Consolidated Financial Results for the Fiscal Year Ended March 31, 2017
Sony Corporation of America - 05/10/2017
April 28, 2017
Tokyo, April 28, 2017 -- Sony Corporation today announced its consolidated financial results for the fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017).
(Billions of yen, millions of U.S. dollars, except per share amounts)
Fiscal Year ended March 31
|2016||2017||Change in yen||2017*|
|Sales and operating revenue||¥8,105.7||¥7,603.3||-6.2 %||
|Income before income taxes||304.5||251.6||-17.4||2,247|
Net income attributable to Sony
Net income attributable to Sony Corporation's
stockholders per share of common stock:
* U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 112 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of March 31, 2017.
All amounts are presented on the basis of Generally Accepted Accounting Principles in the U.S. (“U.S. GAAP”).
Sony Corporation and its consolidated subsidiaries are together referred to as “Sony”.
The average foreign exchange rates during the fiscal years ended March 31, 2016 and 2017 are presented below.
Fiscal Year ended March 31
|The average rate of yen|
|1 U.S. dollar||¥120.1||¥108.4||10.8%||(yen depreciation)|
|1 Euro||132.6||118.8||11.6||(yen appreciation)|
Consolidated Results for the Fiscal Year Ended March 31, 2017
Sales and operating revenue (“Sales”) decreased by 6.2% compared to the previous fiscal year (“year-on-year”) to 7,603.3 billion yen (67,886 million U.S. dollars). This decrease was mainly due to the impact of foreign exchange rates. On a constant currency basis, sales were essentially flat year-on-year, due to significant increases in Game & Network Services (“G&NS”) and Semiconductors segment sales, substantially offset by a significant decrease in Mobile Communications (“MC”) segment sales. For further details about the impact of foreign exchange rates fluctuations on sales and operating income (loss), see Notes on page 11.
Operating income decreased 5.5 billion yen year-on-year to 288.7 billion yen (2,578 million U.S. dollars). This decrease was mainly due to the 962 million U.S. dollars (112.1 billion yen) impairment charge of goodwill recorded in the Pictures segment, substantially offset by an improvement in the operating results of the MC segment and an increase in the operating income of the G&NS segment. Sony made a downward revision in the future profitability projection for the Motion Pictures business within the Pictures segment. Due to the revision, it was determined that the entire amount of goodwill, in the Production & Distribution reporting unit of the Pictures segment, which includes the Motion Pictures business, was impaired and an operating loss was recorded in the Pictures segment.
In addition, operating income in the current fiscal year included a 42.3 billion yen (378 million U.S. dollars) impairment charge related to the planned transfer of the battery business in the Components segment, a 23.9 billion yen (213 million U.S. dollars) impairment charge against long-lived assets resulting from the termination of the development and manufacturing of certain high-functionality camera modules for external sale in the Semiconductors segment, as well as net charges of 15.4 billion yen (137 million U.S. dollars) in expenses resulting from the earthquakes in the Kumamoto region in 2016 (“the 2016 Kumamoto Earthquakes”), also in the Semiconductors segment. The expenses resulting from the 2016 Kumamoto Earthquakes include 16.7 billion yen (149 million U.S. dollars) of repair costs for certain fixed assets and losses on disposal of inventories that were directly damaged (the “Physical Damage”), as well as 9.4 billion yen (84 million U.S. dollars) of idle facility costs at manufacturing sites. The expenses for the Physical Damage were partially offset by the recognition of 10.7 billion yen (95 million U.S. dollars) of probable insurance recoveries. Offsetting all of the above charges was a 37.2 billion yen (332 million U.S. dollars) gain on the sale of certain shares of M3, Inc. (“M3”) recorded in All Other.
Operating income in the previous fiscal year included a 59.6 billion yen impairment charge against long-lived
assets in the camera module business in the Semiconductors segment, a 30.6 billion yen impairment charge against long-lived assets for the battery business in the Components segment, a 151 million U.S. dollars (18.1 billion yen) gain in the Music segment on the remeasurement to fair value of Sony Music Entertainment’s (“SME”) 51% equity interest in Orchard Media, Inc. (“The Orchard”), which had previously been accounted for under the equity method, as a result of SME increasing its ownership interest to 100%, as well as a gain of 12.3 billion yen from the sale of a part of the logistics business, in connection with the formation of a logistics joint venture, recorded in Corporate
During the current fiscal year, restructuring charges, net, increased 22.0 billion yen year-on-year to 60.2 billion yen (538 million U.S. dollars) primarily due to the above-mentioned impairment charge related to the planned transfer of the battery business. This amount is recorded as an operating expense included in the above-mentioned operating income.
Equity in net income of affiliated companies, recorded within operating income, increased 1.3 billion yen year-on-year to 3.6 billion yen (32 million U.S. dollars).
The net effect of other income and expenses was an expense of 37.1 billion yen (331 million U.S. dollars), compared to income of 10.3 billion yen in the previous fiscal year. This was primarily due to the absence of a 46.8 billion yen gain on the sale of certain shares of Olympus Corporation (“Olympus”) recorded in the previous fiscal year.
Income before income taxes decreased 52.9 billion yen year-on-year to 251.6 billion yen (2,247 million U.S. dollars).
During the current fiscal year, Sony recorded 124.1 billion yen (1,108 million U.S. dollars) of income tax expense, resulting in an effective tax rate of 49.3% which exceeded the effective tax rate of 31.1% of the previous fiscal year. This higher effective tax rate was mainly due to the nondeductible impairment charge of goodwill recorded during the current fiscal year.
Net income attributable to Sony Corporation’s stockholders, which deducts net income attributable to noncontrolling interests, decreased 74.5 billion yen year-on-year to 73.3 billion yen (654 million U.S. dollars).