Sony 2001 Annual Report Download - page 129

Sony Corporation Annual Report 2001
127
At March 31, 2001, no deferred income taxes have been provided on undistributed earnings of foreign
subsidiaries not expected to be remitted in the foreseeable future totaling ¥500,155 million ($4,001 million), 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 consequences on possible future disposition of its investment based on its tax planning strategies.
The unrecognized deferred tax liabilities as of March 31, 2001 for such temporary differences amounted to
¥110,387 million ($883 million).
Operating loss carryforwards for tax purposes of consolidated subsidiaries at March 31, 2001 amounted to
approximately ¥258,800 million ($2,070 million) and are available as an offset against future taxable income of such
subsidiaries. These carryforwards, except for ¥55,300 million ($442 million) with no expiration period, expire at
various dates primarily up to 11 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 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.
21. Reconciliation of the differences between basic and diluted net income per share (“EPS”)
Basic and diluted EPS as well as the number of shares in the following table have been adjusted to reflect the two-
for-one stock split that was completed on May 19, 2000. Reconciliation of the differences between basic and diluted
EPS for the years ended March 31, 1999, 2000 and 2001 is as follows:
Year ended
Year ended March 31 March 31,
1999 2000 2001 2001
Dollars
Yen in millions in millions
Income before cumulative effect of accounting changes . . . . ¥179,004 ¥121,835 ¥121,227 $ 970
Effect of dilutive securities:
Convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,361 2,537 2,417 19
Income before cumulative effect of
accounting changes for diluted EPS computation . . . . . . . . ¥181,365 ¥124,372 ¥123,644 $ 989
Thousands of shares
Weighted-average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819,506 842,679 913,932
Effect of dilutive securities:
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 500 472
Convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,095 101,174 79,830
Weighted-average shares for diluted EPS computation . . . . . 927,661 944,353 994,234
Yen Dollars
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 218.43 ¥144.58 ¥132.64 $1.06
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 195.51 ¥131.70 ¥124.36 $0.99
In accordance with FAS No. 128, “Earnings Per Share”, the computation of diluted net income per share for the
year ended March 31, 2001 uses the same weighted-average shares used for the computation of diluted net income
before cumulative effect of accounting changes per share, and reflects the effect of assumed conversion of convertible
bonds in diluted net income.