Sony Corporation : Sony Ericsson Reports Fourth Quarter and Full Year 2011 Results and U.S. GAAP Equity Method Results for Sony

January 19, 2012

Sony Corporation

Sony Ericsson Reports Fourth Quarter and Full Year 2011 Results

and U.S. GAAP Equity Method Results for Sony's Investment in Sony Ericsson Ar e Expected to Include

Valuation Allowance Against Certain Deferred Tax Assets

Today, Sony Ericsson Mobile Communications AB ("SEMC"), an affiliated company of Sony Corporation ("Sony") which Sony accounts for under the equity method, announced its financial results for the fourth quarter and the full year ended December 31, 2011 under accounting principles generally accepted in Sweden ("Swedish GAAP"), as attached.

At the same time, and as a result of Sony's obligation to account for SEMC's results under the equity method in accordance with generally accepted accounting principles in the United States ("US GAAP"), SEMC is recording a valuation allowance under US GAAP of approximately EUR 650 million (66 billion yen) against certain of its deferred tax assets. Under the equity method, in Sony's third quarter (October

- December) of the fiscal year ending March 31, 2012, Sony expects to reflect 50%, or approximately EUR 325 million (33 billion yen), of this valuation allowance in equity in net loss of affiliated companies in its consolidated financial results on a US GAAP basis.

As previously stated, Sony is currently reevaluating its forecast of consolidated financial results for the fiscal year ending March 31, 2012, taking into account the transaction in connection with S-LCD Corporation announced on December 26, 2011, this valuation allowance and other factors, including the impact of the October 2011 floods in Thailand, that might affect its consolidated financial results forecast for the full year ending March 31, 2012.

In October 2011 Sony and Telefonaktiebolaget LM Ericsson ("Ericsson") announced that Sony will acquire Ericsson's stake in SEMC and that SEMC will become a wholly-owned subsidiary of Sony. The transaction is expected to close in late January to February, subject to customary closing conditions, including regulatory approvals.

(For reference)Sony's consolidated financial forecast for the fiscal year ending March 31, 2012, which was disclosed on November 2, 2011 and its consolidated financial results for the fiscal year

ended March 31, 2011

(Yen in billions)

	Sales and operating revenue	Operating income	Income before income tax	Net income (loss) attributable to Sony Corporation's stockholders
Consolidated financial forecast for the fiscal year ending March 31, 2012	6,500	20	10	(90)
Consolidated financial results for the fiscal year ended March 31, 2011	7,181.3	199.8	205.0	(259.6)

PRESS RELEASE January 19, 2012 Sony Ericsson reports fourth quarter and full year 2011 results

• Q4 loss reflects intense competition, price erosion and restructuring charges

• 65% year-on-year increase in Android-based XperiaTM smartphone quarterly sales

• 28 million Xperia smartphones shipped to date

The consolidated financial summary for Sony Ericsson Mobile Communications AB (Sony Ericsson)
for the fourth quarter and full year ended December 31, 2011 is as follows*:

Average selling price (Euro)

136

166

143

146

152

*All amounts are according to Swedish GAAP.

Bert Nordberg, President and CEO of Sony Ericsson commented: "Our fourth quarter results reflected intense competition, unfavorable macroeconomic conditions and the effects of a natural disaster in Thailand this quarter. We are aligning our business to drive profitability and to meet customer needs. In spite of these challenges, throughout 2011 we've shifted our business from feature phones to smartphones, and our Android-based smartphone sales in the quarter increased by 65% year-on-year. The Xperia portfolio, including the recently announced Xperia NXT series, will serve as a cornerstone of our smartphone lineup in 2012."
Units shipped during the quarter were 9 million, a 20% decrease year-on-year and a 5% decrease compared to last quarter. The year-on-year and sequential declines reflect a significantly lower number of feature phones shipped, partially offset by an increase in smartphone shipments. Sony Ericsson has shipped 28 million Xperia smartphones to date.
Average selling price (ASP) for the quarter was Euro 143, up 5% year-on-year but down 14% sequentially. The year-on-year increase is due to the shift to smartphones and geographic mix. The sequential decrease in ASP is attributed to geographic and product mix, including declining prices of products launched earlier in the year, and the absence of new products introduced in the fourth quarter.
Sales for the quarter were approximately Euro 1.3 billion, down 16% year-on-year and 19% quarter over quarter. The year-on-year decline reflects the decrease of feature phone sales which was only partially offset by an increase in smartphone sales. The sequential decline is due to geographic and product mix, resulting in lower sales of both smartphones and feature phones. Fourth quarter sales were negatively impacted by macroeconomic challenges in advanced economies contributing to weaker holiday sales, and certain component shortages from the flooding in Thailand in late October and early November 2011. Xperia smartphones accounted for approximately 80% of total sales in the fourth quarter.
The gross margin for the quarter was 24%, a decrease of 6 percentage points year-on-year and 3 percentage points from the previous quarter. The year-on-year and sequential decreases are attributed to product and geographic mix. Fourth quarter gross margin was also adversely affected by intense smartphone price competition which more than offset the benefit of royalty and other items.
Loss before taxes, excluding restructuring charges, was Euro 154 million for the quarter, compared to income of Euro 39 million for the same quarter last year and of Euro 31 million in the previous quarter. The year-on-year and sequential declines are due to lower gross margin and increased operational expenses, including higher development and selling expenses.
In December 2011, Sony Ericsson launched a restructuring program including global workforce reductions to reduce costs and drive competitiveness. Restructuring charges for the quarter are Euro 93 million and the program is estimated to be completed by the end of 2012.
The quarter ended in a net loss of Euro 207 million, compared to a net income of Euro 8 million in the same quarter of the previous year, and essentially a break even result in the previous quarter.
Cash flow from operating activities during the quarter was negative Euro 26 million. External borrowings were Euro 19 million during the quarter. Total borrowings were Euro 742 million at the end of the quarter. Total cash balances at December 31, 2011 were Euro 442 million.
Sony Ericsson estimates that its share of the global Android-based smartphone market was 10% in volume and 7% in value during the quarter and 10% in volume and 10% in value for the full year.
Sony Ericsson estimates that the global smartphone market for the full year 2011 increased by 60%
in volume to 463 million units. Sony Ericsson estimates strong growth in the smartphone market in
2012.
In October 2011 Sony Corporation ("Sony") and Telefonaktiebolaget LM Ericsson ("Ericsson") announced that Sony will acquire Ericsson's stake in Sony Ericsson and that Sony Ericsson will become a wholly-owned subsidiary of Sony. The transaction is expected to close in late January to February, subject to customary closing conditions, including regulatory approvals.

The liquid identity is a registered trademark of Sony Ericsson Mobile Communications AB. Xperia™ is a trademark of Sony Ericsson Mobile Communications AB. Sony is a registered trademark of Sony Corporation. Ericsson is a registered trademark of Telefonaktiebolaget LM Ericsson. Any rights not expressly granted herein are reserved and subject to change without prior notice.

EDITOR'S NOTES:

Financial statements: Consolidated income statement

Consolidated income statement - isolated quarters
Consolidated balance sheet
Consolidated statement of cash flows
Consolidated statement of cash flows - isolated quarters
Net sales by market area by quarter

About Sony Ericsson

Sony Ericsson is a 50:50 joint venture between Sony Corporation ("Sony") and Telefonaktiebolaget LM Ericsson ("Ericsson"). In October 2011 it was announced by Sony and Ericsson that Sony will acquire Ericsson's stake in the company and that Sony Ericsson will become a wholly-owned subsidiary of Sony. The transaction is expected to close in late January to February, subject to customary closing conditions, including regulatory approvals. Over the years Sony Ericsson has brought together the best communication technologies with superior entertainment user experiences to create its Xperia™ line of the 'most entertaining smartphones' in the mobile handset industry.
With its global corporate functions in London, Sony Ericsson has sales and marketing operations in all major regions of the world, as well as manufacturing in China, and product development sites in China, Japan, Sweden and Silicon Valley, California. For more information, please visit: www.sonyericsson.com/press.
- ENDS -

CONTACTS: Ericsson investor relations

Stefan Jelvin (Stockholm) [phone]

Sony investor relations

Yoshinori Hashitani (Tokyo) [phone]
Yas Hasegawa (London) [phone]

Press / Media

Sony Ericsson global communications and PR

Cathy Davies (London) [phone]
Holly Rossetti (London) + 44 208 762 5851
Gustaf Brusewitz (London) [phone]

This press release contains forward-looking statements that involve inherent risks and uncertainties. Sony Ericsson has identified certain important factors that may cause actual results to differ materially from those contained in such forward- looking statements. For a detailed description of risk factors see Sony's and Ericsson's filings with the US Securities and Exchange Commission, particularly each company's latest published Annual Report on Form 20-F.

Sony Ericsson CONSOLIDATED INCOME STATEMENT*

Oct-Dec Jan-Dec

EUR million 2010 2011 Change 2010 2011 Change

Net sales 1 528 1 288	-16%	6 294 5 212	-17%
Cost of sales -1 069 -985	-8%	-4 440 -3 735	-16%
Gross profit	459	303	-34%	1 853	1 477	-20%
Gross margin %	30%	24%	-6pp	29%	28%	-1pp
Research and development expenses	-191	-268	40%	-746	-815	9%
Selling and administrative expenses	-236 -270	14%	-986 -900	-9%
Operating expenses**	-427 -538	26%	-1 732 -1 715	-1%

Other operating income, net 7 8 14% 38 32 -16%

Operating income	39	-227	-682%	159	-206	-230%
Operating margin %	3%	-18%	-21pp	3%	-4%	-7pp
Financial income	2	4	100%	18	19	6%
Financial expenses -6 -24 Income before taxes 35 -247	300% -806%	-30 -56 147 -243	87% -265%

Taxes

Minority interest 0 -6 - -9 -23 156%

Net income 8 -207 -2688% 90 -247 -374%

Number of units shipped (million) 11,2 9,0 -20% 43,1 34,4 -20%

ASP (EUR) 136 143 5% 146 152 4%

EUR million Oct-Dec Jan-Dec

Restructuring charges 2010 2011 2010 2011

Cost of sales 2 0 -32 0

Research and development expenses 0 -55 7 -55

Selling and administrative expenses -5 -38 -17 -38

Total -3 -93 -42 -93

* All amounts are according to Swedish GAAP

**Operating expenses in 2010 have been restated to reflect certain organizational changes.

Sony Ericsson CONSOLIDATED INCOME STATEMENT - ISOLATED QUARTERS*

2010 2011

EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Net sales 1 ,405 1 ,757 1 ,603 1 ,528 1, 145 1, 193 1, 586 1 ,288

Cost of sales -975 -1,266 -1,130 -1,069 -763 -828 -1,159 -985

Gross profit 429 492 473 459 382 365 427 303

Gross margin % 31% 28% 30% 30% 33% 31% 27% 24%

Research and development

expenses -185 -191 -179 -191 -173 -184 -190 -268

Selling and administrative

expenses -238 -272 -241 -236 -199 -224 -207 -270

Operating expenses**

-423

-463

-420

-427

-372

-408

-397

-538

Other operating income, net 14 7 10 7 10 6 8 8

Operating income 20 36 63 39 19 -37 38 -227

Operating margin % 1% 2% 4% 3% 2% -3% 2% -18%

Financial income 7 2 7 2 3 5 7 4

Financial expenses -9 -7 -8 -6 -8 -10 -14 -24

Income before taxes 18 31 62 35 15 -42 31 -247

Taxes 6 -16 -12 -27 -5 -3 -17 46

Minority interest -3 -4 -2 0 1 -5 -14 -6

Net income 21 12 49 8 11 -50 0 -207

Number of units shipped

(million) 10.5 11.0 10.4 11.2 8.1 7.6 9.5 9.0

ASP (EUR) 134 160 154 136 141 156 166 143

EUR million 2010 2011

Restructuring charges Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Cost of sales	2	-33	-3	2	- - - 0
Research and development expenses Selling and administrative	-2	-1	5	0	- - - -55

expenses -3 2 -6 -5 - - - -38

Total -3 -32 -4 -3 - - - -93

* All amounts are according to Swedish GAAP.

** Operating expenses in 2010 have been restated to reflect certain organizational changes.

Sony Ericsson CONSOLIDATED BALANCE SHEET*

Dec 31 Jun 30 Sep 30 Dec 31

EUR million 2010 2011 2011 2011

ASSETS

Total fixed and financial assets 803 819 890 1,122

Current assets

Inventories 460 570 656 447

Accounts receivable 836 872 1,090 692

Other assets 295 330 408 380

Other short-term cash investments 276 329 301 270

Cash and bank 329 188 165 172

Total current assets 2,196 2, 289 2,620 1,961

Total assets 2,999 3 ,108 3,510 3,083

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity 532 451 507 309

Minority interest 42 43 60 58

Total equity 574 494 567 367

Borrowing, Non Current 100 0 0 0

Other long-term liabilities 32 31 40 44

Total long-term liabilities 132 31 40 44

Accounts payable 769 716 1 050 676

Borrowing, Current 130 769 718 742

Other current liabilities 1, 394 1,098 1,135 1,254

Total current liabilities 2 ,293 2,583 2,903 2,672

Total shareholders' equity and liabilities 2, 999 3,108 3, 510 3 ,083

Net cash** 375 -252 -252 -300

* All amounts are according to Swedish GAAP.

** Net cash is defined as cash and bank deposit plus short-term cash investments less interest-bearing liabilities.

Sony Ericsson CONSOLIDATED STATEMENT OF CASH FLOWS*

Oct-Dec Jan-Dec

EUR million 2010 2011 2010 2011

OPERATING

Net income	8 -207	90 -247
Adjustments to reconcile net income to cash	-50 112 -42 -95	-156 -27 -65 -274

Changes in operating net assets -86 69 -183 -276

Cash flow from operating activities -128 -26 -248 -550

INVESTING

Investing activities -18 -19 -4 -113

Cash flow from investing activities -18 -19 -4 -113

FINANCING

Financing activities - 178 11 - 60 496

Cash flow from financing activities -178 11 -60 496

Net change in cash -324 -34 -312 -167

Cash, beginning of period 921 466 878 605

Translation difference in Cash 7 10 38 4

Cash, end of period 605 442 605 442

* All amounts are according to Swedish GAAP.

Sony Ericsson CONSOLIDATED STATEMENT OF CASH FLOWS - ISOLATED QUARTERS*

2010 2011

EUR million Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

OPERATING

Net income 21 12 49 8 11 -50 0 -207

Adjustments to reconcile net income to

cash -44 4 -66 -50 -137 -29 27 112

-23 16 -17 -42 -127 -79 27 -95

Changes in operating net assets -72 13 -38 -86 -226 -145 26 69

Cash flow from operating activities -94 29 -54 -128 -353 -224 53 -26

INVESTING

Investing activities 27 -15 2 -18 -14 -21 -58 -19

Cash flow from investing activities 27 -15 2 -18 -14 -21 -58 -19

FINANCING

Financing activities 150 0 - 32 - 178 375 165 - 56 11

Cash flow from financing activities 150 0 -32 -178 375 165 -56 11

Net change in cash	83	15	-85	-324	8	-80	-61	-34
Cash, beginning of period	878	980	1 039	921	605	599	516	466

Translation difference in Cash 19 45 -33 7 -14 -3 11 10

Cash, end of period 980 1, 039 921 605 599 516 466 442

* All amounts are according to Swedish GAAP.

Sony Ericsson NET SALES BY MARKET AREA BY QUARTER*

EUR million 2010 2011

Isolated quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Europe, Middle East & Africa **	711	876	837	795	485	435	480	571
Americas	201	223	222	205	151	193	121	199

Asia 493 659 544 528 509 565 985 518

Total 1,405 1, 757 1, 603 1, 528 1, 145 1, 193 1,586 1, 288

** of which W estern Europe 525 668 632 569 307 323 313 355

2010 2011

Sequential change ( %) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe, Middle East & Africa ** -26% 23% -4% -5% -39% -10% 10% 19% Americas -9% 11% 0% -8% -26% 28% -37% 64%

Asia -12% 34% -17% -3% -4% 11% 74% -47%

Total -20 % 25 % -9% -5% -25 % 4% 33 % -19 %

** of which W estern Europe -23% 27% -5% -10% -46% 5% -3% 13%

2010 2011

Year over year change ( %) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Europe, Middle East & Africa ** -27% -6% -4% -18% -32% -50% -43% -28% Americas 1% 14% -4% -8% -25% -13% -45% -3%

Asia -12% 17% 6% -6% 3% -14% 81% -2%

Total -19 % 4% -1% -13 % -19 % -32 % -1% -16 %

** of which W estern Europe -27% -1% -1% -16% -42% -52% -50% -38%

2010 2011

Year to date 1003 1006 1009 1012 1103 1106 1109 1112

Europe, Middle East & Africa **	711	1 ,587	2 ,424	3 ,219	485	919	1, 399	1,970
Americas	201	424	646	851	151	345	466	664

Asia 493 1, 152 1, 695 2, 224 509 1,075 2,060 2,577

Total 1 ,405 3 ,162 4, 765 6 ,294 1, 145 2 ,339 3 925 5, 211

** of which W estern Europe 525 1,193 1 ,825 2 ,393 307 630 944 1 ,298

2010 2011

YTD year over year change ( %) 1003 1006 1009 1012 1103 1106 1109 1112 Europe, Middle East & Africa ** -27% -17% -13% -14% -32% -42% -42% -39% Americas 1% 7% 3% 0% -25% -19% -28% -22%

Asia -12% 3% 4% 1% 3% -7% 22% 16%

Total -19 % -8% -5% -7% -19 % -26 % -18 % -17 %

** of which W estern Europe -27% -15% -10% -12% -42% -47% -48% -46%

*All amounts are according to Swedish GAAP.