Sony 2006 Annual Report Download - page 21

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19
ALL OTHERPICTURES FINANCIAL
SERVICES
9.3% 9.3% 5.1%
■
Sales
■
Operating income
■Financial Services revenue
■Operating income ■Sales
■Operating income (loss)
2004 2005 2006
2004 2005 2006
2004 2005 2006
●Business sales increased 1.7% due to the
depreciation of the yen. On a U.S. dollar basis,
however, sales decreased 4%.
●The decline in sales on a U.S. dollar basis was
due primarily to lower worldwide theatrical and
home entertainment revenues on feature films.
●The lower theatrical and home entertainment
revenues primarily resulted from the significant
contribution of Spider-Man 2 in the previous
period coupled with the disappointing
performances of certain films released during
the period under review.
●Lower theatrical and home entertainment
revenues were also the principal reasons for
a 57.1% decline in operating income.
The Pictures business encompasses motion
pictures, television programming and other
businesses conducted by Sony Pictures
Entertainment Inc.
2006/2005
(Percent
(Yen in billions, %) 2004 2005 2006 change)
Sales
¥756.4.¥733.7.¥ 745.9.+1.7.%
Operating income
35.2.63.9.27.4.–57.1.%
Operating margin
4.7.8.7.3.7.
Assets
856.5.863.1.1,029.9.
●Revenue in this business advanced 32.6%,
primarily reflecting higher revenue at Sony Life.
●Sony Life’s revenue increase was due mainly to
an improvement in gains and losses from invest-
ments prompted by favorable stock market
conditions in Japan and higher revenue from
insurance premiums, owing to an increase of
insurance-in-force.
●Operating income rose 239.4%, primarily as a
result of the improvement in gains and losses
from investments in the general account at
Sony Life.
●Sony Life’s solid results were largely attributable
to an improvement in valuation gains on stock
conversion rights in convertible bonds, reflecting
favorable Japanese stock market conditions.
The Financial Services business comprises the
businesses of Sony Life Insurance Co., Ltd. (Sony
Life), Sony Assurance Inc., Sony Bank Inc. and
Sony Finance International, Inc.
2006/2005
(Percent
(Yen in billions, %) 2004 2005 2006 change)
Financial services
revenues ¥ 593.5.¥ 560.6.¥ 743.2.+32.6.%
Operating income 55.2.55.5.188.3.+239.4.%
Operating margin 9.3.0.9.9.25.3.
Assets 3,475.0.3,885.5.4,565.6.
●Sales in this business declined 11.1%.
●In the previous period, business sales included
sales of SMEI’s recorded music business for four
months, which was combined to form the SONY
BMG MUSIC ENTERTAINMENT joint venture,
accounted for using the equity method.
●Sales at SMEJ were largely unchanged from the
previous period.
●Sales increased in businesses other than music.
●Operating income increased 286.4%.
●Operating income reflected the fact that results
for SMEI’s recorded music business, which
registered a loss in the previous period, are now
accounted for as part of the SONY BMG MUSIC
ENTERTAINMENT joint venture, as well as a
strong performance by SMEJ.
●Businesses other than music posted a collective
operating loss mainly due to an asset impairment
write-down associated with the sale of a U.S.
entertainment complex. This was offset to some
extent by cost reductions at network-related
businesses within Sony Corporation.
This comprises a variety of businesses, including
the music content business of Sony Music
Entertainment (Japan) Inc. (SMEJ), the music
publishing business of Sony Music Entertainment
Inc. (SMEI), the network services business of
Sony Communication Network Corporation (SCN),
and an animation products production and
marketing business.
2006/2005
(Percent
(Yen in billions, %) 2004 2005 2006 change)
Sales ¥662.8.¥459.9.¥408.9.–11.1.%
Operating income
(loss) (16.2.)4.2.16.2.+286.4.%
Operating margin — 0.9.4.0.%
Assets 763.9.577.7.617.9.
(Yen in billions) (Yen in billions) (Yen in billions)
(Continued from previous page)
As a result of these changes in the Music business segment, Sony no longer breaks out the Music business segment as a reportable business as it no longer meets the materiality threshold.
Effective April 1, 2005, results for the Music business segment are included within All Other. Accordingly, results for the corresponding period of the year ended March 31, 2005, in the
Electronics business segment and All Other have been restated to conform to the presentation for the period under review.
408.9
662.8
16.2
(16.2)
743.2 188.3
593.5
55.2
745.9
27.4
756.4
35.2
733.7
63.9 560.6
55.5
459.9
4.2