Sony 2000 Annual Report Download - page 88

86
SONY CORPORATION ANNUAL REPORT 2000
17. Stockholders’ equity
Changes in the number of shares issued and outstand-
ing during the years ended March 31, 1998, 1999 and 2000 have resulted from the following:
Number of shares
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
Exercise of stock purchase warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 92,162
Conversion of convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,028,11 9
Stock issued under exchange offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,979,771
Balance at March 31, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453,639,1 63
At March 31, 2000, 44,502,906 shares of common
stock would be issued upon conversion or exercise of
all convertible debentures and warrants outstanding.
On May 19, 2000, Sony Corporation completed a
two-for-one stock split. The number of shares issued
was 453,639,163 shares. There was no increase in the
common stock account because the new shares were
distributed from the portion of previously issued
shares accounted for as excess of par value in the
common stock account in accordance with the Japanese
Commercial Code. The above share information does
not reflect this stock split.
On November 20, 1991, Sony Corporation made a
free share distribution of 33,908,621 shares in ratios of one
share for each ten shares held for which no accounting
entry was required in Japan. Had the distribution been
accounted for in the manner adopted by companies in
the United States of America, ¥201,078 million would
have been transferred from retained earnings to the
appropriate capital accounts. This has been the only
free distribution of common stock where no accounting
entry was required in Japan.
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.
The amounts of statutory retained earnings of Sony
Corporation available for the payments of dividends to
stockholders as of March 31, 1999 and 2000 were
¥610,133 million and ¥617,403 million ($5,825 million),
respectively. The appropriation of retained earnings for
the year ended March 31, 2000, which has been incor-
porated in the accompanying consolidated financial
statements, will be proposed for approval at the Ordinary
General Meeting of Shareholders to be held on June 29,
2000 and will be recorded in the statutory books of
account, in accordance with the Japanese Commercial
Code, after stockholders’ approval. The above statutory
amounts available for dividends include cash dividends
for the six-month periods ended March 31, 1999 and
2000, respectively, which have been incorporated in the
accompanying consolidated financial statements.
Retained earnings include Sony’s equity in undistrib-
uted earnings of affiliated companies accounted for by
the equity method in the amount of ¥20,159 million and
¥7,699 million ($73 million) at March 31, 1999 and 2000,
respectively.
The Ordinary General Meeting of Shareholders held
on June 27, 1997 authorized Sony Corporation, pursuant
to the Japanese regulations, to acquire and retire up to
a total not exceeding 30 million outstanding shares of
its common stock with its profit, on and after June 28,
1997, whenever deemed necessary by the Board of
Directors in view of general economic conditions,
Sony’s business performance and financial condition
and other factors. At March 31, 2000, no common stock
had been acquired under this authorization.
The Ordinary General Meeting of Shareholders held
on June 26, 1998 approved that (a) in addition to the
shares discussed in the preceding paragraph, on and
Operating loss carryforwards for tax purposes of
consolidated subsidiaries at March 31, 2000 amounted
to approximately ¥181,200 million ($1,709 million) and
are available as an offset against future taxable income
of such subsidiaries. These carryforwards, except for
approximated ¥37,100 million ($350 million) with no
expiration period, expire at various dates primarily up to
12 years. Realization is dependent on such subsidiaries
generating sufficient 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 allow-
ance, 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.