RECENT P/E Trailing: 27.4 RELATIVE DIV’D VALUE CORP. (ADR) NYSE-SNE PRICE 50.06RATIO 17.9()Median: 42.0 P/E RATIO 1.17YLD 0.4% LINE TIMELINESS 2 Raised 8/3/07 High: 33.9 51.8 48.6 147.9 157.4 85.8 59.9 43.4 43.7 41.8 52.3 59.8 Target Price Range Low: 28.7 31.7 30.1 32.8 67.0 32.8 39.8 23.2 32.3 31.8 37.2 42.7 2010 2011 2012 SAFETY 3 New 7/27/90 LEGENDS 12.0 x ″Cash Flow″p ADR TECHNICAL 3 Raised 1/11/08 .... Relative Price Strength 200 2-for-1 split 5/00 160 BETA 1.15 (1.00 = Market) Options: Yes Shaded area indicates recession 2010-12 PROJECTIONS 100 Ann’l Total Price Gain Return 80 High 110 (+120%) 22% 2-for-1 60 Low 75 (+50%) 11% 50 Insider Decisions 40 MAM J JASON 30 to Buy 000000000 Options 000000000 20 to Sell 000000000 % TOT. RETURN 12/07 Institutional Decisions THIS VL ARITH. STOCK INDEX 1Q2007 2Q2007 3Q2007 Percent 1.5 to Buy 106 119 99 1 yr. 27.3 1.3 shares 1 3 yr. 41.6 25.2 to Sell 99 78 104 traded 0.5 Hld’s(000) 165367 164369 155392 5 yr. 35.1 117.2 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 VALUE LINE, INC. 10-12 133 116 103 89.00 107 124 132 120 106 126 133 120 106 107 117 118 105 105 Translation Rate (Yen/$)A 105 38.51 44.81 46.89 57.50 54.21 56.48 59.77 68.98 69.63 63.72 62.04 67.41 77.81 67.10 63.79 70.16 78.00 84.50 Sales per ADR B 90.00 3.26 3.59 3.30 3.63 3.52 4.26 4.87 4.94 4.46 3.18 3.02 4.22 4.74 5.07 4.31 4.45 6.55 7.25 ‘‘Cash Flow’’ per ADR 8.05 .54 .40 .20 .29 .63 1.25 1.83 1.63 1.24 .15 .13 .96 .89 1.52 1.00 1.02 2.85 3.25 Earnings per ADR BC 3.60 .19 .22 .24 .28 .23 .22 .23 .21 .23 .23 .19 .20 .21 .23 .21 .21 .22 .24 Gross Div’ds Decl’d/ADR D .25 4.48 2.90 2.57 3.35 3.13 3.13 3.52 3.74 4.20 4.08 3.18 2.48 4.44 4.25 3.95 7.74 8.00 8.25 Cap’l Spending per ADR 9.50 15.49 16.50 17.27 15.14 14.61 15.31 16.89 18.51 22.73 20.17 19.40 20.57 24.68 23.29 27.34 28.51 31.20 34.20 Book Value per ADR E 44.25 746.16 746.32 747.46 747.82 748.14 768.37 814.39 820.88 906.01 918.40 918.51 923.88 926.42 997.21 1001.7 1002.1 1000.00 1000.00 Equiv ADRs Outst’g F 1000.00 35.0 41.5 NMF NMF 43.2 26.1 24.0 24.3 NMF NMF NMF 47.2 38.5 24.3 38.2 43.8 15.7 Avg Ann’l P/E Ratio 26.0 2.24 2.52 NMF NMF 2.89 1.63 1.38 1.26 NMF NMF NMF 2.58 2.19 1.28 2.03 2.36 .83 Relative P/E Ratio 1.37 1.0% 1.3% 1.0% 1.0% .9% .7% .5% .5% .3% .3% .4% .4% .6% .6% .6% .5% .5% Avg Ann’l Div’d Yield .7% CAPITAL STRUCTURE as of 9/30/07 48673 56622 63082 58518 56979 62280 72081 66912 63893 70303 78000 84500 Sales ($mill) B 93000 Total Debt $11673 mill. Due in 5 Yrs $16865 mill. 11.9% 14.2% 8.2% 7.8% 6.4% 7.2% 6.2% 13.9% 10.7% 5.7% 12.0% 12.0% Operating Margin 12.5% LT Debt $8828 mill. LT Interest $239 mill. 2285.3 2559.8 2892.0 2786.0 2662.7 2933.0 3522.0 3485.0 3264.0 3390.0 3700 4000 Depreciation ($mill) 4750 $327 mill. capitalized leases. (LT interest earned: 3.5x; total interest coverage: 2.8x) (23% of Cap’l) 1682.3 1491.7 1149.0 134.0 115.1 963.0 871.0 1575.0 1057.0 1071.0 2850 3250 Net Profit ($mill) 3500 47.4% 48.1% 35.8% 71.6% 66.0% 32.7% 36.6% 10.2% 61.6% 53.8% 35.0% 35.0% Income Tax Rate 35.0% 3.5% 2.6% 1.8% .2% .2% 1.5% 1.2% 2.4% 1.7% 1.5% 3.7% 3.9% Net Profit Margin 3.9% Leases, Uncapitalized Annual rentals $512 mill. 8720.8 9390.4 9191.0 6646.0 5855.0 5993.0 3665.0 6979.0 4866.0 8855.0 5475 4435 Working Cap’l ($mill) 2500 Pension Assets-3/07 $892 mill. Oblig. $1.6 bill. 8366.8 8645.5 7678.0 6749.0 6305.4 6729.0 7477.0 6346.0 6538.0 8483.0 6300 6000 Long-Term Debt ($mill) 5000 13754 15197 20593 18524 17823 19007 22865 23222 27383 28565 31200 34200 Shr. Equity ($mill) 44250 Common Stock 1,002,981,000 shs. 8.4% 6.9% 4.7% 1.2% .9% 4.0% 3.1% 5.6% 3.5% 3.0% 7.5% 8.0% Return on Total Capital 7.5% MARKET CAP: $50.2 billion (Large Cap) 12.2% 9.8% 5.6% .7% .6% 5.1% 3.8% 6.8% 3.9% 3.7% 9.0% 9.5% Return on Shr. Equity 8.0% CURRENT POSITION 2005 2006 9/30/07 11.0% 8.5% 4.6% NMF NMF 4.1% 2.8% 5.9% 3.1% 3.0% 8.5% 9.0% Retained to Com Eq 7.5% ($MILL.) 10% 14% 17% NMF NMF 20% 25% 14% 20% 20% 8% 7% All Div’ds to Net Prof 7% Cash Assets 10598 10960 9758 Receivables 8424 12631 12427 BUSINESS: Sony Corp. is a leader in electronics and entertain- ’89, Metro-Goldwyn Mayer in ’05. R&D: 6.6% of sales. ’06 Inventory (Avg Cst) 6878 7974 10975 ment. ’06 sales by business segment: Electronics, 67%; Games, depreciation rate: 10.8%. Has about 163,000 empl. Chrmn. & CEO: Other 6318 7390 10266 11%; Pictures, 11%; Insurance and Other, 11%. By region: Japan, . President: Ryoji Chubachi. Incorporated: Japan. Current Assets 32218 38955 43426 26%; U.S., 26%; Europe, 25%; rest of world, 23%. Plants located in Address: 7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo 141, Accts Payable 7307 8210 8471 Japan, U.S., Europe, and Southeast Asia. Acquired CBS Records Japan. U.S. Address: 550 Madison Ave., New York, New York Debt Due 8606 10806 2845 Other 11439 11084 23236 (now ) in ’88, Columbia Pictures (now ) in 10022. Telephone: 212-833-6849. Internet: www.sony.com. Current Liab. 27352 30100 34579 Sony Corporation is showing increas- 3 consoles, is having success in the fight to ANNUAL RATES Past Past Est’d ’04-’06 ing signs of a turnaround. The company become the next-generation movie format. of change (per ADR) 10 Yrs. 5 Yrs. to ’10-’12 faced a challenging environment over the The company’s product offerings are Sales 2.0% 0.5% 5.0% past few years. Management responded promising. Aside from the improving pic- ‘‘Cash Flow’’ 2.0% 5.5% 9.5% Earnings 5.0% 18.5% 20.5% with a restructuring effort aimed to re- ture with the Playstation 3 and Blu-ray Dividends -1.0% - - 2.5% establish itself across its product offerings technology, Sony has other products that Book Value 6.0% 5.0% 9.0% as a leader in innovation. It appears the are gaining interest. SNE’s organic light- Fiscal B Full restructuring initiative has been working, emitting diode (OLED) televisions have Year QUARTERLY SALES ($ mill.) Fiscal Begins Jun.30 Sep.30 Dec.31 Mar.31 Year as SNE has posted strong growth in share been a big hit in the consumer electronics 2004 15066 15909 20077 15860 66912 net thus far in fiscal 2007 (year ends community. Many believe this cutting- 2005 13328 14556 20236 15773 63893 March 31st) on strength in new products. edge technology will replace LCD televi- 2006 14781 15713 22100 17709 70303 If Sony can sustain this momentum, it sions as the next-generation of televisions. 2007 16069 18113 24500 19318 78000 may be able to regain some of the clout Therefore, the company’s strong position 2008 18000 19500 27000 20000 84500 that once defined it as a market leader in early on in this market adds to SNE’s Fiscal BC Full consumer electronics and entertainment. long-term potential. Year EARNINGS PER ADR Fiscal Begins Jun.30 Sep.30 Dec.31 Mar.31 Year The Playstation 3 registered an im- There is risk here. Sony is no longer the 2004 .27 .51 1.29 d.55 1.52 proved performance over the holiday firm envied in the consumer electronics in- 2005 d.07 .23 1.38 d.54 1.00 season. The video-game console has been dustry. Numerous competitors have suc- 2006 .27 .01 1.28 d.57 1.02 a disappointment since it launched in No- cessfully entered into SNE’s markets in 2007 .51 .61 1.35 .38 2.85 vember, 2006. Nintendo’s innovative Wii recent years, and they should continue to 2008 .45 .60 1.65 .55 3.25 has been a runaway success, and has re- challenge the company. Moreover, Sony’s Cal-GROSS SEMIANNUAL DIV’DS PAID D Full placed the Playstation brand as the trend- business is partly driven by its ability to endarJun.30 Dec.31 Year setter, relieving Sony of a position held for create and deliver innovative products. If 2004 .112 .121 .23 over a decade. However, during the key its product offerings weaken, financial re- 2005 .115 .113 .23 holiday shopping season, Playstation 3 sults will probably suffer. Still, 2006 .110 .100 .21 sales strengthened in what is an encourag- This equity is ranked favorably for 2007 .102 .113 .22 ing sign for Sony. Additionally, SNE’s Blu- year-ahead performance. 2008 ray technology, which is in all Playstation Richard Gallagher February 1, 2008 (A) At fiscal yearend. (B) Fisc. yr. ends Mar. ’91, 57¢; ’94, d$4.20; ’00, d75¢; ’03 d2¢. historically paid July 1st and Dec. 1st. Company’s Financial Strength B++ 31st of following year. Inc. insur. and other Quarterly figure may not sume due to rounding. (E) Incl intang. In 2006: $4.6 bill., $4.59/sh. Stock’s Price Stability 60 rev’s. after ’97. Next egs. report late April. (F) In mill., adj. for stk. split and div’d. Each Price Growth Persistence 15 (C) Dil. egs., U.S. acctg. Excl. nonrec. items: (D) Bef. 7% Japanese wthhldng. tax. Dividends ADR represents one common share. Earnings Predictability 30 © 2008, Value Line Publishing, Inc. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. 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