Hello, everyone. I am Kazuo Hirai. Thank you for being here today despite the short notice. As announced at 3:00 p.m. today, current executive Deputy President and CFO, Kenichiro Yoshida, will be succeeding me as Sony President and CEO effective April 1. I will offer my support to Mr. Yoshida and the future of Sony in my new role as director and chairman. Ever since my appointment as President and CEO in April 2012, over the past 6 years, I have dedicated myself to transforming the company and enhancing its profitability. I had been considering for some time, when would be the appropriate time for me to step away from my role? The company's approaching a crucial juncture as we prepare to embark on a new mid-range plan. I decided this would be the ideal timing to pass the baton of leadership to a new management team for the future of Sony and also for myself to embark on a new chapter in my life. Towards the end of last year, I informed Osamu Nangayama, Chairman of the Board and Chair of the Nominating Committee, of my decision. While Sony's nominating committee comprising mainly outside directors had been regularly discussing management succession plans, and Mr. Nangayama and I subsequently held several discussions following which he and the Sony board agreed to respect my decision. I am very grateful to Mr. Nangayama and the board for their understanding and support. Throughout my tenure as President and CEO, I have stated that my mission is to ensure Sony continues to be a company that provides customers with kando and inspires and fulfill their curiosity. I have strived to lead the company accordingly. At the time of my appointment, the largest and the most pressing challenge was the turnaround of our consumer electronics business. Working together with everyone to tackle this challenge head-on and revitalizing the business operations so they could deliver stable profit was for me, personally, a deeply moving experience. Do not pursue scale but instead pursue differentiation. I took inspiration from this DNA and various of our founders. Over the past 6 years, I gave my all to driving the company forward. There were, of course, many challenges -- challenging moments when I had to make difficult decisions that impacted our employees and the stakeholders around the world. However, I took the decision in the belief that they were imperative to ensuring Sony's recovery and future growth. Even during such testing times, I always tried to lead the company in a way that would uphold our spirit of innovation and our confidence to take on new challenges to move the company forward, while always maintaining an awareness of what it means to deliver kando to our customers through our products and content and services. I'm very proud that now, in the third and final year of our current mid-range corporate plan, we are expecting to exceed our financial targets. And it excites me to hear more and more people enthused that Sony is back again. I am extremely grateful for the continuous support of our customers, business partners, shareholders and investors around the world. And I also greatly appreciate the guidance I received from the board and dedication shown by my outstanding management team and, of course, the tireless efforts of all the Sony Group employees who put their faith in me and the roadmap I laid out, never giving up, however daunting the challenge. My successor, Kenichiro Yoshida, has supported me closely over the past 4 years contributing extensively beyond his remit as CFO and acting as valuable confidant and business partners as we took on the challenge of transforming Sony together. His many achievements and leadership qualities need no introduction, and I believe his deeply strategic mindset brought perspective and experience across business -- diverse business areas together, with his unwavering leadership strength make him ideally suited to lead Sony going forward. The nominating committee had been regularly discussing potential management succession plans, and I understand that in recent discussions in the committee, Mr. Yoshida had emerged as the leading candidate to my potential successor. At the same time, when I informed the nominating committee of my decision to step down, I also proposed that Mr. Yoshida would succeed me as CFO, and I appreciate the board also unanimously supporting his appointment. The company will now embark on a new mid-range plan from April under the leadership of Mr. Yoshida and his new management team. Although we have made significant progress in improving our financial results, the competitive landscape is changing as rapidly as ever, and all of our businesses continue to face great challenges. Under Mr. Yoshida's leadership, I expect the new management team to maintain an acute sense of vigilance and urgency as they emerge in our -- engage in our business operations. While I look forward to continue my relationship with you in my role as Chairman, but I'd like to take this opportunity to express gratitude to all of you, investor and analyst community here today. Thank you all for your support over the past 6 years. J. Hill: Next, I will call up Mr. Yoshida to speak.

Good evening, ladies and gentlemen. I'm Kenichiro Yoshida. As announced today, I have been appointed as President and CEO of Sony Corporation. I'm grateful to Kazuo Hirai and the Sony board for their trust and confidence in appointing me to this extremely important role and feel a great sense of responsibility as I take on this key position. Just over 4 years ago in December 2013, I returned to Sony from the ISP company So-net, where I had spent the previous 14 years of my career. Mr. Hirai offered me the opportunity to join him in revitalizing Sony, and I was inspired by the way that he was addressing difficult issues head on and without delay. Sony had provided me with many life-changing opportunities and enabled me to pursue a varied and diverse career. So I also saw this as a chance to give something back to the company that had given me so much. Since then, I performed the role of CFO within Mr. Hirai's management team. In this position, I've strived to enhance the company's management accountability and contributing any way possible to transforming Sony into a highly profitable enterprise. I'm pleased that this year is the final year of our second midterm corporate plan, we're able to forecast exceeding our targets and achieving our highest profit in 20 years. However, at the same time, this also signifies that, as a company, we have been unable to surpass ourselves for the past 20 years. During this period, the global business environment surrounding Sony has changed drastically. Although we are now able to forecast a return to record profit levels, our position in the global market is still very different to where we were 20 years ago. Mr. Hirai and I both share a great sense of urgency regarding a need for us to enhance our competitiveness as a global company. I believe that Sony's greatest strength is the S-O-N-Y brand that resonates with so many customers around the world. It has been and always will be our greatest asset. At Sony, we have a diverse array of employees engaged in a diverse range of businesses. How we go about maximizing this diversity to our advantage is one of our most pressing challenges. From April, we will embark on our next mid-range plan under a new management structure. I'm also considering other executive appointments and organizational changes beyond those announced today. We will update you on these changes once they have been finalized. I intend to present details of our future strategic direction at our next Corporate Strategy Meeting scheduled to be held soon after our full year earnings announcement. Together with my management team and all our employees, I will devote myself, my full effort to creating a better Sony that captures the imagination of our many stakeholders around the world. I hope I can count on your continued support going forward. Thank you for your attendance here today. J. Hill: Thank you. We would like to take your questions. J. Hill: And of course, Mr. Yoshida will discuss the earnings. So please defer your questions about the earnings until then. We will bring a microphone to you. Therefore, please identify yourself and affiliation. Since time is limited, may I ask that you ask a question -- 2 questions per person and not more.

SMBC Nikko, my name is [ Katada ]. My question is directed to both Hirai, one to Hirai-san and other for Yoshida-san. Now a general question: why now and why Yoshida? So you chose to make this announcement or make a disappointment at this time, this juncture. I always go age-wise, I think Mr. Yoshida is senior by 1 year and yet if decided that it should be succeeded by Yoshida. Now what about the right to be a representative member or director? Now succeeding this position is a very, very challenging job. So how do you feel? What are your commitments today? So I'm sure there are certain things that you would like to continue, and there are certain things that you would like to change. You have changed the combination or the sequence of the segments. Maybe this is just one example of what you might want to do in the future.

Thank you. Timing, why now? In case of Sony, we have the 3-year, mid-range plan. I became the President in April of 2012 and I ran 2 cycles. And as we're going to discuss about the financial results, we believe that during the second period, we were able to, in the final year, book a very high level of results, the highest. So Sony has been improving, and Sony is in a very good state. And I believe that this was the right time to hand over the responsibility to Yoshida. Now what about my -- and I think it's my life plan as well. Why Yoshida? I have a long story. And during the past 4 years, we were working very close together. Expressions or the way we phrase it may be different, but we're looking into the same direction. The vector is the same. So we are in agreement on many things. He has the managerial skill, the leadership and also the wisdom and the expertise in different areas. He was more than the CFO. I have witnessed that he was truly an excellent CFO and his contribution was even beyond CFO. That is why I have recommended that I'll be succeeded by Yoshida. How am I going to be involved? I think I have to make one thing very clear. Succession, who will be the leader, I think must be known very clearly inside and outside of the organization. After April 1, the new President, Mr. Yoshida, and his team would be responsible for the management of the Sony Group. He is the leader. The board has asked me to stay as a member of the board and assist Yoshida, and I have accepted that. So as long as I'm needed as a Chairman of the Board, I would like to support Yoshida in the management team. So to be more concrete, in the game business or entertainment or network, I may be able to provide some advice. And I have just returned from Davos meeting. So I may be present and attending in different functions and events and meetings of Sony or other organization. So upon request from Mr. Yoshida, I may be attending those meetings as a representative of Sony. But again, I am assisting Yoshida. And as a member of the board, I wish to be making contributions to the Sony Group. Thank you.

Now Mr. [ Katada ] asked me how do I feel today. What am I going to keep on maintain, sustain or change? As I said at the outset, I feel the gravity or the importance of the responsibility, JPY 8.5 trillion of top line, the total sales, customers support this figure and 120,000 of employees. Together with the shareholders, there are 480,000 of them. They all support this. So we have different stakeholders, and so I have a responsibility vis-à-vis all of those stakeholders. They are maybe sustaining, succeeding certain things or maybe changing. Now over the years, I have been working together with Hirai. So I don't think I need to change the direction. The kando is one vision, [ or ] recurring is a concept. I think I would like to further advance and evolve those concepts. The kando, the people who would be emotionally moved and those who creates kando, and I think we have to make sure that we have a good link between the two. J. Hill: Next question, please?

Ono, Morgan Stanley. First, for the past 6 years, you have worked hard to lead the recovery of the financial results. To Mr. Hirai, I'd like to pay tribute to you, the appreciation and the congratulations. And also, I have high hopes and expectation towards the new management structure and Mr. Yoshida. Now I'd like to ask each question to both Mr. Hirai and Mr. Yoshida. Six years ago when you assumed the position, Mr. Hirai, up to now, now in terms of spirit of the employees internally with Sony Group, what sort of change do you see, especially from us? You have declared the nondividend distribution first time after the listing of the company and -- but you have declared that drastic measure. And what is your feeling about it? And the question to Mr. Yoshida is that under the management, new management structure from April where the profitably has improved and you have done away with the waste and the structure became slim. But in terms of resources, including development resources, you would have to build up further and supplement further. Now what about -- what are your views about the current state of your resources as well as the management structure? What would be the area you would emphasize or prioritize to the extent possible at this point in time? Please respond to these points.

Now internally, in the mindset of employees, you questioned, the Electronics business was the matter of urgent priority. And if I could focus on that, six years ago, when I became the President and CEO, the product concept of Sony's Electronics business or the direction of the business maybe we were lost and lost the sense of direction we should go. And we were mired in the price competition and also bogged down by the specification and competition race. So what I emphasize always is that Sony products have the functional value as well as emotional value. Functional value, that is in terms of specification, we should pursue that. But that alone would not make Sony's product should appeal to the emotion and senses. It should be a wow product in terms of the appearance and the basic quality and without changing the high quality of Sony's products and appearance, we should appeal to the customers. That should be the way. Therefore, I emphasize at these both aspects of value, functional value and emotional value. And also, when everyone joined forces together, Sony has a basic strength. The recent example is that 1.5 years ago, I declared that we will start working on aibo again and the number of parts of aibo is 4,000. But in a short period of 1.5 years, the products were launched. And this clearly shows that when employees become of one mind and determination, it becomes possible. And it was a formidable job, but I spent time and went to the forefront of the activities and share the views and worked together with the employees. And I kept such approach throughout 6 years to incentivize the employees. About the nondistribution dividend, that exerted a major impact internally as well. But that was a shock measure, and we had to take that decision to make a positive turnaround. And externally, we show the extent of strong commitment we made to make Sony a better company. That was expression of our determination.

Your question about the resources we have in Sony, as you pointed out, we have the challenge of resources and this is a very important issue. For one thing, we should improve the overall productivity and do away with unnecessary meetings, conferences and the reports. And also, how to attract talents from outside, that's another important aspect. In that sense, as Mr. Hirai mentioned, the example is the aibo in terms of robotics and AI going forward. It is a very important product attracting the necessary human talents. Well, there is a discussion of to what extent the aibo can achieve a revenue and profits, but at the same time, what's important is to launch such products and have it as an attractive magnet to invite necessary resources and talent to Sony. Thank you. J. Hill: Next question, please?

My name is Ezawa from Citigroup Securities. I have a question, one each, respectively. First, I will ask Mr. Yoshida. While the expression may be different but the vector, the orientation remains the same between you and Mr. Hirai. And first, as you embark on this post of CEO, President and CEO to be more specific, how different you are in expression from Mr. Hirai? You said the vector orientation is the same, but let me just ask you, confirm again, well, of course, you have explained this, but I would like you to state it again, what's the orientation or vector you are talking about? And then I have one question to Mr. Hirai. As you become Chairman, CES and E3 and -- will I miss you speaking on the stages of these events? Because you were so brilliant and shining on the stages.

Thank you very much. Vector remains the same, and the expression may be different, I said. So what's the difference, that's the question I assume. Let's say the vision of kando, this same expression, we use the same expression for kando. But I say those people who experience kando and those who create kando and try to approach them, and for us, as far as people are concerned, last 1 inch is the word used by Mr. Hirai and maybe I use a different expression, but users and creators, we need to approach them, get closer to them. In that sense, the vector remains the same between me and Mr. Hirai.

And CES, will I ever appear again. Going forward, well, there are various events, I -- sometimes -- it is appropriate for me to go and make the presentation. In case of the product announcements, I am not -- I will not be involved in operation with Mr. Yoshida or the local sales operations top executives may appear. There are various options available. It depends on the occasion. Sometimes I may make presentation, again. So you said that I was shining. Thank you very much for the compliment, but other top management, I would like them to come to the stage and shine. So in various stages, various people will appear. Thank you. J. Hill: I'm afraid that the next question will have to be the last question. Let me go to this side.

Nakane from Mizuho Securities. Mr. Hirai, thank you for working so hard for the past 6 years, and good luck to Mr. Yoshida. I wish you success. Maybe you may not be able to respond to this now, but having observed the 6 years of reform from outside, there was spin outs, split outs and also disclosures of information. You've done some wonderful things. But for each business to be profitable, and we've reached that stage. And I think Mr. Yoshida referred to this shortly, but to unite Sony into one, the coordination, togetherness amongst the business units, right now, I think you have been optimizing each business unit. But maybe the geographical strategy is not that visible yet. So what vector would you be pursuing in the future? What is your recognition today? Which direction would you want to pursue? So please share your thoughts as of now, Mr. Hirai, Mr. Yoshida. I'm sorry, I have been so very, very [ rude ]. I'm sure you understand what I'm trying to arrive at.

It's very difficult to state in just one word, but split-outs, the Electronics was splitted out. And of course, before that, pictures, games, music, music publishing, financial services had been managed by a separate entity. And so we have the centripetal and centrifugal force. Both of them. We have argued what are needed and we discussed this very seriously. And as you know, the leader of each Electronics division was appointed as the executive officer serving the corporate headquarters. So they managed the business units or the businesses, and at the same time, serve as an executive director for Sony so that we can maintain the balance, the centripetal or centrifugal force. That's how we designed it. If you look at the recovery mode of Electronics and the collaboration between the different companies that had been split out, I think it has worked well. It's functioning well. One example, I talked about aibo. The AI robotics division started from a scratch, but as IPS engineers obviously Ishizuka-San's team, and other people from different parts of the company were put into that division. So we put resources from different divisions to realize aibo. So I don't think that there has been too much of an adverse impact on split out. Geographical strategy, I can talk for a long time, but I think it varies according to businesses. Should you look at the geographic strategy per business or for the entire team, so the question is that. Depending upon the business, it may change. It may be different. That's how I have thought as we -- as I managed the company during the past 6 years, he says once only and he also embarked upon the split-outs. And some people argue that if you do that, the overhead or the administration costs would increase. But a split-out enhance accountability. So at least if you look back, it was the right thing to do. It was not wrong.

Now disclosure. Of course, we wanted to respond to you, to your request. But most of that -- the disclosure would improve the company. You have to explain all because if you conceal it, you cheat yourself. So I think disclosure, I think, is a very important policy embarked by Hirai. Geographical strategy, the areas [indiscernible], and we have started a joint effort to the start level. So what Hirai says frequently is that we have to nurture the local artists. That's he has been approaching this since the past. It's not just the content. In all business areas, I think we have to make sure that we do not miss or overlook anything in the area. Maybe this is one area that we can revisit. Thank you. J. Hill: Thank you. This will conclude the Q&A on the new management structure. From 18:55, we would like to start the Q3 FY 2017 consolidated financial results presentation. So please, we seek for your patience. [Break] J. Hill: A bit earlier than scheduled, but we would like to start the announcement of Q3 FY 2017 consolidated financial results. Today, we have the presenters here: Executive Deputy President and CFO Representative of Corporate Executive Officer, Kenichiro Yoshida; Corporate Executive, Corporate Planning and Control and Accounting, CIO, Kazuhiko Takeda; Corporate Executive and Finance, Atsuko Murakami. Today, Mr. Yoshida will make the presentation to be followed by Q&A session. In total, we expect 35 minutes. Mr. Yoshida, please.

I'm CFO, Kenichiro Yoshida, and today, I would like to explain 2 topics in the next 15 minutes. Consolidated sales in the third quarter increased 12% year-on-year to JPY 2,672,300,000,000. Consolidated operating income was JPY 350.8 billion, approximately 3.8x the same quarter of the previous fiscal year. Net income attributable to Sony Corporation shareholders was JPY 295.9 billion. As is shown in this slide, operating income in the third quarter, the previous fiscal year and the current fiscal year included certain extraordinary items. Excluding those items, operating income would have increased by JPY 137.4 billion. This chart shows the cumulative results for the first 9 months of the fiscal year. Adjusted operating income increased by JPY 263.7 billion or approximately by 65%. This chart shows the results by segment for the third quarter. Please note that we have changed the order of segments from this quarter. This slide shows the results by segment for the first 9 months of the fiscal year. Next is the consolidated results forecast for fiscal '17. Consolidated sales remains unchanged from our October forecast at JPY 8.5 trillion. We have revised upward our operating income forecast by JPY 90 billion to JPY 720 billion. We have also upwardly revised our forecast for net income by JPY 100 billion to JPY 480 billion, partially due to the recording of JPY 13.8 billion gain in the third quarter resulting from the recent tax reform in the U.S. For several years, we have had valuation allowances recorded against our deferred tax assets in the United States. As a result, the reduction in corporate tax rate brought about by the tax reform in the U.S. has not caused a onetime increase in income tax expenses. This fiscal year results -- the fiscal year results forecast for each segment are shown on this slide, and as you can see, we have upwardly revised our operating income forecast in the Music, Semiconductors and Financial Services segment. At the time of October forecast, we have incorporated a loss of JPY 50 billion in corporate and elimination as contingency for business risks, but no contingency is included in the forecast this time. Operating results are trending well, but we recognize that these results are being supported by external tailwinds such as forex and the stronger global economy. We expect forex, one of the external tailwind, to have approximately JPY 60 billion positive impact on the 5 electronic segments in total for the fiscal year. And I will now turn to the situation in each of our businesses. First, I will talk about Game & Network Services segment. Sales for the quarter increased 16% year-on-year, primarily due to an increase in PS4 software sales and the impact of forex. Network sales have increased 41% year-on-year and have exceeded JPY 300 billion on a quarterly basis for the first time. Operating income increased JPY 35.3 billion year-on-year to JPY 85.4 billion, primarily due to the increase in sales and the impact of foreign exchange rates. We had a strong holiday season with cumulative sales through units of PS4 exceeding 73.4 million unit as of the end of December last year. In addition, subscribers to PS Plus, our paid subscription service, exceeded 31.5 million as of the end of December last year. We have reduced our forecast for fiscal year sales by JPY 60 billion compared with October forecast to JPY 1,940,000,000,000. This is due to a change in the launch date of a certain software title as well as an increase in sales of PS4 hardware at proportional prices during the holiday season. Our fiscal year unit sales forecast for PS4 remains unchanged at 19 million units. Our forecast for operating income remains unchanged at JPY 180 billion because the impact of the above-mentioned decrease in sales is expected to be offset by the reduction in SG&A expenses. Next, I will talk about the Music segment. Third quarter sales increased 22% year-on-year and operating income increased JPY 11.4 billion to JPY 39.3 billion. The mobile game application, Fate/Grand Order, continued to make a significant contribution to financial performance. Streaming revenue continues to grow, increasing 37% year-on-year. We have upwardly revised our forecast for sales by JPY 50 billion to JPY 780 billion from October forecast to reflect the strong performance through the third quarter. We also upwardly revised our forecast for operating income by JPY 16 billion to JPY 110 billion due to the increase of sales. Next, I will talk about the Pictures segment. Sales increased 16% year-on-year, and operating income improved JPY 117.3 billion to JPY 10.5 billion. This significant improvement in results was due to the absence of the above-mentioned JPY 112.1 billion impairment charge of goodwill recorded in the same quarter of the previous fiscal year. Jumanji, which we released near the end of December, has been performing very well at the box office. There's no change to our fiscal year forecast for sales and operating income. Although the above-mentioned Jumanji has been performing quite well, we expect its positive impact to be offset by the negative impact of lower home entertainment sales, including DVD and Blu-ray sales. Next is Home Entertainment & Sound segment. In the third quarter, sales increased 22% year-on-year, and operating income increased JPY 20.3 billion to JPY 46.2 billion. The increase in sales and operating income was primarily due to a shift to high value-added models, primarily 4K Televisions, and the positive impact of foreign exchange rates. We have upwardly revised our forecast for operating income by JPY 4 billion to JPY 80 billion, primarily due to an improvement in product mix in Audio and Video. Next, I would explain the Imaging Products & Solutions segment. Third quarter sales increased 8% year-on-year, and operating income increased JPY 4.9 billion to JPY 26 billion. The increase in sales and operating income was primarily due to the positive impact of foreign exchange rates and a shift to high value-added models. There's no change to our forecast for the fiscal year. Next, I will talk about the Mobile Communications segment. During the third quarter, sales decreased 13% year-on-year primarily due to a decrease in smartphone unit sales. Operating income decreased JPY 5.4 billion to JPY 15.8 billion. This decrease was primarily due to the above-mentioned decrease in unit sales and an increase in the price of key components and the negative impact of foreign exchange rates, partially offset by reductions in operating costs and the reversal of patent royalty accrual. We have lowered our forecast for annual smartphone unit sales by 1.5 million units from our October forecast to 14 million units. As a result, we have reduced our sales forecast by JPY 40 billion to JPY 740 billion. The forecast for operating income remains unchanged. We would like to generate a profit again this fiscal year primarily by offsetting the negative impact of the above-mentioned decrease in unit sales by reduction in operating costs. Next, I will talk about the Semiconductors segment. In the third quarter, sales increased 7% year-on-year, and operating income increased JPY 33.4 billion to JPY 60.6 billion. The increase in sales and operating income was primarily due to an increase in unit sales of image sensors for mobile products. The sales for the third quarter includes some revenue from fourth quarter shipments that were accelerated due to the timing of an upgrade of our supply chain management system. We have reduced our sales forecast by JPY 30 billion compared with the October forecast to JPY 850 billion due to a decrease in unit sales of image sensors for mobile products shipped to Chinese smartphone makers. We have upwardly revised our operating income forecast by JPY 5 billion to JPY 155 billion primarily due to an increase in gains from asset sales and a reduction in expenses, partially offset by the decrease in sales. Short-term demand for image sensors for mobile products is fluctuating, but we expect growth to come from the adoption of dual lens and sensing applications. Moreover, our view that the market for image sensors will grow over the mid to long term is unchanged because we expect growth to come from other applications such as automotive as well. Lastly, I will explain the Financial Services segment. Third quarter Financial Services revenue increased 17% year-on-year and operating income increased JPY 27.3 billion to JPY 56.3 billion. This increase in operating income was primarily due to the recording of a gain on the sales of real estate held for investment purposes and a decrease in net losses on derivative transactions to hedge market risk. We have raised our forecast for Financial Services revenue and operating income to JPY 1,250,000,000,000 and JPY 175 billion, respectively. These upward revisions were due to the fact that results in the third quarter were higher than the October forecast. Now I would like to discuss our assessment of the financial strength of Sony. First, I will discuss cash flow. This slide shows a consolidated cash flow excluding the Financial Services segment because the nature of the Financial Services business differs from our other segments. For the first 9 months of the fiscal year through the end of the third quarter, the combination of operating and investment cash flow was positive JPY 237.7 billion, as is shown at the bottom of this slide. Cash flow has improved significantly compared with the same period of the previous fiscal year when it was negative JPY 160.6 billion. This is primarily due to an improvement in profit. Now I'd like to discuss the state of our balance sheet. On the right side of this slide, you can see your balance sheet, excluding the Financial Services segment. As of the end of December 2017, Sony Corporation's stockholders' equity was about -- approximately JPY 2.2 trillion. If we look back over the last 10 years, stockholders' equity decreased from a peak of approximately JPY 3.3 trillion at the end of December 2007 to a low of approximately JPY 1.4 trillion at the end of September 2012. However, primarily due to improved operating performance since that time, equity has recovered somewhat. As I mentioned earlier, cash flow has significantly improved recently but stockholders' equity has just begun to improve. Going forward, in order to make proactive investments for future growth, we want to enhance stockholders' equity and our overall financial position a little further through continued recording of profit. This ends my presentation. Thank you. J. Hill: Now the floor is open to your questions. J. Hill: Those of you with questions, please raise your hand.

Nishimura of Credit Suisse Securities. Two points, the first question, how would you foresee the fourth quarter of the current fiscal year? And when you subtract the result of third quarter from the new forecast, then the fourth quarter results turn out to be lower. But going into the next fiscal year, are you planning to spend positively? Or would you be taking risks in each business? And the second point about the image sensors business. In terms of capacity, at the end of -- towards the end of March, you have been increasing the capacity, and I'll like to know the rate of capacity operation. And the major customers, the major manufacturers in China, what is the prospect of recovery of the market?

The first point answered by Mr. Takeda, and the second question, I would like to answer. And I would like to start with the second question on the Semiconductors. As I mentioned in my presentation, compared to our assumption, our shipment to Chinese market, well, there was a contraction of Chinese market, that was a factor. And the average input in the third quarter was 86k. 86,000 in terms of output, and it was lower than the previous quarter. But in terms of our capacity, it was a full capacity operation. And for the fourth quarter on a monthly average, in terms of input, 82k. And we think the level in January would be the bottom. There may be under capacity operation immediately, but we will resolve that issue. The profit level for the fourth quarter -- and during the fourth quarter, usually we had a seasonal change, and also, we have to deal with the expenses such as R&D expense. So on that basis, for the current fiscal year, I can point to 3 points. The first, we have the heavy inventory at the end of December in products in the U.S. And also, the image sensors demand for U.S. market, we have to watch it very closely. And also, as was questioned, not for coming fiscal 2018 but we have to sort out the asset as well as renewal of information systems and withdrawal from nonprofit-making business. And because the results are favorable, we have to take a quick measures without waiting for the next fiscal year. J. Hill: Our next question would be from this side in row 1.

Hirakawa from Merrill Lynch. I have 2 questions. First, I'm also going to ask about Semiconductors, so it may be repetition. In fourth quarter, there will be restructuring charges. How much would it be in the area of semiconductor structural reform? And also, what is your anticipated capacity at the end of this fiscal year? I know that you have future prospects, investments. And also, when you are making presentations on new appointments, if you could explain why you have changed the order of the segments where you have realigned, why have you realigned the segments?

Thank you. The fourth quarter, how much will we be charging for structural reform? It's approximately JPY 6 billion. That's all. About the capacity, I think there was a question about capacity -- excuse me, this is something that I have touched upon this when there was a last meeting. It's 88k right now. We have the capacity of up to 88k. But it's going to be increased up to 100k. And we are working on the equipment right now. On the segments, users and creator was focused. So we looked at the -- it does not mean -- it does not measure the significance of each business to group. But to realize kando, we have to be more customer-focused, the users and also creators, who generate creators. So we wanted to be closer to those. As you know, in the Game -- and we have a network service that links directly to the users. And also, there's IP creation and hardware that links. Music, Pictures, it's on the content side creating kando. Under the Sony brand, you have Electronics hardware that links users and creators under the 3 segment. And also, the Electronics hardware is supported by devices and semiconductor. So that's how we look at this. Financial Services, it's publicly listed. That is why we put it at the bottom. This is all that is a reason behind realignment. J. Hill: Next question?

My name is Sugiyama from Goldman Sachs. I have a question about games and vectors. In the Game business, PS4, the cycle of the PS4, what is your recognition, perception of this current cycle? And more detailed question, software release has been -- well, is being postponed. Operating income has not changed. So there should have been somewhere the upside. So compared to the budget, what was the situation? For Pictures, how good are you feeling? Jumanji and Spider-Man, they are relatively going well, and it has been franchised you have been involved with for some time. So has -- what's the -- do you feel about the change of the orientation of the pictures and crickets IPO -- IPL, if you could comment on that.

Allow me to answer the second point first, and then Murakami-san will answer the first question. Pictures, Jumanji and Spider-Man, the creative policies change and how good we feel about it. After the change to Tom Rothman, what he has been dealing with that the pictures he has been handling has been coming up. Spider-Man and Baby Driver has been a great hit with great profitability. And Jumanji this time came. And one thing I can say is that Jumanji, the last time, I think it was 22 years ago, 1995 release. It's not a sequel but reboot of Jumanji of 1995 this time. In Pictures, there is 3,500 titles in the library. By holding studio with long history, you can look at the past library, and we can make investment to the titles which can reboot the old titles. Jumanji itself has brought profit but value of the IP, Jumanji IP, has increased, which is important to us at Sony. So for creatives, to a certain extent, we are getting a good feel. We are feeling the influence, the impact of losing cricket IPL. We have acquired TEN Sports. So in terms of sports content, we went ahead for acquisition in view of the risk of losing IPL. So there has not been major impact so far.

First, about the games console, console cycle compared to previous time -- well, we have been saying that the hardware peak, the same year -- the next year, the profit will peak. What's different this time is that we tried to leverage on the change after the waves of the peak, we need to stabilize the earnings base and the business structure is different, there are several difference. One, PS Plus, subscription-type recurring businesses contributing and then console cycles wave have been mitigated. And PS4 users network for enjoyment of games and users find it different. After purchasing software, user can resort to add-on contents. Download contents can be purchased or currency within the game or we can expect sales from this. So console cycle compared to the traditional console cycle, the vicissitude has been mitigated. In this fiscal year's profit from first quarter until the end of third quarter, as has been mentioned earlier, this year, foreign exchange had a positive. From first quarter to third quarter, the sales has been positive and the profit has been positive and the foreign exchange impact has been large relatively. The third quarter loan, the foreign exchange rate, JPY 41.6 billion in sales and JPY 2.3 billion in profit. That was the effect in fourth quarter. PS4 software centering around this software, the investment -- overall investment will be on par with the previous year. For profit, the sales is increasing and the PS4's hardware cost reduction is a push upward for the profit compared to last year. Last year had the large pickup games, titles released, which we don't have this year. So there was some push, downward pressure on the profit because of the SG&A increase and royalties' adjustment that I explained earlier, with this adjustment, JPY 16.7 billion, and then about JPY 5 billion worth of increase in profit is expected. J. Hill: This is going to be the last question in view of time constraint. So please.

Ezawa of Citigroup Global Markets, Japan. And 2 questions. The first question concerning Motion Pictures business. In your presentation, you mentioned the improvement efforts are going well and you have a good feel about it. Now the revitalization or rebooting of IP you are working on and with the continuation of these measures, then do you think there is no need to have a major restructuring in Motion Pictures segment? And the second point, the operating profit during the third quarter by segment and actual results, are there any segment where there was a major deviation from the original plan internally?

What I mentioned earlier is the good feel about the creative value. And what I mentioned is, for instance, home video, DVD or Blu-rays, such home entertainment discs, the business results underperformed against the plan, and the market is declining. So as a motion picture, there are structural challenges and we should take measures in terms of structures of the market. Anthony Vinciquerra, the current management, will be in discussion with us. And about the third quarter results by segment, any deviation from our original plan, I'd like to refrain from making specific comment for each quarters by segment. Thank you very much. J. Hill: This concludes the earnings announcement, and thank you very much for your attendance.