Sony 2006 Annual Report Download - page 106

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104
8. Marketable securities and securities investments and other
Marketable securities and securities investments and other include debt and equity securities of which the aggregate cost, gross
unrealized gains and losses and fair value pertaining to available-for-sale securities and held-to-maturity securities are as follows:
Yen in millions
March 31, 2005 March 31, 2006
Gross Gross Gross Gross
unrealized unrealized unrealized unrealized
Cost gains losses Fair value Cost gains losses Fair value
Available-for-sale:
Debt securities . . . . . . . . . . . . . . . . . .
¥2,090,605 ¥ 58,161 ¥(2,464) ¥2,146,302 ¥2,522,864 ¥ 17,021 ¥(22,810) ¥2,517,075
Equity securities . . . . . . . . . . . . . . . . .
107,126 49,350 (814) 155,662 227,079 171,921 (1,589) 397,411
Held-to-maturity securities . . . . . . . . . . .
27,431 530 (13) 27,948 33,193 132 (221) 33,104
Total . . . . . . . . . . . . . . . . . . . . . . . . . .
¥2,225,162 ¥108,041 ¥(3,291) ¥2,329,912 ¥2,783,136 ¥189,074 ¥(24,620) ¥2,947,590
Dollars in millions
March 31, 2006
Gross Gross
unrealized unrealized
Cost gains losses Fair value
Available-for-sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$21,563 $ 145 $(195) $21,513
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,941 1,470 (14) 3,397
Held-to-maturity
securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
283 1 (1) 283
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$23,787 $1,616 $(210) $25,193
was in March 2005 in which Sony sold a total of ¥10,041 million.
Sony sold a total of ¥146,193 million ($1,250 million) of receiv-
ables during the fiscal year ended March 31, 2006. Losses from
these transactions were insignificant. Although Sony continues
servicing the sold receivables, no servicing liabilities are
recorded because costs for collection of the sold receivables
are insignificant.
Through May 2005, Sony had set up an accounts receivable
securitization program in the United States of America whereby
Sony could sell interests in up to $500 million of eligible trade
accounts receivable, as defined. Through this program, Sony
could 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. Sony could sell receiv-
ables in which the agreed upon original due dates were no more
than 90 days after the invoice dates. The value assigned to
undivided interests retained in securitized trade receivables was
based on the relative fair values of the interest retained and sold
in the securitization. Sony had assumed that the fair value of
the retained interest was equivalent to its carrying value as
the receivables were short-term in nature, high quality and had
appropriate reserves for bad debt incidence. These securitization
transactions were accounted for as a sale in accordance with
FAS No. 140, because Sony had relinquished control of the
receivables. During the period from April 2004 to January 2005,
Sony sold a total of ¥80,250 million of accounts receivable
under this program. There were no outstanding amounts due
at March 31, 2005 relating to the existing undivided interests in
the pool of receivables that had been sold. Losses from these
transactions were insignificant. This program was terminated
in May 2005.
At March 31, 2006, debt securities classified as available-for-
sale securities and held-to-maturity securities mainly consist of
Japanese government and municipal bonds and corporate debt
securities with maturities of one to ten years.
Proceeds from sales of available-for-sale securities were
¥397,817 million, ¥613,035 million and ¥524,268 million ($4,481
million) for the fiscal years ended March 31, 2004, 2005 and
2006, respectively. On those sales, gross realized gains com-
puted on the average cost basis were ¥9,525 million, ¥24,080
million and ¥68,096 million ($582 million) and gross realized
losses were ¥1,906 million, ¥5,940 million and ¥3,143 million
($27 million), respectively.
Marketable securities classified as trading securities at
March 31, 2005 and 2006 were ¥315,946 million and ¥401,561
million ($3,432 million), respectively, which consist of debt and
equity securities including short-term investments in money
market funds.
In the ordinary course of business, Sony maintains long-term
investment securities, included in securities investments and
other, issued by a number of non-public companies. The