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SON: Sony Corporation: Consolidated Financial Results for the Fiscal Year Ended March 31, 2014

  SON: Sony Corporation: Consolidated Financial Results for the Fiscal Year
  Ended March 31, 2014

UK Regulatory Announcement

TOKYO

Sony Corporation
1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan

No. 14-049E
3:00 P.M. JST, May 14, 2014

Consolidated Financial Results for the Fiscal Year Ended March 31, 2014

Tokyo, May 14, 2014 -- Sony Corporation today announced its consolidated
financial results for the fiscal year ended March 31, 2014 (April 1, 2013 to
March 31, 2014).

(Billions of yen, millions of U.S. dollars, except per share amounts)
                   Fiscal year ended March 31
                  2013          2014         Change in    2014^*
                                                    yen
Sales and
operating            ¥6,795 .5     ¥7,767.3    +14  .3%     $75,410
revenue
Operating income     226    .5       26.5          -88  .3          257
Income before        242    .1       25.7          -89  .4          250
income taxes
Net income
(loss)
attributable to      41     .5       (128.4   )         -           (1,246  )
Sony
Corporation’s
stockholders
Net income
(loss)
attributable to
Sony                                                                
Corporation’s
stockholders per
share of common
stock:
- Basic              ¥41    .32      ¥(124.99 )         -          $(1.21  )
- Diluted            38     .79      (124.99  )         -           (1.21   )
                                                                             

* U.S. dollar amounts have been translated from yen, for convenience only, at
the rate of 103 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange
market rate as of March 31, 2014.

All amounts are presented on the basis of Generally Accepted Accounting
Principles in the U.S. (“U.S. GAAP”).

Certain figures for the fiscal year ended March 31, 2013 have been revised
from the versions previously disclosed. For further details, please see Note 5
on page F-18.

The average foreign exchange rates during the fiscal years ended March 31,
2013 and 2014 are presented below.

                 Fiscal year ended March 31            
                2013       2014       Change     
The
average                                    
rate of yen
1 U.S.            ¥ 83 .1       ¥    .2       17 .1 %       (yen
dollar                              100                         depreciation)
1 Euro            107  .2       134  .4       20 .3         (yen
                                                                depreciation)
                                                                

Consolidated Results for the Fiscal Year Ended March 31, 2014

Sales and operating revenue (“sales”) were 7,767.3 billion yen (75,410 million
U.S. dollars), an increase of 14.3% compared to the previous fiscal year
(“year-on-year”). This increase was primarily due to the favorable impact of
foreign exchange rates, the launch of the PlayStation®4 (PS4™), as well as a
significant increase in sales of smartphones. On a constant currency basis,
sales decreased 2% year-on-year. For further details about sales on a constant
currency basis, see Note on page 11.

Operating income decreased 200.0 billion yen year-on-year to 26.5 billion yen
(257 million U.S. dollars). This significant decrease was primarily due to a
year-on-year decrease in gains on the sale of assets and remeasurement gains
(see below), a recording of 91.7 billion yen (890 million U.S. dollars) in
losses related to the PC business, including restructuring charges, compared
to 38.6 billion yen in PC business-related losses recorded in the previous
fiscal year, and a recording of impairment charges in the battery business and
in the disc manufacturing business. This decrease was partially offset by the
favorable impact of foreign exchange rates, a significant improvement in
operating results in the mobile phone business and a significant decrease in
loss in Televisions.

Of the 91.7 billion yen (890 million U.S. dollars) in losses related to the PC
business in the current fiscal year, 58.3 billion yen (566 million U.S.
dollars) were costs related to the decision to exit the business, of which
45.5 billion yen (442 million U.S. dollars) was recorded in the Mobile
Products & Communications (“MP&C”) segment and 12.8 billion yen (124 million
U.S. dollars) was recorded in Corporate and elimination. The 12.8 billion yen
(124 million U.S. dollars) represents restructuring costs related to reducing
the scale of sales companies resulting from Sony’s exit from the PC business.
Of the 58.3 billion yen (566 million U.S. dollars), 40.9 billion yen (397
million U.S. dollars) was recognized as restructuring charges, and the
remaining 17.4 billion yen (169 million U.S. dollars) was an expense primarily
for the write-down of excess components in inventory. The following table
provides a reconciliation of the PC business operating loss.

                                  (Billions of yen, millions of U.S. dollars)
                                    Fiscal year ended March 31 2014
                                          Corporate         Consolidated       Consolidated
                       MP&C        and            total           total
                                          elimination
          Impairment
i.       of             ¥12.8        ¥ -            ¥12.8           $124
          long-lived
          assets
          Expenses
          to
ii.       compensate       8.0            -                 8.0                78
          suppliers
          for unused
          components
          Early
iii.     retirement    7.3        12.8          20.1           195      
          costs etc.
       Restructuring
(I)   charges (i +        28.1           12.8              40.9               397
       ii + iii)
       Write-down of
       excess
(II)  components in    17.4       -             17.4           169      
       inventory
       etc.
PC exit costs (I+II)       45.5           12.8              58.3               566
Operating loss          (33.3  )    -             (33.3    )      (323     )
excluding exit cost
Total PC Operating         ¥(78.8 )       ¥(12.8   )        ¥(91.7   )         $(890    )
Loss
                                                                                        

Included in operating income in the current fiscal year was a gain of 12.8
billion yen (124 million U.S. dollars) from the sale of certain shares of M3,
Inc. (“M3”). Included in operating income in the previous fiscal year were a
gain of 122.2 billion yen from the sale of certain shares of M3 and the
subsequent remeasurement of Sony’s remaining interest in M3, formerly a
consolidated subsidiary, in All Other, a gain of 691 million U.S. dollars
(65.5 billion yen) from the sale of Sony’s U.S. headquarters building at 550
Madison Avenue in New York City (“Sony’s U.S. headquarters building”), a gain
of 42.3 billion yen from the sale of the “Sony City Osaki” office building and
premises (“Sony City Osaki”) in Tokyo in Corporate and elimination, and a gain
of 9.1 billion yen recognized on the sale of the chemical products related
business in the Devices segment.

Total impairment charges of 86.0 billion yen (835 million U.S. dollars) in the
current fiscal year includes a 32.1 billion yen (312 million U.S. dollars)
impairment charge related to long-lived assets in the battery business in the
Devices segment, a 25.6 billion yen (249 million U.S. dollars) impairment
charge related to long-lived assets in the disc manufacturing business outside
of Japan and the U.S. and goodwill across the entire disc manufacturing
business in All Other, and a 12.8 billion yen (124 million U.S. dollars)
impairment charge related to long-lived assets in the PC business in the MP&C
segment.

Restructuring charges, net, increased 3.1 billion yen year-on-year to 80.6
billion yen (782 million U.S. dollars). The charges in the current fiscal year
were primarily related to restructuring initiatives in the PC business and at
Sony’s headquarters and sales companies. Restructuring charges related to
Sony’s exit from the PC business were 40.9 billion yen (397 million U.S.
dollars), which includes 12.8 billion yen (124 million U.S. dollars) in
impairment charges for long-lived assets in the PC business, 12.8 billion yen
(124 million U.S. dollars) in restructuring charges related to reducing the
scale of sales companies resulting from Sony’s exit from the PC business, 8.0
billion yen (78 million U.S. dollars) of expenses to compensate suppliers for
unused components reflecting the termination of future manufacturing and 7.3
billion yen (71 million U.S. dollars) primarily in early retirement costs.

Operating income for the current fiscal year included a net benefit of 11.9
billion yen (116 million U.S. dollars) from insurance recoveries related to
damages and losses incurred from the floods in Thailand (the “Floods”), which
took place in the fiscal year ended March 31, 2012. Operating results for the
previous fiscal year included a net benefit of 40.0 billion yen from the
above-mentioned insurance recoveries.

Equity in net loss of affiliated companies, recorded within operating income, 
increased 0.4 billion yen year-on-year to 7.4 billion yen (72 million U.S.
dollars).

The net effect of other income and expenses was an expense of 0.8 billion yen
(7 million U.S. dollars), compared to income of 15.6 billion yen in the
previous fiscal year. This change was primarily due to a decrease in gain on
the sale of securities investments, partially offset by a decrease in interest
expense. Sales of securities investments in the current fiscal year include a
gain of 7.4 billion yen (72 million U.S. dollars) from the sale of Sony’s
shares in Sky Perfect JSAT Holdings Inc., which were sold in December 2013.
Sales of securities investments in the previous fiscal year included a gain of
40.9 billion yen from the sale of Sony’s shares in DeNA Co., Ltd. (“DeNA”),
which were sold in March 2013.

Income before income taxes decreased 216.3 billion yen year-on-year to 25.7
billion yen (250 million U.S. dollars).

Income taxes: During the current fiscal year, Sony recorded 94.6 billion yen
(918 million U.S. dollars) of income tax expense, and Sony’s effective tax
rate exceeded the Japanese statutory tax rate. During the current fiscal year,
Sony Corporation and certain of its subsidiaries which had established
valuation allowances incurred losses and, as such, Sony continued to not
recognize the associated tax benefits, although this was partially offset by
the recording of certain tax benefits associated with the impact of gains in
other comprehensive income. Sony also recorded additional tax reserves during
the current fiscal year.

Net loss attributable to Sony Corporation’s stockholders, which excludes net
income attributable to noncontrolling interests, was 128.4 billion yen (1,246
million U.S. dollars) compared to net income of 41.5 billion yen in the
previous fiscal year.

To view the full announcement, paste the following link into your web browser:
http://www.sony.net/SonyInfo/IR/financial/fr/13q4_sony.pdf

Contact:

Sony Corporation
 
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