PDF [4833KB] - Sony
PDF [4833KB] - Sony
PDF [4833KB] - Sony
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a worldwide restructuring program since the<br />
year ended March 31, 2001 to reduce staffing<br />
and other costs through the consolidation and<br />
rationalization of facilities worldwide.<br />
During the year ended March 31, 2004,<br />
<strong>Sony</strong> broadened the scope of its worldwide<br />
restructuring of the Music segment, which<br />
resulted in restructuring charges totaling 10.7<br />
billion yen, compared to 22.4 billion yen in the<br />
fiscal year ended March 31, 2003. Restructuring<br />
activities included the shutdown of a CD<br />
manufacturing facility in the U.S. as well as the<br />
restructuring of the music label operations and<br />
further rationalization of overhead functions<br />
through staff reductions. The restructuring<br />
charges consisted of personnel related costs of<br />
5.1 billion yen, lease abandonment costs of<br />
1.3 billion yen and other related costs of 4.2<br />
billion yen including non-cash asset impairments<br />
and disposals. Most of these charges<br />
were recorded in selling, general and administrative<br />
expense. Employees were eliminated<br />
across various employee levels, business functions,<br />
operating units, and geographic regions<br />
during this phase of the worldwide restructuring<br />
program.<br />
PICTURES<br />
Restructuring charges in the Pictures segment<br />
for the fiscal year ended March 31, 2004 were<br />
4.6 billion yen, compared to 0.5 billion yen in<br />
the previous fiscal year. A variety of initiatives<br />
were undertaken in the segment in an effort<br />
to reduce fixed costs including the reduction of<br />
staffing levels and the disposal of certain longlived<br />
assets. Restructuring charges consisted of<br />
1.0 billion yen of personnel related costs, 1.7<br />
billion yen of non-cash asset impairment and<br />
disposal costs and 1.9 billion yen of other<br />
restructuring costs. Among these charges, 1.5<br />
billion yen was recorded in cost of sales, 1.3<br />
billion yen was recorded in selling, general and<br />
administrative expenses, and 1.7 billion yen<br />
was recorded in loss on sale, disposal or<br />
impairment of assets, net.<br />
The table below summarizes major restructuring activities for which charges of over 5 billion<br />
yen were recorded during the fiscal year ended March 31, 2004.<br />
Segment<br />
Electronics<br />
Music<br />
SALES<br />
Sales for the fiscal year ended March 31, 2004<br />
increased by 22.8 billion yen, or 0.3 percent,<br />
to 7,496.4 billion yen compared with the previous<br />
fiscal year. A further breakdown of sales<br />
figures is presented under “Operating Performance<br />
by Business Segment” below.<br />
8,000<br />
6,000<br />
4,000<br />
2,000<br />
0<br />
Nature of Restructuring<br />
Reduction of TV display CRT<br />
production capacity in Japan<br />
Early retirement program<br />
Closure of CD<br />
manufacturing facility in<br />
U.S., restructuring of the<br />
music label operations, and<br />
rationalization of overhead<br />
functions<br />
OPERATING PERFORMANCE<br />
Sales and operating revenue and operating income<br />
(Billion ¥) (Billion ¥)<br />
1.8%<br />
2.5%<br />
1.3%<br />
02 03 04<br />
Sales and operating revenue (left)<br />
Operating income (right)<br />
Operating margin<br />
*Year ended March 31<br />
Costs incurred in the<br />
fiscal year ended<br />
March 31, 2004<br />
8.5 billion yen<br />
114.0 billion yen<br />
10.7 billion yen<br />
1,200<br />
1,000<br />
800<br />
600<br />
400<br />
200<br />
0<br />
Additional Information<br />
Remaining liability balance of 2.2 billion yen at March 31, 2004<br />
will be paid or settled in the fiscal year ending March 31, 2005.<br />
Remaining liability balance of 18.3 billion yen at March 31,<br />
2004 will be paid in the fiscal year ending March 31, 2005.<br />
Most of the remaining liability balance of 6.2 billion yen at<br />
March 31, 2004 will be paid or settled during the fiscal year<br />
ending March 31, 2005.<br />
(Yen in billions)<br />
Year ended March 31<br />
Percent<br />
2003 2004 change<br />
Sales and operating revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,473.6 7,496.4 +0.3%<br />
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185.4 98.9 –46.7<br />
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 247.6 144.1 –41.8<br />
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.5 88.5 –23.4<br />
(“Sales” in this analysis of the ratio of selling,<br />
general and administrative expenses to sales<br />
refers only to the “net sales” and “other operating<br />
revenue” portions of consolidated sales<br />
and operating revenue, and excludes Financial<br />
Service revenue. This is because Financial<br />
Service expenses are recorded separately from<br />
cost of sales and selling, general and administrative<br />
expenses. Furthermore, in the analysis<br />
of cost of sales, including research and development<br />
costs, to sales, only “net sales” are<br />
used. This is because cost of sales is an expense<br />
associated only with net sales. All the<br />
ratios below that pertain to business segments<br />
are calculated with intersegment transactions<br />
included.)<br />
COST OF SALES AND SELLING, GENERAL<br />
AND ADMINISTRATIVE EXPENSES<br />
Cost of sales for the fiscal year ended March<br />
31, 2004 increased by 78.8 billion yen, or 1.6<br />
percent, to 5,058.2 billion yen compared with<br />
the previous fiscal year, and increased from<br />
72.0 percent to 73.5 percent as a percentage<br />
of sales. Year on year, the cost of sales ratio was<br />
unchanged at 78.8 percent in the Electronics<br />
segment and almost unchanged from 70.2<br />
percent to 70.1 percent in the Game segment.<br />
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