Thank you for waiting, ladies and gentlemen. This is the earnings announcement of the consolidated results for the first quarter of 2017. And thank you very much for being with us despite your very busy schedules. And our speakers here today, first of all we have Kenichiro Yoshida, Executive Deputy President and CFO; and Corporate Executive Corporate Planning and Control and Accounting, Kazuhiko Takeda and Corporate Executive responsible for Finance and Corporate Development is Atsuko Murakami.Today Mr. Yoshida will give you a presentation on the first quarter results for 2017 as well as a full year forecast for the year. Then we have some time for questions and answers. All together we plan to spend 40 minutes. Now Mr. Yoshida, would you please start.

I'm CFO, Kenichiro Yoshida. Today I would like to explain these 2 topics in the next 15 minutes. Consolidated sales for the first quarter of fiscal '17 increased 15% year-on-year to JPY 1,858,100,000,000. Consolidated operating income was JPY 157.6 billion, approximately 2.8x times as high as the same quarter of the previous fiscal year. Net income attributable to Sony Corporation stock holders was JPY 80.9 billion, about 3.8x that of the same quarter previous year. As is shown in this slide, the operating income in the first quarter of fiscal '17 and fiscal '16 include many one-time gains and losses. In the first quarter of fiscal '16 a negative impact from the Kumamoto earthquake and the impairment against the Camera Module long-lived asset were recorded. In the first quarter of fiscal '17 a gain from the sales of the manufacturing subsidiary of Camera Module business and the insurance recoveries related to the earthquakes were recorded. Excluding these one-time items operating income would have increased JPY 11.4 billion or slightly more than 10% year-on-year. This chart shows the result of each segment.From the first quarter we eliminated the former corporate -- component segment and the business previously within the component segment are now included in all other. The transfer of the battery business, which accounts for approximately 60% of the sales of the former components segment Murata Manufacturing Company Limited is expected to be completed on September 1st of this year. Business that will remain in all other includes storage media business.Next is the consolidated results forecasts for the current fiscal year. Our consolidated sales forecast has been upwardly revised by JPY 300 billion, primarily due to the impact of foreign exchange rate. The forecast for operating income, income before income taxes and net income remain unchanged from the April forecast. Our foreign exchange assumptions have been changed to JPY 110 to USD 1, and JPY 120 to EUR 1 as is shown here. And as to the interim dividend for fiscal '17, we plan to pay JPY 12.5 per share.Next, you can see the forecast for the fiscal year by segment. As is shown here we have changed operating income forecast for the Imaging Products & Solutions, Game & Network Services and Semiconductor segments. As is shown in the upper right, we used JPY 112 to USD 1 and JPY 120 to EUR 1 when formulating the forecast for each segment. There is an approximately JPY 40 billion negative impact on operating income, which is included in the corporate and elimination resulting from the difference caused by our using the rates for the consolidated forecast JPY 110 to USD 1, and JPY 120 to EUR 1, as well as the impact of the Imaging market currencies.Now, I will turn to the situation in each of our businesses and first I will explain Mobile Communications segment, mainly due to a change in the product mix of smartphones sales for the quarter decreased 3% year-on-year. Operating income increased year-on-year to JPY 3.6 billion primarily due to reduction in operating costs and research and development expenses. Our sales and operating income forecast for the fiscal year remains unchanged. We have estimate -- we have maintained our JPY 5 billion operating income forecast despite further increase in the prices of memory and other smartphone components about what we expected in April because we're expected to offset negative impacts these increased with cost reductions.Next, talking about the Game & Network Services segment. Sales for the quarter increased 5% year-on-year, operating income declined JPY 26.3 billion year-on-year to JPY 17.7 billion because of the absence of the significant contribution from Uncharted 4, the first-party title that we had in the previous year in the same quarter and also from the impact of the price reduction on PS-4 hardware. So network revenue increased 34% year-on-year.And forecast for full-year operating income was revised upward by JPY 10 billion to JPY 180 billion due to the appreciation of euro against the dollar. The ForwardWorks, which distributes game applications for mobile products started to distribute its first game Everybody's Golf on July 4th. It has been downloaded more than 2 million times and [indiscernible] expanding the business going forward as we plan to distribute first original content called Sora to Umi no Aida from the beginning of October.Next, touch upon the Imaging Products & Solutions business. Sales for the quarter increased 27% year-on-year, mainly due to the absence of the negative impact that we experienced last year of the components shortages resulting from the earthquakes in Kumamoto. The increase in sales helped the operating income to increase by JPY 15.7 billion year-on-year to JPY 23.2 billion. Excluding the impact of the Kumamoto earthquakes, the underlying year-on-year increase in operating income would have been JPY 6.1 billion as shown on this slide.In the Digital Imaging business we launched the Alpha 9 in May, a full range -- or full frame mirrorless interchangeable single lens camera, which has a high rate burst capture feature. This camera is being received very well not only by professional sports photographers but also by news photographers. And our operating income forecast has been here revised upward by JPY 12 billion to JPY 72 billion mainly due to the impact of the yen's depreciation.Next, explaining about the Home Entertainment & Sound segment. Sales for the quarter grew 9% year-on-year. And operating income increased JPY 2.3 billion, up to JPY 22.6 billion. And we continue to improve the product mix refinishing the shift to high value added models such as 4K TVs. Sony's OLED TVs, which we launched in June, have superior picture and sound quality, as well as an excellent design and their sales continue to be strong. Our operating income here, the forecast for the fiscal year remains unchanged.Next, a few words about Semiconductors segment. Sales for the quarter rose 41% and operating income of JPY 55.4 billion was recorded, which is an improvement of JPY 99 billion year-on-year. This increase in sales were primarily due to an increase in unit sales by image sensors for mobile products and the absence of the negative impact of the earthquakes that we had in the same quarter the previous year. As I mentioned at the beginning of my remarks there were one-time items including earthquakes -- impact of the earthquakes and camera modules.And excluding these one-time items, as is shown on this slide, underlying operating income would have increased JPY 21 billion year-on-year. And the main reason for the increase in the underlying operating income was an increase in unit sales of image sensors for mobile products that I mentioned before.Our sales forecast has been revised down by JPY 20 billion to reflect image sensor unit sales for mobile products, which are expected to be lower than the April forecast. The operating income forecast has been revised upward by JPY 10 billion to JPY 130 billion, benefiting from cost reductions previously undertaken but partially offset by the negative impact of the decrease in sales.Next I will explain the Pictures segment. Sales for the quarter increased 12% year-on-year and a JPY 9.5 billion operating loss was recorded, an improvement of JPY 1.1 billion year-on-year. The main reason for the operating results improvement was the contribution from the television productions business. There is no change to the forecast for the fiscal year.As we announced this morning, we have decided to acquire Funimation, a distributor of anime content in the U.S. We plan to acquire 95% of the equity of the company for USD 143 million. As we also announced previously, Tony Vinciquerra became CEO of Sony Pictures on June 1st. Tony has experience managing a variety of entertainment business and has accomplished much in his career. He's currently working with the management of each business to quickly assess the status and issues facing their businesses.Spiderman Homecoming was released on July 7th and is recording a high level box office revenue, mainly in the U.S., the movie will be released in Japan on August 11th. We plan to release Venom, an offshoot of Spiderman, in the fall of 2018. Like Spiderman and Venom, there are hundreds of Marvel characters for which we have the filmmaking rights and we plan to proactively leverage that IP going forward.Next I will explain the Music segment. Sales for the quarter increased 19% year-on-year and the operating income increased JPY 9.5 billion year-on-year to JPY 25 billion. Fate/Grand Order, a mobile game application continues to contribute to financial performance. There is no change to the forecast for the fiscal year.Lastly I will explain the Financial Services segment, revenues increased 30% year-on-year but operating income decreased year-on-year to JPY 46.2 billion, revenue increased due to the improvement of investment performance in the separate account at our primary business, Sony Life, primarily reflecting a rise in the Japanese stock market in the current quarter. However the impact of the improved investment performance had a limited positive impact on the operating income because the improvement in investment performance is ultimately attributed to policyholders.The year-on-year decrease in operating income was mainly due to the deterioration in net gains and losses from hedging of equity securities which are classified as other securities for accounting purposes. And a decrease of net gains on sales for securities compared with the same quarter of the previous fiscal year. There is no change to the forecast for the fiscal year.Finally, I will again show the forecast by segment [indiscernible]. So compared to the previous year's cash flow analysis and other data in Page 18 and 19 of the handout documents as to the first quarter, there's a description on that as well. So please refer to that section on the first quarter as well.Thank you very much, this concludes my explanation.

Now the floor is open to your questions. Those of you with a question, please wait for the microphone to be brought to you and please identify yourself by stating your name and affiliation before asking the questions. When the questions are asked in English, there will be consecutive interpretation into Japanese and the answers will be given in Japanese. And please confine the number of questions to 2 per person, any questions please.

Nishimura, Crédit Suisse. Two questions concerning Semiconductor business. The first point about image sensors for smartphones and the sales unit that was revised downward, what is the background to this? And also the second half of the year and the next fiscal year, what is the situation about the inquiry of Semiconductors? The second point, in the materials distributed this time you talk about the improvement of cost of production and as the element for upward revision. And in IR Days you talked about your emphasis on the reduction of production cost. What is the state of progress of this plan, I think it is going very well, and what would be the actual impact of it?

Thank you. The first question has to do with the downward revision of the sales unit of image sensors for smartphones. As you know, the price of memory is increasing and the impact of that is felt in the sales of high end smartphones, as we see it. However, it's not that the major market trend is changing. We did make a downward adjustment. That is compared to our estimate -- of the estimate -- or forecast we made at the beginning of the year and we are cautious about third quarter and fourth quarter but for over -- year-on-year I think we will be able to achieve a 2-digit growth. So the major trend of dual camera and also high functionality of front-faced camera, the image sensors, these major trend remain unchanged. And about the cost of production, improvement of yield as well as the plant operating cost included. And we see a smooth progress in cost reduction.

Next question please.

Ayada, Daiwa Securities. I also like to ask 2 questions, one on Semiconductors and also about the effort recently you made on the overall results. First of all image sensors, the first quarter factory operation how are you doing? And also the wafer production, what is the situation? And also in the second quarter unit price is going to rise according to your guidance, is that still the case? And the second question is about the assumption you used for the ForEx, the dollar and the euro, you've made some changes here. In terms of your [indiscernible] just by changing the ForEx assumptions you should have revised the profitability upward more than you have done. On Page 5 the corporate and eliminations negative JPY 32 billion, is what I see, and what is the impact of the ForEx fluctuations out of this?

Your first question, I will answer the question. The second point will answered by Sen Takeda. So the rate of operations, in the first quarter, please think of it as a full operation, basically. In terms of the input places on average 87,000. And in the second quarter as well we maintain the same level of production. And the unit price, there's no major change in the unit price but we expect there will be slight increase in the unit price. About assumptions we use in ForEx, for ForEx. And the numbers you see in the others column, others line, first of all the ForEx assumptions, as we explained, for all the related segments $1 is JPY 112 and EUR 1 is JPY 120 that is the actual rates as of July 1st. So those rates are used as assumptions in the business plans but from a consolidated basis we have a conservative, $1 is JPY 110 and EUR 1 is JPY 120, which is 1.09 [indiscernible] between the two. There is a likelihood of fluctuations going forward, so we took a more conservative view. So the difference translates to JPY 4 billion, the rest the JPY 17 billion which is the business risk that the headquarter is now accounting for. Compared to Aprilits not the case that the business situations have aggravated but the business units prepared their plans that are high end modest, in the meantime the cost of memory has increased, the competition is getting more severe, demand is expected to decline we think. And in Financial Services segment, the interest rates and fluctuation in stock markets are the factors that are affecting results. So we decided to take a more cautious assumptions and these factors will affect the business, the business units. And therefore, the business operation risk was added by the headquarters for JPY 32 billion. And [indiscernible] 3 businesses, that's why we introduced the numbers.

So the person in front, please.

Hirakawa, Merrill Lynch. I have 2 questions about Music and then the dividend. First one Music, this time you increased the revenue as well as the profit and markedly this time, but as to the revenue sales the image media they have JPY 15 billion in the music production of JPY 10 billion, but if the profit increase wise it doubled into JPY 9 billion, but anyway as to the ratio between the 2, what do you think? And now as to the fiscal year and it's JPY 75 billion and then in the first quarter it's JPY 25 billion, but in this seasonality the profitability should increase from the October to February. So what is your thought on the risk analysis? That's my first question. And the second part of my question is follows. Today, the first half the dividend is JPY 12.5 was indicated this is based upon last year's pattern. It will be the same, so -- in the latter half so that the JPY 25 per annum net results the dividend payout ratio it's about 10% or so. But as to the recurring business, you're increasing the portion, so that the dividend payout ratio is likely to go up maybe depending upon that. So as of now, could you please give us your philosophy idea as to the dividend payout policy?

About the Music and the second point is our dividend policy. So I would like to make a comment first and as to the next point Mr. Takeda will give some additional comment on the first point, as to the second Ms. Murakami will give additional comment. As to the first question about music the category details are not really disclosed, so please forgive us, we are not disclosing that detailed breakdown, but generally speaking, the image ones especially, Fate/Grand Order it's making a great contribution that has been unchanged throughout the year. We haven't changed the annual analysis. But we just ended the first quarter now. So in the future in general, the market should change in a good way, but we are facing with fluctuation. Of course factors and demand are cautiously analyzed as well in coming up with assumption. As to the dividend payout, we have a major fluctuation of the profit up and down. So we'd like to stabilize that operating income. So the word key recurring -- recurring business is a key word emphasized by President Hirai but that has not been realized this emphasis on recurring business JPY 12.5 in the first half then in the latter half we haven't decided yet. Taking that into account based upon that thought, how can we achieve this stable operating income and always revising upwardly is a challenge. But on the other hand as to the balance sheet, we have to pay due respect to that as well. So that's my comment on Music. Then dividend ratio, so I would like to hear the details.

As to the music. Yes, in the second quarter and later we are not assuming any major risks. Digital's streaming market is expanding. And of course in Japan, the Grand Order is very smoothly expanding. But as to the Fate/Grand Order this is third year. So in the second term -- the quarter and so on that we have a cautious view on that too

As to the dividend, the interim payout is JPY 12.5 billion. As of the end of the year payout, we have not decided yet. So that third quarter the results the one at the time of the announcement we'd announce that too. So we would like to make a stable division to the profit and that of course is that should be reflected in the dividend level, but we have to make investment for the future growth and then the financial structure should be strengthened and solidified in the future. So we would like to strike a balance and we decide the eventual level of the payout ratio in the next phase of the mid range plan, dividend policy and as to return to the shareholders, we will consider that aspect as well.

Next question, please.

Ezawa, Citigroup Securities. Two points. First point. In the first quarter the operating income results, how different it was from the earlier assumption or what has been the forecast and the results? Some explanation or and other relevant factors in your view including ForEx impact? And also the -- some of the business group the annual forecast has been revised upward, is it because of the good results of the first quarter? Or does it have any effect or not? The second point, you talked about corporate and elimination and the risk among JPY 70 billion and I don't know if it could be called as a buffer, but compared to the previous years this amount appears to be high. And as CFO do you foresee any major risks for this year different from other years so that the higher amount of risk buffer is incorporated? Or at this point in time you just happened to come up with this number, it's not that specific, expectation is there about the possible risks.

The first point, I will ask to Takeda San to supplement me. About the initial assumption I would refrain from making comment, it's not that we did not have any assumptions, but internally the earlier number so we try to be conservative and it might be misleading. Therefore we look at the trend and a comparison over the previous year in coming with our analysis and forecast. About the buffers, size of buffers, it's not at this point in time we foresee any major or different type of risks coming. And having said that I'd like to ask Mr. Takeda to supplement me.

About the upward revision of our forecast and the background to it and if I could refer to that a little, IP&S and Game & Network Services and Semiconductors upward revisions were made for IP&S the brisk business of the [ I ] and also the ForEx impact. And the Games & Network Services, ForEx impact is improvement factors but competitive environment and title release schedule some review, impact of review and so the upward revision by JPY 10 billion. And the Semiconductors through the efforts to maintain prices level and also improvement of the cost of production efforts being made, but the change over the product mix for the smartphone manufacture in Asia and the sensor, image sensor business might -- value might be affected. So for three segments the positive aspect of ForEx impact is reflected on the upward revision.

I would like to invite the next question.

Ono, Morgan Stanley. So 1 major question on entertainment particularly pictures business I have a question. This year there's the Spiderman so hit titles here, but in terms of external environment recently Netflix is doing very well and increasing subscriptions there. In your case, in the case of your company as a content supplier and you're a content supplier, and also you're operating PSPUs so there are various different implications on your business but currently the pictures business, particularly centering around TV what's your view of how the market is faring? Should it be considered a risk? So in terms of timing there was a question of business risks that you posted of JPY 70 billion. And is that a risk that you have to consider the risks associated with the pictures?

Thank you for the questions on pictures business. As you correctly pointed out, Netflix and others the OTT players are growing their business in a significant way. So our view of these players is not simple, we cannot be simplistic, because in some ways they are our partners but in other ways they are our competitors and in other ways they are our customers or clients. And therefore how to maintain our partnerships, how to maintain our relationship with them is very important. The how question is very important. And Funimation that we talked about today, there is Funimation now the OTT subscription service that they operate. The biggest platform for this is PlayStation now. And so we have a diverse entertainment range of business all of which need to be enhanced. But the changes in the business is very rapid and so we have to be nimble enough to be able to cope with and respond to those changes in the industry.

Next question, please. So the last row please.

Thank you for your explanation. Sugiyama of Goldman Sachs. About the gaming or gaming business and music. So I have 2 questions. First of all game market. The business segment compared to last year the in-house title or the first party title has a very important role to be played in the last term. But E3 announcement, I think in the next term and later on do you have a first party title or not. Because in the decrease of this profit and revenue you mentioned is expected in the next term and later. But what is your outlook on this? The second point is my question on Music segment. Because in terms of Music the Fate and excluding Fate and others relatively speaking album and others have an impact and which might push down or upward the performance. But what about the current streaming, there is a shift to streaming. So maybe organic growth of the business is likely to take place for Music. What do you think? Qualitative explanation is also appreciated.

First of all the first point maybe I make some comment and Murakami will give some additional comment first. As to game, Games the console trend there is a certain trend of the console trend. So in the major trend, the flow, what happens to the next fiscal year, well, we are not in a position to talk about the next term or next year. But there is a general trend. So based upon the general trend business performance will be linked to the general trend. To a certain extent. Yes, as we mentioned there's a cycle, there's a hardware peak, was last year, and then a year or next year the peak of the software and profit is likely to take place, based upon the cycle of the trend that will be maintained. So we won't deviate from that, based upon the -- there is different to from the conventional business structure console cycle and the peak might have some impact upon us. We'll have to stabilize the profit structure and as of 2018 it's not a solid fear, so we refrain from making any specific comment on this. As to PS-4, the first party title August this year, Uncharted Lost Legacy, Everybody's Golf and [ Grand Design ] and Battle King and all these things are scheduled to be launched, new releases, and so that I think that -- is this a new expected schedule the title releases as to the music also.

The music itself the streaming it's the driving force for the growth in general. The package run, the business, the sales is going down and downloading demand is going down as well. So streaming will be the main driver. Our partner and a very good subscription members are the driving force for us to push up our growth of this music business, they are the key factors to drive growth in music.

Next question please.

Okazaki of Nomura Securities. Concerning the Consumer Electronics be that TV or digital camera or mobiles, in the first quarter there has been a steady recovery of profitability and the upward revision was for the exchange impact of digital camera only. But for other consumer electronics what are you -- what is your view? And including the market environment and other factors you incorporate the risk buffers but what is your view on that?

For the Consumer Electronics, you posed a question, in the past several years for one thing the management of supply chain went rather well and we can say that we are getting better. Especially we place emphasis on sell out rather than sell in. And this culture is taking root. And concerning the quality in some product areas the cost of quality was higher but now the cost of quality issues have been reduced substantially and a good impact is seen in the result of the first quarter.

We are running short of time so this next question will have to be the last one. Yes, please.

Just one point. Katsura, SMBC Nikko. And this will be the continuation of the previous question about the changes in the Consumer Electronics, particularly the mobile and IP&S. As far as the mobile business is concerned [indiscernible] I think it's negative. But still the profits will be increasing you say and the -- look at the unit volume for smartphones, again there's an upside it seems but the sales revenue is declining. So the situation in the mobile business, what is the situation, there are a lot of factors, some plus, some negative. So what is your general view of the situation, the state of affairs in the mobile business? And secondly DSCs, the unit volume has been revised upward, the digital cameras. And as you said before, the upward revision is due to the review of the ForEx assumptions, but can you elaborate on the view about this situation?

I'll have my colleagues answer more. But there's a change in the timing of introduction, for instance. So that's a factor that affects the results but Mr. Takeda will explain this. But as far the DSC is concerned, the interchangeable lens cameras the ILCs take away the full frame models. Alpha 9 is launched as we explained before and there's a strong and good momentum that we've been able to maintain. That's our general take of the market. Yes, the mobile business for the first quarter. So as smart phones business is concerned you do not lose money. But as far the unit volume is concerned compared to last year, there's a slight decline in the number of units but the premium products and so-called value products, the mid-range products the mix between the 2 has changed somewhat. So that there's some decline in the premium models. But is this a situation that will continue to affect the profitability at the end of the year? No, we do not think so. About Digital Imaging, the DI, as has been explained our policy in Consumer Business is not to go after the volume unnecessarily. So the inter lens cameras and the premium model DSCs, the compact cameras, the high-end models did very well in the first quarter. The market situation is such that the market continues to shrink. But as far we are concerned, our major field of play in the premium models position, we'll continue to work on further improving our position in the premium segment of the market. So the results were good in first quarter, but the year has just started so we will take a wait-and-see attitude and see how the year would end.And with this we'd like to conclude the session for today. I'd like to appreciate your participation today.