Sony Achieves Record Quarterly Sales and Net Income; Pictures, Electronics and Game Segments Contribute to Profitability
PRNewswire-FirstCall
TOKYO
01/29/2003
Sony Corporation announced today its consolidated results for the third quarter ended December 31, 2002 (October 1, 2002 to December 31, 2002).
Highlights
-- For the three months ended December 31, 2002, consolidated sales
increased slightly year on year to achieve a quarterly record for Sony
of Yen 2,307.7 billion ($19.2 billion). Operating income increased
Yen 40.9 billion year on year to Yen 199.5 billion ($1.7 billion).
Net income reached Yen 125.4 billion ($1.05 billion), the highest
quarterly net income Sony has ever recorded. The depreciation of the
Yen against the euro had a positive impact on results.
-- In the Pictures business, strong home entertainment sales of motion
pictures, including Spider-Man and Men in Black II, that had strong
theatrical performances earlier in the year, resulted in a significant
increase in sales and operating income.
-- In the Electronics segment, although sales decreased due to the severe
operating environment, the strong performance of components,
semiconductors and consumer audio-visual products, which resulted from
an improvement in profit structure, resulted in an increase in total
operating income.
-- In the Game segment, the market penetration of hardware continued to
expand as hardware unit sales, primarily in the U.S. and Europe,
increased significantly during the quarter. As a result, software
sales worldwide increased, and this enabled the segment to again
achieve the high level of sales and operating income recorded in the
same quarter of the previous year.
-- Cash flow was positive throughout the nine months ended December 31,
2002, a significant improvement over the same period of the previous
year. This was due to an increase in the operating income of the
Electronics, Game, and Pictures businesses. Total interest-bearing
debt on December 31, 2002 was lower than as of December 31, 2001 and
as of March 31, 2002.
-- Based on management's belief that uncertain market conditions and the
implementation of additional restructuring initiatives will make the
fourth quarter a difficult one, Sony has not changed its forecast for
the fiscal year ending March 31, 2003, which was announced in October
2002.
(Billions of Yen, millions of U.S. dollars, except per share amounts)
Third quarter ended December 31
2001 2002 Change 2002*
Sales and operating revenue Yen 2,279.3 Yen 2,307.7 +1.2% $19,231
Operating income 158.6 199.5 +25.8 1,663
Income before income taxes 119.3 201.9 +69.3 1,683
Net income 64.0 125.4 +95.9 1,045
Net income per share for common stock
- Basic Yen 69.72 Yen 136.19 +95.3 $1.13
- Diluted 64.87 126.05 +94.3 1.05
* U.S. dollar amounts have been translated from Yen, for convenience only,
at the rate of Yen 120=U.S.$1, the approximate Tokyo foreign exchange
market rate as of December 30, 2002.
Remarks by Nobuyuki Idei, Chairman and CEO of Sony Corporation
Despite prior concerns that sales over the year-end selling season, especially in the U.S., would be slow, Sony performed relatively well, achieving record sales and net income for the third quarter of the fiscal year.
The Pictures business recorded its largest ever sales and operating income for the third quarter, as earlier box office hits continued to generate profits through their release on DVD and VHS. In the Game business, PlayStation 2's strong market position was further strengthened by a large increase in unit sales of both PlayStation 2 hardware and software.
Although its sales decreased, the Electronics business made a significant contribution to operating income with restructuring initiatives leading to an improvement in profitability. Through further reductions in inventory and other initiatives, we will continue to work to build upon our achievements to date. In the Music business, which has been impacted by industry-wide difficulties, we welcome Mr. Andrew Lack as the new Chairman and CEO of U.S.-based Sony Music Entertainment. I look forward to his exercising considerable expertise in improving financial results.
Consolidated Results for the Third Quarter
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales were Yen 2,307.7 billion ($19.2 billion), a slight increase year on
year (almost flat on a local currency basis - see Note I).
-- Although sales in the Pictures segment increased by Yen 98.0 billion,
sales to external customers in the Electronics segment decreased by
Yen 59.7 billion.
Operating income of Yen 199.5 billion ($1,663 million) was recorded, an
increase of Yen 40.9 billion, or 25.8%, year on year (7% increase on a
local currency basis).
-- Operating income in the Pictures segment increased Yen 31.4 billion
due to the contribution of record home entertainment sales mainly from
summer 2002 theatrical releases. The Electronics segment achieved a
Yen 10.1 billion increase in operating income due to the depreciation
of the yen against the euro and further cost reductions. Operating
income in the Game segment increased Yen 5.3 billion because of the
strength of software sales, the depreciation of the yen against the
euro, and continuing reductions in the cost of manufacturing hardware.
-- Selling, general and administrative expenses increased Yen 24.1
billion mainly as a result of an increase in advertising and marketing
expenses in the Pictures segment in support of increased sales.
Income before income taxes was Yen 201.9 billion ($1,683 million), an
increase of Yen 82.6 billion, or 69.3%, year on year.
-- Income before income taxes increased because operating income
increased Yen 40.9 billion, other income increased Yen 6.2 billion and
other expenses decreased Yen 35.5 billion.
-- Other income increased due to a Yen 2.8 billion ($24 million)
foreign exchange gain.
-- Other expenses decreased because of the absence of the Yen 30.7
billion foreign exchange loss recorded in the same quarter of the
previous year, and because interest expense decreased by Yen 3.2
billion due to lower interest rates and reduced outstanding debt.
Net income of Yen 125.4 billion ($1,045 million) was recorded, an increase
of Yen 61.4 billion, or 95.9%, year on year.
-- The significant improvement occurred as a result of the increase in
income before income taxes discussed above and a decrease in losses
from affiliates accounted for under the equity method.
-- Equity in net losses of affiliated companies decreased Yen 6.9
billion to Yen 10.0 billion ($83 million).
-- This decrease was mainly due to a reduction in losses at Sony
Ericsson Mobile Communications, AB ("SEMC") and at American Video
Glass Company ("AVGC"), a joint venture in the U.S. which
produces glass components for televisions. Losses at SEMC
decreased Yen 3.2 billion to Yen 4.2 billion ($35 million).
Compared with a loss in the same quarter of the previous year,
AVGC improved Yen 1.9 billion to record a small profit.
-- Partially offsetting the improvement was a Yen 26.5 billion increase to
Yen 65.5 billion Yen ($546 million) in income taxes due to the increase
in income before taxes mentioned above.
Operating Performance Highlights by Business Segment
Electronics
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Sales and operating revenue Yen 1,539.7 Yen 1,468.2 -4.6% $12,235
Operating income 72.0 82.1 +14.1 685
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales were Yen 1,468.2 billion ($12.2 billion), a decrease of 4.6% year on
year (6% decrease on a local currency basis).
-- On a product category basis, sales increased in "Semiconductors" by
33.5%, in "Components" by 7.5%, and in "Video" by 3.0%.
-- Sales decreased in "Information and Communications" by 18.2% and
"Audio" by 9.6%.
-- On a local currency basis:
-- Products with significant increases in sales were digital still
cameras ("Cybershot"), semiconductors (especially CCDs and LCDs,
which increased due to higher demand for digital still cameras
and personal digital assistants), projection televisions, plasma
televisions and personal digital assistants ("CLIE").
-- Products with significant decreases in sales were VAIO PCs, CRT
computer displays and CRT televisions.
-- On a geographic basis, sales in Other areas increased, while
sales in the U.S., Europe and Japan decreased.
Operating income was Yen 82.1 billion ($685 million), an increase of Yen
10.1 billion, or 14.1%, year on year (10% decrease on a local currency
basis).
-- Despite the negative impact of the decrease in sales, the following
factors led to the increase in profit:
-- The depreciation of the yen against the euro.
-- An improvement in the profitability of such business as CRTs for
computer displays, where a reduction in fixed costs led to greater
financial viability, and semiconductors, where utilization at
manufacturing facilities increased.
-- The following product categories achieved an increase in profitability:
"Components," in which CRTs for computer displays, recording media and
battery businesses benefited from structural changes, "Audio" in which
home theatre products performed well, and "Televisions" in which large
screen televisions performed well. "Semiconductors" changed from loss
to profit, mainly due to the strong performance of CCDs. However,
"Information and Communications" turned from profit to loss due to the
deterioration of the profit performance of PCs.
Regarding the performance during the quarter of the Aiwa business, sales decreased and the implementation of restructuring initiatives led to an operating loss. Sony merged with Aiwa Co., Ltd. on December 1, 2002 (see Note III).
Inventory as of December 31, 2002 was Yen 506.5 billion ($4,221 million), a Yen 120.9 billion, or 19.3%, decrease compared with the level as of December 31, 2001.
Game
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Sales and operating revenue Yen 383.2 Yen 384.1 + 0.3% $3,201
Operating income 66.4 71.7 + 7.9 597
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales were Yen 384.1 billion ($3,201 million), almost flat year on year
(4% decrease on a local currency basis).
-- Hardware sales decreased, but software sales increased, compared with
the same quarter of the previous year.
-- Unit sales of both PlayStation 2 and PS one hardware decreased in
Japan, but increased significantly in other areas, particularly the
U.S. and Europe. Strategic price reductions in all major regions
led to a year on year decrease in sales revenue in the U.S. and
Japan, although sales revenue increased in Europe.
-- Software sales increased worldwide due to an increase in PlayStation
2 software unit sales resulting from the continuing market
penetration of PlayStation 2 hardware. (Worldwide hardware
production shipments of PlayStation 2 were 49.59 million units as of
December 31, 2002 on a cumulative basis.)
-- Worldwide hardware production shipments:*
-- PS 2: 8.03 million units (an increase of 2.61 million units)
-- PS one: 3.02 million units (an increase of 1.99 million units)
-- Worldwide software production shipments:*
-- PS 2: 79.00 million units (an increase of 26.30 million units)
-- PlayStation: 22.00 million units (a decrease of 16.00 million units)
* Production shipment units of hardware and software are counted upon
shipment of the products from manufacturing bases. Sales of such
products are recognized when the products are delivered to customers.
Operating income was Yen 71.7 billion ($597 million), an increase of Yen
5.3 billion, or 7.9%, year on year (12% decrease on a local currency
basis).
-- Strong software sales worldwide led to an overall increase in operating
income. Although hardware sales decreased due to strategic price
reductions in all major regions, the positive impact of the
depreciation of the yen against the euro, in addition to continued
reduction of manufacturing costs, resulted in only a slight
negative impact on operating income.
Inventory as of December 31, 2002 was Yen 144.7 billion ($1,206 million),
a Yen 4.4 billion, or 3.1%, increase compared with the level as of
December 31, 2001.
Music
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Sales and operating revenue Yen 205.5 Yen 198.8 - 3.3% $1,657
Operating income 23.1 20.9 - 9.5 174
The amounts presented above are the sum of the yen-translated results of Sony Music Entertainment Inc. ("SMEI"), a U.S.-based operation which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis, and the results of Sony Music Entertainment (Japan) Inc. ("SMEJ"), a Japan based operation which aggregates results in Yen. Management analyzes the results of SMEI in U.S. dollars, so discussion of certain portions of its results are specified as being on "a U.S. dollar basis."
Sales were Yen 198.8 billion ($1,657 million), a decrease of 3.3% year on
year (3% decrease on a local currency basis). Of the Music segment's
sales, 74% were generated by SMEI, and 26% were generated by SMEJ.
-- SMEI's sales (on a U.S. dollar basis) decreased 1%.
-- Sales decreased because continuing difficult market conditions
caused a decline in record sales in many regions worldwide.
-- Partially offsetting this decline was increased DVD software
manufacturing sales to the Pictures and Game segments.
-- Titles that contributed the most to sales were Jennifer Lopez's This
is Me ... Then and Dixie Chicks' Home.
-- SMEJ's sales decreased 8%.
-- Sales decreased because of the continued contraction of the record
industry.
-- Titles that contributed the most to sales were Chemistry's Second to
None and The Gospellers' aCappella.
Operating income was Yen 20.9 billion ($174 million), a decrease of Yen
2.2 billion, or 9.5% year on year (9% decrease on a local currency basis).
-- SMEI's operating income (on a U.S. dollar basis) decreased 10% as
compared to the same quarter of the prior year.
-- Operating income declined as a result of the decrease in record
sales, higher talent-related expenses, and increased costs recorded
for ongoing restructuring activities, including continuing worldwide
headcount reductions.
-- Partially offsetting this decrease was a decrease in advertising and
promotion expenses, increased income generated by the increased DVD
software manufacturing activity, and savings realized from SMEI's
previously implemented cost savings initiatives.
-- SMEJ's operating income decreased 6% as compared to the same quarter of
the prior year.
-- Although a reduction in advertising and promotion expenses led to a
decrease in selling, general and administrative expenses, the drop
in record sales resulted in a decline in operating income.
Pictures
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Sales and operating revenue Yen 158.4 Yen 256.3 + 61.9% $2,136
Operating income 0.3 31.7 +10,761.3 264
The results presented above are a yen-translation of the results of Sony Pictures Entertainment ("SPE"), a U.S.-based operation which aggregates the results of its worldwide subsidiaries on a U.S. dollar basis. Management analyzes the results of SPE in U.S. dollars, so discussion of certain portions of its results are specified as being on "a U.S. dollar basis."
Sales were Yen 256.3 billion ($2,136 million), an increase of 61.9% year
on year (64% increase on a U.S dollar basis).
-- The reasons for the substantial increase in sales (on a U.S. dollar
basis) were:
-- Record SPE home entertainment sales as a result of the releases of
Spider-Man, Men in Black II, xXx, Stuart Little 2, and Mr. Deeds.
-- Over 40 million initial DVD and VHS units of Spider-Man were
shipped worldwide during the quarter.
-- Higher television revenues primarily from a library sale to a cable
channel of the television program The Nanny and higher advertising
revenues from Wheel of Fortune.
Operating income was Yen 31.7 billion ($264 million), an increase of Yen
31.4 billion year on year.
-- The reasons for the increase in profitability were:
-- Substantially higher home entertainment revenues, as noted above,
driven by SPE's successful summer 2002 theatrical release slate.
-- Higher television operating income from the increased revenues noted
above.
-- The absence of a television restructuring charge recorded in the
prior year.
-- Partially offsetting the increase in profitability was:
-- The disappointing theatrical performance of I Spy.
Financial Services
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Financial Service revenue Yen 127.1 Yen 133.9 + 5.4% $1,116
Operating income 2.1 3.6 +72.4 30
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Financial Service revenue was Yen 133.9 billion ($1,116 million), an
increase of 5.4% year on year.
-- Revenue increased primarily due to an increase in revenue at Sony Life
Insurance Co., Ltd. ("Sony Life").
-- Revenue increased because valuation gains and losses from
investments in the general account improved compared to a loss
recorded on Argentine government bonds in the same quarter of the
previous year, and because insurance revenue rose due to an increase
in insurance-in-force.
-- The above revenue gains were partially offset by an increase in
valuation losses from investments in the separate account, which
resulted from the stock market downturn. Valuation gains and losses
from investments in the separate account accrue directly to the
account of policyholders and, therefore, do not affect operating
income.
-- In addition, the following factors affected Financial Services segment
revenue:
-- Revenue at Sony Assurance Inc. increased due to higher insurance
revenue brought about by an expansion in insurance-in-force.
-- Revenue at Sony Finance International, Inc. ("Sony Finance") was
almost flat year on year.
-- Revenue at Sony Bank increased only slightly reflecting the severe
market environment though the total balance of deposited funds
increased.
Operating income increased Yen 1.5 billion or 72.4% year on year to Yen
3.6 billion ($30 million).
-- Operating income increased primarily due to the improvement in
valuation gains and losses from investments in the general account and
increase in insurance revenue.
-- In addition, the following factors affected Financial Services segment
operating income:
-- Losses at Sony Assurance Inc. decreased due to an increase in
insurance revenue and a decrease in payments for insurance benefits.
-- Operating income at Sony Finance was almost flat year on year.
-- Sony Bank, which began operations in June 2001, recorded a loss
similar to that of the same quarter in the previous year.
Other
(Billions of Yen, millions of U.S. dollars)
Third quarter ended December 31
2001 2002 Change 2002
Sales and operating revenue Yen 53.0 Yen 64.1 + 21.0% $535
Operating income (loss) (3.5) (6.6) - (55)
Unless otherwise specified, all amounts are on a U.S. GAAP basis.
Sales were Yen 64.1 billion ($535 million), an increase of 21.0% year on
year.
-- Sales of NACS-related businesses (see Note II) and sales at
an advertising agency business subsidiary in Japan increased.
In terms of profitability, an operating loss of Yen 6.6 billion ($55
million) was recorded compared with an operating loss of Yen 3.5 billion
in the same quarter of the previous year, a deterioration of Yen 3.2
billion year on year.
-- Losses increased at NACS-related businesses in the aggregate, mainly
because of losses incurred in connection with the creation of a
platform business for the networked era, although operating income was
recorded at Sony Communication Network Corporation.
Cash Flow
(Billions of Yen, millions of U.S. dollars)
Nine months ended December 31
2001 2002 Difference 2002
Cash flow
- From operating activities Yen 330.8 Yen 503.1 Yen + 172.3 $4,192
- From investing activities (590.9) (404.6) + 186.3 (3,371)
- From financing activities 366.7 40.5 - 326.2 338
Cash and cash equivalents
as of December 31 744.2 798.6 + 54.4 6,655
Cash provided by operating activities for the nine months ended December
31, 2002 was Yen 503.1 billion ($4,192 million), an increase of Yen 172.3
billion.
-- While cash was used for an increase in notes and accounts receivable
during the nine months, the contribution to profit of the Electronics,
Game and Pictures businesses and an increase in notes and accounts
payable caused cash generated from operating activities to exceed
expenditures.
-- Although the amount of increase in notes and accounts receivable
increased and inventories changed from a decrease to an increase,
leading to a decrease in cash provided by operating activities, an
increase in the operating income of the Electronics, Game and Pictures
businesses, and a change from a decrease to an increase in notes and
accounts payable contributed to the increase in cash provided by
operating activities compared with the same period of the previous
year.
Cash used in investing activities for the nine months was Yen 404.6
billion ($3,371 million), a decrease of Yen 186.3 billion.
-- The use of cash derived primarily from the fact that, reflecting an
increase in assets under management in the life insurance and banking
businesses, investments and advances of Yen 686.8 billion ($5,723
million) exceeded sales and maturities of securities investments and
collections of advances of Yen 386.0 billion ($3,216 million) in the
Financial Services business.
-- In addition, Yen 203.6 billion ($1,696 million) was used to purchase
fixed assets, primarily in the Electronics business but, as a result of
the prioritization of investments, the figure decreased by Yen 89.6
billion compared with the same nine months of the previous fiscal year.
Cash proceeds of Yen 127.4 billion ($1,062 million) were also generated
from the sales of securities investments and collections of advances,
including Yen 88.4 billion* from the sale of equity in Telemundo
Communications Group, Inc. and its subsidiaries, a U.S. based
television network and station group.
(*The U.S. dollar amount of the cash proceeds recorded on the sale of Telemundo was $679 million.)
Cash provided by financing activities for the nine months was Yen 40.5
billion ($338 million), a decrease of Yen 326.2 billion.
-- Although cash was used during the nine months to pay down borrowings of
the Sony group as a whole and Yen 23.0 billion ($191 million) in
dividends were paid, cash was provided by a Yen 106.5 billion
($887 million) increase in deposits from customers in the banking
business.
Notes
Note I: During the third quarter ended December 31, 2002, the average
value of the Yen was Yen 121.58 against the U.S. dollar and Yen 121.05
against the euro, which was 0.8% higher against the U.S. dollar and 9.8%
lower against the euro, compared with the average rate for the third
quarter of the previous fiscal year. Operating results on a local
currency basis described herein reflect sales and operating revenue
("sales") and operating income obtained by applying the yen's average
exchange rate in the third quarter of the previous fiscal year to local
currency-denominated monthly sales, cost of sales, and selling, general
and administrative expenses in the third quarter of the current
fiscal year. Local currency basis results are not reflected in Sony's
financial statements and are not measures conforming with Generally
Accepted Accounting Principles in the U.S. ("U.S. GAAP"). In addition,
Sony does not believe that these measures are a substitute for U.S. GAAP
measures. However, Sony believes that local currency basis results
provide additional useful information to investors regarding operating
performance.
Note II: Commencing with the first quarter ended June 30, 2002, Sony has
partly realigned its business segment configuration and Electronics
segment product category configuration. In accordance with this
realignment, results of the third quarter of the previous fiscal year have
been reclassified to conform to the presentation for the third quarter of
the current fiscal year. Sales of related businesses in the Network
Application and Contents Service Sector ("NACS"), established in April
2002 to enhance network businesses, are included in the "Other" segment.
In addition to Sony Communication Network Corporation, which was
originally contained in the "Other" segment, NACS-related businesses
include an in-house oriented information system service business and an IC
card business formerly contained in the "Other" category of the
Electronics segment.
Note III: On October 1, 2002, Sony implemented a share exchange as a
result of which Aiwa Co., Ltd. became a wholly-owned subsidiary. As a
result of this share exchange, Sony issued 2,502,491 new shares, the
minority interest in Aiwa was eliminated from the balance sheet, and
additional paid-in capital increased Yen 15.9 billion. On
December 1, 2002, Sony absorbed Aiwa by merger. The merger had no effect
on Sony's financial statements.
Note IV: "Sales and operating revenue" in each business segment represents
sales and operating revenue recorded before intersegment transactions are
eliminated. "Operating income" in each business segment represents
operating income recorded before intersegment transactions and unallocated
corporate expenses are eliminated. "Sales on a product category basis" in
the Electronics segment represents only sales of products to external
customers, i.e. those sales recorded after intersegment and intercategory
transactions have been eliminated.
Other Matters
In November 2002, Sony Corporation of America, a subsidiary of Sony Corporation, together with other investors, executed a definitive agreement to acquire all of the outstanding common stock of InterTrust Technologies Corporation ("InterTrust") for approximately $453 million. In January 2003, the acquisition of InterTrust by Sony Corporation of America, Koninklijke Philips Electronics N.V. of Holland, and another investor was successfully completed. InterTrust is a leading holder of intellectual property in digital rights management. The objective of this transaction fits with Sony's network strategy which is to enable wide access to secure digital content through networks.
In January 2003, Sony and Telefonaktiebolaget LM Ericsson announced that they will each invest an additional 150 million euro in SEMC to strengthen its financial position.
Outlook for the Fiscal Year ending March 31, 2003
Despite the solid results that Sony achieved in the third quarter, we believe that the business environment in which Sony operates will remain unstable because of the uncertain economic outlook and waning consumer confidence. Due to these uncertainties in the market, and the implementation of restructuring, we believe that the fourth quarter will be a difficult one. Therefore we have not changed our October forecast.
Change from previous year Sales and operating revenue Yen 7,600 billion Unchanged Operating income 280 billion + 108% Income before income taxes 310 billion + 234 Net income 180 billion + 1,076
Assumed exchange rates for the fourth quarter: approximately Yen 120 to the dollar and Yen 125 to the euro.
(Exchange rates assumed in October for the third quarter: approximately Yen 120 to the dollar and Yen 115 to the euro.)
No change was made in capital expenditures and depreciation and amortization.
Capital expenditures
(additions to fixed assets) Yen 280 billion - 14%
Depreciation and amortization* 350 billion - 1
(Depreciation expenses
for tangible assets 260 billion - 13)
* Including amortization of intangible assets and amortization of deferred
insurance acquisition costs.
Cautionary Statement
Statements made in this release with respect to Sony's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Sony. Forward-looking statements include but are not limited to those using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "may" or "might" and words of similar meaning in connection with a discussion of future operations or financial performance. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Sony cautions you that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, and therefore you should not place undue reliance on them. You also should not rely on any obligation of Sony to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Sony disclaims any such obligation. Risks and uncertainties that might affect Sony include, but are not limited to (i) the global economic environment in which Sony operates, as well as the economic conditions in Sony's markets, particularly levels of consumer spending; (ii) exchange rates, particularly between the Yen and the U.S. dollar, euro, and other currencies in which Sony makes significant sales or in which Sony's assets and liabilities are denominated; (iii) Sony's ability to continue to design and develop and win acceptance of its products and services, which are offered in highly competitive markets characterized by continual new product introductions, rapid development in technology (particularly in the Electronics business), and subjective and changing consumer preferences (particularly in the Game, Music, and Pictures businesses); (iv) Sony's ability to implement successfully the restructuring initiatives in its Electronics, Music and Pictures businesses and its network strategy for its Electronics, Music, Pictures, and Game businesses; (v) Sony's ability to compete and develop and implement successful sales and distribution strategies in light of Internet and other technological developments in its Music and Pictures businesses; (vi) Sony's continued ability to devote sufficient resources to research and development and, with respect to capital expenditures, to prioritize investments (particularly in the Electronics business); (vii) the success of Sony's joint ventures and alliances; and (viii) the outcome of contingencies. Risks and uncertainties also include the impact of any future events with material unforeseen impacts.
Business Segment Information (Unaudited)
(Millions of yen, millions of U.S. dollars)
Three months ended December 31
2001 2002 Change 2002
Sales and operating revenue
Electronics
Customers Y 1,402,933 Y 1,343,231 -4.3% $11,194
Intersegment 136,765 125,017 1,041
Total 1,539,698 1,468,248 -4.6 12,235
Game
Customers 378,747 377,027 -0.5 3,142
Intersegment 4,412 7,096 59
Total 383,159 384,123 +0.3 3,201
Music
Customers 188,715 173,354 -8.1 1,445
Intersegment 16,811 25,488 212
Total 205,526 198,842 -3.3 1,657
Pictures
Customers 158,358 256,332 +61.9 2,136
Intersegment 0 0 0
Total 158,358 256,332 +61.9 2,136
Financial Services
Customers 119,952 127,132 +6.0 1,059
Intersegment 7,102 6,755 57
Total 127,054 133,887 +5.4 1,116
Other
Customers 30,601 30,657 +0.2 255
Intersegment 22,411 33,483 280
Total 53,012 64,140 +21.0 535
Elimination (187,501) (197,839) - (1,649)
Consolidated
total Y 2,279,306 Y 2,307,733 +1.2% $19,231
Electronics intersegment amounts primarily consist of transactions with
the Game business.
Music intersegment amounts primarily consist of transactions with
the Game and Pictures businesses.
Other intersegment amounts primarily consist of transactions with the
Electronics business.
2001 2002 Change 2002
Operating income (loss)
Electronics Y 72,008 Y 82,146 +14.1% $685
Game 66,410 71,664 +7.9 597
Music 23,096 20,902 -9.5 174
Pictures 292 31,715 +10,761.3 264
Financial Services 2,063 3,557 +72.4 30
Other (3,469) (6,622) - (55)
Total 160,400 203,362 +26.8 1,695
Corporate and
elimination (1,789) (3,846) - (32)
Consolidated
total Y 158,611 Y 199,516 +25.8% $1,663
Commencing with the first quarter ended June 30, 2002, Sony has partly
realigned its business segment configuration. In accordance with this
change, results of the previous year have been reclassified to conform to
the presentation for the current year.
(Millions of yen, millions of U.S. dollars)
Nine months ended December 31
2001 2002 Change 2002
Sales and operating revenue
Electronics
Customers Y 3,611,799 Y 3,547,650 -1.8% $29,564
Intersegment 422,126 367,505 3,062
Total 4,033,925 3,915,155 -2.9 32,626
Game
Customers 768,789 772,559 +0.5 6,438
Intersegment 12,106 15,134 126
Total 780,895 787,693 +0.9 6,564
Music
Customers 447,695 422,598 -5.6 3,522
Intersegment 41,460 61,290 510
Total 489,155 483,888 -1.1 4,032
Pictures
Customers 441,065 615,530 +39.6 5,129
Intersegment 0 0 0
Total 441,065 615,530 +39.6 5,129
Financial Services
Customers 342,179 371,493 +8.6 3,096
Intersegment 21,285 20,620 172
Total 363,464 392,113 +7.9 3,268
Other
Customers 82,180 89,439 +8.8 745
Intersegment 67,597 91,609 764
Total 149,777 181,048 +20.9 1,509
Elimination (564,574) (556,158) - (4,634)
Consolidated
total Y 5,693,707 Y 5,819,269 +2.2% $48,494
Electronics intersegment amounts primarily consist of transactions with
the Game business.
Music intersegment amounts primarily consist of transactions with the
Game and Pictures businesses.
Other intersegment amounts primarily consist of transactions with the
Electronics business.
2001 2002 Change 2002
Operating income (loss)
Electronics Y 50,188 Y 157,524 +213.9% $1,313
Game 67,357 99,022 +47.0 825
Music 22,232 5,027 -77.4 42
Pictures 19,660 50,882 +158.8 424
Financial Services 11,346 20,314 +79.0 169
Other (11,418) (21,269) - (177)
Total 159,365 311,500 +95.5 2,596
Corporate and
elimination (1,142) (9,593) - (80)
Consolidated
total Y 158,223 Y 301,907 +90.8% $2,516
Commencing with the first quarter ended June 30, 2002, Sony has partly
realigned its business segment configuration. In accordance with this
change, results of the previous year have been reclassified to conform to
the presentation for the current year.
Electronics Sales and Operating Revenue to Customers by Product Category
(Millions of yen, millions of U.S. dollars)
Three months ended December 31
2001 2002 Change 2002
Sales and operating
revenue
Audio Y 238,422 Y 215,565 -9.6% $1,797
Video 249,742 257,274 +3.0 2,144
Televisions 280,968 283,956 +1.1 2,366
Information and
Communications 307,593 251,718 -18.2 2,098
Semiconductors 39,595 52,844 +33.5 440
Components 134,759 144,855 +7.5 1,207
Other 151,854 137,019 -9.8 1,142
Total Y 1,402,933 Y 1,343,231 -4.3% $11,194
Nine months ended December 31
2001 2002 Change 2002
Sales and operating
revenue
Audio Y 599,073 Y 548,962 -8.4% $4,575
Video 648,973 676,462 +4.2 5,637
Televisions 623,013 666,683 +7.0 5,556
Information and
Communications 854,607 715,741 -16.2 5,964
Semiconductors 136,967 152,257 +11.2 1,269
Components 384,127 404,412 +5.3 3,370
Other 365,039 383,133 +5.0 3,193
Total Y 3,611,799 Y 3,547,650 -1.8% $29,564
The above table is a breakdown of Electronics sales and operating revenue
to customers in the Business Segment Information. The Electronics
business is managed as a single operating segment by Sony's management.
However, Sony believes that the information in this table is useful to
investors in understanding the sales contributions of the products in this
business segment. In addition, commencing with the first quarter ended
June 30, 2002, Sony has partly realigned its product category
configuration in the Electronics business. In accordance with this
change, results of the previous year have been reclassified to conform to
the presentations for the current year. Sales of mobile phones are no
longer recorded in the "Information and Communications" category as of the
third quarter ended December 31, 2001. From the third quarter of the
previous year, sales of mobile phones manufactured for Sony Ericsson
Mobile Communications, AB are recorded in the "Other" product category.
Geographic Segment Information (Unaudited)
(Millions of yen, millions of U.S. dollars)
Three months ended December 31
2001 2002 Change 2002
Sales and operating
revenue
Japan Y 606,985 Y 576,943 -4.9% $4,808
United States 774,706 748,374 -3.4 6,236
Europe 538,073 591,181 +9.9 4,927
Other Areas 359,542 391,235 +8.8 3,260
Total Y 2,279,306 Y 2,307,733 +1.2% $19,231
Nine months ended December 31
2001 2002 Change 2002
Sales and operating
revenue
Japan Y 1,662,078 Y 1,575,947 -5.2% $13,133
United States 1,886,116 1,922,199 +1.9 16,018
Europe 1,200,604 1,302,616 +8.5 10,855
Other Areas 944,909 1,018,507 +7.8 8,488
Total Y 5,693,707 Y 5,819,269 +2.2% $48,494
Classification of Geographic Segment Information shows sales and
operating revenue recognized by location of customers.
Consolidated Statements of Income (Unaudited)
(Millions of yen, millions of U.S. dollars, except per share amounts)
Three months ended December 31
2001 2002 Change 2002
%
Sales and operating
revenue
Net sales Y 2,149,813 Y 2,166,684 $18,056
Financial service
revenue 119,952 127,132 1,059
Other operating
revenue 9,541 13,917 116
2,279,306 2,307,733 +1.2 19,231
Costs and expenses
Cost of sales 1,550,162 1,507,867 12,566
Selling, general
and administrative 452,643 476,775 3,972
Financial service
expenses 117,890 123,575 1,030
2,120,695 2,108,217 17,568
Operating income 158,611 199,516 +25.8 1,663
Other income
Interest and
dividends 3,973 3,340 28
Royalty income 4,849 5,581 47
Foreign exchange
gain, net - 2,840 24
Other 4,729 8,009 66
13,551 19,770 165
Other expenses
Interest 9,842 6,673 56
Loss on devaluation
of securities
investments 2,789 1,720 14
Foreign exchange
loss, net 30,748 - -
Other 9,494 8,993 75
52,873 17,386 145
Income before income
taxes 119,289 201,900 +69.3 1,683
Income taxes 39,038 65,536 546
Income before minority
interest and equity in
net losses of
affiliated
companies 80,251 136,364 +69.9 1,137
Minority interest in
income (loss) of
consolidated
subsidiaries (706) 928 9
Equity in net losses
of affiliated
companies 16,934 10,005 83
Net income Y 64,023 Y 125,431 +95.9 $1,045
Per share data:
Common stock
Net income
- Basic Y 69.72 Y 136.19 +95.3 $1.13
- Diluted 64.87 126.05 +94.3 1.05
Subsidiary tracking
stock
Net income (loss)
- Basic (4.06) 1.11 - 0.01
Consolidated Statements of Income (Unaudited)
(Millions of yen, millions of U.S. dollars, except per share amounts)
Nine months ended December 31
2001 2002 Change 2002
%
Sales and operating
revenue
Net sales Y 5,325,076 Y 5,412,892 $45,107
Financial service
revenue 342,179 371,493 3,096
Other operating
revenue 26,452 34,884 291
5,693,707 5,819,269 +2.2 48,494
Costs and expenses
Cost of sales 3,926,022 3,838,888 31,991
Selling,
general and
administrative 1,278,629 1,327,295 11,061
Financial service
expenses 330,833 351,179 2,926
5,535,484 5,517,362 45,978
Operating income 158,223 301,907 +90.8 2,516
Other income
Interest and
dividends 11,618 10,161 85
Royalty income 18,743 22,246 185
Foreign exchange
gain, net - 2,192 18
Gain on sale of
securities
investments,
net 317 70,870 591
Other 25,647 24,672 206
56,325 130,141 1,085
Other expenses
Interest 32,539 20,063 167
Loss on devaluation
of securities
investments 13,615 17,925 149
Foreign exchange
loss, net 30,963 - -
Other 31,859 26,697 224
108,976 64,685 540
Income before income
taxes 105,572 367,363 +248.0 3,061
Income taxes 74,119 104,243 869
Income before minority interest,
equity in net losses of
affiliated companies and
cumulative effect of
accounting changes 31,453 263,120 +736.5 2,192
Minority interest in income
(loss) of consolidated
subsidiaries (9,635) 6,671 55
Equity in net losses of
affiliated companies 26,298 29,786 248
Income before cumulative
effect of accounting
changes 14,790 226,663 +1,432.5 1,889
Cumulative effect of
accounting changes
(2001:Net of income
taxes of
Y2,975 million) 5,978 - -
Net income Y 20,768 Y 226,663 +991.4 $1,889
Per share data:
Common stock
Income before
cumulative effect
of accounting
changes
- Basic Y 16.12 Y 246.46 +1,428.9 $2.05
- Diluted 16.07 228.77 +1,323.6 1.91
Net income
- Basic 22.63 246.46 +989.1 2.05
- Diluted 22.56 228.77 +914.1 1.91
Subsidiary tracking stock
Net income (loss)
- Basic (4.90) 27.88 - 0.23
Consolidated Balance Sheets (Unaudited)
(Millions of yen, millions of U.S. dollars)
December 31 March 31 December 31 December 31
2001 2002 2002 2002
ASSETS
Current assets:
Cash and cash
equivalents Y 744,167 Y 683,800 Y 798,635 $6,655
Time deposits 8,329 5,176 6,103 51
Marketable
securities 155,163 162,147 218,448 1,820
Notes and accounts
receivable,
trade 1,532,626 1,363,652 1,635,099 13,626
Allowance for
doubtful accounts
and sales returns (120,543) (120,826) (152,518) (1,271)
Inventories 816,114 673,437 701,068 5,842
Deferred income
taxes 151,669 134,299 149,865 1,249
Prepaid expenses
and other current
assets 435,506 435,527 493,120 4,110
3,723,031 3,337,212 3,849,820 32,082
Film costs 352,197 313,054 275,801 2,298
Investments and advances:
Affiliated
companies 125,279 131,068 72,479 604
Securities
investments
and other 1,469,205 1,566,739 1,745,558 14,546
1,594,484 1,697,807 1,818,037 15,150
Property, plant and
equipment:
Land 187,476 195,292 189,518 1,579
Buildings 888,820 891,436 873,645 7,280
Machinery and
equipment 2,257,331 2,216,347 2,118,062 17,651
Construction
in progress 64,586 66,825 61,588 513
Less-Accumulated
depreciation (1,961,927) (1,958,234) (1,927,595) (16,063)
1,436,286 1,411,666 1,315,218 10,960
Other assets:
Intangibles, net 228,113 245,639 258,229 2,152
Goodwill 312,977 317,240 291,412 2,428
Deferred insurance
acquisition costs 295,533 308,204 326,401 2,720
Other 497,417 554,973 656,430 5,471
1,334,040 1,426,056 1,532,472 12,771
Y 8,440,038 Y 8,185,795 Y 8,791,348 $73,261
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term
borrowings Y 453,100 Y 113,277 Y 80,608 $ 672
Current portion
of long-term debt 22,488 240,786 230,479 1,921
Notes and accounts
payable, trade 789,339 767,625 896,089 7,467
Accounts payable,
other and accrued
expenses 896,884 869,533 889,754 7,415
Accrued income and
other taxes 113,293 105,470 172,238 1,435
Deposits from
customers in the
banking business 63,602 106,472 213,881 1,782
Other 413,617 355,333 377,343 3,145
2,752,323 2,558,496 2,860,392 23,837
Long-term liabilities:
Long-term debt 1,052,778 838,617 811,151 6,760
Accrued pension
and severance
costs 231,900 299,089 317,514 2,646
Deferred income
taxes 160,317 159,573 162,379 1,353
Future insurance
policy benefits
and other 1,569,068 1,680,418 1,848,136 15,401
Other 252,625 255,824 282,878 2,357
3,266,688 3,233,521 3,422,058 28,517
Minority interest
in consolidated
subsidiaries 31,913 23,368 22,220 185
Stockholders' equity:
Capital stock 476,031 476,106 476,261 3,969
Additional paid-in
capital 968,147 968,223 984,181 8,202
Retained earnings 1,226,219 1,209,262 1,424,413 11,870
Accumulated other
comprehensive
income (273,788) (275,593) (388,895) (3,242)
Treasury stock,
at cost (7,495) (7,588) (9,282) (77)
2,389,114 2,370,410 2,486,678 20,722
Y 8,440,038 Y 8,185,795 Y 8,791,348 $73,261
Consolidated Statements of Cash Flows (Unaudited)
(Millions of yen, millions of U.S. dollars)
Nine months ended December 31
2001 2002 2002
Cash flows from operating activities:
Net income Y 20,768 Y 226,663 $ 1,889
Adjustments to reconcile net income to
net cash provided by operating
activities -
Depreciation and amortization,
including amortization of
deferred insurance acquisition costs 262,179 255,684 2,131
Amortization of film costs 165,105 232,727 1,939
Accrual for pension and severance
costs, less payments 8,922 20,125 168
Loss on sale, disposal or
impairment of long-lived assets, net 23,099 23,539 196
Gain on sales of securities
investments, net (317) (70,870) (591)
Deferred income taxes (29,698) (65,648) (547)
Equity in net losses of
affiliated companies, net of dividends 28,938 30,880 257
Cumulative effect of accounting changes (5,978) - -
Changes in assets and liabilities:
Increase in notes and accounts
receivable, trade (52,521) (298,009) (2,483)
(Increase) decrease in inventories 150,272 (41,752) (348)
Increase in film costs (197,605) (226,738) (1,889)
Increase (decrease) in notes
and accounts payable, trade (149,850) 139,788 1,165
Increase (decrease) in accrued
income and other taxes (44,042) 69,970 583
Increase in future insurance
policy benefits and other 203,054 167,718 1,398
Increase in deferred insurance
acquisition costs (53,848) (49,808) (415)
Changes in other current assets
and liabilities, net 51,479 35,476 296
Other (49,189) 53,321 443
Net cash provided by
operating activities 330,768 503,066 4,192
Cash flows from investing activities:
Payments for purchases of fixed assets (293,123) (203,552) (1,696)
Proceeds from sales of fixed assets 34,216 23,567 196
Payments for investments and
advances by financial service business(469,028) (686,800) (5,723)
Payments for investments and
advances (other than financial service
business) (78,465) (49,961) (416)
Proceeds from sales of securities
investments, maturities of marketable
securities and collections of
advances by financial service business 190,585 385,984 3,216
Proceeds from sales of securities
investments, maturities of marketable
securities and collections
of advances (other than financial service
business) 26,560 127,389 1,062
Increase in time deposits (1,641) (1,196) (10)
Net cash used in investing activities (590,896) (404,569) (3,371)
Cash flows from financing activities:
Proceeds from issuance of long-term
debt 223,888 10,506 88
Payments of long-term debt (163,992) (23,101) (193)
Increase (decrease)
in short-term borrowings 239,434 (22,147) (185)
Increase in deposits from
customers in the banking business 63,602 106,462 887
Proceeds from issuance
of subsidiary tracking stock 9,529 - -
Dividends paid (22,951) (22,965) (191)
Other 17,195 (8,219) (68)
Net cash provided
by financing activities 366,705 40,536 338
Effect of exchange rate changes
on cash and cash equivalents 30,345 (24,198) (202)
Net increase in cash and
cash equivalents 136,922 114,835 957
Cash and cash equivalents
at beginning of the year 607,245 683,800 5,698
Cash and cash equivalents
at end of the third quarter Y 744,167 Y 798,635 $ 6,655
(Notes)
1. U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of Yen 120 = U.S.$1, the approximate Tokyo foreign
exchange market rate as of December 30, 2002.
2. As of December 31, 2002, Sony had 1,050 consolidated subsidiaries. It
has applied the equity accounting method in respect to its 83
affiliated companies.
3. Sony calculates and presents per share data separately for Sony's
Common stock and for the subsidiary tracking stock which is linked to
the economic value of Sony Communication Network Corporation, based on
Statement of Financial Accounting Standards ("FAS") No.128, "Earnings
per Share." The holders of the tracking stock have the right to
participate in earnings, together with common stock holders.
Accordingly, Sony calculates per share data by the "two-class" method
based on FAS No.128. Under this method, basic net income per share
for each class of stock is calculated based on the earnings allocated
to each class of stock for the applicable period, divided by the
weighted-average number of outstanding shares in each class during
the applicable period. The earnings allocated to the subsidiary
tracking stock are determined based on the subsidiary tracking stock
holders' economic interest in the targeted subsidiary's earnings
available for dividends. The earnings allocated to Common stock are
calculated by subtracting the earnings allocated to the subsidiary
tracking stock from Sony's net income for the period.
Weighted-average shares used for computation of earnings per share of
Common stock are as follows. The dilutive effect mainly resulted from
convertible bonds. In accordance with FAS No.128, the computation of
diluted net income per share for the nine months ended December 31,
2001 uses the same weighted-average shares used for the computation of
diluted income before cumulative effect of accounting changes per
share, and reflects the effect of the assumed conversion of
convertible bonds in diluted net income.
Weighted-average shares (Thousands of shares)
Three months ended December 31
2001 2002
Net income
-- Basic 918,470 920,961
-- Diluted 996,345 999,828
Weighted-average shares (Thousands of shares)
Nine months ended December 31
2001 2002
Income before cumulative effect
of accounting changes
and net income
-- Basic 918,450 919,337
-- Diluted 921,407 998,275
Weighted-average shares used for computation of earnings per share of
the subsidiary tracking stock for the three months and nine months
ended December 31, 2001 and 2002 are 3,072 thousand shares. There were
no potentially dilutive securities for the subsidiary tracking stock
outstanding at December 31, 2001 and 2002.
4. Sony's comprehensive income is comprised of net income and other
comprehensive income. Other comprehensive income includes changes in
unrealized gains or losses on securities, unrealized gains or losses
on derivative instruments, minimum pension liability adjustment and
foreign currency translation adjustments. Net income, other
comprehensive income (loss) and comprehensive income for the three
months and nine months ended December 31, 2001 and 2002 were as
follows;
(Millions of yen, millions of U.S. dollars)
Three months ended Nine months ended
December 31 December 31
2001 2002 2002 2001 2002 2002
Net income Y 64,023 Y 125,431 $ 1,045 Y 20,768 Y 226,663 $1,889
Other
comprehensive
income (loss) :
Unrealized gains
(losses) on
securities (9,251) (744) (6) (35,913) (8,173) (68)
Unrealized
gains (losses) on
derivative
instruments 1,087 (1,066) (9) 2,821 (3,414) (28)
Foreign currency
translation
adjustments 131,886 (12,467) (104) 87,871 (101,715) (848)
123,722 (14,277) (119) 54,779 (113,302) (944)
Comprehensive
income Y 187,745 Y 111,154 $ 926 Y 75,547 Y 113,361 $ 945
5. On April 1, 2001, Sony adopted FAS No.133, "Accounting for Derivative
Instruments and Hedging Activities" as amended by FAS No.138,
"Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an Amendment of FASB statement No.133". As a result of
the adoption of the new standard, Sony recorded a one-time non-cash
after-tax unrealized gain of Yen 1,089 million in accumulated other
comprehensive income in the consolidated balance sheet, as well as an
after-tax gain of Yen 5,978 million in the cumulative effect of
accounting changes in the consolidated statement of income.
6. In the fourth quarter of the year ended March 31, 2002, Sony adopted
Emerging Issues Task Force Issue No. 01-09, "Accounting for
Consideration Given by a Vendor to a Customer or Reseller of the
Vendor's Products", retroactive to April 1, 2001. As a result of the
adoption of new statement, certain cooperative advertising and product
placement costs previously classified as selling, general and
administrative expenses for the three months and nine months ended
December 31, 2001 have been reclassified as a reduction of revenues to
conform to the presentation for the three months and nine months ended
December 31, 2002.
7. Adoption of New Accounting Standards
Impairment or Disposal of Long-Lived Assets
On April 1, 2002, Sony adopted FAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement establishes a single accounting model for long-lived assets to be disposed of by sale and modifies the accounting and disclosure rules for discontinued operations. The adoption of this statement did not have an impact on Sony's results of operations and financial position.
FAS No.145, "Rescission of FASB Statements No.4, 44 and 64, Amendment of FASB Statement No.13, and Technical Corrections"
In April 2002, the Financial Accounting Standards Board issued FAS No. 145. This statement rescinds certain authoritative pronouncements and amends, clarifies or describes the applicability of others, effective for fiscal years beginning or transactions occurring after May 15, 2002, with early adoption encouraged. Sony elected early adoption of this statement retroactive to the beginning of the fiscal year. The adoption of this statement did not have an impact on Sony's results of operations and financial position.
Other Consolidated Financial Data
(Millions of yen, millions of U.S. dollars)
Three months ended December 31
2001 2002 Change 2002
Capital expenditures
(additions to
fixed assets) Y 75,160 Y 56,937 -24.2% $ 474
Depreciation
and amortization expenses* 94,603 88,716 -6.2 739
(Depreciation expenses
for tangible assets) (77,572) (70,304) (-9.4) (586)
R&D expenses 98,918 105,564 +6.7 880
Nine months ended December 31
2001 2002 Change 2002
Capital expenditures
(additions to fixed assets) Y 254,594 Y 184,631 -27.5% $ 1,539
Depreciation and
amortization expenses* 262,179 255,684 -2.5 2,131
(Depreciation expenses
for tangible assets) (215,646) (205,136) (-4.9) (1,709)
R&D expenses 325,283 311,749 -4.2 2,598
* Including amortization expenses for intangible assets and for deferred
insurance acquisition costs.
SOURCE: Sony Corporation
CONTACT: Tokyo - Takeshi Sudo, +81-0-3-5448-2180; New York - Yas
Hasegawa, +1-212-833-6820, Kumiko Koyama, +1-212-833-5011, London - Hanako
Muto, +44-0-20-7426-8760, Chris Hohman, +44-0-20-7426-8739, all of Sony
Corporation
Web site: http://www.sony.com/
http://www.sony.net/IR