Sony 2015 Annual Report Download - page 163

SONY CORPORATION AND CONSOLIDATED SUBSIDIARIES
5. Investments in affiliated companies
The summarized combined financial information that is based on information provided by the equity
investees including information for significant equity affiliates and the reconciliation of such information to the
consolidated financial statements is shown below:
Balance Sheets
Yen in millions
March 31
2015 2016
Current assets 280,485 367,465
Noncurrent assets 770,847 773,126
Current liabilities 208,271 245,731
Noncurrent liabilities and noncontrolling interests 657,865 709,134
Percentage of ownership in equity investees 20%-50% 20%-50%
Statements of Income
Yen in millions
Fiscal year ended March 31
2014 2015 2016
Net revenues 306,383 308,399 358,256
Operating income (loss) (1,064) 34,962 32,884
Net income (loss) attributable to controlling interests (15,195) (5,461) 8,388
Percentage of ownership in equity investees 20%-50% 20%-50% 20%-50%
On June 29, 2012, an investor group which included a wholly-owned subsidiary of Sony Corporation
completed its acquisition of EMI Music Publishing. To effect the acquisition, the investor group formed DH
Publishing, L.P. (“DHP”), which acquired EMI Music Publishing for total consideration of 2.2 billion
U.S. dollars. Sony invested 320 million U.S. dollars in DHP, through Nile Acquisition LLC, for a 39.8% equity
interest. Nile Acquisition LLC is a joint venture with the third-party investor of Sony’s U.S.- based music
publishing subsidiary in which Sony holds a 74.9% ownership interest. Sony accounts for its interest in DHP
under the equity method. In addition, DHP entered into an agreement with Sony’s U.S.-based music publishing
subsidiary in which the subsidiary provides administration services to DHP. DHP was determined to be a
variable interest entity (“VIE”) as described in Note 23.
On February 25, 2013, Sony sold 95,000 shares of its 886,908 shares in its consolidated subsidiary M3, Inc.
(“M3”) to a third party for cash consideration of 14,236 million yen. In connection with the sale, Sony
deconsolidated M3 as its share ownership fell to 49.8% of the issued and outstanding shares of M3. On
September 17, 2013, Sony sold an additional 155,000 shares of M3 (9.75% of the issued and outstanding shares
of M3) to a third party for cash consideration of 37,799 million yen, which is included within other in the
investing activities section of the consolidated statements of cash flows. In connection with the sale, Sony
recorded a gain of 12,793 million yen in other operating expense, net in the consolidated statements of income
for the fiscal year ended March 31, 2014. Although Sony’s ownership has decreased to 39.36% due to the above-
mentioned sales and M3’s subsequent issuance of additional common stock, Sony remains a major shareholder of
M3 and will continue to pursue opportunities to collaborate with M3 in certain business areas, including medical.
Sony accounts for its remaining interest in M3 under the equity method.
The carrying value of Sony’s investment in M3 exceeded its proportionate share in the underlying net assets
of M3 by 85,519 million yen at March 31, 2016. The excess is substantially attributable to the remeasurement to
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