索尼 (SONY) 2003 Q2 法說會逐字稿

Good morning. My name is Leslie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Sony Corporation Second Quarter Fiscal Year 2003 Conference Call. During the opening remarks, all lines are placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. To queue up to ask a question, please press star, one on your telephone keypad. Please feel free to enter the queue at any time during the speakers' remarks. Thank you. The conference will begin now.

Thank you very much, Leslie. Thank you for that introduction and thank all of you out there for joining us today for this discussion of Sony's financial results for the second quarter ended September 30, 2003. I am Justin Hill(ph) with Sony Investor Relations in Tokyo. I am joined this evening by Takao Yuhara, who is Corporate Senior Vice President and Group CFO of Sony. Mr. Yuhara, would you please say "Welcome" to our guests?

Yes, thank you, Justin, I am Takao Yuhara of Sony Corporation.

As you know, this afternoon Sony released its second quarter results for the ease of communication I have Justin (inaudible) to read summary of the results we have reported today, and together with the highlights of the each segment performance.

And I will (inaudible) and (inaudible) questions from you. So thank you. Justin(ph), could you start?

Great, thank you very much Mr. Yuhara. We are also joined by Robert Wiesenthal, who is CFO of Sony Corporation of America. Mr. Wiesenthal joins us from his offices in New York. Mr. Wiesenthal, please say hello to our guests.

Good morning everybody. We're happy to be here and we'll be taking questions regarding the entertainment assets after the discussion of the earnings.

Thank you very much Mr. Wiesenthal. As Mr. Yuhara just mentioned in just a few moments I'm going to give a brief overview or our second quarter results, then Mr. Yuhara and Mr. Wiesenthal will take your questions.

During the Q&A session, I will be taking time out to pose to our two CFO's questions that we received by e-mail.

Please be aware that statements made during the following remarks and Q&A session with respect to Sony's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements without the future performance of Sony.

These statements are based on management's assumptions and beliefs in light of the information currently available to it, and therefore, you should not place undue reliance on them.

Sony cautions you that a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statements. For additional information as to risks and uncertainties as well as factors that could cause actual results to differ, please refer to Sony's -- to today's press release, which can be accessed by choosing investor relations at the bottom of the page at www.sony.com.

With that I am now going to turn to our results.

Consolidated sales in the second quarter were up slightly year-on-year for the first time in three quarters. Sales in our financial services segment increased 21% and sales to our outside customers in our electronic segment increased 7%. But sales in our game segment decreased due to a drop in sales of both hardware and software.

Consolidated operating income decreased 34% year-on-year to 33.2 billion yen. This is primarily due to a decrease in operating income in the game segment and the recording of a loss in the picture segment compared to a profit in the same quarter the previous year.

On the other hand, the electronics and financial services segment had an increase in operating income and the music segment recorded a profit where it had recorded a loss in the previous year.

Restructuring expenses during the quarter were 9.7 billion yen. Of this figure, 4. -- 5.4 billion was recorded in the electronics segment and 4.1 billion was recorded in the music segment.

As you all know, we plan to implement the bulk of the restructuring we announced in April in the second half of this fiscal year. The details of that plan will be announced in Tokyo on the 28th of this month, which is just about five days away.

Returning to our consolidated results, income before income taxes for the second quarter decreased 10% to 44.1 billion yen, due to the recording of a net foreign exchange gain compared with a net foreign exchange loss in the previous year’s second quarter, and due to a year-on-year decrease in loss on devaluation of securities and investments.

Net income decreased 25% to 32.9 billion yen.

I mentioned a moment ago that our sales to outside customers in the electronics segment increased 7%. When we include intersegment sales, most of which are sales to the game business of the symbol Play Station II Game Consoles, however, the overall sales figure for the electronics segment turns to a decrease of approximately 1% year-on-year. The significant decrease in intersegment was caused by the outsourcing, actually, of those PS 2 assemblies to (ph) China.

Products that contributed the most to sales were cellular phones which we supply mainly to Sony Ericsson, digital still cameras, VAIO PCs, DVD drives, and flat-panel TVs. Products that had the largest decrease in sales were CRT TVs and portable audio products.

Operating income in Electronics increased by 9.5 billion yen year-on-year to 35.8 billion yen. The primary factors were, one, an increase in gross profit from the increase in outside sales amounting to about 13.9 billion yen; two, foreign exchange - we had a positive impact of about 11.8 billion yen; and three, a decrease in SG&A, which was about 6.7 billion yen. Partially offsetting these positive factors was an approximately 26.5 billion yen deterioration in our cost of sales ratio primarily due to price declines.

Turning now to the Games segment, a decrease in sales of both hardware and software led this segment to suffer a 36% decrease in sales. Despite the decrease in sales, PlayStation 2's share of the game console market remained strong. We have approximately 70% of the market in Japan, 50% of the market in the U.S., and 70% of the market in Europe.

Unit sales and revenue generated from hardware in the U.S. were not as high as the second quarter of last year because the price reduction we undertook in May of last year caused unit sales to be strong in the first couple of months of the second quarter of last year, and because retailers accelerated their buying in of PlayStation 2 units last year in advance of the dockworkers' strike on the west coast of the U.S. that took place that year. In Japan, sales revenue decreased as PlayStation 2 unit sales declined due to a market slowdown. In Europe, sales revenue dropped as well, but a reduction in the price of PS 2 units caused unit sales to increase.

Software sales on the whole also declined. Although unit sales of PlayStation 2 software increased year-on-year, PS 1 software decreased, leading to an overall drop in software unit sales. Software sales revenue decreased in the U.S., Europe, and Japan mainly due to a decline in in-house software unit sales. Operating income in Game decreased 91% year-on-year to 2.2 billion yen. The primary reasons were, one, an increase in research and development expenses due to our proactive investment in R&D for semiconductors and other items designed for the next generation; and two, the decrease in software sales - again, mostly sales of in-house software.

The in-house ratio of software for the second quarter decreased from 14% - decreased to 14%, excuse me - from the 18% level it was in the same quarter the previous year. Partially due to the positive effect of the appreciation of the euro, the profitability of PlayStation 2 hardware has not changed that much from its level last year. We continue to make a profit from PlayStation 2 hardware on a gross margin basis.

Inventory at the end of the second quarter in the Game business was 193.6 billion yen, which was an increase of 26.4 billion yen year-on-year. Our production shipment forecast for PS 2 hardware for the full fiscal year remains unchanged at 20 million units. We have revised upward our production shipment forecast for PS 1 from 2.5 million units to 3 million units.

Penetration of the console - the PS 1 console - continues in Europe and Asia, so we have raised our forecast.

On the other hand, we have revised downward our production shipment forecast for software from 250 million units to 240 million units. Those figures include both PS2 and PS1 software.

Due primarily to a decrease in shipments of in-house software, we expect units to be lower than our initial expectations.

Moving now to the music segment, sales decreased 9% to 126.7 billion yen, due to the continued downturn of the market. Despite the decline in sales though our operating income of the segment changed from a 5.6 billion yen loss recorded in the second quarter of last year to a 0.3 billion, that's 300 million yen profit primarily due to the benefits of previously implemented restructuring.

Sales in the picture segment increased 1% to 187.4 billion yen. While there was an increase in home entertainment revenues, our revenues from theatrical releases declined year-on-year do to a difficult comparison with the previous year, in which films like Men in Black 2 and Spiderman were in theaters.

At the operating line, a 4.6 billion yen loss was recorded, compared with a 9.9 billion yen profit in the second quarter of last year. This deterioration resulted from the disappointing performance of certain films that were released during the quarter.

In the financial services segment revenue increased 21% to 154.4 billion yen, and operating income increased 97% to 11.3 billion yen, both higher on contributions from the Sony Life's business.

Sales in other, which is our last segment increased 8% while operating loss decreased from 5.8 billion yen to 5.1 billion yen year-on-year.

Excuse me. I will end with our forecast for the fiscal year, which ends in March, March 31st, 2004.

In reviewing our forecast, we changed our foreign exchange rate assumptions for the dollar from approximately 115 yen to the dollar to approximately 110 yen to the dollar. Our assumption of 125 yen to the Euro remains the same.

Consolidated sales for the year are expected to be 7 trillion 400 billion yen. This represents no change to our previous forecast or sales.

Consolidated operating income however is expected to be 100 billion yen, which is a revision downward from the 130 billion yen figure we announced in July.

Income before income taxes is expected to 120 billion yen, a revision downward from 130 billion yen.

Net income is expected to remain unchanged at 50 billon yen.

In electronics, we expect sales for the fiscal year to be higher than our previous forecast, but operating income to be unchanged from the previous forecast. The upward revision in sale is due to the higher than expected sales in the second quarter. Again, that's in electronics.

Operating income in the second quarter was also higher than our expectations, but these gains have been offset in our year-long forecast for electronics by the change in foreign exchange rate assumptions.

In the game segment, we have revised downward our forecast for both sales and operating income. This is due to one, an acceleration of R&D expenses for new technologies in the semi-conductor area and for PSP, the Playstation portable console; two, lower than expected reductions in the manufacturing costs of Playstation 2; and three, a 10 million unit downward revision in our production shipment forecast for software.

In the Music and Picture segments, we have revised downward our forecast for sales. But in the Financial Services segment, we have revised upward our forecast for operating income. We expect to see an improvement in operating performance in Financial Services as a result of the favorable change in the asset management environment.

And with that, I will now turn the podium over to our Chief CFOs, who will take your questions. So first, let's move to the operator, Leslie.

At this time, I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad. While we take a moment to compile the Q&A roster, we will go to a previously submitted e-mail question.

OK, great. Thank you very much, Leslie. The first question comes from Connor Imara (ph) at (inaudible) Research.

Connor (ph) asks, "Why are video category profit margins falling so much and what margins do you expect in video for the full year of fiscal year 2003?" Mr. Yuhara, would you mind answering the question?

Yes, in this second quarter, as you know the profit margin of video is 11% and compared to the last - you know, same period last year, there was, you know, the profit shortfall over 4%,points. And as you know, in this category and coming quarter and also digital still cameras are included.

And, you know, the main reason for this, you know, the profit shortfall was we have just started the - you know, the sales on the DVD recorder, still in preparation period in the second quarter. So we had the D&D cost was (inaudible). And the other thing is camcorder area due to the short supply of, you know, the semiconductor that we have also suffered you know, the sales decrease - you know, sales decrease in this reason.

As you know, the camcorder, you know, the most of - you know, the profitable category in Sony and due to the decrease of sales, eventually the sales profit amount decreased. So, in the second quarter is an 11% the profit margin as I mentioned, but of course, you know, the - we would, you know, like to keep that at least, you know, the 15%. It's the same level as last year. You know, we like to keep those - you know, the profit margin in the video category. OK?

Thank you very much for that answer. We'll go with another e-mail question again from Mr. Connor Imara (ph).

His question is regarding our information and communications category in Electronics. "Despite heavy price discounting, the information and communications category just about broke even this quarter with sales up about 12%." Connor (ph) wants to know what drove this increase.

And you said that unit forecasts have been maintained for VAIO - our year-long forecast for VAIO. "Was pricing outside of Japan more robust?"

Yes, in this category, the VAIO was the main, you know, the main contributor to improve the profit in this category, and as I, you know, mentioned, you know, the, in this you know, the release for three months ago, now VAIO is -- aiming for the profitability, by their, you know, the efforts, and those would result in that, the improvement of the, you know, the profitability.

And as you know the annual, you know, the sales quantities for this VAIO is 3.1 million, which is unchanged that we are forecasting at the beginning of the year. So we not, you know, the speaking for (inaudible) you know, they are markets shares, but you know, very much, you know, concerned about the profitability.

Of course, you know, towards you know, the, you know, the 2004 and beyond and we are just, you know, seeking for both you know, the quantity and the profitability on the PC VAIO category.

And the other point is clear, as you know that there is a heavy competition in the United States. So due to this, we have you know, the short (ph) decrease of sales and the results in have been that, you know, the (inaudible) lower profitability, you know, is this category.

So that is, that is answer to this question.

Great, thank you very much for that. I think next if there's a live caller, we'll go with that.

Thank you, your first question comes from Mr. Chris Muse(ph) from Lehman Brothers. Mr. Chris Muse(ph), please press star one on your telephone keypad.

fiscal 2003, and also can you provide any insight into Sony's rumored JV with Samsung for LCD panels.

Mr. Muse(ph), actually we only heard about half of your question, would you mind saying it again.

Oh, I apologize. Regarding your semi-conductor business, can you outline your new capacity plans particularly as it relates to 300 millimeter capacity and what your capex budget is for fiscal 2003, and then regarding LCD business, can you comment on the rumored JV with Samsung for seventh Gen panels?

On this, you know, the joint venture, you know, the issue, we (inaudible) Korean companies and we are just, we continue to talk with them, but it's not finalized, so as soon as we finalize and would you know, quickly inform you what is the time for joint venture and related issues.

What is the timing for that announcement?

Well, you know, we not determined yet for this, you know, the announcement. as soon as it's finalized and we will let you know immediately.

OK. And on the semi-conductor question?

Right. Regarding the capacity for 300 millimeter, can we get back to you on that possibly even during this call? I'll make sure that we reply to you live.

OK. And what about your just cap ex budget for semis this year?

The cap ex budget for semis in the Electronics business is 80 billion yen. In the Game business, it will be in the vicinity of 73 billion yen. Well, overall cap ex for semiconductors in Game for the fiscal will be 105.

OK, thank you.

We'll go now with another question.

Your next question comes from Mr. Bill Lennon(ph) from W.R. Hambrecht. Mr. Bill Lennon(ph), please press star, one on your telephone keypad. Your line is now open. Please proceed with your question.

OK, thank you. You made reference earlier in your forecast for Games you said part of the reason profitability will be lower than expected is because you anticipate lower than expected reduction in manufacturing costs for PS 2 hardware.

Could you please elaborate on what those - what the factors are that are limiting those cost reductions? And secondly, does this materially change the timing of future PS 2 price reductions? Thank you.

Yes, on this, you know, the cost reduction initiatives in this, you know, PlayStation 2 platform and as you know, the beginning of this fiscal year, we have transferred this - the PS 2 production from Japan to China to EMS (ph) Company. And due to the several reasons, maybe SARS is one of the reasons, there is some delay of the local parts procurement which could give us the lower price on parts.

And also there is some delay of the design activities, like the (indiscernible) activities to reduce a number of parts on the PlayStation 2.

Thirdly, we have already started to make one chip, the GS+EE (ph) which is currently the decided to use for the PSX (ph) rather than this PS 2. So, this is not the plan at the beginning of the year and currently we changed those - the priority, and therefore there is some delay of the equipped - the one chip for the PSX (ph).

That is reasons - you know, one is that we have some delay of that cost-down initiatives on the PlayStation 2. The other thing that as far as pricing is concerned and this is, you know, the most followed (indiscernible) I would like to decline to answer this question. Thank you.

OK, well, thank you for taking my questions.

Thank you, sir, for submitting.

Next, I'd like to go with an e-mail question. Actually I'd like to direct this e-mail question to our CFO in New York, Mr. Wiesenthal. The question is what is the split in terms of profit between box office, TV and home entertainment in the picture business.

Overall for the industry, for the film industry, the theatrical split is about 25% in revenues, home entertainment is 50% and television and other windows are 25%. In terms of home entertainment for the quarter, we are up about 15%. We're still experiencing tremendous growth in a DVD business, home video, however, has been declining. Our split in terms of revenues between DVD and home video is about 70% DVD and 30% home video.

Industry-wide for the year, the expectations are that DVD sale increased about 37% and a decline of about 12% for VHS.

Great thank you. That's actually, I apologize, there's a follow-on question here regarding Thompson Technicolor, (inaudible) mentions a disappointing quarter for them as VHS imploded more than expected. Do you see Sony seeing the same trend? You mentioned a little bit about the adjusted (inaudible).

I think that, you know, commensurate with the industry, again, about 12% for the industry, a decline on the packaged goods VHS, but it's more than made up for by the DVD growth, which continues, about 38%, 37% for the industry.

Thank you very much. Now we'd like to go with a live call.

Again, in order to ask a question, please press star-one on your telephone keypad. One moment please.

Your next question comes from Greg Nortonkid(ph) from Credit Suisse. Mr. Nortonkid(ph), please press star-one on your telephone keypad.

Your line is now open; please proceed with your question.

Two questions if I may. The first is regarding the inventory levels on the game business. I didn't catch the number you mentioned, I think about 10 minutes ago. Could you just remind me what the inventory level was, and whether you consider this an appropriate level for this time of year?

The second question is just regarding the slide at the back of the presentation on depreciation numbers, looks like you're looking for quite a sharp jump in depreciation this year, to 390 billion yen, which is, I think the highest depreciation number in many years. I just wondered what the reason, the main reasons for that were.

First, I'd like to answer your question about inventory levels of the game business. Inventory at the end of the second quarter, which is September end was 193.6 billion yen. There was an increase of a 26.4 billion yen year-on-year. So as you know the game business is a very seasonal business, and we could expect that, you know, big sales you know, during that Christmas time and New Year time in Japan.

So we are now, you know, the increase in the inventory level to this in a higher season, than we still, we continue that you know, the production level of 3 million sets in October. So, you know, the - so far and, you know, we have, you know the (inaudible) high season end.

The other point is, depreciation. (inaudible) we forecasted 390 billion depreciation and, as you know, the - you know, this year and last year we have a high level of investment in our semiconductor business. So this is the, you know, one of the main reasons to increase this, you know, the depreciation.

OK. Thank you.

And thank you for that question. We'll now go to another e-mail question; could you quantify the negative impact of Clie on profits? I just thought everybody is talking about a recovery in the PC market and Sony has maintained unit forecasts; do you not believe a recovery is happening? Again, this is referring to our information and communications category.

Yeah, as you say, as you mentioned that, you know, the market involvement in the PCs you know, getting better, as you know and we also realize this. But this is our start of a very - you know, the severe price competition you know, particularly in the United States market and we just know this and this year we have done a couple of things. One is we did combine the Vaio business company, you know, the into one business company. And we just, you know, concentrate (inaudible).

And the other thing that we just concentrate to the - you know, the middle and high-end model. You know the - to looking for the higher profitability from those - you know line-ups (ph) and if I looked at the PC, you know, marketwise, then in the overseas, outside of Japan, you know, the market is - is increasing. And domestic, you know, we see the - you know, we are not, you know, looking at previously about, you know, the market sales. So, therefore, although in all the total, you know, planned forecasted, you know quantity is 3.1 million, then you know the you know, for overseas with 2 million and Japan the 1.1 million sets which is, you know, the total quantity the same but about 200,000 set increased in overseas and same quantity was decreased in Japan from what I mentioned.

OK. Great. Thank you very much. We'll now go with the live call.

Your next question comes from Mr. Mike Wallace of UBS. Mr. Wallace, please press star one on your telephone keypad. Your line is now open. Please proceed with your question.

Hi, I was wondering - you left your 20 million PS 2 estimate unchanged for the year ending March, and it's pretty clear that the U.S. is below plan and won't hit the original projection. So I'm wondering why that 20 million number hasn't been ticked down. Could you talk about Japan and Europe? Are they making up for the U.S.?

OK, yes, as far (inaudible) and production shipments in last year will go 22.5 million. So 20 million is about 10% decrease compared to the last year. So, this is what we are forecasted for this year.

For the market - Japan and the U.S. - the sell-through, I mean sales quantity itself will be probably lower than last year, however, the Europe is now in very good condition and definitely the total quantity of the increase compared to last year.

Coming this Christmas and New Year season and we are expected that the market will be very active. As you know, the Sony and also the many other companies are preparing the killer content, the software, for this Christmas season. So we expect that this year again could be a good year for PlayStation business.

OK? Thank you.

Thank you very much. We'll go again with another live call.

The next question comes from Mr. Peter Boardman(ph) from NWQ(ph). Mr. Boardman(ph), please press star, one on your telephone keypad. Your line is now open. Please proceed with your question.

Hi. I had two questions. First of all, your cash flow - could you go into great detail about the cash flow from operations? It seems as though your net profit and depreciation weren't so bad that - you know, it was pretty bad obviously - these numbers are terrible. But the cash flow shouldn't have fallen as much as it had. So can you go into greater detail about the changes in cash flow from operations?

And the second question I had was regarding your long-term strategy. Given the severity of the situation at Sony and obviously you've talked a lot about your structuring goals and trying to achieve a 10% operating profit margin I think in two or three years, I mean realistically should we really believe this strategy or is this - and I know you're having a strategy meeting. If you can just give us a little bit of guidance as to what we should be expecting.

You know, on this another part of question about operating margin of 10%, we are scheduling another IR meeting on twenty-eighth of October and Sony would announce and talking about (indiscernible) plan to you. And I would like to use the - I would like to concentrate today is related to, you know, the financial results for this second quarter.

On this and our cash flow, the -- we should excluding the financial service business, there was shortfall of a negative 162 billion yen, which is, you know, due to the seasonal factor, you know, because inventories increasing and those are you know, the investment on semi-conductor maybe was increased (inaudible) this for six months.

You know those two reasons there was a negative cashflow. As you know this is seasonal factor you know, the (inaudible) after the Christmas season and we are you know, collecting the account receivables to improve the cash position, as you know.

And your cash flow from financial services is improving because of the lower interest rates and reduced write-offs in Japan, for life insurance.

The question you're asking again the --

Cash flow from financial services.

Financial services.

Yes.

Segment. I'm sorry we didn't hear the last sentence of your question.

The financial services cash flow, is that not, improving a little bit because of Japanese insurance improving, share prices improving and lack of write-offs?

Yes, in this you know, rather than cash flow in terms of profit on financial service will improve due to that, you know, the Japanese stock market positions, which gives us more, you know, you know, gain. And also you know, the, we have the, you know, the revenue from insurance was increased during this period, and also --

Revenue from insurance loss.

Revenue of you know, the new insurance was increased you know, during this period.

OK, thank you.

Great, actually at this time, I'm going to step back and try to respond to the question that was asked earlier about semi-conductors, I believe it was from Mr. Muse(ph) regarding 300 millimeter. I mentioned that the capital expenditure for semi-conductors in our electronics business is in the vicinity -- or our forecast for the year is for 80 billion yen, that's correct, 80 billion yen in electronics and then in game, 105 billion yen. The 300 millimeter capacity, investment in 300 millimeter capacity in the electronics business is that our Kumamoto facility, which is where we produce CCDs and also high temperature polysilicon LCDs.

The investment in that facility for 300 millimeter is in the vicinity of about 50 billion yen, and the investment, the 105 billion yen investment in the game business is predominantly 300 millimeter and could put in 105 billion yen for 300 millimeter there.

The next question is an e-mail question. It's regarding the game business. Consoles, hardware units have not recovered as fast as would have been expected after the inventory adjustments; what is going on here? How much of the profit drop was due to R&D and how much due to lower sales? So, perhaps, Yuhara-San if you could give us an idea of the actual results in the game business; which was the bigger factor to the decline in profitability, was it research and development or the decline in sales?

Are you talking about second quarter?

Yes. (inaudible). That's correct. Yes.

Yes, and just, you know, we have mentioned that operating profit for this, you know, second quarter was 2.2 billion yen which is, you know, the 91% reduction compared to the same period of last year. Of this, you know, the quarter, there was an increase of R&D expense which is probably 15 billion yen, you know, year-on-year. And also, you know, the PS2 software published by Sony Computer Entertainment was not expected - expected, you know, the lower - lower than our plan.

And also, the accessory sales, you know, the sales of accessories was lower than what we have expected during this period. So those, you know, the three reasons, there was, you know, this shortfall of profit (inaudible).

OK. Thank you very much. I think we'll go with a live call now.

Your next question comes from Mr. Nick Nestor(ph) from Pythar(ph) Capital Advisors. Mr. Nestor, please press star one on your telephone keypad. Your line is now open, please proceed with your question.

Thank you, good evening.

I was wondering if you could please give an update on the launch of the PlayStation personal device coming next year and any color on the universal media disks that will - it should - rumors have will be used?

Yes, and this is, you know, so far unchanged as far as schedule concerned. You know, we have announced this, you know, the few months ago and we just, you know, planned to market this, you know, the PlayStation portable in - at Christmas time next year. So we are preparing, you know, for '04 you know, the launch at the moment.

OK. Thank you very much.

OK. Thank you. I think we're running out of time here and we're going to end the call at this point in time. I would like to thank all of you for calling in. I'd like to thank Mr. Wiesenthal in New York and Mr. Yuhara for joining us. Thank you all.

I'd also like to take this opportunity to remind everyone of our investor relations contact information. In Tokyo, IR staff can be reached at 81 3 50 48 21 80. In New York, Yas Hasegawa, (ph) Masaaki Konoo (ph) and Kuniko Koyama (ph) can be reached at 212-833-6722. In London, Chris Holman (ph) and Shinji Tomita are available at 44 20 7444 9713.

Again, thank you very much for joining us today and that ends the call.

Thank you for participating in the Sony Corporation's second quarter fiscal year 2003 conference call. You may disconnect at this time.