6-K 1 a50863670.htm SONY CORPORATION 6-K a50863670.htm
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 May 2014
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/  Kenichiro Yoshida
 
                (Signature)
 
Kenichiro Yoshida
 
Executive Vice President and
 
Chief Financial Officer
 
Date: May 14, 2014

List of materials

Documents attached hereto:
 
i) Press release announcing Consolidated Financial Results for the fiscal year ended March 31, 2014.

 
 
 
 
 
1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan
 
News & Information
 
No. 14-049E
3:00 P.M. JST, May 14, 2014
 
 
Consolidated Financial Results
for the Fiscal Year Ended March 31, 2014
 
 
Tokyo, May 14, 2014 -- Sony Corporation today announced its consolidated financial results for the fiscal year ended March 31, 2014 (April 1, 2013 to March 31, 2014).
 
   
(Billions of yen, millions of U.S. dollars, except per share amounts)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
       2014*  
                           
Sales and operating revenue
   ¥ 6,795.5     ¥ 7,767.3       +14.3 %   $ 75,410  
Operating income
     226.5       26.5       -88.3       257  
Income before income taxes
     242.1       25.7       -89.4       250  
Net income (loss) attributable to Sony Corporation’s
stockholders
     41.5       (128.4 )     -       (1,246 )
Net income (loss) attributable to Sony Corporation’s
stockholders per share of common stock:
                                
    - Basic
   ¥ 41.32     ¥ (124.99 )     -     $ (1.21 )
    - Diluted
     38.79       (124.99 )     -       (1.21 )

*
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 103 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of March 31, 2014.

All amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).

Certain figures for the fiscal year ended March 31, 2013 have been revised from the versions previously disclosed.  For further details, please see Note 5 on page F-18.

The average foreign exchange rates during the fiscal years ended March 31, 2013 and 2014 are presented below.

   
Fiscal year ended March 31
    
   
2013
    
2014
    
Change
    
The average rate of yen
                    
     1 U.S. dollar
   ¥ 83.1     ¥ 100.2       17.1 %
(yen depreciation)
1 Euro
     107.2       134.4       20.3  
(yen depreciation)
 
Consolidated Results for the Fiscal Year Ended March 31, 2014

Sales and operating revenue (“sales”) were 7,767.3 billion yen (75,410 million U.S. dollars), an increase of 14.3% compared to the previous fiscal year (“year-on-year”).  This increase was primarily due to the favorable impact of foreign exchange rates, the launch of the PlayStation®4 (PS4™), as well as a significant increase in sales of smartphones.  On a constant currency basis, sales decreased 2% year-on-year.  For further details about sales on a constant currency basis, see Note on page 11.

Operating income decreased 200.0 billion yen year-on-year to 26.5 billion yen (257 million U.S. dollars).  This significant decrease was primarily due to a year-on-year decrease in gains on the sale of assets and remeasurement gains (see below), a recording of 91.7 billion yen (890 million U.S. dollars) in losses related to the PC business, including restructuring charges, compared to 38.6 billion yen in PC business-related losses recorded in the previous fiscal year, and a recording of impairment charges in the battery business and in the disc manufacturing business.
 
 
1
 
 
This decrease was partially offset by the favorable impact of foreign exchange rates, a significant improvement in operating results in the mobile phone business and a significant decrease in loss in Televisions.

Of the 91.7 billion yen (890 million U.S. dollars) in losses related to the PC business in the current fiscal year, 58.3 billion yen (566 million U.S. dollars) were costs related to the decision to exit the business, of which 45.5 billion yen (442 million U.S. dollars) was recorded in the Mobile Products & Communications (“MP&C”) segment and 12.8 billion yen (124 million U.S. dollars) was recorded in Corporate and elimination.  The 12.8 billion yen (124 million U.S. dollars) represents restructuring costs related to reducing the scale of sales companies resulting from Sony’s exit from the PC business.  Of the 58.3 billion yen (566 million U.S. dollars), 40.9 billion yen (397 million U.S. dollars) was recognized as restructuring charges, and the remaining 17.4 billion yen (169 million U.S. dollars) was an expense primarily for the write-down of excess components in inventory.  The following table provides a reconciliation of the PC business operating loss.
 
(Billions of yen, millions of U.S. dollars)
  
Fiscal year ended March 31 2014
  
   
MP&C
    
Corporate and
elimination
    
Consolidated
total
    
Consolidated
total
  
i.  Impairment of long-lived assets
   ¥ 12.8     ¥ -     ¥ 12.8     $ 124  
ii.  Expenses to compensate suppliers
for unused components
     8.0       -       8.0       78  
iii. Early retirement costs etc.
    7.3       12.8       20.1       195  
(I) Restructuring charges (i + ii + iii)
     28.1       12.8       40.9       397  
(II) Write-down of excess components in
inventory etc.
     17.4       -       17.4       169  
PC exit costs (I+II)
     45.5       12.8       58.3       566  
Operating loss excluding exit cost
     (33.3 )     -       (33.3 )     (323 )
Total PC Operating Loss
   ¥ (78.8 )   ¥ (12.8 )   ¥ (91.7 )   $ (890 )
 
Included in operating income in the current fiscal year was a gain of 12.8 billion yen (124 million U.S. dollars) from the sale of certain shares of M3, Inc. (“M3”).  Included in operating income in the previous fiscal year were a gain of 122.2 billion yen from the sale of certain shares of M3 and the subsequent remeasurement of Sony’s remaining interest in M3, formerly a consolidated subsidiary, in All Other, a gain of 691 million U.S. dollars (65.5 billion yen) from the sale of Sony’s U.S. headquarters building at 550 Madison Avenue in New York City (“Sony’s U.S. headquarters building”), a gain of 42.3 billion yen from the sale of the “Sony City Osaki” office building and premises (“Sony City Osaki”) in Tokyo in Corporate and elimination, and a gain of 9.1 billion yen recognized on the sale of the chemical products related business in the Devices segment.

Total impairment charges of 86.0 billion yen (835 million U.S. dollars) in the current fiscal year includes a 32.1 billion yen (312 million U.S. dollars) impairment charge related to long-lived assets in the battery business in the Devices segment, a 25.6 billion yen (249 million U.S. dollars) impairment charge related to long-lived assets in the disc manufacturing business outside of Japan and the U.S. and goodwill across the entire disc manufacturing business in All Other, and a 12.8 billion yen (124 million U.S. dollars) impairment charge related to long-lived assets in the PC business in the MP&C segment.

Restructuring charges, net, increased 3.1 billion yen year-on-year to 80.6 billion yen (782 million U.S. dollars).  The charges in the current fiscal year were primarily related to restructuring initiatives in the PC business and at Sony’s headquarters and sales companies.  Restructuring charges related to Sony’s exit from the PC business were 40.9 billion yen (397 million U.S. dollars), which includes 12.8 billion yen (124 million U.S. dollars) in impairment charges for long-lived assets in the PC business, 12.8 billion yen (124 million U.S. dollars) in restructuring charges related to reducing the scale of sales companies resulting from Sony’s exit from the PC business, 8.0 billion yen (78 million U.S. dollars) of expenses to compensate suppliers for unused components reflecting the termination of future manufacturing and 7.3 billion yen (71 million U.S. dollars) primarily in early retirement costs.

Operating income for the current fiscal year included a net benefit of 11.9 billion yen (116 million U.S. dollars) from insurance recoveries related to damages and losses incurred from the floods in Thailand (the “Floods”), which took place in the fiscal year ended March 31, 2012.  Operating results for the previous fiscal year included a net benefit of 40.0 billion yen from the above-mentioned insurance recoveries.
 
 
2
 
 
Equity in net loss of affiliated companies, recorded within operating income, increased 0.4 billion yen year-on-year to 7.4 billion yen (72 million U.S. dollars).

The net effect of other income and expenses was an expense of 0.8 billion yen (7 million U.S. dollars), compared to income of 15.6 billion yen in the previous fiscal year.  This change was primarily due to a decrease in gain on the sale of securities investments, partially offset by a decrease in interest expense.  Sales of securities investments in the current fiscal year include a gain of 7.4 billion yen (72 million U.S. dollars) from the sale of Sony’s shares in Sky Perfect JSAT Holdings Inc., which were sold in December 2013.  Sales of securities investments in the previous fiscal year included a gain of 40.9 billion yen from the sale of Sony’s shares in DeNA Co., Ltd. (“DeNA”), which were sold in March 2013.

Income before income taxes decreased 216.3 billion yen year-on-year to 25.7 billion yen (250 million U.S. dollars).

Income taxes: During the current fiscal year, Sony recorded 94.6 billion yen (918 million U.S. dollars) of income tax expense, and Sony’s effective tax rate exceeded the Japanese statutory tax rate.  During the current fiscal year, Sony Corporation and certain of its subsidiaries which had established valuation allowances incurred losses and, as such, Sony continued to not recognize the associated tax benefits, although this was partially offset by the recording of certain tax benefits associated with the impact of gains in other comprehensive income.  Sony also recorded additional tax reserves during the current fiscal year.

Net loss attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, was 128.4 billion yen (1,246 million U.S. dollars) compared to net income of 41.5 billion yen in the previous fiscal year.


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) reported before intersegment transactions are eliminated and excludes unallocated corporate expenses.
 
Mobile Products & Communications (MP&C)

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 1,257.6     ¥ 1,630.1       +29.6 %   $ 15,826  
Operating loss
     (97.2 )     (75.0 )     -       (729 )

The MP&C segment includes the Mobile Communications and Personal and Mobile Products categories.  Mobile Communications includes mobile phones; Personal and Mobile Products includes personal computers.
 
Sales increased 29.6% year-on-year (a 6% increase on a constant currency basis) to 1,630.1 billion yen (15,826 million U.S. dollars).  This significant increase was primarily due to a significant increase in unit sales of smartphones and an increase in the average selling price of smartphones as well as the favorable impact of foreign exchange rates, partially offset by a significant decrease in unit sales of PCs.

Operating loss decreased 22.1 billion yen year-on-year to 75.0 billion yen (729 million U.S. dollars).  This significant decrease in loss year-on-year was primarily due to a significant improvement in the operating results of the mobile phone business, resulting in the recording of a profit, partially offset by an increase in restructuring charges and increased operating losses in the PC business.

PC operating losses, including restructuring charges, in the MP&C segment were 78.8 billion yen (765 million U.S. dollars), compared to a loss of 38.6 billion yen in the previous fiscal year.  Of the 78.8 billion yen (765 million U.S. dollars) in operating losses, 45.5 billion yen (442 million U.S. dollars) was for costs related to Sony’s decision to exit the PC business.  Of the 45.5 billion yen (442 million U.S. dollars), 28.1 billion yen (273 million U.S. dollars) was recognized as restructuring charges and the remaining 17.4 billion yen (169 million U.S. dollars) was an expense primarily for the write-down of excess components in inventory.
 
 
3
 
 
During the current fiscal year, restructuring charges, net, for the MP&C segment increased 26.6 billion yen year-on-year to 32.5 billion yen (315 million U.S. dollars).  Of the 32.5 billion yen (315 million U.S. dollars), 28.1 billion yen (273 million U.S. dollars) was related to the PC business.  This 28.1 billion yen (273 million U.S. dollars) includes a 12.8 billion yen (124 million U.S. dollars) impairment for long-lived assets, an 8.0 billion yen (78 million U.S. dollars) expense to compensate suppliers for unused components reflecting the termination of future manufacturing and 7.3 billion yen (71 million U.S. dollars) primarily in early retirement costs.
 
Game

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 707.1     ¥ 979.2       +38.5 %   $ 9,507  
Operating income (loss)
     1.7       (8.1 )     -       (78 )

Sales increased 38.5% year-on-year (a 16% increase on a constant currency basis) to 979.2 billion yen (9,507 million U.S. dollars).  This significant increase was primarily due to the launch of the PS4 as well as the favorable impact of foreign exchange rates.  PlayStation®3 (“PS3”) hardware unit sales decreased, although PS3 software sales increased.

Operating loss of 8.1 billion yen (78 million U.S. dollars) was recorded, compared to operating income of 1.7 billion yen in the previous fiscal year.  This year-on-year deterioration was primarily due to an increase in costs related to the launch of the PS4 as well as the recording of a 6.2 billion yen (60 million U.S. dollars) write-off of certain PC game software titles sold by Sony Online Entertainment LLC, partially offset by the above-mentioned increase in sales.
 
Imaging Products & Solutions (IP&S)

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 756.2     ¥ 741.2       -2.0 %   $ 7,196  
Operating income
     1.4       26.3       +1,725.7       256  

The IP&S segment includes the Digital Imaging Products and Professional Solutions categories.  Digital Imaging Products includes compact digital cameras, video cameras and interchangeable single-lens cameras; Professional Solutions includes broadcast- and professional-use products.  Due to certain changes in the organizational structure, sales and operating revenue and operating income (loss) of the IP&S segment of the comparable prior period have been reclassified to conform to the current presentation.

Sales decreased 2.0% year-on-year (a 16% decrease on a constant currency basis) to 741.2 billion yen (7,196 million U.S. dollars).  This decrease was primarily due to a significant decrease in unit sales of compact digital cameras and video cameras reflecting a contraction of these markets, partially offset by the favorable impact of foreign exchange rates during the current fiscal year.

Operating income increased 24.9 billion yen year-on-year to 26.3 billion yen (256 million U.S. dollars).  This significant increase year-on-year was mainly due to the favorable impact of foreign exchange rates and a decrease in restructuring charges, partially offset by the above-mentioned decrease in sales of video cameras.  During the current fiscal year, restructuring charges, net, decreased 9.5 billion yen year-on-year to 3.4 billion yen (33 million U.S. dollars).
 
 
4
 
 
Home Entertainment & Sound (HE&S)

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 994.8     ¥ 1,168.6       +17.5 %   $ 11,345  
Operating loss
     (84.3 )     (25.5 )     -       (248 )

The HE&S segment includes the Televisions and Audio and Video categories.  Televisions includes LCD televisions; Audio and Video includes home audio, Blu-ray DiscTM players and recorders and memory-based portable audio devices.

Sales increased 17.5% year-on-year (a 2% decrease on a constant currency basis) to 1,168.6 billion yen (11,345 million U.S. dollars).  This significant increase was primarily due to the favorable impact of foreign exchange rates and an improvement in LCD television product mix reflecting the introduction of high value-added models.

Operating loss decreased 58.8 billion yen year-on-year to 25.5 billion yen (248 million U.S. dollars).  This improvement was primarily due to an improvement in LCD television product mix and cost reductions.  During the current fiscal year, restructuring charges, net, decreased 10.8 billion yen year-on-year to 1.6 billion yen (15 million U.S. dollars).

In Televisions, sales increased 29.7% year-on-year to 754.3 billion yen (7,323 million U.S. dollars).  Operating loss* decreased 43.9 billion yen year-on-year to 25.7 billion yen (250 million U.S. dollars).

*
The operating loss in Televisions excludes restructuring charges, which are included in the overall segment results and are not allocated to product categories.
 
Devices

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 848.6     ¥ 794.2       -6.4 %   $ 7,711  
Operating income (loss)
     43.9       (13.0 )     -       (126 )

The Devices segment includes the Semiconductors and Components categories.  Semiconductors includes image sensors; Components includes batteries, recording media and data recording systems.

Sales decreased 6.4% year-on-year (a 19% decrease on a constant currency basis) to 794.2 billion yen (7,711 million U.S. dollars).  This decrease was primarily due to a decrease in sales of system LSIs primarily used for PS3s and the absence of sales from the chemical products related business in the current fiscal year, partially offset by the favorable impact of foreign exchange rates and a significant increase in sales of image sensors reflecting higher demand for mobile products.  Sales to external customers increased 0.9% year-on-year.

Operating loss of 13.0 billion yen (126 million U.S. dollars) was recorded, compared to operating income of 43.9 billion yen in the previous fiscal year.  This significant deterioration in operating results was primarily due to the recording of a 32.1 billion yen (312 million U.S. dollars) impairment charge related to long-lived assets in the battery business as well as a lower net benefit in the current fiscal year from insurance recoveries related to damages and losses incurred from the Floods.  During the current fiscal year, restructuring charges, net, decreased 10.2 billion yen to 8.9 billion yen (87 million U.S. dollars) year-on-year.
 
 
5
 
 
*    *    *    *    *

Total inventory of the five Electronics* segments above as of March 31, 2014 was 642.9 billion yen (6,242 million U.S. dollars), an increase of 16.4 billion yen, or 2.6% year-on-year.  This increase was primarily due to the impact of the depreciation of the yen.  Inventory decreased by 102.4 billion yen, or 13.7% compared with the level as of December 31, 2013.

* The term “Electronics” refers to the sum of the MP&C, Game, IP&S, HE&S and Devices segments.

*    *    *    *    *
 
Pictures

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 732.7     ¥ 829.6       +13.2 %   $ 8,054  
Operating income
     47.8       51.6       +8.0       501  

Starting from the second quarter ended September 30, 2013, the disclosure for sales to external customers for the Pictures segment has been expanded into the following three categories: Motion Pictures, Television Productions, and Media Networks.  Motion Pictures includes the production, acquisition and distribution of motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks.  For further details, see page F-8.

The results presented in Pictures are a yen-translation of the results of Sony Pictures Entertainment (“SPE”), a U.S.-based operation that aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.  Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results is specified as being on “a U.S. dollar basis.”

Sales increased 13.2% year-on-year (a 6% decrease on a constant currency (U.S. dollar) basis) to 829.6 billion yen (8,054 million U.S. dollars) due to the favorable impact of the depreciation of the yen against the U.S. dollar.  On a U.S. dollar basis, sales for Motion Pictures decreased significantly year-on-year due to lower theatrical and home entertainment revenues as the previous fiscal year benefitted from the strong performances of Skyfall, The Amazing Spider-Man and Men in Black 3 as well as a greater number of home entertainment releases.  On a U.S. dollar basis, sales for Television Productions increased significantly year-on-year primarily due to the extension and expansion in scope of a licensing agreement for game shows produced by SPE, including Wheel of Fortune, and higher home entertainment and subscription video on demand (“SVOD”) revenues for the U.S. television series Breaking Bad.  On a U.S. dollar basis, Media Networks revenues were also higher than the previous fiscal year due to an increase in advertising and digital game revenues.

Operating income increased 3.8 billion yen year-on-year to 51.6 billion yen (501 million U.S. dollars) primarily due to the favorable impact of the depreciation of the yen against the U.S. dollar.  On a U.S. dollar basis, operating income decreased year-on-year.  This decrease was primarily due to the lower Motion Pictures sales noted above and higher restructuring charges incurred during the current fiscal year.  The current fiscal year’s operating results also reflect the underperformance of White House Down and After Earth.  These lower results were partially offset by the higher sales for Television Productions noted above and a gain of 106 million U.S. dollars (10.3 billion yen) recognized on the sale of SPE’s music publishing catalog in the current fiscal year.
 
 
6
 
 
Music

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Sales and operating revenue
   ¥ 441.7     ¥ 503.3       +13.9 %   $ 4,886  
Operating income
     37.2       50.2       +34.9       487  

Starting from the second quarter ended September 30, 2013, the disclosure for sales to external customers for the Music segment has been expanded into the following three categories: Recorded Music, Music Publishing and Visual Media and Platform.  Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes various service offerings for music and visual products and the production and distribution of animation titles.  For further details, see page F-8.

The results presented in Music include the yen-translated results of Sony Music Entertainment (“SME”), a U.S.-based operation which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis, the results of Sony Music Entertainment (Japan) Inc., a Japan-based music company which aggregates its results in yen, and the yen-translated consolidated results of Sony/ATV Music Publishing LLC (“Sony/ATV”), a 50% owned U.S.-based joint venture in the music publishing business which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis.

Sales increased 13.9% year-on-year (essentially flat on a constant currency basis) to 503.3 billion yen (4,886 million U.S. dollars) primarily due to the favorable impact of the depreciation of the yen against the U.S. dollar.  On a constant currency basis, Recorded Music sales decreased primarily due to a contraction of the Japanese music market, partially offset by an increase in digital revenue and the strong performances of a number of releases in most regions excluding Japan.  However, Music Publishing and Visual Media and Platform sales increased, resulting in overall segment sales being essentially flat year-on-year.  Best-selling titles in the current fiscal year included One Direction’s Midnight Memories, Daft Punk’s Random Access Memories, Beyoncé’s BEYONCÉ and Miley Cyrus’ Bangerz.

Operating income increased 13.0 billion yen year-on-year to 50.2 billion yen (487 million U.S. dollars).  This increase was primarily due to an improvement in equity in net income (loss) from affiliated companies, mainly EMI Music Publishing, the favorable impact of the depreciation of the yen against the U.S. dollar and a decrease in restructuring charges.

Financial Services

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change in yen
    
2014
  
Financial services revenue
   ¥ 1,002.4     ¥ 993.8       -0.9 %   $ 9,649  
Operating income
     142.2       170.3       +19.7       1,653  

The Financial Services segment results include Sony Financial Holdings Inc. (“SFH”) and SFH’s consolidated subsidiaries such as Sony Life Insurance Co., Ltd. (“Sony Life”), Sony Assurance Inc. and Sony Bank Inc. (“Sony Bank”).  The results of Sony Life discussed in the Financial Services segment differ from the results that SFH and Sony Life disclose separately on a Japanese statutory basis.

Certain figures for the fiscal year ended March 31, 2013 have been revised from the versions previously disclosed.  For details, please see Note 5 on page F-18.

Financial services revenue decreased 0.9% year-on-year to 993.8 billion yen (9,649 million U.S. dollars) due to a decrease in revenue at Sony Life being essentially offset by a significant increase in revenue at Sony Bank primarily reflecting an improvement in foreign exchange gains and losses on foreign currency-denominated customer deposits.  Revenue at Sony Life decreased 3.7% year-on-year to 882.4 billion yen (8,567 million U.S. dollars).  This decrease was due to a change in the product mix of new insurance policies, in which the initial payment of insurance premiums, such as for lump-sum payment endowment insurance, is deferred as deposits payable and not recognized as revenue in the period.
 
 
7
 
 
Operating income increased 28.1 billion yen year-on-year to 170.3 billion yen (1,653 million U.S. dollars) primarily due to the above-mentioned improvement in foreign exchange gains and losses on foreign currency-denominated customer deposits at Sony Bank.  Operating income at Sony Life increased 2.4 billion yen year-on-year to 159.8 billion yen (1,551 million U.S. dollars) due to an improvement in investment performance in the general account primarily resulting from higher interest and dividend income.


*    *    *    *    *

Cash Flows

For Consolidated Statements of Cash Flows, charts showing Sony’s cash flow information for all segments, all segments excluding the Financial Services segment and the Financial Services segment alone, please refer to pages F-5 and F-16.

Operating Activities: Net cash provided by operating activities was 664.1 billion yen (6,448 million U.S. dollars), an increase of 188.0 billion yen, or 39.5% year-on-year.

For all segments excluding the Financial Services segment, there was a net cash inflow of 257.2 billion yen (2,498 million U.S. dollars), an increase of 218.7 billion yen, or 568.5% year-on-year.  This increase in inflow was primarily due to the positive impact of an increase in notes and accounts payable, trade resulting from an expansion in production of PS4 hardware, compared to a decrease in the previous fiscal year.  This increase was partially offset by the negative impact of increases in notes and accounts receivable and in other receivables, included in other current assets, from component assembly companies, compared to decreases in the previous fiscal year, and by the negative impact of a smaller decrease in inventories resulting from the expansion in production of PS4 hardware and its higher unit sales.  Also included in notes and accounts receivable in the current fiscal year was the impact of the sale of accounts receivable in the Pictures segment in the U.S.

The Financial Services segment had a net cash inflow of 413.6 billion yen (4,015 million U.S. dollars), a decrease of 29.7 billion yen, or 6.7% year-on-year.  This decrease was primarily due to a decrease in insurance premium revenue at Sony Life.

Investing Activities: Net cash used in investing activities during the current fiscal year was 710.5 billion yen (6,898 million U.S. dollars), an increase of 5.2 billion yen, or 0.7% year-on-year.

For all segments excluding the Financial Services segment, there was a net cash outflow of 94.3 billion yen (915 million U.S. dollars), an increase of 44.5 billion yen, or 89.3% year-on-year.  This increase was primarily due to a year-on-year decrease in cash proceeds from the sales of fixed assets and businesses.  Included in the sales of fixed assets and businesses during the current fiscal year were the proceeds from the sale and leaseback of machinery and equipment and from the sale of all of Sony’s shares of Gracenote, Inc.  Included in the sales of fixed assets and businesses during the previous fiscal year were the sale of Sony’s U.S. headquarters building, Sony City Osaki, and the chemical products related business.

The Financial Services segment used 616.2 billion yen (5,983 million U.S. dollars) of net cash, a decrease of 39.6 billion yen, or 6.0% year-on-year.  This decrease was mainly due to a year-on-year increase in proceeds from the sales of investment securities at Sony Bank.

In all segments excluding the Financial Services segment, net cash generated from operating and investing activities combined*1 for the current fiscal year was 162.9 billion yen (1,583 million U.S. dollars), a 174.3 billion yen improvement from net cash used in the previous fiscal year.

Financing Activities: Net cash provided by financing activities during the current fiscal year was 207.9 billion yen (2,018 million U.S. dollars), an increase of 119.3 billion yen, or 134.8% year-on-year.

For all segments excluding the Financial Services segment, there was a 40.2 billion yen (391 million U.S. dollars) net cash outflow, a decrease of 115.4 billion yen, or 74.2% year-on-year.  The decrease was mainly due to a decrease in repayments of long-term debt, net, year-on-year, a tender offer for shares of So-net Entertainment Corporation (currently So-net Corporation) in the previous fiscal year, and an increase in short-term borrowings　year-on-year.
 
 
8
 
 
In the Financial Services segment, financing activities provided 241.5 billion yen (2,344 million U.S. dollars) of net cash, an increase of 2.5 billion yen, or 1.0% year-on-year.  The increase was primarily due to the increase in borrowings at Sony Bank.

Total Cash and Cash Equivalents: Accounting for the above factors and the effect of fluctuations in foreign exchange rates, the total outstanding balance of cash and cash equivalents as of March 31, 2014 was 1,046.5 billion yen (10,160 million U.S. dollars).  Cash and cash equivalents of all segments excluding the Financial Services segment was 806.1 billion yen (7,827 million U.S. dollars) as of March 31, 2014, an increase of 181.3 billion yen, or 29.0% compared with the balance as of March 31, 2013, and an increase of 197.8 billion yen, or 32.5% compared with the balance as of December 31, 2013.  Sony believes that it continues to maintain sufficient liquidity through access to a total, translated into yen, of 733.3 billion yen (7,120 million U.S. dollars) of unused committed lines of credit with financial institutions in addition to the cash and cash equivalents balance as of March 31, 2014.  Within the Financial Services segment, the outstanding balance of cash and cash equivalents was 240.3 billion yen (2,333 million U.S. dollars) as of March 31, 2014, an increase of 38.8 billion yen, or 19.2% compared with the balance as of March 31, 2013, and a decrease of 0.6 billion yen, or 0.3% compared with the balance as of December 31, 2013.

*1
Sony has included the information for cash flow from operating and investing activities combined, excluding the Financial Services segment’s activities, as Sony’s management frequently monitors this financial measure and believes this non-U.S. GAAP measurement is important for use in evaluating Sony’s ability to generate cash to maintain liquidity and fund debt principal and dividend payments from business activities other than its Financial Services segment.  This information is derived from the reconciliations prepared in the Condensed Statements of Cash Flows on page F-16.  This information and the separate condensed presentations shown below are not required or prepared in accordance with U.S. GAAP.  The Financial Services segment’s cash flow is excluded from the measure because SFH, which constitutes a majority of the Financial Services segment, is a separate publicly traded entity in Japan with a significant minority interest and it, as well as its subsidiaries, secure liquidity on their own.  This measure may not be comparable to those of other companies.  This measure has limitations because it does not represent residual cash flows available for discretionary expenditures principally due to the fact that the measure does not deduct the principal payments required for debt service.  Therefore, Sony believes it is important to view this measure as supplemental to its entire statement of cash flows and together with Sony’s disclosures regarding investments, available credit facilities and overall liquidity.

A reconciliation of the differences between the Consolidated Statement of Cash Flows reported and cash flows from operating and investing activities combined excluding the Financial Services segment’s activities is as follows:

   
(Billions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
2014
  
Net cash provided by operating activities reported in the consolidated statements of
cash flows
   ¥ 476.2     ¥ 664.1     $ 6,448  
Net cash used in investing activities reported in the consolidated statements of cash flows
     (705.3 )     (710.5 )     (6,898 )
      (229.1 )     (46.4 )     (450 )
                         
Less: Net cash provided by operating activities within the Financial Services segment
     443.3       413.6       4,015  
Less: Net cash used in investing activities within the Financial Services segment
     (655.9 )     (616.2 )     (5,983 )
Eliminations *2
     5.2       6.7       65  
                         
Cash flow provided by (used in) operating and investing activities combined excluding the
Financial Services segment’s activities
   ¥ (11.3 )   ¥ 162.9     $ 1,583  

*2
Eliminations primarily consist of intersegment dividend payments.


*    *    *    *    *
Consolidated Results for the Fourth Quarter Ended March 31, 2014

For Consolidated Statements of Income and Business Segment Information for the fourth quarter ended March 31, 2014 and 2013, please refer to pages F-3 and F-7 respectively.

Sales for the fourth quarter ended March 31, 2014 increased 8.1% year-on-year to 1,870.9 billion yen (18,164 million U.S. dollars).  This increase was primarily due to the favorable impact of foreign exchange rates, the launch of the PS4, and a significant increase in sales in the Pictures segment, partially offset by a significant decrease in financial services revenue.
 
9
 

During the current quarter, the average rates of the yen were 102.8 yen against the U.S. dollar and 140.9 yen against the euro, which were 10.2% lower and 13.5% lower, respectively, as compared with the same period in the previous fiscal year.  On a constant currency basis, consolidated sales were essentially flat year-on-year.  For further details about sales on a constant currency basis, see Note on page 11.

In the MP&C segment, sales increased primarily due to the favorable impact of foreign exchange rates and a significant increase in unit sales of smartphones.  In the Game segment, sales increased significantly primarily due to the launch of the PS4 and the favorable impact of foreign exchange rates.  In the IP&S segment, sales increased primarily due to the favorable impact of foreign exchange rates as well as an increase in unit sales of interchangeable single-lens cameras.  In the HE&S segment, sales increased significantly primarily due to the favorable impact of foreign exchange rates, an improvement in LCD television product mix and an increase in unit sales.  In the Devices segment, sales increased mainly due to an increase in sales of image sensors and the favorable impact of foreign exchange rates.  In the Pictures segment, sales increased significantly primarily due to the favorable impact of the depreciation of the yen against the U.S. dollar, the extension and expansion in scope of a licensing agreement for game shows produced by SPE including Wheel of Fortune, and higher home entertainment and SVOD revenues for Breaking Bad.  In the Music segment, sales increased significantly due to the favorable impact of the depreciation of the yen against the U.S. dollar as well as an increase in Music Publishing and Visual Media and Platform sales.  In the Financial Services segment, financial services revenue decreased significantly primarily due to a significant deterioration in investment performance in the separate account at Sony Life reflecting a deterioration in the stock market in the current quarter compared with a significant rise in the stock market in the same quarter of the previous fiscal year.

Operating loss of 111.8 billion yen (1,085 million U.S. dollars) was recorded for the current quarter, compared to operating income of 145.4 billion yen in the same quarter of the previous fiscal year.  This significant deterioration was primarily due to a decrease year-on-year in sale and remeasurement gains associated with the sale of assets and the recording of an impairment charge in the current quarter in the disc manufacturing business in All Other.  Included in operating income in the same quarter of the previous fiscal year were a gain from the sale of certain shares of M3 and the subsequent remeasurement of Sony’s remaining interest in M3, a gain from the sale of Sony’s U.S. headquarters building and a gain from the sale of Sony City Osaki.

In the MP&C segment, operating results deteriorated significantly primarily due to the recording of charges related to Sony’s withdrawal from the PC business.  In the Game segment, operating loss increased primarily due to increased costs related to the launch of the PS4.  In the IP&S segment, operating results improved significantly mainly due to a decrease in restructuring charges and the favorable impact of foreign exchange rates.  In the HE&S segment, operating loss decreased significantly primarily due to a decrease in loss in Televisions.  In the Devices segment, operating loss was essentially flat primarily due to a lower year-on-year net benefit from insurance recoveries related to damages and losses incurred from the Floods, offset by the favorable impact of foreign exchange rates.  In the Pictures segment, operating income increased significantly due to the extension and expansion in scope of a licensing agreement for game shows produced by SPE and higher sales for Breaking Bad, partially offset by higher restructuring charges compared to the same quarter of the previous fiscal year.  In the Music segment, operating income increased primarily due to the impact of the above-mentioned increase in sales and a decrease in restructuring charges. In the Financial Services segment, operating income decreased significantly primarily due to an increase in the provision of policy reserves pertaining to minimum guarantees for variable insurance at Sony Life, driven by the above-mentioned deterioration in the stock market.

Restructuring charges, net, recorded as operating expenses, amounted to 54.5 billion yen (529 million U.S. dollars) compared to 38.1 billion yen for the same quarter of the previous fiscal year.

Equity in net loss of affiliated companies, recorded within operating income, increased 3.4 billion yen year-on-year to 6.6 billion yen (64 million U.S. dollars).

The net effect of other income and expenses was an expense of 1.3 billion yen (13 million U.S. dollars), compared to 40.0 billion yen of income recorded in the same quarter of the previous fiscal year.  This change was primarily due to the recording of a gain on sale of securities investments in the same quarter of the previous fiscal year resulting from the sale of Sony’s shares in DeNA.
 
 
10
 
 
Loss before income taxes of 113.1 billion yen (1,098 million U.S. dollars) was recorded, compared to income of 185.4 billion yen recorded in the same quarter of the previous fiscal year.

Income taxes: During the current quarter, Sony recorded 11.2 billion yen (109 million U.S. dollars) of income tax expense despite the net loss before income taxes.  During the current quarter, Sony Corporation and certain of its subsidiaries which had established valuation allowances incurred losses and, as such, Sony continued to not recognize the associated tax benefits, although this was partially offset by the recording of certain tax benefits associated with the impact of gains in other comprehensive income.  Sony also recorded additional tax reserves during the current quarter.

Net loss attributable to Sony Corporation’s stockholders, which excludes net income attributable to noncontrolling interests, was 138.2 billion yen (1,342 million U.S. dollars) compared to a net income of 93.2 billion yen in the same quarter of the previous fiscal year.
 
*    *    *    *    *
 
Note

The descriptions of sales on a constant currency basis reflect sales obtained by applying the yen’s monthly average exchange rates from the previous fiscal year or the same quarter of the previous fiscal year to local currency-denominated monthly sales in the current fiscal year or the current quarter.  In certain cases, most significantly in the Pictures segment and SME and Sony/ATV in the Music segment, the constant currency amounts are after aggregation on a U.S. dollar basis.  Sales on a constant currency basis are not reflected in Sony’s consolidated financial statements and are not measures in accordance with U.S. GAAP.  Sony does not believe that these measures are a substitute for U.S. GAAP measures.  However, Sony believes that disclosing sales information on a constant currency basis provides additional useful analytical information to investors regarding the operating performance of Sony.

*    *    *    *    *

Outlook for the Fiscal Year Ending March 31, 2015

The forecast for consolidated results for the fiscal year ending March 31, 2015 is as follows:

   
(Billions of yen)
  
   
March 31, 2014
 Results
    
March 31, 2015 Forecast
    
Change from
March 31, 2014 Results
  
Sales and operating revenue
   ¥ 7,767.3     ¥ 7,800       +0.4 %
Operating income
     26.5       140       +428.4  
Income before income taxes
     25.7       130       +405.0  
Net loss attributable to
Sony Corporation’s stockholders
     (128.4 )     (50 )     -  

Assumed foreign currency exchange rates: approximately 103 yen to the U.S. dollar and approximately 137 yen to the euro.

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2015 to reflect modifications to its organizational structure as of April 1, 2014, primarily repositioning the operations of the previously reported Game and MP&C segments.  In connection with this realignment, the previously-reported operations of the network business which were included in All Other will be integrated with the previously-reported Game segment and be reported as the Game & Network Services segment.  The previously reported Mobile Communications category which was included in the MP&C segment has been reclassified as the newly established Mobile Communications segment, while the other categories in the previously reported MP&C segment will be included in All Other.  This includes the reclassification of the PC business into All Other.

In connection with this realignment, the sales and operating revenue and operating income (loss) of each segment in the fiscal year ended March 31, 2014 have been reclassified to conform to the presentation of the fiscal year ending March 31, 2015.

Consolidated sales for the fiscal year ending March 31, 2015 are expected to be essentially flat due to an increase in sales in the electronics businesses being offset by an expected decrease in PC sales included in All Other related to Sony’s withdrawal from the PC business.
 
 
11
 
 
Consolidated operating income is expected to increase primarily due to an improvement in the operating results of the electronics businesses as well as the absence of impairment charges related to long-lived assets that were recorded in the fiscal year ended March 31, 2014.

Losses related to the PC business, including restructuring charges, in the fiscal year ending March 31, 2015 are expected to be approximately 80 billion yen, compared to 91.7 billion yen in the fiscal year ended March 31, 2014.  Included in the 80 billion yen is approximately 36 billion yen in costs related to the exit from the PC business including customer-service costs, approximately 27 billion yen in fixed costs at sales companies as well as other costs.  Although Sony is reducing the scale of its sales companies in response to the decrease in PC sales, with the goal of achieving this reduction by the end of the fiscal year ending March 31, 2015, sales company fixed costs are expected to be charged in the PC business in the fiscal year ending March 31, 2015.

In the fiscal year ended March 31, 2014, Sony recorded 58.3 billion yen in costs related to the exit from the PC business, 73.2 billion yen in impairment charges (excluding impairment charges related to the PC business), a 6.2 billion yen write-off of certain PC game software titles, and 39.7 billion yen in restructuring charges that are not included in the above-mentioned items, for a total of 177.4 billion yen.  The forecast for operating income for the fiscal year ending March 31, 2015 includes approximately 135 billion yen in remaining costs related to the exit from the PC business and other strategic management initiatives.

The forecast for each business segment is as follows:
 
     
(Billions of yen)
  
     
March 31, 2014
Results
    
March 31, 2015
Forecast
    
Change from
March 31, 2014
Results
  
Mobile
Sales and operating revenue
   ¥ 1,191.8     ¥ 1,530       +28.4 %
Communications
Operating income
     12.6       26       +106.3  
Game &
Sales and operating revenue
     1,043.9       1,220       +16.9  
Network Services
Operating income (loss)
     (18.8 )     20       -  
Imaging Products &
Sales and operating revenue
     741.2       710       -4.2  
Solutions
Operating income
     26.3       38       +44.3  
Home Entertainment &
Sales and operating revenue
     1,168.6       1,260       +7.8  
Sound
Operating income (loss)
     (25.5 )     10       -  
Devices
Sales and operating revenue
     794.2       870       +9.5  
 
Operating income (loss)
     (13.0 )     31       -  
Pictures
Sales and operating revenue
     829.6       880       +6.1  
 
Operating income
     51.6       65       +25.9  
Music 
Sales and operating revenue
     503.3       500       -0.7  
 
Operating income
     50.2       48       -4.4  
Financial Services
Financial services revenue
     993.8       1,000       +0.6  
 
Operating income
     170.3       164       -3.7  
All Other, Corporate
Operating loss
     (227.2 )     (262 )     -  
and Elimination                          
Consolidated
Sales and operating revenue
     7,767.3       7,800       +0.4  
  Operating income     26.5       140       +428.4  
 
Mobile Communications

Sales are expected to increase primarily due to an increase in unit sales of smartphones.  Operating income is expected to increase primarily due to the impact of the increase in sales, partially offset by an increase in research and development costs and marketing expenses.

Game & Network Services

Sales are expected to increase primarily due to an increase in unit sales of PS4s and an increase in network services revenue.  Operating results are expected to improve primarily due to the impact of the increase in sales and a decrease in costs related to the launch of the PS4.
 
 
12
 
 
Imaging Products & Solutions

Overall segment sales are expected to decrease mainly due to a significant decrease in sales of video cameras.  Operating income is expected to increase primarily due to a decrease in costs, partially offset by the decrease in sales.

Home Entertainment & Sound

Overall segment sales are expected to increase mainly due to an increase in unit sales of LCD televisions, primarily 4K LCD televisions.  Operating results are expected to improve primarily due to the impact of the increase in LCD televisions sales and additional cost reductions.

Devices

Overall segment sales are expected to increase primarily due to a significant increase in sales of image sensors and batteries.  Operating results are expected to improve primarily due to the absence of the impairment charge related to long-lived assets in the battery business which was recorded in the fiscal year ended March 31, 2014.

Pictures

Sales are expected to increase primarily due to increased sales in Media Networks.  Operating income is expected to increase primarily due to the higher performance expected from the Motion Pictures film slate in the fiscal year ending March 31, 2015 and from the expected increase in Media Networks sales.

Music

Sales are expected to be essentially flat year-on-year.  Operating income is expected to slightly decrease primarily due to an increase in restructuring charges as well as the negative impact from the contraction of the recorded music market in Japan.

Financial Services

Financial services revenue is expected to be essentially flat and operating income is expected to decrease year-on-year because the impact from market fluctuations, such as the increase in revenue and operating income at Sony Life in the fiscal year ended March 31, 2014, is not incorporated into the forecast.  If the favorable impact of market performance on the operating results for the fiscal year ended March 31, 2014 is excluded, financial services revenue and operating income are expected to increase due to the continued steady expansion of the financial services business.

The effects of gains and losses on investments held by the Financial Services segment due to market fluctuations have not been incorporated within the above forecast as it is difficult for Sony to predict market trends in the future.  Accordingly, future market fluctuations could further impact the current forecast.
 
Sony’s forecast for capital expenditures, depreciation and amortization, as well as research and development expenses for the fiscal year ending March 31, 2015 is as per the table below.
 
   
(Billions of yen)
  
   
March 31, 2014
Results
    
March 31, 2015
Forecast
    
Change from
March 31, 2014
Results
  
Capital expenditures
 (addition to property, plant and equipment)
   ¥164.6       ¥180          +9.4%  
Depreciation and amortization*
   376.7     370      -1.8  
[for property, plant and equipment (included above)
   195.8     180      -8.1  
Research and development expenses
   466.0     485     +4.1  
 
*
The forecast for depreciation and amortization includes amortization expenses for intangible assets and for deferred insurance acquisition costs.
 
 
13
 
 
This forecast is based on management’s current expectations and is subject to uncertainties and changes in circumstances.  Actual results may differ materially from those included in this forecast due to a variety of factors.  See “Cautionary Statement” below.

*    *    *    *    *

Management Policy

Sony is accelerating initiatives to revitalize its electronics businesses by accelerating reforms in the three core electronics businesses (Mobile, Game and Imaging) and taking significant measures to deal with its problematic businesses while further growing the entertainment and financial services businesses that have been contributing stable profits, in order to enhance the entire Sony Group’s corporate value.  Sony plans to detail these initiatives at its next Corporate Strategy Meeting on May 22, 2014.


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,” “intend,” “seek,” “may,” “might,” “could” or “should,” 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, judgments and beliefs in light of the information currently available to it.  Sony cautions investors 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 investors should not place undue reliance on them.  Investors 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 and the economic conditions in Sony’s markets, particularly levels of consumer spending;
(ii)
foreign exchange rates, particularly between the yen and the U.S. dollar, the euro and other currencies in which Sony makes significant sales and incurs production costs, 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 televisions, game platforms and smartphones, which are offered in highly competitive markets characterized by severe price competition and continual new product and service introductions, rapid development in technology and subjective and changing consumer preferences;
(iv)
Sony’s ability and timing to recoup large-scale investments required for technology development and production capacity;
(v)
Sony’s ability to implement successful business restructuring and transformation efforts under changing market conditions;
(vi)
Sony’s ability to implement successful hardware, software, and content integration strategies for all segments excluding the Financial Services segment, and to develop and implement successful sales and distribution strategies 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 prioritize investments correctly (particularly in the electronics businesses);
(viii)
Sony’s ability to maintain product quality;
(ix)
the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures and other strategic investments;
(x)
significant volatility and disruption in the global financial markets or a ratings downgrade;
(xi)
Sony’s ability to forecast demands, manage timely procurement and control inventories;
(xii)
the outcome of pending and/or future legal and/or regulatory proceedings;
(xiii)
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;
(xiv)
the impact of unfavorable conditions or developments (including market fluctuations or volatility) in the Japanese equity markets on the revenue and operating income of the Financial Services segment; and
(xv)
risks related to catastrophic disasters or similar events.
Risks and uncertainties also include the impact of any future events with material adverse impact.
 
Investor Relations Contacts: 
Tokyo
  
New York
  
London
Atsuko Murakami
  
Justin Hill
  
Haruna Nagai
+81-(0)3-6748-2111
  
+1-212-833-6722
  
+44-(0)1932-816-000
 
IR home page: http://www.sony.net/IR/
Presentation slides: http://www.sony.net/SonyInfo/IR/financial/fr/13q4_sonypre.pdf
 
 
14
 
 
 
Consolidated Financial Statements
                                
Consolidated Balance Sheets
                                
   
(Millions of yen, millions of U.S. dollars)
  
   
March 31
    
March 31
    
Change from
    
March 31
  
ASSETS
  
2013
    
2014
    
March 31, 2013
    
2014
  
Current assets:
                                
  Cash and cash equivalents
  
¥
826,361
    
¥
1,046,466
    
¥
+220,105
    
$
10,160
  
  Marketable securities
    
697,597
      
832,566
      
+134,969
      
8,083
  
  Notes and accounts receivable, trade
    
844,117
      
946,553
      
+102,436
      
9,190
  
  Allowance for doubtful accounts and sales returns
  
(67,625
 )     
(75,513
 )     
-7,888
      
(733
 ) 
  Inventories
    
710,054
      
733,943
      
+23,889
      
7,126
  
  Other receivables
    
148,142
      
177,685
      
+29,543
      
1,725
  
  Deferred income taxes
    
44,615
      
53,068
      
+8,453
      
515
  
  Prepaid expenses and other current assets
    
443,272
      
490,118
      
+46,846
      
4,758
  
Total current assets
    
3,646,533
      
4,204,886
      
+558,353
      
40,824
  
                                 
Film costs
    
270,089
      
275,799
      
+5,710
      
2,678
  
                                 
Investments and advances:
                                
  Affiliated companies
    
198,621
      
181,263
      
-17,358
      
1,760
  
  Securities investments and other
    
7,118,504
      
7,737,748
      
+619,244
      
75,124
  
     
7,317,125
      
7,919,011
      
+601,886
      
76,884
  
                                 
Property, plant and equipment:
                                
  Land
    
131,484
      
125,890
      
-5,594
      
1,222
  
  Buildings
    
778,514
      
674,841
      
-103,673
      
6,552
  
  Machinery and equipment
    
1,934,520
      
1,705,774
      
-228,746
      
16,561
  
  Construction in progress
    
47,839
      
39,771
      
-8,068
      
386
  
     
2,892,357
      
2,546,276
      
-346,081
      
24,721
  
  Less-Accumulated depreciation
    
2,030,807
      
1,796,266
      
-234,541
      
17,439
  
     
861,550
      
750,010
      
-111,540
      
7,282
  
                                 
Other assets:
                                
  Intangibles, net
    
694,621
      
675,663
      
-18,958
      
6,560
  
  Goodwill
    
643,243
      
691,803
      
+48,560
      
6,717
  
  Deferred insurance acquisition costs
    
465,499
      
497,772
      
+32,273
      
4,833
  
  Deferred income taxes
    
107,688
      
105,442
      
-2,246
      
1,024
  
  Other
    
204,685
      
213,334
      
+8,649
      
2,069
  
     
2,115,736
      
2,184,014
      
+68,278
      
21,203
  
                                 
Total assets
  
¥
14,211,033
    
¥
15,333,720
    
¥
+1,122,687
    
$
148,871
  
                                 
                                 
LIABILITIES AND EQUITY
                                
Current liabilities:
                                
  Short-term borrowings
  
¥
87,894
    
¥
111,836
    
¥
+23,942
    
$
1,086
  
  Current portion of long-term debt
    
156,288
      
265,918
      
+109,630
      
2,582
  
  Notes and accounts payable, trade
    
572,102
      
712,829
      
+140,727
      
6,921
  
  Accounts payable, other and accrued expenses
  
1,097,253
      
1,175,413
      
+78,160
      
11,412
  
  Accrued income and other taxes
    
75,080
      
81,842
      
+6,762
      
795
  
  Deposits from customers in the banking business
  
1,857,448
      
1,890,023
      
+32,575
      
18,350
  
  Other
    
469,024
      
545,753
      
+76,729
      
5,297
  
Total current liabilities
    
4,315,089
      
4,783,614
      
+468,525
      
46,443
  
                                 
Long-term debt
    
938,428
      
916,648
      
-21,780
      
8,899
  
Accrued pension and severance costs
    
311,469
      
284,963
      
-26,506
      
2,767
  
Deferred income taxes
    
369,919
      
410,896
      
+40,977
      
3,989
  
Future insurance policy benefits and other
    
3,535,532
      
3,824,572
      
+289,040
      
37,132
  
Policyholders’ account in the life insurance business
  
1,715,610
      
2,023,472
      
+307,862
      
19,645
  
Other
    
349,985
      
302,299
      
-47,686
      
2,935
  
Total liabilities
    
11,536,032
      
12,546,464
      
+1,010,432
      
121,810
  
                                 
Redeemable noncontrolling interest
    
2,997
      
4,115
      
+1,118
      
40
  
                                 
Equity:
                                
Sony Corporation’s stockholders’ equity:
                                
  Common stock
    
630,923
      
646,654
      
+15,731
      
6,278
  
  Additional paid-in capital
    
1,110,531
      
1,127,090
      
+16,559
      
10,943
  
  Retained earnings
    
1,094,775
      
940,262
      
-154,513
      
9,129
  
  Accumulated other comprehensive income
    
(639,495
 )     
(451,585
 )     
+187,910
      
(4,384
 ) 
  Treasury stock, at cost
    
(4,472
 )     
(4,284
 )     
+188
      
(42
 ) 
     
2,192,262
      
2,258,137
      
+65,875
      
21,924
  
                                 
Noncontrolling interests
    
479,742
      
525,004
      
+45,262
      
5,097
  
Total equity
    
2,672,004
      
2,783,141
      
+111,137
      
27,021
  
Total liabilities and equity
  
¥
14,211,033
    
¥
15,333,720
    
¥
+1,122,687
    
$
148,871
  
 
 
 
F-1
 
 
 
Consolidated Statements of Income
                        
   
(Millions of yen, millions of U.S. dollars, except per share amounts)
  
   
Fiscal year ended March 31
  
   
2013
    
2014
    
Change from 2013
  
2014
  
Sales and operating revenue:
                        
Net sales
   ¥ 5,691,216     ¥ 6,682,274           $ 64,876  
Financial services revenue
     999,276       988,944             9,601  
Other operating revenue
     105,012       96,048             933  
      6,795,504       7,767,266       +14.3 %     75,410  
                                 
Costs and expenses:
                                
Cost of sales
     4,485,425       5,140,053               49,903  
Selling, general and administrative
     1,457,626       1,728,520               16,782  
Financial services expenses
     854,221       816,158               7,924  
Other operating (income) expense, net
     (235,219 )     48,666               472  
      6,562,053       7,733,397       +17.9       75,081  
                                 
Equity in net loss of affiliated companies
     (6,948 )     (7,374 )  
－
       (72 )
                                 
Operating income
     226,503       26,495       -88.3       257  
                                 
Other income:
                                
Interest and dividends
     21,987       16,652               162  
Gain on sale of securities investments, net
     41,781       12,049               117  
Other
     4,888       13,752               133  
      68,656       42,453       -38.2       412  
                                 
Other expenses:
                                
Interest
     26,657       23,460               228  
Loss on devaluation of securities investments
     7,724       1,648               16  
Foreign exchange loss, net
     10,360       9,224               90  
Other
     8,334       8,875               85  
      53,075       43,207       -18.6       419  
                                 
Income before income taxes
     242,084       25,741       -89.4       250  
                                 
Income taxes
     140,398       94,582               918  
                                 
Net income (loss)
     101,686       (68,841 )  
－
       (668 )
                                 
Less - Net income attributable to noncontrolling interests
     60,146       59,528               578  
                                 
Net income (loss) attributable to Sony Corporation’s
   ¥ 41,540     ¥ (128,369 )  
－
 %    $ (1,246 )
stockholders
                                
                                 
                                 
                                 
Per share data:
                                
Net income (loss) attributable to Sony Corporation’s
                                
stockholders
                                
— Basic
   ¥ 41.32     ¥ (124.99 )  
－
 %    $ (1.21 )
— Diluted
     38.79       (124.99 )  
－
       (1.21 )
                                 
                                 
Consolidated Statements of Comprehensive Income
                                
   
(Millions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
  
      2013       2014    
Change from 2013
     2014  
                                 
Net income (loss)
   ¥ 101,686     ¥ (68,841 )  
－
 %    $ (668 )
                                 
Other comprehensive income, net of tax –
                                
Unrealized gains on securities
     68,609       19,310               188  
Unrealized gains on derivative instruments
     308       742               7  
Pension liability adjustment
     (6,623 )     11,883               115  
Foreign currency translation adjustments
     161,818       158,884               1,543  
                                 
Total comprehensive income
     325,798       121,978       -62.6       1,185  
                                 
Less - Comprehensive income attributable
     82,619       62,437               606  
to noncontrolling interests
                          
－
  
                                 
Comprehensive income attributable
   ¥ 243,179     ¥ 59,541       -75.5 %   $ 579  
to Sony Corporation’s stockholders
                          
 
  
 
 
 
F-2
 
 
 
Consolidated Statements of Income
                            
 
(Millions of yen, millions of U.S. dollars, except per share amounts)
  
 
Three months ended March 31
  
 
2013
    
2014
      Change from 2013  
2014
  
Sales and operating revenue:
                            
     Net sales
¥
1,393,799
    
¥
1,633,368
          
$
15,858
  
     Financial services revenue
  
312,111
      
215,446
            
2,092
  
     Other operating revenue
  
24,547
      
22,109
            
214
  
   
1,730,457
      
1,870,923
    
+8.1
%
    
18,164
  
                             
Costs and expenses:
                            
     Cost of sales
  
1,151,240
      
1,300,131
            
12,623
  
     Selling, general and administrative
  
390,730
      
472,335
            
4,586
  
     Financial services expenses
  
260,290
      
174,474
            
1,694
  
     Other operating (income) expense, net
  
(220,364
 )    
29,191
            
282
  
   
1,581,896
      
1,976,131
    
+24.9
      
19,185
  
                             
Equity in net loss of affiliated companies
  
(3,183
 )     
(6,593
 )   
－
      
(64
 ) 
                             
Operating income (loss)
  
145,378
      
(111,801
 )  
－
      
(1,085
 ) 
                             
Other income:
                            
     Interest and dividends
  
10,390
      
5,571
            
54
  
     Gain on sale of securities investments, net
  
41,597
      
4,005
            
39
  
     Other
  
1,991
      
2,523
            
24
  
   
53,978
      
12,099
    
-77.6
      
117
  
                             
Other expenses:
                            
     Interest
  
5,826
      
5,180
            
50
  
     Loss on devaluation of securities investments
  
247
      
1,534
            
15
  
     Foreign exchange loss, net
  
4,548
      
4,924
            
48
  
     Other
  
3,314
      
1,748
            
17
  
   
13,935
      
13,386
    
-3.9
      
130
  
                             
Income (loss) before income taxes
  
185,421
      
(113,088
 )  
－
      
(1,098
 ) 
                             
     Income taxes
  
73,063
      
11,191
            
109
  
                             
Net income (loss)
  
112,358
      
(124,279
 )   
－
      
(1,207
 ) 
                             
     Less - Net income attributable to noncontrolling interests
19,196
      
13,968
            
135
  
                             
Net income (loss) attributable to Sony Corporation’s
¥
93,162
    
¥
(138,247
 )   
－
%
  
$
(1,342
 ) 
   stockholders
                            
                             
                             
                             
Per share data:
                            
Net income (loss) attributable to Sony Corporation’s
                            
   stockholders
                            
   — Basic
¥
92.16
    
¥
(132.97
 )   
－
%
  
$
(1.29
 ) 
   — Diluted
  
79.77
      
(132.97
 )  
－
      
(1.29
 ) 
                             
                             
Consolidated Statements of Comprehensive Income
                            
 
(Millions of yen, millions of U.S. dollars)
  
 
Three months ended March 31
  
 
2013
    
2014
    
Change from 2013
  
2014
  
                             
Net income (loss)
¥
112,358
    
¥
(124,279
 )   
－
%
  
$
(1,207
 ) 
                             
Other comprehensive income, net of tax –
                            
     Unrealized gains on securities
  
28,939
      
6,639
            
64
  
     Unrealized gains on derivative instruments
  
2
      
348
            
3
  
     Pension liability adjustment
  
(5,248
 )    
18,594
            
181
  
     Foreign currency translation adjustments
  
115,213
      
(36,209
 )          
(351
 ) 
                             
Total comprehensive income (loss)
  
251,264
      
(134,907
 )   
－
      
(1,310
 ) 
                             
     Less - Comprehensive income attributable
  
36,602
      
17,275
            
167
  
        to noncontrolling interests
                        
－
  
                             
Comprehensive income (loss) attributable
¥
214,662
    
¥
(152,182
 )   
－
%
  
$
(1,477
 ) 
   to Sony Corporation’s stockholders
                
 
      
－
  
 
 
 
F-3
 
 
 
Consolidated Statements of Changes in Stockholders' Equity
  
(Millions of yen)  
                                                 
   
Common stock
    
Additional paid-
in capital
 
  
Retained
earnings
    
Accumulated
other comprehensive income
 
  
Treasury stock,
at cost
    
Sony
Corporation’s stockholders’ equity
 
  
Noncontrolling
interests
    
Total equity
  
Balance at March 31, 2012
   ¥ 630,923     ¥ 1,160,236     ¥ 1,078,434     ¥ (841,134 )   ¥ (4,637 )   ¥ 2,023,822     ¥ 457,836     ¥ 2,481,658  
Exercise of stock acquisition rights
                                                     109       109  
Stock based compensation
             851                               851               851  
                                                                 
Comprehensive income:
                                                                
   Net income                     41,540                       41,540       60,146       101,686  
   Other comprehensive income, net of tax                                                                
      Unrealized gains on securities                             43,238               43,238       25,371       68,609  
      Unrealized gains on derivative instruments                             308               308               308  
      Pension liability adjustment                             (4,983 )             (4,983 )     (1,640 )     (6,623 )
      Foreign currency translation adjustments                             163,076               163,076       (1,258 )     161,818  
   Total comprehensive income                                             243,179       82,619       325,798  
                                                                 
Stock issue costs, net of tax
                     (18 )                     (18 )             (18 )
Dividends declared
                     (25,181 )                     (25,181 )     (9,195 )     (34,376 )
Purchase of treasury stock
                                     (35 )     (35 )             (35 )
Reissuance of treasury stock
             (155 )                     200       45               45  
Transactions with noncontrolling interests
             (50,401 )                             (50,401 )     (51,627 )     (102,028 )
   shareholders and other
                                                                
Balance at March 31, 2013
   ¥ 630,923     ¥ 1,110,531     ¥ 1,094,775     ¥ (639,495 )   ¥ (4,472 )   ¥ 2,192,262     ¥ 479,742     ¥ 2,672,004  
                                                                 
Balance at March 31, 2013
   ¥ 630,923     ¥ 1,110,531     ¥ 1,094,775     ¥ (639,495 )   ¥ (4,472 )   ¥ 2,192,262     ¥ 479,742     ¥ 2,672,004  
Exercise of stock acquisition rights
     121       121                               242               242  
Conversion of zero coupon convertible bonds
     15,610       15,610                               31,220               31,220  
Stock based compensation
             906                               906               906  
                                                                 
Comprehensive income:
                                                                
   Net income (loss)                     (128,369 )                     (128,369 )     59,528       (68,841 )
   Other comprehensive income, net of tax                                                                
      Unrealized gains on securities                             18,430               18,430       880       19,310  
      Unrealized gains on derivative instruments                             742               742               742  
      Pension liability adjustment                             11,777               11,777       106       11,883  
      Foreign currency translation adjustments                             156,961               156,961       1,923       158,884  
   Total comprehensive income                                             59,541       62,437       121,978  
                                                                 
Stock issue costs, net of tax
                     (127 )                     (127 )             (127 )
Dividends declared
                     (26,017 )                     (26,017 )     (15,430 )     (41,447 )
Purchase of treasury stock
                                     (76 )     (76 )             (76 )
Reissuance of treasury stock
             (140 )                     264       124               124  
Transactions with noncontrolling interests
             62                               62       (1,745 )     (1,683 )
   shareholders and other
                                                                
Balance at March 31, 2014
   ¥ 646,654     ¥ 1,127,090     ¥ 940,262     ¥ (451,585 )   ¥ (4,284 )   ¥ 2,258,137     ¥ 525,004     ¥ 2,783,141  
                                                                 
Transactions with noncontrolling interests include the tender offer conducted by Sony Corporation to purchase additional shares of its subsidiary So-net Entertainment Corporation and the acquisition of the remaining ownership through a share exchange, which resulted in a decrease in additional paid-in capital of 38,715 million yen. So-net Entertainment Corporation subsequently changed its name to So-net Corporation, effective July 1, 2013.
  
                                                                 
                                                                 
                                                                 
                                                                 
                 
(Millions of U.S. dollars)
  
                                                                 
   
Common stock
      
Additional paid
-in capital
 
  
Retained
earnings
    
Accumulated
other comprehensive income
 
  
Treasury stock,
at cost
 
  
Sony
Corporation’s stockholders’ equity
 
   Noncontrolling interests
 
  
Total equity
  
Balance at March 31, 2013
   $ 6,125     $ 10,782     $ 10,629     $ (6,209 )   $ (43 )   $ 21,284     $ 4,658     $ 25,942  
Exercise of stock acquisition rights
     1       1                               2               2  
Conversion of zero coupon convertible bonds
     152       152                               304               304  
Stock based compensation
             8                               8               8  
                                                                 
Comprehensive income:
                                                                
   Net income (loss)                     (1,246 )                     (1,246 )     578       (668 )
   Other comprehensive income, net of tax                                                                
      Unrealized gains on securities                             179               179       9       188  
      Unrealized gains on derivative instruments                             7               7               7  
      Pension liability adjustment                             114               114       1       115  
      Foreign currency translation adjustments                             1,525               1,525       18       1,543  
   Total comprehensive income                                             579       606       1,185  
                                                                 
Stock issue costs, net of tax
                     (1 )                     (1 )             (1 )
Dividends declared
                     (253 )                     (253 )     (150       (403 )
Purchase of treasury stock
                                     (1 )     (1 )             (1 )
Reissuance of treasury stock
             (1 )                     2       1               1  
Transactions with noncontrolling interests
             1                               1       (17 )     (16 )
   shareholders and other
                                                                
Balance at March 31, 2014
   $ 6,278     $ 10,943     $ 9,129     $ (4,384 )   $ (42 )   $ 21,924     $ 5,097     $ 27,021  
 
 
 
F-4
 
 
 
Consolidated Statements of Cash Flows
  
 
(Millions of yen, millions of U.S. dollars)
  
 
Fiscal year ended March 31
  
 
2013
    
2014
    
2014
  
Cash flows from operating activities:
                
    Net income (loss)
 ¥ 101,686     ¥ (68,841 )   $ (668 )
    Adjustments to reconcile net income (loss) to net cash
                      
    provided by operating activities:
                      
        Depreciation and amortization, including amortization of deferred
   376,735       376,695       3,657  
            insurance acquisition costs
                      
        Amortization of film costs
   208,051       285,673       2,774  
        Stock(based compensation expense
   1,232       1,068       10  
        Accrual for pension and severance costs, less payments
   (16,669 )     (38,131 )     (370 )
        Other operating (income) expense, net
   (235,219 )     48,666       472  
        Gain on sale or devaluation of securities investments, net
   (34,057 )     (10,401 )     (101 )
        Gain on revaluation of marketable securities held in the financial
   (72,633 )     (58,608 )     (569 )
            services business for trading purposes, net
                      
        Gain on revaluation or impairment of securities investments held
   (5,689 )     (3,688 )     (36 )
            in the financial services business, net
                      
        Deferred income taxes
   65,771       (6,661 )     (65 )
        Equity in net loss of affiliated companies, net of dividends
   8,819       10,022       97  
        Changes in assets and liabilities:
                      
            (Increase) decrease in notes and accounts receivable, trade
   55,712       (29,027 )     (282 )
            Decrease in inventories
   56,987       20,248       197  
            Increase in film costs
   (173,654 )     (266,870 )     (2,591 )
            Increase (decrease) in notes and accounts payable, trade
   (206,621 )     103,379       1,004  
            Increase (decrease) in accrued income and other taxes
   12,446       (3,110 )     (30 )
            Increase in future insurance policy benefits and other
   434,786       391,541       3,801  
            Increase in deferred insurance acquisition costs
   (73,967 )     (77,656 )     (754 )
            Increase in marketable securities held in the financial services
   (25,254 )     (33,803 )     (328 )
                  business for trading purposes
                      
            (Increase) decrease in other current assets
   91,762       (48,115 )     (467 )
            Increase (decrease) in other current liabilities
   (55,830 )     58,656       569  
        Other
   (38,229 )     13,079       128  
                Net cash provided by operating activities
   476,165       664,116       6,448  
                       
Cash flows from investing activities:
                      
    Payments for purchases of fixed assets
   (326,490 )     (283,457 )     (2,752 )
    Proceeds from sales of fixed assets
   245,758       99,694       968  
    Payments for investments and advances by financial services business
   (1,046,764 )     (1,032,594 )     (10,025 )
    Payments for investments and advances
   (92,364 )     (14,892 )     (145 )
        (other than financial services business)
                      
    Proceeds from sales or return of investments and collections of advances
   400,654       426,621       4,142  
       by financial services business
                      
    Proceeds from sales or return of investments and collections of advances
   78,010       75,417       732  
       (other than financial services business)
                      
    Proceeds from sales of businesses
   52,756       15,016       146  
    Other
   (16,840 )     3,693       36  
                Net cash used in investing activities
   (705,280 )     (710,502 )     (6,898 )
                       
Cash flows from financing activities:
                      
    Proceeds from issuance of long-term debt
   159,781       178,935       1,737  
    Payments of long-term debt
   (326,164 )     (164,540 )     (1,597 )
    Increase (decrease) in short-term borrowings, net
   (29,683 )     25,183       244  
    Increase in deposits from customers in the financial services business, net
   237,908       238,828       2,319  
    Proceeds from issuance of convertible bonds
   150,000       —       —  
    Dividends paid
   (25,057 )     (25,643 )     (249 )
    Payment for purchase of So-net shares from noncontrolling interests
   (55,178 )     —       —  
    Other
   (23,079 )     (44,886 )     (436 )
                Net cash provided by financing activities
   88,528       207,877       2,018  
                       
Effect of exchange rate changes on cash and cash equivalents
   72,372       58,614       569  
                       
Net increase (decrease) in cash and cash equivalents
   (68,215 )     220,105       2,137  
Cash and cash equivalents at beginning of the fiscal year
   894,576       826,361       8,023  
                       
Cash and cash equivalents at end of the period
 ¥ 826,361     ¥ 1,046,466     $ 10,160  
 
 
 
 
F-5
 
 
 
 
Business Segment Information
                              
   
(Millions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
Sales and operating revenue
  
2013
    
2014
    
Change
  
2014
  
                               
     Mobile Products & Communications
                              
              Customers
  
¥
1,220,013
    
¥
1,629,525
    
+33.6
%
  
$
15,821
  
              Intersegment
    
37,605
      
536
            
5
  
              Total
    
1,257,618
      
1,630,061
    
+29.6
      
15,826
  
                               
     Game
                              
              Customers
    
527,110
      
750,448
    
+42.4
      
7,286
  
              Intersegment
    
179,968
      
228,799
            
2,221
  
              Total
    
707,078
      
979,247
    
+38.5
      
9,507
  
                               
     Imaging Products & Solutions
                              
              Customers
    
752,603
      
737,474
    
-2.0
      
7,160
  
              Intersegment
    
3,598
      
3,729
            
36
  
              Total
    
756,201
      
741,203
    
-2.0
      
7,196
  
                               
     Home Entertainment & Sound
                              
              Customers
    
993,822
      
1,166,007
    
+17.3
      
11,320
  
              Intersegment
    
1,005
      
2,572
            
25
  
              Total
    
994,827
      
1,168,579
    
+17.5
      
11,345
  
                               
     Devices
                              
              Customers
    
583,968
      
589,194
    
+0.9
      
5,720
  
              Intersegment
    
264,607
      
204,996
            
1,991
  
              Total
    
848,575
      
794,190
    
-6.4
      
7,711
  
                               
     Pictures
                              
              Customers
    
732,127
      
828,668
    
+13.2
      
8,045
  
              Intersegment
    
612
      
916
            
9
  
              Total
    
732,739
      
829,584
    
+13.2
      
8,054
  
                               
     Music
                              
              Customers
    
431,719
      
492,058
    
+14.0
      
4,777
  
              Intersegment
    
9,989
      
11,230
            
109
  
              Total
    
441,708
      
503,288
    
+13.9
      
4,886
  
                               
     Financial Services
                              
              Customers
    
999,276
      
988,944
    
-1.0
      
9,601
  
              Intersegment
    
3,113
      
4,902
            
48
  
              Total
    
1,002,389
      
993,846
    
-0.9
      
9,649
  
                               
     All Other
                              
              Customers
    
506,729
      
532,936
    
+5.2
      
5,174
  
              Intersegment
    
56,283
      
61,675
            
599
  
              Total
    
563,012
      
594,611
    
+5.6
      
5,773
  
                               
     Corporate and elimination
    
(508,643
 )    
(467,343
 )  
－
      
(4,537
 )
     Consolidated total
  
¥
6,795,504
    
¥
7,767,266
    
+14.3
%
  
$
75,410
  
                               
Game intersegment amounts primarily consist of transactions with All Other.
Devices intersegment amounts primarily consist of transactions with the Game segment and the Imaging Products & Solutions (“IP&S”) segment.
All Other intersegment amounts primarily consist of transactions with the Pictures segment, the Music segment and the Game segment.
Corporate and elimination includes certain brand and patent royalty income.
 
 
     
(Millions of yen, millions of U.S. dollars)
     
Fiscal year ended March 31
Operating income (loss)  
2013
    
2014
    
Change
  
2014
  
                                 
 
Mobile Products & Communications
  
¥
(97,170
 )   
¥
(75,037
 )   
－
%
  
$
(729
 ) 
 
Game
    
1,735
      
(8,058
 )   
－
      
(78
 ) 
 
Imaging Products & Solutions
    
1,442
      
26,327
    
+1,725.7
      
256
  
 
Home Entertainment & Sound
    
(84,315
 )    
(25,499
 )   
－
      
(248
 ) 
 
Devices
    
43,895
      
(12,981
 )   
－
      
(126
 ) 
 
Pictures
    
47,800
      
51,619
    
+8.0
      
501
  
 
Music
    
37,218
      
50,208
    
+34.9
      
487
  
 
Financial Services
    
142,209
      
170,292
    
+19.7
      
1,653
  
 
All Other
    
101,480
      
(58,641
 )   
－
      
(568
 ) 
 
Total
    
194,294
      
118,230
    
-39.1
      
1,148
  
                                 
 
Corporate and elimination
    
32,209
      
(91,735
 )   
－
      
(891
 ) 
 
Consolidated total
  
¥
226,503
    
¥
26,495
    
-88.3
%
  
$
257
  
                                 
 
Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.
Corporate and elimination includes headquarters restructuring costs, restructuring costs related to the reduction in scale of sales companies following the decision to exit from the PC business, and certain other corporate expenses, including the amortization of certain intellectual property assets such as the cross-licensing of intangible assets acquired from Ericsson at the time of the Sony Mobile Communications acquisition, which are not allocated to segments.
 
Within the Home Entertainment & Sound (“HE&S”) segment, the operating loss of Televisions, which primarily consists of LCD televisions, for the fiscal years ended March 31, 2013 and 2014 was 69,602 million yen and 25,705 million yen, respectively.  The operating loss of Televisions excludes restructuring charges which are included in the overall segment results and are not allocated to product categories.
 
Due to certain changes in the organizational structure, sales and operating revenue of the IP&S segment and All Other and operating income (loss) of the IP&S segment, All Other and Corporate and elimination for the comparable period have been reclassified to conform to the current presentation.
 
 
 
 
F-6
 
 
 
Business Segment Information
   
(Millions of yen, millions of U.S. dollars)
   
Three months ended March 31
Sales and operating revenue
  
2013
    
2014
    
Change
  
2014
  
                               
     Mobile Products & Communications
                              
              Customers
  
¥
337,592
    
¥
360,953
    
+6.9
%
  
$
3,504
  
              Intersegment
    
15,200
      
43
            
1
  
              Total
    
352,792
      
360,996
    
+2.3
      
3,505
  
                               
     Game
                              
              Customers
    
118,782
      
200,102
    
+68.5
      
1,943
  
              Intersegment
    
53,698
      
63,783
            
619
  
              Total
    
172,480
      
263,885
    
+53.0
      
2,562
  
                               
     Imaging Products & Solutions
                              
              Customers
    
180,133
      
185,829
    
+3.2
      
1,804
  
              Intersegment
    
1,024
      
917
            
9
  
              Total
    
181,157
      
186,746
    
+3.1
      
1,813
  
                               
     Home Entertainment & Sound
                              
              Customers
    
182,528
      
224,769
    
+23.1
      
2,182
  
              Intersegment
    
735
      
826
            
8
  
              Total
    
183,263
      
225,595
    
+23.1
      
2,190
  
                               
     Devices
                              
              Customers
    
127,603
      
136,738
    
+7.2
      
1,328
  
              Intersegment
    
36,489
      
37,103
            
360
  
              Total
    
164,092
      
173,841
    
+5.9
      
1,688
  
                               
     Pictures
                              
              Customers
    
207,189
      
268,696
    
+29.7
      
2,609
  
              Intersegment
    
238
      
411
            
4
  
              Total
    
207,427
      
269,107
    
+29.7
      
2,613
  
                               
     Music
                              
              Customers
    
114,807
      
128,251
    
+11.7
      
1,245
  
              Intersegment
    
2,398
      
3,442
            
34
  
              Total
    
117,205
      
131,693
    
+12.4
      
1,279
  
                               
     Financial Services
                              
              Customers
    
312,111
      
215,446
    
-31.0
      
2,092
  
              Intersegment
    
782
      
1,231
            
12
  
              Total
    
312,893
      
216,677
    
-30.8
      
2,104
  
                               
     All Other
                              
              Customers
    
137,321
      
139,266
    
+1.4
      
1,352
  
              Intersegment
    
12,222
      
14,556
            
141
  
              Total
    
149,543
      
153,822
    
+2.9
      
1,493
  
                               
     Corporate and elimination
    
(110,395
 )     
(111,439
 )   
－
      
(1,083
 ) 
     Consolidated total
  
¥
1,730,457
    
¥
1,870,923
    
+8.1
%
  
$
18,164
  
                               
Game intersegment amounts primarily consist of transactions with All Other.
Devices intersegment amounts primarily consist of transactions with the Game segment and the IP&S segment.
All Other intersegment amounts primarily consist of transactions with the Pictures segment, the Music segment and the Game segment.
Corporate and elimination includes certain brand and patent royalty income.
 
 
     
(Millions of yen, millions of U.S. dollars)
     
Three months ended March 31
Operating income (loss)  
2013
    
2014
    
Change
  
2014
  
                                 
 
Mobile Products & Communications
  
¥
(24,601
 )   
¥
(67,469
 )   
－
%
  
$
(655
 ) 
 
Game
    
(1,592
 )     
(10,505
 )   
－
      
(102
 ) 
 
Imaging Products & Solutions
    
(10,473
 )     
7,467
    
－
      
72
  
 
Home Entertainment & Sound
    
(50,545
 )     
(23,180
 )   
－
      
(225
 ) 
 
Devices
    
(11,504
 )     
(11,996
 )   
－
      
(116
 ) 
 
Pictures
    
19,482
      
41,375
    
+112.4
      
402
  
 
Music
    
5,697
      
8,024
    
+40.8
      
78
  
 
Financial Services
    
51,009
      
40,442
    
-20.7
      
393
  
 
All Other
    
107,906
      
(49,303
 )   
－
      
(479
 ) 
 
Total
    
85,379
      
(65,145
 )   
－
      
(632
 ) 
                                 
 
Corporate and elimination
    
59,999
      
(46,656
 )   
－
      
(453
 ) 
 
Consolidated total
  
¥
145,378
    
¥
(111,801
 )   
－
%
  
$
(1,085
 ) 
                                 
 
Operating income (loss) is sales and operating revenue less costs and expenses, and includes equity in net income (loss) of affiliated companies.
Corporate and elimination includes headquarters restructuring costs, restructuring costs related to the reduction in scale of sales companies following the decision to exit from the PC business, and certain other corporate expenses, including the amortization of certain intellectual property assets such as the cross-licensing of intangible assets acquired from Ericsson at the time of the Sony Mobile Communications acquisition, which are not allocated to segments.
 
Within the HE&S segment, the operating loss of Televisions, which primarily consists of LCD televisions, for the three months ended March 31, 2013 and 2014 was 38,062 million yen and 16,659 million yen, respectively. The operating loss of Televisions excludes restructuring charges which are included in the overall segment results and are not allocated to product categories.
 
Due to certain changes in the organizational structure, sales and operating revenue of the IP&S segment and All Other and operating income (loss) of the IP&S segment, All Other and Corporate and elimination for the comparable period have been reclassified to conform to the current presentation.
 
 
 
F-7
 
 
 
Sales to Customers by Product Category
                              
   
(Millions of yen, millions of U.S. dollars)
   
Fiscal year ended March 31
Sales and operating revenue (to external customers)
  
2013
    
2014
    
Change
    
2014
  
                               
Mobile Products & Communications
                              
     Mobile Communications
  
¥
733,622
    
¥
1,191,787
    
+62.5
%
  
$
11,571
  
     Personal and Mobile Products
    
480,132
      
431,378
    
-10.2
      
4,188
  
     Other
    
6,259
      
6,360
    
+1.6
      
62
  
     Total
    
1,220,013
      
1,629,525
    
+33.6
      
15,821
  
                               
Game
    
527,110
      
750,448
    
+42.4
      
7,286
  
                               
Imaging Products & Solutions
                              
     Digital Imaging Products
    
449,724
      
413,255
    
-8.1
      
4,012
  
     Professional Solutions
    
285,698
      
306,885
    
+7.4
      
2,980
  
     Other
    
17,181
      
17,334
    
+0.9
      
168
  
     Total
    
752,603
      
737,474
    
-2.0
      
7,160
  
                               
Home Entertainment & Sound
                              
     Televisions
    
581,475
      
754,308
    
+29.7
      
7,323
  
     Audio and Video
    
405,024
      
400,828
    
-1.0
      
3,891
  
     Other
    
7,323
      
10,871
    
+48.5
      
106
  
     Total
    
993,822
      
1,166,007
    
+17.3
      
11,320
  
                               
Devices
                              
     Semiconductors
    
301,915
      
336,845
    
+11.6
      
3,270
  
     Components
    
271,654
      
249,856
    
-8.0
      
2,426
  
     Other
    
10,399
      
2,493
    
-76.0
      
24
  
     Total
    
583,968
      
589,194
    
+0.9
      
5,720
  
                               
Pictures
                              
     Motion Pictures
    
446,254
      
422,255
    
-5.4
      
4,100
  
     Television Productions
    
159,794
      
247,568
    
+54.9
      
2,403
  
     Media Networks
    
126,079
      
158,845
    
+26.0
      
1,542
  
     Total
    
732,127
      
828,668
    
+13.2
      
8,045
  
                               
Music
                              
     Recorded Music
    
307,788
      
347,684
    
+13.0
      
3,376
  
     Music Publishing
    
52,764
      
66,869
    
+26.7
      
649
  
     Visual Media and Platform
    
71,167
      
77,505
    
+8.9
      
752
  
     Total
    
431,719
      
492,058
    
+14.0
      
4,777
  
                               
Financial Services
    
999,276
      
988,944
    
-1.0
      
9,601
  
All Other
    
506,729
      
532,936
    
+5.2
      
5,174
  
Corporate
    
48,137
      
52,012
    
+8.0
      
506
  
     Consolidated total
  
¥
6,795,504
    
¥
7,767,266
    
+14.3
%
  
$
75,410
  
                               
 
The above table includes a breakdown of sales and operating revenue to external customers for certain segments shown in the Business Segment Information on page F-6. Sony management views each segment as a single operating segment. However, Sony believes that the breakdown of sales and operating revenue to external customers for the segments in this table is useful to investors in understanding sales by product category.
 
In the Mobile Products & Communications (“MP&C”) segment, Mobile Communications includes mobile phones; Personal and Mobile Products includes personal computers. In the IP&S segment, Digital Imaging Products includes compact digital cameras, video cameras and interchangeable single lens cameras; Professional Solutions includes broadcast- and professional-use products. In the HE&S segment, Televisions includes LCD televisions; Audio and Video includes home audio, Blu-ray disc players and recorders, and memory-based portable audio devices. In the Devices segment, Semiconductors includes image sensors; Components includes batteries, recording media and data recording systems. In the Pictures segment, Motion Pictures includes the production, acquisition and distribution of motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks. In the Music segment, Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes various service offerings for music and visual products and the production and disribution of animation titles.
 
Due to certain changes in the organizational structure, sales and operating revenue to external customers of the IP&S segment and All Other for the comparable period have been reclassified to conform to the current presentation.
 
 
 
F-8
 
 
Sales to Customers by Product Category
   
(Millions of yen, millions of U.S. dollars)
   
Three months ended March 31
Sales and operating revenue (to external customers)
  
2013
    
2014
    
Change
    
2014
  
                               
Mobile Products & Communications
                              
     Mobile Communications
  
¥
218,925
    
¥
268,517
    
+22.7
%
  
$
2,607
  
     Personal and Mobile Products
    
116,402
      
90,270
    
-22.4
      
876
  
     Other
    
2,265
      
2,166
    
-4.4
      
21
  
     Total
    
337,592
      
360,953
    
+6.9
      
3,504
  
                               
Game
    
118,782
      
200,102
    
+68.5
      
1,943
  
                               
Imaging Products & Solutions
                              
     Digital Imaging Products
    
89,103
      
88,790
    
-0.4
      
862
  
     Professional Solutions
    
86,106
      
91,735
    
+6.5
      
891
  
     Other
    
4,924
      
5,304
    
+7.7
      
51
  
     Total
    
180,133
      
185,829
    
+3.2
      
1,804
  
                               
Home Entertainment & Sound
                              
     Televisions
    
95,102
      
139,723
    
+46.9
      
1,357
  
     Audio and Video
    
84,488
      
82,015
    
-2.9
      
796
  
     Other
    
2,938
      
3,031
    
+3.2
      
29
  
     Total
    
182,528
      
224,769
    
+23.1
      
2,182
  
                               
Devices
                              
     Semiconductors
    
66,698
      
73,374
    
+10.0
      
712
  
     Components
    
58,601
      
62,906
    
+7.3
      
611
  
     Other
    
2,304
      
458
    
-80.1
      
5
  
     Total
    
127,603
      
136,738
    
+7.2
      
1,328
  
                               
Pictures
                              
     Motion Pictures
    
118,382
      
133,519
    
+12.8
      
1,296
  
     Television Productions
    
53,735
      
97,987
    
+82.4
      
952
  
     Media Networks
    
35,072
      
37,190
    
+6.0
      
361
  
     Total
    
207,189
      
268,696
    
+29.7
      
2,609
  
                               
Music
                              
     Recorded Music
    
81,017
      
81,574
    
+0.7
      
792
  
     Music Publishing
    
16,472
      
21,760
    
+32.1
      
211
  
     Visual Media and Platform
    
17,318
      
24,917
    
+43.9
      
242
  
     Total
    
114,807
      
128,251
    
+11.7
      
1,245
  
                               
Financial Services
    
312,111
      
215,446
    
-31.0
      
2,092
  
All Other
    
137,321
      
139,266
    
+1.4
      
1,352
  
Corporate
    
12,391
      
10,873
    
-12.3
      
105
  
     Consolidated total
  
¥
1,730,457
    
¥
1,870,923
    
+8.1
%
  
$
18,164
  
                               
 
The above table includes a breakdown of sales and operating revenue to external customers for certain segments shown in the Business Segment Information on page F-7.  Sony management views each segment as a single operating segment.  However, Sony believes that the breakdown of sales and operating revenue to external customers for the segments in this table is useful to investors in understanding sales by product category.
 
In the MP&C segment, Mobile Communications includes mobile phones; Personal and Mobile Products includes personal computers.  In the IP&S segment, Digital Imaging Products includes compact digital cameras, video cameras and interchangeable single lens cameras; Professional Solutions includes broadcast- and professional-use products.  In the HE&S segment, Televisions includes LCD televisions; Audio and Video includes home audio, Blu-ray disc players and recorders, and memory-based portable audio devices.  In the Devices segment, Semiconductors includes image sensors; Components includes batteries, recording media and data recording systems.  In the Pictures segment, Motion Pictures includes the production, acquisition and distribution of motion pictures; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks.  In the Music segment, Recorded Music includes the distribution of physical and digital recorded music and revenue derived from artists’ live performances; Music Publishing includes the management and licensing of the words and music of songs; Visual Media and Platform includes various service offerings for music and visual products and the production and disribution of animation titles.
 
Due to certain changes in the organizational structure, sales and operating revenue to external customers of the IP&S segment and All Other for the comparable period have been reclassified to conform to the current presentation.
 
 
 
F-9
 
 
 
Other Items
     
(Millions of yen, millions of U.S. dollars)
     
Fiscal year ended March 31
Depreciation and amortization   2013    
2014
      Change
 
  
2014
  
                           
 
Mobile Products & Communications
   ¥ 25,777     ¥ 31,365     +21.7 %   $ 304  
 
Game
     11,870       15,346     +29.3       149  
 
Imaging Products & Solutions
     39,605       38,080     -3.9       370  
 
Home Entertainment & Sound
     26,968       25,806     -4.3       250  
 
Devices
         112,486       106,472     -5.3       1,034  
 
Pictures
         15,428       18,078     +17.2       175  
 
Music
     13,209       14,414     +9.1       140  
 
Financial Services, including deferred insurance acquisition costs
     62,633       54,348     -13.2       528  
  All Other     24,190       21,716     -10.2       211  
 
Total
     332,166       325,625     -2.0       3,161  
                                 
  Corporate     44,569       51,070     +14.6       496  
 
Consolidated total
   ¥ 376,735     ¥ 376,695     -0.0 %   $ 3,657  
                                 
 
     
(Millions of yen, millions of U.S. dollars)
     
Fiscal year ended March 31
Restructuring charges and associated depreciation   2013    
2014
      Change
 
  
2014
  
                           
 
Mobile Products & Communications
   ¥ 5,885     ¥ 32,485     +452.0 %   $ 315  
 
Game
     250       371     +48.4       4  
 
Imaging Products & Solutions
     11,240       3,422     -69.6       33  
 
Home Entertainment & Sound
     11,815       1,537     -87.0       15  
 
Devices
         19,096       5,464     -71.4       53  
 
Pictures
         1,081       6,722     +521.8       65  
 
Music
     2,305       576     -75.0       6  
 
Financial Services
    
－
      
－
    
－
      
－
  
  All Other and Corporate     22,714       24,993     +10.0       243  
 
Total net restructuring charges
     74,386       75,570     +1.6       734  
                                 
  Depreciation associated with restructured assets     3,121       5,019     +60.8       48  
 
Total
   ¥ 77,507     ¥ 80,589     +4.0 %   $ 782  
                                 
 
Depreciation associated with restructured assets as used in the context of the disclosures regarding restructuring activities refers to the increase in depreciation expense caused by revising the useful life and the salvage value of depreciable fixed assets to coincide with the earlier end of production under an approved restructuring plan. Any impairment of the assets is recognized immediately in the period it is identified.
 
                             
Geographic Information
                            
   
(Millions of yen, millions of U.S. dollars)
   
Fiscal year ended March 31
Sales and operating revenue (to external customers)
 
2013
    
2014
  
Change
2014
  
                             
    Japan
  
¥
2,197,881
    
¥
2,199,099
  
+0.1
%
  
$
21,350
  
    United States
    
1,064,765
      
1,302,052
  
+22.3
      
12,641
  
    Europe
    
1,362,488
      
1,753,526
  
+28.7
      
17,025
  
    China
    
464,784
      
520,539
  
+12.0
      
5,054
  
    Asia-Pacific
    
806,205
      
1,013,635
  
+25.7
      
9,841
  
    Other Areas
    
899,381
      
978,415
  
+8.8
      
9,499
  
    Total
  
¥
6,795,504
    
¥
7,767,266
  
+14.3
%
  
$
75,410
  
                             
 
Geographic Information shows sales and operating revenue recognized by location of customers.
Major areas in each geographic segment excluding Japan, United States and China are as follows:
    (1)  Europe:           United Kingdom, France, Germany, Russia, Spain and Sweden
    (2) Asia-Pacific:    India, South Korea and Oceania
    (3) Other Areas:   The Middle East/Africa, Brazil, Mexico and Canada
 
 
F-10
 
 
 
Other Items
     
(Millions of yen, millions of U.S. dollars)
     
Three months ended March 31
Depreciation and amortization
   2013    
2014
      Change
 
  
2014
  
                           
 
Mobile Products & Communications
   ¥ 5,589     ¥ 7,910     +41.5 %   $ 77  
 
Game
     3,408       3,921     +15.1       38  
 
Imaging Products & Solutions
     11,098       9,538     -14.1       93  
 
Home Entertainment & Sound
     7,260       6,525     -10.1       63  
 
Devices
         30,182       29,036     -3.8       282  
 
Pictures
         4,520       4,672     +3.4       46  
 
Music
     3,871       3,612     -6.7       35  
 
Financial Services, including deferred insurance acquisition costs
    
15,741
      
13,734
    
-12.8
      
133
  
  All Other     9,462       6,179     -34.7       60  
 
Total
     91,131       85,127     -6.6       827  
                                 
 
Corporate
     10,661       13,816     +29.6       134  
 
Consolidated total
   ¥ 101,792     ¥ 98,943     -2.8 %   $ 961  
                                 
     
(Millions of yen, millions of U.S. dollars)
     
Three months ended March 31
Restructuring charges and associated depreciation
   2013    
2014
      Change
 
  
2014
  
                           
 
Mobile Products & Communications
   ¥ 2,942     ¥ 20,178     +585.9 %   $ 196  
 
Game
     36       (21 )   
－
       (0 ) 
 
Imaging Products & Solutions
     7,155       750     -89.5       7  
 
Home Entertainment & Sound
     3,150       598     -81.0       6  
 
Devices
         7,431       1,933     -74.0       19  
 
Pictures
         907       5,573     +514.4       54  
 
Music
     1,732       428     -75.3       4  
 
Financial Services
    
－
      
－
    
－
      
－
  
  All Other and Corporate     13,465       20,485     +52.1       199  
 
Total net restructuring charges
     36,818       49,924     +35.6       485  
                                 
 
Depreciation associated with restructured assets
     1,247       4,542     +264.3       44  
 
Total
   ¥ 38,065     ¥ 54,466     +43.1 %   $ 529  
                                 
 
Depreciation associated with restructured assets as used in the context of the disclosures regarding restructuring activities refers to the increase in depreciation expense caused by revising the useful life and the salvage value of depreciable fixed assets to coincide with the earlier end of production under an approved restructuring plan. Any impairment of the assets is recognized immediately in the period it is identified.
 
Geographic Information
   
(Millions of yen, millions of U.S. dollars)
   
Three months ended March 31
Sales and operating revenue (to external customers)
    
2013
 
    
2014
 
    Change
 
  
2014
                               
    Japan
  
¥
604,656
    
¥
527,653
    
-12.7
%
  
$
5,123
  
    United States
    
254,718
      
359,005
    
+40.9
      
3,485
  
    Europe
    
349,230
      
426,389
    
+22.1
      
4,140
  
    China
    
103,158
      
119,277
    
+15.6
      
1,158
  
    Asia-Pacific
    
202,543
      
222,707
    
+10.0
      
2,162
  
    Other Areas 
    
216,152
      
215,892
    
-0.1
      
2,096
  
    Total
  
¥
1,730,457
    
¥
1,870,923
    
+8.1
%
  
$
18,164
  
                               
 
Geographic Information shows sales and operating revenue recognized by location of customers.
Major areas in each geographic segment excluding Japan, United States and China are as follows:
    (1) Europe:             United Kingdom, France, Germany, Russia, Spain and Sweden
    (2) Asia-Pacific:    India, South Korea and Oceania
    (3) Other Areas:   The Middle East/Africa, Brazil, Mexico and Canada
 
 
 
F-11
 
 
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 in accordance with accounting principles generally accepted in the United States of America (“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 the Financial Services segment, including noncontrolling interests, are included in those respective presentations, then eliminated in the consolidated figures shown below.
                         
Condensed Balance Sheets
                        
   
(Millions of yen, millions of U.S. dollars)
  
      Financial Services
  
March 31
    
March 31
  
   
2013
    
2014
    
2014
  
  ASSETS
                        
Current assets:
                        
      Cash and cash equivalents
  
¥
201,550
    
¥
240,332
    
$
2,333
  
      Marketable securities
    
694,130
      
828,944
      
8,048
  
      Other
    
156,310
      
147,241
      
1,430
  
     
1,051,990
      
1,216,517
      
11,811
  
                         
Investments and advances
    
6,985,918
      
7,567,242
      
73,468
  
Property, plant and equipment
    
14,886
      
17,057
      
166
  
Other assets:
                        
      Deferred insurance acquisition costs
    
465,499
      
497,772
      
4,833
  
      Other
    
51,788
      
49,328
      
478
  
     
517,287
      
547,100
      
5,311
  
    Total assets
  
¥
8,570,081
    
¥
9,347,916
    
$
90,756
  
                         
LIABILITIES AND EQUITY
                        
Current liabilities:
                        
      Short-term borrowings
  
¥
10,322
    
¥
6,148
    
$
60
  
      Deposits from customers in the banking business
1,857,448
      
1,890,023
      
18,350
  
      Other
    
172,979
      
175,499
      
1,703
  
     
2,040,749
      
2,071,670
      
20,113
  
                         
Long-term debt
    
27,008
      
44,678
      
434
  
Future insurance policy benefits and other
  
3,535,532
      
3,824,572
      
37,132
  
Policyholders’ account in the life insurance business
1,715,610
      
2,023,472
      
19,645
  
Other
    
278,402
      
302,521
      
2,937
  
    Total liabilities
    
7,597,301
      
8,266,913
      
80,261
  
                         
Equity:
                        
Stockholders’ equity of Financial Services
  
970,877
      
1,079,740
      
10,483
  
Noncontrolling interests
    
1,903
      
1,263
      
12
  
    Total equity
    
972,780
      
1,081,003
      
10,495
  
    Total liabilities and equity
  
¥
       8,570,081
    
¥
9,347,916
    
$
90,756
  
 
 
 
F-12
 
 
 
   
(Millions of yen, millions of U.S. dollars)
  
       Sony without Financial Services
  
March 31
    
March 31
  
   
2013
    
2014
    
2014
  
ASSETS
                        
Current assets:
                        
       Cash and cash equivalents
  
¥
624,811
    
¥
806,134
    
$
7,827
  
       Marketable securities
    
3,467
      
3,622
      
35
  
       Notes and accounts receivable, trade
    
773,784
      
864,178
      
8,390
  
       Other
    
1,197,108
      
1,316,653
      
12,783
  
     
2,599,170
      
2,990,587
      
29,035
  
                         
Film costs
    
270,089
      
275,799
      
2,678
  
Investments and advances
    
362,188
      
381,076
      
3,700
  
Investments in Financial Services, at cost
    
111,476
      
111,476
      
1,082
  
Property, plant and equipment
    
846,664
      
732,953
      
7,116
  
Other assets
    
1,602,061
      
1,640,385
      
15,926
  
   Total assets
  
¥
5,791,648
    
¥
6,132,276
    
$
59,537
  
                         
LIABILITIES AND EQUITY
                        
Current liabilities:
                        
       Short-term borrowings
  
¥
233,859
    
¥
371,606
    
$
3,608
  
       Notes and accounts payable, trade
    
572,102
      
712,829
      
6,921
  
       Other
    
1,473,007
      
1,629,728
      
15,822
  
     
2,278,968
      
2,714,163
      
26,351
  
                         
Long-term debt
    
915,032
      
875,440
      
8,499
  
Accrued pension and severance costs
    
290,274
      
262,558
      
2,549
  
Other
    
493,677
      
462,386
      
4,490
  
   Total liabilities
    
3,977,951
      
4,314,547
      
41,889
  
                         
Redeemable noncontrolling interest
    
2,997
      
4,115
      
40
  
                         
Equity:
                        
Stockholders’ equity of Sony without Financial Services
  
1,722,296
      
1,722,743
      
16,726
  
Noncontrolling interests
    
88,404
      
90,871
      
882
  
   Total equity
    
1,810,700
      
1,813,614
      
17,608
  
                         
   Total liabilities and equity
  
¥
5,791,648
    
¥
6,132,276
    
$
59,537
  
                         
   
(Millions of yen, millions of U.S. dollars)
  
       Consolidated
  
March 31
    
March 31
  
   
2013
    
2014
    
2014
  
  ASSETS
                        
Current assets:
                        
       Cash and cash equivalents
  
¥
826,361
    
¥
1,046,466
    
$
10,160
  
       Marketable securities
    
697,597
      
832,566
      
8,083
  
       Notes and accounts receivable, trade
    
776,492
      
871,040
      
8,457
  
       Other
    
1,346,083
      
1,454,814
      
14,124
  
     
3,646,533
      
4,204,886
      
40,824
  
                         
Film costs
    
270,089
      
275,799
      
2,678
  
Investments and advances
    
7,317,125
      
7,919,011
      
76,884
  
Property, plant and equipment
    
861,550
      
750,010
      
7,282
  
Other assets:
                        
       Deferred insurance acquisition costs
    
465,499
      
497,772
      
4,833
  
       Other
    
1,650,237
      
1,686,242
      
16,370
  
     
2,115,736
      
2,184,014
      
21,203
  
                         
Total assets
  
¥
14,211,033
    
¥
15,333,720
    
$
148,871
  
                         
LIABILITIES AND EQUITY
                        
Current liabilities:
                        
       Short-term borrowings
  
¥
244,182
    
¥
377,754
    
$
3,668
  
       Notes and accounts payable, trade
    
572,102
      
712,829
      
6,921
  
       Deposits from customers in the banking business
    
1,857,448
      
1,890,023
      
18,350
  
       Other
    
1,641,357
      
1,803,008
      
17,504
  
     
4,315,089
      
4,783,614
      
46,443
  
                         
Long-term debt
    
938,428
      
916,648
      
8,899
  
Accrued pension and severance costs
    
311,469
      
284,963
      
2,767
  
Future insurance policy benefits and other
    
3,535,532
      
3,824,572
      
37,132
  
Policyholders’ account in the life insurance business
    
1,715,610
      
2,023,472
      
19,645
  
Other
    
719,904
      
713,195
      
6,924
  
   Total liabilities
    
11,536,032
      
12,546,464
      
121,810
  
                         
Redeemable noncontrolling interest
    
2,997
      
4,115
      
40
  
                         
Equity:
                        
Sony Corporation’s stockholders’ equity
    
2,192,262
      
2,258,137
      
21,924
  
Noncontrolling interests
    
479,742
      
525,004
      
5,097
  
   Total equity
    
2,672,004
      
2,783,141
      
27,021
  
                         
   Total liabilities and equity
  
¥
14,211,033
    
¥
15,333,720
    
$
148,871
  
 
 
 
F-13
 
 
 
Condensed Statements of Income
  
 
(Millions of yen, millions of U.S. dollars)
  
 
Fiscal year ended March 31
         Financial Services
2013
    
2014
    
Change
  
2014
  
                       
Financial services revenue
 ¥ 1,002,389     ¥ 993,846     -0.9 %   $ 9,649  
Financial services expenses
   857,877       821,218     -4.3       7,973  
Equity in net loss of affiliated companies
   (2,303 )     (2,336 )  
－
       (23 )
Operating income
   142,209       170,292     +19.7       1,653  
Other income (expenses), net
   100       2     -98.0       0  
Income before income taxes
   142,309       170,294     +19.7       1,653  
Income taxes and other
   43,328       54,161     +25.0       525  
Net income of Financial Services
 ¥ 98,981     ¥ 116,133     +17.3 %   $ 1,128  
                             
                             
                             
 
(Millions of yen, millions of U.S. dollars)
 
Fiscal year ended March 31
         Sony without Financial Services
 2013      2014    
Change
     2014  
                             
Net sales and operating revenue
 ¥ 5,799,582     ¥ 6,780,504     +16.9 %   $ 65,830  
Costs and expenses
   5,713,090       6,921,294     +21.1       67,197  
Equity in net loss of affiliated companies
   (4,645 )     (5,038 )  
－
       (49 )
Operating income (loss)
   81,847       (145,828 )  
－
       (1,416 )
Other income (expenses), net
   23,147       7,800     -66.3       76  
Income (loss) before income taxes
   104,994       (138,028 )  
－
       (1,340 )
Income taxes and other
   117,013       53,290     -54.5       517  
Net loss of Sony without Financial Services
 ¥ (12,019 )   ¥ (191,318 )   － %   $ (1,857 )
                             
                             
                             
 
(Millions of yen, millions of U.S. dollars)
 
Fiscal year ended March 31
  
         Consolidated
 2013      2014     Change     2014  
                             
Financial services revenue
 ¥ 999,276     ¥ 988,944     -1.0 %   $ 9,601  
Net sales and operating revenue
   5,796,228       6,778,322     +16.9       65,809  
    6,795,504       7,767,266     +14.3       75,410  
Costs and expenses
   6,562,053       7,733,397     +17.9       75,081  
Equity in net loss of affiliated companies
   (6,948 )     (7,374 )  
－
       (72 )
Operating income
   226,503       26,495     -88.3       257  
Other income (expenses), net
   15,581       (754 )  
－
       (7 )
Income before income taxes
   242,084       25,741     -89.4       250  
Income taxes and other
   200,544       154,110     -23.2       1,496  
Net income (loss) attributable to Sony Corporation’s stockholders
 ¥ 41,540     ¥ (128,369 )   － %   $ (1,246 )
 
 
 
F-14
 
 
 
Condensed Statements of Income
                            
 
(Millions of yen, millions of U.S. dollars)
 
Three months ended March 31
         Financial Services
2013
    
2014
    
Change
  
2014
  
                             
Financial services revenue
¥
312,893
    
¥
216,677
    
-30.8
%
  
$
2,104
  
Financial services expenses
  
261,087
      
175,823
    
-32.7
      
1,707
  
Equity in net loss of affiliated companies
  
(797
 )     
(412
 )   
－
      
(4
 )
Operating income
  
51,009
      
40,442
    
-20.7
      
393
  
Other income (expenses), net
  
13
      
(176
 )   
－
      
(2
 ) 
Income before income taxes
  
51,022
      
40,266
    
-21.1
      
391
  
Income taxes and other
  
15,482
      
11,745
    
-24.1
      
114
  
Net income of Financial Services
¥
35,540
    
¥
28,521
    
-19.7
%
  
$
277
  
                             
                             
                             
 
(Millions of yen, millions of U.S. dollars)
 
Three months ended March 31
         Sony without Financial Services
2013
    
2014
    
Change
  
2014
  
                             
Net sales and operating revenue
¥
1,419,215
    
¥
1,655,583
    
+16.7
%
  
$
16,074
  
Costs and expenses
  
1,323,078
      
1,802,161
    
+36.2
      
17,497
  
Equity in net loss of affiliated companies
  
(2,386
 )     
(6,181
 )   
－
      
(60
 ) 
Operating income (loss)
  
93,751
      
(152,759
 )   
－
      
(1,483
 ) 
Other income (expenses), net
  
40,647
      
(595
 )   
－
      
(6
 ) 
Income (loss) before income taxes
  
134,398
      
(153,354
 )   
－
      
(1,489
 ) 
Income taxes and other
  
61,950
      
2,008
    
-96.8
      
19
  
Net income (loss) of Sony without Financial Services
¥
72,448
    
¥
(155,362
 )   
－
%
  
$
(1,508
 ) 
                             
                             
                             
 
(Millions of yen, millions of U.S. dollars)
 
Three months ended March 31
         Consolidated
2013
    
2014
    
Change
  
2014
  
                             
Financial services revenue
¥
312,111
    
¥
215,446
    
-31.0
%
  
$
2,092
  
Net sales and operating revenue
  
1,418,346
      
1,655,477
    
+16.7
      
16,072
  
   
1,730,457
      
1,870,923
    
+8.1
      
18,164
  
Costs and expenses
  
1,581,896
      
1,976,131
    
+24.9
      
19,185
  
Equity in net loss of affiliated companies
  
(3,183
 )     
(6,593
 )   
－
      
(64
 ) 
Operating income (loss)
  
145,378
      
(111,801
 )   
－
      
(1,085
 ) 
Other income (expenses), net
  
40,043
      
(1,287
 )   
－
      
(13
 ) 
Income (loss) before income taxes
  
185,421
      
(113,088
 )   
－
      
(1,098
 ) 
Income taxes and other
  
92,259
      
25,159
    
-72.7
      
244
  
Net income (loss) attributable to Sony Corporation’s stockholders
¥
93,162
    
¥
(138,247
 )   
－
%
  
$
(1,342
 ) 
 
 
 
F-15
 
 
 
Condensed Statements of Cash Flows
                        
   
(Millions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
         Financial Services
  
2013
    
2014
    
2014
  
                         
Net cash provided by operating activities
  
¥
443,284
    
¥
413,555
    
$
4,015
  
Net cash used in investing activities
    
(655,859
 )     
(616,223
 )     
(5,983
 ) 
Net cash provided by financing activities
    
238,974
      
241,450
      
2,344
  
Net increase in cash and cash equivalents
    
26,399
      
38,782
      
376
  
Cash and cash equivalents at beginning of the fiscal year
    
175,151
      
201,550
      
1,957
  
Cash and cash equivalents at end of the period
  
¥
201,550
    
¥
240,332
    
$
2,333
  
                         
                         
   
(Millions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
         Sony without Financial Services
  
2013
    
2014
    
2014
  
                         
Net cash provided by operating activities
  
¥
38,478
    
¥
257,224
    
$
2,498
  
Net cash used in investing activities
    
(49,801
 )     
(94,279
 )     
(915
 ) 
Net cash used in financing activities
    
(155,663
 )     
(40,236
 )     
(391
 ) 
Effect of exchange rate changes on cash and cash equivalents
    
72,372
      
58,614
      
569
  
Net increase (decrease) in cash and cash equivalents
    
(94,614
 )     
181,323
      
1,761
  
Cash and cash equivalents at beginning of the fiscal year
    
719,425
      
624,811
      
6,066
  
Cash and cash equivalents at end of the period
  
¥
624,811
    
¥
806,134
    
$
7,827
  
                         
                         
   
(Millions of yen, millions of U.S. dollars)
  
   
Fiscal year ended March 31
         Consolidated
  
2013
    
2014
    
2014
  
                         
Net cash provided by operating activities
  
¥
476,165
    
¥
664,116
    
$
6,448
  
Net cash used in investing activities
    
(705,280
 )     
(710,502
 )     
(6,898
 ) 
Net cash provided by financing activities
    
88,528
      
207,877
      
2,018
  
Effect of exchange rate changes on cash and cash equivalents
    
72,372
      
58,614
      
569
  
Net increase (decrease) in cash and cash equivalents
    
(68,215
 )     
220,105
      
2,137
  
Cash and cash equivalents at beginning of the fiscal year
    
894,576
      
826,361
      
8,023
  
Cash and cash equivalents at end of the period
  
¥
826,361
    
¥
1,046,466
    
$
10,160
  
 
 
 
F-16
 
 
(Notes)
1.
U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥103 = U.S. $1, the approximate Tokyo foreign exchange market rate as of March 31, 2014.

2.
As of March 31, 2014, Sony had 1,317 consolidated subsidiaries (including variable interest entities) and 107 affiliated companies accounted for under the equity method.

3.
The weighted-average number of outstanding shares used for the computation of earnings per share of common stock are as follows:

Weighted-average number of outstanding shares
  
(Thousands of shares)
  
   
Fiscal year ended March 31
  
Net income (loss) attributable to Sony Corporation’s stockholders
  
2013
    
2014
  
— Basic
     1,005,416       1,027,024  
— Diluted
     1,070,792       1,027,024  

Weighted-average number of outstanding shares
  
(Thousands of shares)
  
   
Three months ended March 31
  
Net income (loss) attributable to Sony Corporation’s stockholders
  
2013
    
2014
  
— Basic
     1,010,906       1,039,666  
— Diluted
     1,167,914       1,039,666  

The dilutive effect in the weighted-average number of outstanding shares for the fiscal year and three months ended March 31, 2013, primarily resulted from convertible bonds which were issued in November 2012.　Potential shares were excluded as anti-dilutive for the fiscal year and three months ended March 31, 2014 due to Sony incurring a net loss attributable to Sony Corporation’s stockholders for those periods.

4.
Recently adopted accounting pronouncements:
Disclosure about balance sheet offsetting -
In December 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance for disclosure about balance sheet offsetting.  The guidance requires entities to disclose information about offsetting and related arrangements to enable financial statement users to understand the effect of such arrangements on their financial position as well as to improve comparability of balance sheets prepared under U.S. GAAP and International Financial Reporting Standards.  Subsequently, in January 2013, the FASB issued updated accounting guidance clarifying the scope of disclosures about offsetting assets and liabilities.  This guidance is required to be applied retrospectively and was effective for Sony as of April 1, 2013.  Since this guidance impacts disclosures only, its adoption did not have an impact on Sony’s results of operations and financial position.

Testing indefinite lived intangible assets for impairment -
In July 2012, the FASB issued new accounting guidance to simplify how entities test indefinite lived intangible assets for impairment.  The new guidance allows entities an option to first assess qualitative factors to determine whether it is more likely than not that indefinite lived intangible assets are impaired as a basis for determining if it is necessary to perform the quantitative impairment test.  Under the new guidance, entities are no longer required to calculate the fair value of the assets unless the entities determine, based on the qualitative assessment, that it is more likely than not that indefinite lived intangible assets are impaired.  This guidance was effective for Sony as of April 1, 2013.  The adoption of this guidance did not have a material impact on Sony’s results of operations and financial position.

Presentation of amounts reclassified out of accumulated other comprehensive income -
In February 2013, the FASB issued new accounting guidance for reporting of amounts reclassified out of accumulated other comprehensive income.  The guidance requires entities to report the significant reclassifications out of accumulated other comprehensive income if the amount is required to be reclassified in its entirety to net income.  For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, entities are required to cross-reference other disclosures required that provide additional detail about those amounts.  This guidance was effective for Sony as of April 1, 2013.  Sony applied this guidance prospectively from the date of adoption.  Since this guidance impacts disclosures only, its adoption did not have an impact on Sony’s results of operations and financial position.
 
 
 
F-17
 

 
5.
During the fourth quarter of the fiscal year ended March 31, 2014, Sony revised its financial statements as summarized below.  Sony had previously recognized substantially all of the revenue from universal life insurance contracts over the period of the contract as fees were earned for services.  However, Sony had recognized a small portion of the overall contract revenue, representing the residual amount of revenue after taking into account the future insurance liabilities and future services to be provided to the policyholder, as fees were received.  Under the revision, Sony will also recognize this small portion of revenue over the contract period.  The application of the prior revenue recognition accounting, which occurred over a number of years, was immaterial to previously issued financial statements, but its cumulative impact would have been material to the consolidated financial statements had it been adjusted in the fiscal year ended March 31, 2014.  Accordingly, Sony revised its financial statements for the prior period as indicated below.  The modified application does not affect the presentation of the Japanese statutory financial statements of Sony’s Financial Services segment subsidiaries under generally accepted accounting principles and practices in Japan.
 
Consolidated Balance Sheets
   
(Millions of yen)
  
   
March 31, 2013
  
   
As previously
reported
    
As adjusted
  
Deferred insurance acquisition costs
   ¥ 460,758     ¥ 465,499  
Deferred income taxes (Long-term liabilities)
     373,999       369,919  
Future insurance policy benefits and other
     3,540,031       3,535,532  
Policyholders’ account in the life insurance business
     1,693,116       1,715,610  
Retained earnings
     1,102,297       1,094,775  
Accumulated other comprehensive income
     (641,513 )     (639,495 )
Noncontrolling interests
     483,412       479,742  

Consolidated Statements of Income
   
(Millions of yen, except per share amounts)
  
   
Fiscal year ended March 31, 2013
  
   
As previously
reported
    
As adjusted
  
Financial services revenue
   ¥ 1,004,623     ¥ 999,276  
Financial services expenses
     855,971       854,221  
Operating income
     230,100       226,503  
Income before income taxes
     245,681       242,084  
Income taxes
     141,505       140,398  
Net income
     104,176       101,686  
Less - Net income attributable to noncontrolling interests
     61,142       60,146  
Net income attributable to Sony Corporation’s stockholders
     43,034       41,540  
                 
Per share data:
                
Basic EPS
   ¥ 42.80     ¥ 41.32  
Diluted EPS
     40.19       38.79  

Consolidated Statements of Comprehensive Income
 
(Millions of yen)
  
 
Fiscal year ended March 31, 2013
  
 
As previously
reported
  
As adjusted
  
Net income
 ¥ 104,176     ¥ 101,686  
Unrealized gains on securities
   66,844       68,609  
Less - Comprehensive income attributable to noncontrolling interests
   82,909       82,619  
Comprehensive income attributable to Sony Corporation’s stockholders
   243,614       243,179  
 
 
 
F-18
 
 
Consolidated Statements of Cash Flows
 
(Millions of yen)
  
 
Fiscal year ended March 31, 2013
  
 
As previously
reported
  
As adjusted
  
Net income
 ¥ 104,176     ¥ 101,686  
Depreciation and amortization, including amortization of deferred insurance acquisition costs*
   330,554       376,735  
Increase in future insurance policy benefits and other
   438,371       434,786  
Other (Cash flows from operating activities)*
   7,224       (38,229 )
Increase in deposits from customers in the financing services business, net
   232,561       237,908  

* Including reclassification of amortization of internal-use software.  For further details, see Note 6 below.

6.
Certain reclassifications of the financial statements and accompanying footnotes for the fiscal years ended March 31, 2013 have been made to conform to the presentation for the fiscal year ended March 31, 2014.  Reclassifications include changes in the presentation and disclosure related to internal-use software, effective on March 31, 2014.  Due to the changes, capitalized internal-use software was reclassified from other noncurrent assets to intangibles, net in the consolidated balance sheets.  In addition, the amortization of internal-use software was reclassified from other to depreciation and amortization, including amortization of deferred insurance acquisition costs in the cash flows from operating activities section of the consolidated statements of cash flows.  Depreciation and amortization in the business segment information were also reclassified, accordingly.

Other Consolidated Financial Data

 
(Millions of yen, millions of U.S. dollars)
  
 
Fiscal year ended March 31
  
 
2013
  
2014
  
2014
  
Capital expenditures (additions to property, plant and equipment)
 ¥ 188,627     ¥ 164,589     $ 1,598  
Depreciation and amortization expenses*
   376,735       376,695       3,657  
(Depreciation expenses for property, plant and equipment)
   (199,248 )     (195,795 )     (1,901 )
Research and development expenses
   473,610       466,030       4,525  
 

 
(Millions of yen, millions of U.S. dollars)
  
 
Three months ended March 31
  
 
2013
  
2014
  
2014
  
Capital expenditures (additions to property, plant and equipment)
 ¥ 55,523     ¥ 40,446     $ 393  
Depreciation and amortization expenses*
   101,792       98,943       961  
(Depreciation expenses for property, plant and equipment)
   (53,096 )     (52,381 )     (509 )
Research and development expenses
   124,023       121,448       1,179  
 
* Including amortization expenses for intangible assets and for deferred insurance acquisition costs.
 
(Subsequent events)
(1) Sale of Buildings and Premises at the Gotenyama Technology Center
On April 30, 2014, Sony sold buildings and premises at the Gotenyama Technology Center with a total sales price of 23,163 million yen.  Sony expects to recognize a gain on sale totaling 14,776 million yen in other operating (income) expense, net in the consolidated statements of income and will include proceeds from the sales of fixed assets within investing activities of the consolidated statements of cash flows for the first quarter of the fiscal year ending March 31, 2015.

(2) Sale of PC business
On May 2, 2014, Sony entered into agreements to sell its PC business and certain related assets to VAIO Corporation, to be established by Japan Industrial Partners, Inc., with a targeted closing date of July 1, 2014.  No further significant gain or loss is expected to be recorded as a result of the sale.
 
 
F-19