Form 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of October 2007
Commission File Number: 001-06439
SONY CORPORATION
(Translation of registrant's name into English)
1-7-1 KONAN, MINATO-KU, TOKYO, 108-0075, JAPAN
(Address of principal executive offices)
The registrant files annual reports under cover of Form 20-F.
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F,
Form 20-F X Form 40-F __
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934,
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):82-______
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SONY CORPORATION
(Registrant)
By: /s/ Nobuyuki Oneda
(Signature)
Nobuyuki Oneda
Executive Vice President and
Chief Financial Officer
Date: October 25, 2007
List of materials
Documents attached hereto:
i) Press release announcing Consolidated Financial Results for the Second
Quarter Ended September 30, 2007
Sony Corporation
1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan
No: 07-121E
3:00 P.M. JST, October 25, 2007
Consolidated Financial Results
for the Second Quarter Ended September 30, 2007
Tokyo, October 25, 2007 -- Sony Corporation today announced its consolidated
results for the second quarter of the fiscal year ending March 31, 2008 (July 1,
2007 to September 30, 2007).
(Billions of yen, millions of U.S. dollars, except per share amounts)
Second quarter ended September 30
2006 2007 Change 2007*
in yen
--------- --------- --------- ---------
Sales and operating Y1,854.2 Y2,083.0 +12.3% $18,113
revenue
Operating income (loss) (20.8) 90.5 - 787
Income (loss) before (26.1) 87.9 - 765
income taxes
Equity in net income of 19.7 21.1 +7.2 184
affiliated companies
Net income 1.7 73.7 +4,287.8 641
Net income per share of
common stock
- Basic Y1.68 Y73.50 +4,275.0 $0.64
- Diluted 1.60 70.09 +4,280.6 0.61
Unless otherwise specified, all amounts are presented on the basis of
Generally Accepted Accounting Principles in the U.S. ("U.S. GAAP").
* U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of Y115=U.S.$1, the approximate Tokyo foreign exchange
market rate as of September 28, 2007.
Consolidated Results for the Second Quarter Ended September 30, 2007
--------------------------------------------------------------------
Sales and operating revenue ("sales") increased 12.3% (a 9% increase on a
local currency basis) compared with the same quarter of the previous
fiscal year ("year-on-year"). (For all references herein to sales on a
local currency basis.)
Electronics segment sales increased 20.7% (a 17% increase on a local
currency basis). Products such as BRAVIA(TM) LCD televisions, VAIO(TM) PCs
and Cyber-shot(TM) digital cameras contributed to the sales increase;
however, sales declined for products such as LCD rear-projection
televisions. In the Game segment, sales increased 42.9% year-on-year
primarily as a result of the contribution to sales from PLAYSTATION(R)3
("PS3"), which was released during the second half of the last fiscal
year. In the Pictures segment, there was a 6.4% increase in sales
primarily due to higher sales of theatrically released and
made-for-television movies in the television market. In the Financial
Services segment, revenue decreased by 6.3% year-on-year mainly due to a
deterioration in net gains from investments in the separate account and
in net valuation gains from convertible bonds in the general account at
Sony Life Insurance Co., Ltd. ("Sony Life").
Operating income was Y90.5 billion ($787 million) compared to an
operating loss of Y20.8 billion in the second quarter of the previous
fiscal year.
In the Electronics segment, operating income increased significantly
year-on-year mainly due to a Y51.2 billion provision recorded in the
second quarter of the previous fiscal year for charges related to recalls
by certain notebook computer makers and the subsequent global replacement
program by Sony and certain notebook computer makers involving battery
packs containing Sony-manufactured battery cells. In addition, an
increase in sales of semiconductors to the Game segment and the positive
impact from the depreciation of the yen against the U.S. dollar and the
euro contributed to the increase. In the Game segment, operating loss
increased primarily due to the loss arising from strategic pricing of PS3
at points lower than its production cost. In the Pictures segment,
operating income improved mainly due to lower marketing expenses as a
result of a decrease in the number of theatrical releases during the
current quarter. In the Financial Services segment, there was a decrease
in operating income mainly attributable to the deterioration in net
valuation gains from convertible bonds in the general account at Sony
Life. Operating income for the current quarter also includes a gain on
the sale of a portion of the site of Sony's former headquarters of Y60.7
billion ($528 million).
Restructuring charges, which amounted to Y18.5 billion ($161 million) for
the quarter compared to Y5.3 billion for the same quarter of the previous
fiscal year, were recorded as operating expenses this quarter.
Substantially all of these restructuring charges in both years relate to
the Electronics segment.
Income before income taxes was Y87.9 billion ($765 million) compared to a
loss before income taxes of Y26.1 billion in the same quarter of the
prior fiscal year. Despite an increase of loss on devaluation of
securities investments, there was a slight improvement in the net effect
of other income and expenses primarily due to the recording of a net
foreign exchange gain in the current quarter versus the net foreign
exchange loss recorded in the same quarter of the previous fiscal year.
Income taxes: During the current quarter, Sony recorded Y34.9 billion
($304 million) of income taxes resulting in an effective tax rate of
39.7%.
Equity in net income of affiliated companies increased 7.2% year-on-year
to Y21.1 billion ($184 million). Sony recorded equity in net income for
Sony Ericsson Mobile Communications AB ("Sony Ericsson") of Y21.1 billion
($183 million), a decrease of Y0.7 billion year-on-year. Sony recorded
equity in net loss of Y0.5 billion ($4 million) for SONY BMG MUSIC
ENTERTAINMENT ("SONY BMG"), an improvement of Y1.8 billion compared to
the same quarter of the previous fiscal year, primarily due to lower
marketing, overhead and restructuring costs. Equity in net loss of Y0.5
billion ($5 million) was recorded for S-LCD Corporation ("S-LCD"), a
joint-venture with Samsung Electronics Co., Ltd., compared to equity in
net income of Y2.9 billion in the same quarter of the previous fiscal
year.
Sony did not record any equity gain or loss for Metro-Goldwyn-Mayer Inc.
("MGM") in the current quarter compared to equity in net loss of Y2.8
billion recorded in the same quarter of the prior fiscal year. As of
March 31, 2007, Sony no longer has any book basis in MGM and accordingly,
no additional losses are recorded.
As a result of the changes in the items discussed above, net income
increased Y72.0 billion year-on-year to Y73.7 billion ($641 million).
Operating Performance Highlights by Business Segment
----------------------------------------------------
"Sales and operating revenue" in each business segment represents sales
and operating revenue recorded before intersegment transactions are
eliminated. "Operating income (loss)" in each business segment represents
operating income (loss) recorded before intersegment transactions and
unallocated corporate expenses are eliminated.
Electronics
-----------
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change in 2007
yen
-------- -------- -------- --------
Sales and operating revenue Y1,378.4 Y1,663.1 +20.7% $14,461
Operating income 8.0 106.9 +1,231.6% 930
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales increased by 20.7% year-on-year (a 17% increase on a local currency
basis). Sales to outside customers increased 11.7% year-on-year. There
was an increase in sales of products including BRAVIA LCD televisions,
which experienced higher sales in all regions, VAIO PCs, which recorded
favorable sales outside of Japan, and Cyber-shot digital cameras, which
experienced favorable sales in all regions. On the other hand, there was
a decrease in sales of products including LCD rear-projection televisions,
the market for which is shrinking. There was also a significant
increase in intersegment sales mainly due to increased sales of
semiconductors to the Game segment.
Operating income of Y106.9 billion ($930 million) was recorded, a
1,231.6% increase year-on-year. This was primarily the result of a Y51.2
billion provision recorded in the second quarter of the previous fiscal
year for charges related to the notebook computer battery pack recalls
and subsequent global replacement program, as well as an increase in
sales and a positive impact from the depreciation of the yen against the
U.S. dollar and the euro. With regard to products within the Electronics
segment, the improvement was mainly attributable to system LSIs, which
saw an increase in sales of semiconductors for PS3, VAIO PCs, and
Cyber-shot digital cameras. This was partially offset by a decrease in
contribution from other products including LCD rear-projection
televisions.
Inventory, as of September 30, 2007, was Y1,006.6 billion ($8,753
million), which increased Y35 billion, or 3.6%, compared with the level
as of September 30, 2006 and an increase of Y78.2 billion, or 8.4%,
compared with the level as of June 30, 2007.
Operating Results for Sony Ericsson Mobile Communications AB
------------------------------------------------------------
The following operating results for Sony Ericsson, which is accounted for
by the equity method, are not consolidated in Sony's consolidated
financial statements. However, Sony believes that this disclosure
provides additional useful analytical information to investors regarding
operating performance.
(Millions of euro)
Quarter ended September 30
2006 2007 Change in euro
-------- -------- --------
Sales and operating revenue EUR2,913 EUR3,108 +7%
Income before income taxes 433 384 -11
Net income 298 267 -10
Sales for the current quarter increased by 7% year-on-year. Results were
boosted by sales of successful models such as Walkman(R) and Cyber-shot
phones. Income before income taxes for the current quarter was EUR384
million, representing a year-on-year decrease of 11%, which reflects the
exceptional quarter Sony Ericsson experienced in 2006. Sony recorded
equity in net income of Y21.1 billion ($183 million) for the current
quarter.
Game
----
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change 2007
in yen
-------- -------- ------- --------
Sales and operating revenue Y170.3 Y243.4 +42.9% $2,117
Operating income (loss) (43.5) (96.7) - (841)
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales increased 42.9% year-on-year (a 38% increase on a local currency
basis).
Hardware: Overall hardware sales increased as a result of the
contribution to sales from PS3, which was released during the second half
of last fiscal year, in addition to increased unit sales of PSP(R)
(PlayStation(R)Portable) ("PSP"), of which a new slimmer, lighter model
was released. Sales of PlayStation(R)2 ("PS2") were essentially unchanged
year-on-year.
Software: Despite the contribution from PS3 software sales, overall
software sales decreased as a result of a decrease in PS2 and PSP
software sales.
An operating loss of Y96.7 billion ($841 million) was recorded, a Y53.2
billion deterioration year-on-year. This deterioration was primarily due
to the loss arising from the strategic pricing of PS3 at points lower
than its production cost and the increase in PS3-related inventory
write-downs recorded during the current quarter compared to the same
quarter of the previous year.
Worldwide hardware unit sales (increase/decrease year-on-year):*
-> PS2: 3.28 million units (a decrease of 0.13 million units)
-> PSP: 2.58 million units (an increase of 0.56 million units)
-> PS3: 1.31 million units
Worldwide software unit sales (decrease year-on-year):*
-> PS2: 38.0 million units (a decrease of 9.2 million units)
-> PSP: 12.6 million units (a decrease of 0.6 million units)
-> PS3: 10.3 million units
*Beginning with the quarter ended June 30, 2007, the method of reporting
hardware and software unit sales has been changed from production
shipments to recorded sales.
Inventory, as of September 30, 2007, was Y247.8 billion ($2,155 million),
which represents a Y59.7 billion, or 31.7%, increase compared with the
level as of September 30, 2006. This increase was primarily due to the
buildup of finished goods inventory following the introduction of the PS3
platform in Japan, North America, and Europe. Inventory increased by
Y20.8 billion, or 9.2%, compared with the level as of June 30, 2007.
Pictures
--------
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change in 2007
yen
------- ------- ------ -------
Sales and operating revenue Y178.2 Y189.6 +6.4% $1,649
Operating income (loss) (15.3) 2.7 - 23
Unless otherwise specified, all amounts are reported on a U.S. GAAP
basis. The results presented above are a yen-translation of the results
of Sony Pictures Entertainment ("SPE"), a U.S.-based operation which
aggregates the results of its worldwide subsidiaries. Management analyzes
the results of SPE in U.S. dollars, so discussion of certain portions of
its results are specified as being on "a U.S. dollar basis."
Sales increased 6.4% year-on-year (a 5% increase on a U.S. dollar basis).
Sales increased primarily due to higher sales of theatrically released
and made-for-television movies in the television market, as well as
higher advertising and subscription revenues from several of SPE's
international channels. This was partially offset by a decrease in
theatrical revenues due to fewer films released in the second quarter of
the current fiscal year as compared to the same quarter of the prior
year. The film that contributed most significantly to revenue during the
quarter was Superbad.
Operating income of Y2.7 billion ($23 million) was recorded as compared
to an operating loss of Y15.3 billion in the same quarter of the previous
fiscal year. Operating income benefited from lower marketing expenses due
to the fewer number of theatrical releases in the current quarter as well
as higher sales of theatrically released and made-for-television movies
in the television market, and higher advertising and subscription
revenues from several of SPE's international channels. The results for
the current quarter were negatively impacted by the U.S. theatrical
underperformance of Across The Universe.
Financial Services
------------------
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change 2007
in yen
------- ------- ------- -------
Financial service revenue Y168.1 Y157.5 -6.3% $1,370
Operating income 24.6 23.1 -5.8 201
In Sony's Financial Services segment, results include Sony Financial
Holdings Inc.("SFH"), Sony Life, Sony Assurance Inc., Sony Bank Inc. and
Sony Finance International Inc. Also, unless otherwise specified, all
amounts are reported on a U.S. GAAP basis. Therefore, the results of Sony
Life shown below differ from the results that SFH and Sony Life disclose
on a Japanese statutory basis.
Financial service revenue decreased 6.3% year-on-year due to a decrease
in revenue at Sony Life. Revenue at Sony Life was Y124.5 billion ($1,083
million), a Y19.7 billion or 13.6% decrease year-on-year. The main reason
for this lower revenue was a deterioration in net gains from investments
in the separate account and in net valuation gains from convertible bonds
in the general account reflecting a decrease in the stock market this
quarter compared with a rise in the market in the same quarter of the
previous fiscal year, while there was an increase in insurance premium
revenue reflecting an increase in policy amounts in force.
Operating income decreased 5.8% year-on-year as a result of a decrease at
Sony Life. Operating income at Sony Life was Y17.7 billion ($154
million), a Y7.9 billion, or 30.9% decrease year-on-year. This decrease
was mainly due to a deterioration in net valuation gains from convertible
bonds in the general account, which more than offset the positive impact
from increased insurance premium revenue at Sony Life.
On October 11, 2007, in connection with the global initial public
offering of shares of SFH, the shares of SFH were listed for trading on
the First Section of the Tokyo Stock Exchange. Following this global
offering, SFH remains a consolidated subsidiary with Sony Corporation as
the majority shareholder.
All Other
---------
(Billions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change 2007
in yen
------ ------ ------ -----
Sales and operating revenue Y81.5 Y95.2 +16.8% $828
Operating income 6.5 10.8 +65.9 94
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales increased 16.8% year-on-year. This increase was mainly due to an
increase in album sales year-on-year at Sony Music Entertainment (Japan)
Inc. ("SMEJ") as well as the consolidation of the U.S. music publishing
company Famous Music LLC ("Famous Music") beginning in the current
quarter. This business was acquired by Sony's U.S.-based music publishing
subsidiary, Sony/ATV Music Publishing LLC ("Sony/ATV").
SMEJ's best-selling albums during the current quarter included ORANGE and
RANGE by ORANGE RANGE, five-star by YUKI and TODAY by Angela Aki.
Operating income increased 65.9% year-on-year. This increase was
principally a result of the increased sales recorded at SMEJ, an increase
in trademark royalty income from Sony Ericsson, as well as higher fee
revenue from new broadband subscribers at So-net Entertainment
Corporation.
Operating Results for SONY BMG MUSIC ENTERTAINMENT
--------------------------------------------------
The following operating results for SONY BMG, which is accounted for by
the equity method, are not consolidated in Sony's consolidated financial
statements. However, Sony believes that this disclosure provides
additional useful analytical information to investors regarding operating
performance.
(Millions of U.S. dollars)
Quarter ended September 30
2006 2007 Change in
U.S. dollars
----- ----- -----
Sales and operating revenue $948 $851 -10%
Income (loss) before income taxes (31) 8 -
Net income (loss) (39) (8) -
During the quarter ended September 30, 2007, sales at SONY BMG decreased
by 10% year-on-year due to the continuing decline in the worldwide
physical music market, as well as fewer major artist releases in the
current year as compared to the prior year. Despite this decline in
revenue, SONY BMG recorded income before income taxes of $8 million, as
compared to a loss before income taxes of $31 million in the prior year
primarily due to lower marketing, overhead and restructuring costs.
Income before income taxes includes $18 million of restructuring charges,
a decrease of $21 million year-on-year. As a result of a number of
discrete items recorded in the quarter, including a reduction of deferred
tax assets in Germany as a result of a recent tax rate change and a
number of return to provision adjustments, SONY BMG recorded a net loss
of $8 million. Sony's 50% share of the net loss amounting to Y0.5 billion
($4 million) was recorded as equity in net income (loss) of affiliated
companies. Best selling albums during the quarter included Bruce
Springsteen's Magic, Foo Fighters' Echoes, Silence, Patience & Grace, and
Kenny Chesney's Just Who I Am: Poets & Pirates.
In August 2004, Sony combined its music business outside Japan with the
recorded music business of Bertelsmann AG, forming SONY BMG, upon
approval from, among others, the European Commission competition
authorities. On December 3, 2004, an association of independent recorded
music companies applied for annulment of the decision to clear the
merger. On July 13, 2006, the Court of First Instance overruled the
Commission's decision to allow the merger to go forward, requiring the
Commission to re-examine the merger. On October 3, 2007, the Commission
completed its re-examination of the merger and rendered a decision
confirming the conclusion reached in 2004 that the transaction raised no
competition concerns.
Cash Flows
----------
The following charts show Sony's unaudited condensed statements of cash
flows for all segments excluding the Financial Services segment and for
the Financial Services segment alone. These separate condensed
presentations are not required under U.S. GAAP, which is used in Sony's
consolidated financial statements. However, because the Financial
Services segment is different in nature from Sony's other segments, Sony
believes that these presentations may be useful in understanding and
analyzing Sony's consolidated financial statements.
Cash Flows - Consolidated (Excluding Financial Services segment)
----------------------------------------------------------------
(Billions of yen, millions of U.S. dollars)
Six months ended September 30
Cash flows 2006 2007 Change 2007
in yen
------- ------- -------- -------
- From operating activities Y(191.2) Y(130.5) Y+60.7 $(1,135)
- From investing activities (217.5) (154.3) +63.2 (1,342)
- From financing activities 191.2 219.4 +28.2 1,907
Cash and cash equivalents at 585.5 522.9 -62.6 4,547
beginning of the fiscal year
Cash and cash equivalents 363.9 455.1 +91.2 3,958
at September 30
Operating Activities: During the six months ended September 30, 2007,
although net income was recorded, cash flows from operating activities
resulted in a net use of cash due to an increase in inventory mainly within
the Electronics and Game segments in preparation for the year-end sales
season.
Investing Activities: During the six months ended September 30, 2007,
although cash was generated from the sale of a portion of the site of
Sony's former headquarters, cash was used for the purchase of fixed assets,
principally semiconductor fabrication equipment, within the Electronics
segment and the acquisition of U.S. music publishing company Famous Music
by Sony/ATV.
As a result, total net cash used by operating activities and used in
investing activities during the six months ended September 30, 2007 was
Y284.9 billion ($2,477 million).
Financing Activities: During the six months ended September 30, 2007,
financing was carried out principally through the issuance of commercial
paper. These sources were partially offset by cash used to redeem straight
bonds and for dividend payments.
Cash and Cash Equivalents: As a result of the above factors, and taking
into account the effect of foreign currency exchange rate fluctuations, the
total balance of cash and cash equivalents was Y455.1 billion ($3,958
million) at September 30, 2007, a decrease of Y67.7 billion compared to
March 31, 2007 and an increase of Y91.2 billion compared to September 30,
2006.
Cash Flows - Financial Services segment
---------------------------------------
(Billions of yen, millions of U.S. dollars)
Six months ended September 30
Cash flows 2006 2007 Change 2007
in yen
------ ------ ------ -----
- From operating activities Y121.8 Y67.1 Y-54.7 $584
- From investing activities (113.2) (388.7) -275.5 (3,379)
- From financing activities 65.2 216.4 +151.2 1,881
Cash and cash equivalents at 117.6 277.0 +159.4 2,408
beginning of the fiscal year
Cash and cash equivalents 191.4 171.9 -19.6 1,494
at September 30
Operating Activities: Net cash provided by operating activities was generated
due to an increase in revenue from insurance premiums, primarily reflecting an
increase in policy amounts in force at Sony Life.
Investing Activities: Payments for investments and advances mainly
carried out at Sony Life exceeded proceeds from maturities of marketable
securities, sales of securities investments and collections of advances.
Financing Activities: In addition to an increase in policyholders'
accounts at Sony Life, there was an increase in deposits from customers
in the banking business.
Cash and Cash Equivalents: As a result of the above, the balance of cash
and cash equivalents was Y171.9 billion ($1,494 million) at September 30,
2007, a decrease of Y105.2 billion compared to March 31, 2007 and a
decrease of Y19.6 billion compared to September 30, 2006.
Note
----
During the quarter ended September 30, 2007, the average value of the yen
was Y116.9 against the U.S. dollar and Y160.4 against the euro, which was
1.4% lower against the U.S. dollar and 8.6% lower against the euro,
compared with the average rates for the same quarter of the previous
fiscal year. Sales on a local currency basis described herein reflect
sales obtained by applying the yen's monthly average exchange rate in the
same quarter of the previous fiscal year to local currency-denominated
monthly sales in the current quarter. Sales on a local currency basis are
not reflected in Sony's financial statements and are not measures
conforming with U.S. GAAP. In addition, Sony does not believe that these
measures are a substitute for U.S. GAAP measures. However, Sony believes
that sales on a local currency basis provide additional useful analytical
information to investors regarding operating performance.
Rewarding Shareholders
----------------------
Sony believes that continuously increasing corporate value and providing
dividends are essential to rewarding shareholders. It is Sony's policy to
utilize retained earnings, after ensuring the perpetuation of stable
dividends, to carry out various investments that contribute to an
increase in corporate value such as those that ensure future growth and
strengthen competitiveness.
An interim cash dividend of Y12.5 ($0.11) per share (the same as the
amount paid in the previous fiscal year) payable as of December 3, 2007
was approved by the Board of Directors today.
Outlook for the Fiscal Year ending March 31, 2008
-------------------------------------------------
Sony's consolidated results forecast for the fiscal year ending March 31,
2008, as announced on July 26, 2007, has been revised as per the table
below:
(Billions of yen)
Change from
Current Change from July March 31, 2007
Forecast July Forecast Forecast Actual Results
-------- ------- ------- ------
Sales and operating revenue Y8,980 +2% Y8,780 +8%
Operating income 450 +2 440 +527
(Restructuring charges
recorded as operating expenses 45 +29 35 +16)
Income before income taxes 500 +19 420 +390
Equity in net income of
affiliated companies 90 +13 80 +14
Net income 330 +3 320 +161
Assumed foreign currency exchange rates for the remainder of the fiscal
year: approximately Y115 to the U.S. dollar and approximately Y160 to the
euro.
The principal reasons for the revisions are as follows:
1. Second quarter results as a whole exceeded our previous July forecast.
2. Sales are expected to slightly exceed the July forecast for the second
half. Regarding the operating income forecast for the second half, we
expect lower income in the Game segment as compared to our July forecast
and certain additional one-time gains that were not incorporated in our
July forecast.
3. A Y10 billion increase in the forecast for restructuring charges
compared to the July forecast mainly attributed to additional impairment
charges for manufacturing facilities for rear-projection televisions.
4. In connection with the initial public offering of SFH and its
concurrent listing on the Tokyo Stock Exchange discussed above, we expect
to record a gain in income before income taxes of approximately Y75
billion and net income of approximately Y11 billion in the third quarter.
However, we also expect consolidated net income to be offset by the
expected increase in minority interest arising from the initial public
offering of SFH.
5. A Y10 billion increase in the forecast of equity in net income of
affiliated companies mainly due to better than anticipated results during
the start-up period of production of 8th generation LCD panels at S-LCD.
Our forecast for capital expenditures, depreciation and amortization, and
research and development expenses, as per the table below, is unchanged
from the July 26, 2007 forecast.
(Billions of yen)
previous Change from
fiscal year Forecast
----- -----
Capital expenditures (additions to fixed assets) * Y440 +6%
Depreciation and amortization** 430 +7
(Depreciation expenses for tangible assets 350 +11)
Research and development expenses 550 +1
* Investments in S-LCD are not included within the forecast for capital
expenditures.
** The forecast for depreciation and amortization includes amortization
of intangible assets and amortization of deferred insurance acquisition
costs.
Cautionary Statement
--------------------
Statements made in this release with respect to Sony's current plans,
estimates, strategies and beliefs and other statements that are not
historical facts are forward-looking statements about the future
performance of Sony. Forward-looking statements include, but are not
limited to, those statements using words such as "believe," "expect,"
"plans," "strategy," "prospects," "forecast," "estimate," "project,"
"anticipate," "aim," "may" or "might" and words of similar meaning in
connection with a discussion of future operations, financial performance,
events or conditions. From time to time, oral or written forward-looking
statements may also be included in other materials released to the
public. These statements are based on management's assumptions and
beliefs in light of the information currently available to it. Sony
cautions you that a number of important risks and uncertainties could
cause actual results to differ materially from those discussed in the
forward-looking statements, and therefore you should not place undue
reliance on them. You also should not rely on any obligation of Sony to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. Sony disclaims any such
obligation. Risks and uncertainties that might affect Sony include, but
are not limited to (i) the global economic environment in which Sony
operates, as well as the economic conditions in Sony's markets,
particularly levels of consumer spending; (ii) exchange rates,
particularly between the yen and the U.S. dollar, the euro and other
currencies in which Sony makes significant sales or in which Sony's
assets and liabilities are denominated; (iii) Sony's ability to continue
to design and develop and win acceptance of, as well as achieve
sufficient cost reductions for, its products and services, including
newly introduced platforms within the Game segment, which are offered in
highly competitive markets characterized by continual new product
introductions, rapid development in technology and subjective and
changing consumer preferences (particularly in the Electronics, Game and
Pictures segments, and the music business); (iv) Sony's ability and
timing to recoup large-scale investments required for technology
development and increasing production capacity; (v) Sony's ability to
implement successfully personnel reduction and other business
reorganization activities in its Electronics segment; (vi) Sony's ability
to implement successfully its network strategy for its Electronics, Game
and Pictures segments, and All Other, including the music business, and
to develop and implement successful sales and distribution strategies in
its Pictures segment and the music business in light of the Internet and
other technological developments; (vii) Sony's continued ability to
devote sufficient resources to research and development and, with respect
to capital expenditures, to correctly prioritize investments
(particularly in the Electronics segment); (viii) Sony's ability to
maintain product quality (particularly in the Electronics and Game
segments); (ix) the success of Sony's joint ventures and alliances; (x)
the outcome of pending legal and/or regulatory proceedings; and (xi)
shifts in customer demand for financial services such as life insurance
and Sony's ability to conduct successful asset liability management in
the Financial Services segment. Risks and uncertainties also include the
impact of any future events with material adverse impacts.
(Unaudited)
Consolidated Financial Statements
---------------------------------
Consolidated Balance Sheets
---------------------------
(Millions of yen, millions of U.S. dollars)
September 30
March 31
ASSETS 2006 2007 Change from 2006 2007 2007
---------- ---------- ------------------ -------- -----------
Current
assets:
Cash Y 555,330 Y 626,984 Y +71,654 +12.9% $ 5,452 Y 799,899
and
cash
equi-
valents
Marketable 471,332 495,143 +23,811 +5.1 4,306 493,315
securities
Notes and 1,233,207 1,429,133 +195,926 +15.9 12,427 1,490,452
accounts
receivable,
trade
Allowance (82,340) (106,207) -23,867 +29.0 (924) (120,675)
for
doubtful
accounts and
sales
returns
Inventories 1,152,646 1,262,152 +109,506 +9.5 10,975 940,875
Deferred 251,374 257,480 +6,106 +2.4 2,239 243,782
income
taxes
Prepaid 636,325 1,029,310 +392,985 +61.8 8,951 699,075
expenses
and other
current
assets
---------- ---------- ----------- -------- -----------
4,217,874 4,993,995 +776,121 +18.4 43,426 4,546,723
Film costs 370,905 319,936 -50,969 -13.7 2,782 308,694
Investments and
advances:
Affiliated 339,702 434,159 +94,457 +27.8 3,775 448,169
companies
Securities 3,310,692 3,636,241 +325,549 +9.8 31,620 3,440,567
investments
and
other
---------- ---------- ----------- -------- -----------
3,650,394 4,070,400 +420,006 +11.5 35,395 3,888,736
Property,
plant and
equipment:
Land 172,242 168,985 -3,257 -1.9 1,469 167,493
Buildings 939,040 992,839 +53,799 +5.7 8,633 978,680
Machinery 2,437,235 2,555,014 +117,779 +4.8 22,218 2,479,308
and
equipment
Construction 93,568 62,710 -30,858 -33.0 545 64,855
in progress
Less- (2,200,498) (2,366,962) -166,464 +7.6 (20,582) (2,268,805)
Accumulated
depreciation
---------- ---------- ----------- -------- -----------
1,441,587 1,412,586 -29,001 -2.0 12,283 1,421,531
Other assets:
Intangibles, 213,422 274,229 +60,807 +28.5 2,385 233,255
net
Goodwill 300,627 306,837 +6,210 +2.1 2,668 304,669
Deferred 389,695 399,244 +9,549 +2.5 3,472 394,117
insurance
acquisition
costs
Deferred 159,563 231,074 +71,511 +44.8 2,009 216,997
income
taxes
Other 399,578 462,559 +62,981 +15.8 4,022 401,640
---------- ---------- ----------- -------- -----------
1,462,885 1,673,943 +211,058 +14.4 14,556 1,550,678
---------- ---------- ----------- -------- -----------
Y11,143,645 Y12,470,860 Y+1,327,215 +11.9% $ 108,442 Y11,716,362
---------- ---------- ----------- -------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
liabilities:
Short-term Y 247,953 Y 303,338 Y +55,385 +22.3% $ 2,638 Y 52,291
borrowings
Current 111,620 23,797 -87,823 -78.7 207 43,170
portion
of
long-term
debt
Notes and 975,543 1,186,260 +210,717 +21.6 10,315 1,179,694
accounts
payable,
trade
Accounts 908,378 974,155 +65,777 +7.2 8,471 968,757
payable,
other
and accrued
expenses
Accrued 26,810 115,347 +88,537 +330.2 1,003 70,286
income
and other
taxes
Deposits 682,717 888,443 +205,726 +30.1 7,726 752,367
from
customers
in the
banking
business
Other 490,134 485,296 -4,838 -1.0 4,219 485,287
---------- ---------- ----------- -------- -----------
3,443,155 3,976,636 +533,481 +15.5 34,579 3,551,852
Long-term
liabilities:
Long-term 868,231 1,015,239 +147,008 +16.9 8,828 1,001,005
debt
Accrued 169,667 180,245 +10,578 +6.2 1,567 173,474
pension
and
severance
costs
Deferred 238,021 293,538 +55,517 +23.3 2,553 261,102
income
taxes
Future 2,880,479 3,182,692 +302,213 +10.5 27,676 3,037,666
insurance
policy
benefits
and other
Other 267,088 277,055 +9,967 +3.7 2,409 281,589
---------- ---------- ----------- -------- -----------
4,423,486 4,948,769 +525,283 +11.9 43,033 4,754,836
Minority 40,259 36,597 -3,662 -9.1 318 38,970
interes in
consolidated
subsidiaries
Stockholders'
equity:
Capital 625,194 629,243 +4,049 +0.6 5,472 626,907
stock
Additional 1,139,185 1,147,507 +8,322 +0.7 9,978 1,143,423
paid-in
capital
Retained 1,620,312 1,842,655 +222,343 +13.7 16,023 1,719,506
earnings
Accumulated (144,619) (106,542) +38,077 -26.3 (926) (115,493)
other
comprehensive
income
Treasury (3,327) (4,005) -678 +20.4 (35) (3,639)
stock,
at cost
---------- ---------- ----------- -------- -----------
3,236,745 3,508,858 +272,113 +8.4 30,512 3,370,704
---------- ---------- ----------- -------- -----------
Y11,143,645 Y12,470,860 Y+1,327,215 +11.9% $108,442 Y11,716,362
---------- ---------- ----------- -------- -----------
Consolidated Statements of Income
---------------------------------
(Millions of yen, millions of U.S. dollars, except per share amounts)
Fiscal
year
ended
Second quarter ended September 30 March 31
2006 2007 Change from 2006 2007 2007
---------- ---------- ------------------- -------- -----------
Sales and
operating
revenue:
Net sales Y 1,667,547 Y 1,903,932 Y +236,385 +14.2% $16,556 Y 7,567,359
Financial 162,198 151,109 -11,089 -6.8 1,314 624,282
service
revenue
Other 24,434 27,996 +3,562 +14.6 243 104,054
operating
revenue
---------- ---------- ----------- -------- -----------
1,854,179 2,083,037 +228,858 +12.3 18,113 8,295,695
Costs and
expenses:
Cost of 1,286,412 1,504,207 +217,795 +16.9 13,080 5,889,601
sales
Selling, 449,250 410,213 -39,037 -8.7 3,567 1,788,427
general
and
administrative
Financial 137,623 125,697 -11,926 -8.7 1,093 540,097
service
expenses
(Gain) loss 1,727 (47,550) -49,277 - (414) 5,820
on sale,
disposal or
impairment of
assets, net
---------- ---------- ----------- -------- -----------
1,875,012 1,992,567 +117,555 +6.3 17,326 8,223,945
Operating (20,833) 90,470 +111,303 - 787 71,750
income (loss)
Other income:
Interest and 4,848 5,235 +387 +8.0 46 28,240
dividends
Foreign - 7,904 +7,904 - 69 -
exchange
gain, net
Gain on sale 551 - -551 - - 14,695
of securities
investments,
net
Gain on change 2,029 14 -2,015 -99.3 0 31,509
in interest
in
subsidiaries
and equity
investees
Other 5,664 4,528 -1,136 -20.1 39 20,738
---------- ---------- ----------- -------- -----------
13,092 17,681 +4,589 +35.1 154 95,182
Other expenses:
Interest 5,974 6,493 +519 +8.7 57 27,278
Loss on 734 9,364 +8,630 +1,175.7 81 1,308
devaluation
of securities
investments
Loss on sales - 38 +38 - 0 -
of securities
investments,
net
Foreign 6,036 - -6,036 - - 18,835
exchange
loss, net
Other 5,637 4,332 -1,305 -23.2 38 17,474
---------- ---------- ----------- -------- -----------
18,381 20,227 +1,846 +10.0 176 64,895
Income (loss) (26,122) 87,924 +114,046 - 765 102,037
before income
taxes
Income taxes (7,551) 34,879 +42,430 - 304 53,888
---------- ---------- ----------- -------- -----------
Income (loss) (18,571) 53,045 +71,616 - 461 48,149
before minority
interest and
equity in net
income of
affiliated
companies
Minority (530) 476 +1,006 - 4 475
interest
in income
(loss) of
consolidated
subsidiaries
Equity in net 19,721 21,146 +1,425 +7.2 184 78,654
income of
affiliated
companies
---------- ---------- ----------- -------- -----------
Net income Y 1,680 Y 73,715 Y +72,035 +4,287.8 $ 641 Y 126,328
---------- ---------- ----------- -------- -----------
Per share data:
Common stock
Net income
- Basic Y 1.68 Y 73.50 Y +71.82 +4,275.0 $ 0.64 Y 126.15
- Diluted 1.60 70.09 +68.49 +4,280.6 0.61 120.29
(Millions of yen, millions of U.S. dollars, except per share amounts)
Fiscal
year
ended
Six months ended September 30 March 31
2006 2007 Change from 2006 2007 2007
---------- ---------- ------------------- -------- -----------
Sales and
operating
revenue:
Net sales Y 3,267,083 Y 3,672,084 Y +405,001 +12.4% $31,931 Y 7,567,359
Financial 280,738 328,161 +47,423 +16.9 2,853 624,282
service
revenue
Other 50,594 59,302 +8,708 +17.2 516 104,054
operating
revenue
---------- ---------- ----------- -------- -----------
3,598,415 4,059,547 +461,132 +12.8 35,300 8,295,695
Costs and
expenses:
Cost of 2,498,491 2,833,109 +334,618 +13.4 24,636 5,889,601
sales
Selling, 833,137 814,337 -18,800 -2.3 7,081 1,788,427
general
and
administrative
Financial 251,574 271,118 +19,544 +7.8 2,357 540,097
service
expenses
(Gain) loss 8,998 (48,810) -57,808 - (424) 5,820
on sale,
disposal or
impairment of
assets, net
---------- ---------- ----------- -------- -----------
3,592,200 3,869,754 +277,554 +7.7 33,650 8,223,945
Operating 6,215 189,793 +183,578 +2,953.8 1,650 71,750
income
Other income:
Interest and 11,942 14,695 +2,753 +23.1 128 28,240
dividends
Gain on sale 4,452 1,342 -3,110 -69.9 12 14,695
of securities
investments,
net
Gain on change 20,075 14 -20,061 -99.9 0 31,509
in interest
in
subsidiaries
and equity
investees
Other 10,431 10,980 +549 +5.3 95 20,738
---------- ---------- ----------- -------- -----------
46,900 27,031 -19,869 -42.4 235 95,182
Other expenses:
Interest 11,385 13,537 +2,152 +18.9 117 27,278
Loss on 750 9,405 +8,655 +1,154.0 82 1,308
devaluation
of securities
investments
Foreign 3,494 11,012 +7,518 +215.2 96 18,835
exchange
loss, net
Other 9,580 11,188 +1,608 +16.8 97 17,474
---------- ---------- ----------- -------- -----------
25,209 45,142 +19,933 +79.1 392 64,895
Income before 27,906 171,682 +143,776 +515.2 1,493 102,037
income taxes
Income taxes 17,216 74,529 +57,313 +332.9 648 53,888
---------- ---------- ----------- -------- -----------
Income before 10,690 97,153 +86,463 +808.8 845 48,149
minority
interest and
equity in net
income of
affiliated
companies
Minority 62 94 +32 +51.6 1 475
interest
in income of
consolidated
subsidiaries
Equity in net 23,343 43,111 +19,768 +84.7 375 78,654
income of
affiliated
companies
---------- ---------- ----------- -------- -----------
Net income Y 33,971 Y 140,170 Y +106,199 +312.6 $ 1,219 Y 126,328
---------- ---------- ----------- -------- -----------
Per share data:
Common stock
Net income
- Basic Y 33.93 Y 139.79 Y +105.86 +312.0 $ 1.22 Y 126.15
- Diluted 32.36 133.22 +100.86 +311.7 1.16 120.29
Consolidated Statements of Changes in Stockholders' Equity
----------------------------------------------------------
(Millions of yen)
Common Additional Retained Accumu- Treasury Total
stock paid-in earnings lated stock,
capital other at cost
compre-
hensive
income
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 624,124 Y 1,136,638 Y 1,602,654 Y (156,437) Y (3,127) Y 3,203,852
at
March
31, 2006
Exercise 478 478 956
of stock
acquisition
rights
Conversion 592 592 1,184
of
convertible
bonds
Stock based 1,472 1,472
compensation
Comprehensive
income:
Net 33,971 33,971
income
Cumulative (3,785) (3,785)
effect of
an
accounting
change, net
of tax
Other
comprehensive
income, net of
tax
Unrealized (21,689) (21,689)
gains on
securities
Unrealized (1,026) (1,026)
losses on
derivative
instruments
Minimum (2,647) (2,647)
pension
liability
adjustment
Foreign 37,180 37,180
currency
translation
adjustments
-----------
Total 42,004
comprehensive
income
-----------
Stock issue (11) (11)
costs, net of
tax
Dividends (12,517) (12,517)
declared
Purchase of (226) (226)
treasury
stock
Reissuance of 5 26 31
treasury
stock
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 625,194 Y 1,139,185 Y 1,620,312 Y (144,619) Y (3,327) Y 3,236,745
at
September
30, 2006
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 626,907 Y 1,143,423 Y 1,719,506 Y (115,493) Y (3,639) Y 3,370,704
at
March
31, 2007
Exercise 2,237 2,307 4,544
of stock
acquisition
rights
Conversion 99 99 198
of
convertible
bonds
Stock based 1,671 1,671
compensation
Comprehensive
income:
Net income 140,170 140,170
Cumulative (4,452) (4,452)
effect of an
accounting
change,
net of tax
Other
comprehensive
income, net of
tax
Unrealized 6,668 6,668
gains on
securities
Unrealized 421 421
losses on
derivative
instruments
Pension 544 544
liability
adjustment
Foreign 1,318 1,318
currency
translation
adjustments
-----------
Total 144,669
comprehensive
income
-----------
Stock issue (32) (32)
costs, net
of tax
Dividends (12,537) (12,537)
declared
Purchase of (387) (387)
treasury
stock
Reissuance 7 21 28
of
treasury
stock
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 629,243 Y 1,147,507 Y 1,842,655 Y (106,542) Y (4,005) Y 3,508,858
at
September
30, 2007
------ ---------- ----------- ----------- ---------- -------- -----------
(Millions of U.S. dollars)
Common Additional Retained Accumu- Treasury Total
stock paid-in earnings lated stock,
capital other at cost
compre-
hensive
income
------ ---------- ----------- ----------- ---------- -------- -----------
Balance $ 5,451 $ 9,943 $ 14,952 $ (1,004) $ (32) $ 29,310
at
March
31,
2007
Exercise 20 20 40
of stock
acquisition
rights
Conversion 1 1 2
of
convertible
bonds
Stock based 14 14
compensation
Comprehensive
income:
Net income 1,219 1,219
Cumulative (39) (39)
effect of an
accounting
change, net
of tax
Other
comprehensive
income,
net of tax
Unrealized 58 58
gains
on
securities
Unrealized 4 4
losses
on
derivative
instruments
Pension 5 5
liability
adjustment
Foreign 11 11
currency
translation
adjustments
-----------
Total 1,258
comprehensive
income
-----------
Stock (0) (0)
issue
costs,
net of
tax
Dividends (109) (109)
declared
Purchase of (3) (3)
treasury
stock
Reissuance of 0 0 0
treasury
stock
------ ---------- ----------- ----------- ---------- -------- -----------
Balance $ 5,472 $ 9,978 $ 16,023 $ (926) $ (35) $ 30,512
at
September
30,
2007
------ ---------- ----------- ----------- ---------- -------- -----------
(Millions of yen)
Common Additional Retained Accumu- Treasury Total
stock paid-in earnings lated stock,
capital other at cost
compre-
hensive
income
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 624,124 Y 1,136,638 Y 1,602,654 Y (156,437) Y (3,127) Y 3,203,852
at
March
31,
2006
Exercise 2,175 2,175 4,350
of stock
acquisition
rights
Conversion of 608 608 1,216
of
convertible
bonds
Stock 3,993 3,993
based
compensation
Comprehensive
income:
Net income 126,328 126,328
Cumulative (3,785) (3,785)
effect of an
accounting
change,
net of
tax
Other
comprehensive
income,
net of
tax
Unrealized (14,708) (14,708)
gains on
securities
Unrealized 974 974
losses on
derivative
instruments
Minimum (2,754) (2,754)
pension
liability
adjustment
Foreign 86,313 86,313
currency
translation
adjustments
-----------
Total 192,368
comprehensive
income
-----------
Stock (22) (22)
issue costs,
net of tax
Dividends (25,042) (25,042)
declared
Purchase (558) (558)
of
treasury
stock
Reissuance 9 46 55
of
treasury
stock
Adoption (9,508) (9,508)
of FAS
No.158,
net of tax
Other 19,373 (19,373) -
------ ---------- ----------- ----------- ---------- -------- -----------
Balance Y 626,907 Y 1,143,423 Y 1,719,506 Y (115,493) Y (3,639) Y 3,370,704
at
March
31,
2007
------ ---------- ----------- ----------- ---------- -------- -----------
Consolidated Statements of Cash Flows
-------------------------------------
(Millions of yen, millions of U.S. dollars)
Fiscal
year
ended
Six months ended September 30 March 31
2006 2007 2007 2007
----------- ----------- --------- -----------
Cash flows from operating
activities:
Net income Y 33,971 Y 140,170 $ 1,219 Y 126,328
Adjustments to
reconcile net income
to net cash provided by
(used in) operating
activities:
Depreciation and 184,919 204,576 1,779 400,009
amortization,
including
amortization of
deferred insurance
acquisition costs
Amortization of film 148,714 163,160 1,419 368,382
costs
Stock-based compensation 1,468 1,798 16 3,838
expense
Accrual for pension and (8,479) (10,468) (91) (22,759)
severance costs, less
payments
(Gain) loss on sale, 8,998 (48,810) (424) 5,820
disposal or impairment
of assets, net
Gain on sale or loss on (3,702) 8,063 70 (13,387)
devaluation of securities
investments, net
(Gain) loss on revaluation 3,864 4,114 36 (11,857)
of marketable securities
held in the financial
service business for
trading purpose, net
Gain on change in (20,075) (14) (0) (31,509)
interest in
subsidiaries and
equity investees
Deferred income taxes (4,575) (17,605) (153) (13,193)
Equity in net (income) (21,987) 2,410 21 (68,179)
losses of affiliated
companies, net of
dividends
Changes in assets and
liabilities:
(Increase) decrease in (154,431) 47,824 416 (357,891)
notes and accounts
receivable, trade
Increase in (338,190) (320,912) (2,791) (119,202)
inventories
Increase in film (157,992) (181,942) (1,582) (320,079)
costs
Increase in notes 159,742 6,249 54 362,079
and accounts payable,
trade
Increase (decrease) (49,918) 55,494 483 (14,396)
in accrued income
and other taxes
Increase in future 76,270 78,603 684 172,498
insurance policy
benefits and other
Increase in deferred (30,152) (33,172) (288) (61,563)
insurance acquisition
costs
(Increase) decrease in 18,874 (45,649) (397) 31,732
marketable securities
held in the financial
service business for
trading purpose
Increase in other (26,462) (95,484) (831) (35,133)
current assets
Increase in other 37,034 28,464 247 73,222
current liabilities
Other 69,334 (55,904) (487) 86,268
----------- ----------- --------- -----------
Net cash provided (72,775) (69,035) (600) 561,028
by (used in)
operating activities
----------- ----------- --------- -----------
Cash flows from investing
activities:
Payments for purchases (258,061) (232,311) (2,020) (527,515)
of fixed assets
Proceeds from sales of 25,098 73,898 643 87,319
fixed assets
Payments for investments (470,577) (939,979) (8,174) (914,754)
and advances by financial
service business
Payments for investments (32,751) (71,472) (621) (100,152)
and advances (other than
financial service
business)
Proceeds from maturities 374,782 569,844 4,955 679,772
of marketable securities,
sales of securities
investments and
collections of advances
by financial service
business
Proceeds from maturities 4,139 44,735 389 22,828
of marketable securities,
sales of securities
investments and collections
of advances (other than
financial service
business)
Proceeds from sales of 32,165 928 7 43,157
subsidiaries' and equity
investees' stocks
Other 667 5,506 48 (6,085)
----------- ----------- --------- -----------
Net cash used in (324,538) (548,851) (4,773) (715,430)
investing activities
----------- ----------- --------- -----------
Cash flows from financing
activities:
Proceeds from issuance of 125,047 22,867 199 270,780
long-term debt
Payments of long-term (103,479) (23,697) (206) (182,374)
debt
Increase in short-term 187,021 242,231 2,106 6,096
borrowings
Increase in deposits 142,793 202,568 1,761 273,435
from customers in the
financial service
business
Increase (decrease) in (87,700) 14,000 122 (100,700)
call money and bills
sold in the banking
business
Dividends paid (12,514) (12,537) (109) (25,052)
Proceeds from issuance 2,140 4,742 41 5,566
of shares under stock-
based compensation plans
Other 309 (2,982) (25) 152
----------- ----------- --------- -----------
Net cash provided by 253,617 447,192 3,889 247,903
financing activities
----------- ----------- --------- -----------
Effect of exchange rate (4,072) (2,221) (19) 3,300
changes on cash and cash
equivalents
----------- ----------- --------- -----------
Net increase (decrease) (147,768) (172,915) (1,503) 96,801
in cash and cash
equivalents
Cash and cash equivalents 703,098 799,899 6,955 703,098
at beginning of the
fiscal year
----------- ----------- --------- -----------
Cash and cash equivalents Y 555,330 Y 626,984 $ 5,452 Y 799,899
at the end of the period
----------- ----------- --------- -----------
(Notes)
1. U.S. dollar amounts have been translated from yen, for
convenience only, at the rate of Y115 = U.S. $1, the approximate Tokyo
foreign exchange market rate as of September 28, 2007.
2. As of September 30, 2007, Sony had 990 consolidated
subsidiaries (including variable interest entities). It has applied the
equity accounting method for 63 affiliated companies.
3. Weighted-average number of outstanding shares used for
computation of earnings per share of common stock are as follows. The
dilutive effect in the weighted-average number of outstanding shares
mainly resulted from convertible bonds.
Weighted-average number of outstanding shares
---------------------------------------------
(Thousands of shares)
Second quarter ended September 30
2006 2007
--------- ---------
Net income
- Basic 1,001,293 1,002,981
- Diluted 1,049,549 1,051,680
Weighted-average number of outstanding shares
---------------------------------------------
(Thousands of shares)
Six months ended September 30
2006 2007
--------- ---------
Net income
- Basic 1,001,250 1,002,739
- Diluted 1,049,803 1,052,172
4. In September 2005, the Accounting Standards Executive Committee
of the American Institute of Certified Public Accountants ("AcSEC")
issued the Statement of Position ("SOP") 05-1, "Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection with
Modifications or Exchanges of Insurance Contracts." SOP 05-1 provides
guidance on accounting for deferred acquisition costs on internal
replacements of insurance and investment contracts other than those
specifically described in FAS No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for
Realized Gains and Losses from the Sales of Investments." Sony adopted
SOP 05-1 on April 1, 2007. The adoption of SOP 05-1 did not have a
material impact on Sony's results of operations and financial position.
5. In March 2006, the Financial Accounting Standards Board
("FASB") issued FAS No. 156, "Accounting for Servicing of Financial
Assets - an amendment of FASB Statement No. 140." This statement amends
FAS No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" with respect to the accounting for
separately recognized servicing assets and servicing liabilities. Sony
adopted FAS No. 156 on April 1, 2007. The adoption of FAS No. 156 did not
have a material impact on Sony's results of operations and financial
position.
6. In June 2006, the FASB issued FASB Interpretation ("FIN") No.
48, "Accounting for Uncertainty in Income Taxes, an interpretation of
FASB Statement No. 109."
FIN No. 48 clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FAS
No. 109, "Accounting for Income Taxes." FIN No. 48 prescribes a minimum
recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. FIN No. 48 also provides guidance on
derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition.
Sony adopted FIN No. 48 effective April 1, 2007. As a result of the
adoption of FIN No. 48, a charge against beginning retained earnings
totaling Y4,452 million ($36 million) was recorded. As of April 1, 2007,
total unrecognized tax benefits were Y223,857 million ($1,820 million).
If Sony were to prevail on all unrecognized tax benefits recorded,
Y129,632 million ($1,054 million) of the Y223,857 million would reduce
the effective tax rate. Given the uncertainty regarding when tax
authorities will complete their examinations, the items subject to their
examinations and the possible outcomes of their examinations, an accurate
estimate of significant increases or decreases that may occur within the
next twelve months cannot be made at this time. Based on the items of
which Sony is aware, any change to the unrecognized tax benefits that, if
recognized, would affect the effective tax rate is not expected to be
significant.
Interest associated with a liability for unrecognized tax benefits is
included in interest expense. At April 1, 2007, Sony had an accrual of
Y7,899 million ($64 million) related to interest recorded as accrued
expenses (before any tax benefits related thereto).
Penalties associated with income taxes are recorded within income tax
expense. At April 1, 2007, Sony had an accrual of Y3,696 million ($30
million) related to penalties recorded as a component of other
non-current liabilities.
For the second quarter and the six-months ended September 30, 2007, there
were no material changes to the tax assets and liabilities resulting in a
significant change to the effective income tax rate for the respective
periods attributed to changes in Sony's uncertain tax positions under FIN
No. 48.
Sony is subject to income tax examinations for Japan and various foreign
tax jurisdictions for tax years from 1998 through 2007.
7. In June 2006, the Emerging Issues Task Force ("EITF") issued
EITF Issue No. 06-3, "How Taxes Collected from Customers and Remitted to
Governmental Authorities Should be Presented in the Income Statement."
EITF Issue No. 06-3 requires disclosure of the accounting policy for any
tax assessed by a governmental authority that is imposed concurrently on
a specific revenue-producing transaction between a seller and a customer.
EITF Issue No. 06-3 should be applied to financial reports for interim
and annual reporting periods beginning after December 15, 2006. Sony
adopted EITF Issue No. 06-3 on April 1, 2007. The adoption of EITF Issue
No. 06-3 did not have a material impact on Sony's results of operations
and financial position.
Other Consolidated Financial Data
---------------------------------
(Millions of yen, millions of U.S. dollars)
Second quarter ended September 30
2006 2007 Change 2007
-------- -------- ------ -----
Capital expenditures (additions to Y 90,024 Y 75,797 -15.8% $ 659
property, plant and equipment)
Depreciation and amortization 93,654 100,572 +7.4 875
expenses*
(Depreciation expenses for (74,490) (82,311) +10.5 (716)
tangible assets)
Research and development expenses 143,485 131,741 -8.2 1,146
(Millions of yen, millions of U.S. dollars)
Six months ended September 30
2006 2007 Change 2007
--------- --------- ------ -------
Capital expenditures (additions Y 224,080 Y 170,798 -23.8% $ 1,485
to property, plant and equipment)
Depreciation and amortization 184,919 204,576 +10.6 1,779
expenses*
(Depreciation expenses for (145,492) (158,587) +9.0 (1,379)
tangible assets)
Research and development expenses 262,855 257,724 -2.0 2,241
* Including amortization expenses for intangible assets and for deferred
insurance acquisition costs
Business Segment Information
----------------------------
(Millions of yen, millions of U.S. dollars)
Second quarter ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Electronics
Customers Y 1,286,026 Y 1,436,773 +11.7 % $ 12,494
Intersegment 92,364 226,287 1,967
------------------- ----------- ----------- ---------
Total 1,378,390 1,663,060 +20.7 14,461
Game
Customers 162,571 229,232 +41.0 1,993
Intersegment 7,749 14,192 124
------------------- ----------- ----------- ---------
Total 170,320 243,424 +42.9 2,117
Pictures
Customers 178,153 188,820 +6.0 1,642
Intersegment - 776 7
------------------- ----------- ----------- ---------
Total 178,153 189,596 +6.4 1,649
Financial
Services
Customers 162,198 151,109 -6.8 1,314
Intersegment 5,903 6,395 56
------------------- ----------- ----------- ---------
Total 168,101 157,504 -6.3 1,370
All Other
Customers 65,231 77,103 +18.2 670
Intersegment 16,255 18,094 158
------------------- ----------- ----------- ---------
Total 81,486 95,197 +16.8 828
Elimination (122,271) (265,744) - (2,312)
------------------- ----------- ----------- ---------
Consolidated total Y 1,854,179 Y 2,083,037 +12.3 % $ 18,113
Electronics intersegment amounts primarily consist of transactions
with the Game segment, Pictures segment and All Other.
All Other intersegment amounts primarily consist of
transactions with the Electronics and Game segments.
Operating income (loss) 2006 2007 Change 2007
------------------- ----------- ----------- ------- ---------
Electronics Y 8,027 Y 106,888 +1,231.6 % $ 930
Game (43,527) (96,686) - (841)
Pictures (15,277) 2,698 - 23
Financial 24,567 23,137 -5.8 201
Services
All Other 6,497 10,779 +65.9 94
------------------- ----------- ----------- ---------
Total (19,713) 46,816 - 407
Corporate and (1,120) 43,654 - 380
elimination
------------------- ----------- ----------- ---------
Consolidated total Y (20,833) Y 90,470 - % $ 787
(Millions of yen, millions of U.S. dollars)
Six months ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Electronics
Customers Y 2,517,666 Y 2,752,822 +9.3 % $ 23,938
Intersegment 141,616 339,567 2,952
------------------- ----------- ----------- ---------
Total 2,659,282 3,092,389 +16.3 26,890
Game
Customers 279,597 413,141 +47.8 3,592
Intersegment 13,212 26,865 234
------------------- ----------- ----------- ---------
Total 292,809 440,006 +50.3 3,826
Pictures
Customers 382,904 420,218 +9.7 3,654
Intersegment - 776 7
------------------- ----------- ----------- ---------
Total 382,904 420,994 +9.9 3,661
Financial Services
Customers 280,738 328,161 +16.9 2,853
Intersegment 11,464 14,183 124
------------------- ----------- ----------- ---------
Total 292,202 342,344 +17.2 2,977
All Other
Customers 137,510 145,205 +5.6 1,263
Intersegment 32,115 34,169 297
------------------- ----------- ----------- ---------
Total 169,625 179,374 +5.7 1,560
Elimination (198,407) (415,560) - (3,614)
------------------- ----------- ----------- ---------
Consolidated total Y 3,598,415 Y 4,059,547 +12.8 % $ 35,300
Electronics intersegment amounts primarily consist of
transactions with the Game segment, Pictures segment and All
Other.
All Other intersegment amounts primarily consist of
transactions with the Electronics and Game segments.
Operating income (loss) 2006 2007 Change 2007
------------------- ----------- ----------- ------- ---------
Electronics Y 55,446 Y 190,969 +244.4 % $ 1,660
Game (70,330) (125,892) - (1,095)
Pictures (16,442) 5,949 - 52
Financial 29,146 56,890 +95.2 495
Services
All Other 11,228 18,533 +65.1 161
------------------- ----------- ----------- ---------
Total 9,048 146,449 +1,518.6 1,273
Corporate and (2,833) 43,344 - 377
elimination
------------------- ----------- ----------- ---------
Consolidated total Y 6,215 Y 189,793 +2,953.8 % $ 1,650
Electronics Sales and Operating Revenue to Customers by Product Category
------------------------------------------------------------------------
(Millions of yen, millions of U.S. dollars)
Second quarter ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Audio Y 121,655 Y 128,998 +6.0 % $ 1,122
Video 282,920 316,024 +11.7 2,748
Televisions 251,486 309,300 +23.0 2,690
Information and 220,341 268,800 +22.0 2,337
Communications
Semiconductors 52,482 54,032 +3.0 470
Components 221,335 219,750 -0.7 1,911
Other 135,807 139,869 +3.0 1,216
------------------- ----------- ----------- ---------
Total Y 1,286,026 Y 1,436,773 +11.7 % $ 12,494
Six months ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Audio Y 237,947 Y 254,489 +7.0 % $ 2,213
Video 553,101 653,412 +18.1 5,682
Televisions 513,540 544,509 +6.0 4,735
Information and 433,491 500,870 +15.5 4,355
Communications
Semiconductors 100,473 111,192 +10.7 967
Components 426,071 412,121 -3.3 3,584
Other 253,043 276,229 +9.2 2,402
------------------- ----------- ----------- ---------
Total Y 2,517,666 Y 2,752,822 +9.3 % $ 23,938
The above table is a breakdown of Electronics sales and operating revenue
to customers in the Business Segment Information.
The Electronics segment is managed as a single operating segment by Sony's
management. However, Sony believes that the information in this table
is useful to investors in understanding the
product categories in this business segment.
Geographic Segment Information
------------------------------
(Millions of yen, millions of U.S. dollars)
Second quarter ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Japan Y 497,433 Y 518,627 +4.3 % $ 4,510
United States 479,469 509,802 +6.3 4,433
Europe 417,019 491,666 +17.9 4,275
Other Areas 460,258 562,942 +22.3 4,895
------------------- ----------- ----------- ---------
Total Y 1,854,179 Y 2,083,037 +12.3 % $ 18,113
Six months ended September 30
Sales and operating 2006 2007 Change 2007
revenue
------------------- ----------- ----------- ------- ---------
Japan Y 973,631 Y 1,035,131 +6.3 % $ 9,001
United States 927,386 978,526 +5.5 8,509
Europe 815,871 967,946 +18.6 8,417
Other Areas 881,527 1,077,944 +22.3 9,373
------------------- ----------- ----------- ---------
Total Y 3,598,415 Y 4,059,547 +12.8 % $ 35,300
Classification of Geographic Segment Information shows sales and
operating revenue recognized by location of customers.
Condensed Financial Services Financial Statements
-------------------------------------------------
The results of the Financial Services segment are included in Sony's
consolidated financial statements. The following schedules show
unaudited condensed financial statements for the Financial Services segment
and all other segments excluding Financial Services.
These presentations are not required under U.S. GAAP, which is used by Sony
to prepare its consolidated financial statements.
However, because the Financial Services segment is different in nature from
Sony's other segments, Sony believes that a comparative
presentation may be useful in understanding and analyzing Sony's
consolidated financial statements.
Transactions between the Financial Services segment and Sony without
Financial Services are eliminated in the consolidated figures
shown below.
Condensed Balance Sheet
-----------------------
(Millions of yen, millions of U.S. dollars)
Financial Services September 30 March 31
ASSETS 2006 2007 2007 2007
------- ------- ------- -------
Current assets:
Cash and cash Y 191,438 Y 171,861 $ 1,494 Y 277,048
equivalents
Marketable securities 468,256 492,143 4,280 490,237
Other 274,626 569,917 4,956 321,969
------- ------- ------- -------
934,320 1,233,921 10,730 1,089,254
Investments and advances 3,223,872 3,538,870 30,773 3,347,897
Property, plant and 39,427 38,217 332 38,671
equipment
Other assets:
Deferred insurance 389,695 399,244 3,472 394,117
acquisition costs
Other 97,983 102,398 890 107,703
------- ------- ------- -------
487,678 501,642 4,362 501,820
------- ------- ------- -------
Y 4,685,297 Y 5,312,650 $ 46,197 Y 4,977,642
------- ------- ------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings Y 67,548 Y 75,128 $ 653 Y 48,688
Notes and accounts 12,601 14,192 123 13,159
payable, trade
Deposits from 682,717 888,443 7,726 752,367
customers in the
banking business
Other 113,157 142,004 1,235 143,245
------- ------- ------- -------
876,023 1,119,767 9,737 957,459
Long-term liabilities:
Long-term debt 129,415 119,760 1,041 129,484
Accrued pension and 13,222 6,640 58 8,773
severance costs
Future insurance 2,880,479 3,182,692 27,676 3,037,666
policy benefits and
other
Other 197,307 218,818 1,903 204,317
------- ------- ------- -------
3,220,423 3,527,910 30,678 3,380,240
Minority interest in 4,228 5,310 46 5,145
consolidated subsidiaries
Stockholders' equity 584,623 659,663 5,736 634,798
------- ------- ------- -------
Y 4,685,297 Y 5,312,650 $ 46,197 Y 4,977,642
------- ------- ------- -------
Sony without Financial (Millions of yen, millions of U.S. dollars)
Services September 30 March 31
ASSETS 2006 2007 2007 2007
------- ------- ------- -------
Current assets:
Cash and cash Y 363,892 Y 455,123 $ 3,958 Y 522,851
equivalents
Marketable securities 3,076 3,000 26 3,078
Notes and accounts 1,132,099 1,305,752 11,354 1,343,128
receivable, trade
Other 1,825,897 2,033,075 17,679 1,625,914
------- ------- ------- -------
3,324,964 3,796,950 33,017 3,494,971
Film costs 370,905 319,936 2,782 308,694
Investments and advances 506,433 604,661 5,258 623,342
Investments in Financial 187,400 187,400 1,630 187,400
Services, at cost
Property, plant and 1,402,160 1,374,369 11,951 1,382,860
equipment
Other assets 1,018,696 1,220,908 10,616 1,100,795
------- ------- ------- -------
Y 6,810,558 Y 7,504,224 $ 65,254 Y 7,098,062
------- ------- ------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings Y 329,624 Y 287,867 $ 2,503 Y 80,944
Notes and accounts 963,939 1,173,483 10,204 1,167,324
payable, trade
Other 1,324,318 1,439,763 12,520 1,392,333
------- ------- ------- -------
2,617,881 2,901,113 25,227 2,640,601
Long-term liabilities:
Long-term debt 802,173 939,223 8,167 925,259
Accrued pension and 156,445 173,605 1,509 164,701
severance costs
Other 358,479 422,385 3,674 410,354
------- ------- ------- -------
1,317,097 1,535,213 13,350 1,500,314
Minority interest in 35,593 30,270 263 32,808
consolidated subsidiaries
Stockholders' equity 2,839,987 3,037,628 26,414 2,924,339
------- ------- ------- -------
Y 6,810,558 Y 7,504,224 $ 65,254 Y 7,098,062
------- ------- ------- -------
(Millions of yen, millions of U.S. dollars)
Consolidated September 30 March 31
ASSETS 2006 2007 2007 2007
------- ------- ------- -------
Current assets:
Cash and cash Y 555,330 Y 626,984 $ 5,452 Y 799,899
equivalents
Marketable securities 471,332 495,143 4,306 493,315
Notes and accounts 1,150,867 1,322,926 11,504 1,369,777
receivable, trade
Other 2,040,345 2,548,942 22,164 1,883,732
------- ------- ------- -------
4,217,874 4,993,995 43,426 4,546,723
Film costs 370,905 319,936 2,782 308,694
Investments and advances 3,650,394 4,070,400 35,395 3,888,736
Property, plant and 1,441,587 1,412,586 12,283 1,421,531
equipment
Other assets:
Deferred insurance 389,695 399,244 3,472 394,117
acquisition costs
Other 1,073,190 1,274,699 11,084 1,156,561
------- ------- ------- -------
1,462,885 1,673,943 14,556 1,550,678
------- ------- ------- -------
Y 11,143,645 Y 12,470,860 $ 108,442 Y 11,716,362
------- ------- ------- -------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings Y 359,573 Y 327,135 $ 2,845 Y 95,461
Notes and accounts 975,543 1,186,260 10,315 1,179,694
payable, trade
Deposits from 682,717 888,443 7,726 752,367
customers in the
banking business
Other 1,425,322 1,574,798 13,693 1,524,330
------- ------- ------- -------
3,443,155 3,976,636 34,579 3,551,852
Long-term liabilities:
Long-term debt 868,231 1,015,239 8,828 1,001,005
Accrued pension and 169,667 180,245 1,567 173,474
severance costs
Future insurance 2,880,479 3,182,692 27,676 3,037,666
policy benefits and
other
Other 505,109 570,593 4,962 542,691
------- ------- ------- -------
4,423,486 4,948,769 43,033 4,754,836
Minority interest in 40,259 36,597 318 38,970
consolidated subsidiaries
Stockholders' equity 3,236,745 3,508,858 30,512 3,370,704
------- ------- ------- -------
Y 11,143,645 Y 12,470,860 $ 108,442 Y 11,716,362
------- ------- ------- -------
Condensed Statements of Income
------------------------------
(Millions of yen, millions of U.S. dollars)
Financial Services Second quarter ended September 30
2006 2007 Change 2007
------- ------- ------- -------
Financial service revenue Y 168,101 Y 157,504 -6.3 % $ 1,370
Financial service expenses 143,534 134,367 -6.4 1,169
------- ------- -------
Operating income 24,567 23,137 -5.8 201
Other income (expenses), net (138) (72) - (0)
------- ------- -------
Income before income taxes 24,429 23,065 -5.6 201
Income taxes and other 8,841 11,766 +33.1 103
------- ------- -------
Net income Y 15,588 Y 11,299 -27.5 % $ 98
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Sony without Financial Second quarter ended September 30
Services 2006 2007 Change 2007
------- ------- ------- -------
Net sales and operating Y 1,694,094 Y 1,934,650 +14.2 % $ 16,823
revenue
Costs and expenses 1,739,841 1,867,724 +7.4 16,241
------- ------- -------
Operating income (loss) (45,747) 66,926 - 582
Other income (expenses), (4,806) (2,067) - (18)
net
------- ------- -------
Income before income taxes (50,553) 64,859 - 564
(loss)
Income taxes and other (36,645) 2,444 - 21
------- ------- -------
Net income (loss) Y (13,908) Y 62,415 - % $ 543
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Consolidated Second quarter ended September 30
2006 2007 Change 2007
------- ------- ------- -------
Financial service revenue Y 162,198 Y 151,109 -6.8 % $ 1,314
Net sales and operating 1,691,981 1,931,928 +14.2 16,799
revenue
------- ------- -------
1,854,179 2,083,037 +12.3 18,113
Costs and expenses 1,875,012 1,992,567 +6.3 17,326
------- ------- -------
Operating income (loss) (20,833) 90,470 - 787
Other income (expenses), (5,289) (2,546) - (22)
net
------- ------- -------
Income before income taxes (26,122) 87,924 - 765
(loss)
Income taxes and other (27,802) 14,209 - 124
------- ------- -------
Net income Y 1,680 Y 73,715 +4,287.8 % $ 641
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Financial Services Six months ended September 30
2006 2007 Change 2007
------- ------- ------- -------
Financial service revenue Y 292,202 Y 342,344 +17.2 % $ 2,977
Financial service expenses 263,056 285,454 +8.5 2,482
------- ------- -------
Operating income 29,146 56,890 +95.2 495
Other income (expenses), net (195) (155) - (2)
------- ------- -------
Income before income taxes 28,951 56,735 +96.0 493
Income taxes and other 9,926 25,456 +156.5 221
------- ------- -------
Net income Y 19,025 Y 31,279 +64.4 % $ 272
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Sony without Financial Six months ended September 30
Services 2006 2007 Change 2007
------- ------- ------- -------
Net sales and operating Y 3,322,377 Y 3,736,125 +12.5 % $ 32,488
revenue
Costs and expenses 3,345,971 3,604,021 +7.7 31,339
------- ------- -------
Operating income (loss) (23,594) 132,104 - 1,149
Other income (expenses), 28,659 (10,583) - (92)
net
------- ------- -------
Income before income taxes 5,065 121,521 +2,299.2 1,057
Income taxes and other (16,156) 6,057 - 53
------- ------- -------
Net income Y 21,221 Y 115,464 +444.1 % $ 1,004
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Consolidated Six months ended September 30
2006 2007 Change 2007
------- ------- ------- -------
Financial service revenue Y 280,738 Y 328,161 +16.9 % $ 2,853
Net sales and operating 3,317,677 3,731,386 +12.5 32,447
revenue
------- ------- -------
3,598,415 4,059,547 +12.8 35,300
Costs and expenses 3,592,200 3,869,754 +7.7 33,650
------- ------- -------
Operating income 6,215 189,793 +2,953.8 1,650
Other income (expenses), 21,691 (18,111) - (157)
net
------- ------- -------
Income before income taxes 27,906 171,682 +515.2 1,493
Income taxes and other (6,065) 31,512 - 274
------- ------- -------
Net income Y 33,971 Y 140,170 +312.6 % $ 1,219
------- ------- -------
Condensed Statements of Cash Flows
----------------------------------
(Millions of yen, millions of U.S. dollars)
Financial Services Six months ended September 30
2006 2007 2007
------- ------- -------
Net cash provided by operating Y 121,798 Y 67,118 $ 584
activities
Net cash used in investing activities (113,193) (388,669) (3,379)
Net cash provided by financing 65,203 216,364 1,881
activities
------- ------- -------
Net increase (decrease) in cash and 73,808 (105,187) (914)
cash equivalents
Cash and cash equivalents at beginning 117,630 277,048 2,408
of the fiscal year
------- ------- -------
Cash and cash equivalents at the end Y 191,438 Y 171,861 $ 1,494
of the period
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Sony without Financial Services Six months ended September 30
2006 2007 2007
------- ------- -------
Net cash used in operating activities Y (191,169) Y (130,514) $ (1,135)
Net cash used in investing activities (217,499) (154,348) (1,342)
Net cash provided by financing 191,164 219,355 1,907
activities
Effect of exchange rate changes on (4,072) (2,221) (19)
cash and cash equivalents
------- ------- -------
Net decrease in cash and cash (221,576) (67,728) (589)
equivalents
Cash and cash equivalents at beginning 585,468 522,851 4,547
of the fiscal year
------- ------- -------
Cash and cash equivalents at the end Y 363,892 Y 455,123 $ 3,958
of the period
------- ------- -------
(Millions of yen, millions of U.S. dollars)
Consolidated Six months ended September 30
2006 2007 2007
------- ------- -------
Net cash used in operating activities Y (72,775) Y (69,035) $ (600)
Net cash used in investing activities (324,538) (548,851) (4,773)
Net cash provided by financing 253,617 447,192 3,889
activities
Effect of exchange rate changes on (4,072) (2,221) (19)
cash and cash equivalents
------- ------- -------
Net decrease in cash and cash (147,768) (172,915) (1,503)
equivalents
Cash and cash equivalents at beginning 703,098 799,899 6,955
of the fiscal year
------- ------- -------
Cash and cash equivalents at the end Y 555,330 Y 626,984 $ 5,452
of the period
------- ------- -------
Investor Relations Contacts:
---------------------------
Tokyo New York London
Tatsuyuki Sonoda Sam Levenson/Justin Hill Shinji Tomita
/Miki Emura
+81-(0)3-6748-2180 +1-212-833-6722 +44-(0)20-7444-9713
Home Page: http://www.sony.net/IR/