Sony 1999 Annual Report Download - page 68

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page
Sony Corporation Annual Report 1999
Net deferred tax assets are included in the consoli-
dated balance sheets as follows:
Yen in millions Dollars in thousands
March 31 March 31,
1998 1999 1999
Current assets—Deferred income taxes . . . . . . . . . . . . . . . . . . . . ¥121,189 ¥102,588 $ 854,900
Other assets—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,523 39,483 329,025
Current liabilities—Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,279) (5,377) (44,808)
Long-term liabilities—Deferred income taxes . . . . . . . . . . . . . . . (147,116) (120,822) (1,006,850)
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 317 ¥ 15,872 $ 132,267
At March 31, 1999, no deferred income taxes have
been provided on undistributed earnings of foreign
subsidiaries not expected to be remitted in the foresee-
able future totaling ¥337,056 million ($2,808,800
thousand), and on the gain of ¥61,544 million on a
subsidiary’s sale of stock arising from the issuance of
common stock of Sony Music Entertainment (Japan) Inc.
in a public offering to third parties in November 1991,
as Sony does not anticipate any significant tax conse-
quences on possible future disposition of its remaining
investment based on its tax planning strategies. The
unrecognized deferred tax liabilities as of March 31,
1999 for such temporary differences amounted to
¥86,902 million ($724,183 thousand).
Operating loss carryforwards for tax purposes of
consolidated subsidiaries at March 31, 1999 amounted
to approximately ¥204,041 million ($1,700,342 thou-
sand) and are available as an offset against future tax-
able income of such subsidiaries. These carryforwards
expire at various dates primarily up to 13 years. Realiza-
tion is dependent on such subsidiaries generating suffi-
cient taxable income prior to expiration of the loss
carryforwards. Although realization is not assured,
management believes it is more likely than not that all
of the deferred tax assets, less valuation allowance, will
be realized. The amount of such net deferred tax assets
considered realizable, however, could be changed in the
near term if estimates of future taxable income during
the carryforward period are changed.
Number of shares
Balance at March 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374,067,706
Exercise of stock purchase warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117,838
Conversion of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,999,499
Balance at March 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384,185,043
Exercise of stock purchase warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264,562
Conversion of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,745,666
Balance at March 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407,195,271
Exercise of stock purchase warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,774
Conversion of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,217,066
Balance at March 31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,439,111
At March 31, 1999, 54,445 thousand shares of common
stock would be issued upon conversion or exercise of all
convertible debentures and warrants outstanding.
Shares of common stock that would be issued upon
integration of three listed subsidiaries are described in
Note 18.
On November 20, 1991, Sony Corporation made a free
share distribution of 33,908,621 shares for which no
accounting entry is required in Japan. Had the distribu-
tion been accounted for in the manner adopted by
companies in the United States of America, ¥201,078
million ($1,675,650 thousand) would have been trans-
ferred from retained earnings to the appropriate capital
accounts.
Conversions of convertible bonds into common stock
are accounted for in accordance with the provisions of
the Japanese Commercial Code by crediting approxi-
mately one-half of the conversion proceeds to the com-
mon stock account and the remainder to the additional
paid-in capital account.
15. Stockholders’ equity
Changes in the number of shares issued and outstanding
during the years ended March 31, 1997, 1998 and 1999
have resulted from the following: