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99
Quarterly Financial and Stock Information
Sony Corporation and Consolidated Subsidiaries—Years ended March 31 (Unaudited)
Yen in billions (Yen per share amounts)
1st quarter 2nd quarter 3rd quarter 4th quarter
2006 2007 2006 2007 2006 2007 2006 2007
Sales and operating revenue . . . . . . .
¥1,568.1.¥1,744.2.¥1,711.6.¥1,854.2.¥2,375.1.¥2,607.7.¥1,855.7.¥2,089.6.
Operating income (loss) . . . . . . . . . . .
(6.6.)27.0.74.6.(20.8.)210.3.178.9.(51.9.)(113.4.)
Income (loss) before income taxes . . .
12.9.54.0.95.4.(26.1.)225.9.179.8.(47.9.)(105.7.)
Income taxes . . . . . . . . . . . . . . . . . . .
12.1.24.8.65.1.(7.6.)75.7.61.5.23.6.(24.9.)
Equity in net income (loss) of affiliated
companies . . . . . . . . . . . . . . . . . . . .
(9.1.)3.6.(2.6.)19.7.19.5.43.0.5.4.12.3.
Net income (loss) . . . . . . . . . . . . . . . .
(7.3.)32.3.28.5.1.7.168.9.159.9.(66.5.)(67.6.)
Per share data of common stock
Net income (loss)
—Basic . . . . . . . . . . . . . . . . . . . .
¥ (8.68.)¥ 32.25.¥ 28.63.¥ 1.68.¥ 169.36.¥ 159.70.¥ (66.48.)¥ (67.44.)
—Diluted . . . . . . . . . . . . . . . . . . .
(8.68.)30.75.27.32.1.60.161.60.152.49.(66.48.)(67.44.)
Depreciation and amortization* . . . . .
¥ 88.7.¥ 91.3.¥ 92.8.¥ 93.7.¥ 96.8.¥ 99.9.¥ 103.6.¥ 115.2.
Capital expenditures
(additions to fixed assets) . . . . . . . . .
98.0.134.1.87.8.90.0.76.1. 88.0.122.4.102.1.
R&D expenses . . . . . . . . . . . . . . . . . .
118.4.119.4.131.4.143.5.121.7.133.5.160.4.147.6.
Tokyo Stock Exchange price per
share of common stock:
High . . . . . . . . . . . . . . . . . . . . . . . .
¥ 4,410 ¥ 6,200 ¥ 4,100 ¥ 5,360 ¥ 5,020 ¥ 5,190 ¥ 6,040 ¥ 6,540
Low . . . . . . . . . . . . . . . . . . . . . . . .
3,770 4,660 3,660 4,610 3,710 4,340 4,700 5,120
New York Stock Exchange price
per American Depositary Share:
High . . . . . . . . . . . . . . . . . . . . . . . .
$ 40.79.$ 52.29 .$ 36.74.$ 46.40.$ 41.30.. $ 43.78.$ 51.16.$ 53.34.
Low . . . . . . . . . . . . . . . . . . . . . . . .
34.38.40.67 .32.38.39.30.31.80.37.24.40.90.42.73.
*Including amortization expenses for intangible assets and for deferred insurance acquisition costs
Notes: 1. Effective April 1, 2006, Sony adopted FAS No. 123 (revised 2004), “Share-Based Payment” (“FAS No. 123(R)”). This statement requires the use of the fair value based
method of accounting for employee stock-based compensation and eliminates the alternative to use the intrinsic value method prescribed by APB No. 25. With
limited exceptions, FAS No. 123(R) requires that the grant-date fair value of share-based payments to employees be expensed over the period the service is received.
Sony had accounted for its employee stock-based compensation in accordance with the provisions prescribed by APB No. 25 and its related interpretations and had
disclosed the net effect on net income and net income per share (“EPS”) allocated to the common stock as if Sony had applied the fair value recognition provisions
of FAS No. 123 to stock-based compensation as described in Note 2 to the Consolidated Financial Statements, “Significant accounting policies—Stock-based
compensation.” Sony has elected the modified prospective method of transition prescribed in FAS No. 123(R), which requires that compensation expense be
recorded for all unvested stock acquisition rights as the requisite service is rendered beginning with the first period of adoption. As a result of the adoption of
FAS No. 123(R), Sony’s operating income decreased by 3,670 million yen for the fiscal year ended March 31, 2007.
2. In February 2006, the FASB issued FAS No. 155, “Accounting for Certain Hybrid Financial Instruments,” an amendment of FAS No. 133 and FAS No. 140. This
statement permits an entity to elect fair value remeasurement for any hybrid financial instrument if the hybrid instrument contains an embedded derivative that
would otherwise be required to be bifurcated and accounted for separately under FAS No. 133. The election to measure the hybrid instrument at fair value is made
on an instrument-by-instrument basis and is irreversible. The statement is effective for all financial instruments acquired, issued, or subject to a remeasurement
event occurring after the beginning of an entity’s fiscal year beginning after September 15, 2006, with earlier adoption permitted as of the beginning of the fiscal
year, provided that financial statements for any interim period of that fiscal year have not been issued. Sony early adopted FAS No. 155 on April 1, 2006. As a result of
the adoption of FAS No. 155, Sony’s operating income increased by 3,828 million yen for the fiscal year ended March 31, 2007. Additionally, on April 1, 2006, Sony
recognized a net charge of 3,785 million yen (net of income taxes of 2,148 million yen) as a cumulative-effect adjustment to beginning retained earnings, which
consisted of 1,754 million yen (net of income taxes of 996 million yen) of gross gains and 5,539 million yen (net of income taxes of 3,144 million yen) of gross losses.
3. In September 2006, the FASB issued FAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” an amendment to FASB
Statements No. 87, 88, 106 and 132(R). FAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit pension and
other postretirement benefit plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which
the changes occur through other comprehensive income. FAS No. 158 was adopted by Sony in the financial statements for the year ended March 31, 2007. FAS
No. 158 also requires companies to measure the funded status of the plan as of the date of its fiscal year-end, effective for years ending after December 15, 2008.
Sony expects to adopt the measurement provisions of FAS No. 158 effective March 31, 2009. The impact of adopting FAS 158 was a 9,508 million yen reduction
in accumulated other comprehensive income. Refer to Note 14 to the Consolidated Financial Statements, “Pension and severance plans,” for further details.
4. Effective April 1, 2006, Sony reclassified royalty income as a component of sales and operating revenue, rather than as a component of other income as previously
recorded. In connection with this reclassification, sales and operating revenue, operating income and other income for the fiscal years ended March 31, 2003,
2004, 2005 and 2006 have been reclassified to conform with the presentation of these items for the fiscal year ended March 31, 2007. The amounts of royalty
income reclassified from other income to sales and operating revenue for the fiscal years ended March 31, 2003, 2004, 2005 and 2006 were 32,375, 34,244,
31,709, and 35,161 million yen, respectively. In addition to the above, certain reclassifications of the financial statements for the fiscal years ended March 31,
2003, 2004, 2005 and 2006 have been made to conform to the presentation for the fiscal year ended March 31, 2007.