CONSOLIDATED RESULTS FOR THE SECOND QUARTER AND THE SIX-MONTH PERIOD ENDED SEPTEMBER 30, 1994; SONY MAKES ACCOUNTING CHANGE LEADING TO GOODWILL WRITE-OFF.NEW YORK--(BUSINESS WIRE)--November 17, 1994 --Sony Corporation announced today as part of its second quarter financial statement that it has written off $2,706 million (265 billion yen) of goodwill (reported on the Company's consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. ) associated with the acquisition of Columbia Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. Pictures in 1989. The write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. resulted from a change in the Company's method of consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: accounting to reflect the cost of capital in carrying the investment. Under the new accounting method, discounted future results of the Pictures Group, based on the Company's forecasts, require a restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the investment. "The restatement of the cost of our investment is part of a comprehensive business review I initiated when our Pictures Group began underperforming after three years of achieving excellent box office market share," said Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. P. Schulhof Schulhof is a German surname meaning "schoolyard" and may refer to:
tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. operations." "These steps include, the consolidation of the marketing and distribution units of Columbia and Tri-Star, resulting in staff reductions and other cost management improvements; the creation of Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) Retail Entertainment combining Sony Theatres, Sony Development and Sony Plaza For the hotel in New York City, see . Plaza (IPA /'plaθa/ or /'plasa/ ; the formation of Sony Television Entertainment recognizing the success and potential of that area; the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of responsibilities and accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. at Sony Pictures resulting from management changes, and a realistic timetable “Schedule” redirects here. For other uses, see Schedule (disambiguation). A timetable or schedule is an organized list or schedule, usually set out in tabular form, providing information about a series of arranged events: in particular, the time at which for implementing a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. based on putting more product into production and effecting more cost efficient management," he continued. The non-cash write-off is reflected in Sony's consolidated balance sheet and income statement. However, it does not have any impact on the parent company (non- non- word element [L.]not . non- pref. Not: noninvasive. consolidated) financial results or on consolidated cash flow. Sony's enthusiasm and commitment to its motion picture, television and video businesses is undiminished. Recent management realignment and other organizational changes are part of a wide-ranging wide-rang·ing adj. Covering a wide area; including much: a pianist's wide-ranging repertoire; a wide-ranging interview. program that Sony believes will enhance the development of all these operations. The company will continue to reinforce re·in·force v. 1. To give more force or effectiveness to something; strengthen. 2. To reward an individual, especially an experimental subject, with a reinforcer subsequent to a desired response or performance. 3. and support these efforts, and is confident that the Pictures Group will contribute to the growth of Sony's operations as a whole in the years to come. -0- TOKYO--(BUSINESS WIRE)-- Nov. 17, 1994--Sony Corporation announced today its consolidated results for both the second quarter and the six-month period ended September September: see month. 30, 1994. Performance Highlights Write-off of Goodwill During the second quarter, Sony decided to make an important change in its method of consolidated accounting, with respect to the assessment of the carrying value of its investment, including goodwill, in acquired businesses. As a result, Sony has written-off Y265 billion ($2,706 million) of goodwill associated with the acquisition of Columbia Pictures Entertainment, Inc. (presently Sony Pictures Entertainment, herein "SPE SPE - Software Practice and Experience "). (refer to Note 5 later in release) Since Sony acquired SPE in 1989, SPE has risen to become one of the major studios. However, SPE began underperforming after achieving top-level top-lev·el adj. 1. Of or relating to people of the highest office or rank. 2. Of or relating to the highest office or rank: a top-level job. U.S. box office share for three consecutive years until 1993. In light of the substantial investment, the business has not provided adequate returns. In consideration of anticipated additional investment to attain acceptable performance and together with the resignation of SPE top management, Sony reassessed the value of its investment of the Pictures Group and concluded that a change of accounting was necessary. This write-off of goodwill did not have any impact on consolidated and non-consolidated (parent company only) cash flows or the non-consolidated financial results.
CONSOLIDATED RESULTS FOR THE SECOND QUARTER
(Millions of yen, thousands of U.S. dollars except per share amounts)
1993 1994 Change 1994
Sales and operating
revenue Y 938,436 Y 972,775 +3.7% $ 9,926,276
Operating income (loss) 12,185 (295,581) ---- (3,016,133)
Income (loss) before income
taxes 18,014 (303,538) ---- (3,097,327)
Net income (loss) 2,275 (313,472) ---- (3,198,694)
Net income (loss)
per Depositary Share Y 6.8 Y (749.0) ---- $ (7.64)
CONSOLIDATED RESULTS FOR THE SIX-MONTH PERIOD
(Millions of yen, thousands of U.S. dollars except per share amounts)
1993 1994 Change 1994
Sales and operating
revenue Y 1,767,144 Y 1,837,296 +4.0% $18,747,918
Operating income (loss) 37,488 (263,782) ---- (2,691,653)
Income (loss) before
income taxes 56,648 (279,962) ---- (2,856,755)
Net income (loss) 9,967 (309,563) ---- (3,158,806)
Net income (loss)
per Depositary Share Y 26.6 Y (738.3) ---- $ (7.53)
Consolidated Results
Sony's consolidated sales and operating revenue (herein referred
to as "sales") for the second quarter increased 3.7%, to Y973 billion
($9,926 million), compared with the same period of the previous year.
In the Electronics Business, sales rose 6.7% and operating income
grew significantly, due to the sales increase and the success in
cost-cutting. However, the Entertainment Business faced a 7.7% sales
decline and significant operating losses. The operating losses came
from the aforementioned write-off of goodwill and the substantial
operating losses in the Pictures Group, including approximately Y50
billion ($510 million) arising from a combination of unusual items,
such as abandoning a large number of projects in development and
providing for settlement of outstanding lawsuits and contract claims.
As a result, Sony posted consolidated operating loss of Y296 billion
($3,016 million), consolidated loss before income taxes of Y304
billion ($3,097 million), and consolidated net loss of Y313 billion
($3,199 million) during the quarter.
Non-Consolidated Results
With respect to the non-consolidated (parent company only)
financial results for the first half of the fiscal year, net sales
increased 9.7% from the same period of the previous year, to Y935
billion ($9,542 million). This sales increase came from the 15.2%
increase in export sales, resulting from readjustment of business
operations which had previously been entrusted to the subsidiaries in
Southeast Asia to export products to the United States and Europe.
The sales decline in Japan was held to only 0.7%, reflecting signs of
recovery in the audiovisual market. Ordinary income rose 36.6%, to
Y23 billion ($239 million), but net income decreased 28.2%, to Y12
billion ($123 million).
Impact of Foreign Exchange Trends
During the second quarter, the yen continued to appreciate
approximately 7% and 3% against the U.S. dollar and the pound
sterling, respectively, but depreciated 1% against the deutsche mark,
in terms of average rate. If the value of the yen had remained the
same as in the previous year's second quarter, consolidated sales
would have generated an increase estimated at approximately Y32
billion ($327 million) over the reported figure during the second
quarter of the fiscal year. On a local currency basis, sales in the
United States in the second quarter increased approximately 6% in the
Electronics Business and 10% in the Music Business, and decreased 22%
in the Pictures Business. In Europe, sales on a local currency basis
increased approximately 12% in the Electronics Business. In Other
Areas, sales on a local currency basis increased approximately 21% in
the Electronics Business.
During the first half of the fiscal year, the yen also
appreciated approximately 7%, 4%, and 6% against the U.S. dollar,
the deutsche mark, and the pound sterling, respectively, in terms of
average rate. If the value of the yen had remained the same as in
the previous year's first half, consolidated sales and
non-consolidated export sales would have generated increases
estimated at approximately Y75 billion ($765 million) and Y43 billion
($439 million), respectively, over the reported figures during the
first half of the fiscal year.
Interim Dividends
At the meeting of the Board of Directors held on November 17,
1994, Sony declared an interim cash dividend of Y25 (before deduction
of withholding taxes) per Depositary Share, payable in December 1994.
Future Managerial Policies
Sony's business environment in the year ahead is expected to
remain challenging due to a slow recovery in the Japanese economy,
continued appreciation of the yen against major foreign currencies,
and the rise of interest rates. Under such circumstances, in the
Electronics Business, Sony will develop and introduce
customer-appealing products, supported by the strength of the new
company structure which was established in April 1994. Sony also
plans on further reducing costs, executing appropriate inventory
control, carefully selecting capital expenditures, and accelerating
overseas manufacturing operations. In the Entertainment Business,
Sony will endeavor to further reinforce the business of the Pictures
Group and make every effort to enhance its integrated value in the
total Entertainment Business including the Music Group.
Consolidated Sales Performance by Area
(Millions of yen, thousands of U.S. dollars)
Three months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Japan Y 250,672 Y 255,510 +1.9% $ 2,607,245
United States 318,272 300,881 -5.5 3,070,214
Europe 190,336 211,385 +11.1 2,156,990
Other Areas 179,156 204,999 +14.4 2,091,827
Total Y 938,436 Y 972,775 +3.7% $ 9,926,276
Six months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Japan Y 485,795 Y 499,892 +2.9% $5,100,939
United States 564,924 551,444 -2.4 5,626,979
Europe 375,109 404,464 +7.8 4,127,184
Other Areas 341,316 381,496 +11.8 3,892,816
Total Y 1,767,144 Y 1,837,296 +4.0% $18,747,918
During the second quarter, sales in Japan increased, mainly
attributable to sales growth in Televisions. Sales in the United
States decreased, principally because of a sales decline in the
Pictures Group and the appreciation of the yen. In Europe, sales
advanced as a whole, reflecting the recovery of European economies
and the strength of the Eastern European markets. Other Areas gained
favorable sales expansion in overall electronics products, led by
growing Asian markets.
Consolidated Sales Performance by Product Group
Electronics Business
(Millions of yen, thousands of U.S. dollars)
Three months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Video Equipment Y 164,147 Y 175,104 +6.7% $ 1,786,775
Audio Equipment 217,310 228,181 +5.0 2,328,378
Televisions 152,702 170,782 +11.8 1,742,673
Others 205,155 214,888 +4.7 2,192,735
Total Y 739,314 Y 788,955 +6.7% $ 8,050,561
Six months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Video Equipment Y 328,055 Y 336,815 +2.7% $ 3,436,888
Audio Equipment 396,801 416,946 +5.1 4,254,551
Televisions 286,868 318,550 +11.0 3,250,510
Others 392,584 408,738 +4.1 4,170,796
Total Y 1,404,308 Y 1,481,049 +5.5% $ 15,112,745
During the second quarter, sales in the Electronics Business
increased in all product groups despite the appreciation of the yen.
In Video Equipment, Digital Betacam VTRs, which are used by broadcast
stations worldwide, enjoyed good sales. In Audio Equipment, sales of
car stereos grew and unit sales of CD players increased
significantly. In Televisions, home-use color TVs, especially
wide-screen TVs in Japan, registered notable growth in unit sales.
In addition, sales of computer displays also expanded, primarily in
Japan and Europe. In Others, telephones and batteries showed a
strong performance.
Entertainment Business
(Millions of yen, thousands of U.S. dollars)
Three months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Music Group Y 115,556 Y 117,996 +2.1% $ 1,204,041
Pictures Group 83,566 65,824 -21.2 671,674
Total Y 199,122 Y 183,820 -7.7% $ 1,875,715
Six months ended September 30
1993 1994 Change 1994
Sales and operating
revenue
Music Group Y 212,101 Y 226,150 +6.6% $ 2,307,653
Pictures Group 150,735 130,097 -13.7 1,327,520
Total Y 362,836 Y 356,247 -1.8% $ 3,635,173
During the second quarter, sales in the Music Group increased,
despite the appreciation of the yen, thanks to the popularity of many
artists in various musical genres. Mariah Carey's Music Box album
continues to perform exceptionally well, with aggregate sales of 20
million units, while the Forrest Gump soundtrack sold over 3 million
units worldwide to date. In Japan, major hit releases included TMN
and Misato Watanabe.
Sales in the Pictures Group declined, primarily because there
were few hit films. The appreciation of the yen also affected the
sales results. Under these conditions, Sony Pictures Entertainment's
(SPE) television operations continued their expansion into new
markets and programming arenas during the quarter as SPE continued to
grow its international businesses.
During the second quarter, substantial operating losses were
incurred at the Pictures Group, including approximately Y50 billion
($510 million) arising from a combination of unusual items, such as
abandoning a large number of projects in development and providing
for settlement of outstanding lawsuits and contract claims. The
losses at the Pictures Group from the above items and aforementioned
write-off of goodwill more than offset the substantial profit of the
Music Group.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Million of yen, thousands of U.S. dollars except per share amounts)
Three months ended September 30
1993 1994 Change 1994
%
Sales and operating
revenue:
Net Sales Y 910,174 Y 935,746 $ 9,548,429
Operating revenue 28,262 37,029 377,847
938,436 972,775 +3.7 9,926,276
Costs and expenses:
Cost of sales 705,525 738,734 7,538,102
Selling, general and
administrative 220,726 264,455 2,698,521
Goodwill write-off --------- 265,167 2,705,786
926,251 1,268,356 12,942,409
Operating income (loss) 12,185 (295,581) ---- (3,016,133)
Other income:
Interest and dividends 9,439 7,957 81,194
Foreign exchange
gain, net 11,990 6,707 68,438
Other 14,305 10,691 109,092
35,734 25,355 258,724
Other expenses:
Interest 17,177 17,771 181,337
Other 12,728 15,541 158,581
29,905 33,312 339,918
Income (loss) before
income taxes 18,014 (303,538) ---- (3,097,327)
Income taxes 13,556 8,834 90,142
Income (loss)
before minority interest 4,458 (312,372) (3,187,469)
Minority interest
in consolidated
subsidiaries 2,183 1,100 11,225
Net income (loss) Y 2,275 Y (313,472) ---- $(3,198,694)
Net income (loss)
per Depositary Share Y 6.8 Y (749.0) ---- $(7.64)
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Million of yen, thousands of U.S. dollars except per share amounts)
Six months ended September 30
1993 1994 Change 1994
%
Sales and operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. :
Net Sales Y 1,713,368 Y 1,763,582 $ 17,995,735
Operating revenue 53,776 73,714 752,183
1,767,144 1,837,296 +4.0 18,747,918
Costs and expenses: Cost of sales 1,303,939 1,352,677 13,802,826 Selling, general
and administrative 425,717 483,234 4,930,959
Goodwill write-off ---------- 265,167 2,705,786
1,729,656 2,101,078 21,439,571
Operating income (loss) 37,488 (263,782) ---- (2,691,653)
Other income: Interest and dividends 19,742 16,408 167,429 Foreign exchange
gain, net 32,347 14,202 144,918
Other 25,145 16,926 172,714
77,234 47,536 485,061
Other expenses:
Interest 35,313 34,632 353,388
Other 22,761 29,084 296,775
58,074 63,716 650,163
Income (loss) before income taxes 56,648 (279,962) ---- (2,856,755) Income taxes 42,709 26,525 270,663 Income (loss) before minority interest 13,939 (306,487) (3,127,418) Minority interest in consolidated subsidiaries 3,972 3,076 31,388 Net income (loss) Y 9,967 Y (309,563) ---- $(3,158,806) Net income (loss)
per Depositary Share Y 26.6 Y (738.3) ---- $(7.53)
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Millions of yen, thousands of U.S. dollars)
ASSETS September 30
1993 1994 1994
Current assets:
Cash and time deposits Y 571,248 Y 510,219 $ 5,206,316
Marketable securities 25,967 39,044 398,408
Notes and accounts receivable,
less allowances 597,150 599,354 6,115,857
Inventories 750,459 761,300 7,768,368
Other 254,148 242,220 2,471,633
Total current assets 2,198,972 2,152,137 21,960,582
Noncurrent inventories - film 190,874 148,153 1,511,765
Investments and advances 272,183 461,801 4,712,255
Property, plant and equipment,
less depreciation 1,079,720 1,036,425 10,575,765
Other assets:
Intangibles 105,495 95,342 972,878
Goodwill 436,247 131,940 1,346,327
Other 202,267 205,724 2,099,224
Total other assets 744,009 433,006 4,418,429
Y 4,485,758 Y 4,231,522 $ 43,178,796
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short-term debt Y 470,686 Y 393,487 $ 4,015,173
Notes and accounts payable 610,493 622,978 6,356,918
Accrued income and other taxes 71,958 83,579 852,847
Other 404,950 452,498 4,617,327
Total current liabilities 1,558,087 1,552,542 15,842,265
Long-term liabilities:
Long-term debt 1,065,988 958,602 9,781,653
Accrued pension and
severance costs 92,442 104,230 1,063,571
Deferred income taxes 63,817 132,991 1,357,051
Other 269,886 328,793 3,355,031
Total long-term liabilities 1,492,133 1,524,616 15,557,306
Minority interest in consolidated
subsidiaries 86,056 95,895 978,521
Stockholders' equity:
Common stock, 4 50 par value 298,040 299,306 3,054,143
Additional paid-in capital 439,674 440,957 4,499,561
Legal reserve 22,139 24,765 252,704
Unrealized gain on securities ---- 72,607 740,888
Retained earnings appropriated
for special allowances 19,024 16,896 172,408
Retained earnings 888,086 564,501 5,760,214
Cumulative translation
adjustment (317,481) (360,563) (3,679,214)
Total stockholders' equity 1,349,482 1,058,469 10,800,704
Y 4,485,758 Y 4,231,522 $ 43,178,796
Notes:
1. U.S. Dollar amounts have been translated from yen, for
convenience only, at the rate of 498=U.S.$1, the approximate Tokyo
foreign exchange market rate as of September 30, 1994.
2. As of September 30, 1994, the Company had 835 consolidated
subsidiaries. It has applied the equity accounting method in respect
to its 25 affiliated companies.
3. Net income per Depositary Share is computed based on the
average number of common shares outstanding during each period after
consideration of the dilutive effect of common stock equivalents.
4. Effective April 1, 1994, the Company adopted Statement of
Financial Accounting Standards No. 115 (FAS 115), Accounting for
Certain Investments in Debt and Equity Securities. As a result of
applying the provisions of FAS 115, unrealized holding gains on
available-for-sale securities have been recognized and presented as a
separate component of stockholders' equity on a net-of-tax basis.
This accounting change had no material effect on retained earnings at
April 1, 1994 and net income for the three- and six-month periods
ended September 30, 1994.
5. During the second quarter of the fiscal year ending March 31,
1995, the Company changed its method of accounting. Under its prior
method, the Company assessed the carrying value of its investment in
acquired businesses, including goodwill, on the basis of projections
of undiscounted future operating cash flows plus an amount for an
anticipated residual value. Operating cash flows for this purpose
are all cash flows expected to be generated by the business, net of
taxes and after capital investment, but exclusive of financing
activity (interest and principal).
Under the new method, the Company applies a discount factor to
those projected cash flows. The Company believes that the new method
provides a better measurement of the recoverability of its investment
because the discounted cash flows method recognizes the effect of the
substantial cost of capital employed to carry the investment.
The effect of this accounting change was to reduce the goodwill
of the Entertainment segment associated with the Pictures Group by
Y265,167 million ($2,705,786 thousand). This new accounting
methodology was also applied to unrelated acquisitions and it was
determined that the book value of these investments was recoverable
from future operating cash flows of those businesses over the
forecast period. Accordingly, no additional write-offs were
necessary.
The changes in the Company's goodwill are summarized as follows:
Millions of yen Thousands of U.S. dollars
Balance at March 31, 1994 Y 424,482 $ 4,331,449
Amortization of goodwill (6,011) (61,336)
Goodwill write-off (265,167) (2,705,786)
Translation adjustment and other (21,364) (218,000)
Balance at September 30, 1994 Y 131,940 $1,346,327
Since its acquisition in November November: see month. 1989, there has been slower than expected growth of the businesses of the Pictures Group, higher than expected levels of operating costs operating costs npl → gastos mpl operacionales and expenses, and higher than anticipated capital investment requirements. The deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. experienced in the year ended March 31, 1994 gave rise to a thorough internal review. Similar results experienced thus far this year, together with a resignation of top management in the Pictures Group, caused the Company to conclude that additional funding would be needed to attain acceptable levels of profitability. In light of the existing level of investment and likelihood of additional funding requirements, the Company determined in the second quarter of the current fiscal year that a discounted cash flows method provided a preferable measurement of the recoverability of its investment in acquired businesses because this method recognizes the effect of the cost of capital. The discounted future results of the Pictures Group, based on the Company's forecasts, were not sufficient to justify the current carrying value. In formulating the financial forecasts, the Company considered historical performance, the mid- mid- pref. Middle: midbrain. range plans, as well as the longer term economic outlook. These forecasts took into consideration current market conditions, as well as foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. opportunities for future growth in its existing lines of business. Although the Company believes it can fund the Pictures Group over the entire forecast period, it has not determined whether additional investments will be made in other than the existing lines of business. The operating cash flows Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. are based upon near term plans that call for substantial improvement in earnings through recovered market share and cost reductions. For the longer term, it is assumed that the current low levels of inflation will continue and that the industry will grow at a slightly better rate than the economy as a whole. At the end of the forecast period a residual Residual See:Residual value was included based on an appropriate multiple of the final year's results. The Company believes that the forecasted future results, based on recent historical financial trends and current market conditions, is the best estimate of the Company's future performance. In arriving at the discounted net present value, the Company used a discount rate of 9% reflecting its weighted average cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. , including a factor for equity allocated to the Pictures Group commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the risk associated with that business as indicated by reference to comparable industry statistics. Over the entire forecast period, after giving effect to significant additional investment required to complete the investment program currently contemplated, the Company has forecast total operating cash flows of 44,166,374 million ($42,514,020 thousand). Based on such forecasts, the cumulative results of the Pictures Group operating cash flows on a discounted net present value basis of 4309,005 million ($3,153,112 thousand) are insufficient in·suf·fi·cient adj. 1. Not sufficient. 2. Incapable of proper functioning. to recover a significant portion of the investment. The amount of the resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. reduces the goodwill balance arising from the Pictures Group to 485,197 million ($869,357 thousand). Industry Segment (Millions of yen, thousands of U.S. dollars)
Three months ended September 30
Sales and operating revenue: 1993 1994 Change 1994
%
Electronics Y742,341 Y791,177 +6.6 $8,073,235
Entertainment 199,918 184,633 -7.6 1,884,010
Elimination (3,823) (3,035) ---- (30,969)
Consolidated Y938,436 Y972,775 +3.7 $9,926,276
Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss)
Electronics Y6,667 Y15,997 +139.9 $163,235
Entertainment 9,850 (306,627) ---- (3,128,847)
Corporate and elimination (4,332) (4,951) ---- (50,521)
Consolidated Y12,185 (Y295,581) ---- ($3,016,133)
Six months ended September 30
Sales and operating revenue: 1993 1994 Change 1994
%
Electronics Y1,409,082 Y1,485,206 +5.4 $15,155,163
Entertainment 364,481 357,953 -1.8 3,652,582
Elimination (6,419) (5,863) ---- (59,827)
Consolidated Y1,767,144 Y1,837,296 +4.0 $18,747,918
Operating income (loss) Electronics Y31,308 Y47,708 +52.4 $486,816 Entertainment 13,978 (302,307) ---- (3,084,765) Corporate and elimination (7,798) (9,183) ---- (93,704) Consolidated Y37,488 (Y263,782) ---- ($2,691,653) NON-CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Parent company only) (Millions of yen)
Six months ended September 30
1993 1994 Change
Operating profit and loss: %
Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight :
Japan Y 296,074 Y 294,149 -0.7
Export 556,532 640,982 +15.2
852,607 935,132 +9.7
Cost of sales 710,685 790,379
Selling, general and administrative 139,913 140,167 Operating income 2,008 4,585 +128.3 Non-operating profit and loss: Non-operating profit: 22,599 24,047 Interest and dividends 15,569 23,578 Other 38,169 47,626 Non-operating loss:
Interest 11,197 10,722
Other 11,848 18,089
23,046 28,812
Ordinary income 17,131 23,399 +36.6
Extraordinary income 1,077 0
Income before income taxes 18,209 23,399
Income taxes 1,360 11,300
Net income Y 16,849 Y 12,099 -28.2
COMPOSITION OF NET SALES BY PRODUCT GROUP (Parent company only) (Millions of yen)
Six months ended September 30
1993 1994 Change
Video Equipment Y 239,631 Y 243,644 +1.7%
Audio Equipment 203,548 271,044 +33.2
Televisions 159,403 159,421 +0.0
Other Products 250,023 261,021 +4.4
Net Sales Y 852,607 Y 935,132 +9.7
Note: Figures less than 41 million have been omitted.
Forecast for the Fiscal Year ending March 31, 1995 In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and regulations, Sony has issued an estimate of its financial results for the fiscal year ending March 31, 1995, which is set out below. As mentioned in the press release of the consolidated results for the second quarter and the six-month period ended September 30, 1994, Sony has written-off 4265 billion ($2,706 million) of goodwill associated with the acquisition of Columbia Pictures Entertainment, Inc. (presently Sony Pictures Entertainment). In addition, substantial operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. were incurred at the Pictures Group, including approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 450 billion ($510 million) arising from a combination of unusual items, such as abandoning a large number of projects in development and providing for settlement of outstanding lawsuits and contract claims. Due mainly to the above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. items, Sony revises the estimates downward from that announced in August, 1994. The estimate, which is summarized below, is subject to quarterly revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. . Assuming that the yen-dollar exchange rate until the end of the fiscal year ending March 31, 1995 will be in the upper nineties, Sony estimates its financial results for the fiscal year ending March 31, 1995, compared with the previous fiscal year, as follows: consolidated sales and operating revenue to increase 5%, to approximately 43,920 billion; consolidated operating loss of approximately 4160 billion; consolidated loss before income taxes of 4205 billion; and consolidated net loss of approximately 4285 billion. On a parent-company-only basis, net sales are expected to increase 11%, to approximately 41,890 billion; operating income to increase by about seven times, to approximately 421 billion; ordinary income to increase 57%, to approximately 448 billion; and net income to remain unchanged, at approximately 430 billion. These estimates are based on the above assumption and other assumptions deemed reasonable at this time. Actual financial results may differ.
CONTACT: Terry Hasegawa Ann Morfogen
(Investor Relations) (Corporate Comm.)
(212) 833-6849 (212) 833-6873
Corporate Communications
3-5448-2200
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