REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered | ||
* |
|
| ||
** |
* | American Depositary Shares evidenced by American Depositary Receipts. Each American Depositary Share represents one share of Common Stock. |
** |
No par value per share. Not for trading, but only in connection with the listing of American Depositary Shares pursuant to the requirements of the New York Stock Exchange. |
Outstanding as of |
||||||||
March 31, 2020 |
March 31, 2020 |
|||||||
Title of Class |
(Tokyo Time) |
(New York Time) |
||||||
Common Stock |
|
|
||||||
American Depositary Shares |
|
☑ |
☐ Accelerated filer |
☐ Non-accelerated filer |
|
☑ |
International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ |
Other ☐ |
Item 17 ☐ |
Item 18 ☐ |
Yes ☐ |
No |
(i) | Sony’s ability to maintain product quality and customer satisfaction with its products and services; |
(ii) | 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; |
(iii) | 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; |
(iv) | the effectiveness of Sony’s strategies and their execution, including but not limited to the success of Sony’s acquisitions, joint ventures, investments, capital expenditures, restructurings and other strategic initiatives; |
(v) | changes in laws, regulations and government policies in the markets in which Sony and its third-party suppliers, service providers and business partners operate, including those related to taxation, as well as growing consumer focus on corporate social responsibility; |
(vi) | Sony’s continued ability to identify the products, services and market trends with significant growth potential, to devote sufficient resources to research and development, to prioritize investments and capital expenditures correctly and to recoup its investments and capital expenditures, including those required for technology development and product capacity; |
(vii) | 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, marketing and distribution of its products, and its other business operations; |
(viii) | 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; |
(ix) | Sony’s ability to meet operational and liquidity needs as a result of significant volatility and disruption in the global financial markets or a ratings downgrade; |
(x) | Sony’s ability to forecast demands, manage timely procurement and control inventories; |
(xi) | 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, liabilities and operating results are denominated; |
(xii) | Sony’s ability to recruit, retain and maintain productive relations with highly skilled personnel; |
(xiii) | Sony’s ability to prevent unauthorized use or theft of intellectual property rights, to obtain or renew licenses relating to intellectual property rights and to defend itself against claims that its products or services infringe the intellectual property rights owned by others; |
(xiv) | 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; |
(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) | risks related to catastrophic disasters, pandemic disease or similar events; |
(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 and the personally identifiable information of its employees and customers, potential business disruptions or financial losses; and |
(xviii) | the outcome of pending and/or future legal and/or regulatory proceedings. |
6 |
||||
6 |
||||
6 |
||||
6 |
||||
6 |
||||
6 |
||||
7 |
||||
18 |
||||
18 |
||||
20 |
||||
29 |
||||
30 |
||||
31 |
||||
31 |
||||
31 |
||||
50 |
||||
51 |
||||
52 |
||||
57 |
||||
58 |
||||
59 |
||||
65 |
||||
65 |
||||
66 |
||||
66 |
||||
71 |
||||
76 |
||||
85 |
||||
86 |
||||
86 |
||||
86 |
||||
87 |
||||
87 |
||||
87 |
||||
87 |
||||
87 |
||||
88 |
||||
88 |
||||
88 |
||||
88 |
||||
89 |
||||
89 |
||||
89 |
||||
89 |
||||
89 |
||||
89 |
||||
89 |
||||
89 |
||||
97 |
||||
97 |
||||
101 |
||||
104 |
||||
104 |
||||
104 |
||||
104 |
||||
104 |
||||
106 |
||||
106 |
106 |
||||
106 |
||||
106 |
||||
108 |
||||
108 |
||||
108 |
||||
109 |
||||
109 |
||||
109 |
||||
110 |
||||
110 |
||||
110 |
||||
111 |
||||
111 |
||||
112 |
||||
113 |
||||
118 |
||||
118 |
||||
118 |
||||
119 |
||||
120 |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
A. |
Selected Financial Data |
Fiscal year ended March 31 |
||||||||||||||||||||
2016 |
2017 |
2018 |
2019 |
2020 |
||||||||||||||||
(Yen in millions, yen per share amounts) |
||||||||||||||||||||
Income statement data: |
||||||||||||||||||||
Sales and operating revenue |
8,105,712 |
7,603,250 |
8,543,982 |
8,665,687 |
8,259,885 |
|||||||||||||||
Equity in net income (loss) of affiliated companies |
2,238 |
3,563 |
8,569 |
(2,999 |
) | 9,637 |
||||||||||||||
Operating income |
294,197 |
288,702 |
734,860 |
894,235 |
845,459 |
|||||||||||||||
Income before income taxes |
304,504 |
251,619 |
699,049 |
1,011,648 |
799,450 |
|||||||||||||||
Income taxes |
94,789 |
124,058 |
151,770 |
45,098 |
177,190 |
|||||||||||||||
Net income attributable to Sony Corporation’s stockholders |
147,791 |
73,289 |
490,794 |
916,271 |
582,191 |
|||||||||||||||
Comprehensive income (loss) |
(44,915 |
) | 143,652 |
553,220 |
995,542 |
666,032 |
||||||||||||||
Data per share of Common Stock: |
||||||||||||||||||||
Net income attributable to Sony Corporation’s stockholders* |
||||||||||||||||||||
— Basic |
119.40 |
58.07 |
388.32 |
723.41 |
471.64 |
|||||||||||||||
— Diluted |
117.49 |
56.89 |
379.75 |
707.74 |
461.23 |
|||||||||||||||
Cash dividends declared Interim |
10.00 |
10.00 |
12.50 |
15.00 |
20.00 |
|||||||||||||||
(8.09 cents |
) | (8.79 cents |
) | (11.11 cents |
) | (13.18 cents |
) | (18.38 cents |
) | |||||||||||
Cash dividends declared Fiscal year-end |
10.00 |
10.00 |
15.00 |
20.00 |
25.00 |
|||||||||||||||
(9.01 cents |
) | (9.13 cents |
) | (13.75 cents |
) | (18.28 cents |
) | (22.76 cents |
) | |||||||||||
Balance sheet data: |
||||||||||||||||||||
Sony Corporation’s stockholders’ equity |
2,463,340 |
2,497,246 |
2,967,366 |
3,746,377 |
4,125,306 |
|||||||||||||||
Common stock |
858,867 |
860,645 |
865,678 |
874,291 |
880,214 |
|||||||||||||||
Net assets |
3,124,410 |
3,135,422 |
3,647,157 |
4,436,690 |
4,789,535 |
|||||||||||||||
Total assets** |
16,673,390 |
17,660,556 |
19,065,538 |
20,981,586 |
23,039,343 |
|||||||||||||||
Number of shares issued at fiscal year-end (thousands of shares of common stock) |
1,262,494 |
1,263,764 |
1,266,552 |
1,271,230 |
1,261,059 |
|||||||||||||||
Sony Corporation’s stockholders’ equity per share of common stock |
1,952.79 |
1,977.72 |
2,344.96 |
2,995.31 |
3,380.96 |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
Item 4. |
Information on the Company |
A. |
History and Development of the Company |
B. |
Business Overview |
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
(Yen in millions) |
||||||||||||
Japan |
2,625,619 |
2,591,784 |
2,472,479 |
|||||||||
United States |
1,835,705 |
1,982,135 |
1,864,390 |
|||||||||
Europe |
1,841,457 |
1,862,166 |
1,697,791 |
|||||||||
China |
674,718 |
770,416 |
845,235 |
|||||||||
Asia-Pacific |
1,024,179 |
912,193 |
892,026 |
|||||||||
Other Areas |
542,304 |
546,993 |
487,964 |
|||||||||
Total |
8,543,982 |
8,665,687 |
8,259,885 |
|||||||||
• | greater financial resources and financial strength ratings; |
• | greater brand awareness; |
• | more extensive marketing and sales networks, including through tie-ups with other types of financial institutions; |
• | more competitive pricing; |
• | larger customer bases; and |
• | a wider range of products and services. |
• | Sony’s representative office in Tehran, Iran, which was established in 1992, has been closed and has been under liquidation processes since before the beginning of the fiscal year ended March 31, 2014. In |
the course of liquidation, Sony engages in certain incidental transactions (for example, permits, taxes, and similar matters incidental to the wind-down of the office in Iran) with Iranian government-owned entities. No material revenues or profits are associated with these transactions with the Iranian government-owned entities. |
C. |
Organizational Structure |
Name of company |
Country of incorporation/residence |
(As of March 31, 2020) Percentage owned |
||||||
Sony Global Manufacturing & Operations Corporation |
Japan |
100.0 |
||||||
Sony Semiconductor Solutions Corporation |
Japan |
100.0 |
||||||
Sony Semiconductor Manufacturing Corporation |
Japan |
100.0 |
||||||
Sony Marketing Inc. |
Japan |
100.0 |
||||||
Sony Mobile Communications Inc. |
Japan |
100.0 |
||||||
Sony Network Communications Inc. |
Japan |
100.0 |
||||||
Sony Interactive Entertainment Inc. |
Japan |
100.0 |
||||||
Sony Home Entertainment & Sound Products Inc. |
Japan |
100.0 |
||||||
Sony Storage Media Solutions Corporation |
Japan |
100.0 |
||||||
Sony Imaging Products & Solutions Inc. |
Japan |
100.0 |
||||||
Sony Music Entertainment (Japan) Inc. |
Japan |
100.0 |
||||||
Sony Financial Holdings Inc.* |
Japan |
65.1 |
||||||
Sony Life Insurance Co., Ltd.* |
Japan |
100.0 |
||||||
Sony Bank Inc.* |
Japan |
100.0 |
||||||
Sony Assurance Inc.* |
Japan |
100.0 |
||||||
Sony Americas Holding Inc. |
U.S.A. |
100.0 |
||||||
Sony Corporation of America |
U.S.A. |
100.0 |
||||||
Sony Electronics Inc. |
U.S.A. |
100.0 |
||||||
Sony Music Holdings Inc. |
U.S.A. |
100.0 |
||||||
Sony Interactive Entertainment LLC |
U.S.A. |
100.0 |
||||||
Sony Pictures Entertainment Inc. |
U.S.A. |
100.0 |
||||||
CPT Holdings, Inc. |
U.S.A. |
100.0 |
||||||
Sony Music Entertainment |
U.S.A. |
100.0 |
||||||
Sony/ATV Music Publishing LLC |
U.S.A. |
100.0 |
||||||
Sony Europe B.V. |
U.K. |
100.0 |
||||||
Sony Interactive Entertainment Europe Ltd. |
U.K. |
100.0 |
||||||
Sony Global Treasury Services Plc |
U.K. |
100.0 |
||||||
Sony Overseas Holding B.V. |
Netherlands |
100.0 |
||||||
Sony (China) Limited |
China |
100.0 |
||||||
Sony EMCS (Malaysia) Sdn. Bhd. |
Malaysia |
100.0 |
||||||
Sony Electronics (Singapore) Pte. Ltd. |
Singapore |
100.0 |
D. |
Property, Plant and Equipment |
Location |
Approximate floor space |
Principal products produced | ||||
(square feet) |
||||||
In Japan: |
||||||
Nagasaki (Sony Semiconductor Manufacturing Corporation — Nagasaki TEC) |
2,381,000 |
CMOS Image Sensors | ||||
Kumamoto (Sony Semiconductor Manufacturing Corporation — Kumamoto TEC) |
2,289,000 |
CMOS & CCD Image Sensors, Microdisplay | ||||
Kagoshima (Sony Semiconductor Manufacturing Corporation — Kagoshima TEC) |
1,789,000 |
Analog LSI, Crystal LED (Panel Process), MMIC | ||||
Oita (Sony Semiconductor Manufacturing Corporation — Oita TEC) |
976,000 |
CMOS Image Sensors (Wafer Process) | ||||
Kohda, Aichi (Sony Global Manufacturing & Operations Corporation — Tokai TEC — Kohda Site) |
903,000 |
Digital Still Cameras, Video Camera Peripherals, Interchangeable-lens Cameras, Lenses for Interchangeable-lens Cameras, Lenses, Lens Blocks, Audio Devices, aibo | ||||
Inazawa, Aichi (Sony Global Manufacturing & Operations Corporation — Tokai TEC — Inazawa Site) |
842,000 |
Surface Mounted Boards, TVs, Crystal LED (Assembly) | ||||
Tsuruoka, Yamagata (Sony Semiconductor Manufacturing Corporation — Yamagata TEC) |
698,000 |
CMOS Image Sensors (Wafer Process) | ||||
Kosai, Shizuoka (Sony Global Manufacturing & Operations Corporation — Tokai TEC — Kosai Site) |
576,000 |
Broadcasting/Professional Equipment (Cameras/Editing Systems), Projectors, Professional-use Microphones, Professional-use Monitors, Medical Peripheral Equipment, Flow Cytometers | ||||
Kisarazu, Chiba (Sony Global Manufacturing & Operations Corporation — Kisarazu TEC) |
541,000 |
PlayStation ® 4, FeliCa IC Cards and Related Devices | ||||
Outside of Japan: |
||||||
Terre Haute, Indiana, U.S.A. (Sony DADC US Inc.) |
1,352,000 |
Blu-ray Disc™ -ROMs | ||||
Bangi, Malaysia (Sony EMCS (Malaysia) Sdn. Bhd. — KL TEC) |
1,183,000 |
TVs, TV Components | ||||
Penang, Malaysia (Sony EMCS (Malaysia) Sdn. Bhd. — PG TEC) |
1,021,000 |
System Stereos, Home Audios, BD Players, BD Recorders, Digital Music Players, Headphones, Personal Audios | ||||
Huizhou, China (Sony Precision Devices (Huizhou) Co., Ltd.) |
1,010,000 |
Optical Pickups |
Location |
Approximate floor space |
Principal products produced | ||||
(square feet) |
||||||
Wuxi, China (Sony Digital Products (Wuxi) Co., Ltd.) |
798,000 |
Digital Still Cameras, Lens Assembly, Interchangeable-lens Cameras, Lenses for Interchangeable-lens Cameras | ||||
Bangkadi, Thailand (Sony Device Technology (Thailand) Co., Ltd.) |
513,000 |
Image Sensor Assembly |
Item 4A. |
Unresolved Staff Comments |
Item 5. |
Operating and Financial Review and Prospects |
A. |
Operating Results |
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in billions) |
||||||||
Sales and operating revenue |
8,665.7 |
8,259.9 |
||||||
Equity in net income (loss) of affiliated companies |
(3.0 |
) | 9.6 |
|||||
Operating income |
894.2 |
845.5 |
||||||
Income before income taxes |
1,011.6 |
799.5 |
||||||
Net income attributable to Sony Corporation’s stockholders |
916.3 |
582.2 |
• | Remeasurement and realized gains resulting from the public listing and sale of a portion of shares of SRE Holdings Corporation: 17.3 billion yen (All Other) |
• | Realized and remeasurement gains resulting from the transfer of a portion of shares of NSF Engagement Corporation: 6.3 billion yen (Corporate and elimination) |
• | Remeasurement gain resulting from Sony’s acquisition of the remaining approximately 60% equity interest in DH Publishing, L.P. (“EMI”), which owned and managed EMI Music Publishing: 116.9 billion yen (Music segment) |
• | An impairment charge against long-lived assets of the smartphone business: 19.2 billion yen (EP&S segment) |
• | An impairment charge against long-lived assets and goodwill of the storage media business: 12.9 billion yen (All Other) |
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Sales to external customers by product category |
||||||||
Digital Software and Add-on Content |
1,102,231 |
1,010,296 |
||||||
Network Services |
326,524 |
337,265 |
||||||
Hardware & Others |
795,867 |
572,199 |
||||||
Sales to external customers |
2,224,622 |
1,919,760 |
||||||
Intersegment sales |
86,250 |
57,791 |
||||||
G&NS segment total sales |
2,310,872 |
1,977,551 |
||||||
G&NS segment operating income |
311,092 |
238,400 |
||||||
(Units in millions) |
||||||||
Major product unit sales |
||||||||
PS4 hardware |
17.8 |
13.6 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Sales to external customers by product category |
||||||||
Recorded Music — Streaming |
227,513 |
276,039 |
||||||
Recorded Music — Others |
199,413 |
191,114 |
||||||
Music Publishing |
106,666 |
157,478 |
||||||
Visual Media & Platform |
261,433 |
213,961 |
||||||
Sales to external customers |
795,025 |
838,592 |
||||||
Intersegment sales |
12,464 |
11,317 |
||||||
Music segment total sales |
807,489 |
849,909 |
||||||
Music segment operating income |
232,487 |
142,345 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Sales to external customers by product category |
||||||||
Motion Pictures |
436,017 |
475,061 |
||||||
Television Productions |
288,816 |
301,224 |
||||||
Media Networks |
260,437 |
234,429 |
||||||
Sales to external customers |
985,270 |
1,010,714 |
||||||
Intersegment sales |
1,603 |
1,140 |
||||||
Pictures segment total sales |
986,873 |
1,011,854 |
||||||
Pictures segment operating income |
54,599 |
68,157 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Sales to external customers by product category |
||||||||
TVs |
788,423 |
646,513 |
||||||
Audio & Video |
362,580 |
346,060 |
||||||
Still and Video Cameras |
421,506 |
384,142 |
||||||
Mobile Communications |
487,330 |
362,144 |
||||||
Other |
243,328 |
231,021 |
||||||
Sales to external customers |
2,303,167 |
1,969,880 |
||||||
Intersegment sales |
17,461 |
21,388 |
||||||
EP&S segment total sales |
2,320,628 |
1,991,268 |
||||||
EP&S segment operating income |
76,508 |
87,276 |
||||||
(Units in millions) |
||||||||
Major product unit sales |
||||||||
TVs |
11.3 |
9.3 |
||||||
Digital cameras within Still and Video Cameras* |
3.6 |
2.9 |
||||||
Smartphones within Mobile Communications |
6.5 |
3.2 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Sales to external customers |
770,622 |
985,259 |
||||||
Intersegment sales |
108,708 |
85,317 |
||||||
I&SS segment total sales |
879,330 |
1,070,576 |
||||||
I&SS segment operating income |
143,874 |
235,584 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in billions) |
||||||||
G&NS |
75.1 |
56.3 |
||||||
EP&S |
221.3 |
206.5 |
||||||
I&SS |
253.4 |
250.5 |
||||||
Total |
549.8 |
513.3 |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
Japan |
16.6 |
% | 16.6 |
% | ||||
United States |
23.8 |
% | 26.7 |
% | ||||
Europe |
26.6 |
% | 24.7 |
% | ||||
China |
13.0 |
% | 12.3 |
% | ||||
Asia-Pacific (other than Japan and China) |
13.3 |
% | 13.0 |
% | ||||
Other |
6.7 |
% | 6.8 |
% | ||||
Total |
100 |
% | 100 |
% | ||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
In-house production |
64 |
% | 73 |
% | ||||
Outsourced production |
36 |
% | 27 |
% | ||||
Total |
100 |
% | 100 |
% | ||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
Japan |
47% (89% |
) | 63% (92% |
) | ||||
China |
19% (55% |
) | 12% (60% |
) | ||||
Asia-Pacific (other than Japan and China) |
31% (72% |
) | 24% (66% |
) | ||||
Americas and Europe |
3% (less than 5% |
) | 1% (20% |
) | ||||
Total |
100% |
100% |
||||||
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Financial services revenue |
1,282,539 |
1,307,748 |
||||||
Financial Services segment operating income |
161,477 |
129,597 |
Fiscal year ended March 31 |
||||||||
Financial Services segment |
2019 |
2020 |
||||||
(Yen in millions) |
||||||||
Financial services revenue |
1,282,539 |
1,307,748 |
||||||
Financial services expenses |
1,120,276 |
1,179,776 |
||||||
Other operating (income) expenses, net |
104 |
(1,729 |
) | |||||
|
|
|
|
|||||
1,120,380 |
1,178,047 |
|||||||
Equity in net loss of affiliated companies |
(682 |
) | (104 |
) | ||||
|
|
|
|
|||||
Operating income |
161,477 |
129,597 |
||||||
Other income (expenses), net |
(73 |
) | (20 |
) | ||||
|
|
|
|
|||||
Income before income taxes |
161,404 |
129,577 |
||||||
Income taxes |
44,763 |
36,311 |
||||||
|
|
|
|
|||||
Net income |
116,641 |
93,266 |
||||||
Less — Net income attributable to noncontrolling interests |
235 |
483 |
||||||
|
|
|
|
|||||
Net income of Financial Services |
116,406 |
92,783 |
||||||
|
|
|
|
|||||
Fiscal year ended March 31 |
||||||||
Sony without Financial Services segment |
2019 |
2020 |
||||||
(Yen in millions) |
||||||||
Net sales and operating revenue |
7,396,401 |
6,965,971 |
||||||
Costs of sales |
5,160,284 |
4,764,014 |
||||||
Selling, general and administrative |
1,572,714 |
1,497,764 |
||||||
Other operating (income) expense, net |
(71,672 |
) | (3,841 |
) | ||||
|
|
|
|
|||||
6,661,326 |
6,257,937 |
|||||||
Equity in net income (loss) of affiliated companies |
(2,317 |
) | 9,741 |
|||||
|
|
|
|
|||||
Operating income |
732,758 |
717,775 |
||||||
Other income (expenses), net |
133,929 |
(28,299 |
) | |||||
|
|
|
|
|||||
Income before income taxes |
866,687 |
689,476 |
||||||
Income taxes |
335 |
141,552 |
||||||
|
|
|
|
|||||
Net income |
866,352 |
547,924 |
||||||
Less — Net income attributable to noncontrolling interests |
8,778 |
7,092 |
||||||
|
|
|
|
|||||
Net income of Sony without Financial Services |
857,574 |
540,832 |
||||||
|
|
|
|
|||||
Fiscal year ended March 31 |
||||||||
Consolidated |
2019 |
2020 |
||||||
(Yen in millions) |
||||||||
Financial services revenue |
1,274,708 |
1,299,847 |
||||||
Net sales and operating revenue |
7,390,979 |
6,960,038 |
||||||
|
|
|
|
|||||
8,665,687 |
8,259,885 |
|||||||
Costs of sales |
5,150,750 |
4,753,174 |
||||||
Selling, general and administrative |
1,576,825 |
1,502,625 |
||||||
Financial services expenses |
1,112,446 |
1,171,875 |
||||||
Other operating (income) expenses, net |
(71,568 |
) | (3,611 |
) | ||||
|
|
|
|
|||||
7,768,453 |
7,424,063 |
|||||||
Equity in net income (loss) of affiliated companies |
(2,999 |
) | 9,637 |
|||||
|
|
|
|
|||||
Operating income |
894,235 |
845,459 |
||||||
Other income (expenses), net |
117,413 |
(46,009 |
) | |||||
|
|
|
|
|||||
Income before income taxes |
1,011,648 |
799,450 |
||||||
Income taxes |
45,098 |
177,190 |
||||||
|
|
|
|
|||||
Net income |
966,550 |
622,260 |
||||||
Less — Net income attributable to noncontrolling interests |
50,279 |
40,069 |
||||||
|
|
|
|
|||||
Net income attributable to Sony Corporation’s Stockholders |
916,271 |
582,191 |
||||||
|
|
|
|
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in millions) |
||||||||
Restructuring charges |
33,091 |
24,966 |
Fiscal year ended March 31 |
Impact of changes in foreign exchange rates |
|||||||||||||
2019 |
2020 |
2019 to 2020 |
||||||||||||
(Yen in billions) |
||||||||||||||
G&NS |
Sales |
2,310.9 |
1,977.6 |
(65.4) |
||||||||||
Operating income |
311.1 |
238.4 |
(12.2) |
|||||||||||
EP&S |
Sales |
2,320.6 |
1,991.3 |
(59.8) |
||||||||||
Operating income |
76.5 |
87.3 |
(23.0) |
|||||||||||
I&SS |
Sales |
879.3 |
1,070.6 |
(22.2) |
||||||||||
Operating income |
143.9 |
235.6 |
(18.2) |
Financial Services |
Sony without Financial Services |
Consolidated |
||||||||||||||||||||||
March 31 2019 |
March 31 2020 |
March 31 2019 |
March 31 2020 |
March 31 2019 |
March 31 2020 |
|||||||||||||||||||
(Yen in millions) |
||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||
Current assets: |
||||||||||||||||||||||||
Cash and cash equivalents (*1) |
509,595 |
550,039 |
960,478 |
962,318 |
1,470,073 |
1,512,357 |
||||||||||||||||||
Marketable securities (*2) |
1,324,538 |
1,847,772 |
— |
— |
1,324,538 |
1,847,772 |
||||||||||||||||||
Notes and accounts receivable, trade and contract assets |
16,479 |
10,532 |
1,055,669 |
999,976 |
1,065,802 |
1,002,920 |
||||||||||||||||||
Inventories |
— |
— |
653,278 |
589,969 |
653,278 |
589,969 |
||||||||||||||||||
Other receivables |
63,921 |
73,117 |
159,758 |
115,100 |
223,620 |
188,106 |
||||||||||||||||||
Prepaid expenses and other current assets |
133,214 |
181,247 |
376,778 |
413,496 |
509,301 |
594,021 |
||||||||||||||||||
Total current assets |
2,047,747 |
2,662,707 |
3,205,961 |
3,080,859 |
5,246,612 |
5,735,145 |
||||||||||||||||||
Film costs |
— |
— |
409,005 |
427,336 |
409,005 |
427,336 |
||||||||||||||||||
Investments and advances (*3) |
11,400,938 |
12,457,977 |
399,696 |
351,936 |
11,724,651 |
12,734,132 |
||||||||||||||||||
Investments in Financial Services, at cost |
— |
— |
153,968 |
153,968 |
— |
— |
||||||||||||||||||
Property, plant and equipment |
22,920 |
18,247 |
752,847 |
890,640 |
777,053 |
908,644 |
||||||||||||||||||
Other assets: |
||||||||||||||||||||||||
Right-of-use assets |
— |
58,897 |
— |
333,753 |
— |
392,610 |
||||||||||||||||||
Intangibles, net (*3) |
42,968 |
49,871 |
874,998 |
856,439 |
917,966 |
906,310 |
||||||||||||||||||
Goodwill (*3) |
7,225 |
10,834 |
761,327 |
773,054 |
768,552 |
783,888 |
||||||||||||||||||
Deferred insurance acquisition costs |
595,265 |
600,901 |
— |
— |
595,265 |
600,901 |
||||||||||||||||||
Deferred income taxes |
3,533 |
10,365 |
198,953 |
200,021 |
202,486 |
210,372 |
||||||||||||||||||
Other |
32,085 |
38,949 |
311,653 |
305,028 |
339,996 |
340,005 |
||||||||||||||||||
Total other assets |
681,076 |
769,817 |
2,146,931 |
2,468,295 |
2,824,265 |
3,234,086 |
||||||||||||||||||
Total assets |
14,152,681 |
15,908,748 |
7,068,408 |
7,373,034 |
20,981,586 |
23,039,343 |
||||||||||||||||||
Liabilities and Equity |
||||||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||||||
Short-term borrowings (*4) |
564,609 |
758,737 |
226,470 |
81,246 |
791,079 |
839,983 |
||||||||||||||||||
Short-term operating lease liabilities |
— |
9,363 |
— |
59,595 |
— |
68,942 |
||||||||||||||||||
Notes and accounts payable, trade |
— |
— |
492,124 |
380,810 |
492,124 |
380,810 |
||||||||||||||||||
Accounts payable, other and accrued expenses |
40,228 |
40,457 |
1,653,895 |
1,591,072 |
1,693,048 |
1,630,197 |
||||||||||||||||||
Accrued income and other taxes |
19,655 |
22,825 |
115,571 |
123,171 |
135,226 |
145,996 |
||||||||||||||||||
Deposits from customers in the banking business |
2,302,314 |
2,440,783 |
— |
— |
2,302,314 |
2,440,783 |
||||||||||||||||||
Other |
197,123 |
226,455 |
474,926 |
514,368 |
666,024 |
733,732 |
||||||||||||||||||
Total current liabilities |
3,123,929 |
3,498,620 |
2,962,986 |
2,750,262 |
6,079,815 |
6,240,443 |
||||||||||||||||||
Long-term debt |
235,761 |
240,143 |
336,349 |
398,793 |
568,372 |
634,966 |
||||||||||||||||||
Long-term operating lease liabilities |
— |
41,192 |
— |
273,668 |
— |
314,836 |
||||||||||||||||||
Accrued pension and severance costs |
33,979 |
34,211 |
350,253 |
290,444 |
384,232 |
324,655 |
||||||||||||||||||
Deferred income taxes |
355,356 |
391,883 |
176,065 |
173,022 |
531,421 |
549,538 |
||||||||||||||||||
Future insurance policy benefits and other (*5) |
5,642,671 |
6,246,047 |
— |
— |
5,642,671 |
6,246,047 |
||||||||||||||||||
Policyholders’ account in the insurance business |
3,048,202 |
3,642,271 |
— |
— |
3,048,202 |
3,642,271 |
||||||||||||||||||
Other |
15,488 |
21,843 |
288,164 |
289,574 |
281,382 |
289,285 |
||||||||||||||||||
Total liabilities |
12,455,386 |
14,116,210 |
4,113,817 |
4,175,763 |
16,536,095 |
18,242,041 |
||||||||||||||||||
Redeemable noncontrolling interest |
— |
— |
8,801 |
7,767 |
8,801 |
7,767 |
||||||||||||||||||
Equity: |
||||||||||||||||||||||||
Stockholders’ equity of Financial Services |
1,695,563 |
1,790,333 |
— |
— |
— |
— |
||||||||||||||||||
Stockholders’ equity of Sony without Financial Services |
— |
— |
2,850,380 |
3,159,071 |
— |
— |
||||||||||||||||||
Sony Corporation’s stockholders’ equity |
— |
— |
— |
— |
3,746,377 |
4,125,306 |
||||||||||||||||||
Noncontrolling interests |
1,732 |
2,205 |
95,410 |
30,433 |
690,313 |
664,229 |
||||||||||||||||||
Total Equity |
1,697,295 |
1,792,538 |
2,945,790 |
3,189,504 |
4,436,690 |
4,789,535 |
||||||||||||||||||
Total liabilities and equity |
14,152,681 |
15,908,748 |
7,068,408 |
7,373,034 |
20,981,586 |
23,039,343 |
||||||||||||||||||
March 31, 2020 |
||||||||||||||||
Cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||
(Yen in millions) |
||||||||||||||||
Financial Services Business: |
||||||||||||||||
Available-for-sale securities |
||||||||||||||||
Sony Life |
1,815,487 |
309,294 |
(484 |
) | 2,124,297 |
|||||||||||
Sony Bank |
702,462 |
3,601 |
(2,065 |
) | 703,998 |
|||||||||||
Other |
83,833 |
137 |
(822 |
) | 83,148 |
|||||||||||
Held-to-maturity securities |
||||||||||||||||
Sony Life |
7,334,780 |
2,439,769 |
(6,078 |
) | 9,768,471 |
|||||||||||
Sony Bank |
5,418 |
— |
(421 |
) | 4,997 |
|||||||||||
Other |
78,314 |
22,927 |
(73 |
) | 101,168 |
|||||||||||
Total Financial Services |
10,020,294 |
2,775,728 |
(9,943 |
) | 12,786,079 |
|||||||||||
Non-Financial Services: |
||||||||||||||||
Available-for-sale securities |
1,370 |
— |
— |
1,370 |
||||||||||||
Held-to-maturity securities |
— |
— |
— |
— |
||||||||||||
Total Non-Financial Services |
1,370 |
— |
— |
1,370 |
||||||||||||
Consolidated |
10,021,664 |
2,775,728 |
(9,943 |
) | 12,787,449 |
• Within 1 year: |
— |
|||
• 1 to 5 years: |
— |
|||
• 5 to 10 years: |
— |
|||
• above 10 years: |
100.0 |
% |
• Within 1 year: |
22.4 |
% | ||
• 1 to 5 years: |
59.1 |
% | ||
• 5 to 10 years: |
1.0 |
% | ||
• above 10 years: |
17.5 |
% |
Fiscal year ended March 31 |
||||||||||||||||||||||||
Financial Services |
Sony without Financial Services |
Consolidated |
||||||||||||||||||||||
2019 |
2020 |
2019 |
2020 |
2019 |
2020 |
|||||||||||||||||||
(Yen in millions) |
||||||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||||||
Net income (loss) |
116,641 |
93,266 |
866,352 |
547,924 |
966,550 |
622,260 |
||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||||||||||||||||||
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs |
91,179 |
106,667 |
282,847 |
309,975 |
374,026 |
416,642 |
||||||||||||||||||
Amortization of film costs |
— |
— |
348,493 |
329,809 |
348,493 |
329,809 |
||||||||||||||||||
Other operating (income) expense, net |
104 |
(1,729 |
) |
(71,672 |
) | (3,841 |
) |
(71,568 |
) | (3,611 |
) | |||||||||||||
(Gain) loss on marketable securities and securities investments, net |
(66,383 |
) | 93,088 |
(118,630 |
) | 20,177 |
(185,013 |
) | 113,265 |
|||||||||||||||
Changes in assets and liabilities: |
||||||||||||||||||||||||
(Increase) decrease in notes, accounts receivable, trade and contract assets |
(867 |
) | 5,947 |
2,056 |
55,466 |
1,144 |
62,654 |
|||||||||||||||||
(Increase) decrease in inventories |
— |
— |
30,455 |
40,315 |
30,455 |
40,315 |
||||||||||||||||||
(Increase) decrease in film costs |
— |
— |
(410,994 |
) | (361,194 |
) |
(410,994 |
) | (361,194 |
) | ||||||||||||||
Increase (decrease) in notes and accounts payable, trade |
— |
— |
18,534 |
(91,435 |
) |
18,534 |
(91,435 |
) | ||||||||||||||||
Increase (decrease) in future insurance policy benefits and other |
544,179 |
520,683 |
— |
— |
544,179 |
520,683 |
||||||||||||||||||
(Increase) decrease in deferred insurance acquisition costs |
(88,807 |
) | (99,433 |
) |
— |
— |
(88,807 |
) | (99,433 |
) | ||||||||||||||
(Increase) decrease in marketable securities held in the life insurance business |
(64,034 |
) | (124,270 |
) |
— |
— |
(64,034 |
) | (124,270 |
) | ||||||||||||||
Other |
(10,334 |
) | 10,021 |
(194,002 |
) | (84,346 |
) |
(204,227 |
) | (75,940 |
) | |||||||||||||
Net cash provided by (used in) operating activities |
521,678 |
604,240 |
753,439 |
762,850 |
1,258,738 |
1,349,745 |
||||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||||
Payments for purchases of fixed assets |
(18,610 |
) | (21,822 |
) |
(294,044 |
) | (420,149 |
) |
(312,644 |
) | (439,761 |
) | ||||||||||||
Payments for investments and advances |
(1,078,250 |
) | (1,319,888 |
) |
(53,525 |
) | (48,853 |
) |
(1,131,775 |
) | (1,367,915 |
) | ||||||||||||
Proceeds from sales or return of investments and collections of advances |
309,498 |
343,740 |
84,909 |
94,813 |
394,407 |
438,553 |
||||||||||||||||||
Other |
287 |
8,873 |
(257,719 |
) | 11,100 |
(257,433 |
) | 16,845 |
||||||||||||||||
Net cash provided by (used in) investing activities |
(787,075 |
) | (989,097 |
) |
(520,379 |
) | (363,089 |
) |
(1,307,445 |
) | (1,352,278 |
) | ||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||||||
Increase (decrease) in borrowings, net |
160,902 |
193,709 |
(325,247 |
) | (79,572 |
) |
(164,341 |
) | 113,724 |
|||||||||||||||
Increase (decrease) in deposits from customers, net |
246,945 |
258,720 |
— |
— |
246,945 |
258,720 |
||||||||||||||||||
Dividends paid |
(26,100 |
) | (27,189 |
) |
(38,067 |
) | (49,574 |
) |
(38,067 |
) | (49,574 |
) | ||||||||||||
Other |
112 |
61 |
(157,799 |
) | (247,754 |
) |
(167,421 |
) | (257,212 |
) | ||||||||||||||
Net cash provided by (used in) financing activities |
381,859 |
425,301 |
(521,113 |
) | (377,080 |
) |
(122,884 |
) | 65,658 |
|||||||||||||||
Effect of exchange rate changes on cash and cash equivalents |
— |
— |
52,465 |
(21,643 |
) |
52,465 |
(21,643 |
) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents, including restricted |
116,462 |
40,444 |
(235,588 |
) | 1,038 |
(119,126 |
) | 41,482 |
||||||||||||||||
Cash and cash equivalents, including restricted, at beginning of the fiscal year |
393,133 |
509,595 |
1,199,806 |
964,218 |
1,592,939 |
1,473,813 |
||||||||||||||||||
Cash and cash equivalents, including restricted, at end of the fiscal year |
509,595 |
550,039 |
964,218 |
965,256 |
1,473,813 |
1,515,295 |
||||||||||||||||||
Less — restricted cash and cash equivalents, included in other current assets and other assets |
— |
— |
3,740 |
2,938 |
3,740 |
2,938 |
||||||||||||||||||
Cash and cash equivalents at end of the fiscal year |
509,595 |
550,039 |
960,478 |
962,318 |
1,470,073 |
1,512,357 |
||||||||||||||||||
B. |
Liquidity and Capital Resources |
C. |
Research and Development |
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
(Yen in billions) |
||||||||
R&D costs |
||||||||
G&NS |
116.3 |
126.7 |
||||||
EP&S |
162.8 |
145.9 |
||||||
I&SS |
124.2 |
143.5 |
||||||
Corporate R&D |
45.9 |
44.1 |
||||||
Total |
481.2 |
499.3 |
||||||
D. |
Trend Information |
• | Content and Direct-to-Consumer (“DTC”) businesses that “move people’s hearts” |
• | Branded Hardware and CMOS (complementary metal oxide semiconductor) image sensors that “connect people to people” |
• | Automotive sensing, medical and financial services businesses that “support people” |
• | Launch of “Sony Group Corporation” as Sony Group headquarters (Effective April 1, 2021) |
• | Sony Corporation will change its company name to “Sony Group Corporation” as of April 1, 2021. |
• | Sony Corporation currently operates as the headquarters of the Sony Group, and provides headquarters support functions for its electronics business. As a result of the separation and redefinition of these functions, “Sony Group Corporation” will operate as the sole headquarters of the Sony Group. |
• | With the objective of increasing the corporate value of the entire Sony Group from a long-term perspective, the key missions of “Sony Group Corporation” will be: (1) business portfolio management and strategic capital allocation, (2) value creation through group synergies and business incubation, and (3) investment in talent and technology that form the foundations of innovation. Further details regarding specific functions, organizational structure and personnel will be determined by April 2021. |
• | The decision to change the company name and amend a part of the Articles of Incorporation was approved at the Ordinary General Meeting of Shareholders held on June 26, 2020. |
• | Sony Electronics Corporation to inherit the “Sony Corporation” company name (Effective April 1, 2021) |
• | In conjunction with the launch of “Sony Group Corporation” on April 1, 2021, Sony Electronics Corporation, which currently operates the electronics business (the EP&S segment) which was the origin of Sony’s business as a whole, will inherit the company name “Sony Corporation.” |
• | Sony Electronics Corporation was established as an intermediate holding company overseeing various Sony electronics subsidiaries effective April 1, 2020. Going forward, Sony Electronics Corporation will proceed with the realignment of its business entities and platform organizations and optimize its structure, talent and business portfolio, while further enhancing competitiveness and promoting new business creation. |
• | Financial Services business to become a wholly-owned subsidiary |
• | In order to achieve further growth and strengthen governance within the financial services business with the goal of enhancing the corporate value of the entire Sony Group, Sony Corporation resolved to make a tender offer for all of the common shares and related stock acquisition rights of SFH not held by Sony Corporation, of which it currently owns an approximately 65% stake, with a view to making SFH a wholly-owned subsidiary. Sony Corporation commenced the tender offer on May 20, 2020. Please also refer to Note 30 of the consolidated financial statements. |
• | The financial services business is a core business that is integral to the long-term growth strategies of the Sony Group. SFH has maintained its position as a listed subsidiary primarily considering its ability to flexibly procure capital for growth. However, Sony has decided to make a tender offer with the aim of making SFH a wholly-owned subsidiary in order to ensure the implementation of optimized strategies for each business, and to drive further group-wide synergies rather than continue to operate the business within certain constraints as a listed subsidiary. |
• | The two keywords for the future direction of PlayStation ® are “immersive” and “seamless.” |
• | The launch of PS5, scheduled for the 2020 holiday season, will deliver even more immersive experiences on a game console. In particular, higher speed achieved through improved computational power and a customized ultra-fast broadband solid state drive (SSD), enhanced sensory perceptions generated by the new revolutionary controller, and sound delivered in diverse and sophisticated 3D audio will combine to realize next-generation console game experiences unlike anything before. |
• | PS Now, a cloud streaming game service, and “Remote Play” functionality will provide a seamless game experience to users anytime and anywhere. |
• | Sony will pursue its mission to make PlayStation “The Best Place to Play” by leveraging the latest computing, streaming, cloud and 5G technologies, together with excellent content. |
• | To maximize the business opportunities from the continuing growth of the subscription digital streaming market, Sony will seek to reinforce the quality and quantity of its music catalog, while also discovering and nurturing new artists to generate new music content. |
• | The music business is expected to grow steadily due to the strengthening of the music publishing business through the consolidation of EMI in the fiscal year ended March 31, 2019 as well as the growth of the streaming market. |
• | The Sony Music Group, which combines the recorded music and the music publishing businesses outside of Japan, was established in August 2019. With a vision to become the most talent-friendly music company, the Sony Music Group will continue to support artists from all directions. |
• | Within Sony’s music business in Japan, Sony has created hits in diverse IP areas such as music, Japanese animation (“anime”) and character merchandising, and also plans to enhance its artist management business. |
• | As new DTC services are continuing to be introduced across the industry and demand for content is ever-increasing, Sony is investing in the development of owned IP and strengthening its creative capacity, as well as continuing to produce outstanding video content across diverse genres. |
• | Sony will continue to closely monitor the impact from the spread of COVID-19 on the consumption of video content going forward, while working with the creative community and its supply chain partners, including exhibitors, towards resuming theatrical release of its films. |
• | Sony aims to engage in group-wide efforts to deliver anime to audiences around the world through its anime DTC services. |
• | In China, where growth in digital entertainment is expected, Sony will strive to strengthen its relationships with local companies in areas such as anime, games and music. |
• | Sony defines the products that bear the Sony brand, including television, audio and video products, still and video cameras, as well as smartphones, collectively as Branded Hardware. Sony continues to introduce products and services that deliver the value of Reality (spatial value) and Real-Time (time value) through sound, video and communication technologies. Additionally, Sony will aim to address the increasing need for remote solutions that connect people to people, and people to things. |
• | In the medical business, Sony will reinforce its efforts to contribute to the health of people over the long-term by leveraging the imaging, display and mechatronics technologies which it has cultivated over many years. |
• | In light of the impact from the spread of COVID-19 on product demand and supply chains, Sony will engage in initiatives designed to enhance its business structure in response to changes in the business environment. |
• | Sony expects that the mid- to long-term demand for CMOS image sensors will continue to grow due to the adoption of multiple sensors and larger-sized sensors in smartphones. Although Sony is carefully reviewing investment in greater production capacity, taking into account the uncertain market environment mainly resulting from the impact of the spread of COVID-19, its goal of maintaining the global number one position in imaging applications, and becoming the global number one position in sensing remains unchanged. |
• | Sony is also strengthening its focus on sensing solutions for mobile devices that “connect people to people,” such as Time-of-Flight sensors, and automotive sensing solutions that “support people,” which are expected to grow over the long term. |
• | Based on its belief that CMOS image sensors will be key devices in the AI era, Sony intends to leverage its world-leading stacked CMOS image sensor technology and provide AI sensing solutions that deliver new value across a wide range of applications. |
• | Under the new SFH management team, initiatives will include measures to further increase the value generated by the Lifeplanner ® sales employees who constitute the core value of the life insurance business. |
• | Sony will also explore further opportunities for synergies including leveraging Sony’s technology in the Financial Services segment. |
• | Formulate targets and implement initiatives that leverage the distinctive characteristics of Sony’s businesses. Among these, reduce annual energy consumption by an average of 30% (compared to levels at the fiscal year ended March 31, 2014) in its products in the G&NS, EP&S and I&SS segments, and in the Music and Pictures segments, continue to look to use its content to raise awareness of sustainability issues and inspire environmentally conscious actions; |
• | Enhance efforts to reduce Sony’s environmental footprint across its entire value chain, including manufacturing partners and suppliers, by calling on them to reduce greenhouse gas (GHG) emissions and water consumption; and |
• | Accelerate the use of renewable energy. |
E. |
Off-balance Sheet Arrangements |
F. |
Contractual Obligations, Commitments, and Contingent Liabilities |
Total |
Less than 1 year |
1 to 3 years |
3 to 5 years |
More than 5 years |
||||||||||||||||
(Yen in millions) |
||||||||||||||||||||
Contractual obligations and commitments: |
||||||||||||||||||||
Short-term debt (Note 11) |
810,176 |
810,176 |
— |
— |
— |
|||||||||||||||
Long-term debt (Notes 8 and 11) |
||||||||||||||||||||
Finance lease obligations and other |
56,350 |
14,216 |
15,593 |
10,011 |
16,530 |
|||||||||||||||
Other long-term debt |
608,423 |
15,591 |
373,126 |
114,953 |
104,753 |
|||||||||||||||
Interest on other long-term debt |
4,409 |
1,489 |
1,075 |
729 |
1,116 |
|||||||||||||||
Operating lease obligations, including imputed interest (Note 8) |
424,965 |
76,469 |
125,254 |
70,967 |
152,275 |
|||||||||||||||
Purchase commitments (Note 28) |
||||||||||||||||||||
Contracts for the production or purchase of motion pictures, television programming or certain rights and rights to broadcast certain live action sporting events |
126,917 |
56,385 |
52,372 |
17,480 |
680 |
|||||||||||||||
Contracts with recording artists, songwriters and companies |
128,678 |
56,662 |
33,360 |
16,576 |
22,080 |
|||||||||||||||
Sponsorship contracts related to advertising and promotional rights |
5,162 |
4,602 |
560 |
— |
— |
|||||||||||||||
Long-term contracts for development, distribution and publishing of game software |
29,243 |
5,083 |
4,571 |
5,115 |
14,474 |
|||||||||||||||
Purchase commitments for fixed assets, materials, and other |
394,911 |
255,587 |
88,711 |
47,314 |
3,299 |
|||||||||||||||
Future insurance policy benefits and other and policyholders’ account in the life insurance business* (Note 10) |
26,457,407 |
594,903 |
1,299,026 |
1,370,756 |
23,192,722 |
|||||||||||||||
Gross unrecognized tax benefits** (Note 22) |
41,268 |
— |
— |
— |
— |
|||||||||||||||
Total |
29,087,909 |
1,891,163 |
1,993,648 |
1,653,901 |
23,507,929 |
• | The total amount of expected future pension payments is not included as such amount is not currently determinable. Sony expects to contribute approximately 2 billion yen to Japanese defined benefit pension plans and approximately 8 billion yen to foreign defined benefit pension plans during the fiscal year ending March 31, 2021. Refer to Note 15 of the consolidated financial statements. |
• | The total unused portion of the line of credit extended under loan agreements in the Financial Services segment is not included in the above table as it is not foreseeable what loans will be incurred under such line of credit. The total unused portion of the line of credit extended under these contracts was approximately 34.3 billion yen as of March 31, 2020. Refer to Note 28 of the consolidated financial statements. |
• | Purchases made during the ordinary course of business from certain component manufacturers and contract manufacturers in order to establish the best pricing and continuity of supply for Sony’s production are not included as there are typically no binding purchase obligations. Purchase obligations are defined as contractual obligations to purchase goods or services that are enforceable and legally binding on Sony. These obligations specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the transaction. Purchase obligations do not include contracts that may be cancelled without penalty. These purchases include arrangements with certain component manufacturers whereby Sony procures goods, including product components, for these component manufacturers and is reimbursed for the related purchases. This allows Sony’s supply chain management to have flexible and mutually beneficial purchase arrangements with these manufacturers in order to minimize inventory risk. Consistent with industry practice, Sony purchases processed goods that meet technical criteria from these component manufacturers after issuing to these manufacturers information on Sony’s projected demand and manufacturing needs. |
Yen in millions |
||||
Game & Network Services |
170,974 |
|||
Music |
391,325 |
|||
Pictures |
152,374 |
|||
Electronics Products & Solutions |
12,189 |
|||
Imaging & Sensing Solutions |
46,192 |
|||
Financial Services |
10,834 |
|||
Total |
783,888 |
|||
• | The discount rates ranged from 5.2% to 10.8%. A hypothetical one percentage point increase in the discount rate, holding all other assumptions constant, would not have resulted in an impairment. |
• | The growth rates applied to the terminal values for reporting units within the G&NS, EP&S and I&SS and Financial Services segments ranged from approximately 1.0% to 1.5%. The growth rates beyond the MRP period for the reporting units in the Music segment ranged from 0% to 5.2%, and in the Pictures segment ranged from 3.0% to 4.5%. A hypothetical one percentage point decrease in the growth rate, holding all other assumptions constant, would not have resulted in an impairment. |
• | The earnings multiple used to calculate the terminal value in the Pictures reporting units ranged from 9.0x to 10.0x. A hypothetical reduction in the earnings multiple by 1.0x, holding all other assumptions constant, would not have resulted in an impairment. |
Change in assumption |
Projected benefit obligations |
Pension costs |
Net income |
|||||||||
(Yen in billions) |
||||||||||||
25 basis point increase / decrease in discount rate |
-/+18.6 |
+ /-0.2 |
-/+0.1 |
|||||||||
25 basis point increase / decrease in expected long-term rate of return on pension plan assets |
— |
-/+1.1 |
+/-0.7 |
Item 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Kenichiro Yoshida | ||
Responsibility as a Director: Member of the Nominating Committee | ||
Date of Birth: October 20, 1959 | ||
Number of Years Served as a Director: 6 years | ||
Principal Business Activities Outside the Corporation: Outside Director, M3, Inc. | ||
Brief Personal History: | ||
April 1983 |
Joined Sony Corporation | |
July 2000 |
Joined Sony Communication Network Corporation (currently Sony Network Communications Inc.) | |
May 2001 |
SVP, Sony Communication Network Corporation | |
April 2005 |
President and Representative Director, Sony Communication Network Corporation | |
December 2013 |
EVP, CSO and Deputy CFO, Corporate Executive Officer, Sony Corporation | |
April 2014 |
EVP and CFO, Representative Corporate Executive Officer, Sony Corporation | |
June 2014 |
Director, Sony Corporation (present) | |
April 2015 |
Executive Deputy President and CFO, Representative Corporate Executive Officer, Sony Corporation | |
April 2018 |
President and CEO, Representative Corporate Executive Officer, Sony Corporation | |
June 2020 |
Chairman, President and CEO, Representative Corporate Executive Officer, Sony Corporation (present) | |
Hiroki Totoki | ||
Responsibility as a Director: — | ||
Date of Birth: July 17, 1964 | ||
Number of Years Served as a Director: 1 year | ||
Principal Business Activities Outside the Corporation: Outside Director, Recruit Co., Ltd. | ||
Brief Personal History: | ||
April 1987 |
Joined Sony Corporation | |
February 2002 |
Representative Director, Sony Bank Incorporated | |
June 2005 |
Director, Corporate Executive Officer and Senior Managing Director, Sony Communication Network Corporation (currently Sony Network Communications Inc.) | |
April 2012 |
Representative Director, Corporate Executive Officer and Senior Managing Director, So-net Entertainment Corporation (currently Sony Network Communications Inc.) | |
April 2013 |
Representative Director, Corporate Executive Officer, Deputy President and CFO, So-net Entertainment Corporation | |
December 2013 |
SVP, Corporate Executive, Sony Corporation Corporate Executive in charge of Business Strategy, Corporate Development and Transformation | |
November 2014 |
President and CEO, Sony Mobile Communications Inc. | |
June 2015 |
Director, Chairman, So-net Corporation (currently Sony Network Communications Inc.) | |
April 2016 |
EVP, Corporate Executive Officer, Sony Corporation Officer in charge of New Business Platform Strategy, Sony Corporation President and Representative Director, So-net Corporation | |
June 2017 |
CSO, Sony Corporation Officer in Charge of Mid-to-Long Term Business Strategy, New Business | |
April 2018 |
Representative Corporate Executive Officer, CFO, Sony Corporation | |
June 2018 |
Senior EVP, Sony Corporation | |
Outside Director, Recruit Co., Ltd. (present) | ||
June 2019 |
Director, Sony Corporation (present) | |
June 2020 |
Executive Deputy President and CFO, Representative Corporate Executive Officer, Sony Corporation (present) |
Shuzo Sumi | ||
Responsibility as a Director: Chairman of the Board Chair of the Nominating Committee | ||
Date of Birth: July 11, 1947 | ||
Number of Years Served as a Director: 3 years | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
April 1970 |
Joined Tokio Marine & Fire Insurance Co., Ltd. | |
June 2000 |
Director and Chief Representative in London, Overseas Division, Tokio Marine & Fire Insurance Co., Ltd. | |
June 2002 |
Managing Director, Tokio Marine & Fire Insurance Co., Ltd. | |
October 2004 |
Managing Director, Tokio Marine & Nichido Fire Insurance Co., Ltd. | |
June 2005 |
Senior Managing Director, Tokio Marine & Nichido Fire Insurance Co., Ltd. | |
June 2007 |
President & Chief Executive Officer, Tokio Marine & Nichido Fire Insurance Co., Ltd. President & Chief Executive Officer, Tokio Marine Holdings, Inc. | |
June 2013 |
Chairman of the Board, Tokio Marine & Nichido Fire Insurance Co., Ltd. Chairman of the Board, Tokio Marine Holdings, Inc. | |
June 2014 |
Outside Director, Toyota Industries Corporation (present) | |
April 2016 |
Senior Executive Advisor, Tokyo Marine & Nichido Fire Insurance Co., Ltd. (present) | |
June 2017 |
Director, Sony Corporation (present) | |
Tim Schaaff | ||
Responsibility as a Director: Director in charge of Information Security | ||
Date of Birth: December 5, 1959 | ||
Number of Years Served as a Director: 7 years | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
December 1982 |
Joined New England Digital Corporation | |
July 1991 |
Joined Apple Computer, Inc. | |
1998 |
Vice President, Apple Computer, Inc. | |
December 2005 |
Senior Vice President, Sony Corporation of America | |
November 2006 |
Deputy President, Technology Development Group, Sony Corporation | |
June 2008 |
President, Sony Media Software and Services Inc. | |
December 2009 |
Director, President, Sony Network Entertainment International LLC | |
June 2013 |
Director, Sony Corporation (present) | |
July 2015 |
Chief Product Officer, Intertrust Technologies Corporation (present) | |
Kazuo Matsunaga | ||
Responsibility as a Director: Vice Chairman of the Board Chair of the Audit Committee | ||
Date of Birth: February 28, 1952 | ||
Number of Years Served as a Director: 6 years | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
April 1974 |
Joined the Ministry of International Trade and Industry (currently Ministry of Economy, Trade and Industry (“METI”)) | |
June 2004 |
Director-General, Nuclear and Industrial Safety Agency, METI | |
September 2005 |
Assistant Vice-Minister, Minister’s Secretariat, METI | |
July 2006 |
Deputy Vice-Minister, Minister’s Secretariat, METI | |
July 2008 |
Director-General, Economic and Industrial Policy Bureau, METI | |
July 2010 |
Vice-Minister of Economy, Trade and Industry, METI | |
April 2012 |
Specially-appointed Professor, Graduate School of International Corporate Strategy, Hitotsubashi University (present) | |
June 2013 |
Outside Director, Takasago Thermal Engineering Co., Ltd. (present) | |
June 2014 |
Director, Sony Corporation (present) Outside Director, Hashimoto Sogyo Co., Ltd. (currently Hashimoto Sogyo Holdings Co., Ltd.) (present) | |
April 2016 |
Vice Chairman of the Board, Mitsubishi Fuso Truck and Bus Corporation | |
January 2017 |
Chairman of the Board, Mitsubishi Fuso Truck and Bus Corporation (present) |
Toshiko Oka | ||
Responsibility as a Director: Member of the Audit Committee | ||
Date of Birth: March 7, 1964 | ||
Number of Years Served as a Director: 2 years | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
April 1986 |
Joined Tohmatsu Touche Ross Consulting Limited | |
July 2000 |
Joined Asahi Arthur Anderson Limited | |
September 2002 |
Principal, Deloitte Tohmatsu Consulting Co., Ltd. (currently ABeam Consulting Ltd.) | |
April 2005 |
President and Representative Director, ABeam M&A Consulting Ltd. (currently PwC Advisory LLC) | |
April 2016 |
Partner, PwC Advisory LLC | |
June 2016 |
CEO, Oka & Company Ltd. (present) Outside Director, Hitachi Metals, Ltd. (present) | |
June 2018 |
Director, Sony Corporation (present) | |
June 2019 |
Outside Director, Happinet Corporation (present) | |
June 2020 |
Outside Director, JXTG Holdings, Inc. (present) | |
Sakie Akiyama | ||
Responsibility as a Director: Member of the Compensation Committee | ||
Date of Birth: December 1, 1962 | ||
Number of Years Served as a Director: 1 year | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
April 1987 |
Joined Arthur Andersen & Co. | |
April 1994 |
Founder and CEO, Saki Corporation | |
October 2018 |
Founder, Saki Corporation (present) | |
June 2019 |
Director, Sony Corporation (present) Outside Director, Japan Post Holdings Co., Ltd. (present) Outside Director, Orix Corporation (present) | |
June 2020 |
Outside Director, Mitsubishi Corporation (present) | |
Wendy Becker | ||
Responsibility as a Director: Chair of the Compensation Committee | ||
Date of Birth: November 2, 1965 | ||
Number of Years Served as a Director: 1 year | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
September 1987 |
Brand Manager, Procter & Gamble Company | |
September 1993 |
Consultant, McKinsey & Company, Inc. | |
December 1998 |
Partner, McKinsey & Company, Inc. | |
February 2008 |
Management Director, Residential, TalkTalk, The Carphone Warehouse Ltd. Board member, Member of Remuneration Committee, Whitbread plc | |
September 2009 |
Chief Marketing Officer, Vodafone Group plc | |
September 2012 |
Chief Operating Officer, Jack Wills Ltd. | |
October 2013 |
CEO, Jack Wills Ltd. | |
February 2017 |
Board member, Chair of Remuneration Committee, Great Portland Estates plc (present) | |
September 2017 |
Board member, Logitech International S.A. (present) | |
June 2019 |
Director, Sony Corporation (present) | |
September 2019 |
Chair of the Board, Logitech International S.A. (present) |
Yoshihiko Hatanaka | ||
Responsibility as a Director: Member of the Nominating Committee | ||
Date of Birth: April 20, 1957 | ||
Number of Years Served as a Director: 1 year | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
April 1980 |
Joined Fujisawa Pharmaceutical Co., Ltd. (currently Astellas Pharma Inc.) | |
June 2005 |
Corporate Executive, Vice President, Corporate Planning, Corporate Strategy, Astellas Pharma Inc. | |
April 2006 |
Corporate Executive of Astellas Pharma Inc. and President & CEO, Astellas US LLC and President & CEO, Astellas Pharma US, Inc. | |
June 2008 |
Senior Corporate Executive of Astellas Pharma Inc. and President & CEO, Astellas US LLC and President & CEO, Astellas Pharma US, Inc. | |
April 2009 |
Senior Corporate Executive, Chief Strategy Officer and Chief Financial Officer, Astellas Pharma Inc. | |
June 2011 |
Representative Director, President & CEO, Astellas Pharma Inc. | |
April 2018 |
Representative Director, Chairman of the Board, Astellas Pharma Inc. (present) | |
June 2019 |
Director, Sony Corporation (present) | |
Adam Crozier | ||
Responsibility as a Director: Member of the Nominating Committee | ||
Date of Birth: January 26, 1964 | ||
Number of Years Served as a Director: — | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
January 1995 |
Joint CEO, Saatchi & Saatchi Group Ltd. | |
January 2000 |
CEO, The Football Association | |
February 2003 |
CEO, Royal Mail Group Ltd. | |
April 2010 |
CEO, ITV plc | |
April 2017 |
Non-Executive Chairman, Whitbread Group plc (present) | |
December 2018 |
Non-Executive Chairman, ASOS plc (present) | |
February 2020 |
Non-Executive Chairman, Kantar Group Ltd. (present) | |
June 2020 |
Director, Sony Corporation (present) | |
Keiko Kishigami | ||
Responsibility as a Director: Member of the Audit Committee | ||
Date of Birth: January 28, 1957 | ||
Number of Years Served as a Director: — | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
October 1985 |
Joined Peat Marwick Minato (currently Ernst & Young ShinNihon LLC) | |
August 1989 |
Registered as Certified Public Accountant (present) | |
December 1997 |
Partner, Century Audit Corporation (currently Ernst & Young ShinNihon LLC) | |
May 2004 |
Representative Partner (position currently defined as “Senior Partner”), Ernst & Young ShinNihon (currently Ernst & Young ShinNihon LLC) | |
September 2018 |
Board Member, WWF Japan (present) | |
June 2019 |
Outside Auditor, Okamura Corporation (present) | |
June 2020 |
Director, Sony Corporation (present) Outside Auditor, Sumitomo Seika Chemicals Company, Limited (present) | |
Joseph A. Kraft Jr. | ||
Responsibility as a Director: Member of the Compensation Committee Director in charge of Information Security | ||
Date of Birth: May 12, 1964 | ||
Number of Years Served as a Director: — | ||
Brief Personal History and Principal Business Activities Outside the Corporation: | ||
July 1986 |
Joined Morgan Stanley Inc. | |
January 2000 |
Managing Director, Morgan Stanley Inc. | |
April 2007 |
Managing Director, Head of Capital Markets Division, Dresdner Kleinwort Japan | |
March 2010 |
Deputy Branch Manager & Managing Director, Bank of America Merrill Lynch Japan | |
July 2015 |
CEO, Rorschach Advisory Inc. (present) | |
June 2020 |
Director, Sony Corporation (present) |
Shigeki Ishizuka | ||
Responsibility as an Officer: Vice Chairman, Representative Corporate Executive Officer, Officer in charge of Electronics Products & Solutions and Storage Media Businesses | ||
Date of Birth: November 14, 1958 | ||
Number of Years Served as a Corporate Executive Officer: — | ||
Principal Business Activities Outside Sony: None | ||
Brief Personal History: | ||
April 1981 |
Joined Sony Corporation | |
August 2004 |
Managing Director, Corporate Executive, Sony EMCS Corporation (currently Sony Global Manufacturing & Operations Corporation) | |
November 2006 |
President, Digital Imaging Business Group, Sony Corporation | |
June 2007 |
SVP, Corporate Executive, Sony Corporation | |
June 2009 |
President, Device Solutions Business Group, Sony Corporation | |
April 2012 |
President, Digital Imaging Business Group, Sony Corporation | |
April 2015 |
EVP, Corporate Executive Officer, Sony Corporation | |
April 2017 |
Representative Director and President, Sony Imaging Products & Solutions Inc. (present) | |
June 2018 |
Senior EVP, Sony Corporation | |
April 2020 |
Representative Director, President and CEO, Sony Electronics Corporation (present) | |
June 2020 |
Vice Chairman, Representative Corporate Executive Officer, Sony Corporation (present) | |
Toru Katsumoto | ||
Responsibility as an Officer: Executive Deputy President, Corporate Executive Officer, Officer in charge of R&D and Medical Business | ||
Date of Birth: October 14, 1957 | ||
Number of Years Served as a Corporate Executive Officer: 2 years | ||
Principal Business Activities Outside Sony: None | ||
Brief Personal History: | ||
April 1982 |
Joined Sony Corporation | |
November 2012 |
SVP, Corporate Executive, Sony Corporation | |
April 2013 |
Representative Director and President, Sony Olympus Medical Solutions Inc. | |
January 2016 |
Director, Sony Olympus Medical Solutions Inc. (present) | |
January 2017 |
President, Medical Business Group, Sony Corporation | |
April 2017 |
Representative Director and Deputy President, Sony Imaging Products & Solutions Inc. (present) | |
April 2018 |
EVP, Corporate Executive Officer, Sony Corporation | |
June 2019 |
Senior EVP, Corporate Executive Officer, Sony Corporation | |
June 2020 |
Executive Deputy President, Corporate Executive Officer, Sony Corporation (present) | |
Shiro Kambe | ||
Responsibility as an Officer: Senior EVP, Officer in charge of Legal, Compliance, Corporate Communications, Sustainability, External Relations, Quality, Information Security and Privacy | ||
Date of Birth: December 18, 1961 | ||
Number of Years Served as a Corporate Executive Officer: 6 years | ||
Principal Business Activities Outside Sony: None | ||
Brief Personal History: | ||
April 1984 |
Joined Sony Corporation | |
June 2010 |
SVP, Corporate Executive, Sony Corporation | |
June 2014 |
EVP, Corporate Executive Officer, Sony Corporation | |
June 2020 |
Senior EVP, Corporate Executive Officer, Sony Corporation (present) |
Responsibility as an Officer: Senior EVP, Officer in charge of Human Resources and General Affairs | ||
Date of Birth: April 23, 1961 | ||
Number of Years Served as a Corporate Executive Officer: 4 years | ||
Principal Business Activities Outside Sony: None | ||
Brief Personal History: | ||
April 1984 |
Joined Sony Corporation | |
October 2001 |
Vice President, Sony Ericsson Mobile Communications | |
April 2006 |
Senior Vice President, Sony Corporation of America | |
November 2014 |
SVP, Corporate Executive, Sony Corporation | |
June 2016 |
EVP, Corporate Executive Officer, Sony Corporation | |
June 2020 |
Senior EVP, Corporate Executive Officer, Sony Corporation (present) |
B. |
Compensation |
Fixed remuneration |
Remuneration linked to business results |
Phantom restricted stock plan |
|||||||||||||||||||||||||||
Number of persons |
Amount (Yen in millions) |
Number of persons |
Amount (Yen in millions) |
Number of persons |
Amount (Yen in millions) |
||||||||||||||||||||||||
Directors |
14 |
210 |
— |
— |
3 |
111 |
|||||||||||||||||||||||
(*1) (*2) |
(*3) |
||||||||||||||||||||||||||||
(Outside Directors) |
(12) |
(174) |
(—) |
(—) |
(3) |
(111) |
|||||||||||||||||||||||
Corporate Executive Officers |
5 |
360 |
5 |
446 |
— |
— |
|||||||||||||||||||||||
(*2) |
(*4) |
||||||||||||||||||||||||||||
Total (*6) |
19 |
570 |
5 |
446 |
3 |
111 |
|||||||||||||||||||||||
(*5) |
Name |
Position (*1) |
Fixed Remuneration (*2) (Yen in millions) |
Remuneration linked to business results (*2) (*3) (Yen in millions) |
Phantom restricted stock plan (Yen in millions) |
Total (*2) (Yen in millions) |
Granted number of stock acquisition rights (*4) (Ten thousand shares) |
Granted number of restricted stock (*5) (Ten thousand shares) |
||||||||||||||||||||
Kenichiro Yoshida |
Sony Corporation Director, Chairman, President & CEO, and Representative Corporate Executive Officer (*6) (*7) |
175 |
279 |
— |
454 |
15 |
5 |
||||||||||||||||||||
Hiroki Totoki |
Sony Corporation Director, Executive Deputy President & CFO, and Representative Corporate Executive Officer (*6) (*7) |
59 |
56 |
— |
115 |
3 |
1.5 |
||||||||||||||||||||
Toru Katsumoto |
Sony Corporation Executive Deputy President, Corporate Executive Officer (*7) |
48 (*8) |
46 (*8) |
— |
93 (*8) |
2 |
1 |
||||||||||||||||||||
Shiro Kambe |
Sony Corporation Senior Executive Vice President, Corporate Executive Officer |
42 |
39 |
— |
81 |
2 |
0.6 |
||||||||||||||||||||
Kazushi Ambe |
Sony Corporation Senior Executive Vice President, Corporate Executive Officer |
40 |
36 |
— |
75 |
2 |
0.6 |
• | Attracting and retaining an adequate talent pool of Directors possessing the requisite abilities to excel in the global marketplace; and |
• | Ensuring the effectiveness of the supervisory function of Directors. |
• | Fixed remuneration; |
• | Remuneration linked to stock price; and |
• | Phantom Restricted Stock Plan. |
• | Attracting and retaining an adequate talent pool possessing the requisite abilities to excel in the global marketplace; and |
• | Providing effective incentives to improve business results on a short-, medium- and long- term basis. |
• | Fixed remuneration; |
• | Remuneration linked to business results; |
• | Remuneration linked to stock price; and |
• | Phantom Restricted Stock Plan. |
KPI |
Weight |
Target to be achieved for the fiscal year ended March 31, 2020 (Consolidated) |
Result for the fiscal year ended March 31, 2020 (Consolidated) |
||||||||
Operating CF |
50% |
Amount determined in order to achieve the Operating CF (as defined below) target under Sony’s Third Mid-Range Plan of 2.2 trillion yen or more for the three-year period from the fiscal year ended March 31, 2019 |
762.9 billion yen |
||||||||
Net Income attributable to Sony Corporation’s Stockholders |
40% |
500 billion yen |
582.2 billion yen |
||||||||
ROE |
10% |
12.5% |
14.8% |
C. |
Board Practices |
Name |
Position | ||
Kenichiro Yoshida |
Director | ||
Hiroki Totoki |
Director | ||
Shuzo Sumi |
Chairman of the Board Outside Director | ||
Tim Schaaff |
Non-Executive Director | ||
Kazuo Matsunaga |
Vice Chairman of the Board Outside Director | ||
Toshiko Oka |
Outside Director | ||
Sakie Akiyama |
Outside Director | ||
Wendy Becker |
Outside Director | ||
Yoshihiko Hatanaka |
Outside Director | ||
Adam Crozier |
Outside Director | ||
Keiko Kishigami |
Outside Director | ||
Joseph A. Kraft Jr. |
Outside Director |
(a) | He/she shall not be a director, a statutory auditor, a corporate executive officer, a general manager or other employee of any company in competition with Sony in any of Sony’s principal businesses (a “Competing Company”) or own 3% or more of the shares of any Competing Company. |
(b) | He/she shall not be or have been a representative partner or partner of Sony’s independent auditor the past three years before being nominated as a Director. |
(c) | He/she shall not have any connection with any matter that may cause a material conflict of interest in performing the duties of a Director. |
(a) | He/she shall not have received directly from Sony, during any consecutive twelve-month period within the last three years, more than an amount equivalent to U.S. $120,000, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). |
(b) | He/she shall not be an executive director, corporate executive officer, general manager or other employee of any company whose aggregate amount of transactions with Sony, in any of the last three fiscal years, exceeds the greater of an amount equivalent to U.S. $1,000,000, or 2% of the annual consolidated sales of such company. |
(i) | In a case where a non-executive Director is liable to the company after the execution of the liability limitation agreement for damages pursuant to Article 423, Paragraph 1 of the Companies Act, such liabilities shall be limited to the greater of either 30 million yen or an amount equal to the aggregate sum of the amounts prescribed in each item of Article 425, Paragraph 1 of the Companies Act, only where the non-executive Director acted in good faith without any gross negligence in performing his/her duties as a Director of the company. |
(ii) | In a case where a non-executive Director is reelected as a non-executive Director of the company and reassumes his/her office as such on the expiration of the term of his/her office as a non-executive Director of the company, the liability limitation agreement shall continue to be effective after the reelection and re-assumption without any action or formality. |
(1) | Members: 4 Directors including 3 outside Directors (as of June 26, 2020) |
Name |
Position | ||
Shuzo Sumi |
Chairman of the Nominating Committee (Outside Director) | ||
Adam Crozier |
Nominating Committee Member (Outside Director) | ||
Yoshihiko Hatanaka |
Nominating Committee Member (Outside Director) | ||
Kenichiro Yoshida |
Nominating Committee Member (Director) |
Name |
Position | ||
Kazuo Matsunaga |
Chairman of the Audit Committee (Outside Director) | ||
Toshiko Oka |
Audit Committee Member (Outside Director) | ||
Keiko Kishigami |
Audit Committee Member (Outside Director) |
Name |
Position | ||
Wendy Becker |
Chairman of the Compensation Committee (Outside Director) | ||
Sakie Akiyama |
Compensation Committee Member (Outside Director) | ||
Joseph A. Kraft Jr. |
Compensation Committee Member (Outside Director) |
• | Reviewed relevant material, such as the minutes of Board meetings, and attended a Board meeting; |
• | Confirmed with the Board secretariat office and each Committee’s secretariat office how meetings of the Board and Committees were conducted; |
• | Gathered responses to a questionnaire from each Director about the current status and practices of the Board and each Committee, such as the composition of the Board, operation of the Board, commitments of each Director, activities of each Committee and procedures of the previous Evaluation; |
• | Interviewed the Chairman of the Board, newly-appointed Directors, a Director who is concurrently in the position of the CEO, and certain additional Directors about the Board and Committee status and practices; and |
• | Researched other global companies’ practices in Japan, the United States and Europe, and compared them with the company’s practices. |
• | Enhanced diversity in the boardroom (by newly appointing two non-Japanese and one female Directors as outside Directors); |
• | Continuously made periodic reports to the Board on ESG (Environment, Social and Governance) related matters; |
• | Focused on information security continuously through the Director in charge of Information Security; |
• | Held additional executive sessions; |
• | Expanded disclosure regarding compensation of Directors and Senior Executives; and |
• | Conducted visiting audits by Audit Committee members at Sony’s business sites. |
D. |
Employees |
March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
By segment: |
||||||||||||
G&NS, EP&S and I&SS total |
77,400 |
75,600 |
73,000 |
|||||||||
Music |
8,200 |
8,500 |
9,900 |
|||||||||
Pictures |
9,800 |
9,300 |
8,400 |
|||||||||
Financial Services |
11,400 |
11,800 |
12,300 |
|||||||||
All Other |
5,300 |
4,000 |
3,200 |
|||||||||
Unallocated — Corporate employees |
5,200 |
5,200 |
4,900 |
|||||||||
By region: |
||||||||||||
Japan |
51,500 |
52,200 |
53,700 |
|||||||||
Outside of Japan |
65,800 |
62,200 |
58,000 |
|||||||||
Total |
117,300 |
114,400 |
111,700 |
|||||||||
E. |
Share Ownership |
Year granted (Fiscal year ended March 31) |
Total number of shares subject to stock acquisition rights |
Exercise price per share |
||||||
(in thousands) |
||||||||
2020 |
240 |
6,705 yen |
||||||
2019 |
230 |
6,440 yen |
||||||
2018 |
208 |
5,231 yen |
||||||
2017 |
244 |
3,364 yen |
||||||
2016 |
58 |
3,404 yen |
||||||
2015 |
114 |
2,410.5 yen |
||||||
2014 |
10 |
2,007 yen |
||||||
2012 |
7 |
1,523 yen |
||||||
2011 |
3 |
2,945 yen |
Item 7. |
Major Shareholders and Related Party Transactions |
A. |
Major Shareholders |
Date of Report* |
Reported entities |
Reported number of direct or indirect owned and deemed owned shares** |
Reported percentage of direct or indirect owned and deemed owned shares** |
|||||||
March 22, 2017 |
BlackRock Japan Co., Ltd. |
79,184,569 |
6.27 |
|||||||
September 20, 2019 |
Sumitomo Mitsui Trust Asset Management Co., Ltd. |
72,545,958 |
5.70 |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
Item 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
Item 9. |
The Offer and Listing |
A. |
Offer and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
Item 10. |
Additional Information |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
(i) | manufacture and sale of electronic and electrical machines and equipment, medical instruments, optical instruments and other equipment, machines and instruments; |
(ii) | planning, production and sale of audio-visual software and computer software programs; |
(iii) | manufacture and sale of metal industrial products, chemical industrial products and ceramic industrial products, textile products, paper products and wood-crafted articles, daily necessities, foodstuffs and toys, transportation machines and equipment, and petroleum and coal products; |
(iv) | real estate activities, construction business, transportation business and warehousing business; |
(v) | publishing business and printing business; |
(vi) | advertising agency business, insurance agency business, broadcasting enterprise, recreation business such as travel, management of sporting facilities, etc. and other service enterprises; |
(vii) | financial business; |
(viii) | Type I and Type II telecommunications business under the Telecommunications Business Law; |
(ix) | investing in stocks and bonds, etc.; |
(x) | manufacture, sale, export and import of products which are incidental to or related to those mentioned above; |
(xi) | rendering of services related to those mentioned above; |
(xii) | investment in businesses mentioned above operated by other companies or persons; and |
(xiii) | all businesses which are incidental to or related to those mentioned above. |
“A” = |
the total amount of other capital surplus and other retained earnings, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year | |||||
“B” = |
(if Sony Corporation has disposed of its treasury stock after the end of the last business year) the amount of the consideration for such treasury stock received by Sony Corporation less the book value thereof | |||||
“C” = |
(if Sony Corporation has reduced its stated capital after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to additional paid-in capital or legal reserve (if any) | |||||
“D” = |
(if Sony Corporation has reduced its additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction less the portion thereof that has been transferred to stated capital (if any) | |||||
“E” = |
(if Sony Corporation has cancelled its treasury stock after the end of the last business year) the book value of such treasury stock | |||||
“F” = |
(if Sony Corporation has distributed Surplus to its shareholders after the end of the last business year) the total book value of the Surplus so distributed | |||||
“G” = |
certain other amounts set forth in ordinances of the Ministry of Justice, including (if Sony Corporation has reduced Surplus and increased its stated capital, additional paid-in capital or legal reserve after the end of the last business year) the amount of such reduction and (if Sony Corporation has distributed Surplus to the shareholders after the end of the last business year) the amount set aside in additional paid-in capital or legal reserve (if any) as required by ordinances of the Ministry of Justice. |
(a) | the book value of its treasury stock; |
(b) | the amount of consideration for any of treasury stock disposed of by Sony Corporation after the end of the last business year; and |
(c) | certain other amounts set forth in ordinances of the Ministry of Justice, including (if the sum of one-half of goodwill and the deferred assets exceeds the total of stated capital, additional paid-in capital and legal reserve, each such amount being that appearing on the non-consolidated balance sheet as of the end of the last business year) all or certain part of such exceeding amount as calculated in accordance with ordinances of the Ministry of Justice. |
(1) | acquisition of its own shares from a specific party other than its subsidiaries; |
(2) | consolidation of shares; |
(3) | any offering of new shares or existing shares held by Sony Corporation as treasury stock at a “specially favorable” price (or any offering of stock acquisition rights to acquire shares of capital stock, or bonds with stock acquisition rights on “specially favorable” conditions) to any persons other than shareholders; |
(4) | the exemption of liability of a Director, Corporate Executive Officer or independent auditor with certain exceptions; |
(5) | a reduction of stated capital with certain exceptions; |
(6) | a distribution of in-kind dividends which meets certain requirements; |
(7) | dissolution, merger, consolidation, or corporate split with certain exceptions; |
(8) | the transfer of the whole or a material part of the business; |
(9) | the transfer of the whole or a part of the shares or equity interests in a subsidiary which meets certain requirements; |
(10) | the taking over of the whole of the business of any other corporation with certain exceptions; or |
(11) | share exchange or share transfer for the purpose of establishing 100% parent-subsidiary relationships with certain exceptions, |
C. |
Material Contracts |
D. |
Exchange Controls |
(i) | the aggregate purchase price of the relevant shares is 100 million yen or less; |
(ii) | the acquisition is effected through any bank, financial instruments business operator or other entity prescribed by the Foreign Exchange Regulations acting as an agent or intermediary; or |
(iii) | the acquisition constitutes an “inward direct investment” described below (in which case a prior notification requirement may apply). |
(i) | individuals who reside within Japan; or |
(ii) | corporations whose principal offices are located within Japan. |
(i) | individuals who do not reside in Japan; or |
(ii) | corporations whose principal offices are located outside Japan. |
(i) | individuals who are exchange non-residents; |
(ii) | corporations or other entities that are organized under the laws of foreign countries or whose principal offices are located outside Japan; |
(iii) | corporations of which 50% or more of the total voting rights are held, directly or indirectly, by individuals and/or corporations falling within (i) and/or (ii) above; |
(iv) | partnerships under the Civil Code of Japan established to invest in corporations, limited partnerships for investment under the Limited Partnership Act for Investment of Japan or any other similar partnerships under foreign law of which (a) 50% or more of the total contributions are made by individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations or (b) a majority of the general partners are individuals and/or corporations falling within (i), (ii), (iii) above and/or (v) below or any other persons prescribed under the Foreign Exchange Regulations; or |
(v) | corporations or other entities, a majority of whose directors or other officers (or directors or other officers having the power of representation) are individuals who are exchange non-residents. |
(i) | the foreign investor or its related persons will not become directors or corporate auditors of the relevant corporation; |
(ii) | the foreign investor will not make certain proposals (as prescribed in the Foreign Exchange Regulations) at the general meeting of shareholders, including transfer or discontinuation of the Designated Businesses of the relevant corporation; and |
(iii) | the foreign investor will not access non-public technical information in relation to the Designated Businesses of the relevant corporation, or take certain other actions that may lead to the leak of such non-public technical information (as prescribed in the Foreign Exchange Regulations). |
(i) | the foreign investor will not attend, or not cause any persons designated by it to attend, meetings of the relevant corporation’s board of directors, or meetings of committees having authority to make important decisions, in respect of the Core Sector Designated Businesses of the relevant corporation; and |
(ii) | the foreign investor will not make, or not cause any persons designated by it to make, proposals to such board or committees or their members in writing or electronic form requesting any response or actions by certain deadlines in respect of the Core Sector Designated Businesses of the relevant corporation. |
E. |
Taxation |
(i) | is a resident of the U.S. for purposes of the Treaty; |
(ii) | does not maintain a permanent establishment in Japan (a) with which shares of Common Stock or ADSs of Sony Corporation are effectively connected and through which the U.S. holder carries on or has carried on business or (b) of which shares of Common Stock or ADSs of Sony Corporation form part of the business property; and |
(iii) | is eligible for benefits under the Treaty with respect to income and gain derived in connection with shares of Common Stock or ADSs of Sony Corporation. |
F. |
Dividends and Paying Agent |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
March 31, 2020 |
|||||||||||||
(Yen in billions) |
||||||||||||||||
Net VaR |
1.2 |
1.2 |
0.9 |
1.3 |
||||||||||||
VaR of currency exchange rate risk |
1.2 |
1.1 |
0.9 |
1.3 |
||||||||||||
VaR of interest rate risk |
0.1 |
0.1 |
0.1 |
0.1 |
||||||||||||
VaR of stock price risk |
0.0 |
0.0 |
0.0 |
0.0 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
March 31, 2020 |
|||||||||||||
(Yen in billions) |
||||||||||||||||
Net VaR |
1.3 |
0.9 |
0.8 |
1.1 |
||||||||||||
VaR of currency exchange rate risk |
1.2 |
0.9 |
0.7 |
1.0 |
||||||||||||
VaR of interest rate risk |
0.1 |
0.1 |
0.1 |
0.1 |
||||||||||||
VaR of stock price risk |
0.0 |
0.0 |
0.0 |
0.0 |
June 30, 2019 |
September 30, 2019 |
December 31, 2019 |
March 31, 2020 |
|||||||||||||
(Yen in billions) |
||||||||||||||||
Net VaR |
0.8 |
0.6 |
0.5 |
0.8 |
||||||||||||
VaR of currency exchange rate risk |
0.8 |
0.6 |
0.5 |
0.8 |
||||||||||||
VaR of interest rate risk |
0.0 |
0.0 |
0.0 |
0.0 |
||||||||||||
VaR of stock price risk |
0.0 |
0.0 |
0.0 |
0.0 |
Item 12. |
Description of Securities Other Than Equity Securities |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Rate |
By Whom Paid | ||
Issuance of ADSs upon deposit of Sony Corporation’s Common Stock |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) issued |
Person depositing Sony Corporation’s Common Stock or person receiving ADSs | ||
Delivery of deposited securities against surrender of ADSs |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) surrendered |
Person surrendering ADSs for the purpose of withdrawal of deposited securities or person to whom deposited securities are delivered | ||
Distribution of cash dividends or other cash distributions (i.e., sale of rights and other entitlements) |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held |
Person to whom distribution is made | ||
Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, (ii) exercise of rights to purchase additional ADSs |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held |
Person to whom distribution is made | ||
Distribution of securities other than ADSs or rights purchase Additional ADSs (i.e., spin-off shares) |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held |
Person to whom distribution is made | ||
ADS Services |
Up to 5.00 U.S. dollar per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary |
Person holding ADSs on the applicable record date(s) established by the Depositary |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Sony; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and |
expenditures of Sony are being made only in accordance with authorizations of management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Sony’s assets that could have a material effect on the financial statements. |
Item 16. |
[Reserved] |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
Fiscal year ended March 31 |
||||||||
2019 |
2020 |
|||||||
Yen in millions |
||||||||
Audit Fees (1) |
3,716 |
4,011 |
||||||
Audit-Related Fees (2) |
480 |
400 |
||||||
Tax Fees (3) |
0 |
0 |
||||||
All Other Fees (4) |
197 |
118 |
||||||
4,393 |
4,529 |
|||||||
(1) | Audit Fees consist of fees for the annual audit services engagement and other audit services, which are those services that only the external auditor can provide. |
(2) | Audit-Related Fees consist of fees billed for assurance and related services, and audit services relating to benefit plans, business acquisitions and dispositions. |
(3) | Tax Fees primarily consist of fees for tax advice. |
(4) | All Other Fees consist of fees primarily for services rendered with respect to advisory services. |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Period |
(a) Total number of shares purchased |
(b) Average price paid per share (yen) |
(c) Total number of shares purchased as part of publicly announced plans or programs *1,2 |
(d) Maximum number of shares that may yet be purchased under the plans or programs *1,2 |
||||||||||||
April 1 — 30, 2019 |
1,489 |
5,037.13 |
N/A |
N/A |
||||||||||||
May 1 — 31, 2019 |
480,832 |
5,429.21 |
479,200 |
59,520,800 |
||||||||||||
June 1 — 30, 2019 |
4,269,608 |
5,325.07 |
4,266,900 |
55,253,900 |
||||||||||||
July 1 — 31, 2019 |
577,002 |
5,872.74 |
573,700 |
54,680,200 |
||||||||||||
August 1 — 31, 2019 |
11,469,846 |
*3 |
5,852.46 |
11,467,300 |
43,212,900 |
|||||||||||
September 1 — 30, 2019 |
4,624,744 |
6,315.99 |
4,622,500 |
38,590,400 |
||||||||||||
October 1 — 31, 2019 |
2,018,014 |
6,309.94 |
2,016,500 |
36,573,900 |
||||||||||||
November 1 — 30, 2019 |
1,422,829 |
6,777.15 |
1,419,800 |
35,154,100 |
||||||||||||
December 1 — 31, 2019 |
1,218,592 |
7,164.95 |
1,212,200 |
33,941,900 |
||||||||||||
January 1 — 31, 2020 |
572,214 |
7,804.01 |
567,800 |
33,374,100 |
||||||||||||
February 1 — 29, 2020 |
340,430 |
7,381.84 |
338,500 |
33,035,600 |
||||||||||||
March 1 — 31, 2020 |
6,095,878 |
*4 |
6,077.24 |
6,094,800 |
N/A |
|||||||||||
Total |
33,091,478 |
6,050.24 |
33,059,200 |
N/A |
• | Total number of shares for repurchase: 60 million shares (maximum) (4.80% of total number of shares issued and outstanding (excluding treasury stock)) |
• | Total purchase price for repurchase of shares: 200 billion yen (maximum) |
• | Period of repurchase: From May 17, 2019 to March 31, 2020 |
• | Total number of shares repurchased: 33,059,200 shares |
• | Total purchase price for repurchased shares: 199,999,200,300 yen |
• | Period of repurchase: May 17, 2019 to March 17, 2020 |
• | Class of shares cancelled: Common stock |
• | Total number of shares cancelled: 12,737,400 shares |
• | Date of cancellation: March 26, 2020 |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16G. |
Disclosure About Differences in Corporate Governance |
NYSE Standards |
Sony’s Corporate Governance Practices | |
Board Independence. |
Sony Corporation has adopted the “Company with Three Committees” corporate governance system under the Companies Act. Sony Corporation’s Board Charter requires its board to consist of between 10 to 20 directors. The Companies Act does not require Sony Corporation to have a majority of “independent” (in the meaning given by the NYSE Corporate Governance Standards) directors on its board; rather, it requires Sony Corporation to have a majority of “outside” directors (the definition of the term “outside” director is summarized below) on each of three statutory committees (the Nominating Committee, the Audit Committee and the Compensation Committee). | |
Director Independence. (i) a person who the board determines has a material direct or indirect relationship with the company, its parent or a consolidated subsidiary; (ii) a person who, within the last three years, has been an employee of the company or has an immediate family member of an executive officer of the company, its parent or a consolidated subsidiary; (iii) a person who had received, or whose immediate family member had received, during any 12-month period within the last three years, more than 120,000 U.S. dollars per year in direct compensation from the company, its parent or a consolidated subsidiary, other than director and committee fees or deferred compensation for prior services (provided such compensation is not contingent in any way on continued service);(iv) (A) a person who is, or whose immediate family member is, a current partner or employee of a firm that is the company’s internal or external auditor; (B) a person whose immediate family member is a partner of such a firm; (C) a person who has an immediate family member who is a current employee of such a firm and who personally participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) a person who was, or has an immediate family member who was, within the last three years, a partner or employee of such a firm and personally worked on the listed company’s audit within that time; (v) a person who is, or whose immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of |
“Outside” director is defined in the Companies Act as a person who satisfies all of the requirements (i) through (v) below: (i) a person who is not a Director of Sony Corporation or any of its subsidiaries engaged in the business operations of Sony Corporation or such subsidiaries, as the case may be, or a Corporate Executive Officer or general manager or other employee (“Group Executive Director, etc.”) of Sony Corporation or any of its subsidiaries and who has not been a Group Executive Director, etc. of Sony Corporation or any of its subsidiaries for ten years prior to assuming his/her office; (ii) if a person who has been a director, accounting counselor (if the accounting counselor is a juridical person, a member who is in charge of the affairs), or corporate auditor of Sony Corporation or any of its subsidiaries (excluding a person who has been a Group Executive Director, etc.) at the time within ten years prior to assuming his/her office, a person who has not been a Group Executive Director, etc. of Sony Corporation or any of its subsidiaries for ten years prior to assuming his/her office as a director, an accounting counselor, or a corporate auditor; (iii) a person who is not a director or a Corporate Executive Officer or general manager or other employee of a parent company or any entity which controls the management of Sony Corporation; (iv) a person who is not a Group Executive Director, etc. of a direct/indirect subsidiary of Sony Corporation or any entity the management of which is directly or indirectly controlled by Sony Corporation; and (v) a person who is not a spouse or relative within the second degree of kinship of a Director or a Corporate Executive Officer or general manager or other employee of Sony Corporation. |
NYSE Standards |
Sony’s Corporate Governance Practices | |
the listed company’s present executive officers at the same time serves or served on that company’s compensation committee; or (vi) an executive officer or employee of a company, or has an immediate family member of an executive officer of a company, that makes payments to, or receives payments from, the listed company, its parent or a consolidated subsidiary for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of 1 million U.S. dollars or 2% of such other company’s consolidated gross revenues |
Under the Companies Act, a director’s status as an “outside” director is unaffected by the director’s compensation, his or her affiliation with business partners, or the board’s affirmative determination of independence. On the other hand, under the Companies Act, a director who has had a career as a management director, corporate executive officer, or other employee of the company, its subsidiaries or other group companies is by definition not an “outside” director. | |
Sony Corporation’s Board Charter includes a provision requiring that each “outside” director: (i) Shall not have received directly from Sony Group, during any consecutive 12-month period within the last three years, more than an amount equivalent to 120,000 U.S. dollars, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service); and(ii) Shall not be an executive director, a corporate executive officer, a general manager or other employee of any company whose aggregate amount of transactions with Sony Group, in any of the last three fiscal years, exceeds the greater of an amount equivalent to 1,000,000 U.S. dollars, or 2% of the annual consolidated sales of such company; | ||
In addition, the Securities Listing Regulations of the Tokyo Stock Exchange require Sony Corporation to make efforts to have at least one “Independent Director” on the Board of Directors. “Independent Director” is defined in the Securities Listing Regulations of the Tokyo Stock Exchange as an “outside” director who is unlikely to have conflicts of interest with shareholders. According to the guidelines of the Tokyo Stock Exchange, if a person falls in any of the categories listed below, such person, in principle, will be considered to have a conflict of interest with shareholders of the listed company. (1) A person for which the listed company is a major client or a person who executes business of a person for which the listed company is a major client;(2) A major client of the listed company or a person who executes business of a major client of the listed company;(3) A consultant, accounting professional, or legal professional (or, if such consultant, accounting professional, or legal professional is a juridical person, a member of such juridical person) of | ||
the listed company who receives a large amount of money or other consideration other than remuneration for directorship/auditorship from such listed company; |
NYSE Standards |
Sony’s Corporate Governance Practices | |
(4) A person who has fallen in any of categories (1) through (3) listed above until recently;(5) A person who has fallen in any of categories (a) or (b) listed below for ten years prior to assuming his/her office: | ||
(6) A close relative of a person who falls in any of categories (a) through (f) listed below (only if such person is significant): | ||
As of June 26, 2020, 9 of the 12 members of Sony Corporation’s Board of Directors qualified as “outside” directors. In addition, all 9 “outside” directors are qualified and designated as “Independent Directors” under the Securities Listing Regulations of the Tokyo Stock Exchange. | ||
Executive Sessions. Non-management directors must meet in regularly scheduled executive sessions without management. Independent directors should meet alone in an executive session at least once a year. |
An “outside” director, as defined under the Companies Act, is equivalent to a “non-management director” under the NYSE rules because an “outside” director does not engage in the execution of business operations of the company.The outside/non-management Directors generally meet several times a year without management, though neither the Companies Act nor Sony Corporation’s Board Charter requires non-management Directors to meet regularly without management and there is no requirement for the outside Directors to meet alone in an executive session at least once a year. | |
NYSE Standards |
Sony’s Corporate Governance Practices | |
Nominating/Corporate Governance Committee. |
Sony Corporation’s Nominating Committee shall consist of at least three Directors. Under the Companies Act, the Committee is responsible for determining the contents of proposals regarding the appointment and dismissal of Directors to be submitted for approval to the shareholders’ meeting. Unlike listed U.S. companies under NYSE rules, it is not responsible for developing governance guidelines or overseeing the evaluation of the board and management. Under the Companies Act, a majority of its members shall be “outside” directors, as defined under the Companies Act. Sony Corporation’s Board Charter requires at least one of the Directors on the Committee to be a Corporate Executive Officer. | |
Compensation Committee. |
Sony Corporation’s Compensation Committee shall consist of at least three Directors. Under the Companies Act, a majority of its members shall be “outside” directors, as defined under the Companies Act. Sony Corporation’s Board Charter prohibits the CEO, the COO and/or the CFO (or a person at any equivalent position) from serving on the Compensation Committee. Under the Companies Act, the Committee is responsible for, among others, determining the compensation of each director and Corporate Executive Officer. | |
Audit Committee. 10A-3 under the Exchange Act is required. The committee must have at least three members. All members must be independent. The committee must have a charter addressing the committee’s purpose, an annual performance evaluation of the committee and the duties and responsibilities of the committee. |
Sony Corporation’s Audit Committee shall consist of at least three Directors. Under the Companies Act, a majority of its members shall be “outside” Directors, as defined under the Companies Act. In addition, pursuant to the Companies Act, no member of the Committee shall be a Director of the company or any of its subsidiaries who is engaged in the business operations of the company or such subsidiary, as the case may be, or a corporate executive officer of the company or any of its subsidiaries, or an accounting counselor, general manager or other employee of any of such subsidiaries. Sony Corporation’s Board Charter also requires each member of the Audit Committee to meet the independence requirements of the applicable U.S. securities laws and regulations, and requires at least one member to meet the audit committee financial expert requirements. Currently, all the members of Sony Corporation’s Audit Committee are also “independent” as defined in the NYSE Corporate Governance Standards, and two members of the Committee are qualified as audit |
NYSE Standards |
Sony’s Corporate Governance Practices | |
committee financial experts. Sony Corporation’s Board Charter discourages any Audit Committee member from concurrently being a member of other Committees. | ||
Equity Compensation Plans. |
Under the Companies Act, if Sony Corporation wishes to adopt an equity compensation plan under which stock acquisition rights or shares of common stock are granted on specially favorable conditions, except where all of its shareholders are granted rights to subscribe for such stock acquisition rights/shares of common stock or such stock acquisition rights/shares of common stock are gratuitously allocated to all of its shareholders, each on a pro rata basis, then Sony Corporation must obtain shareholder approval by a “special resolution” at a General Meeting of Shareholders, where the quorum is one-third of the total number of voting rights of all of its shareholders and the approval by at least two-thirds of the number of voting rights of all the shareholders represented at the meeting is required under Sony Corporation’s Articles of Incorporation.On the other hand, under the Companies Act, if Sony Corporation wishes to adopt an equity compensation plan under which stock acquisition rights or shares of common stock are granted against fair value thereof, such plan can be adopted by the resolution of Sony Corporation’s Compensation Committee, and grants of stock acquisition rights or shares pursuant to such plan may be decided by a resolution of the Board of Directors or a determination by a Corporate Executive Officer to whom the authority to make such determination has been delegated, and no shareholder approval is required. | |
Corporate Governance Guidelines. |
Sony Corporation is required to disclose the status of its corporate governance under the Companies Act, Financial Instruments and Exchange Act and its related regulations, and the Securities Listing Regulations of the Tokyo Stock Exchange; however, Sony Corporation does not have corporate governance guidelines that cover all the requirements described in the NYSE Corporate Governance Standards, as many of the provisions do not apply to Sony Corporation. Details of the status are posted on the following website: https://www.sony.net/SonyInfo/csr_report/governance/ | |
Code of Ethics. |
Although this provision of the NYSE Corporate Governance Standards does not apply to Sony Corporation, Sony Corporation has adopted a code of conduct to be observed by all its directors, officers and other employees. The code of conduct is available at: https://www.sony.net/SonyInfo/csr_report/compliance/code.html The code’s content covers principal items described in the NYSE Corporate Governance Standards. | |
Item 16H. |
Mine Safety Disclosure |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
Item 19. |
Exhibits |
1.1 |
||||
1.2 |
||||
1.3 |
||||
1.4 |
||||
2.1 |
||||
2.2 |
||||
8.1 |
||||
12.1 |
||||
12.2 |
||||
13.1 |
||||
15.1 |
||||
101.INS |
Inline XBRL Instance Document — the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document | |||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document | |||
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document | |||
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||
104 |
The cover page for the Company’s Annual Report on Form 20-F for the year ended March 31, 2020, has been formatted in Inline XBRL |
SONY CORPORATION | ||
(Registrant) | ||
By: |
/s/ HIROKI TOTOKI | |
(Signature) | ||
Hiroki Totoki | ||
Executive Deputy President and Chief Financial Officer |
Page |
||||
F- 2 |
||||
F- 6 |
||||
F- 8 |
||||
F- 9 |
||||
F- 10 |
||||
F- 12 |
||||
F- 15 |
||||
F- 16 |
||||
F- 91 |
Yen in millions |
||||||||
2019 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
|
|
||||||
Marketable securities (including assets pledged that secured parties are permitted to sell or repledge of |
|
|
||||||
Notes and accounts receivable, trade and contract assets |
|
|
||||||
Allowance for doubtful accounts |
( |
) | ( |
) | ||||
Inventories |
|
|
||||||
Other receivables |
|
|
||||||
Prepaid expenses and other current assets |
|
|
||||||
Total current assets |
|
|
||||||
Film costs |
|
|
||||||
Investments and advances: |
||||||||
Affiliated companies |
|
|
||||||
Securities investments and other (including assets pledged that secured parties are permitted to sell or repledge of |
|
|
||||||
|
|
|||||||
Property, plant and equipment: |
||||||||
Land |
|
|
||||||
Buildings |
|
|
||||||
Machinery and equipment |
|
|
||||||
Construction in progress |
|
|
||||||
|
|
|||||||
Less — Accumulated depreciation |
|
|
||||||
|
|
|||||||
Other assets: |
||||||||
Operating lease right-of-use assets |
— |
|
||||||
Finance lease right-of-use assets |
— |
|
||||||
Intangibles, net |
|
|
||||||
Goodwill |
|
|
||||||
Deferred insurance acquisition costs |
|
|
||||||
Deferred income taxes |
|
|
||||||
Other |
|
|
||||||
|
|
|||||||
Total assets |
|
|
Yen in millions |
||||||||
2019 |
2020 |
|||||||
LIABILITIES |
||||||||
Current liabilities: |
||||||||
Short-term borrowings |
|
|
||||||
Current portion of long-term debt |
|
|
||||||
Current portion of long-term operating lease liabilities |
— |
|
||||||
Notes and accounts payable, trade |
|
|
||||||
Accounts payable, other and accrued expenses |
|
|
||||||
Accrued income and other taxes |
|
|
||||||
Deposits from customers in the banking business |
|
|
||||||
Other |
|
|
||||||
Total current liabilities |
|
|
||||||
Long-term debt |
|
|
||||||
Long-term operating lease liabilities |
— |
|
||||||
Accrued pension and severance costs |
|
|
||||||
Deferred income taxes |
|
|
||||||
Future insurance policy benefits and other |
|
|
||||||
Policyholders’ account in the life insurance business |
|
|
||||||
Other |
|
|
||||||
Total liabilities |
|
|
||||||
Redeemable noncontrolling interest |
|
|
||||||
Commitments and contingent liabilities |
||||||||
EQUITY |
||||||||
Sony Corporation’s stockholders’ equity: |
||||||||
Common stock, |
||||||||
2019 — Shares authorized: |
|
|||||||
2020 — Shares authorized: |
|
|||||||
Additional paid-in capital |
|
|
||||||
Retained earnings |
|
|
||||||
Accumulated other comprehensive income — |
||||||||
Unrealized gains on securities, net |
|
|
||||||
Unrealized gains (losses) on derivative instruments, net |
( |
) | |
|||||
Pension liability adjustment |
( |
) | ( |
) | ||||
Foreign currency translation adjustments |
( |
) | ( |
) | ||||
Debt valuation adjustments |
— |
|
||||||
( |
) | ( |
) | |||||
Treasury stock, at cost |
||||||||
Common stock |
||||||||
2019 — |
( |
) | ||||||
2020 — |
( |
) | ||||||
|
|
|||||||
Noncontrolling interests |
|
|
||||||
Total equity |
|
|
||||||
Total liabilities and equity |
|
|
Yen in millions |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Sales and operating revenue: |
||||||||||||
Net sales |
|
|
|
|||||||||
Financial services revenue |
|
|
|
|||||||||
Other operating revenue |
|
|
|
|||||||||
|
|
|
||||||||||
Costs and expenses: |
||||||||||||
Cost of sales |
|
|
|
|||||||||
Selling, general and administrative |
|
|
|
|||||||||
Financial services expenses |
|
|
|
|||||||||
Other operating (income) expense, net |
|
( |
) | ( |
) | |||||||
|
|
|
||||||||||
Equity in net income (loss) of affiliated companies |
|
( |
) | |
||||||||
Operating income |
|
|
|
|||||||||
Other income: |
||||||||||||
Interest and dividends |
|
|
|
|||||||||
Gain on sale of securities investments, net |
|
— |
— |
|||||||||
Gain on equity securities, net |
— |
|
— |
|||||||||
Other |
|
|
|
|||||||||
|
|
|
||||||||||
Other expenses: |
||||||||||||
Interest |
|
|
|
|||||||||
Loss on devaluation of securities investments |
|
— |
— |
|||||||||
Loss on equity securities, net |
— |
— |
|
|||||||||
Foreign exchange loss, net |
|
|
|
|||||||||
Loss on pension plan amendment |
— |
— |
|
|||||||||
Other |
|
|
|
|||||||||
|
|
|
||||||||||
Income before income taxes |
|
|
|
|||||||||
Income taxes: |
||||||||||||
Current |
|
|
|
|||||||||
Deferred |
|
( |
) | |
||||||||
|
|
|
||||||||||
Net income |
|
|
|
|||||||||
Less — Net income attributable to noncontrolling interests |
|
|
|
|||||||||
Net income attributable to Sony Corporation’s stockholders |
|
|
|
Yen |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Per share data: |
||||||||||||
Common stock |
||||||||||||
Net income attributable to Sony Corporation’s stockholders |
||||||||||||
— Basic |
|
|
|
|||||||||
— Diluted |
|
|
|
Yen in millions |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net income |
|
|
|
|||||||||
Other comprehensive income, net of tax — |
||||||||||||
Unrealized gains on securities |
|
|
|
|||||||||
Unrealized gains (losses) on derivative instruments |
( |
) | |
|
||||||||
Pension liability adjustment |
|
( |
) | |
||||||||
Foreign currency translation adjustments |
( |
) | |
( |
) | |||||||
Debt valuation adjustments |
— |
— |
|
|||||||||
Total comprehensive income |
|
|
|
|||||||||
Less — Comprehensive income attributable to noncontrolling interests |
|
|
|
|||||||||
Comprehensive income attributable to Sony Corporation’s stockholders |
|
|
|
Yen in millions |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net income |
|
|
|
|||||||||
Adjustments to reconcile net income to net cash provided by operating activities — |
||||||||||||
Depreciation and amortization, including amortization of deferred insurance acquisition costs and contract costs |
|
|
|
|||||||||
Amortization of film costs |
|
|
|
|||||||||
Accrual for pension and severance costs, less payments |
|
( |
) | |
||||||||
Other operating (income) expense, net |
|
( |
) | ( |
) | |||||||
(Gain) loss on securities investments, net (other than financial services business) |
|
( |
) | |
||||||||
(Gain) loss on marketable securities and securities investments held in the financial services business, net |
( |
) | ( |
) | |
|||||||
Deferred income taxes |
|
( |
) | |
||||||||
Equity in net (income) loss of affiliated companies, net of dividends |
( |
) | |
( |
) | |||||||
Changes in assets and liabilities: |
||||||||||||
(Increase) decrease in notes and accounts receivable, trade and contract assets |
( |
) | |
|
||||||||
(Increase) decrease in inventories |
( |
) | |
|
||||||||
Increase in film costs |
( |
) | ( |
) | ( |
) | ||||||
Increase (decrease) in notes and accounts payable, trade |
( |
) | |
( |
) | |||||||
Increase (decrease) in accrued income and other taxes |
|
( |
) | ( |
) | |||||||
Increase in future insurance policy benefits and other |
|
|
|
|||||||||
Increase in deferred insurance acquisition costs |
( |
) | ( |
) | ( |
) | ||||||
Increase in marketable securities held in the life insurance business |
( |
) | ( |
) | ( |
) | ||||||
(Increase) decrease in other current assets |
|
|
( |
) | ||||||||
Increase (decrease) in other current liabilities |
|
|
( |
) | ||||||||
Other |
|
( |
) | |
||||||||
Net cash provided by operating activities |
|
|
|
|||||||||
Cash flows from investing activities: |
||||||||||||
Payments for purchases of fixed assets |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sales of fixed assets |
|
|
|
|||||||||
Payments for investments and advances by financial services business |
( |
) | ( |
) | ( |
) | ||||||
Payments for investments and advances (other than financial services business) |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sales or return of investments and collections of advances by financial services business |
|
|
|
|||||||||
Proceeds from sales or return of investments and collections of advances (other than financial services business) |
|
|
|
|||||||||
Payment for EMI Music Publishing acquisition, net of cash acquired |
— |
( |
) | — |
||||||||
Proceeds from sales of businesses |
|
— |
|
|||||||||
Proceeds related to sales of Spotify Technology S.A. Shares |
— |
|
— |
|||||||||
Proceeds from sales of Olympus Corporation Shares |
— |
— |
|
|||||||||
Other |
( |
) | ( |
) | ( |
) | ||||||
Net cash used in investing activities |
( |
) | ( |
) | ( |
) |
Yen in millions |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from issuance of long-term debt |
|
|
|
|||||||||
Payments of long-term debt |
( |
) | ( |
) | ( |
) | ||||||
Increase in short-term borrowings, net |
|
|
|
|||||||||
Increase in deposits from customers in the financial services business, net |
|
|
|
|||||||||
Dividends paid |
( |
) | ( |
) | ( |
) | ||||||
Payments for purchase of treasury stock |
( |
) | ( |
) | ( |
) | ||||||
Payment for purchase of noncontrolling interest in Nile Acquisition LLC |
— |
( |
) | — |
||||||||
Payment for purchase of noncontrolling interest in Game Show Network, LLC |
— |
— |
( |
) | ||||||||
Other |
( |
) | ( |
) | ( |
) | ||||||
Net cash provided by (used in) financing activities |
|
( |
) | |
||||||||
Effect of exchange rate changes on cash and cash equivalents, including restricted |
( |
) | |
( |
) | |||||||
Net increase (decrease) in cash and cash equivalents, including restricted |
|
( |
) | |
||||||||
Cash and cash equivalents, including restricted, at beginning of the fiscal year |
|
|
|
|||||||||
Cash and cash equivalents, including restricted, at end of the fiscal year |
|
|
|
|||||||||
Less — Restricted cash and cash equivalents, included in other current assets and other assets |
|
|
|
|||||||||
Cash and cash equivalents at end of the fiscal year |
|
|
|
|||||||||
Supplemental data: |
||||||||||||
Cash paid during the fiscal year for — |
||||||||||||
Income taxes |
|
|
|
|||||||||
Interest |
|
|
|
|||||||||
Non-cash investing and financing activities — |
||||||||||||
Obtaining assets by entering into finance leases |
|
|
|
Yen in millions |
||||||||||||||||||||||||||||||||
Common stock |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income |
Treasury stock, at cost |
Sony Corporation’s stockholders’ equity |
Noncontrolling interests |
Total equity |
|||||||||||||||||||||||||
Balance at March 31, 2017 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Issuance of new shares |
|
|
|
|
||||||||||||||||||||||||||||
Exercise of stock acquisition rights |
|
|
|
|
||||||||||||||||||||||||||||
Conversion of convertible bonds |
|
|
|
|
||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|||||||||||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||||||
Net income |
|
|
|
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax — |
||||||||||||||||||||||||||||||||
Unrealized gains (losses) on securities |
( |
) | ( |
) | |
|
||||||||||||||||||||||||||
Unrealized losses on derivative instruments |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Pension liability adjustment |
|
|
|
|
||||||||||||||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | |
( |
) | |||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Dividends declared ( |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Reissuance of treasury stock |
|
|
|
|
||||||||||||||||||||||||||||
Transactions with noncontrolling interests shareholders and other |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at March 31, 2018 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Yen in millions |
||||||||||||||||||||||||||||||||
Common stock |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income |
Treasury stock, at cost |
Sony Corporation’s stockholders’ equity |
Noncontrolling interests |
Total equity |
|||||||||||||||||||||||||
Balance at March 31, 2018 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Cumulative effect of newly adopted ASUs |
|
( |
) | ( |
) | |
( |
) | ||||||||||||||||||||||||
Issuance of new shares |
|
|
|
|
||||||||||||||||||||||||||||
Exercise of stock acquisition rights |
|
|
|
|
||||||||||||||||||||||||||||
Conversion of convertible bonds |
|
|
|
|
||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|||||||||||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||||||
Net income |
|
|
|
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax — |
||||||||||||||||||||||||||||||||
Unrealized gains on securities |
|
|
|
|
||||||||||||||||||||||||||||
Unrealized gains on derivative instruments |
|
|
|
|||||||||||||||||||||||||||||
Pension liability adjustment |
( |
) | ( |
) | |
( |
) | |||||||||||||||||||||||||
Foreign currency translation adjustments |
|
|
( |
) | |
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Dividends declared ( |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Reissuance of treasury stock |
|
|
|
|
||||||||||||||||||||||||||||
Transactions with noncontrolling interests shareholders and other |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Balance at March 31, 2019 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Yen in millions |
||||||||||||||||||||||||||||||||
Common stock |
Additional paid-in capital |
Retained earnings |
Accumulated other comprehensive income |
Treasury stock, at cost |
Sony Corporation’s stockholders’ equity |
Noncontrolling interests |
Total equity |
|||||||||||||||||||||||||
Balance at March 31, 2019 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Cumulative effect of ASU 2016-02 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Issuance of new shares |
|
|
|
|
||||||||||||||||||||||||||||
Exercise of stock acquisition rights |
|
|
|
|
||||||||||||||||||||||||||||
Conversion of convertible bonds |
|
|
|
|
||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|||||||||||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||||||
Net income |
|
|
|
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax — |
||||||||||||||||||||||||||||||||
Unrealized gains on securities |
|
|
|
|
||||||||||||||||||||||||||||
Unrealized gains on derivative instruments |
|
|
|
|||||||||||||||||||||||||||||
Pension liability adjustment |
|
|
|
|
||||||||||||||||||||||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Debt valuation adjustments |
|
|
|
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Stock issue costs, net of tax |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Dividends declared ( |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Reissuance of treasury stock |
|
|
|
|
||||||||||||||||||||||||||||
Cancellation of treasury stock |
( |
) | ( |
) | |
— |
— |
|||||||||||||||||||||||||
Transactions with noncontrolling interests shareholders and other |
|
|
( |
) | ( |
) | ||||||||||||||||||||||||||
Balance at March 31, 2020 |
|
|
|
( |
) | ( |
) | |
|
|
||||||||||||||||||||||
Page |
||||||||
Notes to Consolidated Financial Statements |
||||||||
1. |
F-16 |
|||||||
2. |
F-16 |
|||||||
3. |
F-28 |
|||||||
4. |
F-29 |
|||||||
5. |
F-29 |
|||||||
6. |
F-31 |
|||||||
7. |
F-31 |
|||||||
8. |
F-34 |
|||||||
9. |
F-36 |
|||||||
10. |
F-37 |
|||||||
11. |
F-40 |
|||||||
12. |
F-42 |
|||||||
13. |
F-43 |
|||||||
14. |
F-50 |
|||||||
15. |
F-55 |
|||||||
16. |
F-63 |
|||||||
17. |
F-67 |
|||||||
18. |
F-68 |
|||||||
19. |
F-68 |
|||||||
20. |
F-69 |
|||||||
21. |
F-72 |
|||||||
22. |
F-73 |
|||||||
23. |
F-77 |
|||||||
24. |
F-77 |
|||||||
25. |
F-79 |
|||||||
26. |
F-82 |
|||||||
27. |
F-83 |
|||||||
28. |
F-83 |
|||||||
29. |
F-85 |
|||||||
30. |
F-90 |
1 . |
Nature of operations |
2 . |
Summary of significant accounting policies |
(1) |
Significant accounting policies |
Level 1 |
— |
Inputs are unadjusted quoted prices for identical assets and liabilities in active markets. | ||
Level 2 |
— |
Inputs are based on observable inputs other than level 1 prices, such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations, in which all significant inputs are observable in active markets. | ||
Level 3 |
— |
One or more significant inputs are unobservable. |
(2) |
Recently adopted accounting pronouncements |
(3) |
Recent accounting pronouncements not yet adopted |
(4) |
Reclassifications |
3. |
Inventories |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Finished products |
|
|
||||||
Work in process |
|
|
||||||
Raw materials, purchased components and supplies |
|
|
||||||
|
|
|
|
|||||
Inventories |
|
|
||||||
4. |
Film costs |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Motion picture productions: |
||||||||
Released |
|
|
||||||
Completed and not released |
|
|
||||||
In production and development |
|
|
||||||
Television productions: |
||||||||
Released |
|
|
||||||
In production and development |
|
|
||||||
Broadcasting rights |
|
|
||||||
Less: current portion included in inventories |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Film costs |
|
|
||||||
5. |
Investments in affiliated companies |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Current assets |
|
|
||||||
Noncurrent assets |
|
|
||||||
Current liabilities |
|
|
||||||
Noncurrent liabilities and noncontrolling interests |
|
|
||||||
Percentage of ownership in equity investees |
|
% | |
% |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net revenues |
|
|
|
|||||||||
Operating income |
|
|
|
|||||||||
Net income attributable to controlling interests |
|
|
|
|||||||||
Percentage of ownership in equity investees |
|
% | |
% | |
% |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Accounts receivable, trade |
|
|
||||||
Other receivables |
|
|
||||||
Other current assets |
|
|
||||||
Accounts payable, trade |
|
|
||||||
Short-term borrowings |
|
|
||||||
Finance lease liabilities and other* |
|
|
||||||
Operating lease liabilities |
— |
|
* | Finance lease liabilities and other were represented as Capital lease obligations as of the fiscal year ended March 31, 2019. |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Sales |
|
|
|
|||||||||
Purchases |
|
|
|
6. |
Transfer of financial assets |
7. | Marketable securities and securities investments |
Yen in millions |
||||||||||||||||||||||||||||||||
March 31, 2019 |
March 31, 2020 |
|||||||||||||||||||||||||||||||
Cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
Cost |
Gross unrealized gains |
Gross unrealized losses |
Fair value |
|||||||||||||||||||||||||
Debt securities: |
||||||||||||||||||||||||||||||||
Available-for-sale securities: |
||||||||||||||||||||||||||||||||
Japanese national government bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Japanese local government bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Japanese corporate bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Foreign government bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Foreign corporate bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Securitized products |
|
|
— |
|
|
|
— |
|
||||||||||||||||||||||||
Other |
|
|
— |
|
|
|
( |
) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
( |
) |
|
|
|
( |
) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Held-to-maturity securities: |
||||||||||||||||||||||||||||||||
Japanese national government bonds |
|
|
— |
|
|
|
( |
) |
|
|||||||||||||||||||||||
Japanese local government bonds |
|
|
— |
|
|
|
— |
|
||||||||||||||||||||||||
Japanese corporate bonds |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Foreign government bonds |
|
|
( |
) |
|
|
|
— |
|
|||||||||||||||||||||||
Foreign corporate bonds |
|
|
— |
|
|
|
— |
|
||||||||||||||||||||||||
Securitized products |
— |
— |
— |
— |
|
— |
( |
) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
( |
) |
|
|
|
( |
) |
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
|
|
( |
) |
|
|
|
( |
) |
|
||||||||||||||||||||||
Yen in millions |
||||||||||||||||
March 31, 2020 |
||||||||||||||||
Available-for-sale securities |
Held-to-maturity securities |
|||||||||||||||
Cost |
Fair value |
Cost |
Fair value |
|||||||||||||
Due in one year or less |
|
|
|
|
||||||||||||
Due after one year through five years |
|
|
|
|
||||||||||||
Due after five years through ten years |
|
|
|
|
||||||||||||
Due after ten years |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
Yen in millions |
||||||||||||||||||||||||
March 31, 2019 |
||||||||||||||||||||||||
Less than 12 months |
12 months or more |
Total |
||||||||||||||||||||||
Fair value |
Unrealized losses |
Fair value |
Unrealized losses |
Fair value |
Unrealized losses |
|||||||||||||||||||
Debt securities: |
||||||||||||||||||||||||
Available-for-sale securities: |
||||||||||||||||||||||||
Japanese national government bonds |
— |
— |
|
( |
) | |
( |
) | ||||||||||||||||
Japanese local government bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Japanese corporate bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Foreign government bonds |
— |
— |
|
( |
) | |
( |
) | ||||||||||||||||
Foreign corporate bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Securitized products |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Other |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
( |
) | |
( |
) | |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Held-to-maturity securities: |
||||||||||||||||||||||||
Japanese national government bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Japanese local government bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Japanese corporate bonds |
— |
— |
|
( |
) | |
( |
) | ||||||||||||||||
Foreign government bonds |
— |
— |
|
( |
) | |
( |
) | ||||||||||||||||
Foreign corporate bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
— |
— |
|
( |
) | |
( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Yen in millions |
||||||||||||||||||||||||
March 31, 2020 |
||||||||||||||||||||||||
Less than 12 months |
12 months or more |
Total |
||||||||||||||||||||||
Fair value |
Unrealized losses |
Fair value |
Unrealized losses |
Fair value |
Unrealized losses |
|||||||||||||||||||
Debt securities: |
||||||||||||||||||||||||
Available-for-sale securities: |
||||||||||||||||||||||||
Japanese national government bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Japanese local government bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Japanese corporate bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Foreign government bonds |
— |
— |
|
( |
) | |
( |
) | ||||||||||||||||
Foreign corporate bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Securitized products |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Other |
|
( |
) |
— |
— |
|
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
( |
) | |
( |
) | |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Held-to-maturity securities: |
||||||||||||||||||||||||
Japanese national government bonds |
|
( |
) | — |
— |
|
( |
) | ||||||||||||||||
Japanese local government bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Japanese corporate bonds |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
Foreign government bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Foreign corporate bonds |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Securitized products |
|
( |
) | — |
— |
|
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
( |
) | |
( |
) | |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
|
( |
) | |
( |
) | |
( |
) | |||||||||||||||
8. |
Leases |
(1) |
Lease cost |
Yen in millions |
||||
Fiscal year ended March 31 |
||||
2020 |
||||
Finance Lease cost |
||||
Amortization of right-of-use assets |
||||
Interest on lease liabilities |
||||
Total finance lease cost |
||||
Operating lease cost |
||||
Short-term lease cost |
||||
Variable lease cost |
||||
Sublease income |
( |
) | ||
Total lease cost |
||||
(2) |
Supplemental consolidated balance sheet information related to leases |
Yen in millions |
||||
March 31 |
||||
2020 |
||||
Finance leases |
||||
Current portion of long-term debt |
||||
Long-term debt |
||||
Total finance lease liabilities |
||||
Weighted average remaining lease term |
||||
Operating leases |
||||
Finance leases |
||||
Weighted average discount rate |
||||
Operating leases |
% | |||
Finance leases |
% |
(3) |
Rental payments and sublease rentals under operating leases |
Fiscal year ending March 31 |
Yen in millions |
|||
2020 |
||||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Later fiscal years |
||||
Total minimum future rentals |
||||
(4) |
Maturities of lease liabilities |
Yen in millions |
||||||||
Fiscal year ending March 31 |
Operating leases |
Finance leases |
||||||
2021 |
||||||||
2022 |
||||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
Later fiscal years |
||||||||
Total lease payments |
||||||||
Less imputed interest |
||||||||
Total |
||||||||
(5) |
Other information |
Yen in millions |
||||
Fiscal year ended March 31 |
||||
2020 |
||||
Cash paid for amounts included in the measurement of lease liabilities |
||||
Payments for operating leases, included in cash flows from operating activities |
||||
Payments for finance leases, included in cash flows from financing activities |
||||
Right-of-use assets obtained in exchange for new operating lease liabilities |
9. |
Goodwill and other intangible assets |
Intangible assets acquired during the fiscal year |
Weighted-average amortization period |
|||||||
Yen in millions |
Years |
|||||||
Patent rights, know-how and license agreements |
|
|
||||||
Software to be sold, leased or otherwise marketed |
|
|
||||||
Internal-use software |
|
|
||||||
Music catalogs |
|
|
||||||
Other |
|
|
Yen in millions |
||||||||||||||||
March 31, 2019 |
March 31, 2020 |
|||||||||||||||
Gross carrying amount |
Accumulated amortization |
Gross carrying amount |
Accumulated amortization |
|||||||||||||
Patent rights, know-how and license agreements |
|
( |
) | |
( |
) | ||||||||||
Customer relationships |
|
( |
) | |
( |
) | ||||||||||
Trademarks |
|
( |
) | |
( |
) | ||||||||||
Software to be sold, leased or otherwise marketed |
|
( |
) | |
( |
) | ||||||||||
Internal-use software |
|
( |
) | |
( |
) | ||||||||||
Music catalogs |
|
( |
) | |
( |
) | ||||||||||
Artist contracts |
|
( |
) | |
( |
) | ||||||||||
Television carriage contracts (broadcasting agreements) |
|
( |
) | |
( |
) | ||||||||||
Other |
|
( |
) | |
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
( |
) | |
( |
) | ||||||||||
Fiscal year ending March 31 |
Yen in millions |
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
2025 |
|
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Trademarks |
|
|
||||||
Distribution agreements |
|
|
||||||
Other |
|
|
||||||
|
|
|
|
|||||
Total |
|
|
||||||
G&NS |
Music |
Pictures |
EP&S |
I&SS |
Financial Services |
All Other |
Total |
|||||||||||||||||||||||||
Balance, March 31, 2018: |
||||||||||||||||||||||||||||||||
Goodwill — gross |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Accumulated impairments |
— |
( |
) | ( |
) | ( |
) | — |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Increase (decrease) due to: |
||||||||||||||||||||||||||||||||
Acquisitions * |
|
|
|
— |
— |
— |
— |
|
||||||||||||||||||||||||
Sales and dispositions |
— |
|
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Impairments |
— |
— |
— |
( |
) | — |
— |
( |
) | ( |
) | |||||||||||||||||||||
Translation adjustments |
|
( |
) | |
( |
) | |
— |
|
|
||||||||||||||||||||||
Other |
— |
— |
( |
) | — |
— |
— |
|
( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, March 31, 2019: |
||||||||||||||||||||||||||||||||
Goodwill — gross |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Accumulated impairments |
— |
( |
) | ( |
) | ( |
) | — |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill |
|
|
|
|
|
|
— |
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Increase (decrease) due to: |
||||||||||||||||||||||||||||||||
Acquisitions * |
|
|
|
|
— |
|
— |
|
||||||||||||||||||||||||
Sales and dispositions |
— |
— |
( |
) | — |
— |
— |
— |
( |
) | ||||||||||||||||||||||
Impairments |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||
Translation adjustments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | — |
|
( |
) | ||||||||||||||||||
Other |
— |
( |
) | ( |
) | — |
— |
— |
— |
( |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance, March 31, 2020: |
||||||||||||||||||||||||||||||||
Goodwill — gross |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Accumulated impairments |
— |
( |
) | ( |
) | ( |
) | — |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Goodwill |
|
|
|
|
|
|
— |
|
||||||||||||||||||||||||
* |
Acquisitions for the fiscal year ended March 31, 2019 relate mainly to the acquisition of EMI Music Publishing in the Music segment. Acquisitions for the fiscal year ended March 31, 2020 relate mainly to the acquisition of Insomniac Games, Inc. in the G&NS segment, Silvergate Media in the Pictures segment and AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd. in the Financial Services segment. Refer to Note 25. |
10. |
Insurance-related accounts |
(1) |
Insurance policies |
(2) |
Deferred insurance acquisition costs |
(3) |
Future insurance policy benefits |
(4) |
Policyholders’ account in the life insurance business |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Universal life insurance |
|
|
||||||
Investment contracts |
|
|
||||||
Other |
|
|
||||||
|
|
|
|
|||||
Total |
|
|
||||||
(5) |
Minimum guarantee benefit for variable annuities and variable life insurance contracts |
Yen in million s |
||||||||||||
March 31, 2019 |
||||||||||||
Variable annuities |
Variable life insurance contracts |
Total |
||||||||||
Policyholder s ’ account value |
— |
|
|
|||||||||
Net amount at risk |
— |
|
|
|||||||||
Liability for minimum guarantee benefit |
— |
|
|
|
|
Age |
| |||||
|
|
March 31 2019 |
| |||||
|
|
Variable annuities |
|
|
Variable life insurance contracts |
| ||
Average attained age |
— |
|
Yen in million s |
||||||||||||
March 31 , 2020 |
||||||||||||
Variable annuities |
Variable life insurance contracts |
Total |
||||||||||
Policyholder s ’ account value |
|
|
|
|||||||||
Net amount at risk |
|
|
|
|||||||||
Liability for minimum guarantee benefit |
|
|
|
|
|
Age |
| |||||
|
|
March 31 2020 |
| |||||
|
|
Variable annuities |
|
|
Variable life insurance contracts |
| ||
Average attained age |
|
|
11. |
Short-term borrowings and long-term debt |
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Unsecured loans: |
||||||||
with a weighted-average interest rate of |
|
|||||||
with a weighted-average interest rate of |
|
|||||||
Repurchase agreement: |
||||||||
with a weighted-average interest rate of |
|
|||||||
with a weighted-average interest rate of |
|
|||||||
Secured call money: |
||||||||
with a weighted-average interest rate of |
|
|||||||
with a weighted-average interest rate of |
|
|||||||
|
|
|
|
|||||
|
|
|||||||
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Unsecured loans, representing obligations principally to banks: |
||||||||
Due 2019 to 2024, with interest rates ranging from |
|
|||||||
Due 2020 to 2029, with interest rates ranging from |
|
|||||||
Unsecured |
|
|||||||
Unsecured |
|
|||||||
Unsecured |
|
|
||||||
Unsecured |
|
|
||||||
Unsecured |
|
|
||||||
Unsecured |
|
|
||||||
Unsecured |
|
|||||||
Unsecured |
|
|
||||||
Unsecured |
|
|
||||||
Unsecured |
|
|||||||
Unsecured |
|
|||||||
Unsecured zero coupon convertible bonds, due 2022: |
|
|||||||
Conversion price |
|
|
|
|
|
|
| |
Conversion price |
|
|||||||
Secured |
|
|
||||||
Finance lease liabilities and other*: |
||||||||
Due 2019 to 2048, with interest rates ranging from |
|
|||||||
Due 2020 to 2050, with interest rates ranging from |
|
|||||||
Guarantee deposits received |
|
|
||||||
|
|
|
|
|||||
|
|
|||||||
Less — Portion due within one year |
|
|
||||||
|
|
|
|
|||||
|
|
|||||||
* |
Finance lease liabilities and other were represented as Capital lease obligations and other as of the fiscal year ended March 31, 2019. |
Fiscal year ending March 31 |
Yen in millions |
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
2025 |
|
|||
Later fiscal years |
|
|||
|
|
|||
Total |
|
|||
12. |
Housing loans and deposits from customers in the banking business |
(1) |
Housing loans in the banking business |
(2) |
Deposits from customers in the banking business |
Fiscal year ending March 31 |
Yen in millions |
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
2025 |
|
|||
2026 |
|
|||
Later fiscal years |
|
|||
|
|
|||
Total |
|
|||
13. |
Fair value measurements |
(1) |
Assets and liabilities that are measured at fair value on a recurring basis |
Yen in millions |
||||||||||||||||||||||||||||||||
March 31, 2019 |
||||||||||||||||||||||||||||||||
Presentation in the consolidated balance sheets |
||||||||||||||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Marketable securities |
Securities investments and other |
Other current assets |
Other noncurrent assets |
|||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||||||||||
Trading securities |
|
|
— |
|
|
— |
— |
— |
||||||||||||||||||||||||
Available-for-sale securities |
||||||||||||||||||||||||||||||||
Japanese national government bonds |
— |
|
— |
|
|
|
— |
— |
||||||||||||||||||||||||
Japanese local government bonds |
— |
|
— |
|
|
|
— |
— |
||||||||||||||||||||||||
Japanese corporate bonds |
— |
|
— |
|
|
|
— |
— |
||||||||||||||||||||||||
Foreign government bonds *1 |
— |
|
— |
|
|
|
— |
— |
||||||||||||||||||||||||
Foreign corporate bonds *2 |
— |
|
|
|
|
|
— |
— |
||||||||||||||||||||||||
Securitized products *3 |
— |
|
|
|
— |
|
— |
— |
||||||||||||||||||||||||
Other |
— |
|
— |
|
— |
|
— |
— |
||||||||||||||||||||||||
Equity securities |
|
|
— |
|
|
|
— |
— |
||||||||||||||||||||||||
Other investments *4 |
|
|
|
|
— |
|
— |
— |
||||||||||||||||||||||||
Derivative assets *5 |
|
|
— |
|
— |
— |
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Presentation in the consolidated balance sheets |
||||||||||||||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Future insurance policy benefits |
Policyholders’ account |
Other current liabilities |
Other noncurrent liabilitie s |
|||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Derivative liabilities *5 |
|
|
— |
|
— |
— |
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
|
|
— |
|
— |
— |
|
|
||||||||||||||||||||||||
Yen in millions |
||||||||||||||||||||||||||||||||
March 31, 2020 |
||||||||||||||||||||||||||||||||
Presentation in the consolidated balance sheets |
||||||||||||||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Marketable securities |
Securities investments and other |
Other current assets |
Other noncurrent assets |
|||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||
Debt securities |
||||||||||||||||||||||||||||||||
Trading securities |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Available-for-sale securities |
||||||||||||||||||||||||||||||||
Japanese national government bonds |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Japanese local government bonds |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Japanese corporate bonds |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Foreign government bonds *1 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Foreign corporate bonds *2 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Securitized products *3 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Equity securities |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other investments *4 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Derivative assets *5 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total assets |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Presentation in the consolidated balance sheets |
||||||||||||||||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Future insurance policy benefits |
Policyholders’ account |
Other current liabilities |
Other noncurrent liabilities |
|||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||
Future insurance policy benefits and policyholders’ account in the life insurance business *6 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Derivative liabilities *5 |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total liabilities |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
*1 | . In the consolidated balance sheets, |
*2 |
*3 |
*4 | Other investments include certain hybrid financial instruments and certain private equity investments. |
*5 | Derivative assets and liabilities are recognized and disclosed on a gross basis. |
*6 | Future insurance policy benefits and policyholders’ account in the life insurance business are those for which the fair value option has been elected. |
Net gains of assets and liabilities for which the fair value option has been elected are included in financial services revenue and financial services expense in the consolidated statements of income for the fiscal years ended March 31, 2019 and 2020, respectively. |
Yen in millions |
||||||||||||||||||||||||
Fiscal year ended March 31, 2019 |
||||||||||||||||||||||||
Assets |
Liabilities |
|||||||||||||||||||||||
Debt securities |
|
Future insurance policy benefits and Policyholders’ account |
||||||||||||||||||||||
Available-for-sale securities |
|
|||||||||||||||||||||||
Japanese corporate bonds |
Foreign corporate bonds |
Securitized products |
|
Other |
|
Other investments |
||||||||||||||||||
Beginning balance |
— |
|
|
|
|
— |
|
|
— |
|||||||||||||||
Total realized and unrealized gains (losses): |
|
|
|
|
||||||||||||||||||||
Included in earnings *1 |
— |
|
|
|
|
— |
|
|
— |
|||||||||||||||
Included in other comprehensive income *2 |
— |
|
|
|
|
— |
|
— |
— |
|||||||||||||||
Purchases and Issuances |
— |
|
|
|
|
— |
|
|
— |
|||||||||||||||
Sales |
— |
— |
— |
|
|
— |
|
( |
) | — |
||||||||||||||
Settlements |
— |
( |
) | ( |
) | |
|
— |
|
( |
) | — |
||||||||||||
Transfers into level 3 *3 |
— |
|
|
|
|
— |
|
— |
— |
|||||||||||||||
Transfers out of level 3 *4 |
— |
( |
) | ( |
) | |
|
— |
|
— |
— |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ending balance |
— |
|
|
|
|
— |
|
|
— |
|||||||||||||||
Changes in unrealized gains (losses) still held at |
|
|
|
|||||||||||||||||||||
Included in earnings *1 |
— |
|
|
|
|
— |
|
|
— |
Yen in millions |
||||||||||||||||||||||||
Fiscal year ended March 31, 2020 |
||||||||||||||||||||||||
Assets |
Liabilities |
|||||||||||||||||||||||
Debt securities |
|
Future insurance policy benefits and Policyholder s ’ account |
||||||||||||||||||||||
Available-for-sale securities |
|
|||||||||||||||||||||||
Japanese corporate bonds |
Foreign corporate bonds |
Securitized products |
|
Other |
|
Other investments |
||||||||||||||||||
Beginning balance |
|
|
|
|
|
— |
|
|
— |
|||||||||||||||
Acquisition of AEGON Sony Life Insurance Co., SA Reinsurance Ltd. *5 |
— |
— |
— |
|
|
— |
|
— |
|
|||||||||||||||
Total realized and unrealized gains (losses): |
|
|
|
|
||||||||||||||||||||
Included in earnings *1 |
|
|
( |
) | |
|
— |
|
( |
) | |
|||||||||||||
Included *2 |
|
( |
) |
|
— |
|
|
|||||||||||||||||
Purchases and Issuances |
|
|
|
|
|
|
|
|
|
|||||||||||||||
Sales |
|
|
|
|
|
— |
|
( |
) | |
||||||||||||||
Settlements |
|
( |
) | ( |
) | |
|
— |
|
( |
) | ( |
) | |||||||||||
Transfers into level 3 *3 |
|
|
|
|
|
— |
|
|
|
|||||||||||||||
Transfers out of level 3 *4 |
|
( |
) | ( |
) | |
|
— |
|
|
|
|||||||||||||
Ending balance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in unrealized gains (losses) relating to instruments still held at reporting date: |
|
|
|
|
||||||||||||||||||||
Included in earnings *1 |
|
( |
) | ( |
) | |
|
— |
|
( |
) | |
*1 | Earning effects are included in financi a l services revenue and financial services expense in the consolidated statements of income. |
*2 | Unrealized gains (losses) are included in unrealized gains (losses) on securities, net for available-for-sale securities and included in debt valuation adjustments for future insurance policy benefits and policyholders’ account in the consolidated statements of comprehensive income. |
*3 | Certain corporate bonds and certain securitized products were transferred into level 3 because differences between the fair value determined by indicative quotes from dealers and the fair value determined by internally developed prices became significant and the observability of the inputs used decreased. |
*4 | Certain corporate bonds and certain securitized products were transferred out of level 3 because observable market data became available. |
*5 |
Refer to Note 25 |
(2) |
Assets and liabilities that are measured at fair value on a nonrecurring basis |
During the fiscal year ended March 31, 2019 |
||||||||||||||||
Estimated fair value |
Amounts included in earnings |
|||||||||||||||
Level 1 |
Level 2 |
Level 3 |
||||||||||||||
Assets: |
||||||||||||||||
Long-lived assets impairments |
— |
— |
|
( |
) | |||||||||||
Goodwill impairment |
— |
— |
|
( |
) | |||||||||||
|
|
|||||||||||||||
( |
) | |||||||||||||||
During the fiscal year ended March 31, 2020 |
||||||||||||||||
Estimated fair value |
Amounts included in earnings |
|||||||||||||||
Level 1 |
Level 2 |
Level 3 |
||||||||||||||
Assets: |
||||||||||||||||
Remeasurement of retained investment in SRE |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Long-lived assets impairments |
|
|
|
( |
) | |||||||||||
( |
) | |||||||||||||||
(3) |
Financial instruments |
Yen in millions |
||||||||||||||||||||
March 31, 2019 |
||||||||||||||||||||
Estimated fair value |
Carrying amount |
|||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Total |
||||||||||||||||
Assets: |
||||||||||||||||||||
Housing loans in the banking business |
— |
|
— |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
— |
|
— |
|
|
|||||||||||||||
Liabilities: |
||||||||||||||||||||
Long-term debt including the current portion |
— |
|
— |
|
|
|||||||||||||||
Investment contracts included in policyholders’ account in the life insurance business |
— |
|
— |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
— |
|
— |
|
|
|||||||||||||||
Yen in millions |
||||||||||||||||||||
March 31, 2020 |
||||||||||||||||||||
Estimated fair value |
Carrying amount |
|||||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
Total |
||||||||||||||||
Assets: |
||||||||||||||||||||
Housing loans in the banking business |
— |
|
— |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total assets |
— |
|
— |
|
|
|||||||||||||||
Liabilities: |
||||||||||||||||||||
Long-term debt including the current portion |
— |
|
— |
|
|
|||||||||||||||
Investment contracts included in policyholders’ account in the life insurance business |
— |
|
— |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total liabilities |
— |
|
— |
|
|
|||||||||||||||
14. |
Derivative instruments and hedging activities |
Derivatives designated as hedging instruments |
Yen in millions |
|||||||||||||||||||
Balance sheet location |
Fair value |
Balance sheet location |
Fair value |
|||||||||||||||||
|
March 31 |
|
March 31 |
|||||||||||||||||
Asset derivatives |
2019 |
2020 |
Liability derivatives |
2019 |
2020 |
|||||||||||||||
Interest rate contracts |
Prepaid expenses and other current assets |
|
|
Current liabilities: Other |
|
|
||||||||||||||
Interest rate contracts |
Other assets: Other |
|
|
Liabilities: Other |
|
|
||||||||||||||
Foreign exchange contracts |
Prepaid expenses and other current assets |
|
|
Current liabilities: Other |
|
— |
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Derivatives not designated as hedging instruments |
Yen in millions |
|||||||||||||||||||
Balance sheet location |
Fair value |
Balance sheet location |
Fair value |
|||||||||||||||||
|
March 31 |
|
March 31 |
|||||||||||||||||
Asset derivatives |
2019 |
2020 |
Liability derivatives |
2019 |
2020 |
|||||||||||||||
Interest rate contracts |
Prepaid expenses and other current assets |
|
|
Current liabilities: Other |
|
|
||||||||||||||
Interest rate contracts |
Other assets: Other |
|
|
Liabilities: Other |
|
|
||||||||||||||
Foreign exchange contracts |
Prepaid expenses and other current assets |
|
|
Current liabilities: Other |
|
|
||||||||||||||
Foreign exchange contracts |
Other assets: Other |
|
|
Liabilities: Other |
|
|
||||||||||||||
Equity contracts |
Prepaid expenses and other current assets |
|
|
Current liabilities: Other |
|
|
||||||||||||||
Bond contracts |
Prepaid expenses and other current assets |
— |
|
Current liabilities: Other |
— |
|
||||||||||||||
Commodity contracts |
Prepaid expenses and other current assets |
— |
|
Current liabilities: Other |
— |
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total derivatives |
|
|
|
|
||||||||||||||||
Derivatives under fair value hedging relationships |
Yen in millions |
|||||||||||||
Location of gains or (losses) recognized in income on derivative instruments |
Amounts of gains or (losses) recognized in income on derivative instruments |
|||||||||||||
Fiscal year ended March 31 |
||||||||||||||
2018 |
2019 |
2020 |
||||||||||||
Interest rate contracts |
Financial services revenue |
( |
) | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||||
Total |
( |
) | ( |
) | ( |
) | ||||||||
Yen in millions |
||||||||||||
Derivatives under cash flow hedging relationships |
Fiscal year ended March 31 |
|||||||||||
2018 |
2019 |
2020 |
||||||||||
Amounts recognized in unrealized gains (losses) on derivative instruments in OCI (before tax) |
||||||||||||
Foreign exchange contracts : |
||||||||||||
Components included in the assessment of hedge effectiveness |
( |
) | |
|
||||||||
Components excluded from the assessment of hedge effectiveness that were recognized based on amortization approach |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
( |
) | |
|
||||||||
Derivatives under cash flow hedging relationships |
Yen in millions |
|||||||||||||
Affected line item in consolidated statements of income |
Fiscal year ended March 31 |
|||||||||||||
2018 |
2019 |
2020 |
||||||||||||
Amounts reclassified from unrealized gains (losses) on derivative instruments in accumulated OCI (before tax) |
||||||||||||||
Foreign exchange contracts : |
||||||||||||||
Components included in the assessment of hedge effectiveness |
Cost of sales |
|
( |
) | — |
|||||||||
Net sales |
— |
— |
|
|||||||||||
Components excluded from the assessment of hedge effectiveness that were recognized based on amortization approach |
Net sales |
— |
— |
( |
) | |||||||||
|
|
|
|
|
|
|||||||||
Total |
|
( |
) | ( |
) | |||||||||
Derivatives not designated as hedging instruments |
Yen in millions |
|||||||||||||
Location of gains or (losses) recognized in income on derivative instruments |
Amounts of gains or (losses) recognized in income on derivative instruments |
|||||||||||||
Fiscal year ended March 31 |
||||||||||||||
2018 |
2019 |
2020 |
||||||||||||
Interest rate contracts |
Financial services revenue |
( |
) | ( |
) | |
||||||||
Foreign exchange contracts |
Financial services revenue |
|
( |
) | |
|||||||||
Foreign exchange contracts |
Foreign exchange loss, net |
|
( |
) | |
|||||||||
Equity contracts |
Financial services revenue |
( |
) | ( |
) | |
||||||||
Bond contracts |
Financial services revenue |
— |
— |
( |
) | |||||||||
Commodity contracts |
Financial services revenue |
— |
— |
|
||||||||||
|
|
|
|
|
|
|||||||||
Total |
|
( |
) | |
||||||||||
Derivatives under fair value hedging relationships |
Yen in millions |
|||||||||
Balance sheet location of hedged items |
March 31, 2020 |
|||||||||
Amortized cost |
Cumulative effect to carrying amount of hedged items by fair value hedges |
|||||||||
Interest rate contracts |
Marketable securities |
|
— |
|||||||
Interest rate contracts |
Securities investments and other |
|
— |
|||||||
|
|
|
|
|||||||
Total |
|
— |
||||||||
Yen in millions |
||||||||||||||||
March 31, 2019 |
March 31, 2020 |
|||||||||||||||
Notional amount |
Fair value |
Notional amount |
Fair value |
|||||||||||||
Foreign exchange contracts: |
||||||||||||||||
Foreign exchange forward contracts |
|
( |
) | |
|
|||||||||||
Currency option contracts purchased |
|
|
|
|
||||||||||||
Currency option contracts written |
|
( |
) | |
( |
) | ||||||||||
Currency swap agreements |
|
( |
) | |
( |
) | ||||||||||
Other currency contracts |
|
|
|
|
||||||||||||
Interest rate contracts: |
||||||||||||||||
Interest rate swap agreements |
|
( |
) | |
( |
) | ||||||||||
Interest rate swaption agreements |
|
( |
) | |
( |
) | ||||||||||
Equity contracts: |
||||||||||||||||
Equity future contracts |
|
|
|
( |
) | |||||||||||
Equity swap agreements |
|
( |
) | |
|
|||||||||||
Bond contracts: |
||||||||||||||||
Bond future contracts |
— |
— |
|
|
||||||||||||
Commodity contracts: |
||||||||||||||||
Commodity future contracts |
— |
— |
|
|
Yen in millions |
||||||||||||||||
As of March 31, 2019 |
||||||||||||||||
Gross amounts presented in the consolidated balance sheet |
Gross amounts not offset in the consolidated balance sheet that are subject to master netting agreements |
|||||||||||||||
Financial instruments |
Cash collateral |
Net amounts |
||||||||||||||
Derivative assets subject to master netting agreements |
|
|
|
|
||||||||||||
Derivative assets not subject to master netting agreements |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting agreements |
|
|
|
|
||||||||||||
Derivative liabilities not subject to master netting agreements |
|
|
||||||||||||||
Repurchase, securities lending and similar arrangements |
|
|
— |
— |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
|
|
|
|
||||||||||||
Yen in millions |
||||||||||||||||
As of March 31, 2020 |
||||||||||||||||
Gross amounts presented in the consolidated balance sheet |
Gross amounts not offset in the consolidated balance sheet that are subject to master netting agreements |
|||||||||||||||
Financial instruments |
Cash collateral |
Net amounts |
||||||||||||||
Derivative assets subject to master netting agreements |
|
|
|
|
||||||||||||
Derivative assets not subject to master netting agreements |
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total assets |
|
|
|
|
||||||||||||
Derivative liabilities subject to master netting agreements |
|
|
|
|
||||||||||||
Derivative liabilities not subject to master netting agreements |
|
|
||||||||||||||
Repurchase, securities lending and similar arrangements |
|
|
— |
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total liabilities |
|
|
|
|
||||||||||||
15. |
Pension and severance plans |
(1) |
Defined benefit and severance plans |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Service cost |
|
|
|
|||||||||
Interest cost |
|
|
|
|||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | ||||||
Recognized actuarial loss |
|
|
|
|||||||||
Amortization of prior service costs |
( |
) | ( |
) | ( |
) | ||||||
Losses on curtailments and settlements |
— |
— |
|
|||||||||
|
|
|
|
|
|
|||||||
Net periodic benefit costs |
|
|
|
|||||||||
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Service cost |
|
|
|
|||||||||
Interest cost |
|
|
|
|||||||||
Expected return on plan assets |
( |
) | ( |
) | ( |
) | ||||||
Amortization of net transition asset |
|
— |
— |
|||||||||
Recognized actuarial loss |
|
|
|
|||||||||
Amortization of prior service costs |
( |
) | ( |
) | |
|||||||
Losses on curtailments and settlements |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Net periodic benefit costs |
|
|
|
|||||||||
Japanese plans |
Foreign plans |
|||||||||||||||
Yen in millions |
Yen in millions |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Change in benefit obligation: |
||||||||||||||||
Benefit obligation at beginning of the fiscal year |
|
|
|
|
||||||||||||
Service cost |
|
|
|
|
||||||||||||
Interest cost |
|
|
|
|
||||||||||||
Plan participants’ contributions |
— |
— |
|
|
||||||||||||
Plan amendments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Actuarial (gain) loss |
|
( |
) | |
|
|||||||||||
Foreign currency exchange rate changes |
— |
— |
( |
) | ( |
) | ||||||||||
Curtailments and settlements |
— |
( |
) | ( |
) | ( |
) | |||||||||
Effect of changes in consolidated subsidiaries |
— |
— |
|
— |
||||||||||||
Other |
|
|
— |
— |
||||||||||||
Benefits paid |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Benefit obligation at end of the fiscal year |
|
|
|
|
||||||||||||
Change in plan assets: |
||||||||||||||||
Fair value of plan assets at beginning of the fiscal year |
|
|
|
|
||||||||||||
Actual return on plan assets |
|
|
|
|
||||||||||||
Foreign currency exchange rate changes |
— |
— |
( |
) | ( |
) | ||||||||||
Employer contribution |
|
|
|
|
||||||||||||
Plan participants’ contributions |
— |
— |
|
|
||||||||||||
Curtailments and settlements |
— |
( |
) | ( |
) | ( |
) | |||||||||
Benefits paid |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair value of plan assets at end of the fiscal year |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Funded status at end of the fiscal year |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Japanese plans |
Foreign plans |
|||||||||||||||
Yen in millions |
Yen in millions |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Noncurrent assets |
|
|
|
|
||||||||||||
Current liabilities |
— |
— |
( |
) | ( |
) | ||||||||||
Noncurrent liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Japanese plans |
Foreign plans |
|||||||||||||||
Yen in millions |
Yen in millions |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Prior service cost (credit) |
( |
) | ( |
) | ( |
) | |
|||||||||
Net actuarial loss |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance |
|
|
|
|
||||||||||||
Japanese plans |
Foreign plans |
|||||||||||||||
Yen in millions |
Yen in millions |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Accumulated benefit obligations |
|
|
|
|
Japanese plans |
Foreign plans |
|||||||||||||||
Yen in millions |
Yen in millions |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Projected benefit obligations |
|
|
|
|
||||||||||||
Accumulated benefit obligations |
|
|
|
|
||||||||||||
Fair value of plan assets |
|
|
|
|
Japanese plans |
Foreign plans |
|||||||||||||||
March 31 |
March 31 |
|||||||||||||||
2019 |
2020 |
2019 |
2020 |
|||||||||||||
Discount rate |
|
% | |
% | |
% | |
% | ||||||||
Rate of compensation increase |
* |
* |
|
|
* | Substantially all of Sony’s Japanese pension plans were point-based. Point-based plans do not incorporate a measure of compensation rate increases. |
Japanese plans |
Foreign plans |
|||||||||||||||||||||||
Fiscal year ended March 31 |
Fiscal year ended March 31 |
|||||||||||||||||||||||
2018 |
2019 |
2020 |
2018 |
2019 |
2020 |
|||||||||||||||||||
Discount rate |
|
% | |
% | |
% | |
% | |
% | |
% | ||||||||||||
Expected return on plan assets |
|
|
|
|
|
|
||||||||||||||||||
Rate of compensation increase |
* |
* |
* |
|
|
|
Japanese plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value at March 31, 2019 |
Fair value measurements using inputs considered as |
|||||||||||||||
Asset class |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Cash and cash equivalents |
|
|
— |
— |
||||||||||||
Equity: |
||||||||||||||||
Equity securities *1 |
|
|
|
— |
||||||||||||
Fixed income: |
||||||||||||||||
Government bonds *2 |
|
— |
|
— |
||||||||||||
Corporate bonds *3 |
|
— |
|
— |
||||||||||||
Asset-backed securities *4 |
|
— |
|
— |
||||||||||||
Commingled funds *5 |
|
— |
|
— |
||||||||||||
Commodity funds *6 |
|
— |
|
— |
||||||||||||
Private equity *7 |
|
— |
— |
|
||||||||||||
Hedge funds *8 |
|
— |
— |
|
||||||||||||
Real estate and other *9 |
|
— |
— |
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
Japanese plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value at March 31, 2020 |
Fair value measurements using inputs considered as |
|||||||||||||||
Asset class |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Cash and cash equivalents |
|
|
— |
— |
||||||||||||
Equity: |
||||||||||||||||
Equity securities *1 |
|
|
|
— |
||||||||||||
Fixed income: |
||||||||||||||||
Government bonds *2 |
|
|
|
— |
||||||||||||
Corporate bonds *3 |
|
|
|
— |
||||||||||||
Asset-backed securities *4 |
|
— |
|
— |
||||||||||||
Commingled funds *5 |
|
— |
|
— |
||||||||||||
Commodity funds *6 |
|
— |
|
— |
||||||||||||
Private equity *7 |
|
— |
— |
|
||||||||||||
Hedge funds *8 |
|
— |
— |
|
||||||||||||
Real estate and other *9 |
|
— |
( |
) |
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
*1 | Includes approximately |
*2 | Includes approximately |
*3 | Includes debt securities issued by Japanese and foreign corporation and government related agencies. |
*4 | Includes primarily mortgage-backed securities. |
*5 | Commingled funds represent pooled institutional investments, including primarily investment trusts. They include approximately |
*6 | Represents commodity futures funds. |
*7 | Includes multiple private equity funds of funds that primarily invest in venture, buyout, and distressed markets in the United States and Europe. |
*8 | Includes primarily funds that invest in a portfolio of a broad range of hedge funds to diversify the risks and reduce the volatilities associated with a single hedge fund. |
*9 | Includes primarily private real estate investment trusts. |
Foreign plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value at 2019 |
Fair value measurements using inputs considered as |
|||||||||||||||
Asset class |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Cash and cash equivalents |
|
|
— |
— |
||||||||||||
Equity: |
||||||||||||||||
Equity securities *1 |
|
|
|
— |
||||||||||||
Fixed income: |
||||||||||||||||
Government bonds *2 |
|
— |
|
— |
||||||||||||
Corporate bonds *3 |
|
— |
|
— |
||||||||||||
Asset-backed securities |
|
— |
|
— |
||||||||||||
Insurance contracts *4 |
|
— |
|
|
||||||||||||
Commingled funds *5 |
|
— |
|
— |
||||||||||||
Real estate and other *6 |
|
— |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
Foreign plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value at 2020 |
Fair value measurements using inputs considered as |
|||||||||||||||
Asset class |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||
Cash and cash equivalents |
|
|
— |
— |
||||||||||||
Equity: |
||||||||||||||||
Equity securities *1 |
|
|
|
— |
||||||||||||
Fixed income: |
||||||||||||||||
Government bonds *2 |
|
— |
|
— |
||||||||||||
Corporate bonds *3 |
|
— |
|
— |
||||||||||||
Asset-backed securities |
|
— |
|
— |
||||||||||||
Insurance contracts *4 |
|
— |
|
|
||||||||||||
Commingled funds *5 |
|
— |
|
— |
||||||||||||
Real estate and other *6 |
|
— |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
*1 | Includes primarily foreign equity securities. |
*2 | Includes primarily foreign government debt securities. |
*3 | Includes primarily foreign corporate debt securities. |
*4 | Represents annuity contracts with or without profit sharing. |
*5 | Commingled funds represent pooled institutional investments including mutual funds, common trust funds, and collective investment funds. They are primarily comprised of foreign equities and fixed income investments. |
*6 | Includes primarily private real estate investment trusts. |
Japanese plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value measurement using significant unobservable inputs (Level 3) |
||||||||||||||||
Private equity |
Hedge funds |
Real estate and other |
Total |
|||||||||||||
Beginning balance at April 1, 2018 |
|
|
|
|
||||||||||||
Return on assets held at end of year |
|
|
|
|
||||||||||||
Purchases, sales, and settlements, net |
( |
) | |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2019 |
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Return on assets held at end of year |
|
( |
) | |
|
|||||||||||
Purchases, sales, and settlements, net |
( |
) | ( |
) | |
( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2020 |
|
|
|
|
||||||||||||
Foreign plans |
||||||||||||||||
Yen in millions |
||||||||||||||||
Fair value measurement using significant unobservable inputs (Level 3) |
||||||||||||||||
Insurance contracts |
Corporate bonds |
Real estate and other |
Total |
|||||||||||||
Beginning balance at April 1, 2018 |
|
|
|
|
||||||||||||
Return on assets held at end of year |
|
— |
|
|
||||||||||||
Purchases, sales, and settlements, net |
( |
) | — |
( |
) | ( |
) | |||||||||
Transfers, net |
— |
( |
) | |
( |
) | ||||||||||
Other * |
( |
) | |
( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2019 |
|
— |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Return on assets held at end of year |
|
— |
|
|
||||||||||||
Purchases, sales, and settlements, net |
( |
) | — |
|
|
|||||||||||
Transfers, net |
— |
— |
— |
— |
||||||||||||
Other * |
( |
) | — |
( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Ending balance at March 31, 2020 |
|
— |
|
|
||||||||||||
* | Primarily consists of translation adjustments. |
Japanese plans |
Foreign plans |
|||||||
Fiscal year ending March 31 |
Yen in millions |
Yen in millions |
||||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
||||||
2025 |
|
|
||||||
2026 — 2030 |
|
|
(2) |
Defined contribution plans |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Japanese plans |
|
|
|
|||||||||
Foreign plans |
|
|
|
16. |
Stockholders’ equity |
(1) |
Common stock |
Number of shares |
||||
Balance at March 31, 2017 |
|
|||
Issuance of new shares |
|
|||
Exercise of stock acquisition rights |
|
|||
Conversion of convertible bonds |
|
|||
|
|
|||
Balance at March 31, 2018 |
|
|||
Issuance of new shares |
|
|||
Exercise of stock acquisition rights |
|
|||
Conversion of convertible bonds |
|
|||
|
|
|||
Balance at March 31, 2019 |
|
|||
|
|
|||
Issuance of new shares |
|
|||
Exercise of stock acquisition rights |
|
|||
Conversion of convertible bonds |
|
|||
Cancellation of treasury stock |
( |
) | ||
|
|
|||
Balance at March 31, 2020 |
|
|||
(2) |
Retained earnings |
(3) |
Other comprehensive income |
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 |
|
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Other comprehensive income before reclassifications |
|
( |
) | |
( |
) | ( |
) | ||||||||||||
Amounts reclassified out of accumulated other comprehensive income * |
( |
) | |
|
( |
) | |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income |
|
( |
) | |
( |
) | |
|||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests |
|
— |
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2018 |
|
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
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, 2018 |
|
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Cumulative effect of ASU2016-01 |
( |
) | — |
— |
— |
( |
) | |||||||||||||
Other comprehensive income before reclassifications |
|
|
( |
) | |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Amounts reclassified out of accumulated other comprehensive income * |
|
( |
) | |
( |
) | |
|||||||||||||
Net other comprehensive income |
|
|
( |
) | |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: Other comprehensive income attributable to noncontrolling interests |
|
— |
|
( |
) | |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2019 |
|
( |
) | ( |
) | ( |
) | ( |
) | |||||||||||
Yen in millions |
||||||||||||||||||||||||
Unrealized gains (losses) on securities |
Unrealized gains (losses) on derivative instruments |
Pension liability adjustment |
Foreign currency translation adjustments |
Debt valuation adjustments |
Total |
|||||||||||||||||||
Balance at March 31, 2019 |
|
( |
) | ( |
) | ( |
) | — |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other comprehensive income before reclassifications |
|
|
( |
) | ( |
) | |
( |
) | |||||||||||||||
Amounts reclassified out of accumulated other comprehensive income * |
|
|
|
( |
) | — |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net other comprehensive income |
|
|
|
( |
) | |
|
|||||||||||||||||
Less: Other comprehensive income attributable to noncontrolling interests |
|
— |
|
( |
) | |
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at March 31, 2020 |
|
|
( |
) | ( |
) | |
( |
) | |||||||||||||||
* | Foreign currency translation adjustments were transferred from accumulated other comprehensive income to net income as a result of a complete or substantially complete liquidation or sale of certain foreign subsidiaries and affiliates. |
Yen in millions |
||||||||||||||
Comprehensive income components |
Amounts reclassified from accumulated other comprehensive income |
Affected line items in consolidated statements of income | ||||||||||||
2018 |
2019 |
2020 |
||||||||||||
Unrealized gains (losses) on securities |
( |
) | |
|
Financial services revenue | |||||||||
( |
) | — |
— |
Gain on sale of securities investments, net | ||||||||||
|
|
|
|
|
|
|||||||||
Total before tax |
( |
) | |
|
||||||||||
Tax expense or (benefit) |
|
( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|||||||||
Net of tax |
( |
) | |
|
||||||||||
|
|
|
|
|
|
|||||||||
Unrealized gains (losses) on derivative instruments |
|
( |
) | — |
Cost of sales | |||||||||
— |
— |
|
Net sales | |||||||||||
|
|
|
|
|
|
|||||||||
Total before tax |
|
( |
) | |
||||||||||
Tax expense or (benefit) |
— |
— |
( |
) |
||||||||||
|
|
|
|
|
|
|||||||||
Net of tax |
|
( |
) | |
||||||||||
|
|
|
|
|
|
|||||||||
Pension liability adjustment |
|
|
|
* | ||||||||||
Tax expense or (benefit) |
( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||||
Net of tax |
|
|
|
|||||||||||
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | Foreign exchange loss, net and other operating (income) expense, net | |||||||
Tax expense or (benefit) |
— |
— |
— |
|||||||||||
|
|
|
|
|
|
|||||||||
Net of tax |
( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||||
Total amounts reclassified out of accumulated other comprehensive income, net of tax |
|
|
|
|||||||||||
* | The amortization of pension and postretirement benefit components is included in the computation of net periodic pension cost. Refer to Note 15. |
(4) |
Equity transactions with noncontrolling interests |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net income attributable to Sony Corporation’s stockholders |
|
|
|
|||||||||
Transfers (to) from the noncontrolling interests: |
||||||||||||
Increase (decrease) in additional paid-in capital for purchase of additional shares in consolidated subsidiaries |
( |
) | ( |
) | |
|||||||
|
|
|
|
|
|
|||||||
Change from net income attributable to Sony Corporation’s stockholders and transfers (to) from the noncontrolling interests |
|
|
|
|||||||||
17. |
Stock-based compensation plans |
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Weighted-average assumptions |
||||||||||||
Risk-free interest rate |
|
% | |
% | |
% | ||||||
Expected lives |
|
years | |
years | |
years | ||||||
Expected volatility * |
|
% | |
% | |
% | ||||||
Expected dividends |
|
% | |
% | |
% |
* | Expected volatility was based on the historical volatilities of Sony Corporation’s common stock over the expected life of the stock acquisition rights. |
Fiscal year ended March 31, 2020 |
||||||||||||||||
Number of shares |
Weighted- average exercise price |
Weighted- average remaining life |
Total intrinsic value |
|||||||||||||
Yen |
Years |
Yen in millions |
||||||||||||||
Outstanding at beginning of the fiscal year |
|
|
||||||||||||||
Granted |
|
|
||||||||||||||
Exercised |
|
|
||||||||||||||
Forfeited or expired |
|
|
||||||||||||||
Outstanding at end of the fiscal year |
|
|
|
|
||||||||||||
Exercisable at end of the fiscal year |
|
|
|
|
||||||||||||
18. |
Kumamoto Earthquake |
19. |
Revenue |
(1) |
Contract balances |
Yen in millions |
||||||||
March 3 1, 2019 |
March 31, 2020 |
|||||||
Receivables from contracts with customers *1 |
|
|
||||||
Contract assets *1 |
|
|
||||||
Contract liabilities *2 |
|
|
*1 |
Receivables from contracts with customers and contract assets are included in the consolidated balance sheets as “Notes and accounts receivable, trade and contract assets” and “Other”, non-current. |
*2 | Contract liabilities are included in the consolidated balance sheets as “Other”, both current and non-current. |
(2) |
Performance obligations |
Yen in millions |
||||
March 31, 2020 |
||||
Pictures — Motion Pictures and Television Productions *1 |
|
|||
Pictures — Media Networks |
|
|||
Music *2 |
|
|||
Others |
|
*1 | For Motion Pictures and Television Productions in the Pictures segment, Sony has included all contracts regardless of duration. |
*2 | Amount included in the Music segment primarily consists of minimum royalty guarantees or fixed fees in contracts related to license revenue for ongoing access to an evolving library of content. These contracts also include the potential for sales-based or usage-based royalties to exceed the minimum guarantees, and these additional royalties are excluded from the amount above, of which substantially all are recognized as revenue within three years. |
(3) |
Contract costs |
Yen in millions |
||||||||
March 31 , 2019 |
March 31, 2020 |
|||||||
Incremental costs of obtaining a contract |
|
|
(4) |
Disaggregation of revenue |
20. |
Restructuring charges |
Yen in millions |
||||||||||||||||
Employee termination benefits |
Non-cash write-downs and disposals, net * |
Other associated costs |
Total |
|||||||||||||
Balance at March 31, 2017 |
|
— |
|
|
||||||||||||
Restructuring costs |
|
|
|
|
||||||||||||
Non-cash charges |
— |
( |
) | — |
( |
) | ||||||||||
Cash payments |
( |
) | — |
( |
) | ( |
) | |||||||||
Adjustments |
( |
) | — |
|
( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2018 |
|
— |
|
|
||||||||||||
Restructuring costs |
|
|
|
|
||||||||||||
Non-cash charges |
— |
( |
) | — |
( |
) | ||||||||||
Cash payments |
( |
) | — |
( |
) | ( |
) | |||||||||
Adjustments |
|
— |
( |
) | |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2019 |
|
— |
|
|
||||||||||||
Restructuring costs |
|
|
|
|
||||||||||||
Non-cash charges |
— |
( |
) | — |
( |
) | ||||||||||
Cash payments |
( |
) | — |
( |
) | ( |
) | |||||||||
Adjustments |
( |
) | — |
( |
) | ( |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at March 31, 2020 |
|
— |
|
|
||||||||||||
* | Significant asset impairments excluded from restructuring charges are described in Note 13. |
Yen in millions |
||||||||||||||||||||
Fiscal year ended March 31, 2018 |
||||||||||||||||||||
Employee termination benefits |
Other associated costs * |
Total net restructuring charges |
Depreciation associated with restructured assets |
Total |
||||||||||||||||
Game & Network Services |
— |
— |
— |
— |
— |
|||||||||||||||
Music |
|
|
|
— |
|
|||||||||||||||
Pictures |
|
— |
|
— |
|
|||||||||||||||
Electronics Products & Solutions |
|
|
|
|
|
|||||||||||||||
Imaging & Sensing Solutions |
|
— |
|
— |
|
|||||||||||||||
Financial Services |
— |
— |
— |
— |
— |
|||||||||||||||
All Other and Corporate |
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
|
|
|
|
|
|||||||||||||||
Yen in millions |
||||||||||||||||||||
Fiscal year ended March 31, 2019 |
||||||||||||||||||||
Employee termination benefits |
Other associated costs * |
Total net restructuring charges |
Depreciation associated with restructured assets |
Total |
||||||||||||||||
Game & Network Services |
— |
— |
— |
— |
— |
|||||||||||||||
Music |
|
|
|
— |
|
|||||||||||||||
Pictures |
|
— |
|
— |
|
|||||||||||||||
Electronics Products & Solutions |
|
|
|
|
|
|||||||||||||||
Imaging & Sensing Solutions |
— |
— |
— |
— |
— |
|||||||||||||||
Financial Services |
— |
— |
— |
— |
— |
|||||||||||||||
All Other and Corporate |
|
|
|
— |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
|
|
|
|
|
|||||||||||||||
Yen in millions |
||||||||||||||||||||
Fiscal year ended March 31, 2020 |
||||||||||||||||||||
Employee termination benefits |
Other associated costs * |
Total net restructuring charges |
Depreciation associated with restructured assets |
Total |
||||||||||||||||
Game & Network Services |
— |
— |
— |
— |
— |
|||||||||||||||
Music |
|
|
|
— |
|
|||||||||||||||
Pictures |
|
— |
|
— |
|
|||||||||||||||
Electronics Products & Solutions |
|
|
|
— |
|
|||||||||||||||
Imaging & Sensing Solutions |
— |
— |
— |
— |
— |
|||||||||||||||
Financial Services |
— |
— |
— |
— |
— |
|||||||||||||||
All Other and Corporate |
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
|
|
|
|
|
|||||||||||||||
* | Other associated costs includes non-cash write-downs and disposals, net |
21. |
Supplemental consolidated statements of income information |
(1) |
Other operating (income) expense, net |
Yen in millions |
||||||||||||
March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Gain on sale of Sony City Osaki *1 |
( |
) | — |
— |
||||||||
Gain on remeasurement of EMI shares *2 |
— |
( |
) | — |
||||||||
Gain on remeasurement and sale of SRE shares *3 |
— |
— |
( |
) | ||||||||
Gain on remeasurement of AEGON Sony Life Insurance Co., Ltd. and SA Reinsurance Ltd. shares *4 |
— |
— |
( |
) | ||||||||
(Gain) loss on purchase/sale of interests in subsidiaries and affiliates, net *5 |
( |
) | ( |
) | ( |
) | ||||||
(Gain) loss on sale, disposal or impairment of assets, net *6 |
|
|
|
|||||||||
Other |
— |
— |
( |
) | ||||||||
|
|
|
|
|
|
|||||||
|
( |
) | ( |
) | ||||||||
*1 | A portion of gain on sale and leaseback transactions is deferred and is amortized on a straight-line basis over the lease term. |
*2 | Refer to Notes 5 and 25. |
*3 | Refer to Note 5. |
*4 | Refer to Notes 5 and 25. |
*5 | Refer to Notes 25 and 26. |
*6 | Refer to Notes 9, 13, 20 and 26. |
(2) |
Research and development costs |
(3) |
Advertising costs |
(4) |
Shipping and handling costs |
22. |
Income taxes |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Income before income taxes: |
||||||||||||
Sony Corporation and all subsidiaries in Japan |
|
|
|
|||||||||
Foreign subsidiaries |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
|
|
|
||||||||||
Income taxes—Current: |
||||||||||||
Sony Corporation and all subsidiaries in Japan |
|
|
|
|||||||||
Foreign subsidiaries |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
|
|
|
||||||||||
Income taxes—Deferred: |
||||||||||||
Sony Corporation and all subsidiaries in Japan |
|
|
|
|||||||||
Foreign subsidiaries |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
|
( |
) | |
|||||||||
|
|
|
|
|
|
|||||||
Total income tax expense |
|
|
|
|||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Statutory tax rate |
|
% | |
% | |
% | ||||||
Non-deductible expenses |
|
|
|
|||||||||
Income tax credits |
( |
) | ( |
) | ( |
) | ||||||
Change in statutory tax rate and law |
( |
) | ( |
) | ( |
) | ||||||
Change in valuation allowances (other than the 2019 reversal of Sony Americas Holding Inc. (“SAHI”) and its U.S. consolidated tax filing group below) |
( |
) | |
( |
) | |||||||
The 2019 reversal of valuation allowances of SAHI and its U.S. consolidated tax filing group |
— |
( |
) | — |
||||||||
Change in deferred tax liabilities on undistributed earnings of foreign subsidiaries and corporate joint ventures |
( |
) | ( |
) | |
|||||||
Lower tax rate applied to life and non-life insurance business in Japan |
( |
) | ( |
) | ( |
) | ||||||
Foreign income tax differential |
( |
) | ( |
) | ( |
) | ||||||
Adjustments to tax reserves |
( |
) | ( |
) | |
|||||||
Effect of equity in net income of affiliated companies |
|
|
|
|||||||||
The remeasurement gain for the equity interest in EMI |
— |
( |
) | — |
||||||||
Japan controlled foreign company taxation |
— |
|
|
|||||||||
Other |
|
( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Effective income tax rate |
|
% | |
% | |
% | ||||||
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Operating loss carryforwards for tax purposes |
|
|
||||||
Accrued pension and severance costs |
|
|
||||||
Amortization including film costs |
|
|
||||||
Lease liability |
|
|
— |
|
|
|
|
|
Warranty reserves and accrued expenses |
|
|
||||||
Future insurance policy benefits |
|
|
||||||
Inventory |
|
|
||||||
Depreciation |
|
|
||||||
Tax credit carryforwards |
|
|
||||||
Loss on equity securities |
|
|
— |
|
|
|
|
|
Reserve for doubtful accounts |
|
|
||||||
Impairment of investments |
|
|
||||||
Deferred revenue |
|
|
||||||
Other |
|
|
||||||
|
|
|||||||
Gross deferred tax assets |
|
|
||||||
Less: Valuation allowance |
( |
) | ( |
) | ||||
|
|
|||||||
Total deferred tax assets |
|
|
||||||
|
|
|||||||
Deferred tax liabilities: |
||||||||
Insurance acquisition costs |
( |
) | ( |
) | ||||
Future insurance policy benefits |
( |
) | ( |
) | ||||
Unbilled accounts receivable in the Pictures segment |
( |
) | ( |
) | ||||
Right-of-use assets |
|
|
— |
|
|
|
( |
) |
Unrealized gains on securities |
( |
) | ( |
) | ||||
Gain on equity securities |
( |
) | |
|||||
Intangible assets acquired through stock exchange offerings |
( |
) | ( |
) | ||||
Intangible assets derived from EMI Music Publishing acquisition |
( |
) | ( |
) | ||||
Undistributed earnings of foreign subsidiaries and corporate joint ventures |
( |
) | ( |
) | ||||
Investment in M3 |
( |
) | ( |
) | ||||
Other |
( |
) | ( |
) | ||||
|
|
|||||||
Gross deferred tax liabilities |
( |
) | ( |
) | ||||
|
|
|||||||
Net deferred tax liabilities |
( |
) | ( |
) | ||||
Yen in millions |
||||||||||||
March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Balance at beginning of the fiscal year |
|
|
|
|||||||||
Reductions for tax positions of prior years |
( |
) | ( |
) | ( |
) | ||||||
Additions for tax positions of prior years |
|
|
|
|||||||||
Additions based on tax positions related to the current year |
|
|
|
|||||||||
Settlements |
( |
) | ( |
) | ( |
) | ||||||
Lapse in statute of limitations |
( |
) | ( |
) | ( |
) | ||||||
Foreign currency translation adjustments |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at end of the fiscal year |
|
|
|
|||||||||
Total net amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate |
|
|
|
23. |
Reconciliation of the differences between basic and diluted EPS |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net income attributable to Sony Corporation’s stockholders for basic and diluted EPS computation |
|
|
|
|||||||||
Thousands of shares |
||||||||||||
Weighted-average shares outstanding |
|
|
|
|||||||||
Effect of dilutive securities: |
||||||||||||
Stock acquisition rights |
|
|
|
|||||||||
Zero coupon convertible bonds |
|
|
|
|||||||||
|
|
|||||||||||
Weighted-average shares for diluted EPS computation |
|
|
|
|||||||||
Yen |
||||||||||||
Basic EPS |
|
|
|
|||||||||
Diluted EPS |
|
|
|
|||||||||
24. |
Variable interest entities |
(1 ) |
Consolidated VIEs |
(2) |
Unconsolidated VIEs |
Yen in millions |
||||||||||||||||
March 31, 2019 |
||||||||||||||||
Presentation in the consolidated balance sheets |
Maximum exposure to loss |
|||||||||||||||
Marketable securities |
Securities investments and other |
Prepaid expenses and other current assets |
||||||||||||||
Equity securities *1 |
|
|
— |
|
||||||||||||
Securitized products |
— |
|
— |
|
||||||||||||
Foreign corporate bonds *2 |
|
|
— |
|
||||||||||||
Other investments |
— |
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
Yen in millions |
||||||||||||||||
March 31, 2020 |
||||||||||||||||
Presentation in the consolidated balance sheets |
Maximum exposure to loss |
|||||||||||||||
Marketable securities |
Securities investments and other |
Prepaid expenses and other current assets |
||||||||||||||
Equity securities *1 |
|
|
— |
|
||||||||||||
Securitized products |
— |
|
— |
|
||||||||||||
Foreign corporate bonds *2 |
|
|
— |
|
||||||||||||
Other investments |
— |
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
||||||||||||
*1 |
Equity securities include Investment funds. |
*2 |
Foreign corporate bonds include repackaged bonds. |
25. |
Acquisitions |
(1) |
EMI Music Publishing acquisition |
Yen in millions |
||||||||||||
Acquired assets and liabilities recorded at fair value as of acquisition date (Preliminary) |
Measurement period adjustments |
Acquired assets and liabilities recorded at fair value as of acquisition date (Final) |
||||||||||
Cash and cash equivalents |
|
|
||||||||||
Notes and accounts receivable, trade and contract assets |
|
|
||||||||||
Prepaid expenses and other current assets |
|
( |
) | |
||||||||
Securities investments and other |
|
|
||||||||||
Intangibles, net |
|
|
||||||||||
Goodwill |
|
( |
) | |
||||||||
Other |
|
|
||||||||||
|
|
|
|
|
|
|||||||
Total assets |
|
( |
) | |
||||||||
|
|
|
|
|
|
|||||||
Notes and accounts payable, trade |
|
|
||||||||||
Accounts payable, other and accrued expenses |
|
|
||||||||||
Accrued income and other taxes |
|
( |
) | |
||||||||
Long-term debt |
|
|
||||||||||
Accrued pension and severance costs |
|
|
||||||||||
Deferred income taxes |
|
( |
) | |
||||||||
Other |
|
|
||||||||||
|
|
|
|
|
|
|||||||
Total liabilities |
|
( |
) | |
||||||||
|
|
|
|
|
|
Yen in millions, Yen per share amounts |
||||||||
Fiscal year ended March 31 |
||||||||
2018 |
2019 |
|||||||
Net sales |
|
|
||||||
Operating income |
|
|
||||||
Net income attributable to Sony Corporation’s stockholders |
|
|
||||||
Per share data: |
||||||||
— Basic EPS |
|
|
||||||
— Diluted EPS |
|
|
(2) |
Insomniac Games, Inc. acquisition |
(3) |
Silvergate Media acquisition |
(4) |
Acquisition of equity interests in joint ventures in the life insurance business |
Yen in millions |
||||
Cash and cash equivalents |
|
|||
Marketable securities |
|
|||
Prepaid expenses and other current assets |
|
|||
Securities investments and other |
15,329 |
|||
Goodwill |
|
|||
Other |
|
|||
|
|
|||
Total assets |
|
|||
|
|
|||
Future insurance policy benefits and other |
|
|||
Policyholders’ account in the life insurance business |
|
|||
Other |
|
|||
|
|
|||
Total liabilities |
|
|||
|
|
(5) |
Other acquisitions |
26. |
Divestitures |
27. |
Collaborative arrangements |
28. |
Commitments, contingent liabilities and other |
(1) |
Loan commitments |
(2) |
Purchase commitments and other |
Fiscal year ending March 31 |
Yen in millions |
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
2024 |
|
|||
2025 |
|
|||
Later fiscal years |
|
|||
|
|
|||
Total |
|
|||
(3) |
Litigation |
(4) |
Guarantees |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Balance at beginning of the fiscal year |
|
|
|
|||||||||
Additional liabilities for warranties |
|
|
|
|||||||||
Settlements (in cash or in kind) |
( |
) | ( |
) | ( |
) | ||||||
Changes in estimate for pre-existing warranty reserve |
( |
) | ( |
) | ( |
) | ||||||
Translation adjustments |
|
( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance at end of the fiscal year |
|
|
|
|||||||||
29. |
Business segment information |
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Sales and operating revenue: |
||||||||||||
Game & Network Services — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Music — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Pictures — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Electronics Products & Solutions — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Imaging & Sensing Solutions — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Financial Services — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
All Other — |
||||||||||||
Customers |
|
|
|
|||||||||
Intersegment |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Corporate and elimination |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated total |
|
|
|
|||||||||
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Operating income (loss): |
||||||||||||
Game & Network Services |
|
|
|
|||||||||
Music |
|
|
|
|||||||||
Pictures |
|
|
|
|||||||||
Electronics Products & Solutions |
|
|
|
|||||||||
Imaging & Sensing Solutions |
|
|
|
|||||||||
Financial Services |
|
|
|
|||||||||
All Other |
( |
) | ( |
) | |
|||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Corporate and elimination |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated operating income |
|
|
|
|||||||||
Other income |
|
|
|
|||||||||
Other expenses |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Consolidated income before income taxes |
|
|
|
|||||||||
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Equity in net income (loss) of affiliated companies: |
||||||||||||
Game & Network Services |
— |
— |
|
|||||||||
Music |
|
( |
) | |
||||||||
Pictures |
( |
) | |
( |
) | |||||||
Electronics Products & Solutions |
( |
) | ( |
) | |
|||||||
Imaging & Sensing Solutions |
— |
— |
|
|||||||||
Financial Services |
( |
) | ( |
) | ( |
) | ||||||
All Other |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total |
|
( |
) | |
||||||||
Depreciation and amortization: |
||||||||||||
Game & Network Services |
|
|
|
|||||||||
Music |
|
|
|
|||||||||
Pictures |
|
|
|
|||||||||
Electronics Products & Solutions |
|
|
|
|||||||||
Imaging & Sensing Solutions |
|
|
|
|||||||||
Financial Services, including deferred insurance acquisition costs |
|
|
|
|||||||||
All Other |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Corporate |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total |
|
|
|
|||||||||
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Sales and operating revenue: |
||||||||||||
Game & Network Services |
||||||||||||
Digital Software and Add-on Content |
|
|
|
|||||||||
Network Services |
|
|
|
|||||||||
Hardware and Others |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Music |
||||||||||||
Recorded Music — Streaming |
|
|
|
|||||||||
Recorded Music — Others |
|
|
|
|||||||||
Music Publishing |
|
|
|
|||||||||
Visual Media and Platform |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Pictures |
||||||||||||
Motion Pictures |
|
|
|
|||||||||
Television Productions |
|
|
|
|||||||||
Media Networks |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Electronics Products & Solutions |
||||||||||||
Televisions |
|
|
|
|||||||||
Audio and Video |
|
|
|
|||||||||
Still and Video Cameras |
|
|
|
|||||||||
Mobile Communications |
|
|
|
|||||||||
Other |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Imaging & Sensing Solutions |
|
|
|
|||||||||
Financial Services |
|
|
|
|||||||||
All Other |
|
|
|
|||||||||
Corporate |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Consolidated total |
|
|
|
|||||||||
Yen in millions |
||||||||||||
Fiscal year ended March 31 |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Sales and operating revenue: |
||||||||||||
Japan |
|
|
|
|||||||||
United States |
|
|
|
|||||||||
Europe |
|
|
|
|||||||||
China |
|
|
|
|||||||||
Asia-Pacific |
|
|
|
|||||||||
Other Areas |
|
|
|
|||||||||
|
|
|
|
|
|
|||||||
Total |
|
|
|
|||||||||
Yen in millions |
||||||||
March 31 |
||||||||
2019 |
2020 |
|||||||
Property, plant and equipment, net and right-of-use assets*: |
||||||||
Japan |
|
|
||||||
United States |
|
|
||||||
Europe |
|
|
||||||
China |
|
|
||||||
Asia-Pacific |
|
|
||||||
Other Areas |
|
|
||||||
|
|
|
|
|||||
Total |
|
|
||||||
* |
As of March 31, 2020, the amounts include operating lease right-of-use assets, which were recognized from April 1, 2019 onward as a result of the adoption of ASU 2016-02. |
(1) Europe: |
United Kingdom, France, Germany, Russia, Spain and Sweden | |
(2) Asia-Pacific: |
India, South Korea, Oceania, Thailand and Malaysia | |
(3) Other Areas: |
The Middle East/Africa, Brazil, Mexico and Canada |
30. |
Subsequent events |
1. |
Shares and Stock Acquisition Rights to be purchased: Common shares (excluding SFH’s common shares owned by Sony Corporation and the treasury shares owned by SFH) and the related stock acquisition rights |
2. |
Period: From May 20, 2020 through July 13, 2020 |
3. |
Price: |
4. |
Number of Shares to be purchased (including the number of shares subject to stock acquisition rights): |
Yen in millions |
||||||||||||||||||||||||
Balance at beginning of period |
Beginning adjustment (Note 3) |
Additions charged to costs and expenses |
Deductions (Note 1) |
Other (Note 2) |
Balance at end of period |
|||||||||||||||||||
Fiscal year ended March 31, 2018: |
||||||||||||||||||||||||
Allowance for doubtful accounts and sales returns |
|
— |
|
( |
) | |
|
|||||||||||||||||
Fiscal year ended March 31, 2019: |
||||||||||||||||||||||||
Allowance for doubtful accounts |
|
( |
) | |
( |
) | |
|
||||||||||||||||
Fiscal year ended March 31, 2020: |
||||||||||||||||||||||||
Allowance for doubtful accounts |
|
— |
|
( |
) | ( |
) | |
||||||||||||||||
1. | Reversal including amounts written off. |
2. | Translation adjustments. |
3. | Sony adopted ASU 2014-09 from April 1, 2018, and as a result, sales returns are presented as a liability instead of as a contra-asset allowance. Accordingly, Sony changed the presentation from “Allowance for doubtful accounts and sales returns” to “Allowance for doubtful accounts” for the fiscal years ended March 31, 2019 and 2020. |
Yen in millions |
||||||||||||||||||||
Balance at beginning of period |
Additions |
Deductions |
Other (Note 1) |
Balance at end of period |
||||||||||||||||
Fiscal year ended March 31, 2018: |
||||||||||||||||||||
Valuation allowance — Deferred tax assets |
|
|
( |
) | ( |
) | |
|||||||||||||
Fiscal year ended March 31, 2019: |
||||||||||||||||||||
Valuation allowance — Deferred tax assets |
|
|
( |
) | |
|
||||||||||||||
Fiscal year ended March 31, 2020: |
||||||||||||||||||||
Valuation allowance — Deferred tax assets |
|
|
( |
) | ( |
) | |
|||||||||||||
1. | Translation adjustments and the effect of change in statutory tax rate. |