[Foreign Language] Ladies and gentlemen, we would like to have the presentation on Q1 fiscal year 2016 consolidated financial results of Sony Corporation. We'd like to thank for your attendance despite your busy schedule. Let me introduce the representatives who are seated on the stage. First, Kenichiro Yoshida, the Executive Deputy President and CFO, the representative of Corporate Officer; next to him is Kazuhiko Takeda, the Corporate Executive, Corporate Planning and Control and Accounting. And also, we have Ms. Atsuko Murakami, the Corporate Executive Finance Department. First, Mr. Yoshida will give the initial presentation and in the remainder of the time, we will accommodate your questions. Overall, we intend to spend 45 minutes. So to you, Mr. Yoshida.

I am CFO Kenichiro Yoshida. Today, I would like to explain 2 topics in the next 15 minutes. Consolidated sales for the first quarter of fiscal 2016 decreased 11% year-on-year to JPY 1,613.2 billion. Consolidated operating income decreased 42% year-on-year to JPY 56.2 billion. We estimate that the negative impact of April Kumamoto earthquakes on the operating income of the first quarter was approximately JPY 34.2 billion, including opportunity losses. Net income attributable to Sony Corporation's stockholders decreased 74% year-on-year to JPY 21.2 billion. In the same quarter of the previous fiscal year, we recorded several onetime items such as asset sales gains. Specific examples are, as shown here. A total of JPY 35.1 billion in onetime profit was included in operating income, and a total of JPY 49.5 billion in onetime profit was included in other income of the first quarter of the previous fiscal year. Next I will turn to the results by segment. From this fiscal year, we have separated the Devices segment into 2 segments: the Semiconductors segment, which was recently made into a separate subsidiary; and the Components segment. Compared with the same quarter of the previous year, an improvement in the profitability of the Game & Network Services segment and the Mobile Communications segment contributed significantly to the results. On the other hand, the profitability of the Semiconductors segment deteriorated significantly year-on-year. Next is a consolidated result forecast for the current fiscal year. Our consolidated sales forecast has been revised downward by JPY 400 billion, mainly due to the impact of the appreciation of the yen. Profit forecast remains unchanged from May forecast, and foreign exchange rate assumption has been changed to JPY 103 to U.S. dollars and JPY 114 to the euro, as is shown here. The negative impact of the change in…

Now the floor is open to your questions. Those of you with questions, please wait for the microphone and please identify yourself by stating your name and affiliation before asking questions. And please confine the number of questions to 2 per person. Anyone with questions, please raise your hand. The person at the front row of the block desk.

Ayada of Daiwa Securities. Two questions, if I may. First question, the Page 10 on semiconductors, and the first quarter results, I like to ask about. And this time, we did [indiscernible] by JPY 76 billion in the first quarter and JPY 68 billion decline excluding the ForEx impact. And about the breakdown of it, the camera module impairment, JPY 20.3 billion; and the Kumamoto earthquake burden, JPY 24.7 billion. So JPY 45 billion as the factors, and the difference is JPY 23 billion. It would come from decline in sales. They say the impact of decline in sales would be about JPY 10 billion to JPY 15 billion, which means, excluding the primary factors, the decline in profit appears to be larger. Is there any other aggravation in product mix in the first quarter compared to previous year or the increase in cost? Are there any supplementary factors you can talk about? That's the first point. And the second question, this time, in some cases, you changed the full year results, and a cancellation for the headquarters are increasing JPY 38 billion. At the beginning of the year, exchange rate by segment as a whole, there are differences, and that accounts for JPY 20 billion and opportunities, JPY 35 billion, they were included. And how these were changed this time around in your full year forecast?

The first point about the semiconductor first quarter results. The volume and the high cost of depreciation, and Takeda will explain in details. And about the opportunity what is our accounting. We increased the opportunities, which means that the hurdle is higher to achieve the results, and Takeda will further supplement this.

The first point, Semiconductors segment, the aggravation of profitability over the previous year, as we pointed it out, JPY 24.7 billion impact of the earthquake and the impairment of module, JPY 20.3 billion. In addition to that, JPY 7 billion impact of exchange rate, and the volume and the price sales related factors amounted to JPY 9 billion. And the remaining JPY 10 billion increase in capacity starting from previous year, and that established [ph] the cost of depreciation along with that investment. And the headquarter cancellation and the elimination, as you pointed out, JPY 20 billion. In May, we included, as the ForEx risk buffer. And at that time, a JPY 30 billion opportunity was included. And in this regard, increasing JPY 10 billion. So we have the opportunity of about JPY 45 billion in the business upside. During the first quarter, the TV business was the game network and Music, in these business segments, so we have an upside. And in addition to that, the insurance payment received about the earthquakes. And for the company as a whole, we would like to achieve that by improving the results and reducing the costs.

We will take the next question, and please raise your hand if you do.

Sugiyama from Goldman Sachs. I have 3 questions. First about the Game business, 2 questions about the Game. Play Station VR reservation seems to be very brisk, doing quite well. And I think you are getting additional reservations. But what is your production plan? Has there been any change made to the production plan versus the beginning of the year? And the next is your first party title, Uncharted 4 title, the number of units sold. And given this good performance, what would be the additional titles that may -- would come towards the end of the year, such as Gran Turismo. The third point is you are selling your battery business and transferring your businesses in the future, will there be a particular in-house standard that you will apply? Is there any criteria such as if you are in red for a certain number of years, that you would decide to sell? So please explain.

First on the VR, the production plan, of course, reservations are doing quite well, but we have the annual budget of the plan, and we are not making any change to the overall volume. And Uncharted 4, the downloads and the number of units, including the downloads. I'm afraid that we cannot give you the total numbers. But suffice to say that in the first week, we sold 2.7 million units. That's the number that we have publicly stated. Gran Turismo, and you commented on those other titles. At this point in time, it's very difficult to be the assume any, but the volume is increasing, and PS4 volume is increasing. And I believe that the sales is on the upward trend. And for the first party title, the profitability is high. Therefore, we have high expectations on the performance of such titles. About the transfer of business, do we have any particular standard in making a decision on transfer? No. We are looking at each piece of business and are trying to make the best of the decision for any particular business. Thank you.

Yes, the person sitting next to the previous one.

UFJ Morgan Stanley Securities, Miyamoto. First about Semiconductor. The production platform, the current production platform you said had 73,000 wafers, and in May it was -- the expectation was 71,000 or 70,000. It seems that you are going to increase the production. You're in the midst of increase the production. The vendors, to a certain extent, requested for the customers. In the second half, they are facing tough times. If you could just explain the situation in a systematic manner I would appreciate it very much. Now PS4, if you could update on the current situation, PlayStation?

First, the question will be answered by Mr. Takeda, and then I will take care of the second one.

Thank you for the question about the production platform. As you already know, as of April, the production capacity was 70,000 wafers. That was how we announced the situation to be. In addition this time, 75,000 is the number now. That is to say, Yamagata TEC, which was not used before, a part of the facilities are being utilized. And what used to be produced at Kumamoto, a mobile sensor, certain mobile sensors, have been transferred to Yamagata. The mobile sensor, the mobile tech lines, which used to produce the mobile sensors, they are turned to the use of producing surveillance and AV sensors. Then as a result, that wafer bases 85,000 was the wafers, and out of which, at this moment, 75,000 are being produced at this moment. Next for PS Vue, thank you for your question about PlayStation Vue. As you know, most recently, contents lineup, ESPN, Disney, contents lineup have increased. Also, the hardware, compatible hardware is increasing. And then the nationwide services being provided, the number of subscribers is steadily increasing. At the same time, we're going to disclose the detailed numbers, but the conversion rate is improving from trial to real use. So we have a good feeling about this going forward. Thank you.

I earlier mentioned 75,000, but the 73,000 as of July. And as a supplementation, the demand trend itself shows improvement for CMOS sensors compared to May. Is that the case? About the sales expansion, compared to the end of the previous year, we are very energetic about sales promotion. And in some cases of customers, so there are difference positive or negative, but the sales process itself is going smoothly. So compared to the previous year, the fourth quarter previous year was the bottom in terms of volume and starting from first quarter, there has been improvement. Next question?

SMBC Nikko of [indiscernible]. Two questions. The first quarter landing zone compared to internal budget, probably you do not disclose it, we understand. But in terms of the consensus, including the impact of the earthquake, we thought it would start as a negative, but you had very good results. So in terms of change from your original thinking, could you give us the hint of the process? And in this connection, for the full year, you maintain the numbers unchanged. And for Corporate and illumination, you mentioned the hurdle has been raised, but the buffer opportunity has been increased. And also, you have transaction with Murata and that would incur negative results, but way of thinking of OP of JPY 300 billion you mentioned initially, the hurdle is high. But for the first quarter, with the operated [ph] revision even though negative impact of Murata transaction this would be achieved. Is that the thinking? And the second point about the battery business, and you divided it, the component and the batteries. And other than that, maybe part of the battery would remain and your components. But for Sony, what -- how would you position this component business?

Thank you. The first point. Based on the results of first quarter, how do we forecast the full year results? And the second, Component business, other than batteries. Basically, for first quarter, as you would realize every time, we see upward results in the first quarter because of the budgeting process. Maybe the budget assumptions may be misleading, so we do not talk about it or disclose it. But still, the first quarter has been very sound. And based on that, the JPY 300 billion OP for fiscal year to achieve has become a little bit more difficult because of the major negative impact of the ForEx, as we had talked about earlier. And in addition to that, for this time, we did not include it, but the battery business transfer and that may accompany the loss associated with the transaction. That is why it's become a little bit more difficult to achieve the OP goal. And the component business other than batteries, the main would be the recording media or tapes, high-end tapes, as well as disc business. So we will continue our business in a solid way, but this is not the type of business we will pursue a greater volume.

Masahiro Ono from Morgan Stanley. The sixth slide talks about Mobile Communication. And you changed the unit forecast, the volume forecast, and yet you have not changed the forecast for the profit. And you talked about these 3 positive factors versus May meeting and there are also 2 other factors. So there are 3 positive factors. If you are going to put in order, how will those 3 factors compare in terms of the size of the magnitude or the influence? And the next is about Game, which is on Page 7. There has been increase in marketing expense which was recognized as a negative factor. How big was that increase? And how was it used? Where was such an expense used?

I think the first question had to do with 3 positive factors that contributed to the mobile communication, which we could put in order in terms of the size or priority. And the next was on the increase of marketing cost for the Mobile Communication -- excuse me, interpreter, the Game. On the mobile, JPY 100 billion was the revision that we have made. Now in terms of the size, they are almost comparable, should I say. If we look at the numbers, we do not intend to chase after the sales for the added value. We are aiming for the higher added value or the price range, and we will continue to reduce cost. And there are also ForEx implications and maybe by comparison, products implications are bigger. Now let me rephrase it. Price, ForEx and the material or the cost reduction in this order. The second question is about the marketing expenditure for Games. The increase of the marketing expenditure for Game business is -- I cannot disclose the concrete numbers, which may have to do with the increase of marketing costs for the Game. PS Vue advertising and promotions was increased, strengthened to prepare for the future expansion. SGA, there was an increase by JPY 8 billion. SG&A increase is at JPY 8 billion. This is that you have increased or the SG&A is JPY 8 billion more than you have anticipated, yes. Point of confirmation, Mobile. The unit price went up. You have improved the product mix during the first quarter. So I trust that you have some very hard facts that would substantiate the increase of the unit price, yes. Thank you.

Anyone? Yes, the next one please.

My name is Taguchi from Deutsche Securities. I have 2 questions, Page 12. First, the first quarter landing. While I don't think you have disclosed the numbers and figures, but the landing, how -- when you landed, how did that compare to your original expectations? So in the operating income, there is this decrease by JPY 5.6 billion. Is it all attributable to the currency hit or any other factors such as increasing the advertisement cost? Any other items? At the backdrop, JPY 38 billion, is it the lowest ceiling? How certain are you about this JPY 38 billion as the lowest limit?

About the Pictures, thank you very much for your question. In the first quarter, to a large extent, the movement was within what we expected. In the Motion Pictures, some didn't reach the budget, but some others went smoothly. So not a major negative from the Motion Pictures. The decrease by JPY 5 billion, basically, that's from the currency hit or exchange rate impact. If you're asking whether there's a risk or not about JPY 38 billion, the Pictures itself, sometimes they are big hits, sometimes no hits, so there are risks involved. The profitability volatility is relatively large in Pictures.

Thank you. This is going to be one last question because of time constraints. The person in the middle of the room.

Hirakawa of Merrill Lynch Nomura. Two questions. The first question related to earlier question about the battery business, so there may be a loss associated with transfer. Last year, JPY 30 billion in impairment was recorded, but still, will there be another loss as a result of transfer the business? And at the loss, is it necessary to sell that business? And if the loss is to the tune of several tens of billions, then what was the meaning of impairment costs last year? And the second question about the impact of earthquakes, and the full year forecast, and the first quarter estimate indicated. But what about the estimated size for the second quarter, if you have any forecast?

The first point, the battery business sales loss; and the second point, the second quarter impact coming from the earthquake. As you pointed out, impairment was recorded, and that reduces the asset valuation, and it is not definitive yet, we are still in negotiation, and I was refraining from making any specific comments. But basically, it all depends on the negotiated price. The rationale and reason of sales, well, at the major loss, you decide to sell, and what is the background of such a decision? Based on the negotiation, if it is decided to sell, even at the loss, you will be selling the business, and what's the reason behind this? In 1991, when we started the development of lithium ion batteries, we are the developer and the pioneer. And as you know, in the past several years, there has been a rather unfavorable performance. And this is the type of business development investment and the capital investment for facility we needed continuously. So including Hirai [ph] and others, we know that we have accumulated technology assets and the human resources, and they should be fully made use of. Therefore, in the Electronics parts industry, Murata is the top-notch excellent company. So under Murata, the technology could be further pursued as well as the sales channels and the business opportunities, and we thought that to be better for all. And the second question has to do with the impact of the earthquake. And most likely, the impact of the earthquake would be larger in second quarter than the first quarter. For the second half, we will not see the specific impact of the earthquake to the extent of 9 versus 1. So the first half, 90%, and the second half, 10%. So the first quarter and second quarter, not a major difference in monetary amount, but the second quarter has slightly larger negative impact compared to the first quarter. This concludes my answer.

Thank you. And with this, we'd like to conclude the earnings announcement session. Thank you very much for coming.