6-K 1 sony-6k_1111.htm

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 November 2013
Commission File Number: 001-06439

SONY CORPORATION

(Translation of registrant’s name into English)

7-1, KONAN 1-CHOME, 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 þ Form 40-F o

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 o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-

 

 

 

 
 


Quarterly Securities Report
For the three months ended September 30, 2013
 
(TRANSLATION)
 
Sony Corporation

 
 

 


CONTENTS
       
     
Page
       
Note for readers of this English translation
 
1
Cautionary Statement
 
1
       
I
Corporate Information
 
2
 
(1)     Selected Consolidated Financial Data
 
2
 
(2)     Business Overview
 
3
       
II
State of Business
 
4
 
(1)     Risk Factors
 
4
 
(2)     Material Contracts
 
4
 
(3)     Management’s Discussion and Analysis of Financial Condition, Results of Operations and Status of Cash Flows
 
4
       
III
Company Information
 
8
 
(1)     Information on the Company’s Shares
 
8
 
(2)     Directors and Corporate Executive Officers
 
12
       
IV
Financial Statements
 
13
 
(1)     Consolidated Financial Statements
 
14
 
(2)     Other Information
 
42
 
 
 

 

 
 
 
Note for readers of this English translation
 
On November 11, 2013, Sony Corporation (the “Company” or “Sony Corporation”) filed its Japanese-language Quarterly Securities Report (Shihanki Houkokusho) for the three months ended September 30, 2013 with the Director-General of the Kanto Local Finance Bureau in Japan pursuant to the Financial Instruments and Exchange Act of Japan.  This document is an English translation of the Quarterly Securities Report in its entirety, except for (i) information that had been previously filed with or submitted to the U.S. Securities and Exchange Commission (the “SEC”) in a Form 20-F, Form 6-K or any other form and (ii) a description of differences between generally accepted accounting principles in the U.S. (“U.S. GAAP”) and generally accepted accounting principles in Japan (“J-GAAP”), which are required to be described in the Quarterly Securities Report under the Financial Instruments and Exchange Act of Japan if the Company prepares its financial statements in conformity with accounting principles other than J-GAAP.
 
Cautionary Statement
 
Statements made in this release with respect to Sony’s current plans, estimates, strategies and beliefs and other statements of the Company and its consolidated subsidiaries (collectively “Sony”) 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 smart phones, 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) Sony’s ability to forecast demands, manage timely procurement and control inventories; (xi) the outcome of pending and/or future legal and/or regulatory proceedings; (xii) 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; (xiii) 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 (xiv) risks related to catastrophic disasters or similar events. Risks and uncertainties also include the impact of any future events with material adverse impact.
 
 
 
- 1 -
 

 

 
I     Corporate Information
(1) Selected Consolidated Financial Data
 
   
Yen in millions, Yen per share amounts
 
   
Six months
ended
September 30,
2012
   
Six months
ended
September 30,
2013
   
Fiscal year
ended
March 31,
2013
 
Sales and operating revenue
    3,119,842       3,488,198       6,800,851  
Operating income
    36,526       51,121       230,100  
Income before income taxes
    29,063       52,217       245,681  
Net income (loss) attributable to Sony Corporation’s stockholders
    (40,111 )     (15,807 )     43,034  
Comprehensive income (loss)
    (77,441 )     77,958       326,523  
Total equity
    2,328,229       2,765,645       2,681,178  
Total assets
    13,254,028       14,977,728       14,206,292  
Net income (loss) attributable to Sony Corporation’s stockholders per share of common stock, basic (yen)
    (39.97 )     (15.57 )     42.80  
Net income (loss) attributable to Sony Corporation’s stockholders per share of common stock, diluted (yen)
    (39.97 )     (15.57 )     40.19  
Ratio of stockholders’ equity to total assets (%)
    14.1       15.1       15.5  
Net cash provided by (used in) operating activities
    49,437       (10,216 )     481,512  
Net cash used in investing activities
    (470,826 )     (224,111 )     (705,280 )
Net cash provided by financing activities
    147,974       108,643       83,181  
Cash and cash equivalents at end of the period
    588,827       725,668       826,361  
                         
 
   
Yen in millions, Yen per share amounts
 
   
Three months
ended
September 30,
2012
   
Three months
ended
September 30,
2013
 
Sales and operating revenue
    1,604,659       1,775,486  
Net loss attributable to Sony Corporation’s stockholders
    (15,470 )     (19,287 )
Net loss attributable to Sony Corporation’s stockholders per share of common stock, basic (yen)
    (15.41 )     (18.91 )
 
 
Notes:
 
1.
The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP.
 
2.
The Company reports equity in net loss of affiliated companies as a component of operating income.
 
3.
Consumption taxes are not included in sales and operating revenue.
 
4.
Total equity is presented based on U.S. GAAP.
 
5.
Ratio of stockholders’ equity to total assets is calculated by using total equity attributable to the stockholders of the Company.
 
6.
The Company prepares consolidated financial statements.  Therefore parent-only selected financial data is not presented.

- 2 -
 

 


(2) Business Overview
 
There was no significant change in the business of Sony during the six months ended September 30, 2013.
 
As of September 30, 2013, the Company had 1,326 subsidiaries and 110 affiliated companies, of which 1,305 companies are consolidated subsidiaries (including variable interest entities) of the Company.  The Company has applied the equity accounting method for 103 affiliated companies.
 
- 3 -
 

 

 
II       State of Business
 
(1) Risk Factors
 
     
 
Note for readers of this English translation:
 
     
 
There was no significant change from the information presented in the Risk Factors section of the Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on June 27, 2013.  Any forward-looking statements included in the descriptions below are based on management’s current judgment.
 
     
 
URL: The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
 
 
(2) Material Contracts
 
There were no material contracts executed or determined to be executed during the three months ended September 30, 2013.
 
     
 
Note for readers of this English translation:
 
     
 
Except for the matters as updated in the Quarterly Securities Report on Form 6-K submitted to the SEC on August 9, 2013, there was no significant change from the information presented in the Annual Report on Form 20-F (“Patents and Licenses” in Item 4) filed with the SEC on June 27, 2013.
 
     
 
URL:  The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
     
 
URL:  The Quarterly Securities Report on Form 6-K submitted to SEC on August 9, 2013
http://www.sec.gov/Archives/edgar/data/313838/000090342313000456/sony-6k_0809.htm
 
     
 
(3) Management’s Discussion and Analysis of Financial Condition, Results of Operations and Status of Cash Flows
 
i) Results of Operations
     
 
Note for readers of this English translation:
 
     
 
Except for information specifically included in this English translation, this document omits certain information set out in the Japanese-language Quarterly Securities Report for the three-month and six-month periods ended September 30, 2013, since it is the same as described in a press release previously submitted to the SEC.  Please refer to “Consolidated Financial Results for the Second Quarter Ended September 30, 2013” submitted to the SEC on Form 6-K on October 31, 2013.
 
     
 
URL: The press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2013”
http://www.sec.gov/Archives/edgar/data/313838/000115752313005150/a50740032.htm
 
 
 
- 4 -
 

 

 
Foreign Exchange Fluctuations and Risk Hedging
 
     
 
Note for readers of this English translation:
 
     
 
Except for the information set forth below, there was no significant change from the information presented in the Foreign Exchange Fluctuations and Risk Hedging section of the Annual Report on Form 20-F filed with the SEC on June 27, 2013.  Although foreign exchange rates have fluctuated during the three-month period ended September 30, 2013, there has been no significant change in Sony’s risk hedging policy as described in the Annual Report on Form 20-F.
 
     
 
URL: The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
     
 
During the three months ended September 30, 2013, the average rates of the yen were 98.9 yen against the U.S. dollar and 131.1 yen against the euro, which were 20.5 percent and 24.9 percent lower, respectively, than the same quarter of the previous fiscal year (“year-on-year”).
 
For the three months ended September 30, 2013, sales were 1,775.5 billion yen, an increase of 10.6 percent year-on-year, while on a constant currency basis, sales decreased approximately 9 percent year-on-year.  For references to information on a constant currency basis, see Note at the bottom of this section.
 
Consolidated operating income of 14.8 billion yen was recorded for the three months ended September 30, 2013, a decrease of 15.5 billion yen year-on-year (a deterioration of approximately 30.3 billion yen year-on-year on a constant currency basis).  Most of the foreign exchange rate impact was attributable to the Imaging Products & Solutions (“IP&S”), Game, Mobile Products & Communications (“MP&C”), Home Entertainment & Sound (“HE&S”) and Devices segments.
 
The table below indicates the impact of changes in foreign exchange rates on sales and operating results of each of the above-mentioned five segments.  For a detailed analysis of segment performance, please refer to the “Results of Operations” section above, which discusses the impact of foreign exchange rates within each segment.
                                           
       
(Billions of yen)
                     
Change on
 
Impact of
       
Second quarter ended
September 30
 
Change in
    constant
currency  
  changes in
foreign
       
2012
   
2013
    yen     basis    exchange rates
    IP&S
Sales
    188.6       175.5       -6.9 %     -24 %     +32.1  
Operating income (loss)
    2.2       (2.3 )     -4.5       -17.3       +12.8  
Game
Sales
    148.2       155.7       +5.1 %     -14 %     +28.9  
Operating income (loss)
    2.3       (0.8 )     -3.1       +2.6       -5.7  
MP&C
Sales
    300.4       418.6       +39.3 %     +4 %     +106.2  
Operating loss
    (23.1 )     (0.9 )     +22.2       +22.9       -0.7  
HE&S
Sales
    236.0       263.8       +11.8 %     -12 %     +55.9  
Operating loss
    (15.8 )     (12.1 )     +3.7       +4.7       -1.0  
Devices
Sales
    249.9       208.1       -16.7 %     -30 %     +34.3  
Operating income
    29.8       11.9       -17.9       -32.1       +14.3  
 
In addition, sales for the Pictures segment increased 9.1 percent year-on-year to 177.8 billion yen, an approximate 13 percent decrease on a constant currency (U.S. dollar) basis.  In the Music segment, sales increased 15.9 percent year-on-year to 115.0 billion yen.  On a constant currency basis, the sales in the Music segment were essentially flat year-on-year.  For a detailed analysis of segment performance, please refer to the Pictures and Music segments under the “Results of Operations” section above.  Sony’s Financial Services segment consolidates the yen-based results of Sony Financial Holdings Inc.  As most of the operations in this segment are based in Japan, Sony’s management analyzes the performance of the Financial Services segment on a yen basis only.
 
- 5 -
 

 

 
Note: In this section, the descriptions of sales on a constant currency basis reflect sales obtained by applying the yen’s monthly average exchange rates from the same quarter of the previous fiscal year to local currency-denominated monthly sales in the three months ended September 30, 2013.  The impact of foreign exchange rate fluctuations on operating income (loss) described herein is estimated by deducting cost of sales and selling, general and administrative (“SGA”) expenses on a constant currency basis from sales on a constant currency basis.  Cost of sales and SGA expenses on a constant currency basis are obtained by applying the yen’s monthly average exchange rates from the same quarter of the previous fiscal year to the corresponding local currency-denominated monthly cost of sales and SGA expenses for the three months ended September 30, 2013.  In certain cases, most significantly in the Pictures segment, and Sony Music Entertainment and Sony/ATV Music Publishing LLC in the Music segment, the constant currency amounts are after aggregation on a U.S. dollar basis.  Sales and operating income (loss) 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 and operating income information on a constant currency basis provides additional useful analytical information to investors regarding the operating performance of Sony.
 
Status of Cash Flows
 
 
     
 
Note for readers of this English translation:
 
     
 
Except for information specifically included in this English translation, this document omits certain information set out in the Japanese-language Quarterly Securities Report for the six-month period ended September 30, 2013, since it is the same as described in a press release previously submitted to the SEC.  Please refer to “Consolidated Financial Results for the Second Quarter Ended September 30, 2013” submitted to the SEC on Form 6-K on October 31, 2013.
 
     
 
URL: The press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2013”
http://www.sec.gov/Archives/edgar/data/313838/000115752313005150/a50740032.htm
 
     
 
ii) Issues Facing Sony and Management’s Response to those Issues
 
 
     
 
Note for readers of this English translation:
 
     
 
There was no significant change from the information presented as the Issues Facing Sony and Management’s Response to those Issues in the Trend Information section of the Annual Report on Form 20-F filed with the SEC on June 27, 2013.  Any forward-looking statements included in the descriptions below are based on management’s current judgment.
 
     
  URL: The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
     

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iii) Research and Development
 
 
     
 
Note for readers of this English translation:
 
     
 
Excluding the below, there was no significant change from the information presented as the Research and Development in the Annual Report on Form 20-F filed with the SEC on June 27, 2013.
 
     
 
URL: The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
     
 
The following significant changes in research and development activities occurred during the period.
 
The Advanced Device Technology Platform, the Corporate R&D and the System & Software Technology Platform were realigned in June 2013, to form the R&D Platform and the Software Design Group to accelerate the development of next generation core technology to deliver Sony products and services in order to increase customer value.
Research and development costs for the six months ended September 30, 2013 totaled 228.6 billion yen.
 
iv) Liquidity and Capital Resources
     
 
Note for readers of this English translation:
 
     
 
Except for the information related to the committed lines of credit and the issuance of unsecured straight bonds below, there was no significant change from the information presented in the Annual Report on Form 20-F filed with the SEC on June 27, 2013.  The changes are indicated by underline below.  Any forward-looking statements included in the descriptions below are based on management’s current judgment.
 
     
 
URL: The Annual Report on Form 20-F filed with the SEC on June 27, 2013
http://www.sec.gov/Archives/edgar/data/313838/000119312513273660/d519176d20f.htm
 
     
 
Sony typically raises funds through straight bonds, CP programs and bank loans (including syndicated loans).  If market disruption and volatility occur and if Sony could not raise sufficient funds from these sources, Sony may also draw down funds from contractually committed lines of credit from various financial institutions.  Sony has a total, translated into yen, of 819.1 billion yen in unused committed lines of credit, as of September 30, 2013.  Details of those committed lines of credit are: a 475.0 billion yen committed line of credit contracted with a syndicate of Japanese banks, effective until November 2015, a 1.5 billion U.S. dollar multi-currency committed line of credit also with a syndicate of Japanese banks, effective until December 2018, and a 2.02 billion U.S. dollar multi-currency committed line of credit contracted with a syndicate of foreign banks, effective until April 2015.  In all of these committed lines of credit, Sony Corporation and Sony Global Treasury Services Plc are defined as borrowers.  In September 2013, Sony extended by five years the term for the 1.5 billion U.S. dollar multi-currency committed line of credit contracted with a syndicate of Japanese banks.  These contracts are aimed at securing sufficient liquidity in a quick and stable manner even in the event of turmoil within the financial and capital markets.
In June 2013, Sony issued unsecured straight bonds for Japanese retail investors in the aggregate principal amount of 150.0 billion yen.  The proceeds from the issuance of the bonds are to be applied to the repayment of borrowings and debt, and to capital expenditures.

- 7 -
 

 

 
III. Company Information
(1) Information on the Company’s Shares
 
i) Total Number of Shares
1) Total Number of Shares
Class
Total number of shares authorized to be issued
Common stock
3,600,000,000
Total
3,600,000,000
 
2) Number of Shares Issued
Class
Number of shares issued
Name of Securities Exchanges
where the shares are listed or
authorized Financial
Instruments Firms Association
where the shares are registered
Description
As of the end of the
second quarterly
period
(September 30, 2013)
As of the filing date of
the Quarterly
Securities Report
(November 11, 2013)
Common
stock
1,038,634,659
1,038,635,659
Tokyo Stock Exchange
New York Stock Exchange
London Stock Exchange
The number of
shares constituting
one full unit is one
hundred (100).
Total
1,038,634,659
1,038,635,659
Notes:
1.
The Company’s shares of common stock are listed on the First Section of the Tokyo Stock Exchange in Japan.
2.
The number of shares issued as of the filing date of this Quarterly Securities Report does not include shares issued upon the exercise of stock acquisition rights (“SARs”) (including the exercise of stock acquisition rights of the Zero Coupon Convertible Bonds) during November 2013, the month in which this Quarterly Securities Report (Shihanki Houkokusho) was filed.
 
ii) Stock Acquisition Rights
Not applicable.
 
Note for readers of this English translation:
The above means that there was no issuance of SARs during the three months ended September 30, 2013.
 
iii) Status of the Exercise of Moving Strike Convertible Bonds
Not applicable.
 
iv) Description of Rights Plan
Not applicable.
 
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v) Changes in the Total Number of Shares Issued and the Amount of Common Stock, etc.
Period
Change in the
total number of
shares issued
Balance of the
total number of
shares issued
Change in
the amount of
common stock
Balance of
the amount of
common stock
Change in the
legal capital
surplus
Balance of the
legal capital
surplus
(Thousands)
(Thousands)
(Yen in Millions)
(Yen in Millions)
(Yen in Millions)
(Yen in Millions)
From July 1 to
September 30,
2013
26,657
1,038,635
12,763
643,702
12,763
857,395
Notes:
1.
The increase is due to the exercise of SARs.
2.
Upon the exercise of SARs during the period from October 1, 2013 to October 31, 2013, the total number of shares issued increased by 1 thousand shares, the amount of common stock and the legal capital surplus increased by 1 million yen, respectively.
 
- 9 -
 

 


vi) Status of Major Shareholders
(As of September 30, 2013)
Name
Address
Number of
shares held
(Thousands)
Percentage
of shares held
to total shares
issued (%)
Moxley and Co. LLC *1
(Local Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)
New York, U.S.A.
(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)
78,405
7.55
Japan Trustee Services Bank, Ltd.
(Trust account) *2
1-8-11, Harumi, Chuo-ku, Tokyo
48,466
4.67
The Master Trust Bank of Japan, Ltd.
(Trust account) *2
2-11-3, Hamamatsu-cho, Minato-ku, Tokyo
44,912
4.32
The Bank of New York, Non-Treaty Jasdec Account *3
(Local Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd)
New York, U.S.A.
(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)
17,153
1.65
Third Point Offshore Master Fund L.P.
(Local Custodian: Goldman Sachs Japan Co., Ltd.)
New York, U.S.A.
(Roppongi Hills Mori Tower 6-10-1, Roppongi, Minato-ku, Tokyo)
17,029
1.64
Japan Trustee Services Bank, Ltd.
(Trust account 9) *2
1-8-11, Harumi, Chuo-ku, Tokyo
15,800
1.52
Goldman, Sachs & Co. Reg *3
(Local Custodian: Goldman Sachs Japan Co., Ltd.)
New York, U.S.A.
(Roppongi Hills Mori Tower 6-10-1, Roppongi, Minato-ku, Tokyo)
15,470
1.49
The Bank of New York, Treaty Jasdec Account *3
(Local Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd)
Brussels, Belgium
(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)
13,804
1.33
Japan Trustee Services Bank, Ltd.
(Trust account 1) *2
1-8-11, Harumi, Chuo-ku, Tokyo
11,421
1.10
SSBT OD05 Omnibus Account - Treaty Clients *3
(Local Custodian: The Hongkong and Shanghai
Banking Corporation Limited)
Sydney, Australia
(3-11-1, Nihonbashi, Chuo-ku, Tokyo)
11,391
1.10
Total
273,851
26.37
Notes:
 
*1.
Moxley and Co. LLC is the nominee of JPMorgan Chase Bank, N.A., which is the Depositary for holders of the Company’s American Depositary Receipts .
*2.
The shares held by each shareholder are held in trust for investors, including shares in securities investment trusts.
*3.
Each shareholder provides depositary services for shares owned by institutional investors, mainly in Europe and North America.  They are also the nominees for these investors.
 
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vii) Status of Voting Rights
1) Shares Issued
(As of September 30, 2013)
Classification
Number of shares of
common stock
Number of voting rights
(Units)
Description
Shares without voting rights
Shares with restricted voting rights
(Treasury stock, etc.)
Shares with restricted voting rights (Others)
Shares with full voting rights
(Treasury stock, etc.)
1,004,500
Shares with full voting rights (Others)
1,035,230,500
10,352,305
Shares constituting less than one full unit
2,399,659
Shares constituting
less than one full unit
(100 shares)
Total number of shares issued
1,038,634,659
Total voting rights held by all shareholders
10,352,305
Note:
Included in “Shares with full voting rights (Others)” under “Number of shares of common stock” are 19,500 shares of common stock held under the name of Japan Securities Depository Center, Incorporated.  Also included in “Shares with full voting rights (Others)” under “Number of voting rights (Units)” are 195 units of voting rights relating to the shares of common stock with full voting rights held under the name of Japan Securities Depository Center, Incorporated.
 
2) Treasury Stock, Etc.
 
(As of September 30, 2013)
Name of shareholder
Address of shareholder
Number of
shares held
under own
name
Number of
shares held
under the names
of others
Total number
of shares
held
Percentage of
shares held to
total shares
issued (%)
Sony Corporation
(Treasury stock)
1-7-1, Konan, Minato-ku, Tokyo
1,004,500
1,004,500
0.10
Total
1,004,500
 —
1,004,500
0.10
Note:
In addition to the 1,004,500 shares listed above, there are 300 shares of common stock held in the name of the Company in the register of shareholders that the Company does not beneficially own.  These shares are included in “Shares with full voting rights (Others)” in Table 1 “Shares Issued” above.
 
- 11 -
 

 


(2)       Directors and Corporate Executive Officers
 
There was no change in directors or corporate executive officers in the period from the filing date of the Securities Report (Yukashoken Houkokusho) for the fiscal year ended March 31, 2013 to the filing date of this Quarterly Securities Report (Shihanki Houkokusho), though the following person is planned to be newly appointed as a corporate executive officer as of December 1, 2013.
 
Newly Appointed Corporate Executive Officer (Planned)
 
Title
Position
Name
Date of
Birth
Prior and Current Position
Term
Number
of shares
held
Appointment
Date
(Planned)
Corporate
Executive
Officer
Executive Vice President (Chief Strategy Officer and Deputy Chief Financial Officer)
Kenichiro Yoshida
October 20, 1959
 
 1983.4 
 2001.5 
 
 2005.4 
 
 2013.12
 
 
Joined Sony Corporation
Senior Vice President, So-net
Corporation
President and Representative Director, So-net Corporation (present)
Executive Vice President, Corporate Executive Officer, Chief Strategy Officer and Deputy Chief Financial Officer, Sony Corporation (planned)
 
*
0
December 1, 2013
 
Note: 
* The term of office will expire at the conclusion of the first meeting of the Board of Directors held immediately after the conclusion of the Ordinary General Meeting of Shareholders held for the fiscal year ending March 31, 2014.

- 12 -
 

 


IV          Financial Statements
 
Page
   
(1) Consolidated Financial Statements
14
 
(i)
Consolidated Balance Sheets
14
 
(ii)
Consolidated Statements of Income
16
 
(iii)
Consolidated Statements of Comprehensive Income
18
 
(iv)
Consolidated Statements of Cash Flows
19
(2) Other Information
42
 
- 13 -
 

 


(1) Consolidated Financial Statements
 
(i)  Consolidated Balance Sheets (Unaudited)
Sony Corporation and Consolidated Subsidiaries
   
Yen in millions
 
   
At March 31,
2013
   
At September 30,
2013
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
    826,361       725,668  
Marketable securities
    697,597       750,409  
Notes and accounts receivable, trade
    844,117       938,435  
Allowance for doubtful accounts and sales returns
    (67,625 )     (63,411 )
Inventories
    710,054       965,689  
Other receivables
    148,142       259,783  
Deferred income taxes
    44,615       51,930  
Prepaid expenses and other current assets
    443,272       488,056  
     Total current assets
    3,646,533       4,116,559  
Film costs
    270,089       311,756  
Investments and advances:
               
Affiliated companies
    198,621       172,586  
Securities investments and other
    7,118,504       7,379,501  
      7,317,125       7,552,087  
Property, plant and equipment:
               
Land
    131,484       132,040  
Buildings
    778,514       787,185  
Machinery and equipment
    1,934,520       1,920,482  
Construction in progress
    47,839       44,281  
      2,892,357       2,883,988  
Less – Accumulated depreciation
    2,030,807       2,036,454  
      861,550       847,534  
Other assets:
               
Intangibles, net
    527,507       526,922  
Goodwill
    643,243       672,101  
Deferred insurance acquisition costs
    460,758       473,360  
Deferred income taxes
    107,688       105,719  
Other
    371,799       371,690  
      2,110,995       2,149,792  
Total assets
    14,206,292       14,977,728  
(Continued on following page.)
 
- 14 -
 

 

 
Consolidated Balance Sheets (Unaudited)
 
   
Yen in millions
 
   
At March 31,
2013
   
At September 30,
2013
 
LIABILITIES
           
Current liabilities:
           
Short-term borrowings
    87,894       94,194  
Current portion of long-term debt
    156,288       367,891  
Notes and accounts payable, trade
    572,102       845,845  
Accounts payable, other and accrued expenses
    1,097,253       1,090,539  
Accrued income and other taxes
    75,080       97,664  
Deposits from customers in the banking business
    1,857,448       1,813,054  
Other
    469,024       503,399  
     Total current liabilities
    4,315,089       4,812,586  
                 
Long-term debt
    938,428       915,865  
Accrued pension and severance costs
    311,469       312,946  
Deferred income taxes
    373,999       377,242  
Future insurance policy benefits and other
    3,540,031       3,690,141  
Policyholders’ account in the life insurance business
    1,693,116       1,804,816  
Other
    349,985       295,616  
Total liabilities
    11,522,117       12,209,212  
Redeemable noncontrolling interest
    2,997       2,871  
Commitments and contingent liabilities
               
EQUITY
               
Sony Corporation’s stockholders’ equity:
Common stock, no par value –
At March 31, 2013–Shares authorized: 3,600,000,000, shares issued: 1,011,950,206
At September 30, 2013–Shares authorized: 3,600,000,000, shares issued: 1,038,634,659
   
  630,923
 
          643,702  
                 
Additional paid-in capital
    1,110,531       1,123,747  
Retained earnings
    1,102,297       1,073,431  
Accumulated other comprehensive income –
               
   Unrealized gains on securities, net
    107,061       113,570  
   Unrealized losses on derivative instruments, net
    (742 )     (147 )
   Pension liability adjustment
    (191,816 )     (195,007 )
   Foreign currency translation adjustments
    (556,016 )     (492,360 )
      (641,513 )     (573,944 )
Treasury stock, at cost
               
Common stock
At March 31, 2013–1,048,870 shares
At September 30, 2013–1,004,506 shares
   
(4,472
 
 
)
 
    (4,248 )
      2,197,766       2,262,688  
Noncontrolling interests
    483,412       502,957  
Total equity
    2,681,178       2,765,645  
                 
Total liabilities and equity
    14,206,292       14,977,728  
The accompanying notes are an integral part of these statements.
 
- 15 -
 

 

 
(ii)  Consolidated Statements of Income (Unaudited)
Sony Corporation and Consolidated Subsidiaries
   
Yen in millions
 
   
Six months ended September 30
 
   
2012
   
2013
 
Sales and operating revenue:
           
Net sales
    2,636,714       2,949,976  
Financial services revenue
    424,362       495,209  
Other operating revenue
    58,766       43,013  
      3,119,842       3,488,198  
Costs and expenses:
               
Cost of sales
    2,051,409       2,253,995  
Selling, general and administrative
    678,209       797,371  
Financial services expenses
    364,130       408,742  
Other operating (income) expense, net
    (13,837 )     (25,481 )
      3,079,911       3,434,627  
Equity in net loss of affiliated companies
    (3,405 )     (2,450 )
Operating income
    36,526       51,121  
Other income:
               
Interest and dividends
    8,908       9,444  
Foreign exchange gain, net
          447  
Other
    2,150       9,986  
      11,058       19,877  
Other expenses:
               
Interest
    13,475       14,048  
Foreign exchange loss, net
    1,692        
Other
    3,354       4,733  
      18,521       18,781  
Income before income taxes
    29,063       52,217  
Income taxes
    42,010       38,341  
Net income (loss)
    (12,947 )     13,876  
Less - Net income attributable to noncontrolling interests
    27,164       29,683  
Net loss attributable to Sony Corporation’s stockholders
    (40,111 )     (15,807 )
 
   
Yen
 
   
Six months ended September 30
 
   
2012
   
2013
 
Per share data:
               
Net loss attributable to Sony Corporation’s stockholders
               
Basic
    (39.97 )     (15.57 )
Diluted
    (39.97 )     (15.57 )
The accompanying notes are an integral part of these statements.
 
- 16 -
 

 

 
Consolidated Statements of Income (Unaudited)
Sony Corporation and Consolidated Subsidiaries
   
Yen in millions
 
   
Three months ended September 30
 
   
2012
   
2013
 
Sales and operating revenue:
           
Net sales
    1,341,262       1,511,040  
Financial services revenue
    230,645       243,746  
Other operating revenue
    32,752       20,700  
      1,604,659       1,775,486  
Costs and expenses:
               
Cost of sales
    1,044,996       1,155,115  
Selling, general and administrative
    331,459       412,378  
Financial services expenses
    198,478       204,012  
Other operating (income) expense, net
    (3,651 )     (12,808 )
      1,571,282       1,758,697  
Equity in net loss of affiliated companies
    (3,126 )     (2,025 )
Operating income
    30,251       14,764  
Other income:
               
Interest and dividends
    3,198       5,557  
Other
    953       1,024  
      4,151       6,581  
Other expenses:
               
Interest
    5,912       7,092  
Foreign exchange loss, net
    7,114       5,744  
Other
    1,726       2,545  
      14,752       15,381  
Income before income taxes
    19,650       5,964  
Income taxes
    22,008       11,601  
Net loss
    (2,358 )     (5,637 )
Less - Net income attributable to noncontrolling interests
    13,112       13,650  
Net loss attributable to Sony Corporation’s stockholders
    (15,470 )     (19,287 )
 
   
Yen
 
   
Three months ended September 30
 
   
2012
   
2013
 
Per share data:
               
Net loss attributable to Sony Corporation’s stockholders
               
Basic
    (15.41 )     (18.91 )
Diluted
    (15.41 )     (18.91 )
The accompanying notes are an integral part of these statements.
 
- 17 -
 

 

 
(iii)  Consolidated Statements of Comprehensive Income (Unaudited)
Sony Corporation and Consolidated Subsidiaries
   
Yen in millions
 
   
Six months ended September 30
 
   
2012
   
2013
 
Net income (loss)
    (12,947 )     13,876  
Other comprehensive income, net of tax
               
Unrealized gains on securities
    18,652       2,876  
Unrealized gains on derivative instruments
    137       595  
Pension liability adjustment
    2,046       (3,184 )
Foreign currency translation adjustments
    (85,329 )     63,795  
Total comprehensive income (loss)
    (77,441 )     77,958  
Less – Comprehensive income attributable to noncontrolling interests
    30,690       26,196  
Comprehensive income (loss) attributable to Sony Corporation’s stockholders
    (108,131 )     51,762  
 
   
Yen in millions
 
   
Three months ended September 30
 
   
2012
   
2013
 
Net loss
    (2,358 )     (5,637 )
Other comprehensive income, net of tax
               
Unrealized gains on securities
    18,545       16,807  
Unrealized gains (losses) on derivative instruments
    (29 )     402  
Pension liability adjustment
    436       63  
Foreign currency translation adjustments
    (6,190 )     1,423  
Total comprehensive income
    10,404       13,058  
Less – Comprehensive income attributable to noncontrolling interests
    16,821       19,365  
Comprehensive loss attributable to Sony Corporation’s stockholders
    (6,417 )     (6,307 )
The accompanying notes are an integral part of these statements.
 
- 18 -
 

 

 
(iv)  Consolidated Statements of Cash Flows (Unaudited)
Sony Corporation and Consolidated Subsidiaries 
   
Yen in millions
 
   
Six months ended September 30
 
   
2012
   
2013
 
Cash flows from operating activities:
           
Net income (loss)
    (12,947 )     13,876  
Adjustments to reconcile net income (loss) to net cash
               
provided by (used in) operating activities–
               
Depreciation and amortization, including amortization
 of deferred insurance acquisition costs
    163,521       164,789  
Amortization of film costs
    85,707       116,847  
  Stock-based compensation expense
    764       612  
    Accrual for pension and severance costs, less payments
    (3,120 )     (3,672 )
    Other operating (income) expense, net
    (13,837 )     (25,481 )
    (Gain) loss on sale or devaluation of securities investments, net
    189       (531 )
(Gain) loss on revaluation of marketable securities held in the
 financial services business for trading purposes, net
    16,538       (35,062 )
(Gain) loss on revaluation or impairment of securities investments
 held in the financial services business, net
    3,175       (2,778 )
    Deferred income taxes
    3,905       (11,131 )
Equity in net loss of affiliated companies, net of dividends
    3,734       4,145  
    Changes in assets and liabilities:
               
     Increase in notes and accounts receivable, trade
    (16,944 )     (70,549 )
     Increase in inventories
    (159,456 )     (240,382 )
     Increase in film costs
    (84,164 )     (148,661 )
     Increase (decrease) in notes and accounts payable, trade
    (55,729 )     260,074  
     Increase (decrease) in accrued income and other taxes
    (5,786 )     16,556  
     Increase in future insurance policy benefits and other
    161,526       205,633  
     Increase in deferred insurance acquisition costs
    (36,011 )     (37,982 )
     Increase in marketable securities held in the
financial services business for trading purposes
    (13,725 )     (14,469 )
     (Increase) decrease in other current assets
    3,863       (151,311 )
     Decrease in other current liabilities
    (48,879 )     (39,003 )
    Other
    57,113       (11,736 )
          Net cash provided by (used in) operating activities
    49,437       (10,216 )
(Continued on following page.)
 
- 19 -
 

 

 
Consolidated Statements of Cash Flows (Unaudited)
             
   
Yen in millions
 
   
Six months ended September 30
 
   
2012
   
2013
 
Cash flows from investing activities:
           
Payments for purchases of fixed assets
    (151,314 )     (135,857 )
Proceeds from sales of fixed assets
    17,801       85,088  
Payments for investments and advances by financial services business
    (528,155 )     (470,121 )
Payments for investments and advances
(other than financial services business)
    (33,884 )     (4,059 )
Proceeds from sales or return of investments and collections of advances
by financial services business
    178,266       242,294  
Proceeds from sales or return of investments and collections of advances
(other than financial services business)
    21,403       42,260  
Proceeds from sales of businesses
    51,831       1,668  
Other
    (26,774 )     14,616  
Net cash used in investing activities
    (470,826 )     (224,111 )
Cash flows from financing activities:
               
Proceeds from issuance of long-term debt
    149,521       167,961  
Payments of long-term debt
    (227,185 )     (44,106 )
Increase in short-term borrowings, net
    185,580       10,508  
Increase in deposits from customers in the financial services business, net
    115,590       14,116  
Dividends paid
    (12,488 )     (12,588 )
Payment for purchase of So-net shares from noncontrolling interests
    (54,920 )  
 
Other
    (8,124 )     (27,248 )
Net cash provided by financing activities
    147,974       108,643  
Effect of exchange rate changes on cash and cash equivalents
    (32,334 )     24,991  
Net decrease in cash and cash equivalents
    (305,749 )     (100,693 )
Cash and cash equivalents at beginning of the fiscal year
    894,576       826,361  
Cash and cash equivalents at end of the period
    588,827       725,668  
The accompanying notes are an integral part of these statements.
 
- 20 -
 

 

 
Index to Notes to Consolidated Financial Statements
Sony Corporation and Consolidated Subsidiaries
 
Notes to Consolidated Financial Statements
   
Page
 
1.
 
Summary of significant accounting policies
 
22
 
2.
 
Marketable securities and securities investments
 
23
 
3.
 
Fair value measurements
 
24
 
4.
 
Supplemental equity and comprehensive income information
 
26
 
5.
 
Sale and leaseback transactions
 
28
 
6.
 
Reconciliation of the differences between basic and diluted EPS
 
28
 
7.
 
Commitments, contingent liabilities and other
 
29
 
8.
 
Business segment information
 
31
 
- 21 -
 

 

 
Notes to Consolidated Financial Statements (Unaudited)
 
Sony Corporation and Consolidated Subsidiaries
 
1.
Summary of significant accounting policies
 
The accompanying consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), except for certain disclosures which have been omitted.  Certain adjustments and reclassifications have been incorporated in the accompanying consolidated financial statements to conform with U.S. GAAP.  These adjustments were not recorded in the statutory books and records as Sony Corporation and its subsidiaries in Japan maintain their records and prepare their statutory financial statements in accordance with accounting principles generally accepted in Japan while its foreign subsidiaries maintain their records and prepare their financial statements in conformity with accounting principles generally accepted in the countries of their domiciles.
 
(1)  Recently adopted accounting pronouncements:
 
Disclosure about balance sheet offsetting –
 
In December 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which 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. The new 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.  The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012.  This guidance was effective for Sony as of April 1, 2013.  The adoption of this guidance is not expected to 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 amendments require 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 disclosure only, its adoption did not have an impact on Sony’s results of operations and financial position.
 
(2)  Accounting methods used specifically for interim consolidated financial statements:
 
Income Taxes -
 
Sony estimates the annual effective tax rate (“ETR”) derived from a projected annual net income before taxes and calculates the interim period income tax provision based on the year-to-date income tax provision computed by applying the ETR to the year-to-date net income before taxes at the end of each interim period.  The income tax provision based on the ETR reflects anticipated income tax credits and net operating loss carryforwards; however, it excludes the income tax provision related to significant unusual or extraordinary transactions.  Such income tax provision is separately reported from the provision based on the ETR in the interim period in which they occur.
 
(3)  Reclassifications:
 
Certain reclassifications of the financial statements and accompanying footnotes for the six and three months ended September 30, 2012 have been made to conform to the presentation for the six and three months ended September 30, 2013.
 
- 22 -
 

 

 
2. Marketable securities and securities investments
 
Marketable securities and securities investments, mainly included in the Financial Services segment, are comprised of debt and equity securities of which the aggregate cost, gross unrealized gains and losses and fair value pertaining to available-for-sale securities and held-to-maturity securities are as follows:
 
   
Yen in millions
 
   
March 31, 2013
   
September 30, 2013
 
   
Cost
   
Gross
unrealized
gains
   
Gross
unrealized
losses
   
Fair value
   
Cost
   
Gross
unrealized
gains
   
Gross
unrealized
losses
   
Fair value
 
                                                 
Available-for-sale:
                                               
Debt securities:
                                               
Japanese national
government bonds
    1,106,265       114,806       (463 )     1,220,608       1,074,830       100,513       (425 )     1,174,918  
                                                                 
Japanese local
government bonds
    66,553       643       (1 )     67,195       64,061       523       (3 )     64,581  
                                                                 
Japanese corporate
bonds
    210,519       1,715       (70 )     212,164       184,834       1,251       (13 )     186,072  
                                                                 
Foreign corporate bonds
    425,892       17,502       (620 )     442,774       422,899       14,710       (508 )     437,101  
                                                                 
Other
    20,607       4,431       (2 )     25,036       23,263       3,606       (113 )     26,756  
      1,829,836       139,097       (1,156 )     1,967,777       1,769,887       120,603       (1,062 )     1,889,428  
                                                                 
Equity securities
    89,079       44,443       (997 )     132,525       90,399       80,451       (219 )     170,631  
                                                                 
Held-to-maturity
                                                               
securities:
                                                               
Japanese national
government bonds
    3,876,600       545,188             4,421,788       4,125,911       409,149             4,535,060  
                                                                 
Japanese local
government bonds
    7,195       432             7,627       6,492       361             6,853  
                                                                 
Japanese corporate
bonds
    28,918       3,571             32,489       28,044       2,697             30,741  
                                                                 
Foreign corporate bonds
    52,738       20             52,758       55,606       16             55,622  
                                                                 
Other
                            6,273       57       (208 )     6,122  
      3,965,451       549,211             4,514,662       4,222,326       412,280       (208 )     4,634,398  
                                                                 
Total
    5,884,366       732,751       (2,153 )     6,614,964       6,082,612       613,334       (1,489 )     6,694,457  
 
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3.  Fair value measurements
 
The fair value of Sony’s assets and liabilities that are measured at fair value on a recurring basis are as follows:
 
   
Yen in millions
 
   
March 31, 2013
 
         
Presentation in the consolidated balance sheets
 
   
Level 1
   
Level 2
   
Level 3
   
Total
   
Marketable
securities
   
Securities
investments
and other
   
Other
current
assets/
liabilities
   
Other
noncurrent
assets/
liabilities
 
                                                 
Assets:
                                               
Trading securities
    278,575       252,212             530,787       530,787                    
Available-for-sale securities
                                                               
Debt securities
                                                               
Japanese national government bonds
          1,220,608             1,220,608       24,335       1,196,273              
Japanese local government bonds
          67,195             67,195       61       67,134              
Japanese corporate bonds
          209,950       2,214       212,164       40,359       171,805              
Foreign corporate bonds
          422,022       20,752       442,774       96,896       345,878              
Other
          25,036             25,036       98       24,938              
Equity securities
    132,447       78             132,525             132,525              
Other investments *1
    6,742       3,126       76,892       86,760             86,760              
Derivative assets *2, *3
          21,862             21,862                   20,713       1,149  
Total assets
    417,764       2,222,089       99,858       2,739,711       692,536       2,025,313       20,713       1,149  
Liabilities:
                                                               
Derivative liabilities*2,*3
          41,998             41,998                   20,322       21,676  
Total liabilities
          41,998             41,998                   20,322       21,676  
 
- 24 -
 

 

 
   
Yen in millions
 
   
September 30, 2013
 
         
Presentation in the consolidated balance sheets
 
   
Level 1
   
Level 2
   
Level 3
   
Total
   
Marketable
securities
   
Securities
investments
and other
   
Other
current
assets/
liabilities
   
Other
noncurrent
assets/
liabilities
 
                                                 
Assets:
                                               
Trading securities
    311,366       271,749             583,115       583,115                    
Available-for-sale securities
                                                               
Debt securities
                                                               
Japanese national government bonds
          1,174,918             1,174,918       26,907       1,148,011              
Japanese local government bonds
          64,581             64,581       1,517       63,064              
Japanese corporate bonds
          183,857       2,215       186,072       42,576       143,496              
Foreign corporate bonds
          422,443       14,658       437,101       91,896       345,205              
Other
          26,756             26,756       1,037       25,719              
Equity securities
    170,550       81             170,631             170,631              
Other investments *1
    7,029       3,607       78,605       89,241             89,241              
Derivative assets *2, *3
          22,297             22,297                   21,318       979  
Total assets
    488,945       2,170,289       95,478       2,754,712       747,048       1,985,367       21,318       979  
Liabilities:
                                                               
Derivative liabilities*2,*3
          30,734             30,734                   15,373       15,361  
Total liabilities
          30,734             30,734                   15,373       15,361  
 
*1 Other investments include certain hybrid financial instruments and certain private equity investments.
*2 Derivative assets and liabilities are recognized and disclosed on a gross basis.
*3 The potential effect of offsetting on assets and liabilities, which primarily consists of derivatives subject to master netting agreements and/or collateral, is insignificant.

- 25 -
 

 


4.  Supplemental equity and comprehensive income information
 
(1)       Stockholders’ Equity
 
A reconciliation of the beginning and ending carrying amounts of Sony Corporation’s stockholders’ equity, noncontrolling interests and the total equity for the six months ended September 30, 2012 and 2013 are as follows: