Sony 2005 Annual Report Download - page 57

54 Sony Corporation
CONTRACTUAL OBLIGATIONS, COMMITMENTS, AND CONTINGENT LIABILITIES
The following table summarizes Sony’s contractual obligations and major commitments as of March 31, 2005. Please note that
references to Notes below are references to particular notes within the Notes to Consolidated Financial Statements.
Yen in millions
Payments due by period
Less than
Tot al 1 year 1 to 3 years 3 to 5 years After 5 years
Contractual Obligations and Major Commitments*:
Long-term debt (Note 12)
Capital lease obligations (Notes 9 and 12) . . . . . . . . . . . . . . . . . . . . . . .
40,301 11,173 17,435 6,655 4,498
Other long-term debt (Note 12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805,561 155,157 192,741 278,684 178,979
Minimum rental payments required under operating leases (Note 9) . . . . . . 169,951 38,182 53,561 24,556 53,652
Purchase commitments for property, plant and equipment and
other assets (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
83,683 67,698 15,973 12 —
Expected cost for the production or purchase of films and
television programming or certain rights (Note 24) . . . . . . . . . . . . . . . . . . 82,080 45,651 36,429 — —
* The total amount of expected future pension payments is not included in the above table or the total amount of commitments outstanding at March 31, 2005 discussed
below as such amount is not currently determinable. Sony expects to contribute approximately 35.0 billion yen to the Japanese pension plans and approximately 6.0 billion
yen to the foreign pension plans for the fiscal year ending March 31, 2006 (Note 15).
* The total unused portion of the line of credit extended under loan agreements in the Financial Services segment is not included in the above table or the amount of
commitments outstanding at March 31, 2005 discussed below as it is not foreseeable how many loans will be executed. The total unused portion of the line of credit
extended under these contracts was 199.9 billion yen as of March 31, 2005 (Note 24).
* The 5 year Revolving Credit Agreement with Sony BMG, which matures on August 5, 2009 and provides for a base commitment of 32.1 billion yen and additional
incremental borrowings of up to 16.1 billion yen, is not included in the above table or the amount of commitments outstanding at March 31, 2005 discussed below as such
amount is not currently determinable. Sony’s outstanding commitment under this Credit Agreement as of March 31, 2005 was 24.1 billion yen (Note 24).
The total amount of commitments outstanding at March 31,
2005 was 240.7 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
for the purchase of property, plant and equipment. As of March
31, 2005, such commitments outstanding were 83.7 billion yen.
A subsidiary in the Pictures segment has committed to fund a
portion of the production cost of completed films and is respon-
sible for all distribution and marketing expenses relating to these
films under a distribution agreement with a third party. Further,
certain subsidiaries in the Pictures segment have entered into
agreements with creative talent for the development and
production of films and television programming as well as
agreements with third parties to acquire completed films, or
certain rights therein. As of March 31, 2005, the total amount of
the expected cost for the production or purchase of films and
television programming or certain rights under the above
commitments was 82.1 billion yen.
In order to fulfill its commitments, Sony will use cash gener-
ated by its operating activities, intra-group loans and borrowings
from subsidiaries with excess funds to subsidiaries that are short
of funds through its finance subsidiaries such as SGTS, and
raise funds from the global capital markets and from banks
when necessary.
The following table summarizes Sony’s contingent liabilities as
of March 31, 2005.
Yen in millions
Total amounts of
contingent liabilities
Contingent Liabilities (Notes 24):
Loan guarantees to related parties . . . . . . . . 7,642
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,407
Total contingent liabilities . . . . . . . . . . . . . . . 26,049
OFF-BALANCE SHEET ARRANGEMENTS
Sony has several accounts receivable securitization programs to
provide liquidity, capital resources and credit risk support.
In the United States, Sony has set up an accounts receivable
securitization program that provides for the accelerated receipt
of up to 53.5 billion yen of cash on eligible trade accounts
receivable of Sony’s U.S. electronics subsidiary. Through this
program, Sony can securitize and sell a percentage of an
undivided interest in that pool of receivables to several multi-
seller commercial paper conduits owned and operated by a
bank. These securitization transactions are accounted for as a
sale in accordance with FAS No. 140, “Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities”, because Sony has relinquished control of the
receivables. Accordingly, accounts receivable sold under these
transactions are excluded from receivables in the accompanying
consolidated balance sheet. During the period from April 2004
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