Sony 1997 Annual Report Download - page 57

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55
Pension plans’ funded status:
Japanese plans Foreign plans
Dollars in Dollars in
Yen in millions thousands Yen in millions thousands
March 31 March 31 March 31,
1996 1997 1997 1996 1997 1997
Actuarial present value of obligations—
Vested benefit . . . . . . . . . . . . . . . . . ¥207,925 ¥268,719 $2,167,089 ¥38,439 ¥50,325 $405,847
Nonvested benefit . . . . . . . . . . . . . 42,544 53,311 429,927 3,877 4,060 32,742
Accumulated benefit obligation . . . . . 250,469 322,030 2,597,016 42,316 54,385 438,589
Additional benefits related to
projected salary increase . . . . . . . . . 60,184 71,418 575,952 18,735 20,288 163,613
Projected benefit obligation . . . . . . . . 310,653 393,448 3,172,968 61,051 74,673 602,202
Plan assets at fair value . . . . . . . . . . . 171,240 204,491 1,649,121 31,280 43,837 353,524
Excess of projected benefit
obligation over plan assets . . . . . . . . 139,413 188,957 1,523,847 29,771 30,836 248,678
Unrecognized net loss . . . . . . . . . . . . (30,722) (59,740) (481,774) (5,280) (4,805) (38,750)
Unrecognized net transition asset. . . . 3,479 3,104 25,032 (771) 1,453 11,717
Unrecognized prior service cost . . . . . (10,766) (12,807) (103,282) ———
Net pension liability recognized
in the balance sheet . . . . . . . . . . . . . ¥101,404 ¥119,514 $ 963,823 ¥23,720 ¥27,484 $221,645
Assumptions used in developing the
pension obligation as of March 31:
Discount rate . . . . . . . . . . . . . . . . . 4.0% 3.5% 7.0– 9.0% 6.5– 9.0%
Long-term rate of salary increase . . . 3.2% 3.0% 3.0– 8.5% 2.5– 8.5%
Long-term rate of return on
funded assets . . . . . . . . . . . . . . . . 3.5% 3.7% 7.0–10.0% 7.0–10.0%
As required under FAS 87, the assumptions are reviewed in accordance with changes in circumstances.
Such changes in assumptions are the primary reason for the fluctuation in the projected benefit obligation and
unrecognized net gains and losses.
The plan assets are invested primarily in interest bearing securities and listed equity securities.
14. Income taxes The company is subject to a number of different income taxes which, in the aggregate, indicate a statutory
rate in Japan of approximately 51%.
Reconciliations of the differences between the statutory tax rate and the effective income tax rate are
as follows:
Year ended March 31
1995 1996 1997
Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (51.0)% 51.0% 51.0%
Increase (reduction) in taxes resulting from:
Income tax credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.0) (2.8) (2.8)
Nondeductible goodwill write-off . . . . . . . . . . . . . . . . . . . . . . . . . . 61.2 — —
Current operating losses of subsidiaries,
excluding nondeductible goodwill write-off . . . . . . . . . . . . . . . . . 17.6 7.9 5.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 (0.2) (1.0)
Effective income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.5% 55.9% 52.4%
March 31,