Sony 2003 Annual Report Download - page 110

Consolidated Financial Information 2003
24
unnecessary cash and cash equivalents as well as borrowings as much as possible.
The above description of basic policies and quantitative information excludes Sony Life, Sony Assurance and
Sony Bank, each of which respectively secures liquidity on its own.
Financial Services Segment
In the Financial Services segment, the management of Sony Life, Sony Assurance, and Sony Bank recognize
the importance of securing sufficient liquidity to cover the payment obligations that they take on as a result of their
ordinary course of business. These companies abide by the regulations imposed by regulatory authorities and
establish and operate under company guidelines that comply with these regulations and are designed to secure
sufficient means to pay their obligations.
Sony Life currently obtains ratings from four rating agencies: AA- by S&P, A+ by AM Best Corporation, and AA
by R&I and the Japan Credit Rating Agency Ltd. However, since April 2002, S&P has changed its outlook from
“stable” to “negative” in conjunction with the Japanese Government Bond rating reduction. In September 2001, Sony
Bank obtained an A-/A-2 rating from S&P for its long-term/short-term debt.
Contractual obligations, commitments, and contingent liabilities
The following table summarizes Sony’s contractual obligations and major commitments.
（Yen in millions）
Payments Due by Period
Total
Less than
1 year 1 to 3 year 3 to 5 year After 5 year
Contractual Obligations and Major Commitments:
Long-term debt (Note 12)
Capital lease obligations (Notes 9 and 12). 39,899 11,313 19,731 2,696 6,159
Other long-term debt (Note 12) . . . . . . . . 801,925 23,072 452,478 196,327 130,048
Minimum rental payments required under
operating leases (Note 9) .. . . . . . . . . . . . . . . . . 289,511
51,786 77,953 47,305 112,467
Purchase commitments for property, plant and
equipment and other assets (Note 24) . . . . . . 30,814 30,814 - - -
Expected payments regarding contracts with
recording artists and other (Note 24) . . . . . . . 54,508 24,913 20,182 6,138 3,275
Expected cost for the production or purchase of
films or certain rights (Note 24). . . . . . . . . . . . 128,140 65,831 62,309 - -
The total amount of commitments at March 31, 2003 was 297.8 billion yen (refer to Note 24 of Notes to
Consolidated Financial Statements). The commitments include major purchase obligations as shown above.
In the ordinary course of business, Sony makes commitments to purchase property, plant and equipment. As of
March 31, 2003, such outstanding commitments totaled 30.8 billion yen. Most of these assets will be used for general
operating purposes.
Certain subsidiaries in the Music segment have entered into long-term contracts with recording artists and
companies for the production and/or distribution of prerecorded music and videos. The total amount of expected