Sony 2006 Annual Report Download - page 67

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CONTRACTUAL OBLIGATIONS, COMMITMENTS, AND CONTINGENT LIABILITIES
The following table summarizes Sony’s contractual obligations and major commitments as of March 31, 2006. References to Note
below represents a particular note within the Notes to Consolidated Financial Statements:
Yen in millions
Payments due by period
Less than
Total 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) . . . . . . . . . . . . . . . . . . . . . . . . .
38,280 16,966 12,642 4,342 4,330
Other long-term debt (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 920,173 176,589 306,063 172,851 264,670
Minimum rental payments required under operating leases (Note 9) . . . . . . 195,537 47,500 61,244 27,861 58,932
Purchase commitments for property, plant and equipment and
other assets (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69,286 65,135 4,124 27 —
Expected cost for the production or purchase of films and
television programming or certain rights (Note 24) . . . . . . . . . . . . . . . . . .
76,736 50,578 25,926 213 19
Partnership program contract with
Fédération Internationale de Football Association (Note 24) . . . . . . . . . . . 34,639 3,875 7,750 8,660 14,354
* 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, 2006 discussed
below as such amount is not currently determinable. Sony expects to contribute approximately ¥33.0 billion to the Japanese pension plans and approximately ¥6.0 billion
to the foreign pension plans during the fiscal year ending March 31, 2007 (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, 2006 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 ¥326.7 billion as of March 31, 2006 (Note 24).
* The 5 year Revolving Credit Agreement with Sony BMG, which matures on August 5, 2009 and provides for a base commitment of $300 million and additional incremental
borrowings of up to $150 million, is not included in the above table or the amount of commitments outstanding at March 31, 2006 discussed below as such amount is not
currently determinable. Sony’s outstanding commitment under this Credit Agreement as of March 31, 2006 was ¥26.3 billion (Note 24).
The total amount of commitments outstanding at March 31,
2006 was ¥285.8 billion (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,
2006, such commitments outstanding were ¥69.3 billion.
A subsidiary in the Pictures segment has committed to fund a
portion of the production cost of completed films and is
responsible 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, 2006, 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 ¥76.7 billion.
Sony Corporation has entered into a partnership program
contract with Fédération Internationale de Football Association
(“FIFA”). Through this program Sony Corporation will be able to
exercise various rights as an official sponsor of FIFA events from
2007 to 2014. As of March 31, 2006, Sony Corporation was
committed to make payments under such contract of ¥34.6 billion.
In order to fulfill its commitments, Sony will use cash
generated 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, 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, 2006.
Yen in millions
Total amounts of
contingent liabilities
Contingent Liabilities (Note 24):
Loan guarantees to related parties . . . . . . . . 9,325
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,747
Total contingent liabilities . . . . . . . . . . . . . . . . . 21,072
OFF-BALANCE SHEET ARRANGEMENTS
Sony has several off-balance sheet arrangements to provide
liquidity, capital resources and/or credit risk support.
During the fiscal year ended March 31, 2005, Sony entered
into new accounts receivable sales programs that provide for
the accelerated receipt of up to ¥47.5 billion of eligible trade
accounts receivable of Sony Corporation. Through these
programs, Sony can sell receivables to special purpose entities
owned and operated by banks. These transactions are