Sony 2006 Annual Report Download - page 127

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125
The changes in the accrued restructuring charges for the fiscal years ended March 31, 2004, 2005 and 2006 are as follows:
Yen in millions
Employee Non-cash Other
termination write-downs associated
benefits and disposals costs Total
Balance at March 31, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥ 14,784 — ¥ 5,787 ¥ 20,571
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
133,367 ¥ 19,170 15,554 168,091
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—(19,170) — (19,170)
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(124,674) — (13,686) (138,360)
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,173 — 333 1,506
Balance at March 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24,650 — 7,988 32,638
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53,563 25,564 10,836 89,963
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—(25,564) — (25,564)
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61,523) — (10,427) (71,950)
Adjustments* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,705) — (3,096) (4,801)
Balance at March 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,985 — 5,301 20,286
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48,255 76,999 13,438 138,692
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—(76,999) — (76,999)
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(42,152) — (7,929) (50,081)
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,227) — 3 (1,224)
Balance at March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
¥ 19,861 — ¥ 10,813 ¥ 30,674
Dollars in millions
Employee Non-cash Other
termination write-downs associated
benefits and disposals costs Total
Balance at March 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 128 — $ 45 $ 173
Restructuring costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
412 $ 658 115 1,185
Non-cash charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—(658) — (658)
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(360) — (68) (428)
Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10) — 0 (10)
Balance at March 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 170 — $ 92 $ 262
*Adjustments primarily consist of the transfer of the accrued restructuring charges to SONY BMG, a joint venture with Bertelsmann AG (Note 6).
During the fiscal year ended March 31, 2006, the worldwide
restructuring program was completed and Sony recorded
additional restructuring charges totaling ¥129 million ($1 million),
primarily consisting of other associated restructuring costs.
Restructuring activities included the further shutdown of certain
distribution operations that were no longer required as a result of
the recorded music joint venture with Bertelsmann AG. These
charges are included in selling, general and administrative
expenses in the consolidated statements of income.
All Other (U.S. Entertainment Complex)
As part of its efforts to restructure and eliminate certain non-core
businesses, Sony reached an agreement to sell a U.S. entertain-
ment complex in March 2006. As a result, Sony recorded an
impairment charge of ¥8,522 million ($73 million). The impair-
ment charge was based on the negotiated sales price of the
complex, and is recorded in loss on sale, disposal or impairment
of assets, net in the consolidated statements of income.
19. Research and development costs, advertising
costs and shipping and handling costs
(1) Research and development costs:
Research and development costs charged to cost of sales for
the fiscal years ended March 31, 2004, 2005 and 2006 were
¥514,483 million, ¥502,008 million and ¥531,795 million ($4,545
million), respectively.
(2) Advertising costs:
Advertising costs included in selling, general and administrative
expenses for the fiscal years ended March 31, 2004, 2005 and
2006 were ¥421,433 million, ¥359,661 million and ¥419,508
million ($3,586 million), respectively.