Related party transactions

12 Months Ended

Mar. 31, 2011


5.	*Related party transactions*

Sony accounts for its investments in affiliated companies over which Sony has significant influence under the equity method. In addition, investments in general partnerships in which Sony does not have a controlling interest and limited partnerships are also accounted for under the equity method if more than minor influence over the operation of the investee exists (generally through more than 3-5% ownership). Significant investments at March 31, 2011 of this nature include, but are not limited to, Sony’s interest in Sony Ericsson Mobile Communications AB (“Sony Ericsson”) (50%) and S-LCD Corporation (“S-LCD”) (50% minus 1 share).

The summarized combined financial information that is based on information provided by the equity investees including information for significant equity affiliates and the reconciliation of such information to the consolidated financial statements is shown below:

Balance Sheets


	Yen in millions
	March 31, 2010
	Sony
	Ericsson			S-LCD			Others			Total

Current assets		322,537			161,571			133,606			617,714
Noncurrent assets		98,375			300,206			127,237			525,818

Total assets		420,912			461,777			260,843			1,143,532

Current liabilities		341,087			102,538			100,829			544,454
Long-term liabilities and noncontrolling interests		23,837			22,443			54,306			100,586
Stockholders’ equity		55,988			336,796			105,708			498,492
Percentage of ownership in equity investees		50	%		50	%		20%-50	%
Equity investment and undistributed earnings of affiliated companies, before consolidating and reconciling adjustments		27,994			168,398
Consolidation and reconciling adjustments:
Other		(1,088	)		61

Investment in and advances to equity investees at cost plus equity in undistributed earnings since acquisition		26,906			168,459			33,686			229,051


	Yen in millions
	March 31, 2011
	Sony
	Ericsson			S-LCD			Others			Total

Current assets		254,858			188,903			183,597			627,358
Noncurrent assets		92,925			233,988			137,720			464,633

Total assets		347,783			422,891			321,317			1,091,991

Current liabilities		282,857			71,572			166,056			520,485
Long-term liabilities and noncontrolling interests		8,089			29,696			61,036			98,821
Stockholders’ equity		56,837			321,623			94,225			472,685
Percentage of ownership in equity investees		50	%		50	%		20%-50	%
Equity investment and undistributed earnings of affiliated companies, before consolidating and reconciling adjustments		28,419			160,812
Consolidation and reconciling adjustments:
Other		(79	)		—

Investment in and advances to equity investees at cost plus equity in undistributed earnings since acquisition		28,340			160,812			32,841			221,993

Statements of Income


	Yen in millions
	Fiscal year ended March 31, 2009
	Sony
	Ericsson			S-LCD			Others			Total

Net revenues		1,459,259			670,311			550,691			2,680,261

Operating income (loss)		(92,762	)		1,393			15,475			(75,894	)
Other income (expense), net		12,599			11,191

Income (loss) before income taxes		(80,163	)		12,584
Income tax (expense) benefit		23,888			(626	)
Net income (loss) attributable to noncontrolling interests		(3,434	)		—

Net income (loss) attributable to controlling interests		(59,709	)		11,958			4,898			(42,853	)
Percentage of ownership in equity investees		50	%		50	%		20%-50	%
Equity in net income (loss) of affiliated companies, before consolidating and reconciling adjustments		(29,855	)		5,979
Consolidation and reconciling adjustments:
Other		(400	)		916

Equity in net income (loss) of affiliated companies		(30,255	)		6,895			(1,749	)		(25,109	)


	Yen in millions
	Fiscal year ended March 31, 2010
	Sony
	Ericsson			S-LCD			Others			Total

Net revenues		837,149			796,575			323,576			1,957,300

Operating income (loss)		(81,385	)		3,825			29,686			(47,874	)
Other income (expense), net		(4,676	)		(4,055	)

Income (loss) before income taxes		(86,061	)		(230	)
Income tax (expense) benefit		20,470			53
Net income (loss) attributable to noncontrolling interests		(3,318	)		—

Net income (loss) attributable to controlling interests		(68,909	)		(177	)		17,064			(52,022	)
Percentage of ownership in equity investees		50	%		50	%		20%-50	%
Equity in net income (loss) of affiliated companies, before consolidating and reconciling adjustments		(34,455	)		(89	)
Consolidation and reconciling adjustments:
Other		(59	)		476

Equity in net income (loss) of affiliated companies		(34,514	)		387			3,892			(30,235	)


	Yen in millions
	Fiscal year ended March 31, 2011
	Sony
	Ericsson			S-LCD			Others			Total

Net revenues		673,464			807,955			268,604			1,750,023

Operating income (loss)		16,453			12,527			17,630			46,610
Other income (expense), net		(1,572	)		(4,119	)

Income (loss) before income taxes		14,881			8,408
Income tax (expense) benefit		(6,065	)		3,094
Net income (loss) attributable to noncontrolling interests		(520	)		—

Net income (loss) attributable to controlling interests		8,296			11,502			8,895			28,693
Percentage of ownership in equity investees		50	%		50	%		20%-50	%
Equity in net income (loss) of affiliated companies, before consolidating and reconciling adjustments		4,148			5,751
Consolidation and reconciling adjustments:
Other		7			1,463

Equity in net income (loss) of affiliated companies		4,155			7,214			2,693			14,062

Sony Ericsson, a 50/50 joint venture with Telefonaktiebolaget LM Ericsson focused on mobile phone handsets, was established in October 2001 and is included in affiliated companies accounted for under the equity method. Sony Ericsson purchases several key components such as camera modules, memory, batteries and liquid crystal display (“LCD”) panels from Sony. Sony received dividends of 23,363 million yen in September 2008 from Sony Ericsson.

S-LCD, a joint venture with Samsung Electronics Co., Ltd. focused on manufacturing amorphous TFT panels, was established in April 2004 with Sony’s ownership interest of 50% minus 1 share. Sony invested 13,273 million yen in S-LCD during the fiscal year ended March 31, 2009. S-LCD is strategic to Sony’s television business as it provides a source of high quality large screen LCD panels to differentiate Sony’s Bravia LCD televisions.

On October 1, 2008, Sony acquired Bertelsmann AG’s 50% equity interest in SONY BMG MUSIC ENTERTAINMENT (“SONY BMG”). As a result of this acquisition, SONY BMG became a wholly owned subsidiary of Sony and its results are consolidated from the acquisition date. The summarized financial information for SONY BMG for the six months ended September 30, 2008 is included in Others in the table above. SONY BMG was established as a 50/50 joint venture on August 1, 2004 when Sony combined its recorded music business, except for the operations of its recorded music business in Japan, with the recorded music business of Bertelsmann AG. As a result, the operations of SONY BMG were accounted for under the equity method from August 1, 2004 until Sony’s acquisition of the remaining 50% equity interest.

There was no significant difference between Sony’s proportionate share in the underlying net assets of the investees and the carrying value of investments in affiliated companies at March 31, 2010 and 2011.

There were no affiliated companies accounted for under the equity method with a market quotation at March 31, 2010 and 2011.

The number of affiliated companies accounted for under the equity method at March 31, 2010 and 2011 were 73 and 82, respectively.

Account balances and transactions with affiliated companies accounted for under the equity method are presented below:


	Yen in millions
	March 31
	2010		2011

Accounts receivable, trade		21,467		18,631

Accounts payable, trade		61,360		45,434


	Yen in millions
	Fiscal year ended March 31
	2009		2010		2011

Sales		204,578		132,937		96,164

Purchases		332,286		309,550		383,922

Dividends from affiliated companies accounted for under the equity method for the fiscal years ended March 31, 2009, 2010 and 2011 were 40,361 million yen, 5,948 million yen and 2,583 million yen, respectively.

- Definition

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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