Sony 2003 Annual Report Download - page 129

Consolidated Financial Information 2003
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Financial Services
Although increased revenue is anticipated in the life and automobile insurance businesses, due to the planned
expansion of these businesses, increased expenses, such as expenses resulting from the planned expansion of
Sony Finance International Inc.’s credit card business and other factors, are expected to lead to a decrease in
operating income.
Capital Expenditures
Sony will strengthen its semiconductor business with investments of approximately 500 billion yen over the next
three years. Over the next three years Sony is planning to invest approximately 200 billion yen of this 500 billion yen
in semiconductor production facilities for next-generation broadband processors, of which approximately 73 billion
yen is expected to be invested in the fiscal year ending March 31, 2004. Across the Sony Group, Sony expects
capital expenditures for the fiscal year ending March 31, 2004 to amount to approximately 350 billion yen.
Depreciation Expenses
In the fiscal year ending March 31, 2004, expenses for depreciation and amortization, which includes the
amortization of intangible assets and the amortization of deferred insurance acquisition costs, are expected to be
approximately 390 billion yen, an increase of 38.0 billion yen, or 11 percent. This is because expenses for the
amortization of deferred insurance acquisition costs in the Financial Services segment are expected to increase
although expenses for depreciation and amortization are expected to be flat in the Electronics segment.
Research and Development
Sony expects research and development expenses (total of expenses for the development of new product
prototypes and expenses for the development of mid- to long-term new technologies) for the fiscal year ending March
31, 2004 to increase slightly compared with the fiscal year ended March 31, 2003. In the Electronics segment, Sony
anticipates research and development expenses to center around the introduction of new products and
communications technology, next generation displays, optical and magnetic storage media and semiconductor
technology. In the Game segment, the main expenses are expected to be for the development of semiconductor
technology, the development of software for the PlayStation 2, and research and development for next-generation
computer entertainment systems. Sony expects that investment in development of mid- to long-term new
technologies over the next three years will total 500 billion yen (excluding expenses for the development of new
product prototypes).