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Title of each class | Name of each exchange on which registered | |
American Depositary Shares* | New York Stock Exchange | |
Common Stock** | New York Stock Exchange |
* | American Depositary Shares evidenced by American Depositary Receipts. Each American Depositary Share represents one share of Common Stock. |
** | No par value per share. Not for trading, but only in connection with the listing of American Depositary Shares pursuant to the requirements of the New York Stock Exchange. |
Outstanding as of | ||||
March 30, 2007 | March 29, 2007 | |||
Title of Class | (Tokyo Time) | (New York Time) | ||
Common Stock | 1,002,062,405 | |||
American Depositary Shares | 176,704,973 |
Large Accelerated Filer þ | Accelerated Filer o | Non-Accelerated Filer o |
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EX-12.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 | ||||||||
EX-12.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 | ||||||||
EX-13.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 | ||||||||
EX-15.1(a) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||||||||
EX-15.1(b) CONSENT OF INDEPENDENT ACCOUNTANTS |
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ITEM 1. | Identity of Directors, Senior Management and Advisers |
ITEM 2. | Offer Statistics and Expected Timetable |
ITEM 3. | Key Information |
Fiscal Year Ended March 31 | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(Yen in millions, Yen per share amounts) | ||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||
Sales and operating revenue | 7,506,008 | 7,530,635 | 7,191,325 | 7,510,597 | 8,295,695 | |||||||||||||||
Operating income | 217,815 | 133,146 | 145,628 | 226,416 | 71,750 | |||||||||||||||
Income before income taxes | 247,621 | 144,067 | 157,207 | 286,329 | 102,037 | |||||||||||||||
Income taxes | 80,831 | 52,774 | 16,044 | 176,515 | 53,888 | |||||||||||||||
Income before cumulative effect of accounting changes | 115,519 | 90,628 | 168,551 | 123,616 | 126,328 | |||||||||||||||
Net income | 115,519 | 88,511 | 163,838 | 123,616 | 126,328 | |||||||||||||||
Data per Share of Common Stock: | ||||||||||||||||||||
Income before cumulative effect of accounting changes | ||||||||||||||||||||
— Basic | 125.74 | 98.26 | 180.96 | 122.58 | 126.15 | |||||||||||||||
— Diluted | 118.21 | 89.03 | 162.59 | 116.88 | 120.29 | |||||||||||||||
Net income | ||||||||||||||||||||
— Basic | 125.74 | 95.97 | 175.90 | 122.58 | 126.15 | |||||||||||||||
— Diluted | 118.21 | 87.00 | 158.07 | 116.88 | 120.29 | |||||||||||||||
Cash dividends declared | ||||||||||||||||||||
Interim | 12.50 | 12.50 | 12.50 | 12.50 | 12.50 | |||||||||||||||
(10.50 cents | ) | (11.37 cents | ) | (12.12 cents | ) | (10.36 cents | ) | (10.78 cents | ) | |||||||||||
Fiscal year-end | 12.50 | 12.50 | 12.50 | 12.50 | 12.50 | |||||||||||||||
(10.53 cents | ) | (11.26 cents | ) | (11.29 cents | ) | (11.04 cents | ) | (10.24 cents | ) | |||||||||||
Depreciation and amortization* | 351,925 | 366,269 | 372,865 | 381,843 | 400,009 | |||||||||||||||
Capital expenditures (additions to fixed assets) | 261,241 | 378,264 | 356,818 | 384,347 | 414,138 | |||||||||||||||
Research and development costs | 443,128 | 514,483 | 502,008 | 531,795 | 543,937 |
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Fiscal Year Ended March 31 | ||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | ||||||||||||||||
(Yen in millions, Yen per share amounts) | ||||||||||||||||||||
Balance Sheet Data: | ||||||||||||||||||||
Net working capital | 719,166 | 381,140 | 746,803 | 569,296 | 994,871 | |||||||||||||||
Long-term debt | 807,439 | 777,649 | 678,992 | 764,898 | 1,001,005 | |||||||||||||||
Stockholders’ equity | 2,280,895 | 2,378,002 | 2,870,338 | 3,203,852 | 3,370,704 | |||||||||||||||
Total assets | 8,370,545 | 9,090,662 | 9,499,100 | 10,607,753 | 11,716,362 | |||||||||||||||
Number of shares issued at | ||||||||||||||||||||
fiscal year-end (thousands of shares of common stock) | 922,385 | 926,418 | 997,211 | 1,001,680 | 1,002,897 | |||||||||||||||
Stockholders’ equity per share of common stock | 2,466.81 | 2,563.67 | 2,872.21 | 3,200.85 | 3,363.77 |
Average* | High | Low | Period-End | |||||||||||||
(Yen) | ||||||||||||||||
Yen Exchange Rates per U.S. Dollar: | ||||||||||||||||
Fiscal year ended March 31 2003 | 121.94 | 115.71 | 133.40 | 118.07 | ||||||||||||
2004 | 113.07 | 120.55 | 104.18 | 104.18 | ||||||||||||
2005 | 107.49 | 114.30 | 102.26 | 107.22 | ||||||||||||
2006 | 113.15 | 120.93 | 104.41 | 117.78 | ||||||||||||
2007 | 116.92 | 121.81 | 110.07 | 117.56 | ||||||||||||
2007 | ||||||||||||||||
January | — | 121.81 | 118.49 | 121.02 | ||||||||||||
February | — | 121.77 | 118.33 | 118.33 | ||||||||||||
March | — | 118.15 | 116.01 | 117.56 | ||||||||||||
April | — | 119.84 | 117.69 | 119.44 | ||||||||||||
May | — | 121.79 | 119.77 | 121.76 | ||||||||||||
June (through June 20) | — | 123.67 | 121.08 | 123.60 |
1. | In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities — an Interpretation of Accounting Research Bulletin (“ARB”) No. 51.” FIN No. 46 addresses the consolidation by a primary beneficiary of a variable interest entity (“VIE”). Sony early adopted the provisions of FIN No. 46 on July 1, 2003. As a result of adopting the original FIN No. 46, Sony recognized a one-time charge with no tax effect of 2,117 million yen as a cumulative effect of accounting change in the consolidated statement of income, and Sony’s assets and liabilities increased by 95,255 million yen and 97,950 million yen, respectively. These increases were treated as non-cash transactions in the consolidated statement of cash flows. In addition, cash and cash equivalents increased by 1,521 million yen. Sony subsequently early adopted the provisions of FIN No. 46R, which replaced FIN No. 46, upon issuance |
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in December 2003. The adoption of FIN No. 46R did not have an impact on Sony’s results of operations and financial position or impact the way Sony had previously accounted for VIEs. |
2. | In July 2003, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position (“SOP”)03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts.”SOP 03-1 requires insurance enterprises to record additional reserves for long-duration life insurance contracts with minimum guarantee or annuity receivable options. Additionally,SOP 03-1 provides guidance for the presentation of separate accounts. Sony adoptedSOP 03-1 on April 1, 2004. As a result of the adoption ofSOP 03-1, Sony’s operating income decreased by 5,156 million yen for the fiscal year ended March 31, 2005. Additionally, on April 1, 2004, Sony recognized a charge of 4,713 million yen (net of income taxes of 2,675 million yen) as a cumulative effect of an accounting change. |
3. | In July 2004, the Emerging Issues Task Force (“EITF”) issued EITF IssueNo. 04-8, “The Effect of Contingently Convertible Instruments on Diluted Earnings per Share.” In accordance with Statement of Financial Accounting Standards (“FAS”) No. 128, “Earnings per Share”, Sony had not previously included in the computation of diluted earnings per share (“EPS”) the number of potential common stock issuable upon the conversion of contingently convertible debt instruments (“Co-Cos”) that had not met the conditions to exercise the stock acquisition rights. EITF IssueNo. 04-8 requires that the maximum number of common stock that could be issued upon the conversion of Co-Cos be included in diluted EPS computations from the date of issuance regardless of whether the conditions to exercise the stock acquisition rights have been met. Sony adopted EITF IssueNo. 04-8 during the quarter ended December 31, 2004. As a result of the adoption of EITF IssueNo. 04-8, Sony’s diluted EPS of income before cumulative effect of an accounting change and net income for the fiscal year ended March 31, 2004 were restated. Sony’s diluted EPS of income before cumulative effect of an accounting change and net income for the fiscal year ended March 31, 2005 decreased by 7.26 yen and 7.06 yen, respectively, as a result of adopting EITF IssueNo. 04-8. |
4. | Effective April 1, 2006, Sony adopted FAS No. 123 (revised 2004), “Share-Based Payment” (“FAS No. 123(R)”). This statement requires the use of the fair value based method of accounting for employee stock-based compensation and eliminates the alternative to use the intrinsic value method prescribed by Accounting Principle Board Opinion (“APB”) No. 25. With limited exceptions, FAS No. 123(R) requires that the grant-date fair value of share-based payments to employees be expensed over the period the service is received. Sony had accounted for its employee stock-based compensation in accordance with the provisions prescribed by APB No. 25 and its related interpretations and had disclosed the net effect on net income and net income per share (“EPS”) allocated to the common stock as if Sony had applied the fair value recognition provisions of FAS No. 123 to stock-based compensation as described in Note 2 to the Consolidated Financial Statements, “Significant accounting policies — Stock-based compensation.” Sony has elected the modified prospective method of transition prescribed in FAS No. 123(R), which requires that compensation expense be recorded for all unvested stock acquisition rights as the requisite service is rendered beginning with the first period of adoption. As a result of the adoption of FAS No. 123(R), Sony’s operating income decreased by 3,670 million yen for the fiscal year ended March 31, 2007. |
5. | In February 2006, the FASB issued FAS No. 155, “Accounting for Certain Hybrid Financial Instruments,” an amendment of FAS No. 133 and FAS No. 140. This statement permits an entity to elect fair value remeasurement for any hybrid financial instrument if the hybrid instrument contains an embedded derivative that would otherwise be required to be bifurcated and accounted for separately under FAS No. 133. The election to measure the hybrid instrument at fair value is made on aninstrument-by-instrument basis and is irreversible. The statement is effective for all financial instruments acquired, issued, or subject to a remeasurement event occurring after the beginning of an entity’s fiscal year beginning after September 15, 2006, with earlier adoption permitted as of the beginning of the fiscal year, provided that financial statements for any interim period of that fiscal year have not been issued. Sony early adopted FAS No. 155 on April 1, 2006. As a result of the adoption of FAS No. 155, Sony’s operating income increased by 3,828 million yen for the fiscal year ended March 31, 2007. Additionally, on April 1, 2006, Sony recognized a net charge of 3,785 million yen (net of income taxes of 2,148 million yen) as a cumulative-effect adjustment to beginning retained earnings, which consisted of 1,754 million yen (net of income taxes of 996 million yen) of gross gains and 5,539 million yen (net of income taxes of 3,144 million yen) of gross losses. |
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6. | In September 2006, the FASB issued FAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” an amendment to FASB Statements No. 87, 88, 106 and 132(R). FAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit pension and other postretirement benefit plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. FAS No. 158 was adopted by Sony in the financial statements for the year ended March 31, 2007. FAS No. 158 also requires companies to measure the funded status of the plan as of the date of its fiscal year-end, effective for years ending after December 15, 2008. Sony expects to adopt the measurement provisions of FAS No. 158 effective March 31, 2009. The impact of adopting FAS 158 was a 9,508 million yen reduction in accumulated other comprehensive income. Refer to Note 14 to the Consolidated Financial Statements, “Pension and severance plans,” for further details. |
7. | Effective April 1, 2006, Sony reclassified royalty income as a component of sales and operating revenue, rather than as a component of other income as previously recorded. In connection with this reclassification, sales and operating revenue, operating income and other income for the fiscal years ended March 31, 2003, 2004, 2005 and 2006 have been reclassified to conform with the presentation of these items for the fiscal year ended March 31, 2007. The amounts of royalty income reclassified from other income to sales and operating revenue for the fiscal years ended March 31, 2003, 2004, 2005 and 2006 were 32,375, 34,244, 31,709, and 35,161 million yen, respectively. In addition to the above, certain reclassifications of the financial statements for the fiscal years ended March 31, 2003, 2004, 2005 and 2006 have been made to conform to the presentation for the fiscal year ended March 31, 2007. |
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• | changes in trends underlying the insurance businesses’ assumptions and estimates, such as mortality and morbidity rates and automobile accident rates; |
• | the availability of sufficient reliable data and the insurance businesses’ ability to correctly analyze the data; |
• | the insurance businesses’ selection and application of appropriate rating and pricing techniques; and |
• | changes in legal standards, claim settlement practices, medical care expenses and automobile repair costs. |
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Item 4. | Information on the Company |
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Main Product | Previous Product Category | New Product Category | ||||
Low-temperature polysilicon thin film transistor LCD | “Semiconductors” | “Components” | ||||
Chemical component | “Other” | “Components” |
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Fiscal Year Ended March 31 | ||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
(Yen in millions) | ||||||||||||||||||||||||
Electronics | 4,827,663 | (67.1 | ) | 4,782,173 | (63.7 | ) | 5,421,384 | (65.4 | ) | |||||||||||||||
Game | 702,524 | (9.8 | ) | 918,252 | (12.2 | ) | 974,218 | (11.7 | ) | |||||||||||||||
Pictures | 733,677 | (10.2 | ) | 745,859 | (9.9 | ) | 966,260 | (11.7 | ) | |||||||||||||||
Financial Services | 537,715 | (7.5 | ) | 720,566 | (9.6 | ) | 624,282 | (7.5 | ) | |||||||||||||||
All Other | 389,746 | (5.4 | ) | 343,747 | (4.6 | ) | 309,551 | (3.7 | ) | |||||||||||||||
Sales and operating revenue | 7,191,325 | (100.0 | ) | 7,510,597 | (100.0 | ) | 8,295,695 | (100.0 | ) | |||||||||||||||
Fiscal Year Ended March 31 | ||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
(Yen in millions) | ||||||||||||||||||||||||
Audio | 571,864 | (11.8 | ) | 536,187 | (11.2 | ) | 522,879 | (9.7 | ) | |||||||||||||||
Video | 1,036,328 | (21.5 | ) | 1,021,325 | (21.4 | ) | 1,143,120 | (21.1 | ) | |||||||||||||||
Televisions | 921,195 | (19.1 | ) | 927,769 | (19.4 | ) | 1,226,971 | (22.6 | ) | |||||||||||||||
Information and Communications | 816,150 | (16.9 | ) | 842,537 | (17.6 | ) | 950,461 | (17.5 | ) | |||||||||||||||
Semiconductors | 184,235 | (3.8 | ) | 172,249 | (3.6 | ) | 205,757 | (3.8 | ) | |||||||||||||||
Components | 751,097 | (15.6 | ) | 800,716 | (16.7 | ) | 852,981 | (15.7 | ) | |||||||||||||||
Other | 546,794 | (11.3 | ) | 481,390 | (10.1 | ) | 519,215 | (9.6 | ) | |||||||||||||||
Electronics Total | 4,827,663 | (100.0 | ) | 4,782,173 | (100.0 | ) | 5,421,384 | (100.0 | ) | |||||||||||||||
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Fiscal Year Ended March 31 | ||||||||||||||||||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
(Yen in millions) | ||||||||||||||||||||||||
Japan | 2,132,462 | (29.7 | ) | 2,203,812 | (29.3 | ) | 2,127,841 | (25.6 | ) | |||||||||||||||
United States | 1,977,310 | (27.5 | ) | 1,957,644 | (26.1 | ) | 2,232,453 | (26.9 | ) | |||||||||||||||
Europe | 1,612,576 | (22.4 | ) | 1,715,775 | (22.8 | ) | 2,037,658 | (24.6 | ) | |||||||||||||||
Other Areas | 1,468,977 | (20.4 | ) | 1,633,366 | (21.8 | ) | 1,897,743 | (22.9 | ) | |||||||||||||||
Sales and operating revenue | 7,191,325 | (100.0 | ) | 7,510,597 | (100.0 | ) | 8,295,695 | (100.0 | ) | |||||||||||||||
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Country of | (As of March 31, 2007) | |||||
Name of company | incorporation | Percentage owned | ||||
Sony EMCS Corporation | Japan | 100.0 | ||||
Sony Semiconductor Kyushu Corporation | Japan | 100.0 | ||||
Sony Marketing (Japan) Inc. | Japan | 100.0 | ||||
Sony Computer Entertainment Inc. | Japan | 100.0 | ||||
Sony Financial Holdings Inc. | Japan | 100.0 | ||||
Sony Life Insurance Co., Ltd. | Japan | 100.0 | ||||
Sony Music Entertainment (Japan) Inc. | Japan | 100.0 | ||||
Sony Americas Holding Inc. | U.S.A. | 100.0 | ||||
Sony Corporation of America | U.S.A. | 100.0 | ||||
Sony Electronics Inc. | U.S.A. | 100.0 | ||||
Sony DADC US Inc. | U.S.A. | 100.0 | ||||
Sony Computer Entertainment America Inc. | U.S.A. | 100.0 | ||||
Sony Pictures Entertainment Inc. | U.S.A. | 100.0 | ||||
Sony Europe Holding B.V. | Netherlands | 100.0 | ||||
Sony Europe G.m.b.H. | Germany | 100.0 | ||||
Sony United Kingdom Ltd. | U.K. | 100.0 | ||||
Sony Computer Entertainment Europe Ltd. | U.K. | 100.0 | ||||
Sony Global Treasury Services Plc | U.K. | 100.0 | ||||
Sony Holding (Asia) B.V. | Netherlands | 100.0 | ||||
Sony Overseas S.A. | Switzerland | 100.0 | ||||
Sony Electronics Asia Pacific Pte. Ltd. | Singapore | 100.0 |
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Approximate | ||||||
Location | floor space | Principal products manufactured | ||||
(square feet) | ||||||
In Japan: | ||||||
Nagasaki (Sony Semiconductor Kyushu Corporation — Nagasaki TEC) | 2,232,000 | CMOS image sensors and other semiconductors | ||||
Kumamoto (Sony Semiconductor Kyushu Corporation — Kumamoto TEC) | 2,104,000 | LCDs, CCDs, CMOS image sensors and other semiconductors | ||||
Kagoshima (Sony Semiconductor Kyushu Corporation — Kagoshima TEC) | 1,783,000 | LCDs, CCDs, CMOS image sensors and other semiconductors | ||||
Kohda, Aichi (Sony EMCS Corporation — Kohda TEC) | 963,000 | Video cameras, digital cameras, and Memory Sticks | ||||
Inazawa, Aichi (Sony EMCS Corporation — Inazawa TEC) | 864,000 | LCD televisions | ||||
Kanuma, Tochigi (Sony Chemicals & Information Device Corporation) | 791,000 | Magnetic tapes, adhesives, and electronic components | ||||
Tochigi, Tochigi (Sony Energy Devices Corporation) | 609,000 | Magnetic and optical storage media and batteries | ||||
Koriyama, Fukushima (Sony Energy Devices Corporation) | 581,000 | Batteries | ||||
Kosai, Shizuoka (Sony EMCS Corporation — Kosai TEC) | 566,000 | Broadcast- and professional-use video equipment | ||||
Minokamo, Gifu (Sony EMCS Corporation — Minokamo TEC) | 543,000 | Video cameras, digital cameras, mobile phone handsets, and modules | ||||
Kisarazu, Chiba (Sony EMCS Corporation — Kisarazu TEC) | 502,000 | DVD-Video Recorders | ||||
Overseas: | ||||||
Pittsburgh, Pennsylvania, U.S.A. (Sony Electronics Inc.) | 2,820,000 | Rear-projection televisions | ||||
Huizhou, China (Sony Precision Devices (Huizhou) Co., Ltd.) | 1,329,000 | Optical pickups |
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Approximate | ||||||
Location | floor space | Principal products manufactured | ||||
(square feet) | ||||||
Terre Haute, Indiana, U.S.A. (Sony DADC US Inc.) | 1,255,000 | CDs, CD-ROMs, DVDs, DVD-ROMs, and Blu-ray Discs | ||||
Wuxi, China (Sony Electronics (Wuxi) Co., Ltd., Sony Digital Products (Wuxi) Co., Ltd. and Sony (China) Ltd.) | 1,202,000 | Batteries, LCD televisions, PCs, and digital cameras | ||||
Penang, Malaysia (Sony EMCS (Malaysia) Sdn. Bhd. — PG TEC) | 988,000 | Audio equipment and data recording systems | ||||
Tijuana, Mexico (Sony de Tijuana Este, S.A. de C.V.) | 935,000 | LCD televisions, rear projection televisions, TV tuners, and audio equipment | ||||
Dothan, Alabama, U.S.A. (Sony Electronics Inc.) | 809,000 | Magnetic tape products | ||||
Bangi, Malaysia (Sony EMCS (Malaysia) Sdn. Bhd. — KL TEC) | 797,000 | CRT televisions, rear projection televisions, TV tuners, and DVD-Video players | ||||
Jurong, Singapore (Sony Display Device (Singapore)) | 786,000 | CRTs | ||||
San Diego, California, U.S.A. (Sony Electronics Inc.) | 658,000 | PCs | ||||
Nuevo Laredo, Mexico (Sony Electronics Inc.) | 587,000 | Magnetic storage media and batteries | ||||
Pitman, New Jersey, U.S.A. (Sony Music Entertainment Inc.) | 568,000 | CDs, CD-ROMs, DVDs, and DVD-ROMs | ||||
Viladecavallas, Spain (Sony Espana, S.A.) | 566,000 | LCD televisions, TV components, and projectors |
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Item 5. | Operating and Financial Review and Prospects |
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Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2006 | 2007 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Sales and operating revenue | 7,510.6 | 8,295.7 | +10.5 | % | ||||||||
Operating income | 226.4 | 71.8 | −68.3 | |||||||||
Income before income taxes | 286.3 | 102.0 | −64.4 | |||||||||
Equity in net income of affiliated companies | 13.2 | 78.7 | +496.9 | |||||||||
Net income | 123.6 | 126.3 | +2.2 |
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Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2006 | 2007 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Sales and operating revenue | ||||||||||||
Electronics | 5,176.4 | 6,050.5 | +16.9 | % | ||||||||
Game. | 958.6 | 1,016.8 | +6.1 | |||||||||
Pictures | 745.9 | 966.3 | +29.5 | |||||||||
Financial Services | 743.2 | 649.3 | −12.6 | |||||||||
All Other | 426.0 | 377.6 | −11.4 | |||||||||
Elimination | (539.5 | ) | (764.8 | ) | — | |||||||
Consolidated | 7,510.6 | 8,295.7 | +10.5 | |||||||||
Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2006 | 2007 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Operating income (loss) | ||||||||||||
Electronics | 6.9 | 156.7 | +2,167.4 | % | ||||||||
Game | 8.7 | (232.3 | ) | — | ||||||||
Pictures | 27.4 | 42.7 | +55.7 | |||||||||
Financial Services | 188.3 | 84.1 | −55.3 | |||||||||
All Other | 20.5 | 32.4 | +57.9 | |||||||||
Sub-Total | 251.9 | 83.7 | −66.8 | |||||||||
Elimination and unallocated corporate expenses | (25.5 | ) | (11.9 | ) | — | |||||||
Consolidated | 226.4 | 71.8 | −68.3 | |||||||||
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à PS2: | 14.20 million units (a decrease of 2.02 million units) | |||
à PSP: | 8.36 million units (a decrease of 5.70 million units) | |||
à PS3: | 5.50 million units |
à PS2: | 193 million units (a decrease of 30 million units) | |||
à PSP: | 54.1 million units (an increase of 12.5 million units) | |||
à PS3: | 13.2 million units |
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Fiscal Year ended March 31 | ||||||||
Financial Services | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Financial service revenue | 743,215 | 649,341 | ||||||
Financial service expenses | 554,892 | 565,199 | ||||||
Operating income | 188,323 | 84,142 | ||||||
Other income (expenses), net | 24,522 | 9,886 | ||||||
Income before income taxes | 212,845 | 94,028 | ||||||
Income taxes and other | 78,527 | 33,536 | ||||||
Net income | 134,318 | 60,492 | ||||||
Fiscal Year ended March 31 | ||||||||
Sony without Financial Services | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Net sales and operating revenue | 6,799,068 | 7,680,578 | ||||||
Costs and expenses | 6,762,194 | 7,694,375 | ||||||
Operating income | 36,874 | (13,797 | ) | |||||
Other income (expenses), net | 36,610 | 27,917 | ||||||
Income before income taxes | 73,484 | 14,120 | ||||||
Income taxes and other | 84,186 | (57,991 | ) | |||||
Net income (loss) | (10,702 | ) | 72,111 |
Fiscal Year ended March 31 | ||||||||
Consolidated | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Financial service revenue | 720,566 | 624,282 | ||||||
Net sales and operating revenue | 6,790,031 | 7,671,413 | ||||||
7,510,597 | 8,295,695 | |||||||
Costs and expenses | 7,284,181 | 8,223,945 | ||||||
Operating income | 226,416 | 71,750 | ||||||
Other income (expenses), net | 59,913 | 30,287 | ||||||
Income before income taxes | 286,329 | 102,037 | ||||||
Income taxes and other | 162,713 | (24,291 | ) | |||||
Net income | 123,616 | 126,328 | ||||||
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Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2005 | 2006 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Sales and operating revenue | 7,191.3 | 7,510.6 | +4.4 | % | ||||||||
Operating income | 145.6 | 226.4 | +55.5 | |||||||||
Income before income taxes | 157.2 | 286.3 | +82.1 | |||||||||
Equity in net income of affiliated companies | 29.0 | 13.2 | −54.6 | |||||||||
Net income | 163.8 | 123.6 | −24.5 |
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Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2005 | 2006 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Sales and operating revenue | ||||||||||||
Electronics | 5,094.5 | 5,176.4 | +1.6 | % | ||||||||
Game | 729.8 | 958.6 | +31.4 | |||||||||
Pictures | 733.7 | 745.9 | +1.7 | |||||||||
Financial Services | 560.6 | 743.2 | +32.6 | |||||||||
All Other | 470.9 | 426.0 | −9.5 | |||||||||
Elimination | (398.1 | ) | (539.5 | ) | — | |||||||
Consolidated | 7,191.3 | 7,510.6 | +4.4 | |||||||||
Fiscal Year Ended | ||||||||||||
March 31 | ||||||||||||
2005 | 2006 | Percent change | ||||||||||
(Yen in billions) | ||||||||||||
Operating income (loss) | ||||||||||||
Electronics | 2.9 | 6.9 | +140.0 | % | ||||||||
Game | 43.2 | 8.7 | −79.7 | |||||||||
Pictures | 63.9 | 27.4 | −57.1 | |||||||||
Financial Services | 55.5 | 188.3 | +239.4 | |||||||||
All Other | 5.1 | 20.5 | +305.4 | |||||||||
Sub-Total | 170.5 | 251.9 | +47.8 | |||||||||
Elimination and unallocated corporate expenses | (24.9 | ) | (25.5 | ) | — | |||||||
Consolidated | 145.6 | 226.4 | +55.5 | |||||||||
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à PS2: | 16.22 million units (an increase of 0.05 million units) | |||
à PSP: | 14.06 million units (an increase of 11.09 million units) |
à PS2: | 223 million units (a decrease of 29 million units) | |||
à PSP: | 41.6 million units (an increase of 35.9 million units) |
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Fiscal Year ended March 31 | ||||||||
Financial Services | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Financial service revenue | 560,557 | 743,215 | ||||||
Financial service expenses | 505,067 | 554,892 | ||||||
Operating income | 55,490 | 188,323 | ||||||
Other income (expenses), net | 9,177 | 24,522 | ||||||
Income before income taxes | 64,667 | 212,845 | ||||||
Income taxes and other | 23,634 | 78,527 | ||||||
Income before cumulative effect of an accounting change | 41,033 | 134,318 | ||||||
Cumulative effect of an accounting change | (4,713 | ) | — | |||||
Net income | 36,320 | 134,318 | ||||||
Fiscal Year ended March 31 | ||||||||
Sony without Financial Services | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Net sales and operating revenue | 6,664,437 | 6,799,068 | ||||||
Costs and expenses | 6,575,354 | 6,762,194 | ||||||
Operating income | 89,083 | 36,874 | ||||||
Other income (expenses), net | 9,957 | 36,610 | ||||||
Income before income taxes | 99,040 | 73,484 | ||||||
Income taxes and other | (34,979 | ) | 84,186 | |||||
Income (loss) before cumulative effect of an accounting change | 134,019 | (10,702 | ) | |||||
Cumulative effect of an accounting change | — | — | ||||||
Net income (loss) | 134,019 | (10,702 | ) |
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Fiscal Year ended March 31 | ||||||||
Consolidated | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Financial service revenue | 537,715 | 720,566 | ||||||
Net sales and operating revenue | 6,653,610 | 6,790,031 | ||||||
7,191,325 | 7,510,597 | |||||||
Costs and expenses | 7,045,697 | 7,284,181 | ||||||
Operating income | 145,628 | 226,416 | ||||||
Other income (expenses), net | 11,579 | 59,913 | ||||||
Income before income taxes | 157,207 | 286,329 | ||||||
Income taxes and other | (11,344 | ) | 162,713 | |||||
Income before cumulative effect of an accounting change | 168,551 | 123,616 | ||||||
Cumulative effect of an accounting change | (4,713 | ) | — | |||||
Net income | 163,838 | 123,616 | ||||||
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March 31 | ||||||||
2006 | 2007 | |||||||
(Yen in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 117,630 | 277,048 | ||||||
Marketable securities | 532,895 | 490,237 | ||||||
Other | 200,929 | 321,969 | ||||||
851,454 | 1,089,254 | |||||||
Investments and advances | 3,131,269 | 3,347,897 | ||||||
Property, plant and equipment | 37,422 | 38,671 | ||||||
Other assets: | ||||||||
Deferred insurance acquisition costs | 383,156 | 394,117 | ||||||
Other | 164,827 | 107,703 | ||||||
547,983 | 501,820 | |||||||
4,568,128 | 4,977,642 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 136,723 | 48,688 | ||||||
Notes and accounts payable, trade | 11,707 | 13,159 | ||||||
Deposits from customers in the banking business | 599,952 | 752,367 | ||||||
Other | 169,956 | 143,245 | ||||||
918,338 | 957,459 | |||||||
Long-term liabilities: | ||||||||
Long-term debt | 128,097 | 129,484 | ||||||
Accrued pension and severance costs | 13,479 | 8,773 | ||||||
Future insurance policy benefits and other | 2,744,321 | 3,037,666 | ||||||
Other | 170,294 | 204,317 | ||||||
3,056,191 | 3,380,240 | |||||||
Minority interest in consolidated subsidiaries | 4,089 | 5,145 | ||||||
Stockholders’ equity | 589,510 | 634,798 | ||||||
4,568,128 | 4,977,642 | |||||||
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March 31 | ||||||||
2006 | 2007 | |||||||
(Yen in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 585,468 | 522,851 | ||||||
Marketable securities | 4,073 | 3,078 | ||||||
Notes and accounts receivable, trade | 973,675 | 1,343,128 | ||||||
Other | 1,393,306 | 1,625,914 | ||||||
2,956,522 | 3,494,971 | |||||||
Film costs | 360,372 | 308,694 | ||||||
Investments and advances | 474,568 | 623,342 | ||||||
Investments in Financial Services, at cost | 187,400 | 187,400 | ||||||
Property, plant and equipment | 1,351,125 | 1,382,860 | ||||||
Other assets | 1,056,726 | 1,100,795 | ||||||
6,386,713 | 7,098,062 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 225,082 | 80,944 | ||||||
Notes and accounts payable, trade | 804,394 | 1,167,324 | ||||||
Other | 1,299,809 | 1,392,333 | ||||||
2,329,285 | 2,640,601 | |||||||
Long-term liabilities: | ||||||||
Long-term debt | 701,372 | 925,259 | ||||||
Accrued pension and severance costs | 168,768 | 164,701 | ||||||
Other | 352,457 | 410,354 | ||||||
1,222,597 | 1,500,314 | |||||||
Minority interest in consolidated subsidiaries | 32,623 | 32,808 | ||||||
Stockholders’ equity | 2,802,208 | 2,924,339 | ||||||
6,386,713 | 7,098,062 | |||||||
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March 31 | ||||||||
2006 | 2007 | |||||||
(Yen in millions) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 703,098 | 799,899 | ||||||
Marketable securities | 536,968 | 493,315 | ||||||
Notes and accounts receivable, trade | 985,508 | 1,369,777 | ||||||
Other | 1,543,950 | 1,883,732 | ||||||
3,769,524 | 4,546,723 | |||||||
Film costs | 360,372 | 308,694 | ||||||
Investments and advances | 3,519,907 | 3,888,736 | ||||||
Property, plant and equipment | 1,388,547 | 1,421,531 | ||||||
Other assets: | ||||||||
Deferred insurance acquisition costs | 383,156 | 394,117 | ||||||
Other | 1,186,247 | 1,156,561 | ||||||
1,569,403 | 1,550,678 | |||||||
10,607,753 | 11,716,362 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 336,321 | 95,461 | ||||||
Notes and accounts payable, trade | 813,332 | 1,179,694 | ||||||
Deposits from customers in the banking business | 599,952 | 752,367 | ||||||
Other | 1,450,623 | 1,524,330 | ||||||
3,200,228 | 3,551,852 | |||||||
Long-term liabilities: | ||||||||
Long-term debt | 764,898 | 1,001,005 | ||||||
Accrued pension and severance costs | 182,247 | 173,474 | ||||||
Future insurance policy benefits and other | 2,744,321 | 3,037,666 | ||||||
Other | 475,106 | 542,691 | ||||||
4,166,572 | 4,754,836 | |||||||
Minority interest in consolidated subsidiaries | 37,101 | 38,970 | ||||||
Stockholders’ equity | 3,203,852 | 3,370,704 | ||||||
10,607,753 | 11,716,362 | |||||||
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March 31, 2007 | ||||||||||||||||
Unrealized | Unrealized | Fair Market | ||||||||||||||
Cost | Gain | Loss | Value | |||||||||||||
(Yen in millions) | ||||||||||||||||
Financial Services Business: | ||||||||||||||||
Available-for-sale | ||||||||||||||||
Debt securities | ||||||||||||||||
Sony Life | 2,129,352 | 17,679 | (3,052 | ) | 2,143,979 | |||||||||||
Other | 381,663 | 5,983 | (5,794 | ) | 381,852 | |||||||||||
Equity securities | ||||||||||||||||
Sony Life | 210,009 | 105,376 | (3,579 | ) | 311,806 | |||||||||||
Other | 7,341 | 1,657 | (40 | ) | 8,958 | |||||||||||
Held to maturity | ||||||||||||||||
Debt securities | ||||||||||||||||
Sony Life | — | — | — | — | ||||||||||||
Other | 34,931 | 165 | (127 | ) | 34,969 | |||||||||||
Total Financial Services | 2,763,296 | 130,860 | (12,592 | ) | 2,881,564 | |||||||||||
Non-Financial Services: | ||||||||||||||||
Available-for-sale securities | 70,496 | 21,909 | (3,770 | ) | 88,635 | |||||||||||
Held to maturity securities | 1,104 | — | — | 1,104 | ||||||||||||
Total Non-Financial Services | 71,600 | 21,909 | (3,770 | ) | 89,739 | |||||||||||
Consolidated | 2,834,896 | 152,769 | (16,362 | ) | 2,971,303 | |||||||||||
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• Within 1 year: | 0.4 percent | |||
• 1 to 5 years: | 96.0 percent | |||
• 5 to 10 years: | 3.4 percent | |||
• Above 10 years: | 0.2 percent |
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Payments Due by Period | ||||||||||||||||||||
Less than | 3 to 5 | After 5 | ||||||||||||||||||
Total | 1 year | 1 to 3 year | year | year | ||||||||||||||||
(Yen in millions) | ||||||||||||||||||||
Contractual Obligations and Major Commitments:* | ||||||||||||||||||||
Long-term debt (Note 11) | ||||||||||||||||||||
Capital lease obligations (Notes 8 and 11) | 49,403 | 12,559 | 13,674 | 6,052 | 17,118 | |||||||||||||||
Other long-term debt (Note 11) | 994,772 | 30,611 | 448,404 | 272,798 | 242,959 | |||||||||||||||
Minimum rental payments required under operating leases (Note 8) | 202,723 | 46,154 | 64,811 | 31,129 | 60,629 | |||||||||||||||
Purchase commitments for property, plant and equipment and other assets (Note 23) | 43,329 | 43,083 | 213 | 33 | — | |||||||||||||||
Expected cost for the production or purchase of films and television programming or certain rights (Note 23) | 67,717 | 54,940 | 12,033 | 585 | 159 | |||||||||||||||
Partnership program contract with Fédération Internationale de Football Association (Note 23) | 30,939 | 3,897 | 7,794 | 9,624 | 9,624 | |||||||||||||||
8th generation amorphous TFT-LCD panel manufacturing line at joint venture, S-LCD Corporation (Note 23) | 50,200 | 50,200 | — | — | — | |||||||||||||||
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Total Amounts of | ||||
Contingent Liabilities | ||||
Contingent Liabilities: (Note 23) | (Yen in millions | ) | ||
Loan guarantees to related parties | 11,100 | |||
Other | 10,581 | |||
Total contingent liabilities | 21,681 | |||
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Fiscal Year ended March 31 | ||||||||
Financial Services | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 147,149 | 256,540 | ||||||
Net cash used in investing activities | (563,753 | ) | (276,749 | ) | ||||
Net cash provided by financing activities | 274,863 | 179,627 | ||||||
Net increase (decrease) in cash and cash equivalents | (141,741 | ) | 159,418 | |||||
Cash and cash equivalents at beginning of the fiscal year | 259,371 | 117,630 | ||||||
Cash and cash equivalents at end of the fiscal year | 117,630 | 277,048 | ||||||
Fiscal Year ended March 31 | ||||||||
Sony without Financial Services | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 251,975 | 305,571 | ||||||
Net cash used in investing activities | (296,376 | ) | (431,086 | ) | ||||
Net cash provided by (used in) financing activities | 74,600 | 59,598 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 35,537 | 3,300 | ||||||
Net increase (decrease) in cash and cash equivalents | 65,736 | (62,617 | ) | |||||
Cash and cash equivalents at beginning of the fiscal year | 519,732 | 585,468 | ||||||
Cash and cash equivalents at end of the fiscal year | 585,468 | 522,851 | ||||||
Fiscal Year ended March 31 | ||||||||
Consolidated | 2006 | 2007 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 399,858 | 561,028 | ||||||
Net cash used in investing activities | (871,264 | ) | (715,430 | ) | ||||
Net cash provided by financing activities | 359,864 | 247,903 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 35,537 | 3,300 | ||||||
Net increase (decrease) in cash and cash equivalents | (76,005 | ) | 96,801 | |||||
Cash and cash equivalents at beginning of the fiscal year | 779,103 | 703,098 | ||||||
Cash and cash equivalents at end of the fiscal year | 703,098 | 799,899 | ||||||
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Fiscal Year ended March 31 | ||||||||
Financial Services | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 168,078 | 147,149 | ||||||
Net cash used in investing activities | (421,384 | ) | (563,753 | ) | ||||
Net cash provided by financing activities | 256,361 | 274,863 | ||||||
Net increase (decrease) in cash and cash equivalents | 3,055 | (141,741 | ) | |||||
Cash and cash equivalents at beginning of the fiscal year | 256,316 | 259,371 | ||||||
Cash and cash equivalents at end of the fiscal year | 259,371 | 117,630 | ||||||
Fiscal Year ended March 31 | ||||||||
Sony without Financial Services | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 485,439 | 251,975 | ||||||
Net cash used in investing activities | (472,119 | ) | (296,376 | ) | ||||
Net cash provided by (used in) financing activities | (95,373 | ) | 74,600 | |||||
Effect of exchange rate changes on cash and cash equivalents | 8,890 | 35,537 | ||||||
Net increase (decrease) in cash and cash equivalents | (73,163 | ) | 65,736 | |||||
Cash and cash equivalents at beginning of the fiscal year | 592,895 | 519,732 | ||||||
Cash and cash equivalents at end of the fiscal year | 519,732 | 585,468 | ||||||
Fiscal Year ended March 31 | ||||||||
Consolidated | 2005 | 2006 | ||||||
(Yen in millions) | ||||||||
Net cash provided by operating activities | 646,997 | 399,858 | ||||||
Net cash used in investing activities | (931,172 | ) | (871,264 | ) | ||||
Net cash provided by financing activities | 205,177 | 359,864 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 8,890 | 35,537 | ||||||
Net increase (decrease) in cash and cash equivalents | (70,108 | ) | (76,005 | ) | ||||
Cash and cash equivalents at beginning of the fiscal year | 849,211 | 779,103 | ||||||
Cash and cash equivalents at end of the fiscal year | 779,103 | 703,098 | ||||||
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Moody’s | S&P | R&I | |||||||
Long-term debt | A2 (Outlook: Stable) | A- (Outlook: Negative) | AA- (Outlook: Stable) | ||||||
Short-term debt | P-1 | A-2 | a-1+ | ||||||
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Pre-Tax | Pension | Equity | ||||||||||
Change in Assumption | PBO | Costs | (Net of Tax) | |||||||||
(Yen in billions) | ||||||||||||
25 basis point increase/decrease in discount rate | −/+24.9 | −/+2.0 | +/−1.2 | |||||||||
25 basis point increase/decrease in expected return on assets | — | −/+1.3 | +/−0.8 |
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Item 6. | Directors, Senior Management and Employees |
Sir Howard Stringer | ||
Date of Birth: February 19, 1942 | ||
Director (Member of the Board) Since: 1999 | ||
Corporate Executive Officer Since: 2003 | ||
Current Positions within Sony: | Chairman and Chief Executive Officer, Representative Corporate Executive Officer Chairman and Chief Executive Officer, Sony Corporation of America Member of the Nominating Committee |
Prior Positions: | ||
2003 | Vice Chairman, Chief Operating Officer in charge of Entertainment Business Group, Sony Corporation | |
1997 | President, Sony Corporation of America | |
1995 | Chairman and Chief Executive Officer,TELE-TV | |
1988 | President, CBS Broadcast Group, CBS Inc. | |
1986 | President, CBS News | |
Principal Business Activities Outside Sony: None |
Ryoji Chubachi | ||
Date of Birth: September 4, 1947 | ||
Director (Member of the Board) Since: 2005 | ||
Corporate Executive Officer Since: 2004 | ||
Current Positions within Sony: | President, Representative Corporate Executive Officer, Electronics Chief Executive Officer Member of the Nominating Committee |
Prior Positions: | ||
2004 | Chief Operating Officer in charge of Micro Systems Network Company (“MSNC”) and Engineering, Manufacturing and Customer Services (“EMCS”), President, Production Strategy Group, Sony Corporation Executive Deputy President, Corporate Executive Officer, Sony Corporation | |
2003 | Executive Vice President, Executive Officer, NC President, MSNC, Sony Corporation | |
2002 | NC President, Core Technology & Network Company (“CNC”), Sony Corporation | |
2002 | Corporate Senior Vice President, Sony Corporation | |
1999 | Corporate Vice President, President, Recording Media Company, CNC, Senior Vice President, CNC, Sony Corporation | |
1977 | Entered Sony Corporation | |
Principal Business Activities Outside Sony: None |
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Katsumi Ihara | ||
Date of Birth: September 24, 1950 | ||
Director (Member of the Board) Since: 2005 | ||
Corporate Executive Officer Since: 2004 | ||
Current Positions within Sony: | Executive Deputy President, Representative Corporate Executive Officer Officer in charge of Consumer Products Group |
Prior Positions: | ||
2005 | Officer in charge of Procurement Strategies and TV & Video Business NC President of Home Electronics Network Company, Sony Corporation | |
2004 | Group Chief Strategy Officer & Group Chief Financial Officer, Sony Corporation | |
2001 | Group Executive Officer, Sony Corporation President, Sony Ericsson Mobile Communications AB | |
2000 | Corporate Senior Vice President, NC President, Personal IT Network Company, Sony Corporation | |
1997 | Corporate Vice President, Sony Corporation | |
1996 | President, Home A&V Products Company, Sony Corporation | |
1981 | Entered Sony Corporation | |
1973 | Entered Mitsui Knowledge Industry Co., Ltd. | |
Principal Business Activities Outside Sony: None |
Akishige Okada | ||
Date of Birth: April 9, 1938 | ||
Outside Director (Member of the Board) Since: 2002 | ||
Current Position within Sony: Chairman of the Compensation Committee | ||
Principal Business Activities Outside Sony: | ||
Advisor, Sumitomo Mitsui Banking Corporation | ||
Director, Daicel Chemical Industries, Ltd. | ||
Director, Mitsui & Co., Ltd. | ||
Statutory Auditor, Toyota Motor Corporation | ||
Statutory Auditor, Hotel Okura Co., Ltd. | ||
Statutory Auditor, Mitsui Fudosan Co., Ltd. | ||
Prior Positions: | ||
2002 | Chairman of the Board (Representative Director), Sumitomo Mitsui Financial Group, Inc. | |
2001 | Chairman of the Board (Representative Director), Sumitomo Mitsui Banking Corporation |
Hirobumi Kawano | ||
Date of Birth: January 1, 1946 | ||
Outside Director (Member of the Board) Since: 2003 | ||
Current Position within Sony: | Vice Chairman of the Board Member of the Nominating Committee | |
Principal Business Activities Outside Sony: Senior Vice President, JFE Steel Corporation |
Prior Positions: | ||
2002 | Executive Adviser, The Tokio Marine and Fire Insurance Co., Ltd. | |
1999 | Director-General, Agency for Natural Resources and Energy, Ministry of International Trade and Industry (“MITI”) (later renamed the Ministry of Economy, Trade and Industry) | |
1998 | Director-General, Basic Industries Bureau, MITI |
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1996 | Director-General, Machinery and Information Industries Policy, Machinery and Information Industries Bureau, MITI | |
1995 | Director-General, Petroleum Department, Agency of Natural Resources and Energy, MITI |
Yotaro Kobayashi | ||
Date of Birth: April 25, 1933 | ||
Outside Director (Member of the Board) Since: 2003 | ||
Current Position within Sony: Chairman of the Board and Chairman of the Nominating Committee | ||
Principal Business Activities Outside Sony: | ||
Chief Corporate Advisor, Fuji Xerox Co., Ltd. | ||
Director, Nippon Telegraph and Telephone Corporation | ||
Director, Callaway Golf Company | ||
Prior Positions: | ||
1999 | Chairman of the Board, Fuji Xerox Co., Ltd. | |
1992 | Chairman and Chief Executive Officer, Fuji Xerox Co., Ltd. | |
1987 | Director, Xerox Corporation | |
1978 | President and Chief Executive Officer, Fuji Xerox Co., Ltd. |
Sakie T. Fukushima | ||
Date of Birth: September 10, 1949 | ||
Outside Director (Member of the Board) Since: 2003 | ||
Current Position within Sony: Member of the Compensation Committee | ||
Principal Business Activities Outside Sony: | ||
Representative Director & Regional Managing Director — Japan, Korn/Ferry International | ||
Director, Korn/Ferry International, U.S.A. | ||
Director, Benesse Corporation | ||
Prior Position: | ||
2000 | Managing Director, Korn/Ferry International — Japan |
Yoshihiko Miyauchi | ||
Date of Birth: September 13, 1935 | ||
Outside Director (Member of the Board) Since: 2003 | ||
Current Position within Sony: Member of the Compensation Committee | ||
Principal Business Activities Outside Sony: | ||
Director, Representative Executive Officer, Chairman and Chief Executive Officer, ORIX Corporation | ||
Director, Aozora Bank, Ltd. | ||
Director, Showa Shell Sekiyu K.K. | ||
Director, Daikyo Incorporated | ||
Director, Access Co., Ltd. | ||
Director, Sojitz Corporation | ||
Prior Positions: | ||
2000 | Representative Director, Chairman and Chief Executive Officer, ORIX Corporation | |
1980 | Representative Director, President, ORIX Corporation |
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Yoshiaki Yamauchi | ||
Date of Birth: June 30, 1937 | ||
Outside Director (Member of the Board) Since: 2003 | ||
Current Position within Sony: Chairman of the Audit Committee | ||
Principal Business Activities Outside Sony: | ||
Director, Sumitomo Mitsui Financial Group, Inc. | ||
Director, Sumitomo Mitsui Banking Corporation | ||
Director, amana Inc. | ||
Statutory Auditor, Stanley Electric Co., Ltd. | ||
Statutory Auditor, Sumitomo Wiring System, Ltd. | ||
Executive Officer, ARI Research Institute | ||
Prior Positions: | ||
1999 | Director, Sumitomo Banking Corporation | |
1993 | Executive Director, Asahi & Co. | |
1991 | President, Inoue Saito Eiwa Audit Corporation | |
1986 | President, Eiwa Audit Corporation | |
Country Managing Partner — Japan, Arthur Andersen & Co. |
Sir Peter Bonfield | ||
Date of Birth: June 3, 1944 | ||
Outside Director (Member of the Board) Since: 2005 | ||
Current Position within Sony: Member of the Nominating Committee | ||
Principal Business Activities Outside Sony: | ||
Director, Telefonaktiebolaget LM Ericsson, Sweden | ||
Director, Mentor Graphics, Inc. | ||
Director and Chairman of Audit Committee, Taiwan Semiconductor Manufacturing Company Ltd. | ||
Prior Positions: | ||
1996 | Chief Executive Officer, British Telecom plc | |
1986 | Chairman, ICL plc, U.K | |
1984 | Managing Director, ICL plc, U.K. |
Fueo Sumita | ||
Date of Birth: May 24, 1938 | ||
Outside Director (Member of the Board) Since: 2005 | ||
Current Position within Sony: Member of the Audit Committee | ||
Principal Business Activities Outside Sony: Chief of Sumita Accounting Office | ||
Prior Positions: | ||
2002 | Executive Vice President, Kawada Corporation | |
2001 | Vice Chairman, Ernst & Young ShinNihon | |
2000 | Deputy Director, Ohta-Showa Century Audit Corporation | |
1999 | Chairman, Century Audit Corporation | |
1985 | Deputy General Manager, Corporate Accounting Dept., Hitachi, Ltd. |
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Fujio Cho | ||
Date of Birth: February 2, 1937 | ||
Outside Director (Member of the Board) Since: 2006 | ||
Current Position within Sony: Member of the Nominating Committee | ||
Principal Business Activities Outside Sony: | ||
Chairman, Toyota Motor Corporation | ||
Director, Central Japan Railway Company | ||
Statutory Auditor, Denso Corporation | ||
Prior Positions: | ||
2005 | Vice Chairman, Toyota Motor Corporation | |
1999 | President, Toyota Motor Corporation |
Ned Lautenbach | ||
Date of Birth: February 2, 1944 | ||
Outside Director (Member of the Board) Since: 2006 | ||
Principal Business Activities Outside Sony: | ||
Partner, Clayton, Dubilier & Rice, Inc. | ||
Lead Director, Fidelity Investments | ||
Director, Eaton Corporation | ||
Prior Positions: | ||
1995 | Senior Vice President & Group Executive, IBM Worldwide Sales & Services, International Business Machines Corporation |
Ryuji Yasuda | ||
Date of Birth: April 28, 1946 | ||
Outside Director (Member of the Board) Since: 2007 | ||
Current Position within Sony: Member of the Audit Committee | ||
Principal Business Activities Outside Sony: | ||
Professor, Hitotsubashi University Graduate School of International Corporate Strategy (present) | ||
Director, Daiwa Securities Group Inc. (present) | ||
Director, Fuji Fire and Marine Insurance Co., Ltd. (present) | ||
Prior Positions: | ||
2003 | Chairman, J-Will Partners Co., Ltd. | |
1996 | Managing Director and Chairman, A.T. Kearney, Asia | |
1991 | Director, McKinsey & Company |
Yutaka Nakagawa | ||
Date of Birth: December 4, 1945 | ||
Corporate Executive Officer Since: 2005 | ||
Current Positions within Sony: | Executive Deputy President, Officer in charge of Semiconductor & Component Group, President of Semiconductor Business Group |
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Prior Positions: | ||
2005 | Officer in charge of Products Strategies, Digital Imaging Business and Audio Business NC President, Personal Audio Visual Network Company, Sony Corporation | |
2003 | Deputy President, Micro Systems Network Company, President, Energy Company, MSNC, Sony Corporation | |
1999 | Corporate Senior Vice President, Sony Corporation | |
1998 | President, Personal and Mobile Communication Company, Sony Corporation | |
1997 | Corporate Vice President, Sony Corporation | |
1992 | General Manager, Camcorder Products Division, Personal Video Group, Sony Corporation | |
1968 | Entered Sony Corporation | |
Principal Business Activities Outside Sony: None |
Nobuyuki Oneda | ||
Date of Birth: May 6, 1945 | ||
Corporate Executive Officer Since: 2004 | ||
Current Positions within Sony: | Executive Vice President and Chief Financial Officer |
Prior Positions: | ||
2004 | Senior Vice President, Officer in charge of Corporate Planning & Control, Accounting and Information Systems, Sony Corporation | |
2003 | Senior Vice President, Executive Officer, Sony Corporation | |
2002 | Officer and Chief Financial Officer, Network Application & Content Service Sector, Sony Corporation Corporate Senior Vice President, Sony Corporation | |
2000 | Deputy President and Chief Financial Officer, Sony Electronics Inc. Group Executive Officer, Sony Corporation | |
1999 | Executive Vice President and Chief Financial Officer, Sony Electronics Inc. (a U.S. subsidiary of Sony Corporation) | |
1996 | General Manager, Corporate Planning & Control Department, Sony Corporation | |
1969 | Entered Sony Corporation | |
Principal Business Activities Outside Sony: None |
Keiji Kimura | ||
Date of Birth: April 4, 1952 | ||
Corporate Executive Officer Since: 2004 | ||
Current Positions within Sony: | Executive Vice President, Officer in charge of Technology Strategies, Electronics Business Strategies and Intellectual Property |
Prior Positions: | ||
2005 | NC President, Information Technology & Communications Network Company, Sony Corporation | |
2004 | Senior Executive Vice President, Corporate Executive Officer, Sony Corporation | |
2003 | Senior Vice President, Executive Officer, Sony Corporation | |
2002 | Corporate Senior Vice President, Sony Corporation | |
2001 | NC President, Mobile Network Company, Sony Corporation | |
2000 | Corporate Vice President, Sony Corporation NC President, Information Technology Company, Personal Network Company, Sony Corporation | |
1977 | Entered Sony Corporation | |
Principal Business Activities Outside Sony: None |
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Nicole Seligman | ||
Date of Birth: October 25, 1956 | ||
Corporate Executive Officer Since: 2003 | ||
Current Positions within Sony: | Executive Vice President and General Counsel Executive Vice President and General Counsel, Sony Corporation of America |
Prior Positions: | ||
2003 | Group Deputy General Counsel, Sony Corporation | |
2000 | Entered Sony Corporation of America as Executive Vice President and General Counsel | |
1992 | Partner, Williams & Connolly LLP | |
1985 | Entered Williams & Connolly LLP | |
1978 | Associate Editorial Page Editor for The Asian Wall Street Journal, Hong Kong | |
Principal Business Activities Outside Sony: None |
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March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Electronics | 124,500 | 130,800 | 136,900 | |||||||||
Game | 4,300 | 4,700 | 5,100 | |||||||||
Pictures | 5,900 | 6,900 | 7,300 | |||||||||
Financial Services | 6,800 | 6,500 | 6,600 | |||||||||
All Other | 8,000 | 7,400 | 4,700 | |||||||||
Unallocated — Corporate employees | 1,900 | 2,200 | 2,400 | |||||||||
Total | 151,400 | 158,500 | 163,000 | |||||||||
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Number of shares | Percentage | |||||||||||
Title of class | Identity of person or group | beneficially owned | of class | |||||||||
(in thousands) | ||||||||||||
Common Stock | Directors and Corporate Executive Officers | 62 | 0.006 |
Total number of | ||||||
Year granted | shares subject to stock | |||||
(Fiscal Year ended March 31) | acquisition rights | Exercise price per share | ||||
(in thousands) | ||||||
2007 | 430 | 40.05 U.S. dollars | ||||
2007 | 257 | 4,756 yen | ||||
2006 | 430 | 34.14 U.S. dollars | ||||
2006 | 159 | 4,060 yen | ||||
2005 | 230 | 40.34 U.S. dollars | ||||
2005 | 71 | 3,782 yen | ||||
2004 | 225 | 40.90 U.S. dollars | ||||
2004 | 42 | 4,101 yen | ||||
2003 | 215 | 36.57 U.S. dollars | ||||
2003 | 9 | 5,396 yen |
Year granted | Total number of shares | |||||||
(Fiscal Year ended March 31) | subject to warrants | Exercise price per share | ||||||
(in thousands) | (yen) | |||||||
2002 | 19 | 6,039 |
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Year issued | Total number of shares | |||||||
(Fiscal Year ended March 31) | subject to CBs | Exercise price per share | ||||||
(in thousands) | (U.S. dollars) | |||||||
2003 | 115 | 52.29 | ||||||
2002 | 106 | 71.28 | ||||||
2001 | 60 | 122.98 |
Year granted | Total number of shares | |||||||
(Fiscal Year ended March 31) | subject to SARs | Exercise price per share | ||||||
(in thousands) | (U.S. dollars) | |||||||
The U.S. plan | ||||||||
2002 | 10 | 44.00 |
Item 7. | Major Shareholders and Related Party Transactions |
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Item 8. | Financial Information |
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Item 9. | The Offer and Listing |
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Tokyo Stock Exchange | ||||||||||||||||
Price Per Share of | New York Stock | |||||||||||||||
Common Stock | Exchange Price Per Share of ADS | |||||||||||||||
High | Low | High | Low | |||||||||||||
(yen) | (U.S. dollars) | |||||||||||||||
Annual highs and lows* | ||||||||||||||||
The fiscal year ended March 31, 2003 | 7,460 | 4,070 | 59.95 | 34.85 | ||||||||||||
The fiscal year ended March 31, 2004 | 4,670 | 2,720 | 42.81 | 23.16 | ||||||||||||
The fiscal year ended March 31, 2005 | 4,710 | 3,550 | 43.67 | 32.35 | ||||||||||||
Quarterly highs and lows* | ||||||||||||||||
The fiscal year ended March 31, 2006 | ||||||||||||||||
1st quarter | 4,410 | 3,770 | 40.79 | 34.38 | ||||||||||||
2nd quarter | 4,100 | 3,660 | 36.74 | 32.38 | ||||||||||||
3rd quarter | 5,020 | 3,710 | 41.30 | 31.80 | ||||||||||||
4th quarter | 6,040 | 4,700 | 51.16 | 40.90 | ||||||||||||
The fiscal year ended March 31, 2007 | ||||||||||||||||
1st quarter | 6,200 | 4,660 | 52.29 | 40.67 | ||||||||||||
2nd quarter | 5,360 | 4,610 | 46.40 | 39.30 | ||||||||||||
3rd quarter | 5,190 | 4,340 | 43.78 | 37.24 | ||||||||||||
4th quarter | 6,540 | 5,120 | 53.34 | 42.73 | ||||||||||||
Monthly highs and lows* | ||||||||||||||||
2006 | ||||||||||||||||
December | 5,190 | 4,470 | 43.78 | 39.27 | ||||||||||||
2007 | ||||||||||||||||
January | 5,830 | 5,120 | 48.01 | 42.73 | ||||||||||||
February | 6,540 | 5,560 | 53.34 | 47.13 | ||||||||||||
March | 6,290 | 5,650 | 53.24 | 48.28 | ||||||||||||
April | 6,660 | 5,860 | 55.54 | 49.77 | ||||||||||||
May | 7,190 | 6,260 | 59.84 | 52.51 | ||||||||||||
June (through June 20) | 7,030 | 6,500 | 57.33 | 52.98 |
* | Stock price data are based on prices throughout the sessions for each corresponding period at each stock exchange. |
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Item 10. | Additional Information |
(i) | manufacture and sale of electronic and electrical machines and equipment, medical instruments, optical instruments and other equipment, machines and instruments; | |
(ii) | planning, production and sale of audio-visual software and computer software programs; | |
(iii) | manufacture and sale of metal industrial products, chemical industrial products and ceramic industrial products, textile products, paper products and wood-crafted articles, daily necessities, foodstuffs and toys, transportation machines, equipment, petroleum and coal products; | |
(iv) | real estate activities, construction business, transportation business and warehousing business; | |
(v) | publishing business and printing business; | |
(vi) | advertising agency business, insurance agency business, broadcasting enterprise, recreation business such as travel, management of sporting facilities, etc. and other service enterprises; | |
(vii) | financial business; | |
(viii) | Type I and Type II telecommunications business under the Telecommunications Business Law; | |
(ix) | investing in stocks and bonds, etc.; | |
(x) | manufacture, sale, export and import of products which are incidental to or related to those mentioned above; | |
(xi) | rendering of services related to those mentioned above; | |
(xii) | investment in businesses mentioned above operated by other companies or persons; and | |
(xiii) | all businesses which are incidental to or related to those mentioned above. |
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“A” = | the total amount of other capital surplus and other retained earnings, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year |
“B” = | (if Sony Corporation has disposed of its treasury stock after the end of the last business year) the amount of the consideration for such treasury stock received by Sony Corporation less the book value thereof | |
“C” = | (if Sony Corporation has reduced its stated capital after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to additional paid-in capital or legal reserve (if any) | |
“D” = | (if Sony Corporation has reduced its additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to stated capital (if any) | |
“E” = | (if Sony Corporation has cancelled its treasury stock after the end of the last business year) the book value of such treasury stock | |
“F” = | (if Sony Corporation has distributed Surplus to its shareholders after the end of the last business year) the total book value of the Surplus so distributed | |
“G” = | certain other amounts set forth in ordinances of the Ministry of Justice, including (if Sony Corporation has reduced Surplus and increased its stated capital, additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction and (if Sony Corporation has distributed Surplus to the shareholders after the end of the last business year) the amount set aside in additional paid-in capital or legal reserve (if any) as required by ordinances of the Ministry of Justice. |
(a) | the book value of its treasury stock; | |
(b) | the amount of consideration for any of treasury stock disposed of by Sony Corporation after the end of the last business year; and | |
(c) | certain other amounts set forth in ordinances of the Ministry of Justice, including (if the sum of one-half of goodwill and the deferred assets exceeds the total of stated capital, additional paid-in capital and legal reserve, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year) all or certain part of such exceeding amount as calculated in accordance with ordinances of the Ministry of Justice. |
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(1) | acquisition of its own shares from a specific party other than its subsidiaries; | |
(2) | consolidation of shares; | |
(3) | any offering of new shares at a “specially favorable” price (or any offering of stock acquisition rights to acquire shares of capital stock, or bonds with stock acquisition rights at “specially favorable” conditions) to any persons other than shareholders; | |
(4) | the exemption of liability of a Director, Corporate Executive Officer or independent auditor with certain exceptions; | |
(5) | a reduction of stated capital with certain exceptions; | |
(6) | a distribution of in-kind dividends which meets certain requirements; | |
(7) | dissolution, merger, consolidation, or corporate split with certain exceptions; | |
(8) | the transfer of the whole or a material part of the business; | |
(9) | the taking over of the whole of the business of any other corporation with certain exceptions; or | |
(10) | share exchange or share transfer for the purpose of establishing 100 percent parent-subsidiary relationships with certain exceptions, |
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• | individuals who do not reside in Japan; and | |
• | corporations whose principal offices are located outside Japan. |
• | individuals who are exchange non-residents; | |
• | corporations that are organized under the laws of foreign countries or whose principal offices are located outside of Japan; and | |
• | corporations (1) of which 50 percent or more of their shares are held by individuals who are exchange non-residentsand/or corporations (a) that are organized under the laws of foreign countries or (b) whose principal offices are located outside of Japan or (2) a majority of whose officers, or officers having the power of representation, are individuals who are exchange non-residents. |
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(i) | is a resident of the U.S. for purposes of the Treaty; | |
(ii) | does not maintain a permanent establishment in Japan (a) with which shares of Common Stock or ADSs of Sony Corporation are effectively connected and through which the U.S. holder carries on or has carried on business or (b) of which shares of Common Stock or ADSs of Sony Corporation form part of the business property; and | |
(iii) | is eligible for benefits under the Treaty with respect to income and gain derived in connection with shares of Common Stock or ADSs of Sony Corporation. |
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Item 11. | Quantitative and Qualitative Disclosures about Market Risk |
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June 30, | September 29, | December 29, | March 30, | |||||||||||||
2006 | 2006 | 2006 | 2007 | |||||||||||||
(Yen in billions) | ||||||||||||||||
Net VaR | 4.8 | 3.8 | 2.3 | 2.9 | ||||||||||||
VaR of currency exchange rate risk | 1.3 | 1.6 | 0.6 | 1.3 | ||||||||||||
VaR of interest rate risk | 0.4 | 0.2 | 0.4 | 0.1 | ||||||||||||
VaR of stock price risk | 4.8 | 3.4 | 2.4 | 3.2 |
June 30, | September 29, | December 29, | March 30, | |||||||||||||
2006 | 2006 | 2006 | 2007 | |||||||||||||
(Yen in billions) | ||||||||||||||||
Net VaR | 4.8 | 3.5 | 2.4 | 3.0 | ||||||||||||
VaR of currency exchange rate risk | 0.5 | 0.4 | 0.3 | 0.6 | ||||||||||||
VaR of interest rate risk | 0.4 | 0.2 | 0.3 | 0.6 | ||||||||||||
VaR of stock price risk | 4.8 | 3.4 | 2.4 | 3.2 |
June 30, | September 29, | December 29, | March 30, | |||||||||||||
2006 | 2006 | 2006 | 2007 | |||||||||||||
(Yen in billions) | ||||||||||||||||
Net VaR | 0.9 | 1.3 | 0.5 | 0.8 | ||||||||||||
VaR of currency exchange rate risk | 0.9 | 1.3 | 0.5 | 0.8 | ||||||||||||
VaR of interest rate risk | 0.0 | 0.0 | 0.2 | 0.1 | ||||||||||||
VaR of stock price risk | 0.0 | 0.0 | 0.0 | 0.0 |
Item 12. | Description of Securities Other Than Equity Securities |
Item 13. | Defaults, Dividend Arrearages and Delinquencies |
Item 14. | Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. | Controls and Procedures |
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Fiscal Year Ended | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Yen in millions | ||||||||
Audit Fees(1) | 2,180 | 4,900 | ||||||
Audit-Related Fees(2) | 206 | 204 | ||||||
Tax Fees(3) | 486 | 110 | ||||||
All Other Fees(4) | 12 | 16 | ||||||
2,884 | 5,230 | |||||||
(1) | Audit Fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor can provide. Theyear-over-year increase in audit fees for the fiscal year ended March 31, 2007 compared to the prior year is mostly related to the attestation services in connection with Section 404 of the Sarbanes-Oxley Act of 2002. |
(2) | Audit-Related Fees consist of fees billed for assurance and related services, and mainly include the audits of employee benefit plans. The audit-related fees for the fiscal year ended March 31, 2006 included the advisory services related to the implementation of Sarbanes-Oxley Act Section 404 and employee benefit plan audits. |
(3) | Tax Fees primarily include tax compliance, tax advice and expatriate tax services. |
(4) | All Other Fees comprise fees for all other services not included in any of the other categories noted above. |
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(c) Total | ||||||||||||||||
Number of | (d) Maximum | |||||||||||||||
Shares | Number of | |||||||||||||||
Purchased as | Shares that | |||||||||||||||
(a) Total | Part of Publicly | May Yet Be | ||||||||||||||
Number of | (b) Average | Announced | Purchased | |||||||||||||
Shares | Price Paid per | Plans or | Under the Plans | |||||||||||||
Period | Purchased | Share | Programs | or Programs | ||||||||||||
April 1st — 30th, 2006 | 7,272 | 5,721.56 | N/A | N/A | ||||||||||||
May 1st — 31st, 2006 | 6,169 | 5,458.88 | N/A | N/A | ||||||||||||
June 1st — 30th, 2006 | 6,212 | 4,935.14 | N/A | N/A | ||||||||||||
July 1st — 31st, 2006 | 6,639 | 4,933.68 | N/A | N/A | ||||||||||||
August 1st — 31st, 2006 | 9,027 | 5,175.29 | N/A | N/A | ||||||||||||
September 1st — 30th, 2006 | 8,082 | 4,983.42 | N/A | N/A | ||||||||||||
October 1st — 31st, 2006 | 7,974 | 4,700.31 | N/A | N/A | ||||||||||||
November 1st — 30th, 2006 | 6,383 | 4,741.61 | N/A | N/A | ||||||||||||
December 1st — 31st, 2006 | 12,594 | 4,920.18 | N/A | N/A | ||||||||||||
January 1st — 31st, 2007 | 12,145 | 5,530.72 | N/A | N/A | ||||||||||||
February 1st — 28th, 2007 | 13,208 | 6,024.99 | N/A | N/A | ||||||||||||
March 1st — 31st, 2007 | 9,049 | 6,151.01 | N/A | N/A | ||||||||||||
Total | 104,754 | 5,324.93 | N/A | N/A |
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8.1 | Significant subsidiaries (as defined in §210.1-02(w) ofRegulation S-X) of Sony Corporation, including additional subsidiaries that management has deemed to be significant, as of March 31, 2007: Incorporated by reference to “Business Overview and Organizational Structure” in “Item 4. Information on the Company” | |
12.1 | 302 Certification | |
12.2 | 302 Certification | |
13.1 | 906 Certification | |
15.1(a) | Consent of PricewaterhouseCoopers Aarata | |
15.1(b) | Consent of PricewaterhouseCoopers AB |
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By: | /s/ NOBUYUKI ONEDA |
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Sony Corporation and Consolidated Subsidiaries
March 31, 2007
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Yen in millions | ||||||||
2006 | 2007 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 703,098 | 799,899 | ||||||
Marketable securities | 536,968 | 493,315 | ||||||
Notes and accounts receivable, trade | 1,075,071 | 1,490,452 | ||||||
Allowance for doubtful accounts and sales returns | (89,563 | ) | (120,675 | ) | ||||
Inventories | 804,724 | 940,875 | ||||||
Deferred income taxes | 221,311 | 243,782 | ||||||
Prepaid expenses and other current assets | 517,915 | 699,075 | ||||||
Total current assets | 3,769,524 | 4,546,723 | ||||||
Film costs | 360,372 | 308,694 | ||||||
Investments and advances: | ||||||||
Affiliated companies | 285,870 | 448,169 | ||||||
Securities investments and other | 3,234,037 | 3,440,567 | ||||||
3,519,907 | 3,888,736 | |||||||
Property, plant and equipment: | ||||||||
Land | 178,844 | 167,493 | ||||||
Buildings | 926,783 | 978,680 | ||||||
Machinery and equipment | 2,327,676 | 2,479,308 | ||||||
Construction in progress | 116,149 | 64,855 | ||||||
3,549,452 | 3,690,336 | |||||||
Less — Accumulated depreciation | 2,160,905 | 2,268,805 | ||||||
1,388,547 | 1,421,531 | |||||||
Other assets: | ||||||||
Intangibles, net | 207,034 | 233,255 | ||||||
Goodwill | 299,024 | 304,669 | ||||||
Deferred insurance acquisition costs | 383,156 | 394,117 | ||||||
Deferred income taxes | 178,751 | 216,997 | ||||||
Other | 501,438 | 401,640 | ||||||
1,569,403 | 1,550,678 | |||||||
Total assets: | 10,607,753 | 11,716,362 | ||||||
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Yen in millions | ||||||||
2006 | 2007 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term borrowings | 142,766 | 52,291 | ||||||
Current portion of long-term debt | 193,555 | 43,170 | ||||||
Notes and accounts payable, trade | 813,332 | 1,179,694 | ||||||
Accounts payable, other and accrued expenses | 854,886 | 968,757 | ||||||
Accrued income and other taxes | 87,295 | 70,286 | ||||||
Deposits from customers in the banking business | 599,952 | 752,367 | ||||||
Other | 508,442 | 485,287 | ||||||
Total current liabilities | 3,200,228 | 3,551,852 | ||||||
Long-term debt | 764,898 | 1,001,005 | ||||||
Accrued pension and severance costs | 182,247 | 173,474 | ||||||
Deferred income taxes | 216,497 | 261,102 | ||||||
Future insurance policy benefits and other | 2,744,321 | 3,037,666 | ||||||
Other | 258,609 | 281,589 | ||||||
Total liabilities: | 7,366,800 | 8,306,688 | ||||||
Minority interest in consolidated subsidiaries | 37,101 | 38,970 | ||||||
Stockholders’ equity: | ||||||||
Common stock, no par value — | ||||||||
2006 — Authorized 3,500,000,000 shares, outstanding 1,001,679,664 shares | 624,124 | |||||||
2007 — Authorized 3,600,000,000 shares, outstanding 1,002,897,264 shares | 626,907 | |||||||
Additional paid-in capital | 1,136,638 | 1,143,423 | ||||||
Retained earnings | 1,602,654 | 1,719,506 | ||||||
Accumulated other comprehensive income — | ||||||||
Unrealized gains on securities | 100,804 | 86,096 | ||||||
Unrealized losses on derivative instruments | (2,049 | ) | (1,075 | ) | ||||
Minimum pension liability adjustment | (39,824 | ) | — | |||||
Pension liability adjustment | — | (71,459 | ) | |||||
Foreign currency translation adjustments | (215,368 | ) | (129,055 | ) | ||||
(156,437 | ) | (115,493 | ) | |||||
Treasury stock, at cost | ||||||||
Common stock | ||||||||
2006 — 740,888 shares | (3,127 | ) | ||||||
2007 — 834,859 shares | (3,639 | ) | ||||||
3,203,852 | 3,370,704 | |||||||
Commitments and contingent liabilities | ||||||||
Total liabilities and stockholders’ equity: | 10,607,753 | 11,716,362 | ||||||
F-5
Table of Contents
Yen in millions | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales and operating revenue: | ||||||||||||
Net sales | 6,565,010 | 6,692,776 | 7,567,359 | |||||||||
Financial service revenue | 537,715 | 720,566 | 624,282 | |||||||||
Other operating revenue | 88,600 | 97,255 | 104,054 | |||||||||
7,191,325 | 7,510,597 | 8,295,695 | ||||||||||
Costs and expenses: | ||||||||||||
Cost of sales | 5,000,112 | 5,151,397 | 5,889,601 | |||||||||
Selling, general and administrative | 1,535,015 | 1,527,036 | 1,788,427 | |||||||||
Financial service expenses | 482,576 | 531,809 | 540,097 | |||||||||
Loss on sale, disposal or impairment of assets, net | 27,994 | 73,939 | 5,820 | |||||||||
7,045,697 | 7,284,181 | 8,223,945 | ||||||||||
Operating income | 145,628 | 226,416 | 71,750 | |||||||||
Other income: | ||||||||||||
Interest and dividends | 14,708 | 24,937 | 28,240 | |||||||||
Gain on sale of securities investments, net | 5,437 | 9,645 | 14,695 | |||||||||
Gain on change in interest in subsidiaries and equity investees | 16,322 | 60,834 | 31,509 | |||||||||
Other | 29,447 | 23,039 | 20,738 | |||||||||
65,914 | 118,455 | 95,182 | ||||||||||
Other expenses: | ||||||||||||
Interest | 24,578 | 28,996 | 27,278 | |||||||||
Loss on devaluation of securities investments | 3,715 | 3,878 | 1,308 | |||||||||
Foreign exchange loss, net | 524 | 3,065 | 18,835 | |||||||||
Other | 25,518 | 22,603 | 17,474 | |||||||||
54,335 | 58,542 | 64,895 | ||||||||||
Income before income taxes | 157,207 | 286,329 | 102,037 | |||||||||
Income taxes: | ||||||||||||
Current | 85,510 | 96,400 | 67,081 | |||||||||
Deferred | (69,466 | ) | 80,115 | (13,193 | ) | |||||||
16,044 | 176,515 | 53,888 | ||||||||||
Income before minority interest, equity in net income of affiliated companies and cumulative effect of an accounting change | 141,163 | 109,814 | 48,149 | |||||||||
Minority interest in income (loss) of consolidated subsidiaries | 1,651 | (626 | ) | 475 | ||||||||
Equity in net income of affiliated companies | 29,039 | 13,176 | 78,654 | |||||||||
Income before cumulative effect of an accounting change | 168,551 | 123,616 | 126,328 | |||||||||
Cumulative effect of an accounting change | ||||||||||||
(2005: Net of income taxes of 2,675 million) | (4,713 | ) | — | — | ||||||||
Net income | 163,838 | 123,616 | 126,328 | |||||||||
F-6
Table of Contents
Yen | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Per share data: | ||||||||||||
Common stock | ||||||||||||
Income before cumulative effect of an accounting change | ||||||||||||
— Basic | 180.96 | 122.58 | 126.15 | |||||||||
— Diluted | 162.59 | 116.88 | 120.29 | |||||||||
Cumulative effect of an accounting change | ||||||||||||
— Basic | (5.06 | ) | — | — | ||||||||
— Diluted | (4.52 | ) | — | — | ||||||||
Net income | ||||||||||||
— Basic | 175.90 | 122.58 | 126.15 | |||||||||
— Diluted | 158.07 | 116.88 | 120.29 | |||||||||
Cash dividends | 25.00 | 25.00 | 25.00 | |||||||||
Subsidiary tracking stock | ||||||||||||
Net income | ||||||||||||
— Basic | 17.21 | — | — | |||||||||
F-7
Table of Contents
Yen in millions | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | 163,838 | 123,616 | 126,328 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities — | ||||||||||||
Depreciation and amortization, including amortization of deferred insurance acquisition costs | 372,865 | 381,843 | 400,009 | |||||||||
Amortization of film costs | 276,320 | 286,655 | 368,382 | |||||||||
Stock-based compensation | (74 | ) | 150 | 3,838 | ||||||||
Accrual for pension and severance costs, less payments | 22,837 | (7,563 | ) | (22,759 | ) | |||||||
Gain on the transfer to the Japanese Government of the substitutional portion of employee pension fund, net | — | (73,472 | ) | — | ||||||||
Loss on sale, disposal or impairment of assets, net | 27,994 | 73,939 | 5,820 | |||||||||
Gain on sale or loss on devaluation of securities investments, net | (1,722 | ) | (5,767 | ) | (13,387 | ) | ||||||
Gain on revaluation of marketable securities held in the financial service business for trading purpose, net | (5,246 | ) | (44,986 | ) | (11,857 | ) | ||||||
Gain on change in interest in subsidiaries and equity investees | (16,322 | ) | (60,834 | ) | (31,509 | ) | ||||||
Deferred income taxes | (69,466 | ) | 80,115 | (13,193 | ) | |||||||
Equity in net (income) losses of affiliated companies, net of dividends | (15,648 | ) | 9,794 | (68,179 | ) | |||||||
Cumulative effect of an accounting change | 4,713 | — | — | |||||||||
Changes in assets and liabilities: | ||||||||||||
(Increase) decrease in notes and accounts receivable, trade | (22,056 | ) | 17,464 | (357,891 | ) | |||||||
(Increase) decrease in inventories | 34,128 | (164,772 | ) | (119,202 | ) | |||||||
Increase in film costs | (294,272 | ) | (339,697 | ) | (320,079 | ) | ||||||
Increase (decrease) in notes and accounts payable, trade | 31,473 | (9,078 | ) | 362,079 | ||||||||
Increase (decrease) in accrued income and other taxes | 3 | 29,009 | (14,396 | ) | ||||||||
Increase in future insurance policy benefits and other | 144,143 | 143,122 | 172,498 | |||||||||
Increase in deferred insurance acquisition costs | (65,051 | ) | (51,520 | ) | (61,563 | ) | ||||||
(Increase) decrease in marketable securities held in the financial service business for trading purpose | (26,096 | ) | (35,346 | ) | 31,732 | |||||||
Increase in other current assets | (29,699 | ) | (8,792 | ) | (35,133 | ) | ||||||
Increase in other current liabilities | 46,545 | 105,865 | 73,222 | |||||||||
Other | 67,790 | (49,887 | ) | 86,268 | ||||||||
Net cash provided by operating activities | 646,997 | 399,858 | 561,028 | |||||||||
F-8
Table of Contents
Yen in millions | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Cash flows from investing activities: | ||||||||||||
Payments for purchases of fixed assets | (453,445 | ) | (462,473 | ) | (527,515 | ) | ||||||
Proceeds from sales of fixed assets | 34,184 | 38,168 | 87,319 | |||||||||
Payments for investments and advances by financial service business | (1,309,092 | ) | (1,368,158 | ) | (914,754 | ) | ||||||
Payments for investments and advances (other than financial service business) | (158,151 | ) | (36,947 | ) | (100,152 | ) | ||||||
Proceeds from maturities of marketable securities, sales of securities investments and collections of advances by financial service business | 923,593 | 857,376 | 679,772 | |||||||||
Proceeds from maturities of marketable securities, sales of securities investments and collections of advances (other than financial service business) | 25,849 | 24,527 | 22,828 | |||||||||
Proceeds from sales of subsidiaries’ and equity investees’ stocks | 3,162 | 75,897 | 43,157 | |||||||||
Other | 2,728 | 346 | (6,085 | ) | ||||||||
Net cash used in investing activities | (931,172 | ) | (871,264 | ) | (715,430 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of long-term debt | 57,232 | 246,326 | 270,780 | |||||||||
Payments of long-term debt | (94,862 | ) | (138,773 | ) | (182,374 | ) | ||||||
Increase (decrease) in short-term borrowings | 11,397 | (11,045 | ) | 6,096 | ||||||||
Increase in deposits from customers in the financial service business | 294,352 | 190,320 | 273,435 | |||||||||
Increase (decrease) in call money and bills sold in the banking business | (40,400 | ) | 86,100 | (100,700 | ) | |||||||
Dividends paid | (22,978 | ) | (24,810 | ) | (25,052 | ) | ||||||
Proceeds from the issuance of shares under stock-based compensation plans | 105 | 4,681 | 5,566 | |||||||||
Proceeds from the issuance of shares by subsidiaries | 4,023 | 6,937 | 2,217 | |||||||||
Other | (3,692 | ) | 128 | (2,065 | ) | |||||||
Net cash provided by financing activities | 205,177 | 359,864 | 247,903 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 8,890 | 35,537 | 3,300 | |||||||||
Net increase (decrease) in cash and cash equivalents | (70,108 | ) | (76,005 | ) | 96,801 | |||||||
Cash and cash equivalents at beginning of the fiscal year | 849,211 | 779,103 | 703,098 | |||||||||
Cash and cash equivalents at end of the fiscal year | 779,103 | 703,098 | 799,899 | |||||||||
Supplemental data: | ||||||||||||
Cash paid during the fiscal year for — | ||||||||||||
Income taxes | 65,477 | 70,019 | 104,822 | |||||||||
Interest | 18,187 | 24,651 | 23,000 | |||||||||
Non-cash investing and financing activities — | ||||||||||||
Conversion of convertible bonds | 282,744 | — | — | |||||||||
Obtaining assets by entering into capital lease | 19,049 | 19,682 | 13,784 | |||||||||
Contribution of net assets into the joint venture with Bertelsmann AG | 9,402 | — | — | |||||||||
F-9
Table of Contents
Yen in millions | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Subsidiary | Additional | other | Treasury | |||||||||||||||||||||||||
tracking | Common | paid-in | Retained | comprehensive | stock, at | |||||||||||||||||||||||
stock | stock | capital | earnings | income | cost | Total | ||||||||||||||||||||||
Balance at March 31, 2004 | 3,917 | 476,350 | 992,817 | 1,367,060 | (449,959 | ) | (12,183 | ) | 2,378,002 | |||||||||||||||||||
Exercise of stock acquisition rights | 52 | 53 | 105 | |||||||||||||||||||||||||
Conversion of convertible bonds | 141,390 | 141,354 | 282,744 | |||||||||||||||||||||||||
Stock based compensation | 340 | 340 | ||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income | 163,838 | 163,838 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax — | ||||||||||||||||||||||||||||
Unrealized gains on securities: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | 5,643 | 5,643 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (12,924 | ) | (12,924 | ) | ||||||||||||||||||||||||
Unrealized losses on derivative instruments: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | (209 | ) | (209 | ) | ||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (1,681 | ) | (1,681 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment | (769 | ) | (769 | ) | ||||||||||||||||||||||||
Foreign currency translation adjustments | 74,224 | 74,224 | ||||||||||||||||||||||||||
Total comprehensive income | 228,122 | |||||||||||||||||||||||||||
Stock issue costs, net of tax | (541 | ) | (541 | ) | ||||||||||||||||||||||||
Dividends declared | (24,030 | ) | (24,030 | ) | ||||||||||||||||||||||||
Purchase of treasury stock | (416 | ) | (416 | ) | ||||||||||||||||||||||||
Reissuance of treasury stock | (342 | ) | (245 | ) | 6,599 | 6,012 | ||||||||||||||||||||||
Balance at March 31, 2005 | 3,917 | 617,792 | 1,134,222 | 1,506,082 | (385,675 | ) | (6,000 | ) | 2,870,338 | |||||||||||||||||||
F-10
Table of Contents
Yen in millions | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Subsidiary | Additional | other | Treasury | |||||||||||||||||||||||||
tracking | Common | paid-in | Retained | comprehensive | stock, at | |||||||||||||||||||||||
stock | stock | capital | earnings | income | cost | Total | ||||||||||||||||||||||
Balance at March 31, 2005 | 3,917 | 617,792 | 1,134,222 | 1,506,082 | (385,675 | ) | (6,000 | ) | 2,870,338 | |||||||||||||||||||
Exercise of stock acquisition rights | 931 | 932 | 1,863 | |||||||||||||||||||||||||
Conversion of convertible bonds | 1,484 | 1,484 | 2,968 | |||||||||||||||||||||||||
Conversion of subsidiary tracking stock | (3,917 | ) | 3,917 | — | ||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income | 123,616 | 123,616 | ||||||||||||||||||||||||||
Other comprehensive income, net of tax — | ||||||||||||||||||||||||||||
Unrealized gains on securities: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | 79,630 | 79,630 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (41,495 | ) | (41,495 | ) | ||||||||||||||||||||||||
Unrealized losses on derivative instruments: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | 7,865 | 7,865 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (7,424 | ) | (7,424 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment | 50,206 | 50,206 | ||||||||||||||||||||||||||
Foreign currency translation adjustments | 140,473 | 140,473 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (17 | ) | (17 | ) | ||||||||||||||||||||||||
Total comprehensive income | 352,854 | |||||||||||||||||||||||||||
Stock issue costs, net of tax | (780 | ) | (780 | ) | ||||||||||||||||||||||||
Dividends declared | (24,968 | ) | (24,968 | ) | ||||||||||||||||||||||||
Purchase of treasury stock | (394 | ) | (394 | ) | ||||||||||||||||||||||||
Reissuance of treasury stock | (1,296 | ) | 3,267 | 1,971 | ||||||||||||||||||||||||
Balance at March 31, 2006 | — | 624,124 | 1,136,638 | 1,602,654 | (156,437 | ) | (3,127 | ) | 3,203,852 | |||||||||||||||||||
F-11
Table of Contents
Yen in millions | ||||||||||||||||||||||||||||
Accumulated | ||||||||||||||||||||||||||||
Subsidiary | Additional | other | Treasury | |||||||||||||||||||||||||
tracking | Common | paid-in | Retained | comprehensive | stock, at | |||||||||||||||||||||||
stock | stock | capital | earnings | income | cost | Total | ||||||||||||||||||||||
Balance at March 31, 2006 | — | 624,124 | 1,136,638 | 1,602,654 | (156,437 | ) | (3,127 | ) | 3,203,852 | |||||||||||||||||||
Exercise of stock acquisition rights | 2,175 | 2,175 | 4,350 | |||||||||||||||||||||||||
Conversion of convertible bonds | 608 | 608 | 1,216 | |||||||||||||||||||||||||
Stock based compensation | 3,993 | 3,993 | ||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||
Net income | 126,328 | 126,328 | ||||||||||||||||||||||||||
Cumulative effect of an accounting change, net of tax | (3,785 | ) | (3,785 | ) | ||||||||||||||||||||||||
Other comprehensive income, net of tax — | ||||||||||||||||||||||||||||
Unrealized gains on securities: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | 6,963 | 6,963 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (21,671 | ) | (21,671 | ) | ||||||||||||||||||||||||
Unrealized losses on derivative instruments: | ||||||||||||||||||||||||||||
Unrealized holding gains (losses) arising during the period | 6,907 | 6,907 | ||||||||||||||||||||||||||
Less: Reclassification adjustment included in net income | (5,933 | ) | (5,933 | ) | ||||||||||||||||||||||||
Minimum pension liability adjustment | (2,754 | ) | (2,754 | ) | ||||||||||||||||||||||||
Foreign currency translation adjustments | 86,313 | 86,313 | ||||||||||||||||||||||||||
Total comprehensive income | 192,368 | |||||||||||||||||||||||||||
Stock issue costs, net of tax | (22 | ) | (22 | ) | ||||||||||||||||||||||||
Dividends declared | (25,042 | ) | (25,042 | ) | ||||||||||||||||||||||||
Purchase of treasury stock | (558 | ) | (558 | ) | ||||||||||||||||||||||||
Reissuance of treasury stock | 9 | 46 | 55 | |||||||||||||||||||||||||
Adoption of FAS No. 158, net of tax | (9,508 | ) | (9,508 | ) | ||||||||||||||||||||||||
Other | 19,373 | (19,373 | ) | — | ||||||||||||||||||||||||
Balance at March 31, 2007 | — | 626,907 | 1,143,423 | 1,719,506 | (115,493 | ) | (3,639 | ) | 3,370,704 | |||||||||||||||||||
F-12
Table of Contents
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
F-17
Table of Contents
F-18
Table of Contents
F-19
Table of Contents
Yen in millions | ||||||||
Fiscal Year Ended March 31 | ||||||||
2005 | 2006 | |||||||
Income before cumulative effect of an accounting change allocated to common stock: | ||||||||
As reported | 168,498 | 122,308 | ||||||
Deduct: Total stock-based compensation expense determined under the fair value based method, net of related tax effects | (4,690 | ) | (4,182 | ) | ||||
Pro forma | 163,808 | 118,126 | ||||||
Net income allocated to common stock: | ||||||||
As reported | 163,785 | 122,308 | ||||||
Deduct: Total stock-based compensation expense determined under the fair value based method, net of related tax effects | (4,690 | ) | (4,182 | ) | ||||
Pro forma | 159,095 | 118,126 | ||||||
F-20
Table of Contents
Yen | ||||||||
Fiscal Year Ended March 31 | ||||||||
2005 | 2006 | |||||||
Income before cumulative effect of an accounting change allocated to common stock: | ||||||||
— Basic EPS: | ||||||||
As reported | 180.96 | 122.58 | ||||||
Pro forma | 175.92 | 118.39 | ||||||
— Diluted EPS: | ||||||||
As reported | 162.59 | 116.88 | ||||||
Pro forma | 158.10 | 112.91 | ||||||
Net income allocated to common stock: | ||||||||
— Basic EPS: | ||||||||
As reported | 175.90 | 122.58 | ||||||
Pro forma | 170.86 | 118.39 | ||||||
— Diluted EPS: | ||||||||
As reported | 158.07 | 116.88 | ||||||
Pro forma | 153.58 | 112.91 |
F-21
Table of Contents
F-22
Table of Contents
F-23
Table of Contents
F-24
Table of Contents
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Finished products | 534,766 | 649,848 | ||||||
Work in process | 123,381 | 123,539 | ||||||
Raw materials, purchased components and supplies | 146,577 | 167,488 | ||||||
804,724 | 940,875 | |||||||
F-25
Table of Contents
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Theatrical: | ||||||||
Released (including acquired film libraries) | 153,992 | 150,396 | ||||||
Completed not released | 13,377 | 16,255 | ||||||
In production and development | 156,019 | 93,584 | ||||||
Television licensing: | ||||||||
Released (including acquired film libraries) | 36,918 | 48,313 | ||||||
In production and development | 66 | 146 | ||||||
360,372 | 308,694 | |||||||
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Current assets | 991,440 | 1,428,227 | ||||||
Property, plant and equipment | 376,155 | 448,199 | ||||||
Other assets | 903,873 | 888,100 | ||||||
Total assets | 2,271,468 | 2,764,526 | ||||||
Current liabilities | 1,009,895 | 1,178,299 | ||||||
Long-term liabilities | 660,504 | 668,254 | ||||||
Stockholders’ equity | 601,069 | 917,973 | ||||||
Total liabilities and stockholders’ equity | 2,271,468 | 2,764,526 | ||||||
Number of companies at end of the fiscal year | 58 | 62 |
F-26
Table of Contents
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales and revenue | 1,473,273 | 2,357,172 | 3,288,212 | |||||||||
Gross profit | 477,796 | 668,226 | 894,232 | |||||||||
Net income | 63,404 | 32,982 | 148,495 |
F-27
Table of Contents
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Accounts receivable, trade | 44,837 | 45,617 | ||||||
Advances | 15,985 | 20,740 | ||||||
Accounts payable, trade | 40,507 | 51,894 | ||||||
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales | 256,799 | 234,636 | 299,487 | |||||||||
Purchases | 101,976 | 282,071 | 463,578 | |||||||||
F-28
Table of Contents
6. | Accounts receivable securitization programs |
7. | Marketable securities and securities investments and other |
Yen in millions | ||||||||||||||||||||||||||||||||
March 31, 2006 | March 31, 2007 | |||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
unrealized | unrealized | unrealized | unrealized | |||||||||||||||||||||||||||||
Cost | gains | losses | Fair value | Cost | gains | losses | Fair value | |||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||
Debt securities | 2,522,864 | 17,021 | (22,810 | ) | 2,517,075 | 2,517,849 | 23,716 | (8,903 | ) | 2,532,662 | ||||||||||||||||||||||
Equity securities | 227,079 | 171,921 | (1,589 | ) | 397,411 | 281,012 | 128,888 | (7,332 | ) | 402,568 | ||||||||||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||||||||||
Securities | 33,193 | 132 | (221 | ) | 33,104 | 36,035 | 165 | (127 | ) | 36,073 | ||||||||||||||||||||||
Total | 2,783,136 | 189,074 | (24,620 | ) | 2,947,590 | 2,834,896 | 152,769 | (16,362 | ) | 2,971,303 | ||||||||||||||||||||||
F-29
Table of Contents
Yen in millions | ||||||||||||||||||||||||
Less than 12 months | 12 months or More | Total | ||||||||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||||||||
Fair value | losses | Fair value | losses | Fair value | losses | |||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||
Debt securities | 67,840 | (124 | ) | 404,486 | (8,779 | ) | 472,326 | (8,903 | ) | |||||||||||||||
Equity securities | 59,790 | (7,104 | ) | 962 | (228 | ) | 60,752 | (7,332 | ) | |||||||||||||||
Held-to-maturity | ||||||||||||||||||||||||
Securities | 2,110 | (6 | ) | 14,906 | (121 | ) | 17,016 | (127 | ) | |||||||||||||||
Total | 129,740 | (7,234 | ) | 420,354 | (9,128 | ) | 550,094 | (16,362 | ) | |||||||||||||||
Yen in millions | ||||||||
March 31 | ||||||||
Class of property | 2006 | 2007 | ||||||
Land | 193 | 80 | ||||||
Buildings | 7,437 | 1,859 | ||||||
Machinery, equipment, film costs, and others | 28,870 | 50,506 | ||||||
Accumulated depreciation | (14,820 | ) | (13,675 | ) | ||||
21,680 | 38,770 | |||||||
F-30
Table of Contents
Yen in millions | ||||
Fiscal Year Ending March 31: | ||||
2008 | 14,113 | |||
2009 | 9,911 | |||
2010 | 6,756 | |||
2011 | 4,838 | |||
2012 | 3,405 | |||
Later years | 21,491 | |||
Total minimum lease payments | 60,514 | |||
Less — Amount representing interest | 11,111 | |||
Present value of net minimum lease payments | 49,403 | |||
Less — Current obligations | 12,559 | |||
Long-term capital lease obligations | 36,844 | |||
Yen in millions | ||||
Fiscal Year Ending March 31: | ||||
2008 | 46,154 | |||
2009 | 36,869 | |||
2010 | 27,942 | |||
2011 | 17,322 | |||
2012 | 13,807 | |||
Later years | 60,629 | |||
Total minimum future rentals | 202,723 | |||
F-31
Table of Contents
Yen in millions | ||||||||||||||||
March 31 | ||||||||||||||||
2006 | 2007 | |||||||||||||||
Gross carrying | Accumulated | Gross carrying | Accumulated | |||||||||||||
amount | amortization | amount | amortization | |||||||||||||
Artist contracts | 15,218 | (12,218 | ) | 15,218 | (13,019 | ) | ||||||||||
Music catalog | 71,921 | (24,012 | ) | 79,930 | (27,669 | ) | ||||||||||
Acquired patent rights | 67,467 | (30,200 | ) | 84,482 | (37,173 | ) | ||||||||||
Software to be sold, leased or otherwise marketed | 40,007 | (24,194 | ) | 42,028 | (21,435 | ) | ||||||||||
Other | 36,833 | (15,133 | ) | 57,022 | (26,287 | ) | ||||||||||
Total | 231,446 | (105,757 | ) | 278,680 | (125,583 | ) | ||||||||||
Yen in millions | ||||
Fiscal Year Ending March 31, | ||||
2008 | 37,334 | |||
2009 | 31,265 | |||
2010 | 23,234 | |||
2011 | 19,534 | |||
2012 | 7,515 |
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Trademarks | 58,195 | 58,212 | ||||||
Distribution agreement | 18,848 | 18,834 | ||||||
Other | 4,145 | 3,112 | ||||||
81,188 | 80,158 | |||||||
F-32
Table of Contents
Yen in millions | ||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||
Electronics | Game | Pictures | Services | All Other | Total | |||||||||||||||||||
Balance at March 31, 2005 | 70,815 | 114,740 | 77,934 | 441 | 19,993 | 283,923 | ||||||||||||||||||
Goodwill acquired during year | 3,337 | 1,317 | 947 | 536 | 382 | 6,519 | ||||||||||||||||||
Reallocated from music business to Electronics segment | 634 | — | — | — | (634 | ) | — | |||||||||||||||||
Impairment losses | — | — | — | — | (534 | ) | (534 | ) | ||||||||||||||||
Other * | 1,577 | 207 | 7,031 | — | 301 | 9,116 | ||||||||||||||||||
Balance at March 31, 2006 | 76,363 | 116,264 | 85,912 | 977 | 19,508 | 299,024 | ||||||||||||||||||
Goodwill acquired during year | 371 | 301 | 8,595 | 698 | 1,068 | 11,033 | ||||||||||||||||||
Impairment losses | (5,620 | ) | — | — | — | (237 | ) | (5,857 | ) | |||||||||||||||
Other * | 155 | 80 | (321 | ) | — | 555 | 469 | |||||||||||||||||
Balance at March 31, 2007 | 71,269 | 116,645 | 94,186 | 1,675 | 20,894 | 304,669 | ||||||||||||||||||
* | Other consists of translation adjustments and reclassification to/from other accounts. |
F-33
Table of Contents
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Unsecured loans: | ||||||||
with a weighted-average interest rate of 3.63% | 32,066 | |||||||
with a weighted-average interest rate of 4.14% | 42,291 | |||||||
Secured call money: | ||||||||
with a weighted-average interest rate of 0.01% | 40,000 | |||||||
with a weighted-average interest rate of 0.21% | 10,000 | |||||||
Secured bills sold: | ||||||||
with a weighted-average interest rate of 0.01% | 70,700 | — | ||||||
142,766 | 52,291 | |||||||
F-34
Table of Contents
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Unsecured loans, representing obligations principally to banks: | ||||||||
Due 2006 to 2015, with interest rates ranging from 0.13% to 5.89% per annum | 128,148 | |||||||
Due 2007 to 2018, with interest rates ranging from 0.51% to 5.89% per annum | 374,091 | |||||||
Medium-term notes of consolidated subsidiaries: | ||||||||
Due 2006 with an interest rate of 4.95% per annum | 58,698 | — | ||||||
Unsecured zero coupon convertible bonds, due 2008, convertible currently at 5,605 yen for one common share, redeemable before due date | 250,000 | 250,000 | ||||||
Unsecured 1.55% bonds, due 2006 with detachable warrants | 12,000 | — | ||||||
Unsecured 0.9% bonds, due 2007 with detachable warrants | 7,300 | 7,300 | ||||||
Unsecured 0.9% bonds, due 2007 with detachable warrants | 150 | 150 | ||||||
Unsecured 0.64% bonds, due 2006, net of unamortized discount | 99,999 | — | ||||||
Unsecured 1.01% bonds, due 2010, net of unamortized discount | 39,996 | 39,997 | ||||||
Unsecured 2.04% bonds, due 2010, net of unamortized discount | 49,987 | 49,990 | ||||||
Unsecured 0.80% bonds, due 2010, net of unamortized discount | 49,991 | 49,993 | ||||||
Unsecured 1.52% bonds, due 2011, net of unamortized discount | 49,997 | 49,998 | ||||||
Unsecured 1.16% bonds, due 2012, net of unamortized discount | 39,981 | 39,985 | ||||||
Unsecured 1.52% bonds, due 2013, net of unamortized discount | 34,997 | 34,997 | ||||||
Unsecured 1.57% bonds, due 2015, net of unamortized discount | 29,980 | 29,982 | ||||||
Unsecured 1.75% bonds, due 2015, net of unamortized discount | 24,993 | 24,993 | ||||||
Unsecured 1.99% bonds, due 2007 | 15,000 | 15,000 | ||||||
Unsecured 2.35% bonds, due 2010 | 4,900 | 4,900 | ||||||
Capital lease obligations: | ||||||||
Due 2006 to 2019, with interest rates ranging from 1.45% to 16.00% per annum | 38,280 | |||||||
Due 2007 to 2020, with interest rates ranging from 1.50% to 17.57% per annum | 49,403 | |||||||
Guarantee deposits received | 24,056 | 23,396 | ||||||
958,453 | 1,044,175 | |||||||
Less — Portion due within one year | 193,555 | 43,170 | ||||||
764,898 | 1,001,005 | |||||||
Exercise price | Number of shares | |||||||||
Issued on | Exercisable during | Yen | per warrant | Status of exercise | ||||||
December 21, 2001 | January 6, 2003 | 6,039 | 100 shares of | 11,459 warrants | ||||||
through December | common stock of | outstanding | ||||||||
20, 2007 | Sony Corporation |
F-35
Table of Contents
Fiscal Year Ending March 31 | Yen in millions | |||
2008 | 43,170 | |||
2009 | 296,659 | |||
2010 | 165,419 | |||
2011 | 209,841 | |||
2012 | 69,008 |
Fiscal Year Ending March 31 | Yen in millions | |||
2009 | 25,296 | |||
2010 | 15,143 | |||
2011 | 4,415 | |||
2012 | 6,570 | |||
2013 | 697 |
F-36
Table of Contents
F-37
Table of Contents
F-38
Table of Contents
Yen in millions | ||||||||||||||||||||||||
March 31 | ||||||||||||||||||||||||
2006 | 2007 | |||||||||||||||||||||||
Notional | Carrying | Estimated | Notional | Carrying | Estimated | |||||||||||||||||||
amount | amount | fair value | amount | amount | fair value | |||||||||||||||||||
Long-term debt including the current portion | — | (958,453 | ) | (981,006 | ) | — | (1,044,175 | ) | (1,075,359 | ) | ||||||||||||||
Foreign exchange forward contracts | 1,489,213 | 1,184 | 1,184 | 1,768,609 | (291 | ) | (291 | ) | ||||||||||||||||
Currency option contracts purchased | 457,380 | 2,540 | 2,540 | 287,833 | 2,404 | 2,404 | ||||||||||||||||||
Currency option contracts written | 163,746 | (2,576 | ) | (2,576 | ) | 67,180 | (462 | ) | (462 | ) | ||||||||||||||
Interest rate swap agreements | 172,430 | (165 | ) | (165 | ) | 272,608 | (1,512 | ) | (1,512 | ) | ||||||||||||||
Interest rate and currency swap agreements | 14,518 | (488 | ) | (488 | ) | 8,718 | (816 | ) | (816 | ) | ||||||||||||||
Interest rate future contracts | — | — | — | 115,291 | 9 | 9 | ||||||||||||||||||
Bond future contracts | 13,934 | 111 | 111 | 6,993 | 1 | 1 | ||||||||||||||||||
Bond option contracts written | — | — | — | 49,964 | 130 | 130 | ||||||||||||||||||
Stock price index option purchased | 26,650 | 40 | 40 | — | — | — | ||||||||||||||||||
Embedded derivatives | 411,252 | 70,712 | 70,712 | — | — | — |
F-39
Table of Contents
F-40
Table of Contents
Before | After | |||||||||||
Adoption of | Adoption of | |||||||||||
FAS No. 158 | Adjustments | FAS No. 158 | ||||||||||
Intangibles | 114 | (114 | ) | 0 | ||||||||
Other assets | 2,198 | (1,711 | ) | 487 | ||||||||
Deferred income tax assets | 22,214 | 5,412 | 27,626 | |||||||||
Other current liabilities | 6,067 | 489 | 6,556 | |||||||||
Accrued pension and severance costs | 157,047 | 8,269 | 165,316 | |||||||||
Other long term liabilities | 14,138 | 2,850 | 16,988 | |||||||||
Deferred income tax liabilities | 41 | 1,487 | 1,528 | |||||||||
Accumulated other comprehensive Income (loss) | (61,951 | ) | (9,508 | ) | (71,459 | ) |
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Service cost | 31,971 | 26,561 | 27,175 | |||||||||
Interest cost | 21,364 | 16,504 | 13,494 | |||||||||
Expected return on plan assets | (16,120 | ) | (17,290 | ) | (17,299 | ) | ||||||
Amortization of net transition asset | (375 | ) | (104 | ) | — | |||||||
Recognized actuarial loss | 20,236 | 14,393 | 10,072 | |||||||||
Amortization of prior service costs | (7,216 | ) | (10,229 | ) | (10,321 | ) | ||||||
Gains on curtailments and settlements | (876 | ) | — | — | ||||||||
Settlement loss resulting from the transfer of the substitutional portion | — | 59,850 | — | |||||||||
Net periodic benefit costs | 48,984 | 89,685 | 23,121 | |||||||||
F-41
Table of Contents
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Service cost | 6,419 | 6,852 | 7,664 | |||||||||
Interest cost | 8,091 | 8,318 | 10,179 | |||||||||
Expected return on plan assets | (6,712 | ) | (7,112 | ) | (9,123 | ) | ||||||
Amortization of net transition asset | (18 | ) | 21 | 27 | ||||||||
Recognized actuarial loss | 1,637 | 1,674 | 2,536 | |||||||||
Amortization of prior service costs | (114 | ) | (240 | ) | (295 | ) | ||||||
Losses on curtailments and settlements | 1,713 | 915 | 120 | |||||||||
Net periodic benefit costs | 11,016 | 10,428 | 11,108 | |||||||||
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation at beginning of the fiscal year | 901,726 | 619,869 | 153,598 | 194,169 | ||||||||||||
Service cost | 26,561 | 27,175 | 6,852 | 7,664 | ||||||||||||
Interest cost | 16,504 | 13,494 | 8,318 | 10,179 | ||||||||||||
Plan participants’ contributions | — | — | 609 | 557 | ||||||||||||
Amendments | (11,522 | ) | (1,693 | ) | 238 | (898 | ) | |||||||||
Actuarial (gain) loss | (3,200 | ) | (7,053 | ) | 20,183 | 4,693 | ||||||||||
Foreign currency exchange rate changes | — | — | 17,506 | 9,040 | ||||||||||||
Curtailments and settlements | — | — | (4,465 | ) | — | |||||||||||
Benefits paid | (18,630 | ) | (15,251 | ) | (8,670 | ) | (8,524 | ) | ||||||||
Transfer of the substitutional portion to the government | (291,570 | ) | — | — | — | |||||||||||
Benefit obligation at end of the fiscal year | 619,869 | 636,541 | 194,169 | 216,880 | ||||||||||||
F-42
Table of Contents
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets at beginning of the fiscal year | 534,451 | 489,328 | 92,025 | 104,394 | ||||||||||||
Actual return on plan assets | 51,766 | 4,199 | 11,209 | 14,393 | ||||||||||||
Foreign currency exchange rate changes | — | — | 5,059 | 13,268 | ||||||||||||
Employer contribution | 32,867 | 37,032 | 5,493 | 21,820 | ||||||||||||
Plan participants’ contributions | — | — | 609 | 557 | ||||||||||||
Curtailments and settlements | — | — | (4,006 | ) | (120 | ) | ||||||||||
Benefits paid | (11,911 | ) | (11,299 | ) | (5,995 | ) | (8,524 | ) | ||||||||
Transfer of the substitutional portion to the government | (117,845 | ) | — | — | — | |||||||||||
Fair value of plan assets at end of the fiscal year | 489,328 | 519,260 | 104,394 | 145,788 | ||||||||||||
Funded status at end of year | (130,541 | ) | (117,281 | ) | (89,775 | ) | (71,092 | ) | ||||||||
Unrecognized actuarial loss | 169,915 | — | 41,587 | — | ||||||||||||
Unrecognized net transition asset | — | — | 153 | — | ||||||||||||
Unrecognized prior service cost | (135,733 | ) | — | (911 | ) | — | ||||||||||
Net amount recognized | (96,359 | ) | (117,281 | ) | (48,946 | ) | (71,092 | ) | ||||||||
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Noncurrent assets | 2,650 | 14 | 1,383 | 473 | ||||||||||||
Current liabilities | — | — | — | (6,556 | ) | |||||||||||
Noncurrent liabilities | (134,849 | ) | (117,295 | ) | (70,986 | ) | (65,009 | ) | ||||||||
Accumulated other comprehensive income — Minimum pension liabilities | 35,840 | — | 20,657 | — | ||||||||||||
Ending Balance | (96,359 | ) | (117,281 | ) | (48,946 | ) | (71,092 | ) | ||||||||
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Minimum pension liabilities | 35,840 | — | 20,657 | — | ||||||||||||
Prior service cost (credit) | — | (127,106 | ) | — | (1,403 | ) | ||||||||||
Net actuarial loss (gain) | — | 200,618 | — | 38,474 | ||||||||||||
Obligation (asset) existing at transition | — | — | — | 343 | ||||||||||||
Ending Balance | 35,840 | 73,512 | 20,657 | 37,414 | ||||||||||||
F-43
Table of Contents
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Accumulated benefit obligation | 613,055 | 635,603 | 143,031 | 181,356 |
Japanese plans | Foreign plans | |||||||||||||||
Yen in millions | Yen in millions | |||||||||||||||
March 31 | March 31 | |||||||||||||||
2006 | 2007 | 2006 | 2007 | |||||||||||||
Projected benefit obligations | 617,883 | 638,560 | 158,353 | 187,637 | ||||||||||||
Accumulated benefit obligations | 612,410 | 634,847 | 139,431 | 171,735 | ||||||||||||
Fair value of plan assets | 488,588 | 518,375 | 99,798 | 136,361 |
March 31 | ||||||||
2006 | 2007 | |||||||
Discount rate | 2.2 | % | 2.3 | % | ||||
Rate of compensation increase | 3.2 | 2.5 |
March 31 | ||||||||
2006 | 2007 | |||||||
Discount rate | 5.1 | % | 5.3 | % | ||||
Rate of compensation increase | 3.7 | 3.6 |
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Discount rate | 2.4 | % | 2.3 | % | 2.2 | % | ||||||
Expected return on plan assets | 3.2 | 3.5 | 3.7 | |||||||||
Rate of compensation increase | 3.0 | 3.3 | 3.2 |
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Discount rate | 5.8 | % | 5.4 | % | 5.1 | % | ||||||
Expected return on plan assets | 7.8 | 7.8 | 7.3 | |||||||||
Rate of compensation increase | 4.0 | 3.7 | 3.6 |
F-44
Table of Contents
March 31 | ||||||||
2006 | 2007 | |||||||
Equity securities | 38.1 | % | 38.6 | % | ||||
Debt securities | 47.7 | 48.6 | ||||||
Cash | 6.0 | 5.3 | ||||||
Other | 8.2 | 7.5 | ||||||
Total | 100.0 | % | 100.0 | % | ||||
March 31 | ||||||||
2006 | 2007 | |||||||
Equity securities | 69.1 | % | 69.0 | % | ||||
Debt securities | 20.8 | 18.4 | ||||||
Real estate | 6.8 | 6.3 | ||||||
Other | 3.3 | 6.3 | ||||||
Total | 100.0 | % | 100.0 | % | ||||
F-45
Table of Contents
Japanese plans | Foreign plans | |||||||
Yen in millions | Yen in millions | |||||||
Fiscal Year Ending March 31, 2008 | 19,204 | 9,310 | ||||||
2009 | 21,096 | 8,034 | ||||||
2010 | 25,443 | 8,893 | ||||||
2011 | 28,984 | 9,824 | ||||||
2012 | 30,357 | 10,337 | ||||||
2013 — 2017 | 169,549 | 68,489 |
15. | Stockholders’ equity |
Number of | ||||
shares | ||||
Balance at March 31, 2004 | 926,418,280 | |||
Conversion of convertible bonds | 70,765,533 | |||
Exercise of stock acquisition rights | 27,400 | |||
Balance at March 31, 2005 | 997,211,213 | |||
Conversion of convertible bonds | 484,200 | |||
Conversion of subsidiary tracking stock | 3,452,808 | |||
Exercise of stock acquisition rights | 531,443 | |||
Balance at March 31, 2006 | 1,001,679,664 | |||
Conversion of convertible bonds | 197,700 | |||
Exercise of stock acquisition rights | 1,019,900 | |||
Balance at March 31, 2007 | 1,002,897,264 | |||
F-46
Table of Contents
Yen in millions | ||||||||||||
Tax | Net-of-tax | |||||||||||
Pre-tax amount | benefit/(expense) | amount | ||||||||||
For the fiscal year ended March 31, 2005: | ||||||||||||
Unrealized gains on securities — | ||||||||||||
Unrealized holding gains (losses) arising during the period | 7,184 | (1,541 | ) | 5,643 | ||||||||
Less: Reclassification adjustment included in net income | (18,140 | ) | 5,216 | (12,924 | ) | |||||||
Unrealized losses on derivative instruments — | ||||||||||||
Unrealized holding gains (losses) arising during the period | (2,015 | ) | 1,806 | (209 | ) | |||||||
Less: Reclassification adjustment included in net income | (2,848 | ) | 1,167 | (1,681 | ) | |||||||
Minimum pension liability adjustment | (1,700 | ) | 931 | (769 | ) | |||||||
Foreign currency translation adjustments — | ||||||||||||
Translation adjustments arising during the period | 76,585 | (2,361 | ) | 74,224 | ||||||||
Other comprehensive income | 59,066 | 5,218 | 64,284 | |||||||||
F-47
Table of Contents
Yen in millions | ||||||||||||
Tax | Net-of-tax | |||||||||||
Pre-tax amount | benefit/(expense) | amount | ||||||||||
For the fiscal year ended March 31, 2006: | ||||||||||||
Unrealized gains on securities — | ||||||||||||
Unrealized holding gains (losses) arising during the period | 125,263 | (45,633 | ) | 79,630 | ||||||||
Less: Reclassification adjustment included in net income | (64,953 | ) | 23,458 | (41,495 | ) | |||||||
Unrealized losses on derivative instruments — | ||||||||||||
Unrealized holding gains (losses) arising during the period | 14,888 | (7,023 | ) | 7,865 | ||||||||
Less: Reclassification adjustment included in net income | (12,597 | ) | 5,173 | (7,424 | ) | |||||||
Minimum pension liability adjustment | 88,941 | (38,735 | ) | 50,206 | ||||||||
Foreign currency translation adjustments — | ||||||||||||
Translation adjustments arising during the period | 143,888 | (3,415 | ) | 140,473 | ||||||||
Less: Reclassification adjustment included in net income | (17 | ) | — | (17 | ) | |||||||
Other comprehensive income | 295,413 | (66,175 | ) | 229,238 | ||||||||
For the fiscal year ended March 31, 2007: | ||||||||||||
Unrealized gains on securities — | ||||||||||||
Unrealized holding gains (losses) arising during the period | 6,242 | 721 | 6,963 | |||||||||
Less: Reclassification adjustment included in net income | (34,416 | ) | 12,745 | (21,671 | ) | |||||||
Unrealized losses on derivative instruments — | ||||||||||||
Unrealized holding gains (losses) arising during the period | 10,786 | (3,879 | ) | 6,907 | ||||||||
Less: Reclassification adjustment included in net income | (10,056 | ) | 4,123 | (5,933 | ) | |||||||
Minimum pension liability adjustment | (8,160 | ) | 5,406 | (2,754 | ) | |||||||
Foreign currency translation adjustments — | ||||||||||||
Translation adjustments arising during the period | 88,957 | (2,644 | ) | 86,313 | ||||||||
Other comprehensive income | 53,353 | 16,472 | 69,825 | |||||||||
F-48
Table of Contents
16. | Stock-based compensation plans |
Fiscal Year Ended March 31 | ||||||||||||||||
2007 | ||||||||||||||||
Weighted- | Weighted- | Total | ||||||||||||||
Number of | average | average | Intrinsic | |||||||||||||
Shares | exercise price | remaining life | Value | |||||||||||||
Yen | Years | Yen in millions | ||||||||||||||
Outstanding at beginning of the fiscal year | 2,068,300 | 8,901 | ||||||||||||||
Expired | (922,400 | ) | 12,457 | |||||||||||||
Outstanding at end of the fiscal year | 1,145,900 | 6,039 | 0.75 | — | ||||||||||||
Exercisable at end of the fiscal year | 1,145,900 | 6,039 | 0.75 | — | ||||||||||||
F-49
Table of Contents
Fiscal Year Ended March 31 | ||||||||||||||||
2007 | ||||||||||||||||
Weighted- | Weighted- | Total | ||||||||||||||
Number of | average | average | Intrinsic | |||||||||||||
Shares | exercise price | remaining life | Value | |||||||||||||
Yen | Years | Yen in millions | ||||||||||||||
Outstanding at beginning of the fiscal year | 2,493,500 | 8,133 | ||||||||||||||
Exercised | (197,700 | ) | 5,975 | |||||||||||||
Expired | (560,500 | ) | 6,186 | |||||||||||||
Outstanding at end of the fiscal year | 1,735,300 | 9,008 | 4.27 | — | ||||||||||||
Exercisable at end of the fiscal year | 1,735,300 | 9,008 | 4.27 | — | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Weighted-average assumptions | ||||||||||||
Risk-free interest rate | 2.04 | % | 2.90 | % | 3.28 | % | ||||||
Expected lives | 3.54 years | 6.14 years | 6.30 years | |||||||||
Expected volatility | 35.56 | % | 39.50 | % | 34.17 | % | ||||||
Expected dividends | 0.62 | % | 0.61 | % | 0.53 | % |
F-50
Table of Contents
Fiscal Year Ended March 31 | ||||||||||||||||
2007 | ||||||||||||||||
Weighted- | Weighted- | Total | ||||||||||||||
Number of | average | average | Intrinsic | |||||||||||||
Shares | exercise price | remaining life | Value | |||||||||||||
Yen | Years | Yen in millions | ||||||||||||||
Outstanding at beginning of the fiscal year | 9,100,700 | 4,351 | ||||||||||||||
Granted | 2,519,300 | 4,693 | ||||||||||||||
Exercised | (1,019,900 | ) | 4,235 | |||||||||||||
Forfeited or expired | (301,500 | ) | 4,457 | |||||||||||||
Outstanding at end of the fiscal year | 10,298,600 | 4,461 | 7.97 | 15,606 | ||||||||||||
Exercisable at end of the fiscal year | 4,796,300 | 4,470 | 6.92 | 7,237 | ||||||||||||
Fiscal Year Ended March 31 | ||||||||
2007 | ||||||||
Weighted- | ||||||||
average | ||||||||
Number of | Grant-date | |||||||
Shares | Fair value | |||||||
Yen | ||||||||
Outstanding at beginning of the fiscal year | 5,964,500 | 1,437 | ||||||
Granted | 2,519,300 | 1,770 | ||||||
Vested | (2,734,500 | ) | 1,362 | |||||
Forfeited or expired | (247,000 | ) | 1,483 | |||||
Outstanding at end of the fiscal year | 5,502,300 | 1,625 | ||||||
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17. | Restructuring charges and asset impairments |
F-52
Table of Contents
F-53
Table of Contents
F-54
Table of Contents
Yen in millions | ||||||||||||||||
Employee | Non-cash | |||||||||||||||
termination | write-downs and | Other associated | ||||||||||||||
benefits | disposals | costs | Total | |||||||||||||
Balance at March 31, 2004 | 24,650 | — | 7,988 | 32,638 | ||||||||||||
Restructuring costs | 53,563 | 25,564 | 10,836 | 89,963 | ||||||||||||
Non-cash charges | — | (25,564 | ) | — | (25,564 | ) | ||||||||||
Cash payments | (61,523 | ) | — | (10,427 | ) | (71,950 | ) | |||||||||
Adjustments* | (1,705 | ) | — | (3,096 | ) | (4,801 | ) | |||||||||
Balance at March 31, 2005 | 14,985 | — | 5,301 | 20,286 | ||||||||||||
Restructuring costs | 48,255 | 76,999 | 13,438 | 138,692 | ||||||||||||
Non-cash charges | — | (76,999 | ) | — | (76,999 | ) | ||||||||||
Cash payments | (42,152 | ) | — | (7,929 | ) | (50,081 | ) | |||||||||
Adjustments | (1,227 | ) | — | 3 | (1,224 | ) | ||||||||||
Balance at March 31, 2006 | 19,861 | — | 10,813 | 30,674 | ||||||||||||
Restructuring costs | 10,790 | 15,467 | 12,513 | 38,770 | ||||||||||||
Non-cash charges | — | (15,467 | ) | — | (15,467 | ) | ||||||||||
Cash payments | (23,052 | ) | — | (14,705 | ) | (37,757 | ) | |||||||||
Adjustments | (152 | ) | — | 1,277 | 1,125 | |||||||||||
Balance at March 31, 2007 | 7,447 | — | 9,898 | 17,345 | ||||||||||||
* | Adjustments primarily consist of the transfer of the accrued restructuring charges to SONY BMG, a joint venture with Bertelsmann AG (Note 5). |
18. | Research and development costs, advertising costs and shipping and handling costs |
19. | Gain on change in interest in subsidiaries and equity investees |
F-55
Table of Contents
F-56
Table of Contents
20. | Income taxes |
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Income (loss) before income taxes: | ||||||||||||
Sony Corporation and subsidiaries in Japan | 5,005 | 243,927 | 174,689 | |||||||||
Foreign subsidiaries | 152,202 | 42,402 | (72,652 | ) | ||||||||
157,207 | 286,329 | 102,037 | ||||||||||
Income taxes — Current: | ||||||||||||
Sony Corporation and subsidiaries in Japan | 23,497 | 55,154 | 51,395 | |||||||||
Foreign subsidiaries | 62,013 | 41,246 | 15,686 | |||||||||
85,510 | 96,400 | 67,081 | ||||||||||
Income taxes — Deferred: | ||||||||||||
Sony Corporation and subsidiaries in Japan | 4,976 | 105,938 | 27,331 | |||||||||
Foreign subsidiaries | (74,442 | ) | (25,823 | ) | (40,524 | ) | ||||||
(69,466 | ) | 80,115 | (13,193 | ) | ||||||||
Total income tax expense | 16,044 | 176,515 | 53,888 | |||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Statutory tax rate | 41.0 | % | 41.0 | % | 41.0 | % | ||||||
Increase (reduction) in taxes resulting from: | ||||||||||||
Non deductible expenses | 1.5 | 0.9 | 12.2 | |||||||||
Income tax credits | (0.1 | ) | (1.3 | ) | (28.8 | ) | ||||||
Change in valuation allowances | (22.7 | ) | 21.6 | (2.9 | ) | |||||||
Increase (decrease) in deferred tax liabilities on undistributed earnings of foreign subsidiaries and affiliates | (4.0 | ) | 4.5 | 12.8 | ||||||||
Lower tax rate applied to life and non-life insurance business in Japan | (1.9 | ) | (3.2 | ) | (4.0 | ) | ||||||
Foreign income tax differential | (3.1 | ) | (1.4 | ) | 13.1 | |||||||
Adjustments to tax accrual and reserves | 3.1 | (1.2 | ) | 4.9 | ||||||||
Other | (3.6 | ) | 0.7 | 4.5 | ||||||||
Effective income tax rate | 10.2 | % | 61.6 | % | 52.8 | % | ||||||
F-57
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Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Deferred tax assets: | ||||||||
Operating loss carryforwards for tax purposes | 146,206 | 174,685 | ||||||
Accrued pension and severance costs | 95,226 | 97,791 | ||||||
Film costs | 51,937 | 54,881 | ||||||
Warranty reserve and accrued expenses | 52,008 | 87,775 | ||||||
Future insurance policy benefits | 24,785 | 40,784 | ||||||
Accrued bonus | 27,353 | 24,723 | ||||||
Inventory — intercompany profits and write-down | 47,578 | 80,580 | ||||||
Depreciation | 34,052 | 31,519 | ||||||
Tax credit carryforwards | 39,443 | 54,075 | ||||||
Reserve for doubtful accounts | 7,479 | 6,312 | ||||||
Impairment of investments | 52,658 | 50,582 | ||||||
Deferred revenue in the Pictures segment | 16,713 | 28,476 | ||||||
Other | 144,337 | 92,069 | ||||||
Gross deferred tax assets | 739,775 | 824,252 | ||||||
Less: Valuation allowance | (150,899 | ) | (174,408 | ) | ||||
Total deferred tax assets | 588,876 | 649,844 | ||||||
Deferred tax liabilities: | ||||||||
Insurance acquisition costs | (136,919 | ) | (143,329 | ) | ||||
Unbilled accounts receivable in the Pictures segment | (49,953 | ) | (55,680 | ) | ||||
Unrealized gains on securities | (63,739 | ) | (50,273 | ) | ||||
Intangible assets acquired through stock exchange offerings | (34,627 | ) | (33,067 | ) | ||||
Undistributed earnings of foreign subsidiaries and affiliates | (66,719 | ) | (97,429 | ) | ||||
Gain on securities contribution to employee retirement benefit trust | (3,992 | ) | (5,315 | ) | ||||
Other | (65,151 | ) | (80,156 | ) | ||||
Gross deferred tax liabilities | (421,100 | ) | (465,249 | ) | ||||
Net deferred tax assets | 167,776 | 184,595 | ||||||
F-58
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Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Current assets — Deferred income taxes | 221,311 | 243,782 | ||||||
Other assets — Deferred income taxes | 178,751 | 216,997 | ||||||
Current liabilities — Other | (15,789 | ) | (15,082 | ) | ||||
Long-term liabilities — Deferred income taxes | (216,497 | ) | (261,102 | ) | ||||
Net deferred tax assets | 167,776 | 184,595 | ||||||
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21. | Reconciliation of the differences between basic and diluted net income per share |
(1) | Income before cumulative effect of accounting changes and net income allocated to each class of stock: |
Yen in millions | ||||||||||||
Fiscal Year Ended March 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Income before cumulative effect of an accounting change allocated to common stock | 168,498 | 122,308 | 126,328 | |||||||||
Income allocated to subsidiary tracking stock | 53 | 1,308 | — | |||||||||
Income before cumulative effect of an accounting change | 168,551 | 123,616 | 126,328 | |||||||||
Net income allocated to common stock | 163,785 | 122,308 | 126,328 | |||||||||
Net income allocated to subsidiary tracking stock | 53 | 1,308 | — | |||||||||
Net income | 163,838 | 123,616 | 126,328 | |||||||||
(2) | EPS attributable to common stock: |
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Income before cumulative effect of an accounting change allocated to common stock | 168,498 | 122,308 | 126,328 | |||||||||
Effect of dilutive securities: | ||||||||||||
Convertible bonds | 1,209 | — | — | |||||||||
Subsidiary tracking stock | (0 | ) | (29 | ) | — | |||||||
Income before cumulative effect of an accounting change allocated to common stock for diluted EPS computation | 169,707 | 122,279 | 126,328 | |||||||||
F-60
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Thousands of shares | ||||||||||||
Weighted-average shares | 931,125 | 997,781 | 1,001,403 | |||||||||
Effect of dilutive securities: | ||||||||||||
Warrants and stock acquisition rights | 61 | 915 | 2,413 | |||||||||
Convertible bonds | 112,589 | 47,468 | 46,355 | |||||||||
Weighted-average shares for diluted EPS computation | 1,043,775 | 1,046,164 | 1,050,171 | |||||||||
Yen | ||||||||||||
Basic EPS | 180.96 | 122.58 | 126.15 | |||||||||
Diluted EPS | 162.59 | 116.88 | 120.29 | |||||||||
(3) | EPS attributable to subsidiary tracking stock: |
22. | Variable interest entities |
F-61
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F-62
Table of Contents
23. | Commitments and contingent liabilities |
A. | Loan Commitments |
B. | Purchase Commitments and other |
F-63
Table of Contents
Fiscal Year Ending March 31, | Yen in millions | |||
2008 | 176,943 | |||
2009 | 53,947 | |||
2010 | 10,057 | |||
2011 | 7,704 | |||
2012 | 6,841 | |||
Thereafter | 40,588 | |||
Total | 296,080 | |||
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Yen in millions | ||||||||
Fiscal Year Ended March 31, | ||||||||
2006 | 2007 | |||||||
Balance at beginning of the fiscal year | 44,919 | 49,470 | ||||||
Additional liabilities for warranties | 48,471 | 77,418 | ||||||
Settlements (in cash or in kind) | (45,162 | ) | (72,368 | ) | ||||
Changes in estimate for pre-existing warranty reserve | 70 | (2,954 | ) | |||||
Translation adjustment | 1,172 | 3,738 | ||||||
Balance at end of the fiscal year | 49,470 | 55,304 | ||||||
F-65
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Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales and operating revenue: | ||||||||||||
Electronics — | ||||||||||||
Customers | 4,827,663 | 4,782,173 | 5,421,384 | |||||||||
Intersegment | 266,874 | 394,206 | 629,087 | |||||||||
Total | 5,094,537 | 5,176,379 | 6,050,471 | |||||||||
Game — | ||||||||||||
Customers | 702,524 | 918,252 | 974,218 | |||||||||
Intersegment | 27,230 | 40,368 | 42,571 | |||||||||
Total | 729,754 | 958,620 | 1,016,789 | |||||||||
Pictures — | ||||||||||||
Customers | 733,677 | 745,859 | 966,260 | |||||||||
Intersegment | — | — | — | |||||||||
Total | 733,677 | 745,859 | 966,260 | |||||||||
Financial Services — | ||||||||||||
Customers | 537,715 | 720,566 | 624,282 | |||||||||
Intersegment | 22,842 | 22,649 | 25,059 | |||||||||
Total | 560,557 | 743,215 | 649,341 | |||||||||
All Other — | ||||||||||||
Customers | 389,746 | 343,747 | 309,551 | |||||||||
Intersegment | 81,201 | 82,297 | 68,087 | |||||||||
Total | 470,947 | 426,044 | 377,638 | |||||||||
Elimination | (398,147 | ) | (539,520 | ) | (764,804 | ) | ||||||
Consolidated total | 7,191,325 | 7,510,597 | 8,295,695 | |||||||||
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Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Operating income (loss): | ||||||||||||
Electronics | 2,881 | 6,913 | 156,745 | |||||||||
Game | 43,170 | 8,748 | (232,325 | ) | ||||||||
Pictures | 63,899 | 27,436 | 42,708 | |||||||||
Financial Services | 55,490 | 188,323 | 84,142 | |||||||||
All Other | 5,063 | 20,525 | 32,417 | |||||||||
Total | 170,503 | 251,945 | 83,687 | |||||||||
Elimination | 3,782 | 1,187 | 4,802 | |||||||||
Unallocated amounts: | ||||||||||||
Corporate expenses | (28,657 | ) | (26,716 | ) | (16,739 | ) | ||||||
Consolidated operating income | 145,628 | 226,416 | 71,750 | |||||||||
Other income | 65,914 | 118,455 | 95,182 | |||||||||
Other expenses | (54,335 | ) | (58,542 | ) | (64,895 | ) | ||||||
Consolidated income before income taxes | 157,207 | 286,329 | 102,037 | |||||||||
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Total assets: | ||||||||
Electronics | 3,529,363 | 4,049,712 | ||||||
Game | 520,394 | 832,791 | ||||||
Pictures | 1,029,907 | 1,024,591 | ||||||
Financial Services | 4,568,128 | 4,977,642 | ||||||
All Other | 630,232 | 599,517 | ||||||
Total assets | 10,278,024 | 11,484,253 | ||||||
Elimination | (361,841 | ) | (435,432 | ) | ||||
Corporate assets | 691,570 | 667,541 | ||||||
Consolidated total | 10,607,753 | 11,716,362 | ||||||
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Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Depreciation and amortization: | ||||||||||||
Electronics | 276,704 | 304,561 | 310,575 | |||||||||
Game | 16,504 | 5,087 | 7,947 | |||||||||
Pictures | 5,598 | 7,401 | 8,464 | |||||||||
Financial Services, including deferred insurance acquisition costs | 52,788 | 47,736 | 56,068 | |||||||||
All Other | 17,012 | 12,755 | 11,406 | |||||||||
Total | 368,606 | 377,540 | 394,460 | |||||||||
Corporate | 4,259 | 4,303 | 5,549 | |||||||||
Consolidated total | 372,865 | 381,843 | 400,009 | |||||||||
Capital expenditures for segment assets: | ||||||||||||
Electronics | 312,216 | 328,625 | 351,482 | |||||||||
Game | 18,824 | 8,405 | 16,770 | |||||||||
Pictures | 5,808 | 10,097 | 10,970 | |||||||||
Financial Services | 3,845 | 4,456 | 6,836 | |||||||||
All Other | 7,928 | 4,186 | 5,617 | |||||||||
Total | 348,621 | 355,769 | 391,675 | |||||||||
Corporate | 8,197 | 28,578 | 22,463 | |||||||||
Consolidated total | 356,818 | 384,347 | 414,138 | |||||||||
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Audio | 571,864 | 536,187 | 522,879 | |||||||||
Video | 1,036,328 | 1,021,325 | 1,143,120 | |||||||||
Televisions | 921,195 | 927,769 | 1,226,971 | |||||||||
Information and Communications | 816,150 | 842,537 | 950,461 | |||||||||
Semiconductors | 184,235 | 172,249 | 205,757 | |||||||||
Components | 751,097 | 800,716 | 852,981 | |||||||||
Other | 546,794 | 481,390 | 519,215 | |||||||||
Total | 4,827,663 | 4,782,173 | 5,421,384 | |||||||||
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Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales and operating revenue: | ||||||||||||
Japan | 2,132,462 | 2,203,812 | 2,127,841 | |||||||||
U.S.A. | 1,977,310 | 1,957,644 | 2,232,453 | |||||||||
Europe | 1,612,576 | 1,715,775 | 2,037,658 | |||||||||
Other | 1,468,977 | 1,633,366 | 1,897,743 | |||||||||
Total | 7,191,325 | 7,510,597 | 8,295,695 | |||||||||
Yen in millions | ||||||||
March 31 | ||||||||
2006 | 2007 | |||||||
Long-lived assets: | ||||||||
Japan | 1,449,997 | 1,469,652 | ||||||
U.S.A. | 757,055 | 685,255 | ||||||
Europe | 165,352 | 187,768 | ||||||
Other | 159,647 | 171,639 | ||||||
Total | 2,532,051 | 2,514,314 | ||||||
Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Sales and operating revenue: | ||||||||||||
Japan — | ||||||||||||
Customers | 2,281,217 | 2,288,365 | 2,242,861 | |||||||||
Intersegment | 2,576,629 | 3,265,747 | 4,349,915 | |||||||||
Total | 4,857,846 | 5,554,112 | 6,592,776 | |||||||||
U.S.A. — | ||||||||||||
Customers | 2,166,323 | 2,197,304 | 2,553,834 | |||||||||
Intersegment | 235,362 | 279,203 | 319,666 | |||||||||
Total | 2,401,685 | 2,476,507 | 2,873,500 |
F-69
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Yen in millions | ||||||||||||
Fiscal Year Ended March 31 | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Europe — | ||||||||||||
Customers | 1,524,222 | 1,575,849 | 1,843,559 | |||||||||
Intersegment | 52,417 | 50,400 | 60,486 | |||||||||
Total | 1,576,639 | 1,626,249 | 1,904,045 | |||||||||
Other — | ||||||||||||
Customers | 1,219,563 | 1,449,079 | 1,655,441 | |||||||||
Intersegment | 804,721 | 1,038,827 | 1,738,602 | |||||||||
Total | 2,024,284 | 2,487,906 | 3,394,043 | |||||||||
Elimination | (3,669,129 | ) | (4,634,177 | ) | (6,468,669 | ) | ||||||
Consolidated total | 7,191,325 | 7,510,597 | 8,295,695 | |||||||||
Operating income: | ||||||||||||
Japan | 28,527 | 230,473 | 167,448 | |||||||||
U.S.A. | 72,414 | 11,291 | (94,005 | ) | ||||||||
Europe | 12,226 | (25,101 | ) | (62,425 | ) | |||||||
Other | 58,554 | 41,953 | 76,282 | |||||||||
Corporate and elimination | (26,093 | ) | (32,200 | ) | (15,550 | ) | ||||||
Consolidated total | 145,628 | 226,416 | 71,750 | |||||||||
F-70
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Yen in millions | ||||||||||||||||||||
Additions | ||||||||||||||||||||
Balance | charged to | Balance | ||||||||||||||||||
at beginning | costs and | Deductions | Other | at end | ||||||||||||||||
of period | expenses | (Note 1) | (Note 2) | of period | ||||||||||||||||
Fiscal Year Ended March 31, 2005: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns | 112,674 | 56,863 | (84,507 | ) | 2,679 | 87,709 | ||||||||||||||
Fiscal Year Ended March 31, 2006: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns | 87,709 | 52,422 | (56,772 | ) | 6,204 | 89,563 | ||||||||||||||
Fiscal Year Ended March 31, 2007: | ||||||||||||||||||||
Allowance for doubtful accounts and sales returns | 89,563 | 83,440 | (55,711 | ) | 3,383 | 120,675 | ||||||||||||||
Balance | Balance | |||||||||||||||||||
at beginning | Other | at end | ||||||||||||||||||
of period | Additions | Deductions | (Note 1) | of period | ||||||||||||||||
Fiscal Year Ended March 31, 2005: | ||||||||||||||||||||
Valuation allowance - Deferred tax assets | 127,577 | 67,889 | (104,670 | ) | (1,686 | ) | 89,110 | |||||||||||||
Fiscal Year Ended March 31, 2006: | ||||||||||||||||||||
Valuation allowance - Deferred tax assets | 89,110 | 72,340 | (11,234 | ) | 683 | 150,899 | ||||||||||||||
Fiscal Year Ended March 31, 2007: | ||||||||||||||||||||
Valuation allowance - Deferred tax assets | 150,899 | 42,910 | (20,002 | ) | 601 | 174,408 | ||||||||||||||
1. | Translation adjustment. |
F-71
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A-1
Table of Contents
A-2
Table of Contents
A-4 | ||||
A-5 | ||||
A-6 | ||||
A-7 |
A-3
Table of Contents
Notes | 2006 | 2005 | 2004 | |||||||||||
Net sales | 2 | 10,959,233 | 7,268,149 | 6,524,498 | ||||||||||
Cost of sales | (7,775,448 | ) | (5,259,893 | ) | (4,712,325 | ) | ||||||||
GROSS PROFIT | �� | 3,183,785 | 2,008,256 | 1,812,173 | ||||||||||
Selling expenses | (861,482 | ) | (654,588 | ) | (614,398 | ) | ||||||||
General and Administration expenses | 26 | 224,648 | (147,049 | ) | (142,851 | ) | ||||||||
Research and Development expenses | (905,811 | ) | (740,000 | ) | (582,923 | ) | ||||||||
Other operating revenues | 3 | 72,126 | 39,759 | 18,656 | ||||||||||
Other operating expenses | 3 | (7,436 | ) | (5,463 | ) | (4,587 | ) | |||||||
OPERATING INCOME | 6, 7, 24, 25 | 1,256,534 | 500,915 | 486,070 | ||||||||||
Result from securities and receivables accounted for as fixed assets | 4 | — | — | 970 | ||||||||||
Interest income and similiar profit items | 4 | 42,288 | 17,964 | 13,290 | ||||||||||
Interest expense and similiar loss items | 4 | (1,118 | ) | (6,840 | ) | (12,555 | ) | |||||||
NET INCOME BEFORE TAXES | 1,297,704 | 512,039 | 487,775 | |||||||||||
Income taxes for the year | 5 | (267,056 | ) | (134,587 | ) | (149,436 | ) | |||||||
Minority interest | (33,329 | ) | (27,110 | ) | (16,320 | ) | ||||||||
NET INCOME | 997,319 | 350,342 | 322,019 |
A-4
Table of Contents
Notes | 2006 | 2005 | ||||||||||
ASSETS | ||||||||||||
Fixed assets: | ||||||||||||
Intangible assets | 6 | 47,235 | 34,683 | |||||||||
Tangible assets | 7 | 126,252 | 101,333 | |||||||||
Financial assets: | ||||||||||||
Securities held as fixed assets | 8 | 91,942 | 81,683 | |||||||||
Other non current assets | 9 | 203,248 | 56,050 | |||||||||
Total fixed and financial assets | 468,677 | 273,749 | ||||||||||
Current assets: | ||||||||||||
Inventories | 11 | 437,462 | 306,105 | |||||||||
Accounts receivable | 12 | 1,652,754 | 851,710 | |||||||||
Other assets | 13 | 309,766 | 178,368 | |||||||||
Other short-term cash investments | 14 | 1,580,077 | 900,272 | |||||||||
Cash and bank | 692,622 | 637,004 | ||||||||||
Total current assets | 4,672,681 | 2,873,459 | ||||||||||
Total assets | 5,141,358 | 3,147,208 | ||||||||||
SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||||||||||
Shareholders’ equity: | 15 | |||||||||||
Share capital | 100,000 | 100,000 | ||||||||||
Restricted reserves | 722,889 | 720,422 | ||||||||||
Non-restricted reserves | (39,599 | ) | (100,869 | ) | ||||||||
Net income for the year | 997,319 | 350,342 | ||||||||||
Total equity | 1,780,609 | 1,069,895 | ||||||||||
Minority interest | 45,148 | 46,488 | ||||||||||
Provisions | ||||||||||||
Pensions and other similar commitments | 16 | 19,409 | 18,418 | |||||||||
Other provisions | 17 | 421,226 | 295,312 | |||||||||
Total provisions | 440,635 | 313,730 | ||||||||||
LIABILITIES | ||||||||||||
Long-term liabilities | ||||||||||||
Liabilities to financial institutions | — | 576 | ||||||||||
Other long-term liabilities | 677 | 455 | ||||||||||
Total long-term liabilities | 18 | 677 | 1,031 | |||||||||
Current liabilities: | ||||||||||||
Liabilities to financial institutions | 511 | 6,911 | ||||||||||
Advances from customers | 2,919 | 13,112 | ||||||||||
Accounts payable | 1,276,478 | 807,065 | ||||||||||
Income tax liabilities | 427,975 | 93,932 | ||||||||||
Other current liabilities | 19 | 1,166,406 | 795,044 | |||||||||
Total current liabilities | 2,874,289 | 1,716,064 | ||||||||||
Total shareholders’ equity and liabilities: | 5,141,358 | 3,147,208 | ||||||||||
Assets pledged as collateral | 20 | 3,973 | 158 | |||||||||
Contingent liabilities | 21 | 12,428 | 12,383 | |||||||||
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Notes | 2006 | 2005 | 2004 | |||||||||||||
OPERATIONS | ||||||||||||||||
Operating income | 1,256,534 | 500,915 | 486,070 | |||||||||||||
Depreciation | 85,029 | 70,884 | 65,822 | |||||||||||||
Other non cash items | 22 | 112,688 | 34,186 | 85,749 | ||||||||||||
1,454,251 | 605,985 | 637,641 | ||||||||||||||
Interest, obtained | 42,288 | 17,964 | 13,290 | |||||||||||||
Dividends received | — | — | 970 | |||||||||||||
Interest paid | (38,386 | ) | (6,840 | ) | (12,555 | ) | ||||||||||
Income taxes, paid | (34,357 | ) | (52,839 | ) | (55,720 | ) | ||||||||||
1,423,796 | 564,270 | 583,626 | ||||||||||||||
Change in inventories | (117,207 | ) | (122,435 | ) | (68,659 | ) | ||||||||||
Change in accounts receivables | (764,993 | ) | 39,787 | (191,969 | ) | |||||||||||
Change in other receivables | (180,662 | ) | 7,423 | (6,966 | ) | |||||||||||
Change in accounts payable | 463,955 | 109,753 | 113,452 | |||||||||||||
Change in other liabilities | 352,115 | 131,655 | 7,131 | |||||||||||||
Cash flow from operating activities | 1,182,004 | 730,453 | 436,615 | |||||||||||||
INVESTMENTS | ||||||||||||||||
Investments in intangible assets | (29,311 | ) | (25,792 | ) | (18,545 | ) | ||||||||||
Sales of intangible assets | 161 | 869 | 243 | |||||||||||||
Investments in tangible assets | (96,105 | ) | (70,712 | ) | (74,108 | ) | ||||||||||
Sales of tangible assets | 19,198 | 6,281 | 4,912 | |||||||||||||
Investment in subsidiary | 22 | (15,501 | ) | — | (12,752 | ) | ||||||||||
Investments / Sales of other financial assets | (12,462 | ) | (5,715 | ) | (67,113 | ) | ||||||||||
Sales/Amortization of other financial assets | 177 | — | — | |||||||||||||
Cash flow from investing activities | (133,843 | ) | (95,069 | ) | (167,363 | ) | ||||||||||
FINANCING | ||||||||||||||||
Borrowing | 245 | 183 | 1,218 | |||||||||||||
Repayment of debt | (576 | ) | (1,294 | ) | (694 | ) | ||||||||||
Change in current financial liabilities | — | (19,096 | ) | 11,462 | ||||||||||||
Dividend to minority | (30,427 | ) | (19,219 | ) | — | |||||||||||
Dividend paid | (247,000 | ) | — | — | ||||||||||||
Cash flow from financing activities | (277,758 | ) | (39,426 | ) | 11,986 | |||||||||||
Net change in cash | 770,403 | 595,958 | 281,238 | |||||||||||||
Cash, beginning of period | 1,537,275 | 915,931 | 640,393 | |||||||||||||
Translation difference in Cash | (34,980 | ) | 25,386 | (5,700 | ) | |||||||||||
Cash, end of period | 2,272,698 | 1,537,275 | 915,931 | |||||||||||||
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A-7
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1. | Accounting Principles |
A-8
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A-9
Table of Contents
A-10
Table of Contents
A-11
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2006 | 2005 | 2004 | ||||||||||
Europe, Middle East & Africa | 5,865,030 | 3,957,567 | 3,397,384 | |||||||||
America | 1,550,179 | 923,647 | 873,375 | |||||||||
Asia | 3,544,024 | 2,386,935 | 2,253,739 | |||||||||
Total | 10,959,233 | 7,268,149 | 6,524,498 |
2006 | 2005 | 2004 | ||||||||||
Other operating revenues | ||||||||||||
Gains on sales of intangible and tangible assets | 16,409 | 151 | 854 | |||||||||
Commissions, license fees and other operating revenues | 53,227 | 30,945 | 9,919 | |||||||||
Other income | 2,490 | 7,714 | 7,098 | |||||||||
Gains on foreign exchange | — | 949 | 785 | |||||||||
Total other operating revenues | 72,126 | 39,759 | 18,656 | |||||||||
Other operating expenses | ||||||||||||
Losses on sales of intangible and tangible assets | (341 | ) | (144 | ) | (177 | ) | ||||||
Other expenses | (3,312 | ) | (2,255 | ) | (3,978 | ) | ||||||
Losses on foreign exchange | (3,783 | ) | (3,064 | ) | (432 | ) | ||||||
Total other operating expenses | (7,436 | ) | (5,463 | ) | (4,587 | ) |
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2006 | 2005 | 2004 | ||||||||||
Interest income and similar profit items | ||||||||||||
Interest income external and similar items | 42,288 | 17,964 | 13,290 | |||||||||
Total | 42,288 | 17,964 | 13,290 | |||||||||
Interest expense and similar loss items | ||||||||||||
Interest expenses external and similar items | (1,118 | ) | (6,840 | ) | (12,555 | ) | ||||||
Total | (1,118 | ) | (6,840 | ) | (12,555 | ) | ||||||
Result from securities and receivables accounted for as a fixed assets | ||||||||||||
Group dividends | — | �� | — | 970 | ||||||||
— | — | 970 | ||||||||||
Financial Net | 41,170 | 11,124 | 1,705 |
2006 | 2005 | 2004 | ||||||||||
Current income taxes for the period | (368,308 | ) | (114,810 | ) | (63,108 | ) | ||||||
Deferred income/expense (-) taxes related to temporary differences | 101,252 | (15,134 | ) | 39,832 | ||||||||
Deferred income/expense (-) taxes related to tax loss carryforwards | — | (4,643 | ) | (126,160 | ) | |||||||
Income taxes for the period | (267,056 | ) | (134,587 | ) | (149,436 | ) |
2006 | 2005 | 2004 | ||||||||||
Income before taxes | 1,297,704 | 512,039 | 487,775 | |||||||||
Tax rate in Sweden (28%) | (363,357 | ) | (143,371 | ) | (136,577 | ) | ||||||
Effect of foreign tax rates | 29,020 | 21,687 | (2,094 | ) | ||||||||
Current income taxes related to prior years | (876 | ) | 745 | 1,435 | ||||||||
Tax effect of expenses that are non deductible for tax purpose | (4,858 | ) | (1,839 | ) | (3,210 | ) | ||||||
Tax effect of income that are non-taxable for tax purpose | 10,014 | 4,775 | 646 | |||||||||
Tax effect of changes in tax rates | 19 | (16,584 | ) | 5,500 | ||||||||
Release of valuation allowance* | 62,982 | — | — | |||||||||
Tax effect of tax losses carryforwards, net | — | — | (15,136 | ) | ||||||||
Income taxes for the year | (267,056 | ) | (134,587 | ) | (149,436 | ) |
* | The release of valuation allowance mainly refers to temporary differences in Japan and US. |
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2006 | 2005 | |||||||
Deferred tax assets | 139,621 | 41,455 | ||||||
Deferred tax liabilities | (13 | ) | 643 |
Licenses, software | ||||||||||||
trademarks and | ||||||||||||
2006 | similar rights | Patents | Total | |||||||||
Accumulated acquisition costs | ||||||||||||
Opening balance January 1, 2006 | 81,504 | — | 81,504 | |||||||||
Acquisitions | 25,333 | 3,978 | 29,311 | |||||||||
Balances regarding acquired and sold companies | 1,316 | — | 1,316 | |||||||||
Sales/disposals | (714 | ) | — | (714 | ) | |||||||
Translation difference for the year | (4,019 | ) | — | (4,019 | ) | |||||||
Closing balance December 31, 2006 | 103,420 | 3,978 | 107,398 | |||||||||
Accumulated depreciation | ||||||||||||
Opening balance January 1, 2006 | (46,821 | ) | — | (46,821 | ) | |||||||
Depreciation | (15,381 | ) | (341 | ) | (15,722 | ) | ||||||
Balances regarding acquired and sold companies | (593 | ) | — | (593 | ) | |||||||
Sales/disposals | 553 | — | 553 | |||||||||
Translation difference for the year | 2,420 | — | 2,420 | |||||||||
Closing balance December 31, 2006 | (59,822 | ) | (341 | ) | (60,163 | ) | ||||||
Net carrying value | 43,598 | 3,637 | 47,235 |
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Licenses, software | ||||||||||||
trademarks and | ||||||||||||
2005 | similar rights | Patents | Total | |||||||||
Accumulated acquisition costs | ||||||||||||
Opening balance January 1, 2005 | 56,516 | — | 56,516 | |||||||||
Acquisitions | 25,792 | — | 25,792 | |||||||||
Sales/disposals | (1,994 | ) | — | (1,994 | ) | |||||||
Translation difference for the year | 1,190 | — | 1,190 | |||||||||
Closing balance December 31, 2005 | 81,504 | — | 81,504 | |||||||||
Accumulated depreciation | ||||||||||||
Opening balance January 1, 2005 | (34,799 | ) | — | (34,799 | ) | |||||||
Depreciation | (12,571 | ) | — | (12,571 | ) | |||||||
Sales/disposals | 1,125 | — | 1,125 | |||||||||
Translation difference for the year | (576 | ) | — | (576 | ) | |||||||
Closing balance December 31, 2005 | (46,821 | ) | — | (46,821 | ) | |||||||
Net carrying value | 34,683 | — | 34,683 |
7. | Tangible assets |
Land and | Other | |||||||||||||||
2006 | buildings | Machinery | equipment | Total | ||||||||||||
Accumulated acquisition costs | ||||||||||||||||
Opening balance January 1, 2006 | 9,283 | 52,120 | 171,568 | 232,971 | ||||||||||||
Acquisitions | 3,646 | 19,103 | 68,147 | 90,896 | ||||||||||||
Balances regarding acquired and sold companies | 5,363 | 17,796 | 764 | 23,923 | ||||||||||||
Sales/disposals | (8 | ) | (8,647 | ) | (7,601 | ) | (16,256 | ) | ||||||||
Translation difference for the year | (597 | ) | (6,045 | ) | (12,257 | ) | (18,899 | ) | ||||||||
Closing balance December 31, 2006 | 17,687 | 74,327 | 220,621 | 312,635 | ||||||||||||
Accumulated depreciation | ||||||||||||||||
Opening balance January 1, 2006 | (2,685 | ) | (25,731 | ) | (102,967 | ) | (131,383 | ) | ||||||||
Depreciation | (939 | ) | (12,824 | ) | (55,544 | ) | (69,307 | ) | ||||||||
Balances regarding acquired and sold companies | (1,639 | ) | (8,116 | ) | (621 | ) | (10,376 | ) | ||||||||
Sales/disposals | 2 | 6,268 | 6,856 | 13,126 | ||||||||||||
Translation difference for the year | 125 | 3,167 | 8,371 | 11,663 | ||||||||||||
Closing balance December 31, 2006 | (5,136 | ) | (37,236 | ) | (143,905 | ) | (186,277 | ) | ||||||||
Accumulated writedowns | ||||||||||||||||
Opening balance January 1, 2006 | — | (245 | ) | (10 | ) | (255 | ) | |||||||||
Write down | — | (61 | ) | (311 | ) | (372 | ) | |||||||||
Sales/disposal | — | 194 | 312 | 506 | ||||||||||||
Translation difference for the year | — | 14 | 1 | 15 | ||||||||||||
Closing balance December 31, 2006 | — | (98 | ) | (8 | ) | (106 | ) | |||||||||
Net carrying value | 12,551 | 36,993 | 76,708 | 126,252 |
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Land and | Other | |||||||||||||||
2005 | buildings | Machinery | equipment | Total | ||||||||||||
Accumulated acquisition costs | ||||||||||||||||
Opening balance January 1, 2005 | 8,492 | 37,740 | 154,787 | 201,019 | ||||||||||||
Acquisitions | — | 20,456 | 50,256 | 70,712 | ||||||||||||
Sales/disposals | — | (10,774 | ) | (36,218 | ) | (46,992 | ) | |||||||||
Translation difference for the year | 791 | 4,698 | 2,743 | 8,232 | ||||||||||||
Closing balance December 31, 2005 | 9,283 | 52,120 | 171,568 | 232,971 | ||||||||||||
Accumulated depreciation | ||||||||||||||||
Opening balance January 1, 2005 | (2,055 | ) | (17,007 | ) | (90,836 | ) | (109,898 | ) | ||||||||
Depreciation | (544 | ) | (16,289 | ) | (41,480 | ) | (58,313 | ) | ||||||||
Sales/disposals | — | 9,835 | 30,732 | 40,567 | ||||||||||||
Translation difference for the year | (86 | ) | (2,270 | ) | (1,383 | ) | (3,739 | ) | ||||||||
Closing balance December 31, 2005 | (2,685 | ) | (25,731 | ) | (102,967 | ) | (131,383 | ) | ||||||||
Accumulated write-downs | ||||||||||||||||
Opening balance January 1, 2005 | — | (410 | ) | (604 | ) | (1,014 | ) | |||||||||
Write down | — | — | (8 | ) | (8 | ) | ||||||||||
Sales/disposal | — | 221 | 603 | 824 | ||||||||||||
Translation difference for the year | — | (56 | ) | (1 | ) | (57 | ) | |||||||||
Closing balance December 31, 2005 | — | (245 | ) | (10 | ) | (255 | ) | |||||||||
Net carrying value | 6,598 | 26,144 | 68,591 | 101,333 |
8. | Other securities held as fixed assets |
2006 | 2005 | |||||||
Accumulated acquisition costs | ||||||||
Opening balance | 83,652 | 77,820 | ||||||
Acquisitions | 12,462 | 5,205 | ||||||
Translation difference for the year | (301 | ) | 639 | |||||
Reclassifications | (3,871 | ) | (12 | ) | ||||
Closing balance | 91,942 | 83,652 | ||||||
Accumulated write-downs | ||||||||
Opening balance | (1,969 | ) | (1,667 | ) | ||||
Translation difference for the year | 142 | (302 | ) | |||||
Reclassification | 1,827 | — | ||||||
Closing balance | — | (1,969 | ) | |||||
Net carrying value | 91,942 | 81,683 |
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9. | Other non current assets |
2006 | 2005 | |||||||
Deferred tax assets | 139,621 | 41,455 | ||||||
External development projects | — | 14,085 | ||||||
Other non current assets | 63,627 | 510 | ||||||
Total | 203,248 | 56,050 |
10. | Group companies |
Percentage of | ||||||
Company | Domicile | ownership | ||||
Sony Ericsson Mobile Communications AB | Sweden | |||||
Sony Ericsson Mobile Communications International AB | Sweden | 100% | ||||
Sony Ericsson Mobile Communications Management Ltd. | United Kingdom | 100% | ||||
Sony Ericsson Mobile Communications S.p.A. | Italy | 100% | ||||
Sony Ericsson Mobile Communications Iberia S.L | Spain | 100% | ||||
Sony Ericsson Mobile Communications Hellas S.A. | Greece | 100% | ||||
Sony Ericsson Hungary Mobile Communications Ltd. | Hungary | 100% | ||||
Sony Ericsson Mobile Communications do Brazil Ltd. | Brasil | 100% | ||||
Sony Ericsson Mobile Communications S.A. de C.V. | Mexico | 100% | ||||
Sony Ericsson Servicios Móviles S.A. de C.V. | Mexico | 100% | ||||
Sony Ericsson Mobile Communications Japan Inc. | Japan | 100% | ||||
Sony Ericsson Mobile Communications (USA) Inc. | USA | 100% | ||||
Sony Ericsson Mobile Communications (Thailand) Co. Limited | Thailand | 100% | ||||
Sony Ericsson Mobile Communications (China) Co. Ltd. | China | 100% | ||||
Beijing Suohong Electronics Co. Ltd (BSE) | China | 100% | ||||
Beijing SE Putian Mobile Communications Co. Ltd (BMC) | China | 51% |
2006 | 2005 | |||||||
Manufacturing work in process | 143,076 | 64,516 | ||||||
Finished products and goods for resale | 294,386 | 241,589 | ||||||
Inventories, net | 437,462 | 306,105 |
12. | Accounts Receivables — Trade |
2006 | 2005 | |||||||
Trade receivables | 1,657,111 | 854,130 | ||||||
Provision for doubtful debts* | (4,357 | ) | (2,420 | ) | ||||
Trade receivables, net | (1,652,754 | ) | (851,710 | ) |
* | Provisions for doubtful debts has been estimated based on commercial risk evaluations. |
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13. | Other current assets |
2006 | 2005 | |||||||
Prepaid,expenses | 55,232 | 38,786 | ||||||
Prepaid, tooling | 15,927 | 14,693 | ||||||
Other, receivables* | 238,607 | 124,889 | ||||||
Total | 309,766 | 178,368 |
* | The major part of other receivables are related to withholding tax and VAT. |
14. | Short term cash investments |
2006 | 2005 | |||||||
Net book value | 1,580,077 | 900,272 | ||||||
Market value | 1,581,671 | 901,430 |
Non- | ||||||||||||||||
restricted | ||||||||||||||||
reserves and | Total | |||||||||||||||
Share | Restricted | net profit/loss | shareholders’ | |||||||||||||
capital* | receives | for the year | equity | |||||||||||||
Shareholder’s equity December 31, 2003 | 100,000 | 712,619 | (434,733 | ) | 377,886 | |||||||||||
Changes in accumulated translation differences | — | (12,760 | ) | 6,090 | (6,670 | ) | ||||||||||
Net income for the year | — | — | 322,019 | 322,019 | ||||||||||||
Shareholder’s equity December 31, 2004 | 100,000 | 699,859 | (106,624 | ) | 693,235 | |||||||||||
Changes in cumulative translation adjustments | — | 20,563 | 4,131 | 24,694 | ||||||||||||
Fair value reserve | — | — | 1,624 | 1,624 | ||||||||||||
Net income for the year | — | — | 350,342 | 350,342 | ||||||||||||
Shareholder’s equity December 31, 2005 | 100,000 | 720,422 | 249,473 | 1,069,895 | ||||||||||||
Changes in cumulative translation adjustments**** | — | (14,534 | ) | (18,027 | ) | (32,561 | ) | |||||||||
Fair value reserve** | — | — | (7,044 | ) | (7,044 | ) | ||||||||||
Transfer between non-restricted and restricted reserves*** | — | 17,001 | (17,001 | ) | — | |||||||||||
Net income for the year | — | — | 997,319 | 997,319 | ||||||||||||
Dividend | — | — | (247,000 | ) | (247,000 | ) | ||||||||||
Shareholder’s equity December 31, 2006 | 100,000 | 722,889 | 957,720 | 1,780,609 |
* | Share capital consists of 100 000 200 shares at a quota value of EUR 1 per share. | |
** | The fair value reserve is related to the effective portion of changes in the fair value of hedging instruments that is recognized in equity. Amounts accumulated in equity are recycled in the income statement in the periods in which the hedged item affects profit or loss, for example, when the forecasted sale which is hedged takes place. | |
*** | The transfer between non-restricted and restricted reserves is in accordance with the proposals of the respective companies’ boards of directors. In evaluating the consolidated financial position, it should be |
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noted that earnings in foreign companies may be subject to taxation when transferred to Sweden and, in some instances, such transfer of earnings may be limited by currency restrictions. | ||
**** | Cumulative translation adjustments have been distributed among unrestricted and restricted stockholders equity. |
• | Defined contribution plans, where the Company’s only obligation is to pay fixed pension premiums into a separate entity (a fund or insurance company) on behalf of the employee. No provision for pensions is recognized in the balance sheet other than accruals for premium pensions earned, but not yet paid. | |
• | Defined benefit plans, where the Company’s undertaking is to provide pension benefits that the employees will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. |
Consolidated | ||||||||
2006 | 2005 | |||||||
Pensions and similar commitments | 19,409 | 18,418 |
2006 | Sweden | UK | Japan | Others | Total | |||||||||||||||
Pension cost for defined benefit plans | — | 592 | 3,780 | — | 4,372 | |||||||||||||||
Pension cost for defined contributions plans | 24,436 | 415 | — | 5,007 | 29,858 | |||||||||||||||
Total | 24,436 | 1,007 | 3,780 | 5,007 | 34,230 |
2006 | Sweden | UK | Japan | Others | Total | |||||||||||||||
Provision for post-employment benefits | — | 4,204 | 12,734 | — | 16,938 | |||||||||||||||
Other employee benefits | — | — | — | 2,471 | 2,471 | |||||||||||||||
Total | — | 4,204 | 12,734 | 2,471 | 19,409 |
2006 | 2005 | |||||||
Warranty commitments* | 378,074 | 254,563 | ||||||
Other provisions | 43,152 | 40,749 | ||||||
Total | 421,226 | 295,312 |
* | Warranty commitments include provisions for faulty products based on estimated return rates and costs. The best estimate is based on sales, contractual warranty periods and historical failure data of products sold. |
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Table of Contents
2006 | 2005 | |||||||
Accrued personnel related expenses | 141,851 | 85,053 | ||||||
Accrued sales related expenses* | 679,485 | 468,572 | ||||||
Other accrued expenses | 252,452 | 190,148 | ||||||
Other short term liabilities | 92,618 | 51,271 | ||||||
Total | 1,166,406 | 795,044 |
* | Accrued sales related expenses includes sales bonuses, such as cash discounts, quarterly and yearly bonuses, quality bonus, co-op and stock protection. |
Liabilities | Advances | Liabilities | Advances | |||||||||||||||||||||
to financial | from | Total | to financial | from | Total | |||||||||||||||||||
institutions | customers | 2006 | institutions | customers | 2005 | |||||||||||||||||||
Bank deposits* | 3,950 | — | 3,950 | — | — | — | ||||||||||||||||||
Other | 23 | — | 23 | 158 | — | 158 | ||||||||||||||||||
Total | 3,973 | — | 3,973 | 158 | — | 158 |
* | Bank deposits are collateral for hedging activities. |
2006 | 2005 | |||||||
Other contingent liabilities* | 12,428 | 12,383 | ||||||
Total | 12,428 | 12,383 |
* | Other contingent liabilities mainly include guarantees for loans and other types of guarantees. |
2006 | 2005 | 2004 | ||||||||||
Change in provisions (note 16,17) | 126,905 | 26,786 | 77,253 | |||||||||
Write down of tangible assets | 134 | 8 | 450 | |||||||||
Gains on disposal of equipment | (16,068 | ) | 144 | 177 | ||||||||
Other | 1,717 | 7,248 | 7,869 | |||||||||
Total | 112,688 | 34,186 | 85,749 |
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Table of Contents
2006 | 2005 | 2004 | ||||||||||
Fixed assets | 14,272 | — | 11,533 | |||||||||
Other assets | 53,746 | — | 189,614 | |||||||||
Other liabilities | (46,874 | ) | — | (166,711 | ) | |||||||
Minority interest | — | — | (18,765 | ) | ||||||||
Net book value of pre owned share in subsidiary | (2,203 | ) | — | (2,919 | ) | |||||||
Total acquisition | 18,941 | — | 12,752 | |||||||||
Cash in acquired subsidiaries | (3,440 | ) | — | — | ||||||||
Cash flow effect from acquisitions in subsidiaries | 15,501 | — | 12,752 | |||||||||
Total cash flow effect from acquisitions in subsidiaries | 15,501 | — | 12,752 |
2006 | ||||
Future payments for operating leases and rents | ||||
2007 | 38,835 | |||
2008 | 36,788 | |||
2009 | 32,052 | |||
2010 | 30,623 | |||
2011 | 25,041 | |||
2012 and future | 60,005 |
25. | Wages, salaries and social security expenses |
2006 | 2005 | 2004 | ||||||||||
Wages and salaries | 390,556 | 327,937 | 268,672 | |||||||||
Social security expenses | 114,872 | 100,429 | 89,490 | |||||||||
Of which pension costs | 34,230 | 28,239 | 17,481 | |||||||||
Of which CO compensation | 1,082 | 999 | 901 | |||||||||
CO pension costs | 190 | 142 | 577 | |||||||||
bonus & similar to CO | 268 | 269 | 1,002 |
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2006 | 2005 | 2004 | ||||||||||
Calculated future payments for synthetic option plan charged to operating costs | 20,826 | 12,018 | 17,300 |
Wages and salaries by geographical area | 2006 | 2005 | 2004 | |||||||||
Europe* and | ||||||||||||
Middle East & Africa | 224,702 | 179,713 | 151,167 | |||||||||
North America | 67,504 | 65,481 | 41,855 | |||||||||
Latin America | 4,267 | 3,698 | 2,624 | |||||||||
China | 26,041 | 16,296 | 13,664 | |||||||||
Japan | 58,369 | 55,534 | 52,285 | |||||||||
Asia Pacific | 9,673 | 7,215 | 7,077 | |||||||||
Total | 390,556 | 327,937 | 268,672 | |||||||||
* Of which Sweden | 157,416 | 121,605 | 96,899 | |||||||||
* Of which EU excl. Sweden | 35,122 | 37,720 | 38,093 |
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2006 | 2005 | |||||||||||||||
Men | Women | Men | Women | |||||||||||||
Europe * and | ||||||||||||||||
Middle East & Africa | 2,245 | 842 | 1,967 | 748 | ||||||||||||
North America | 528 | 176 | 521 | 175 | ||||||||||||
Latin America | 41 | 16 | 32 | 13 | ||||||||||||
China | 942 | 1,168 | 590 | 441 | ||||||||||||
Japan | 839 | 205 | 776 | 183 | ||||||||||||
Asia Pacific | 102 | 71 | 90 | 63 | ||||||||||||
Total | 4,697 | 2,478 | 3,976 | 1,623 | ||||||||||||
* Of which Sweden | 1,696 | 593 | 1,473 | 551 | ||||||||||||
* Of which EU excl. Sweden | 395 | 163 | 363 | 131 |
2006 | 2005 | |||||||||||||||
Number on | whereof | Number on | whereof | |||||||||||||
balance day | men | balance day | men | |||||||||||||
Consolidated (including subsidiaries) | ||||||||||||||||
Members of the board | 86 | 91.9% | 71 | 94.4% | ||||||||||||
Presidents and Executive Vice presidents | 13 | 100% | 12 | 100% | ||||||||||||
Parent Company | ||||||||||||||||
Members of the board | 10 | 100% | 10 | 100% | ||||||||||||
President and Executive Vice president | 2 | 100% | 2 | 100% |
Jan. 1 2006- | Jan. 1 2005- | |||||||
Dec. 31 2006 | Dec. 31 2005 | |||||||
% of total ordinary worktime | ||||||||
Total absence due to illness | 1.6 | 1.8 | ||||||
— long term absence due to illness | 0.8 | 1.8 | ||||||
— absence due to illness for men | 1.1 | 1.2 | ||||||
— absence due to illness for women | 2.9 | 3.4 | ||||||
— employees — 29 years | 0.8 | 0.9 | ||||||
— employees 30 — 49 years | 1.7 | 2.0 | ||||||
— employees 50 years- | 2.3 | 1.7 |
26. | Fees to auditors |
2006 | 2005 | 2004 | ||||||||||
PricewaterhouseCoopers | ||||||||||||
Audit fees | 916 | 881 | 696 | |||||||||
Fees for other services | 897 | 1,291 | 1,083 | |||||||||
Total | 1,813 | 2,172 | 1,779 |
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27. | Financial risks |
28. | Reconciliation to accounting principles generally accepted in the United States |
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2006 | 2005 | |||||||
Net income per Swedish GAAP | 997,319 | 350,342 | ||||||
US GAAP adjustments before taxes: | ||||||||
Business Combination | 918 | 918 | ||||||
Synthetic Option Plan | 1,472 | 906 | ||||||
Tax effect of US GAAP adjustment | (522 | ) | (364 | ) | ||||
Net income in accordance with US GAAP | 999,186 | 351,802 |
2006 | 2005 | |||||||
Net income in accordance with US GAAP | 999,186 | 351,802 | ||||||
Other comprehensive income Gain/loss on cash flow hedges | (9,544 | ) | 2,260 | |||||
Translation adjustment | (32,561 | ) | 24,694 | |||||
Deferred tax | 2,499 | (636 | ) | |||||
Total other comprehensive income | (39,605 | ) | 26,318 | |||||
Comprehensive income in accordance with US GAAP | 959,581 | 378,119 |
2006 | 2005 | |||||||
Equity as reported per Swedish GAAP | 1,780,609 | 1,069,895 | ||||||
US GAAP adjustments before taxes: | ||||||||
Business Combination | (964 | ) | (1,882 | ) | ||||
Synthetic Option Plan | 2,377 | 906 | ||||||
Deferred tax effect of US GAAP adjustment | (550 | ) | (28 | ) | ||||
Stockholders’ equity in accordance with US GAAP | 1,781,472 | 1,068,891 | ||||||
Swedish GAAP | US GAAP | |||||||||||||||
Dec. 31 | Dec. 31 | Dec. 31 | Dec. 31 | |||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
Non-current assets | 468,677 | 273,749 | 328,207 | 230,638 | ||||||||||||
Current assets | 4,672,681 | 2,873,459 | 4,811,636 | 2,914,660 | ||||||||||||
Total Assets | 5,141,358 | 3,147,208 | 5,139,844 | 3,145,298 | ||||||||||||
Stockholders equity | 1,780,609 | 1,069,895 | 1,781,472 | 1,068,891 | ||||||||||||
Minority interest | 45,148 | 46,488 | 45,148 | 46,488 | ||||||||||||
Provisions | 440,635 | 313,730 | 440,635 | 313,730 | ||||||||||||
Non-current liabilities | 677 | 1,031 | 677 | 1,031 | ||||||||||||
Current liabilities | 2,874,289 | 1,716,064 | 2,871,912 | 1,715,158 | ||||||||||||
Total stockholders’ equity and liabilities | 5,141,358 | 3,147,208 | 5,139,844 | 3,145,298 | ||||||||||||
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