Sony 2008 Annual Report Download - page 58

56
Selling, general and administrative expenses decreased by
34.0 billion yen, or 3.1 percent to 1,072.2 billion yen compared
with the previous fiscal year. Although advertising and marketing
expenses and personnel expenses increased for the fiscal year
ended March 31, 2008, selling, general and administrative
expenses decreased as a provision of 51.2 billion yen was
recorded in the previous fiscal year for charges related to the
notebook computer battery pack recalls and subsequent global
replacement program, while a portion of the provision totaling
15.7 billion yen was reversed in the fiscal year ended March 31,
2008 based on the actual results of recalls and replacements as
compared to original estimates. An additional provision was
recorded during the fiscal year for free repair expenses relating
to Sony products and the products of other companies contain-
ing Sony-made CCDs, but this amount was less than in the
previous year. Of the restructuring charges recorded in the
Electronics segment, the amount recorded in selling, general
and administrative expenses decreased by 1.4 billion yen from
14.0 billion yen in the previous fiscal year to 12.6 billion yen. This
12.6 billion yen was for headcount reductions, including reduc-
tions through the early retirement program. The ratio of selling,
general and administrative expenses to sales decreased 2.0
percentage points from the 18.2 percent recorded in the
previous fiscal year to 16.2 percent.
Loss on sale, disposal or impairment of assets, net
increased 2.6 billion yen to 13.5 billion yen compared with
the previous fiscal year. This amount includes a 6.7 billion
yen loss on sale, disposal or impairment of assets, net on
LCD rear-projection televisions.
The amount of operating income recorded in the Electronics
segment for the fiscal year ended March 31, 2008 increased
significantly due to the impact of the provision recorded in the
previous fiscal year for charges related to the notebook com-
puter battery pack recalls and subsequent global replacement
program, the reversal of a portion of the provision in the fiscal
year ended March 31, 2008, increased sales of the segment,
and the positive impact of the depreciation of the yen against
the euro. Also contributing to the increase in Electronics
segment profit was the recording of a 15.6 billion yen gain
relating to the sale of a portion of Sony’s semiconductor
operations in Nagasaki, Japan, including machinery and
equipment. Regarding profit performance by product, profit-
ability of products such as LCD televisions worsened due to
unit selling price declines while profit increased mainly for PCs
and compact digital cameras, which experienced higher sales,
for system large-scale integration (“LSIs”), which saw an
increase in sales of semiconductors for the Game segment,
and for home-use video cameras, which experienced increased
sales of high value-added models.
Sales of home-use video cameras increased as worldwide
unit shipments increased by approximately 250,000 units to
approximately 7.7 million units. Sales of Blu-ray Disc™
recorders and players also increased. On the other hand,
sales of DVD recorders and players decreased, with unit
shipments of DVD recorders decreasing by approximately
150,000 units to approximately 1.7 million units and unit
shipments of DVD players decreasing by approximately
900,000 units to approximately 7.0 million units.
“Televisions” sales increased by 140.1 billion yen, or 11.4
percent, to 1,367.1 billion yen. There was a significant
increase in worldwide sales of LCD televisions, as worldwide
shipments increased by approximately 4.3 million units, to
approximately 10.6 million units. On the other hand, there was
a decrease in sales of LCD rear-projection and CRT televisions
as Sony decided to exit these businesses due to the shrinking
market for these products.
“Information and Communications” sales increased by
148.1 billion yen, or 15.6 percent, to 1,098.6 billion yen.
Sales of PCs increased as worldwide unit shipments
increased by approximately 1.2 million units to approximately
5.2 million units. Sales of broadcast- and professional-use
products increased as a result of favorable sales of high-
definition (“HD”) related products.
“Semiconductors” sales increased by 23.0 billion yen, or 11.2
percent, to 228.7 billion yen. The increase was primarily due to
an increase in sales of CCDs and CMOS image sensors.
“Components” sales decreased by 5.9 billion yen, or 0.7
percent, to 847.1 billion yen. Sales of lithium-ion batteries and
low-temperature polysilicon TFT LCD panels for mobile devices
increased. On the other hand, sales of DVD+/-R/RW drives
decreased due to a decline in unit selling prices, although unit
sales increased in association with an expansion of the market.
“Other” sales increased by 11.2 billion yen, or 2.1 percent, to
552.4 billion yen. Although sales of mobile phones produced for
wireless customers in Japan and Europe decreased, sales of the
disc manufacturing business increased.
In the Electronics segment, cost of sales for the fiscal year
ended March 31, 2008 increased by 372.4 billion yen, or 7.8
percent to 5,154.6 billion yen compared with the previous fiscal
year. The cost of sales ratio improved by 0.9 percentage points
to 77.9 percent compared to 78.8 percent in the previous fiscal
year. While the cost of sales ratio of such products as PCs,
compact digital cameras and home-use video cameras
improved, the cost of sales ratio of products such as LCD
televisions deteriorated. Restructuring charges recorded in cost
of sales amounted to 19.5 billion yen, an increase of 7.0 billion
yen compared with the 12.6 billion yen recorded in the previous
fiscal year. Research and development costs decreased 1.6
billion yen, or 0.4 percent, from 440.4 billion yen in the previous
fiscal year to 438.7 billion yen.