Sony 2001 Annual Report Download - page 130

Sony Corporation Annual Report 2001
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22. Commitments and contingent liabilities
Commitments outstanding at March 31, 2001 for the purchase of property, plant and equipment and other assets
amounted to ¥71,412 million ($571 million). In November 2000, Sony notified the third-party owner of the building
used as an operating lease for the corporate headquarters of Sony’s United States of America subsidiaries, that it
was going to exercise its option to purchase the building. Under the terms of the purchase option, Sony must make
a cash payment totaling $236 million in December 2001 to complete the purchase.
Certain subsidiaries in the music business have entered into long-term contracts with recording artists and
companies for the production and/or distribution of prerecorded music and videos. These contracts cover various
periods mainly through March 31, 2005. As of March 31, 2001, these subsidiaries were committed to make
payments under such long-term contracts of ¥56,731 million ($454 million).
Contingent liabilities for guarantees given in the ordinary course of business and for employee loans amounted
to ¥109,175 million ($873 million) at March 31, 2001.
Sony Corporation and certain of its subsidiaries are defendants in several pending lawsuits. However, based
upon the information currently available to both Sony and its legal counsel, management of Sony believes that
damages from such lawsuits, if any, would not have a material effect on Sony’s consolidated financial statements.
23. Business segment information
The operating segments reported below are the segments of Sony for which separate financial information is
available and for which operating profit or loss amounts are evaluated regularly by executive management in
deciding how to allocate resources and in assessing performance.
The Electronics segment designs, develops, manufactures and distributes audiovisual, informational and
communicative equipment, instruments and devices throughout the world. The Game segment designs, develops
and sells PlayStation game consoles and related software mainly in Japan, the United States of America and Europe,
manufactures semiconductors used in the game consoles in Japan, and licenses to third party software developers.
The Music segment is mainly engaged worldwide in the development, production, manufacture, and distribution of
recorded music, in all commercial formats and musical genres. The Pictures segment develops, produces and
manufactures image-based software, including film, video, and television mainly in the United States of America,
and markets, distributes and broadcasts in the worldwide market. The Insurance segment represents the insurance-
related underwriting business, primarily individual life insurance and non-life insurance businesses in the Japanese
market. The Other segment consists of various operating activities, primarily including leasing and credit financing
businesses, a business focused on parts trading services within the Sony group, advertising agency business,
satellite distribution services including program supplying businesses in Japan, and location-based entertainment
businesses in Japan, the United States of America and Germany. Sony’s products and services are generally unique
to a single operating segment.
Effective for the year ended March 31, 2001, gains and losses on the sale and disposal, net and losses from
impairment of long-lived assets, which were previously recorded in other income and expenses, are now included in
selling, general and administrative expense. As a result, operating income (loss) for the years ended March 31, 1999
and 2000 have been restated to conform to the presentation for the year ended March 31, 2001.
Additionally, Sales and operating revenue and Segment operating income (loss) of the Pictures segment and the
Other segment for the years ended March 31, 1999 and 2000 have been restated to conform to the reportable
segmentation for the year ended March 31, 2001.