Poor Proximity of Production to Cus

Poor Proximity of Production to Customers

Sony’s production facilities are located far from its customer base. Approximately 60% of the annual production in Japan must be distributed to for other regions. In FY2009, the group produced 50% of the electronics segment’s total annual production in Japan.

Substantial Retirement Benefit Commitments

The unfunded status of the pension liabilities (approximately $3.6 billion) increased at a rate of 62% over 2008. Sizeable unfunded post retirement benefits would force the company to make periodic cash contributions, diverting money away from production related uses.