Sony 2007 Annual Report Download - page 77

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74
The following table contains available-for-sale and held to maturity securities, breaking out the unrealized gains and losses by
investment category.
Yen in millions
Unrealized Unrealized Fair market
March 31, 2007 Cost gain loss value
Financial Services Business:
Available for sale
Debt securities
Sony Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,129,352 17,679 (3,052) 2,143,979
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
381,663 5,983 (5,794) 381,852
Equity securities
Sony Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
210,009 105,376 (3,579) 311,806
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7,341 1,657 (40) 8,958
Held to maturity
Debt securities
Sony Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
————
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34,931 165 (127) 34,969
Total Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,763,296 130,860 (12,592) 2,881,564
Non-Financial Services:
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70,496 21,909 (3,770) 88,635
Held to maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,104 — — 1,104
Total Non-Financial Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
71,600 21,909 (3,770) 89,739
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,834,896 152,769 (16,362) 2,971,303
The most significant portion of these unrealized losses relate
to investments held by Sony Life. Sony Life principally invests in
debt securities in various industries. Almost all of these securi-
ties were rated “BBB” or higher by Standard and Poor’s Rating
Services (“S&P”), Moody’s Investors Service (“Moody’s”) or other
rating agencies. As of March 31, 2007, Sony Life had debt and
equity securities which had gross unrealized losses of 3.1 billion
yen and 3.6 billion yen, respectively. Of the unrealized loss
amounts recorded by Sony Life, approximately 46 percent relate
to securities being in an unrealized loss position for periods
greater than 12 months as of March 31, 2007. These unrealized
losses related to numerous investments, with no single invest-
ment being in a material unrealized loss position for the above-
mentioned periods. In addition, there was no individual security
with unrealized losses that met the test discussed above for
impairment as the declines in value were observed to be small
the security is 20 percent or more below its original cost for an
extended period of time (generally a period of up to six months).
The presumption of an other-than-temporary impairment in such
cases may be overcome if there is evidence to support the
conclusion that the decline is temporary in nature due to the
existence of other factors which overcome the duration or
magnitude of the decline. On the other hand, there may be
cases where impairment losses are recognized when the decline
in the fair value of the security is not more than 20 percent or
such decline has not existed for an extended period of time, as
a result of considering specific factors which may indicate the
decline in the fair value is other-than-temporary.
The assessment of whether a decline in the value of an
investment is other-than-temporary is often judgmental in nature
and involves certain assumptions and estimates concerning the
expected operating results, business plans and future cash
flows of the issuer of the security. Accordingly, it is possible that
investments in Sony’s portfolio that have had a decline in value
that Sony currently believes to be temporary may be determined
to be other-than-temporary in the future based on Sony’s
evaluation of additional information such as continued poor
operating results, future broad declines in value of worldwide
equity markets and the effect of worldwide interest rate fluctua-
tions. As a result, unrealized losses recorded for investments
may be recognized into income in future periods.