Sony 2006 Annual Report Download - page 132

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(2) EPS attributable to common stock:
Reconciliation of the differences between basic and diluted EPS for the fiscal years ended March 31, 2004, 2005 and 2006 is as follows:
Dollars in
Yen in millions millions
Years ended March 31 2004 2005 2006 2006
Income before cumulative effect of an accounting change allocated to common stock . . . ¥90,756 ¥168,498 ¥122,308 $1,046
Effect of dilutive securities:
Convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,260 1,209 ——
Subsidiary tracking stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —(0) (29) (0)
Income before cumulative effect of an accounting change allocated to common stock
for diluted EPS computation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥93,016 ¥169,707 ¥122,279 $1,046
Thousands of shares
Weighted-average shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 923,650 931,125 997,781
Effect of dilutive securities:
Warrants and stock acquisition rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48 61 915
Convertible bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,120 112,589 47,468
Weighted-average shares for diluted EPS computation . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044,818 1,043,775 1,046,164
YenDollars
Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥98.26.¥180.96.¥122.58.$1.05.
Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥89.03.¥162.59.¥116.88.$1.00.
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stock. All shares of subsidiary tracking stock were converted to
shares of Sony common stock on December 1, 2005. As a
result of the conversion, the earnings allocated to common
stock for the fiscal year ended March 31, 2006 are calculated by
subtracting the earnings allocated to the subsidiary tracking
stock for the eight months ended November 30, 2005. The
accumulated gains of SCN used for computation of earnings
per share attributable to subsidiary tracking stock were ¥8,578
million as of November 30, 2005.
Potential common stock upon the exercise of warrants and
stock acquisition rights, which were excluded from the compu-
tation of diluted EPS since they have an exercise price in excess
of the average market value of Sony’s common stock during the
fiscal year, were 6,796 thousand shares, 7,987 thousand shares
and 10,483 thousand shares for the fiscal years ended March 31,
2004, 2005 and 2006, respectively.
Warrants and stock acquisition rights of subsidiary tracking
stock for the fiscal year ended March 31, 2004 which have a
potentially dilutive effect by decreasing net income allocated to
common stock, were excluded from the computation of diluted
EPS since they did not have a dilutive effect.
Stock options issued by affiliated companies accounted for
under the equity method for the fiscal years ended March 31,
2004, 2005 and 2006, which have a potentially dilutive effect by
decreasing net income allocated to common stock, were
excluded from the computation of diluted EPS since such stock
options did not have a dilutive effect.
On May 1, 2003, Sony implemented a share exchange as a
result of which CIS Corporation became a wholly-owned subsid-
iary. As a result of this share exchange, Sony issued 1,088
thousand shares. The shares were included in the computation
of basic and diluted EPS.
As a result of the adoption of EITF Issue No. 04-8, Sony’s
diluted EPS of income before cumulative effect of an accounting
change for the fiscal year ended March 31, 2004 was restated in
the above table (Note 2).
(3) EPS attributable to subsidiary tracking stock:
Weighted-average shares used for computation of EPS attribut-
able to subsidiary tracking stock for the fiscal years ended
March 31, 2004 and 2005 were 3,072 thousand shares. At
March 31, 2004 and 2005, there were no potentially dilutive
securities for net income per subsidiary tracking stock, as
tracking stock shares outstanding were increased upon potential
subsidiary tracking stocks’ being exercised, which resulted in a
proportionate increase in earnings allocated to the subsidiary
tracking stock. However, they could have a dilutive effect on
net income per common stock, as earnings allocated to the
common stock would be decreased.
As discussed, all shares of subsidiary tracking stock were
converted to shares of Sony common stock on December 1,