Sony 2003 Annual Report Download - page 90
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Consolidated Financial Information 2003
4
sectors, Sony has been actively repositioning the Music segment for the future by looking to create a more effective
and profitable business model. As a result, the Music segment has undergone a worldwide restructuring program
since the fiscal year ended March 31, 2001 to reduce staffing and other costs through the consolidation and
rationalization of facilities worldwide. Under this worldwide restructuring program, Sony Music Entertainment Inc.
(“SMEI”), a U.S. based subsidiary, incurred restructuring charges of 22.4 billion yen for the year ended March 31,
2003, compared to 8.6 billion yen in the previous fiscal year. This exceeded the estimate made in January 2003, as
certain restructuring initiatives originally expected to be undertaken in the fiscal year ending March 31, 2004 were
accelerated as a result of a management change and the continued decline in the worldwide music market.
Restructuring activities included the further consolidation of operations through the shutdown of a CD and
cassette manufacturing and distribution center in Holland, the shutdown of a CD manufacturing facility in the U.S.,
which was announced on April 2, 2003, although the decision to shut down the facility was made during the fiscal year
ended March 31, 2003, as well as further staff reductions to consolidate various support functions across labels and
operating units. These restructuring activities resulted in the termination of over 1,400 jobs during the fiscal year
ended March 31, 2003, of which approximately 600 were in the U.S. Resulting charges were included in selling,
general and administrative expenses. Total restructuring charges in the Music segment, including Sony Music
Entertainment (Japan) Inc. (“SMEJ”), were 23.9 billion yen.
Note that losses on sales, disposal or impairment of long-lived assets are recorded in selling, general and
administrative expenses. Refer to “Cost of Sales and Selling, General and Administrative Expenses” below and to
Note 18 of Notes to Consolidated Financial Statements.
The following table summarizes major restructuring activities for which charges of over 5 billion yen were
recorded during the fiscal year ended March 31, 2003.