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54
INCOME BEFORE INCOME TAXES
Income before income taxes for the fiscal year ended March 31,
2008 increased 364.3 billion yen, or 357.0 percent, to 466.3
billion yen compared with the previous fiscal year, primarily as
a result of the increase in operating income and the gain on
the change in interest in subsidiaries and equity investees
mentioned above.
INCOME TAXES
During the fiscal year ended March 31, 2008, Sony recorded
203.5 billion yen of income taxes resulting in an effective tax rate
of 43.6 percent. In the previous fiscal year, the effective tax rate
was 52.8 percent and exceeded the Japanese statutory tax rate
as a result of losses recorded by certain overseas subsidiaries
with tax rates that are lower than the rate in Japan.
RESULTS OF AFFILIATED COMPANIES ACCOUNTED FOR
UNDER THE EQUITY METHOD
Equity in net income of affiliated companies during the fiscal
year ended March 31, 2008 was 100.8 billion yen, an increase
of 22.2 billion yen, or 28.2 percent compared to the previous
fiscal year. Equity in net income of affiliated companies reported
for Sony Ericsson Mobile Communications AB (“Sony Ericsson”)
was 79.5 billion yen, a decrease of 5.8 billion yen compared to
the previous fiscal year, due to higher research and develop-
ment expenses as a percentage of sales. Sony recorded equity
in net income of 10.0 billion yen for SONY BMG MUSIC
ENTERTAINMENT (“SONY BMG”), an increase of 5.0 billion yen
compared to the previous fiscal year primarily due to a reduc-
tion in restructuring costs compared to the previous fiscal year,
lower marketing costs, a reduction in overhead costs from con-
tinued restructuring, a gain on the sale of an interest in a joint
venture of SONY BMG and the favorable impact of currency
fluctuations. Sony recorded equity in net income of 7.4 billion
yen, a 2.4 billion yen increase compared to the prior fiscal year,
for S-LCD, a joint-venture with Samsung for the manufacture of
amorphous TFT LCD panels.
Sony did not record any equity gain or loss for Metro-
Goldwyn-Mayer Inc. (“MGM”) in the current fiscal year compared
to equity in net loss of 18.9 billion yen recorded in the prior fiscal
year. As of March 31, 2007, Sony no longer had any book basis
in MGM and, accordingly, no additional losses were recorded
during the fiscal year ended March 31, 2008.
Refer to Note of “Critical Accounting Policies.”
MINORITY INTEREST IN INCOME (LOSS) OF
CONSOLIDATED SUBSIDIARIES
In the fiscal year ended March 31, 2008, minority interest in loss
of consolidated subsidiaries of 5.8 billion yen was recorded
compared to minority interest in income of 0.5 billion yen in the
previous fiscal year. Minority interest in loss was recorded mainly
due to the loss recorded at SFH subsequent to the change in
Sony Corporation’s ownership. Sony Corporation’s ownership
percentage in SFH was reduced from 100 percent to 60 percent
after the global initial public offering of SFH shares during the
fiscal year ended March 31, 2008. The operating results of SFH
in the second half of the fiscal year ended March 31, 2008 were
negatively impacted mainly by the deterioration in net valuation
gains from convertible bonds and an impairment loss on equity
securities at Sony Life.
NET INCOME
Net income for the fiscal year ended March 31, 2008 increased
by 243.1 billion yen, or 192.4 percent, to 369.4 billion yen com-
pared with the previous fiscal year. As a percentage of sales, net
income increased from 1.5 percent to 4.2 percent. Return on
stockholders’ equity increased from 3.8 percent to 10.8 percent.
(This ratio is calculated by dividing net income by the simple
average of stockholders’ equity at the end of each fiscal year
and the previous fiscal year.)
Basic net income per share was 368.33 yen compared with
126.15 yen in the previous fiscal year, and diluted net income
per share was 351.10 yen compared with 120.29 yen in the
previous fiscal year. Refer to Notes 2 and 21 of Notes to
Consolidated Financial Statements.
Net income and ROE
■¥Net income
●¥ROE
*Years ended March 31
(Yen in billions) (%) (Yen)
Net income per share of
common stock
■¥Basic
■¥Diluted
* Years ended March 31
16
12
8
4
0
400
300
200
100
02006 2007 2008
4.1% 3.8%
10.8%
400
300
200
100
02006 2007 2008