6-K 1 d414914d6k.htm SONY CORPORATION 6-K SONY CORPORATION 6-K
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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 November 2017

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 Deputy President and

Chief Financial Officer

Date: November 7, 2017


Table of Contents

Quarterly Securities Report

For the three months ended September 30, 2017

(TRANSLATION)

Sony Corporation


Table of Contents

CONTENTS

 

    

Page  

 

 

Note for readers of this English translation

     1     

Cautionary Statement

     1     

 

   I          Corporate Information

     3     

(1)        Selected Consolidated Financial Data

     3     

(2)        Business Overview

     4     

 

   II        State of Business

     5     

(1)        Risk Factors

     5     

(2)        Material Contracts

     5     

(3)        Management’s Discussion and Analysis of Financial Condition, Results of Operations and Status of Cash Flows

     5     

 

   III       Company Information

     9     

(1)        Information on the Company’s Shares

     9     

(2)        Directors and Corporate Executive Officers

     13    

 

   IV      Financial Statements

     14    

(1)        Consolidated Financial Statements

     15    

(2)        Other Information

     41    


Table of Contents

Note for readers of this English translation

On November 7, 2017, Sony Corporation (the “Company” or “Sony Corporation”) filed its Japanese-language Quarterly Securities Report (Shihanki Houkokusho) for the three months ended September 30, 2017 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 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 and political environment in which Sony operates and the economic and political 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 image sensors, game and network platforms, smartphones and televisions, 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 customer 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 and regulatory conditions;

(vi)

changes in laws, regulations and government policies in the markets in which Sony operates, including those related to taxation and corporate social responsibility;

(vii)

Sony’s ability to implement successful hardware, software, and content integration strategies, and to develop and implement successful sales and distribution strategies in light of new technologies and distribution platforms;

(viii)

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);

(ix)

Sony’s ability to maintain product quality and customer satisfaction with its products and services;

(x)

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;

(xi)

significant volatility and disruption in the global financial markets or a ratings downgrade;

(xii)

Sony’s ability to forecast demands, manage timely procurement and control inventories;

(xiii)

Sony’s reliance on external business partners, including for the procurement of parts, components, software and network services for its products or services, the manufacturing, supply and distribution of its products, and its other business operations;

 



 

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(xiv)

the outcome of pending and/or future legal and/or regulatory proceedings;

(xv)

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;

(xvi)

the impact of changes in interest rates and 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;

(xvii)

the ability of Sony, its third-party service providers or business partners to anticipate and manage cybersecurity risk, including the risk of unauthorized access to Sony’s business information, potential business disruptions or financial losses; and

(xviii) 

risks related to catastrophic disasters or similar events.

Risks and uncertainties also include the impact of any future events with material adverse impact.

 



 

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I     Corporate Information

(1) Selected Consolidated Financial Data

    Yen in millions, Yen per share amounts  
      Six months ended  
  September 30, 2016  
      Six months ended  
  September 30, 2017  
      Fiscal year ended  
  March 31, 2017  
 

 

 
  Sales and operating revenue     3,302,147          3,920,644          7,603,250     

 

 
  Operating income     101,939          361,839          288,702     

 

 
  Income before income taxes     97,536          347,459          251,619     

 

 

Net income attributable to Sony Corporation’s stockholders

    26,008          211,723          73,289     

 

 
  Comprehensive income (loss)     (64,526)         267,514          143,652     

 

 
  Total equity     2,931,470          3,380,652          3,135,422     

 

 
  Total assets     16,804,371          18,797,106          17,660,556     

 

 

Net income attributable to Sony Corporation’s stockholders per share of common stock, basic (yen)

    20.61          167.61          58.07     

 

 

Net income attributable to Sony Corporation’s stockholders per share of common stock, diluted (yen)

    20.20          164.06          56.89     

 

 

Ratio of stockholders’ equity to total assets (%)

    13.7          14.5          14.1     

 

 

Net cash provided by operating activities

    81,483          266,304          809,262     

 

 
  Net cash used in investing activities     (667,640)         (411,787)         (1,253,973)    

 

 

Net cash provided by financing activities

    183,261          179,523          452,302     

 

 

Cash and cash equivalents at end of the period

    525,181          1,000,832          960,142     

 

 
    Yen in millions, Yen per share amounts        
      Three months ended  
  September 30, 2016  
      Three months ended  
  September 30, 2017  
   

 

   

Sales and operating revenue

    1,688,948          2,062,531       

 

   

Net income attributable to Sony Corporation’s stockholders

    4,842          130,852       

 

   

Net income attributable to Sony Corporation’s stockholders per share of common stock, basic (yen)

    3.84          103.57       

 

   

Net income attributable to Sony Corporation’s stockholders per share of common stock, diluted (yen)

    3.76          101.35       

 

   

  Notes:

  1.

The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP.

  2.

The Company reports equity in net income 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.

 

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(2) Business Overview

There was no significant change in the business of Sony during the six months ended September 30, 2017.

Sony realigned its reportable segments effective from the first quarter of the fiscal year ending March 31, 2018. For further information on the realignment, please refer to “IV Financial Statements – Notes to Consolidated Financial Statements – 7. Business segment information”.

As of September 30, 2017, the Company had 1,317 subsidiaries and 115 affiliated companies, of which 1,286 companies are consolidated subsidiaries (including variable interest entities) of the Company. The Company has applied the equity accounting method for 109 affiliated companies.

 

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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 15, 2017. 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 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

(2) Material Contracts

There were no material contracts executed or determined to be executed during the three months ended September 30, 2017.

 

Note for readers of this English translation:

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 15, 2017.

URL: The Annual Report on Form 20-F filed with the SEC on June 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.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, 2017, since it is the same as described in a press release on our website dated as of October 31, 2017. Please refer to the press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2017”.

URL: The press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2017”

https://www.sony.net/SonyInfo/IR/library/fr/17q2_sony.pdf

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 15, 2017. Although foreign exchange rates have fluctuated during the three-month period ended September 30, 2017, 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 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

 

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During the three months ended September 30, 2017, the average rates of the yen were 111.0 yen against the U.S. dollar, which is 7.7 percent lower than the same quarter of the previous fiscal year (“year-on-year”) and 130.4 yen against the euro, which is 12.4 percent lower year-on-year.

For the three months ended September 30, 2017, sales were 2,062.5 billion yen, an increase of 22.1 percent year-on-year, while on a constant currency basis, sales increased approximately 15 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 204.2 billion yen was recorded for the three months ended September 30, 2017, an increase of 158.5 billion yen year-on-year (an increase of approximately 133.6 billion yen year-on-year on a constant currency basis). Most of the foreign exchange rate impact was attributable to the Mobile Communications (“MC”), Game & Network Services (“G&NS”), Imaging Products & Solutions (“IP&S”), Home Entertainment & Sound (“HE&S”) and Semiconductors 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)
                     Impact of
changes in
foreign
    exchange rates    
                          Three months ended        
September 30
    
              2016           2017     
 

  MC

       Sales      168.8       172.0                +8.9
           Operating income (loss)      3.7       (2.5)                -1.2
 

  G&NS

       Sales      319.9       433.2              +33.8
           Operating income      19.0       54.8                +3.1
 

  IP&S

       Sales      135.4       156.7              +11.3
           Operating income      14.9       18.9                +5.2
 

  HE&S

       Sales      234.9       300.9              +26.1
           Operating income      17.6       24.4                +7.0
    Semiconductors        Sales      193.7       228.4              +15.0
           Operating income (loss)      (4.2     49.4                +9.0

In addition, sales for the Pictures segment increased 27.0 percent year-on-year to 244.0 billion yen, an approximately 17 percent increase on a constant currency (U.S. dollar) basis. In the Music segment, sales increased 37.5 percent year-on-year to 206.6 billion yen, an approximately 32 percent increase on a constant currency basis. As most of the operations in Sony’s Financial Services segment are based in Japan, Sony’s management analyzes the performance of the Financial Services segment on a yen basis only.

Note: In this section, the impact of foreign exchange rate fluctuations on sales is calculated by applying the change in the yen’s quarterly weighted average exchange rate for the three months ended September 30, 2016 from the three months ended September 30, 2017 to the major transactional currencies in which the sales are denominated. The impact of foreign exchange rate fluctuations on operating income (loss) described herein is calculated by subtracting from the impact on sales the impact on cost of sales and selling, general and administrative expenses calculated by applying the same major transactional currencies calculation process to cost of sales and selling, general and administrative expenses as for the impact on sales. Additionally, the MC segment enters into its own foreign exchange hedging transactions. The impact of those transactions is included in the impact of foreign exchange rate fluctuations on operating income (loss) for that segment. The descriptions of sales on a constant currency basis reflects sales obtained by applying the yen’s monthly average exchange rates from the three months ended September 30, 2016 to local currency-denominated monthly sales to the three months ended September 30, 2017. In the Pictures segment and Sony Music Entertainment, Sony/ATV Music Publishing LLC in the Music segment, the constant currency amounts are after aggregation on a U.S. dollar basis. This information is not a substitute for Sony’s consolidated financial statements measured in accordance with U.S. GAAP. However, Sony believes that these disclosures provide additional useful analytical information to investors regarding the operating performance of Sony.

 

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  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, 2017, since it is the same as described in a press release on our website dated as of October 31, 2017. Please refer to the press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2017”.

URL: The press release titled “Consolidated Financial Results for the Second Quarter Ended September 30, 2017”

https://www.sony.net/SonyInfo/IR/library/fr/17q2_sony.pdf

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 in the Trend Information section of the Annual Report on Form 20-F filed with the SEC on June 15, 2017. 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 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

iii) Research and Development

 

Note for readers of this English translation:

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 15, 2017.

URL: The Annual Report on Form 20-F filed with the SEC on June 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

Research and development costs for the six months ended September 30, 2017 totaled 210.6 billion yen. There were no significant changes in research and development activities for the period.

iv) Employees

 

Note for readers of this English translation:

Excluding the below, there was no significant change from the information presented in the Employees section of the Annual Report on Form 20-F filed with the SEC on June 15, 2017.

URL: The Annual Report on Form 20-F filed with the SEC on June 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

As of September 30, 2017, Sony Corporation had 2,567 employees, a decrease of 3,618 employees from 6,185 employees as of March 31, 2017. The total number of employees decreased mainly due to the separation of its IP&S business. There is no significant change in the number of employees of Sony on the consolidated basis.

 

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v) 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 15, 2017. 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 15, 2017

https://www.sec.gov/Archives/edgar/data/313838/000119312517203939/d358485d20f.htm

Sony typically raises funds through straight bonds, CP programs and bank loans (including syndicated loans). If market disruption and volatility occur and 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 528.3 billion yen in unused committed lines of credit, as of September 30, 2017. Details of those committed lines of credit are: a 300.0 billion yen committed line of credit contracted with a syndicate of Japanese banks, effective until July 2019, 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 525 million U.S. dollar multi-currency committed line of credit contracted with a syndicate of foreign banks, effective until March 2018, in all of which Sony Corporation and Sony Global Treasury Services Plc are defined as borrowers. 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.

 

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  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, 2017)    

  

As of the filing date of    

the Quarterly    

Securities Report    

(November 7, 2017)    

     

Common    

stock    

   1,264,649,260    1,264,650,760   

Tokyo Stock Exchange

New York Stock Exchange

  

The number of

shares constituting

one full unit is one

hundred (100).

 

Total    

 

  

 

1,264,649,260

 

  

 

1,264,650,760

 

  

 

 

  

 

 

  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”) during November 2017, 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, 2017.

iii) Status of the Exercise of Moving Strike Convertible Bonds

   Not applicable.

iv) Description of Rights Plan

   Not applicable.

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  
(Thousands)   

 

 

Balance of the  
 total number of   
shares issued  
(Thousands)   

 

 

Change in  

the amount of  

common stock  
(Yen in Millions)   

 

 

Balance of  

the amount of  

common stock  
(Yen in Millions)   

 

 

Change in the  
legal capital  
surplus  
(Yen in Millions)   

 

 

Balance of the  
legal capital  
surplus  
(Yen in Millions)   

 

From July 1 to

September 30, 2017 

 

  440   1,264,649   793   862,156   793   1,075,849

Notes:

1.

The increase mentioned above is due to the exercise of SARs and the issuance of new shares as restricted stock compensation.

2.

Upon the exercise of SARs during the period from October 1, 2017 to October 31, 2017 the total number of shares issued increased by 2 thousand shares, and the amount of common stock and the legal capital surplus increased by 2 million yen, respectively.

 

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vi) Status of Major Shareholders

(As of September 30, 2017)

Name   Address  

Number of

shares held

(Thousands)

   

Percentage

of shares held
to total shares
issued (%)

 

 

Citibank as Depositary Bank for Depositary Receipt Holders *1

(Local Custodian: The Bank of Tokyo-Mitsubishi UFJ, Ltd.)

 

 

New York, U.S.A.

(2-7-1, Marunouchi, Chiyoda-ku, Tokyo)

    109,396       8.65  

 

JPMorgan Chase Bank 380055 *2

(Local Custodian: Mizuho Bank, Ltd.)

 

 

New York, U.S.A.

(Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)

    77,467       6.13  

 

Japan Trustee Services Bank, Ltd.
(Trust account) *3

 

  1-8-11, Harumi, Chuo-ku, Tokyo     72,339       5.72  

 

The Master Trust Bank of Japan, Ltd.
(Trust account) *3

 

  2-11-3, Hamamatsu-cho, Minato-ku, Tokyo     70,720       5.59  

 

State Street Bank and Trust Company *2

(Local Custodian: The Hongkong and Shanghai Banking Corporation Limited)

 

 

Boston, U.S.A.

(3-11-1, Nihonbashi, Chuo-ku, Tokyo)

    30,740       2.43  

 

Japan Trustee Services Bank, Ltd.
(Trust account 5) *3

 

  1-8-11, Harumi, Chuo-ku, Tokyo     25,200       1.99  

 

State Street Bank West Client - Treaty 505234 *2

(Local Custodian: Mizuho Bank, Ltd.)

 

 

North Quincy, U.S.A.

(Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)

    20,686       1.64  

 

State Street Bank and Trust Company 505223 *2

(Local Custodian: Mizuho Bank, Ltd.)

 

 

Boston, U.S.A.

(Shinagawa Intercity Tower A, 2-15-1, Konan, Minato-ku, Tokyo)

    20,341       1.61  

 

Japan Trustee Services Bank, Ltd.
(Trust account 1) *3

 

  1-8-11, Harumi, Chuo-ku, Tokyo     19,449       1.54  

 

Japan Trustee Services Bank, Ltd.
(Trust account 2) *3

 

  1-8-11, Harumi, Chuo-ku, Tokyo     19,142       1.51  

Total        

    465,479       36.81  

Notes:

*1.

Citibank as Depositary Bank for Depositary Receipt Holders is the nominee of Citibank, N.A.

*2.

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.

*3.

The shares held by each shareholder are held in trust for investors, including shares in securities investment trusts.

  4.

Sumitomo Mitsui Trust Bank, Limited sent a copy of its “Bulk Shareholding Report” as of April 4, 2014 (which was filed with the Kanto Financial Bureau in Japan) to the Company and reported that it held shares, etc. of the Company as of March 31, 2014 as provided in the below table. As of September 30, 2017, the Company has not been able to confirm such entry of Sumitomo Mitsui Trust Bank, Limited in the register of shareholders.

Name  

Number of shares, etc. held

(Thousands)

 

Percentage of shares, etc. held

to total shares issued (%)

  Sumitomo Mitsui Trust Bank, Limited and the 2 Joint Holders     52,312   5.04

 

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Table of Contents
  5.

BlackRock Japan Co., Ltd. filed its “Amendment to the Bulk Shareholding Report” with the Kanto Financial Bureau in Japan as of March 22, 2017 and reported that it held shares of the Company as of March 15, 2017 as provided in the below table. As of September 30, 2017, the Company has not been able to confirm such entry of BlackRock Japan Co., Ltd. in the register of shareholders.

Name  

Number of shares held

(Thousands)

 

Percentage of shares held

to total shares issued (%)

  BlackRock Japan Co., Ltd. and the 8 Joint Holders                       79,185   6.27
  6.

Capital Research and Management Company filed its “Amendment to the Bulk Shareholding Report” with the Kanto Financial Bureau in Japan as of April 7, 2017 and reported that it held shares of the Company as of March 31, 2017 as provided in the below table. As of September 30, 2017, the Company has not been able to confirm such entry of Capital Research and Management Company in the register of shareholders.

Name  

Number of shares held

(Thousands)

 

Percentage of shares held

to total shares issued (%)

  Capital Research and Management Company                                90,945   7.20

 

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Table of Contents

vii) Status of Voting Rights

1) Shares Issued

(As of September 30, 2017)

 

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.)

         1,092,300    

Shares with full voting rights (Others)

  1,261,485,400   12,614,854  

Shares constituting less than one full unit

         2,071,560     Shares constituting    
less than one full unit    

(100 shares)    

Total number of shares issued

  1,264,649,260    

Total voting rights held by all shareholders

              —              12,614,854  

 

Note:

 

Included in “Shares with full voting rights (Others)” under “Number of shares of common stock” are 19,000 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 190 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, 2017)

 

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     1,092,300     1,092,300   0.09

Total

    1,092,300     1,092,300   0.09

 

Note:

 

In addition to the 1,092,300 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.

 

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Table of Contents

(2)    Directors and Corporate Executive Officers

The 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, 2017 to the filing date of this Quarterly Securities Report (Shihanki Houkokusho) is as follows:

i) Retired Corporate Executive Officer

 

Title    Position    Name      Date of Retirement  

Corporate Executive Officer  

  

                    Executive  Vice President                    

(Officer in charge of Game & Network Services Business)

     Andrew House        October 3, 2017  

ii) The number of male and female Directors and Corporate Executive Officers after the change

   The Directors and Corporate Executive Officers are composed of 18 males and 1 female.

   (The percentage of female Directors and Corporate Executive Officers is 5.3%.)

 

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Table of Contents

IV        Financial Statements

          Page

(1) Consolidated Financial Statements

   15

      (i)         Consolidated Balance Sheets

   15

      (ii)        Consolidated Statements of Income

   17

      (iii)       Consolidated Statements of Comprehensive Income

   19

      (iv)       Consolidated Statements of Cash Flows

   20

(2) Other Information

   41

 

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Table of Contents

(1) Consolidated Financial Statements

(i)    Consolidated Balance Sheets (Unaudited)

 

Sony Corporation and Consolidated Subsidiaries

            Yen in millions                  
    

At March 31,

            2017             

   

At September 30,

            2017             

 

ASSETS

   

Current assets:

   

Cash and cash equivalents

    960,142       1,000,832  

Marketable securities

    1,051,441       1,139,572  

Notes and accounts receivable, trade

    1,006,961       1,222,444  

Allowance for doubtful accounts and sales returns

    (53,150     (48,365

Inventories

    640,835       930,657  

Other receivables

    223,632       367,932  

Prepaid expenses and other current assets

    525,861       507,551  

Total current assets

    4,355,722       5,120,623  

Film costs

    336,928       367,282  

Investments and advances:

   

Affiliated companies

    149,371       154,832  

Securities investments and other

    9,962,422       10,284,195  
      10,111,793       10,439,027  

Property, plant and equipment:

   

Land

    117,293       114,844  

Buildings

    666,381       682,677  

Machinery and equipment

    1,842,852       1,840,950  

Construction in progress

    28,779       34,482  
    2,655,305       2,672,953  

Less – Accumulated depreciation

    1,897,106       1,908,900  
      758,199       764,053  

Other assets:

   

Intangibles, net

    584,185       575,425  

Goodwill

    522,538       540,257  

Deferred insurance acquisition costs

    568,837       585,540  

Deferred income taxes

    98,958       76,431  

Other

    323,396       328,468  
      2,097,914       2,106,121  

Total assets

    17,660,556       18,797,106  

  (Continued on following page.)

 

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Table of Contents

            Consolidated Balance Sheets (Unaudited)

 

             Yen in millions                  
      At March 31,
            2017            
    At September 30,
            2017            
 

LIABILITIES

    

Current liabilities:

    

Short-term borrowings

     464,655       520,649  

Current portion of long-term debt

     53,424       227,058  

Notes and accounts payable, trade

     539,900       871,328  

Accounts payable, other and accrued expenses

     1,394,758       1,447,350  

Accrued income and other taxes

     106,037       163,306  

Deposits from customers in the banking business

     2,071,091       2,121,162  

Other

     591,874       584,688  

Total current liabilities

     5,221,739       5,935,541  

Long-term debt

     681,462       587,838  

Accrued pension and severance costs

     396,715       403,929  

Deferred income taxes

     432,824       424,957  

Future insurance policy benefits and other

     4,834,492       5,015,392  

Policyholders’ account in the life insurance business

     2,631,073       2,747,113  

Other

     314,771       288,854  

Total liabilities

     14,513,076       15,403,624  

Redeemable noncontrolling interest

     12,058       12,830  

Commitments and contingent liabilities

                

EQUITY

                

Sony Corporation’s stockholders’ equity:

    

Common stock, no par value –

    

At March 31, 2017–Shares authorized: 3,600,000,000, shares issued: 1,263,763,660

     860,645    

At September 30, 2017–Shares authorized: 3,600,000,000, shares issued: 1,264,649,260

       862,156  

Additional paid-in capital

     1,275,337       1,277,486  

Retained earnings

     984,368       1,180,298  

Accumulated other comprehensive income –

    

Unrealized gains on securities, net

     126,635       121,751  

Unrealized gains and losses on derivative instruments, net

     (58     171  

Pension liability adjustment

     (308,736     (304,106

Foreign currency translation adjustments

     (436,610     (408,150
     (618,769     (590,334

Treasury stock, at cost

    

Common stock

    

At March 31, 2017–1,073,222 shares

     (4,335  

At September 30, 2017–1,092,334 shares

             (4,415
       2,497,246       2,725,191  

Noncontrolling interests

     638,176       655,461  

Total equity

     3,135,422       3,380,652  

Total liabilities and equity

     17,660,556       18,797,106  

  The accompanying notes are an integral part of these statements.

 

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Table of Contents

  (ii)    Consolidated Statements of Income (Unaudited)

 

Sony Corporation and Consolidated Subsidiaries

    Yen in millions  
              Six months ended September 30             
         2016              2017      

Sales and operating revenue:

    

Net sales

    2,774,435        3,293,559  

Financial services revenue

    489,612        578,794  

Other operating revenue

    38,100        48,291  
      3,302,147        3,920,644  

Costs and expenses:

    

Cost of sales

    2,064,891        2,349,738  

Selling, general and administrative

    676,444        743,658  

Financial services expenses

    406,797        495,563  

Other operating (income) expense, net

    52,441        (27,012
      3,200,573        3,561,947  

Equity in net income of affiliated companies

    365        3,142  

Operating income

    101,939        361,839  

Other income:

    

Interest and dividends

    5,357        13,037  

Other

    1,780        1,644  
      7,137        14,681  

Other expenses:

    

Interest

    8,153        7,246  

Foreign exchange loss, net

    810        19,266  

Other

    2,577        2,549  
      11,540        29,061  

Income before income taxes

    97,536        347,459  

Income taxes

    43,975        110,247  

Net income

    53,561        237,212  

Less - Net income attributable to noncontrolling interests

    27,553        25,489  

Net income attributable to Sony Corporation’s stockholders

    26,008        211,723  
    Yen  
            Six months ended September 30          
         2016              2017      

Per share data:

    

Net income attributable to Sony Corporation’s stockholders

    

– Basic

    20.61        167.61  

– Diluted

    20.20        164.06  

The accompanying notes are an integral part of these statements.

 

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Table of Contents

  Consolidated Statements of Income (Unaudited)

 

Sony Corporation and Consolidated Subsidiaries

    Yen in millions  
            Three months ended September 30          
         2016              2017      

Sales and operating revenue:

    

Net sales

    1,411,918        1,764,916  

Financial services revenue

    258,703        277,434  

Other operating revenue

    18,327        20,181  
      1,688,948        2,062,531  

Costs and expenses:

    

Cost of sales

    1,049,268        1,234,646  

Selling, general and administrative

    338,347        386,279  

Financial services expenses

    225,166        240,305  

Other operating (income) expense, net

    31,568        (901
      1,644,349        1,860,329  

Equity in net income of affiliated companies

    1,148        2,026  

Operating income

    45,747        204,228  

Other income:

    

Interest and dividends

    2,130        4,252  

Other

    687        511  
      2,817        4,763  

Other expenses:

    

Interest

    4,352        2,730  

Foreign exchange loss, net

    2,425        6,298  

Other

    1,267        1,398  
      8,044        10,426  

Income before income taxes

    40,520        198,565  

Income taxes

    23,500        55,751  

Net income

    17,020        142,814  

Less - Net income attributable to noncontrolling interests

    12,178        11,962  

Net income attributable to Sony Corporation’s stockholders

    4,842        130,852  
    Yen  
            Three months ended September 30          
     2016      2017  

Per share data:

    

Net income attributable to Sony Corporation’s stockholders

    

– Basic

    3.84        103.57  

– Diluted

    3.76        101.35  

The accompanying notes are an integral part of these statements.

 

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Table of Contents

  (iii)    Consolidated Statements of Comprehensive Income (Unaudited)

 

Sony Corporation and Consolidated Subsidiaries

    Yen in millions  
            Six months ended September 30          
          2016             2017      

Net income

    53,561       237,212  

Other comprehensive income, net of tax —

   

Unrealized losses on securities

    (17,331     (4,658

Unrealized gains on derivative instruments

    260       229  

Pension liability adjustment

    6,047       4,644  

Foreign currency translation adjustments

    (107,063     30,087  

Total comprehensive income (loss)

    (64,526     267,514  

Less – Comprehensive income attributable to noncontrolling interests

    19,155       27,356  

  Comprehensive income (loss) attributable to Sony Corporation’s stockholders

    (83,681     240,158  
    Yen in millions  
    Three months ended September 30  
     2016     2017  

Net income

    17,020       142,814  

Other comprehensive income, net of tax —

   

Unrealized losses on securities

    (37,726     (1,469

Unrealized gains on derivative instruments

    405       594  

Pension liability adjustment

    2,821       2,339  

Foreign currency translation adjustments

    (16,065     16,502  

Total comprehensive income (loss)

    (33,545     160,780  

Less – Comprehensive income (loss) attributable to noncontrolling interests

    (5,845     13,178  

  Comprehensive income (loss) attributable to Sony Corporation’s stockholders

    (27,700     147,602  

  The accompanying notes are an integral part of these statements.

 

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Table of Contents

  (iv)    Consolidated Statements of Cash Flows (Unaudited)

 

Sony Corporation and Consolidated Subsidiaries

 

      Yen in millions  
       Six months ended September 30          
           2016                     2017          

Cash flows from operating activities:

    

Net income

     53,561       237,212  

Adjustments to reconcile net income to net cash provided by operating activities –

    

Depreciation and amortization, including amortization of deferred insurance acquisition costs

     181,060       169,962  

Amortization of film costs

     122,837       160,142  

Accrual for pension and severance costs, less payments

     7,054       2,583  

Other operating (income) expense, net

     52,441       (27,012

Gain on sale or devaluation of securities investments, net

     (13     (167

(Gain) loss on revaluation of marketable securities held in the financial services business for trading purposes, net

     41,800       (47,765

Loss on revaluation or impairment of securities investments held in the financial services business, net

     2       50  

Deferred income taxes

     (12,382     8,160  

Equity in net (income) loss of affiliated companies, net of dividends

     5,133       (1,312

Changes in assets and liabilities:

    

Increase in notes and accounts receivable, trade

     (154,618     (197,747

Increase in inventories

     (256,549     (272,386

Increase in film costs

     (175,952     (188,281

Increase in notes and accounts payable, trade

     213,623       309,160  

Increase in accrued income and other taxes

     38,529       49,662  

Increase in future insurance policy benefits and other

     170,468       258,762  

Increase in deferred insurance acquisition costs

     (43,691     (43,394

Increase in marketable securities held in the financial services business for trading purposes

     (49,387     (44,002

Increase in other current assets

     (87,477     (125,652

Increase (decrease) in other current liabilities

     (86,249     23,571  

Other

     61,293       (5,242

Net cash provided by operating activities

     81,483       266,304  

(Continued on following page.)

 

 

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Table of Contents

            Consolidated Statements of Cash Flows (Unaudited)

 

 

     Yen in millions  
         Six months ended September 30          

 

           2016                     2017          

Cash flows from investing activities:

    

Payments for purchases of fixed assets

     (205,300     (130,254

Proceeds from sales of fixed assets

     6,946       6,760  

Payments for investments and advances by financial services business

     (603,241     (461,046

Payments for investments and advances (other than financial services business)

     (7,423     (10,969

Proceeds from sales or return of investments and collections of advances by financial services business

     143,080       152,561  

Proceeds from sales or return of investments and collections of advances (other than financial services business)

     4,307       4,219  

Proceeds from sales of businesses

     3,262       18,684  

Other

     (9,271     8,258  

Net cash used in investing activities

     (667,640     (411,787

Cash flows from financing activities:

    

Proceeds from issuance of long-term debt

     203,081       72,430  

Payments of long-term debt

     (140,400     (16,299

Increase in short-term borrowings, net

     123,646       55,904  

Increase in deposits from customers in the financial services business, net

     114,687       88,344  

Dividends paid

     (12,633     (12,649

Payment for purchase of Sony/ATV shares from noncontrolling interests

     (76,565     -  

Other

     (28,555     (8,207

Net cash provided by financing activities

     183,261       179,523  

Effect of exchange rate changes on cash and cash equivalents

     (55,535     6,650  

Net increase (decrease) in cash and cash equivalents

     (458,431     40,690  

Cash and cash equivalents at beginning of the fiscal year

     983,612       960,142  

Cash and cash equivalents at end of the period

     525,181       1,000,832  

  The accompanying notes are an integral part of these statements.

 

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Table of Contents

    Index to Notes to Consolidated Financial Statements

 

 

Sony Corporation and Consolidated Subsidiaries

 

Notes to Consolidated Financial Statements   

Page

 

  1.     Summary of significant accounting policies

     23  

  2.     Marketable securities and securities investments

     24  

  3.     Fair value measurements

     25  

  4.     Supplemental equity and comprehensive income information

     27  

  5.     Reconciliation of the differences between basic and diluted EPS

     29  

  6.     Commitments, contingent liabilities and other

     30  

  7.     Business segment information

     32  

 

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Table of Contents

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 required by U.S. GAAP for interim periods 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)

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 it occurs.

 

(2)

Reclassifications:

Certain reclassifications of the financial statements and accompanying footnotes for the six and three months ended September 30, 2016 have been made to conform to the presentation for the six and three months ended September 30, 2017.

 

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Table of Contents
2.

Marketable securities and securities investments

Marketable securities and securities investments, primarily included in the Financial Services segment, are comprised of debt and equity securities for 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, 2017     September 30, 2017  
    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

    1,161,493         182,836         (928)         1,343,401         1,174,020         179,114         (734)         1,352,400    

Japanese local government bonds

    60,450         144         (63)         60,531         63,583         85         (106)         63,562    

Japanese corporate bonds

    163,785         7,864         (1,846)         169,803         190,611         7,025         (1,733)         195,903    

Foreign government bonds

    27,601         359         (918)         27,042         34,764         922         (515)         35,171    

Foreign corporate bonds

    396,097         4,168         (719)         399,546         397,783         2,697         (452)         400,028    

Other

    15,192         -          (0)         15,192         79,803         1         (0)         79,804    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    1,824,618         195,371         (4,474)         2,015,515         1,940,564         189,844         (3,540)         2,126,868    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity securities

    55,928         69,937         (377)         125,488         55,701         67,132         (279)         122,554    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Held-to-maturity securities:

               

Japanese national government bonds *

    5,661,191         1,520,904         (30,553)         7,151,542         5,770,124         1,461,484         (38,952)         7,192,656    

Japanese local government bonds

    4,101         449         -          4,550         3,926         428         -          4,354    

Japanese corporate bonds

    230,011         12,346         (22,071)         220,286         284,729         11,595         (26,691)         269,633    

Foreign government bonds

    253,019         5,269         (22,868)         235,420         278,068         9,912         (16,159)         271,821    

Foreign corporate bonds

    198         18         -          216         198         16         -          214    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    6,148,520         1,538,986         (75,492)         7,612,014         6,337,045         1,483,435         (81,802)         7,738,678    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    8,029,066         1,804,294         (80,343)         9,753,017         8,333,310         1,740,411         (85,621)         9,988,100    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

* As of September 30, 2017, held-to-maturity securities include 252,931 million yen of pledged Japanese national government bonds as collateral for transactions with short-term repurchase agreement.

 

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Table of Contents
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, 2017  
            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

     611,108          310,212          -          921,320          921,320          -          -          -    

Available-for-sale securities

                       

Debt securities

                       

Japanese national government bonds

     -          1,343,401          -          1,343,401          18,483          1,324,918          -          -    

Japanese local government bonds

     -          60,531          -          60,531          8,518          52,013          -          -    

Japanese corporate bonds

     -          168,493          1,310          169,803          8,433          161,370          -          -    

Foreign government bonds

     -          27,042          -          27,042          1,007          26,035          -          -    

Foreign corporate bonds

     -          358,369          41,177          399,546          86,708          312,838          -          -    

Other

     -          -          15,192          15,192          -          15,192          -          -    

Equity securities

     125,306          182          -          125,488          -          125,488          -          -    

Other investments *1

     6,589          4,525          10,483          21,597          -          21,597          -          -    

Derivative assets *2, *3

     981          26,279          -          27,260          -          -          25,409          1,851    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

     743,984          2,299,034          68,162          3,111,180          1,044,469        2,039,451          25,409          1,851    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

                       

Derivative liabilities*2,*3

     520          33,930          -          34,450          -          -          15,743          18,707    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     520          33,930          -          34,450          -          -          15,743          18,707    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Table of Contents
     Yen in millions  
     September 30, 2017  
            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

     678,442        329,039          -          1,007,481          1,007,481          -          -          -    

Available-for-sale securities

                       

Debt securities

                       

Japanese national government bonds

     -          1,352,400          -          1,352,400          18,665          1,333,735          -          -    

Japanese local government bonds

     -          63,562          -          63,562          9,429          54,133          -          -    

Japanese corporate bonds

     -          195,903          -          195,903          8,784          187,119          -          -    

Foreign government bonds

     -          35,171          -          35,171          -          35,171          -          -    

Foreign corporate bonds

     -          370,373          29,655          400,028          90,122          309,906          -          -    

Other

     -          -          79,804          79,804          -          79,804          -          -    

Equity securities

     122,270          284          -          122,554          -          122,554          -          -    

Other investments *1

     6,828          5,044          10,346          22,218          -          22,218          -          -    

Derivative assets *2, *3

     -          18,149          -          18,149          -          -          16,209          1,940    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

     807,540          2,369,925          119,805          3,297,270          1,134,481          2,144,640          16,209          1,940    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities:

                       

Derivative liabilities*2,*3

     3,664          39,035          -          42,699          -          -          25,042          17,657    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

     3,664          39,035          -          42,699          -          -          25,042          17,657    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

*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.

 

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Table of Contents
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, 2016 and 2017 are as follows:

 

     Yen in millions  
     Sony Corporation’s
    stockholders’ equity    
    Noncontrolling
interests
        Total equity      
  

 

 

 

Balance at March 31, 2016

     2,463,340       661,070       3,124,410     

Exercise of stock acquisition rights

     1,834       -       1,834     

Stock-based compensation

     833       -       833     

Comprehensive income:

      

Net income

     26,008       27,553       53,561     

Other comprehensive income, net of tax —

      

Unrealized losses on securities

     (11,430     (5,901     (17,331)    

Unrealized gains on derivative instruments

     260       -       260     

Pension liability adjustment

     5,959       88       6,047     

Foreign currency translation adjustments

     (104,478     (2,585     (107,063)    
  

 

 

 

Total comprehensive income (loss)

     (83,681     19,155       (64,526)    
  

 

 

 

Dividends declared

     (12,625     (16,434     (29,059)    

Transactions with noncontrolling interests shareholders and other

     (59,598     (42,424     (102,022)    
  

 

 

 

Balance at September 30, 2016

     2,310,103       621,367       2,931,470     
  

 

 

 
     Yen in millions  
     Sony Corporation’s
    stockholders’ equity    
    Noncontrolling
interests
        Total equity      
  

 

 

 

Balance at March 31, 2017

     2,497,246       638,176       3,135,422     

Issuance of new shares

     676       -       676     

Exercise of stock acquisition rights

     2,344       -       2,344     

Stock-based compensation

     1,159       -       1,159     

Comprehensive income:

      

Net income

     211,723       25,489       237,212     

Other comprehensive income, net of tax —

      

Unrealized gains (losses) on securities

     (4,884     226       (4,658)    

Unrealized gains on derivative instruments

     229       -       229     

Pension liability adjustment

     4,630       14       4,644     

Foreign currency translation adjustments

     28,460       1,627       30,087     
  

 

 

 

Total comprehensive income

     240,158       27,356       267,514     
  

 

 

 

Dividends declared

     (15,794     (12,134     (27,928)    

Transactions with noncontrolling interests shareholders and other

     (598     2,063       1,465     
  

 

 

 

Balance at September 30, 2017

     2,725,191       655,461       3,380,652     
  

 

 

 

There was no material effect of changes in Sony Corporation’s ownership interest in its subsidiaries on Sony Corporation’s stockholders’ equity for the six months ended September 30, 2016 and 2017.

 

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Table of Contents
(2)

Other Comprehensive Income

Changes in accumulated other comprehensive income, net of tax by component for the six months ended September 30, 2016 and 2017 are as follows:

 

    Yen in millions  
    Unrealized
    gains (losses)    
on securities
    Unrealized
gains (losses)
on derivative
instruments
    Pension
liability
adjustment
    Foreign
currency
translation
adjustments
    Total  
 

 

 

 

Balance at March 31, 2016

    140,736       (1,198     (371,739     (421,117     (653,318)    

Other comprehensive income before reclassifications

    (18,448     (2,933     (360     (107,063     (128,804)    

Amounts reclassified out of accumulated other comprehensive income

    1,117       3,193       6,407       -       10,717     
 

 

 

 

Net current-period other comprehensive income

    (17,331     260       6,047       (107,063     (118,087)    

Less: Other comprehensive income attributable to noncontrolling interests

    (5,901     -       88       (2,585     (8,398)    
 

 

 

 

Balance at September 30, 2016

    129,306       (938     (365,780     (525,595     (763,007)    
 

 

 

 
    Yen in millions  
    Unrealized
    gains (losses)    
on securities
    Unrealized
gains (losses)
on derivative
instruments
    Pension
liability
adjustment
    Foreign
currency
translation
adjustments
    Total  
 

 

 

 

Balance at March 31, 2017

    126,635       (58     (308,736     (436,610     (618,769)    

Other comprehensive income before reclassifications

    (3,704     (723     (88     32,850       28,335     

Amounts reclassified out of accumulated other comprehensive income

    (954     952       4,732       (2,763     1,967     
 

 

 

 

Net current-period other comprehensive income

    (4,658     229       4,644       30,087       30,302     

Less: Other comprehensive income attributable to noncontrolling interests

    226       -       14       1,627       1,867     
 

 

 

 

Balance at September 30, 2017

    121,751       171       (304,106     (408,150     (590,334)    
 

 

 

 

 

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Table of Contents
5.

Reconciliation of the differences between basic and diluted EPS

Reconciliation of the differences between basic and diluted net income attributable to Sony Corporation’s stockholders per share (“EPS”) for the six and three months ended September 30, 2016 and 2017 is as follows:

 

    

Yen in millions

    

  Six months ended September 30  

    

2016

  

2017

Net income attributable to Sony Corporation’s stockholders for basic and diluted EPS computation

   26,008      211,723  
  

 

  

 

    

Thousands of shares

Weighted-average shares outstanding

   1,261,681      1,263,186  

Effect of dilutive securities:

     

Stock acquisition rights

   2,175      3,374  

Zero coupon convertible bonds

   23,962      23,962  
  

 

  

 

Weighted-average shares for diluted EPS computation

           1,287,818              1,290,522  
  

 

  

 

    

Yen

Basic EPS

   20.61      167.61  
  

 

  

 

Diluted EPS

   20.20      164.06  
  

 

  

 

Potential shares of common stock that were excluded from the computation of diluted EPS for the six months ended September 30, 2016 and 2017 were 6,456 thousand shares and 4,573 thousand shares, respectively. The potential shares related to stock acquisition rights were excluded as anti-dilutive for the six months ended September 30, 2016 and 2017 when the exercise price for those shares was in excess of the average market value of Sony’s common stock for the period. The zero coupon convertible bonds issued in July 2015 were included in the diluted EPS calculation under the if-converted method beginning upon issuance.

 

    

Yen in millions

    

Three months ended September 30

    

2016

  

2017

Net income attributable to Sony Corporation’s stockholders for basic and diluted EPS computation

   4,842      130,852  
  

 

  

 

    

Thousands of shares

Weighted-average shares outstanding

   1,261,840      1,263,452  

Effect of dilutive securities:

     

Stock acquisition rights

   2,468      3,624  

Zero coupon convertible bonds

   23,962      23,962  
  

 

  

 

Weighted-average shares for diluted EPS computation

           1,288,270              1,291,038  
  

 

  

 

    

Yen

Basic EPS

   3.84      103.57  
  

 

  

 

Diluted EPS

                   3.76      101.35  
  

 

  

 

Potential shares of common stock that were excluded from the computation of diluted EPS for the three months ended September 30, 2016 and 2017 were 6,456 thousand shares and 4,573 thousand shares, respectively. The potential shares related to stock acquisition rights were excluded as anti-dilutive for the three months ended September 30, 2016 and 2017 when the exercise price for those shares was in excess of the average market value of Sony’s common stock for the period. The zero coupon convertible bonds issued in July 2015 were included in the diluted EPS calculation under the if-converted method beginning upon issuance.

 

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Table of Contents
6.

Commitments, contingent liabilities and other

 

(1)

  Loan commitments

Subsidiaries in the Financial Services segment have entered into loan agreements with their customers in accordance with the condition of the contracts. As of September 30, 2017, the total unused portion of the lines of credit extended under these contracts was 30,831 million yen. The aggregate amounts of future year-by-year payments for these loan commitments cannot be determined.

 

(2)

  Purchase commitments and other

Purchase commitments and other outstanding commitments as of September 30, 2017 amounted to 386,289 million yen. The major components of these commitments are as follows:

Certain subsidiaries in the Pictures segment have entered into agreements with creative talent for the development and production of motion pictures and television programming as well as agreements with third parties to acquire completed motion pictures, or certain rights therein, and to acquire the rights to broadcast certain live action sporting events. These agreements cover various periods mainly within two years. As of September 30, 2017, these subsidiaries were committed to make payments under such contracts of 122,014 million yen.

Certain subsidiaries in the Music segment have entered into contracts with recording artists, songwriters and companies for the future production, distribution and/or licensing of music product. These contracts cover various periods mainly within five years. As of September 30, 2017, these subsidiaries were committed to make payments of 66,378 million yen under such contracts.

A subsidiary in the Game & Network Services segment has entered into contracts for programming content. These contracts cover various periods mainly within two years. As of September 30, 2017, this subsidiary was committed to make payments of 13,250 million yen under such contracts.

Sony has entered into sponsorship contracts related to advertising and promotional rights. These contracts cover various periods mainly within one year. As of September 30, 2017, Sony has committed to make payments of 5,230 million yen under such contracts.

 

(3)

  Litigation

Beginning in 2009, the U.S. Department of Justice (“DOJ”), the European Commission and certain other governmental agencies outside the United States have conducted investigations relating to competition in the optical disk drives market. Sony Corporation and/or certain of its subsidiaries have been subject to these investigations. Sony understands that the investigations of several agencies, including the DOJ, have ended, and only one agency continues to investigate. However, proceedings initiated by the European Commission as a result of its investigation continue. In October 2015, the European Commission adopted a decision in which it fined Sony Corporation and certain of its subsidiaries 31 million euros; however, Sony filed an appeal against the decision with the European Union’s General Court. In addition, a number of direct and indirect purchaser lawsuits, including class actions, have been filed in certain jurisdictions in which the plaintiffs allege that Sony Corporation and certain of its subsidiaries violated antitrust laws and seek recovery of damages and other remedies. Certain of these lawsuits have been settled, including the class actions brought by the direct and indirect purchasers in the United States; however, certain other lawsuits continue. Based on the stage of the pending proceedings, it is not possible to estimate the amount of losses or range of possible losses, if any, that might ultimately result from adverse judgments, settlements or other resolution of all of these matters.

Beginning in 2011, the DOJ, the European Commission and certain other governmental agencies outside the United States conducted investigations relating to competition in the secondary batteries market. Sony Corporation and/or certain of its subsidiaries were subject to these investigations. Sony understands that the investigations by these agencies, including the DOJ and the European Commission, have ended or are no longer active. With respect to the investigation by the European Commission, in December 2016, Sony Corporation and certain of its subsidiaries reached a settlement with the European Commission to pay a fine of approximately 29.8 million euros. In addition, a number of direct and indirect purchaser lawsuits, including class actions, have been filed in certain jurisdictions in which the plaintiffs allege that Sony Corporation and certain of its subsidiaries violated antitrust laws and seek recovery of damages and other remedies. Certain of these lawsuits have been settled, including the class actions brought by the direct and indirect purchasers in the United States; however, certain other lawsuits continue. Based on the stage of the pending proceedings, it is not possible to estimate the amount of losses or range of possible losses, if any, that might ultimately result from adverse judgments, settlements or other resolution of all of these matters.

In addition, Sony Corporation and certain of its subsidiaries are defendants or otherwise involved in other pending legal and regulatory proceedings. However, based upon the information currently available, Sony believes that the outcome from such legal and regulatory proceedings would not have a material impact on Sony’s results of operations and financial position.

 

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Table of Contents
(4)    Guarantees

Sony has issued guarantees that contingently require payments to guaranteed parties if certain specified events or conditions occur. The maximum potential amount of future payments under these guarantees as of September 30, 2017 amounted to 3,139 million yen.

 

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Table of Contents
7.

Business segment information

The reportable segments presented below are the segments of Sony for which separate financial information is available and for which operating profit or loss amounts are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM does not evaluate segments using discrete asset information. Sony’s CODM is its Chief Executive Officer and President.

Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2018. As a result of this realignment, the operation of the former Components segment is now included in All Other. In connection with this realignment, the sales and operating revenue and operating income (loss) of each segment for the comparable period have been reclassified to conform to the current presentation.

The Mobile Communications (“MC”) segment includes the manufacture and sales of mobile phones and Internet-related service businesses. The Game & Network Services (“G&NS”) segment includes the manufacture and sales of home gaming products, network services businesses and production and sales of software. The Imaging Products & Solutions (“IP&S”) segment includes the Still and Video Cameras business. The Home Entertainment & Sound (“HE&S”) segment includes Televisions as well as Audio and Video businesses. The Semiconductors segment includes the image sensors business. The Pictures segment includes the Motion Pictures, Television Productions and Media Networks businesses. The Music segment includes the Recorded Music, Music Publishing and Visual Media and Platform businesses. The Financial Services segment primarily represents individual life insurance and non-life insurance businesses in the Japanese market and a bank business in Japan. All Other consists of various operating activities, including the overseas disc manufacturing, recording media and battery businesses. Sony’s products and services are generally unique to a single operating segment.

 

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Table of Contents

Business segments -

Sales and operating revenue:

 

     Yen in millions  
             Six months ended September 30          

 

       2016             2017      

Sales and operating revenue:

    

Mobile Communications -

    

Customers

             351,682               348,884  

Intersegment

     3,011       4,344  
  

 

 

   

 

 

 

Total

     354,693       353,228  

Game & Network Services -

    

Customers

     615,616       737,306  

Intersegment

     34,643       43,960  
  

 

 

   

 

 

 

Total

     650,259       781,266  

Imaging Products & Solutions -

    

Customers

     254,402       309,287  

Intersegment

     3,196       3,068  
  

 

 

   

 

 

 

Total

     257,598       312,355  

Home Entertainment & Sound -

    

Customers

     468,816       557,235  

Intersegment

     1,980       565  
  

 

 

   

 

 

 

Total

     470,796       557,800  

Semiconductors -

    

Customers

     279,311       366,086  

Intersegment

     58,867       66,538  
  

 

 

   

 

 

 

Total

     338,178       432,624  

Pictures -

    

Customers

     375,149       449,408  

Intersegment

     280       406  
  

 

 

   

 

 

 

Total

     375,429       449,814  

Music -

    

Customers

     285,038       367,913  

Intersegment

     7,077       7,225  
  

 

 

   

 

 

 

Total

     292,115       375,138  

Financial Services -

    

Customers

     489,612       578,794  

Intersegment

     3,617       3,590  
  

 

 

   

 

 

 

Total

     493,229       582,384  

All Other -

    

Customers

     166,727       189,696  

Intersegment

     35,400       32,364  
  

 

 

   

 

 

 

Total

     202,127       222,060  

Corporate and elimination

     (132,277     (146,025
  

 

 

   

 

 

 
Consolidated total      3,302,147       3,920,644  
  

 

 

   

 

 

 

G&NS intersegment amounts primarily consist of transactions with All Other.

Semiconductors intersegment amounts primarily consist of transactions with the MC segment, the G&NS segment and the IP&S segment.

All Other intersegment amounts primarily consist of transactions with the Pictures segment, the Music segment and the G&NS segment.

Corporate and elimination includes certain brand and patent royalty income.

 

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     Yen in millions  
             Three months ended September 30          

 

       2016             2017      

Sales and operating revenue:

    

Mobile Communications -

    

Customers

             166,814               169,818  

Intersegment

     1,956       2,223  
  

 

 

   

 

 

 

Total

     168,770       172,041  

Game & Network Services -

    

Customers

     304,848       414,255  

Intersegment

     15,032       18,949  
  

 

 

   

 

 

 

Total

     319,880       433,204  

Imaging Products & Solutions -

    

Customers

     134,037       155,170  

Intersegment

     1,335       1,550  
  

 

 

   

 

 

 

Total

     135,372       156,720  

Home Entertainment & Sound -

    

Customers

     233,901       300,770  

Intersegment

     976       163  
  

 

 

   

 

 

 

Total

     234,877       300,933  

Semiconductors -

    

Customers

     161,038       193,407  

Intersegment

     32,710       34,956  
  

 

 

   

 

 

 

Total

     193,748       228,363  

Pictures -

    

Customers

     192,026       243,738  

Intersegment

     86       265  
  

 

 

   

 

 

 

Total

     192,112       244,003  

Music -

    

Customers

     146,629       202,837  

Intersegment

     3,582       3,729  
  

 

 

   

 

 

 

Total

     150,211       206,566  

Financial Services -

    

Customers

     258,703       277,434  

Intersegment

     1,807       1,790  
  

 

 

   

 

 

 

Total

     260,510       279,224  

All Other -

    

Customers

     81,791       95,592  

Intersegment

     19,572       17,228  
  

 

 

   

 

 

 

Total

     101,363       112,820  

Corporate and elimination

     (67,895     (71,343
  

 

 

   

 

 

 
Consolidated total      1,688,948       2,062,531  
  

 

 

   

 

 

 

G&NS intersegment amounts primarily consist of transactions with All Other.

Semiconductors intersegment amounts primarily consist of transactions with the MC segment, the G&NS segment and the IP&S segment.

All Other intersegment amounts primarily consist of transactions with the Pictures segment, the Music segment and the G&NS segment.

Corporate and elimination includes certain brand and patent royalty income.

 

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Segment profit or loss:

 

     Yen in millions  
             Six months ended September 30          

 

   2016      2017  

Operating income (loss):

     

Mobile Communications

     4,113           1,163     

Game & Network Services

     63,023           72,483     

Imaging Products & Solutions

     22,366           42,074     

Home Entertainment & Sound

     37,797           46,970     

Semiconductors

     (47,733)          104,812     

Pictures

     (7,433)          (1,801)    

Music

     32,391           57,536     

Financial Services

     82,110           82,822     

All Other

     (39,555)          (8,259)    
  

 

 

    

 

 

 

Total

     147,079           397,800     

Corporate and elimination

     (45,140)          (35,961)    
  

 

 

    

 

 

 
Consolidated operating income      101,939           361,839     
Other income      7,137           14,681     
Other expenses      (11,540)          (29,061)    
  

 

 

    

 

 

 
Consolidated income before income taxes      97,536           347,459     
  

 

 

    

 

 

 

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 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.

 

     Yen in millions  
         Three months ended September 30          

 

   2016      2017  

Operating income (loss):

     

Mobile Communications

     3,698           (2,453)    

Game & Network Services

     18,992           54,750     

Imaging Products & Solutions

     14,860           18,870     

Home Entertainment & Sound

     17,556           24,387     

Semiconductors

     (4,184)          49,370     

Pictures

     3,207           7,696     

Music

     16,515           32,514     

Financial Services

     33,563           36,599     

All Other

     (32,602)          (28)    
  

 

 

    

 

 

 

Total

     71,605           221,705     

Corporate and elimination

     (25,858)          (17,477)     
  

 

 

    

 

 

 
Consolidated operating income      45,747           204,228     
Other income      2,817           4,763     
Other expenses      (8,044)          (10,426)    
  

 

 

    

 

 

 
Consolidated income before income taxes      40,520           198,565     
  

 

 

    

 

 

 

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 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.

 

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Other Significant Items:

The following table includes a breakdown of sales and operating revenue to external customers by product category for certain segments. Sony management views each segment as a single operating segment.

 

     Yen in millions  
             Six months ended September 30          
  Sales and operating revenue:    2016      2017  

Mobile Communications

         351,682               348,884     

Game & Network Services

     

Hardware

     225,551           235,713     

Network

     292,167           418,288     

Other

     97,898           83,305     

 

  

 

 

    

 

 

 

Total

     615,616           737,306     

Imaging Products & Solutions

     

Still and Video Cameras

     157,000           205,206     

Other

     97,402           104,081     

 

  

 

 

    

 

 

 

Total

     254,402           309,287     

Home Entertainment & Sound

     

Televisions

     335,390           398,927     

Audio and Video

     132,854           157,361     

Other

     572           947     

 

  

 

 

    

 

 

 

Total

     468,816           557,235     

Semiconductors

     279,311           366,086     

Pictures

     

Motion Pictures

     169,274           195,074     

Television Productions

     95,617           119,287     

Media Networks

     110,258           135,047     

 

  

 

 

    

 

 

 

Total

     375,149           449,408     

Music

     

Recorded Music

     179,463           208,999     

Music Publishing

     31,242           36,359     

Visual Media and Platform

     74,333           122,555     

 

  

 

 

    

 

 

 

Total

     285,038           367,913     

Financial Services

     489,612           578,794     

All Other

     166,727           189,696     

Corporate

     15,794           16,035     

 

  

 

 

    

 

 

 

Consolidated total

     3,302,147           3,920,644     
  

 

 

    

 

 

 

 

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Table of Contents
     Yen in millions  
         Three months ended September 30      
  Sales and operating revenue:    2016      2017  

Mobile Communications

         166,814               169,818     

Game & Network Services

     

Hardware

     106,386           137,398     

Network

     146,609           222,986     

Other

     51,853           53,871     

 

  

 

 

    

 

 

 

Total

     304,848           414,255     

Imaging Products & Solutions

     

Still and Video Cameras

     81,471           99,343     

Other

     52,566           55,827     

 

  

 

 

    

 

 

 

Total

     134,037           155,170     

Home Entertainment & Sound

     

Televisions

     169,097           219,553     

Audio and Video

     64,547           80,639     

Other

     257           578     

 

  

 

 

    

 

 

 

Total

     233,901           300,770     

Semiconductors

     161,038           193,407     

Pictures

     

Motion Pictures

     93,952           124,800     

Television Productions

     51,424           57,389     

Media Networks

     46,650           61,549     

 

  

 

 

    

 

 

 

Total

     192,026           243,738     

Music

     

Recorded Music

     89,757           109,177     

Music Publishing

     15,591           19,501     

Visual Media and Platform

     41,281           74,159     

 

  

 

 

    

 

 

 

Total

     146,629           202,837     

Financial Services

     258,703           277,434     

All Other

     81,791           95,592     

Corporate

     9,161           9,510     

 

  

 

 

    

 

 

 

Consolidated total

     1,688,948           2,062,531     
  

 

 

    

 

 

 

In the G&NS segment, Hardware includes home and portable game consoles; Network includes network services relating to game, video and music content provided by Sony Interactive Entertainment; Other includes packaged software and peripheral devices. In the IP&S segment, Still and Video Cameras includes interchangeable lens cameras, compact digital cameras, consumer video cameras and video cameras for broadcast; Other includes display products such as projectors and medical equipment. In the HE&S segment, Televisions includes LCD and OLED televisions; Audio and Video includes Blu-ray disc players and recorders, home audio, headphones and memory-based portable audio devices. In the Pictures segment, Motion Pictures includes the worldwide production, acquisition and distribution of motion pictures and direct-to-video content; Television Productions includes the production, acquisition and distribution of television programming; Media Networks includes the operation of television and digital networks worldwide. 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 the production and distribution of animation titles, including game applications based on the animation titles, and various service offerings for music and visual products.

 

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Table of Contents
     Yen in millions         
             Six months ended September 30                 
     2016      2017         

Depreciation and amortization:

        

Mobile Communications

     9,927           9,300        

Game & Network Services

     12,159           14,162        

Imaging Products & Solutions

     12,215           11,565        

Home Entertainment & Sound

     9,770           9,558        

Semiconductors

     51,377           48,439        

Pictures

     9,681           11,947        

Music

     7,373           8,389        

Financial Services, including deferred insurance acquisition costs

     42,351           32,381        

All Other

     4,193           3,570        
  

 

 

    

 

 

    

Total

     159,046           149,311        

Corporate

     22,014           20,651        
  

 

 

    

 

 

    

Consolidated total

     181,060           169,962        
  

 

 

    

 

 

    
     Yen in millions  
     Six months ended September 30, 2016  
     Total net
      restructuring      
charges
     Depreciation
associated with
  restructured assets  
                 Total              

Restructuring charges and associated depreciation:

        

Mobile Communications

     27           121           148     

Game & Network Services

     6           -           6     

Imaging Products & Solutions

     17           -           17     

Home Entertainment & Sound

     13           -           13     

Semiconductors

     3           -           3     

Pictures

     891           4           895     

Music

     818           -           818     

Financial Services

     -           -           -     

All Other and Corporate

     32,421           -           32,421     
  

 

 

    

 

 

    

 

 

 

Consolidated total

     34,196           125           34,321     
  

 

 

    

 

 

    

 

 

 
     Yen in millions  
     Six months ended September 30, 2017  
     Total net
    restructuring    
charges
     Depreciation
associated with
restructured assets
             Total          

Restructuring charges and associated depreciation:

        

Mobile Communications

     691           0           691     

Game & Network Services

     -           -           -     

Imaging Products & Solutions

     21           -           21     

Home Entertainment & Sound

     19           -           19     

Semiconductors

     -           -           -     

Pictures

     443           -           443     

Music

     222           -           222     

Financial Services

     -           -           -     

All Other and Corporate

     2,633           0           2,633     
  

 

 

    

 

 

    

 

 

 

Consolidated total

     4,029           0           4,029     
  

 

 

    

 

 

    

 

 

 

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 under an approved restructuring plan. Any impairment of the assets is recognized immediately in the period it is identified.

 

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     Yen in millions         
         Three months ended September 30             
     2016      2017         

Depreciation and amortization:

        

Mobile Communications

     4,776           4,715        

Game & Network Services

     6,630           7,258        

Imaging Products & Solutions

     6,130           5,704        

Home Entertainment & Sound

     4,617           4,569        

Semiconductors

     26,071           24,637        

Pictures

     4,747           5,975        

Music

     3,686           4,247        

Financial Services, including deferred insurance acquisition costs

     17,988           17,274        

All Other

     1,888           1,847        
  

 

 

    

 

 

    

Total

     76,533           76,226        

Corporate

     10,970           10,473        
  

 

 

    

 

 

    

Consolidated total

     87,503           86,699        
  

 

 

    

 

 

    
     Yen in millions  
     Three months ended September 30, 2016  
     Total net
      restructuring      
charges
     Depreciation
associated with
  restructured assets  
                 Total              

Restructuring charges and associated depreciation:

        

Mobile Communications

     (295)          121           (174)    

Game & Network Services

     (104)          -           (104)    

Imaging Products & Solutions

     10           -           10     

Home Entertainment & Sound

     1           -           1     

Semiconductors

     -           -           -     

Pictures

     56           4           60     

Music

     708           -           708     

Financial Services

     -           -           -     

All Other and Corporate

     32,075           -           32,075     
  

 

 

    

 

 

    

 

 

 

Consolidated total

     32,451           125           32,576     
  

 

 

    

 

 

    

 

 

 
     Yen in millions  
     Three months ended September 30, 2017  
     Total net
    restructuring    
charges
     Depreciation
associated with
restructured assets
             Total          

Restructuring charges and associated depreciation:

        

Mobile Communications

     42           -           42     

Game & Network Services

     -           -           -     

Imaging Products & Solutions

     9           -           9     

Home Entertainment & Sound

     4           -           4     

Semiconductors

     -           -           -     

Pictures

     (127)          -           (127)    

Music

     215           -           215     

Financial Services

     -           -           -     

All Other and Corporate

     1,448           -           1,448     
  

 

 

    

 

 

    

 

 

 

Consolidated total

     1,591           -           1,591     
  

 

 

    

 

 

    

 

 

 

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 under an approved restructuring plan. Any impairment of the assets is recognized immediately in the period it is identified.

 

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Geographic Information –

Sales and operating revenue attributed to countries and areas based on location of external customers are as follows:

 

     Yen in millions  
     Six months ended September 30  

  Sales and operating revenue:

               2016                              2017              

Japan

     1,054,642            1,216,279      

United States

     715,772            798,121      

Europe

     688,995            781,633      

China

     240,067            339,136      

Asia-Pacific

     392,875            525,845      

Other Areas

     209,796            259,630      

 

  

 

 

    

 

 

 

Total

     3,302,147            3,920,644      
  

 

 

    

 

 

 
     Yen in millions  
     Three months ended September 30  

  Sales and operating revenue:

               2016                              2017              

Japan

     543,231            596,538      

United States

     362,158            437,185      

Europe

     343,478            429,883      

China

     130,994            176,920      

Asia-Pacific

     201,205            278,447      

Other Areas

     107,882            143,558      

 

  

 

 

    

 

 

 

Total

     1,688,948            2,062,531      
  

 

 

    

 

 

 

Major countries and 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

There are no individually material countries with respect to sales and operating revenue included in Europe, Asia-Pacific and Other Areas.

Transfers between reportable business segments or geographic areas are made at individually negotiated prices that are intended to reflect a market-based transfer price.

There were no sales and operating revenue with any single major external customer for the six and three months ended September 30, 2016 and 2017.

 

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(2) Other Information

(i) Dividends declared

An interim cash dividend for Sony Corporation’s common stock was approved at the Board of Directors meeting held on October 31, 2017 as below:

1. Total amount of interim cash dividends:

15,794 million yen

2. Amount of interim cash dividends per share:

12.50 yen

3. Payment date:

December 1, 2017

Interim cash dividends for the fiscal year ending March 31, 2018 have been incorporated in the accompanying consolidated financial statements.

Note: Interim cash dividends are to be distributed to the shareholders recorded or registered as the holders or pledgees of shares in Sony Corporation’s register of shareholders at the end of September 30, 2017

(ii) Litigation

  For the legal proceedings, please refer to “IV Financial Statements - Notes to Consolidated Financial Statements – 6. Commitments, contingent liabilities and other”.

 

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