Sony 2000 Annual Report Download - page 55

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SONY CORPORATION ANNUAL REPORT 2000
53
In March 2000, Sony, Time Warner Inc., and CDNOW
Inc., which provides services for selling music and video
software via the Internet, announced the termination of a
merger plan between CDNOW Inc. and CHC, which is equally
owned by Sony and Time Warner Inc. Instead, Sony and
Time Warner Inc. will commit a total of 51 million U.S. dol-
lars to CDNOW Inc. (50% of which is from Sony), by invest-
ing 21 million U.S. dollars in addition to an existing 30 million
U.S. dollars loan commitment. Also, Sony provided CHC in
April 2000 with an approximately 93 million U.S. dollars loan.
During the year, Sony invested approximately 3.8 billion
yen in Telemundo group, which resulted in a total invest-
ment of approximately 18.9 billion yen. In the fiscal year
ending March 31, 2001, it is expected that Sony will make an
additional investment of approximately 21.7 million U.S.
dollars in Telemundo group.
Net Income
Net income for the fiscal year ended March 31, 2000 de-
creased by 57.2 billion yen, or 31.9%, to 121.8 billion yen
compared with the previous year. As a percentage of sales,
net income decreased from 2.6% to 1.8%, and the return on
stockholders’ equity (using the average of such amounts at
March 31, 1999 and at March 31, 2000) decreased from 9.8%
to 6.1%. Net income in the previous year included 30.7 bil-
lion yen (net of tax) from the aforementioned gain on secu-
rities contribution to an employee retirement benefit trust
which was recorded in other income. Excluding this effect,
the decrease of net income would have been limited to 17.8%.
Basic net income per share was 144.6 yen compared with
218.4 yen in the previous year, and diluted net income per
share was 131.7 yen compared with 195.5 yen in the previ-
ous year (refer to Note 2 of Notes to Consolidated Financial
Statements).
STRATEGIES AND OUTLOOK
This section contains forward-looking statements about the
future performance of Sony and should be read in light of the
cautionary statement on that subject, which appears on in-
side front cover page and applies to this entire document.
Sony’s management is endeavoring to develop the most
appropriate plans for its businesses, considering the current
general economic and operating environment and available
information. The following is a summary of certain of Sony’s
current basic strategies and outlook for its fiscal year ending
March 31, 2001.
Management Policy
At the dawn of the broadband network era, Sony aims to
offer an environment where individuals can enjoy new
lifestyles of entertainment and convenience. To achieve this
vision, Sony has embarked on a series of corporate reforms
including the strengthening and reorganization of its Elec-
tronics business. Sony regards the fiscal year ending March
31, 2001 as a second phase of accelerating corporate re-
form and will strive to increase the corporate value of its
entire group.
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NET INCOME and ROE
Billion ¥ %
Net income
ROE
*Year ended March 31
NET INCOME PER SHARE
¥
Basic
Diluted
*Year ended March 31
*Restated to reflect the two-for-one stock split that has become effective on
May 19, 2000
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