Sony 2001 Annual Report Download - page 80

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Sony Corporation Annual Report 2001
78
The decrease in net cash provided by operating activities compared with the previous year was primarily due
to the increases in inventories as well as notes and accounts receivable, although accrued income and other taxes
increased. Net income decreased significantly primarily due to a non-cash one-time after-tax charge of 104.5
billion yen for cumulative effect of accounting changes relating to the adoptions of the new film accounting
standard (refer to Note 2 of Notes to Consolidated Financial Statements) and the accounting standard regarding
revenue recognition (refer to Note 2 of Notes to Consolidated Financial Statements). In addition, amortization of
film costs decreased while film costs (after adjusted cumulative effect of accounting changes) decreased. During
the year, 16.8 billion yen of net income was recorded. Among adjustments to net income, depreciation and
amortization, including amortization of deferred insurance acquisition costs was 348.3 billion yen, primarily in the
Electronics and Game businesses. The breakdown of this amount was 270.3 billion yen of depreciation of fixed
assets, 39.1 billion yen of amortization of intangible assets, and 38.9 billion yen of amortization of deferred
insurance acquisition costs. Amortization of film costs was 244.6 billion yen. Equity in net losses of affiliated
companies, net of dividends was 47.2 billion yen. Furthermore, the aforementioned cumulative effect of account-
ing changes was recorded. Regarding changes in assets and liabilities, film costs increased by 269.0 billion yen.
Notes and accounts receivable increased by 177.5 billion yen, while notes and accounts payable increased by 95.2
billion yen. The increases in notes and accounts receivable and notes and accounts payable primarily reflected
sales increases in the Electronics and Game businesses. Inventories increased by 103.1 billion yen primarily at
manufacturing facilities in Japan, reflecting increases in manufacturing output in the Electronics and Game
businesses. Furthermore, future insurance policy benefits and other increased by 241.1 billion yen, reflecting net
increases in life insurance-in-force in the Insurance business.
The increase in net cash used in investing activities compared with the previous year was primarily due to
increases in purchases of fixed assets as well as investments and advances. During the year, payments for
purchases of fixed assets were 468.0 billion yen primarily in the Electronics, Game, and Other businesses. In the
Insurance business, payments for investments and advances were 319.1 billion yen, while proceeds from sales of
securities investments and other and collections of advances were 87.5 billion yen, primarily reflecting higher
investment assets. Other than the Insurance business, payments for investments and advances were 122.6 billion
yen, consisting of approximately 98.0 billion yen for investments and approximately 24.0 billion yen for advances.
Payments for investments included investments in Japan in Tokyu Cable Television, bitwallet, Inc., which
promotes an electronic money service, and Internet Initiative Japan Inc., which is an Internet service provider.
Investments in the U.S. included those in Revolution Studios, which is a film production company, Telemundo,
which is a Spanish language television network and station group, Transmeta Corporation, which is a chip
manufacturer, and Candescent Technologies Inc., which has technologies for next-generation flat panel displays.
Investments in Europe included that in Canal+ Technologies, which is a developer of digital and interactive
television-related software solutions. Payments for advances included loans to CHC. On the other hand, proceeds
from sales of securities investment and other and collections of advances (other than insurance business) were
65.1 billion yen. Such proceeds from sales of securities investment and other were approximately 48.0 billion
yen, which included the sale of 50% of the equity of Game Show Network; the sale of a small portion of the
equity of a subsidiary engaged in a television channel operation in India; and the sale of a subsidiary engaged in
the in-flight entertainment business in the U.S.