SON: Sony Corporation: Consolidated Financial Results for the Second Quarter
Ended September 30, 2012
UK Regulatory Announcement
1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan
3:00 P.M. JST, November 1, 2012
Consolidated Financial Results for the Second Quarter Ended September 30, 2012
Tokyo, November 1, 2012 -- Sony Corporation today announced its consolidated
financial results for the second quarter ended September 30, 2012 (July 1,
2012 to September 30, 2012).
(Billions of yen, millions of U.S. dollars, except per share
Second quarter ended September 30
2011 2012 Change 2012^*
operating ¥1,575.0 ¥1,604.7 +1.9 % $20,573
Operating (1.6 ) 30.3 - 388
Income before 0.1 19.7 - 252
stockholders (27.0 ) (15.5 ) - (198 )
per share of
- Basic ¥(26.88 ) ¥(15.41 ) - $(0.20 )
- Diluted (26.88 ) (15.41 ) - (0.20 )
* U.S. dollar amounts have been translated from yen, for convenience only, at
the rate of 78 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange
market rate as of September 30, 2012.
All amounts are presented on the basis of Generally Accepted Accounting
Principles in the U.S. (“U.S. GAAP”).
Sony realigned its business segments from the first quarter of the fiscal year
ending March 31, 2013 to reflect modifications to its organizational structure
as of April 1, 2012, primarily repositioning the operations of the previously
reported Consumer Products & Services (“CPS”), Professional, Device &
Solutions (“PDS”) and Sony Mobile Communications (“Sony Mobile”) segments. In
connection with this realignment, the operations of the former CPS, PDS and
Sony Mobile segments are reclassified in five newly established segments,
namely the Imaging Products & Solutions (“IP&S”), Game, Mobile Products &
Communications (“MP&C”), Home Entertainment & Sound (“HE&S”) and Devices
segments, as well as All Other. The previously reported Sony Mobile segment is
now included in the MP&C segment as the Mobile Communications category. The
network business previously included in the CPS segment and the medical
business previously included in the PDS segment are now included in All Other.
For further details regarding segment and category changes, see page 15.
In connection with this realignment, both sales and operating revenue
(“sales”) and operating income (loss) of each segment in the second quarter
and six months ended September 30, 2011 have been restated to conform to the
current fiscal year’s presentation.
The average foreign exchange rates during the quarters ended September 30,
2011 and 2012 are presented below.
Second quarter ended September 30
2011 2012 Change
The average rate of
1 U.S. ¥ 76.9 ¥ 78.6 2.3 % （yen depreciation）
1 Euro 108.7 98.4 10.4 （yen appreciation）
Consolidated Results for the Second Quarter Ended September 30, 2012
Sales were 1,604.7 billion yen (20,573 million U.S. dollars), an increase of
1.9% compared to the same quarter of the previous fiscal year
(“year-on-year”). This increase was primarily due to a significant increase in
sales in the MP&C segment, while sales in the HE&S segment decreased
significantly resulting from a decrease in LCD television unit sales. On a
constant currency basis, sales increased 3% year-on-year. For further details
about sales on a constant currency basis, see Note on page 10. The increase in
MP&C segment sales was primarily due to the impact of the consolidation of
Sony Mobile Communications AB (“Sony Mobile,” formerly known as Sony Ericsson
Mobile Communications AB (“Sony Ericsson”)) as a wholly-owned subsidiary from
February 2012. During the same quarter of the previous fiscal year, Sony
Mobile was an affiliated company accounted for under the equity method.
On a pro forma basis, had Sony Mobile been fully consolidated in the same
quarter of the previous fiscal year, consolidated sales would have decreased
by approximately 8% year-on-year.
Operating income of 30.3 billion yen (388 million U.S. dollars) was recorded,
compared to an operating loss of 1.6 billion yen in the same quarter of the
previous fiscal year. This improvement was primarily due to an improvement in
the operating results of the Devices segment, and of the HE&S segment, mainly
reflecting cost reductions in LCD televisions.
Restructuring charges, net, decreased 17.3 billion yen year-on-year to 11.5
billion yen (147 million U.S. dollars). This decrease was primarily due to
18.4 billion yen in asset impairments recorded in the Devices segment in the
same quarter of the previous fiscal year associated with the sale of the
small- and medium-sized display business.
Operating results during the current quarter were favorably impacted by a net
benefit of 13.2 billion yen (170 million U.S. dollars) from insurance
recoveries relating to damages and losses incurred from the floods in Thailand
(the “Floods”) which took place in the fiscal year ended March 31, 2012, and a
gain of 8.2 billion yen (105 million U.S. dollars) from the sale of the
chemical products related business recorded mainly in the Devices segment.
Equity in net loss of affiliated companies, recorded within operating income,
was 3.1 billion yen (40 million U.S. dollars), compared to equity in net
income of 1.1 billion yen in the same quarter of the previous fiscal year.
This loss was primarily due to the recording of equity in net loss for EMI
Music Publishing (“EMI”), mainly due to the recording of transaction related
costs, interest expense and restructuring charges stemming from the
acquisition of EMI. From June 29, 2012, EMI became an affiliated company
accounted for under the equity method.
The net effect of other income and expenses was a loss of 10.6 billion yen
(136 million U.S. dollars) in the current quarter, compared to income of 1.7
billion yen in the same quarter of the previous fiscal year. This
deterioration was primarily due to the recording of a net foreign exchange
loss in the current quarter, compared to the recording of a net foreign
exchange gain in the same quarter of the previous fiscal year.
Income before income taxes increased 19.6 billion yen year-on-year to 19.7
billion yen (252 million U.S. dollars).
Income taxes: During the current quarter, Sony recorded 22.0 billion yen (282
million U.S. dollars) of income tax expense. As of March 31, 2012, Sony had
established a valuation allowance against certain deferred tax assets for Sony
Corporation and its national tax filing group in Japan, the consolidated tax
filing group in the U.S., and certain other subsidiaries. During the current
fiscal year, certain of these tax filing groups and subsidiaries incurred
losses and as such Sony continued to not recognize the associated tax
benefits. As a result, Sony’s effective tax rate for the current quarter
exceeded the Japanese statutory tax rate.
Net loss attributable to Sony Corporation’s stockholders, which excludes net
income attributable to noncontrolling interests, decreased 11.5 billion yen
year-on-year to 15.5 billion yen (198 million U.S. dollars).
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