索尼 (SONY) 2003 Q3 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's third quarter fiscal year 2003 conference call.

During the opening remarks all lines are placed on mute to prevent any background noise. Until the (ph) speakers are more there will be a question and answer period.

If you would like to ask a question please press star, 1 on your telephone keypad. Thank you.

The conference will now begin.

Thank you very much for that introduction Leslie (ph) and thank all of you for joining us today for this discussion of Sony's financial results for the third quarter, ended December 31st 2003.

I am Justin Hill 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 a word of welcome to your guests?

Yes, this is Yuhara and thank you Justin. And as you are aware, this afternoon we have released our third quarter results.

And this time, for ease of communication, and I have asked Justin to read the summary of the results, which we have reported today and deliver with (ph) the highlights of the (INAUDIBLE) performance. I will then come and answer any questions you could have.

So could you start this thing?

Yes, thank you very much Mr. Yuhara and I am 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.

Good morning to everybody in the U.S. and abroad.

Thank you very much for joining us Mr. Wiesenthal. As Mr. Yuhara just mentioned in just a few moments I'm going to give a brief overview of our third quarter results.

Then Mr. Yuhara and Mr. Wiesenthal will take your questions.

During the Q&A session I will be taking the time out to pose to our Chief CFO, questions that we have received by e-mail. Please be aware that statements made during the following remarks and Q&A. with respect to Sony's current plans, estimates, strategies and beliefs, and other statements that are not historical facts, are forward-looking statements about 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 used and a number of important factors could cause actual results to differ materially from those discussed in the forward-looking statement.

For additional information as to risks and uncertainties as well as other factor that could cause actual results to differ, please refer 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 third quarter increased slightly year on year setting a quarterly record. Our Electronics segment enjoyed an eight percent increase in sales to outside customers with sales in Japan benefiting from the introduction of new models and an increase in the market share of our DVD recorders, Flat Panel TVs, Digital still cameras and other products.

Our Game segment also performed well as growth in Japan, the U.S. and Europe enabled us to set a record for PlayStation 2 software unit sales.

Unit sales of PlayStation 2 hardware remained strong as the console maintained its commanding position - market position around the world.

Although consolidated operating income for the quarter decreased 20 percent or approximately Yen 40,700,000,000 year/year, restructuring expenses for the quarter, which are included in the operating line, were Yen 53,600,000,000 - an increase of Yen 39,600,000,000 year/year.

Of the Yen 53,600,000,000, Yen 46,300,000,000 was recorded in Electronics, compared to 8,500,000,000 recorded in that segment in the same quarter the previous year.

Approximately Yen 38,400,000,000 of the Yen 53,600,000,000 consolidated figure was incurred for early retirement and severance, while the remaining Yen 15,200,000,000 was incurred for expenses associated with downsizing of certain businesses.

Restructuring expenses during the quarter were higher than our initial expectations, which is one of the reasons why we have revised upward our fiscal year forecast for restructuring expenses from Yen 140,000,000,000 to Yen 150,000,000,000.

Returning to our consolidated results, income before income taxes for the third quarter decreased 22 percent due to the decline in operating income and losses incurred from the devaluation of securities investments.

Influenced by the decrease in income before income taxes, net income for the quarter decreased 26 percent year/year. Partially offsetting the decrease was a Yen 13,100,000,000 improvement in equity and net gain of affiliated companies primarily due to the recording of profit at Sony Ericsson.

I mentioned a moment ago that our sales to outside customers in the Electronics segment increased by approximately eight percent. When the account decreased (ph) in inter-segment sales however, the overall sales increase for the segment was 0.4 percent year/year, basically flat.

When we look at the change in the outside sales on a local currency basis, the increased expense from the eight percent to double-digits in all regions - 15 percent in Japan, 11 percent in the U.S., 10 percent in Europe and 19 percent in other areas.

Contributing to the increase in outside sales, were a number of so-called focal product categories that we have been working to make more competitive since the beginning of the fiscal year.

The sales of these products, which included Flat Panel TVs, DVD recorder products which include PSX, Digital still cameras, Camcorders and VAIO-computers accounted for only 37 percent of sales to outside customers - AV, IT (ph) sales to outside customers in the third quarter of last year, but grew to constitute 48 percent of AV & IT sales to outside customers this year. That is a growth of 35 percent year/year.

The achievements we made in the focal product categories were not just limited to an increase in sales. We succeeded in increasing our market share for many of these products especially when it came to Flat Panel TVs and DVD recorders.

Although the increased sales in Electronics contributed to Yen 43,300,000,000 in gross profit, operating income in the Electronics segment did decrease by 40 percent.

The primary factors leading to the decline were a Yen 36,900,000,000 increase in selling, general, and administrative expenses, which was caused by the increase in restructuring expenses, a Yen 22,500,000,000 deterioration in the cost of goods sold ratio, caused by pricing pressure, and a Yen 12,600,000,000 negative effect from foreign exchange rates.

If we were to compare operating income of this year's third quarter to last year's third quarter, adding back restructuring expenses to both, we would see that the segment as a whole had an increase in operating income year/year.

Turning now to the Game segment, sales here decreased 4.5 percent to Yen 367,000,000,000. Although PlayStation 2 hardware unit sales exceeded those of the previous year in Japan, the U.S. and Europe, hardware sales value as a whole decreased due to strategic reductions in the price of the PlayStation 2 console during the year, in all three of those regions.

Sales value of software increased as unit sales of PlayStation 2 software set a quarterly record. This quarterly unit sales record was higher than the quarterly unit sales record set for PlayStation software - that's software that originated for our first generation console.

The total unit sales of software for the quarter - a figure, which includes both PlayStation and PlayStation 2 software, was also the highest it has ever been for a quarter.

Operating income for the segment declined only about 1.6 percent year/year on a Yen basis. And operating margin of almost 20 percent was recorded. The primary reason for this high margin was an increase in PS - PlayStation 2 software unit sales. Software developed by both Sony and other companies sold strongly, contributing to the margin.

A slight decline in operating income came about as a result of a Yen 3,300,000,000 increase in Research and Development expenses - expenses, which are going towards creating semi-conductors and other technologies for next generation products.

Due to the strength of PlayStation 2 software, we have increased our software production shipment forecast for the fiscal year by 10,000,000 units from 240,000,000 units to 250,000,000 units.

Moving now to the Music segment, sales for the segment as a whole decreased three percent on a Yen basis, but increased at S.M.E.I, which is our U.S. subsidiary, by six percent on a Dollar basis. And at S.M.E.J., which is our Japan based subsidiary, by eight percent on a Yen basis.

Album sales at both subsidiaries increased with sales outside the U.S. causing the increase at S.M.E.I. Operating income for the segment increased 50 percent from Yen 20,200,000,000 to Yen 30,300,000,000 with both S.M.E.I and S.M.E.J. contributing to the increase.

The benefits of restructuring, increased sales, and other non-restructuring related cost cutting, caused S.M.E.I. to have a significant increase in operating income. Increased sales and cost cutting led S.M.E.J. also to have an increase in operating income.

Sales in the Pictures segment decreased 29 percent year/year due to a decline in home entertainment revenues, as compared to the precious quarter in which we had the release of "Spider-Man" and other major titles, which generated significant sales.

Operating income for the segment decreased 82 percent year/year primarily due to the decline in operating income from the decline in home entertainment sales.

In the Financial Services segment, revenue decreased three percent due to an increase in revenues at Sony Life and Sony Assurance. Operating income for the segment was four times what it was in the previous year, primarily due to improvements in valuation gains and losses at Sony Life.

I would now like to touch briefly on the fourth quarter of this fiscal year - for the quarter that is currently underway.

As you know we recorded a Yen 116,500,000,000 operating loss on a consolidated basis in last year's fourth quarter due to such factors as the recording of restructuring and patent-related expenses in Electronics segments.

In this year's fourth quarter, we anticipate that we will record a similar level of operating loss, although it will likely decrease somewhat year/year. This is because we plan to record restructuring expenses for the quarter of approximately Yen 80,000,000,000 primarily in the area of early retirement, and primarily for early retirement.

Because the extraordinary expenses we recorded in the fourth quarter of last year will likely not be recorded this year, and because the Entertainment and Electronic businesses are expected to improve year/year, the amount of operating loss excluding restructuring and other extraordinary expenses is expected to decrease compared with the previous year, fourth quarter.

In the Electronics segment, although we expect restructuring expenses primarily for severance related expenses to increase, we should be able to record a slightly lower operating loss for the segment than in the same quarter of the previous year due to increased sales, a reduction in the inventory adjustment related expenses that we incurred in last year's fourth quarter and the absence of the one-time expenses incurred last year.

In the Game segment, we are looking with some caution at results in the fourth quarter even though results in the third quarter were strong and results for the fiscal year were likely to be higher than our October forecast.

Because the fourth quarter regularly has a low level of sales and because we will continue to invest in Research and Development of next generation technologies, we expect that we will record in the Game segment an operating loss - or at least there is a possibility of an operating loss for the fourth quarter.

R&D expenses for the fourth quarter in the Game segment are projected to be approximately Yen 30,000,000,000. In last year's fourth quarter we recorded approximately Yen 21,000,000,000 in R&D expenses for the Game segment.

I will end with our forecast for the full fiscal year, which ends, of course, as you know, March 31st 2004. In reviewing our forecast we changed our foreign exchange rate assumption for the Dollar from approximately Yen 110 to approximately Yen 105. And for the Euro, from approximately Yen 125 to Yen 135.

Despite these changes and despite the fact that we increased our forecasted restructuring expenses for the fiscal year from Yen 140,000,000,000 to Yen 150,000,000,000, we have made no change to our operating income forecast.

This is because the results of the Game segment in the third quarter exceeded our expectations, primarily due to the strong software sales and because the results of the Financial Services segment also exceeded our expectations, primarily due to the valuation gains at Sony Life.

We did however revise upward our forecast for consolidated income before income taxes. That figure went from Yen 120,000,000,000 to Yen 130,000,000,000 for the year due to the net foreign exchange gain that we recorded in the third quarter. Net income was also revised upwards from Yen 50,000,000,000 to 55,000,000,000 as a result of the change in income before income taxes.

And with that I would now like to turn the podium over to our two CFOs, who will take your questions.

Lets first go 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 1 on your telephone keypads. While we take a moment to compile the Q&A roster, we will go through a previously submitted e-mail questions.

OK great, thank you very much for that. We have received several e-mail questions today. This first question is in regards to PSP. It reads:

"Does Sony still believe the PSP will be shipped on time for Christmas. We hear that few Games - Game developers have received development kits (ph) so far. Should we be worried about this? How many PSP models will be launched and when will this happen?"

Mr. Yuhara, would you respond?

Yes, you know, as far as this PSP is concerned, we have outlined at our Corporate Strategy meeting held in New York, last November. And we have just - you know, the hinted that PSP will be launched by the holiday season of the year 2004.

So far we have not changed this schedule, and I believe, you know, thouse preparation and development for this system is continuing on time.

OK, thank you very much for that response. I think now we may have a live question - no, not yet. I think we will go with another e-mail question. This question is in regard to our TV products.

"The high-end of the U.S. TV market is becoming a lot more competitive with Philips, L.G., Samsung and Thomson all focusing on the high-end with Flat Panel TVs.

Can Sony maintain its brand premium pricing and shelf space at retailers given this? And does Sony need to increase sales and marketing expenses to protect its market position?"

Well, you know, the - I also know the sales review - how U.S. market is severe and competitive you know, in this TV markets. You know, the - according to the rating agency in the U.S. this is, you know, the data of the November and Sony is keeping as a number one position, you know, the - of this T. V. market in terms of dollar value. And still, you know, the - we are having such advanced position.

And, as far as, you know the, the brand premium is concerned, and as you can imagine that, you know the, this would take, you know the, you know, a strong period to create you know the, force of the brand image.

And also, you know the brand premium itself. And that we, you know the, are - so our you know the global, you know the, marketing policy, - you know the - price structure - you know the - then the promotion initiatives into the U.S. markets. For this, you know the - important product in the important market.

Is that clear?

I believe so. If not, maybe the person will call in and ask a follow up? I think - are we - do we have a live question, Leslie (ph)?

Yes, sir, we do. Your first question comes from Mr. Taizo Ishida from Wellington Management. Mr. Ishida, please press star,1 on your telephone keypad.

Hello?

Your line is now open please proceed.

OK, hi Yuhara-san, - good evening, good afternoon. I thought that was a great earnings Q3 and I was listening to the - your comments earlier in Tokyo Web site. And you said something interesting - a Q4 trend - the Electronics trend in Q4 were pretty strong. But, you said something - U.S. is flat from last year. I wasn't quite sure what that means. It's just there was something you was talking about the very conservative view of the U.S. or just - is something else going on? That's number one.

Number two, both of you are talking about, I think, number of units sold in the, I guess, Flat Panel display, PDP and LCD. And I heard that you're talking about 1,000,000 units in PDP and 80,000 units LCD. I want to - I have a question about that, whether your number, Sony's number or industry number last year.

OK. First of all, you know, the - this 10 percent figure, bigger (ph) than - no, break down (ph) (INAUDIBLE) and so this - he wanted to see about the, you know, the sales momentum in the fourth quarter.

And I just mentioned that, you know, the first of all, increase in the fourth quarter by region and I just mentioned that the flat in North American markets, you know, they compare to the last year. That was what was mentioned.

And also, you know, the overall, the earnings for, you know, the - just over the 10,000 increase for the year compared to the 20 of last year. So, ...

Well, my question was really due to some slow-down in the U.S. or just the - because it seems like new products are coming in, in the U.S. market and yet you said, flat. So, I was wondering, is it the market or just the - your problem? I wasn't quite sure.

Well, you know, the I would imagine business here is a little bit conservative, but as you know, the - according to that, you know, the SEL and it is - so, still a very strong trend on the flat TV.

Yes.

And also, you know, the projection TV. It's for the Grand Vega. However, you know, VAIO is exactly, the - just, you know, the moderate this time. So, therefore, it might be a possible or so.

Yes.

And CLIE . CLIE is hand-held personal assistance ...

Correct.

...you know, the computer business. And in this situation, unfortunately, we have to see that decrease over sales. So, overall and, you know, the takings those the products momentum, I would say that, appears to be flat, you know, the sales forecast last year.

So, this is the - what I meant.

OK.

PDP unit sales is constant. I say, last year, we sold 80,000,000 sets in the world. And this year, perhaps, three or four times, yes? Three to four times growth.

80,000? (INAUDIBLE). I'm sorry, how many did you just - sell this last year?

80,000.

80,000.

OK. OK.

Not 8,000.

OK.

80,000. And ...

All right. That's ...

LCD, also 80,000. The same number of units.

Oh, I see, OK. I heard something else. OK. Good.

One is lead (ph) to four times, the other one, 8 to 10 times.

OK. Thank you very much.

All right.

Welcome.

Thank you.

Once again, I would like to remind everyone, that in order to ask a question, please press star and the number 1 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. We're going to go with a question regarding our entertainment business. And we'll ask Mr. Wiesenthal to respond. The question reads, "Could you please give us an update on Sony's planned merger with BMG? Regulators in Europe and elsewhere are now looking at this deal. What is the time frame for the approval process?"

OK. Initial filing has been made with respect to the BMG-Sony transaction with all of the relevant regulatory authorities. And I believe that next month we'll start to get a better sense for the timing, especially when we hear an initial response from the EU. I think overall, we remain optimistic about our ability to consummate the transaction. But at this time, it's probably premature to speculate as to specific timing. And we'll obviously keep everybody posted as we get in more information.

Great. Thank you very much. I think we'll actually go with another e-mail question, here. This one is regarding the CLIE product, which Yuhara just mentioned, in the remark, a moment ago. The question reads, "How was the profitability of CLIE - of the CLIE model line-up, what is the long-term strategy for the CLIE?"

Yes. You know, we've written that, you know, in- the news and information of our third quarter, you know, the result. Due to the very severe, you know, the market conditions, in particular in the U.S. market, and the CLIE could be a,decrease in sales, and also, you know, the profit in this, you know, third quarter.

And at, of course, you know, the - this was, of itself, need more, you know, the functions, such as wireless. And so, we continue to be, you know, the - try to put such, you know, the - AV application, you know, the - on this product. So, that is what we are planning, so far on the CLIE, you know, product.

OK. Thank you very much. We'll go with another e-mail question, here. This, again, is in regard to our entertainment business. The question reads, "When is Spider-Man II due for launch? And do you believe the film will have the same positive effect on income as the first Spider-Man film?" Mr. Wiesenthal? Could you respond?

Surely. Spider-Man II will hit the theatres July 2nd of this year for July 4th weekend. As many of you know, Spider-Man was the establishment of one of our most important film franchises. The original cast, Toby McGuire and Kirsten Dunst will be returning in this film. And of what we've seen in the film, it's spectacular and the new villain is Doc Ock, bringing new special effects to a really - a higher level.

As an initial sense for our view on this film and the public's view of this film, the trailer was one of the highest downloaded trailers on the Internet this year. So, we have extremely high hopes for the film. And beyond that, we'll just keep working on it. We'll see how we go. And also, I'd add that Spider-Man I was the fifth largest film of all time. So, again, very high hopes for this film.

Great. We're certainly looking forward to viewing it here in Tokyo. All right. Great. I think we have another live question that we'll go with now. Leslie (ph)?

Your next question comes from Ms. Margaret Moore (ph) from American Century (ph). Ms. Moore, please press star, 1 on your telephone keypad.

Hello?

Your line is now open. Please proceed.

Thanks. Yuhara san, I was wondering if you could comment in more detail about the loss on the unlisted investments ...

Yes.

...that you refer to in your financial statements.

Yes. Yes, Margaret. Unfortunately, you know, the - there is you know, the - another party is involved in this, you know, the company. So, I would like to decline the the name of company, but, however, this is a Japanese company.

And also, the, you know, we have revalued that single company. One company. And this was, you know, the - because it is unlisted, the company and we have had, you know, the valuation by the third party. And also, it is, you know, the - audited by our, you know, the (INAUDIBLE).

So, that is all what I could tell you at this moment.

Thank you.

Yes.

I think we will go with an e-mail question. Before that, I'd like to remind callers to press star, 1 if they'd like to ask a question.

We're always open to live questions in addition to e-mail questions. So, don't be - don't be bashful. The next question is regarding our digital still camera business. And it reads, "What is Sony's market share in digital still cameras? And what is Sony going to do to recover margins?"

Yes. As we have outlined, this year, we are just plan to, you know, the - sell this, you know, the digital camera by 10,000,000 sets. While that, you know, the market volume is somewhere around 43,000,000 sets or 45,000,000 sets. So, you could imagine that market share in terms of the quantity.

However, since, you know, the - this, you know, market is expanded very rapidly. And that, you know, the price erosion is very significant, , particularly in the market of the United States.

And, you know, currently, we are decreasing that, you know, our profit itself through this, you know, the severe, you know, competition. Not only U.S., but also other regions. And, you know, the good side is, you know, the market is expanding.

And that, you know, the variety of users are now going into, you know, this market to buy those, you know, products and that we are going to have various, you know, initiatives, either to reduce that, you know, the manufacturing cost as as well as, you know, the - expand the variety of line-ups due to, you know, the - to offer the, you know, the consumers - customers. And that we have still, you know, the a lots ways to improve our profitability of digital still camera.

OK, thank you very much. Leslie is there a live caller on the line?

Yes sir. Your next question comes from Mr. Sean Merve (ph) from Shroad Capital (ph). Mr. Merve, please press star, 1 on your telephone keypad. Your line is now open, please proceed.

Good morning. A question on PS 2 hardware pricing as you look out into the next year. Could you talk about any thoughts on where you see the PS 2 hardware pricing going, specifically in the U.S. market?

Secondly, in your last conference call you had indicated there were some production issues as you would outsource some of the production to an EMS Company and that was delaying the ability to lower production costs on the play station 2. Has there been any headway on that front? Thank you.

OK. You know this year, we planned to - you know the - this 20,000,000 you know - PlayStation 2 and you know, the - in this sense and we have a strong you know, the momentum to reduce the products cost. You know so far, believe it or not, there is some delay of the you know, the cost reduction in terms of this you know, this PS2 by various reasons but now it is already solved .

At this moment, I cannot - I couldn't disclose that I know the profitability of the PS 2. That's but - you know the - at the moment we have you know, the positive gross margin –by PlayStation 2 sales. And those are - you just mentioned about the pricing matter in the United States and that, this is again that the strategic issue - I would like to decline about it. Thank you.

OK, thank you very much. We will now go with another e-mail question. Of course, I do remind everyone to press star, 1 if they have any questions they'd like to ask live.

Next e-mail question is in regards Entertainment business, then we ask - we will try to respond. The question reads, "At your New York strategy presentation, you talked about some upcoming initiatives in the wireless entertainment area. Could you provide an update on your plans and initiatives in this area?"

About a year ago, I think many in the industry viewed mobile and entertainment really more of a marketing gimmick. And it truly has emerged as a profitable and a viable business. I think overall, it's just in the U.S. alone we expect sales for the industry to exceed $1,000,000,000.

Both Sony Pictures and Sony Music are working with all the major wireless providers to deliver content from ring tones to master tone ring songs, which are actual songs on your phone, television, motion pictures and artistic (ph) games, still images, short animation clips and there really isn't any other company that can offer wireless providers both - the handset hardware from Sony-Ericsson of the entertainment services and content in one package.

So we've really become in essence, the wireless alliance partner of choice. We have deals in place with Sprint, Vodaphone and others. Obviously music is the first area to really take off and Sony Music was the first label to launch a master tone offering in the U.S. That was at the end of July and I believe that over a million Sony Music tracks have already been downloaded and internationally we are working very aggressively to establish businesses in the U.K., France, Australia and China, especially since those wireless platforms are frankly more advanced than we have here. It is a very big opportunity to sales, are not obviously substantial yet as compared to our core business but the profit margins are very thick (ph) to say the least.

Thank you very much for that response Mr.Wiesenthal.

If we have something from the Operator.

Once again, if you would like to ask a question, please press star then the number 1 on your telephone keypad. That is star then the number 1.

We will pause for just a minute to compile the Q&A roster.

While we're compiling that roster, again I'll go with another e-mail question here. Regarding the cell, chip and the question reads, "When will we see a demonstration of cell? What is the current status?" And also a related question is, "Can you give an update on the next generation game console? Is it on track for release in 2006?"

Yes. You know the as we announced- you know, the (INAUDIBLE) semiconductor investment for cell in last year.. Currently, those equipment under the installation in our Nagasaki semiconductor plant in Kyushu. According to the you know, the schedule, you know the production line, ill be available you know, sometime in next year (ph).

So therefore, to your systems and cell demonstration could be you know, under - along with those you know, manufacturing. , the - so if time is come and we will like to let you know. So the question is regarding the next generation game console. Again, this is you know, the game we would like to address to decline that - you know, to answer this question.

All right, thank you. Is there something from the operator? Or we might have those live calls?

There are no questions at this time.

OK, then I will go with another e-mail question here. It says, "Are you - are your Flat Panel displays profitable? What percentage of profits are expected to be from Flat Panel display TVs by March 2004? The percentage of profits. That's CRT profits versus Flat Panel TV profits. And what businesses will you accept? An additional question.

Yes, yes flat panel display is questionable starting from you know, the third quarter ending (ph) and that if you just try to talk about the you know, the portion of sales - CRT TV and also Flat Panel display for this you know, for this third quarter is 80 percent to 20 percent.

But due to the, you know, the profit margin and you know the profit portion for (INAUDIBLE). your question is what business we will exit in this fiscal year. . Well you know, the - again, this is you know, the - very much related to our concern you know, the party such as our dealers and customers and that when everything ready, you know this - for a particular product to exit and you know, this will be announced in due course.

Right, thank you very much for that response Mr. Yuhara. I would also like to thank you for all of your responses this evening and thank you Mr. Wiesenthal for your participation from New York.

And I would take this opportunity to remind everyone of our investor relations contact information.

In Tokyo, IR staff can be reached at 813-5448-2180.

In New York, Masa Konoo (ph) and Kumiko Koyama can be reached at 212-833-67-22.

In London, Chris Holman (ph) and Shinji Tomita (ph) are available at 44-20-7444-9713.

Thank you again for joining us today. This ends the call.

Thank you for participating in the Sony Corporation third quarter fiscal year 2003 conference call.

You may disconnect at this time.