Sony 2003 Annual Report Download - page 106

Consolidated Financial Information 2003
20
In the first quarter of the fiscal year ended March 31, 2003, SPE and other non-Sony investors sold Telemundo to
NBC, a media company owned by the General Electric Company. In the same quarter, SMEI and AOL Time Warner
Inc.’s Warner Music Group each sold the majority of their holding in CHC to Blackstone Capital Partners, an affiliate of
The Blackstone Group, an investment bank. The Chairman of the Blackstone Group was a director of Sony until June
2002.
In August 2003, Crosswave, 23.9 percent of the equity of which Sony Corporation owns, applied for
commencement of reorganization proceedings under the Corporate Reorganization Law of Japan. Sony has
outstanding loans and leases certain fixed assets to Crosswave. Sony estimates that the commencement of such
reorganization proceedings under the Corporate Reorganization Law will result in a maximum decrease to
consolidated income before income taxes of approximately 6.0 billion yen.
Minority Interest in Income (Loss) of Consolidated Subsidiaries
In the fiscal year ended March 31, 2003, minority interest in the income of consolidated subsidiaries, which is
excluded from income before income taxes, was 6.6 billion yen, compared to a 16.2 billion yen minority interest in the
loss of consolidated subsidiaries recorded in the previous fiscal year. This change was principally due to the reversal
of valuation allowances on deferred tax assets held by Aiwa and because Sony no longer recorded a minority interest
in Aiwa’s losses as Sony took Aiwa private in October 2002.
Net Income
Net income for the fiscal year ended March 31, 2003 increased by 100.2 billion yen, or 654.5 percent, to 115.5
billion yen compared with the previous fiscal year. As a percentage of sales, net income increased from 0.2 percent
to 1.5 percent. The most significant contribution to the year on year increase in net income was the increase in
income before income taxes. However the effect of the minority interest in the income of consolidated subsidiaries,
the absolute increase in income taxes, and the increase in losses in equity of affiliated companies caused net income
to be 132.1 billion yen less than income before income taxes, compared to a difference of 77.5 billion yen in the
previous fiscal year.
The return on stockholders’ equity increased from 0.7 percent to 5.0 percent. (This ratio is calculated by dividing
net income by the simple average of stockholders’ equity at the end of the previous fiscal year and at the end of the
current fiscal year.)
Basic net income per share was 125.74 yen compared with 16.72 yen in the previous fiscal year, and diluted net
income per share was 118.21 yen compared with 16.67 yen in the previous fiscal year. Refer to Notes 2 and 22 of
Notes to Consolidated Financial Statements.
Foreign Exchange Fluctuations and Risk Hedging
During the fiscal year ended March 31, 2003, the average value of the yen was 120.9 yen against the U.S. dollar,