billion from March 31, 2014.
Of which, yen deposit balance amounted to ¥1,551.0 billion, up ¥24.5 billion fromMarch 31, 2014, due to a conversion from foreign currencies to yen.Foreign
currency deposit balance amounted to ¥327.2 billion, down ¥36.3 billion fromMarch 31, 2014, due to a conversion and a transfer into yen deposit led by yen
depreciation.
(Right-hand graph)
Loan balance as of March 31, 2015 expanded to ¥1,187.1 billion, up ¥129.7
billion from March 31, 2014.
Of which, mortgage loans balance exceeded ¥1 trillion, reaching record high.

(Left-hand graph)
As of March 31, 2015, the balance of securities amounted to ¥730.0 billion, down
¥43.7 billion from March 31, 2014. Sony Bank continuously invests in highly ratedbonds.
(Right-hand graph)
As of March 31, 2015, Sony Bank’s non-consolidated capital adequacy ratio(domestic criteria) was 10.66%, down 1.06 percentage point from March 31,2014.
Sony Bank has maintained a financial soundness.

For FY2015, stable and sustainable business growth is expected in all thebusinesses: life insurance, non-life insurance and banking. We expect
consolidated ordinary revenues to decrease because we do not anticipate an
improvement in investment income backed by favorable market conditions as
was present in FY2014 mainly in the life insurance business.
Consolidated ordinary profit is expected to decrease because we anticipate anincrease in spending for medium-term business growth activities and an increasein provision of policy reserves for minimum guarantees for variable life insurance
in the life insurance business, and lower gains on sale of securities in the life
insurance and banking businesses.
On the other hand, consolidated net income is expected to increase due to thelower effective corporate tax rate for FY2015, compared with FY2014 negative
impact of a reversal of deferred tax assets accompanied by the reduction in thecorporate tax rate.

We have steadily increased dividends based on our dividend policy of steadyincreases in dividends in line with earnings growth over the medium to longterms.
We will enhance shareholder returns by revising upward our medium-term target
for the dividend payout ratio from the current range of 30% to 40%, into the newrange of 40% to 50% of consolidated net income.
For FY2015, we plan to pay a year-end divided of ¥55 per share, up ¥15 pershare year on year with the dividend payout ratio of approx
approx. 42%42%. This will be thefourth consecutive year of dividend increases since FY2012.

Sony Life’s MCEV as of March 31, 2015 increased ¥101.6 billion fromMarch 31, 2014, to ¥1,322.9 billion, due mainly to the contribution of newbusiness, the decrease in inflation rates, the effect of the reduction in thecorporate tax rate. While the value of existing business decreased
significantly due to a decline in interest rates, most of the decrease wasoffset with the benefit of ALM (by the increase in the adjusted net worth).
MCEV as of March 31,
31 2015 increased ¥88.0¥88 0 billion from December 31
31,
2014, due mainly to the contribution of new business, a rise in interest
rates
in Japanese yen, and the effect of the reduction in the corporate tax rate.
New business value (new business margin) for 12 months ended March31, 2015 was ¥48.6 billion ((3.8%)) while that for 12 months ended March
31, 2014 was ¥55.2 billion (5.2%). New business margin as of March 31,
2015 was down from March 31, 2014, due mainly to a decline in interestrates.
New business value as of March 31, 2015 increased ¥20.4 billion from thefigure as of December 31, 2014 (9 months), amounting to ¥28.2 billion, to¥48.6 billion.
Please see page 44 for the details of the changes in new business value
from December 31, 2014 (9 months).

The risk amount based on economic value as of March 31, 2015 amounted to¥745.5 billion. Within Sony Life’s risks, insurance risk and market-related risk
amounted to ¥724.2 billion and ¥287.0 billion respectively.
The risk amount based on economic value as of March 31, 2015, was up fromMarch 31, 2014 due to lower interest rates and an increase in policy amount inforce, and was up from December 31, 2014 due mainly to the reduction in thecorporate tax rate.
However, Sony Life has maintained high financial soundness by keeping MCEV,
which is capital based on economic value at a higher level than the risk amount.