1-7-1 Konan, Minato-ku
Tokyo 108-0075 Japan
3:00 P.M. JST, February 7, 2013
Consolidated Financial Results for the Third Quarter Ended December 31, 2012
Tokyo, February 7, 2013 -- Sony Corporation today announced its consolidated financial results for the third quarter ended December 31, 2012 (October 1, 2012 to December 31, 2012).
(Billions of yen, millions of U.S. dollars, except per share amounts)
Third quarter ended December 31
|2011||2012||Change in yen||2012*|
|Sales and operating revenue||¥1,822.9||¥1,948.0||+6.9||%||$22,391|
|Operating income (loss)||(91.7||)||46.4||-||534|
|Income (loss) before income taxes||(105.9||)||29.4||-||338|
Net loss attributable to Sony Corporation’s
Net loss attributable to Sony Corporation’s
* U.S. dollar amounts have been translated from yen, for convenience only, at the rate of 87 yen = 1 U.S. dollar, the approximate Tokyo foreign exchange market rate as of December 31, 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 16.
In connection with this realignment, both sales and operating revenue (“sales”) and operating income (loss) of each segment in the third quarter and nine months ended December 31, 2011 have been restated to conform to the current fiscal year’s presentation.
The average foreign exchange rates during the quarters ended December 31, 2011 and 2012 are presented below.
|Third quarter ended December 31|
|The average rate of yen|
1 U.S. dollar
|¥ 76.4||¥ 81.2||6.0||%||（yen depreciation）|
Consolidated Results for the Third Quarter Ended December 31, 2012
Sales were 1,948.0 billion yen (22,391 million U.S. dollars), an increase of 6.9% 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, the Pictures segment and the Financial Services segment, while sales decreased significantly primarily in the HE&S segment, resulting from a decrease in LCD television unit sales, and in the Game segment. 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 significant 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 remained essentially flat.
Operating income of 46.4 billion yen (534 million U.S. dollars) was recorded, compared to an operating loss of 91.7 billion yen in the same quarter of the previous fiscal year. This improvement was primarily due to a 63.4 billion yen impairment loss on the shares of S-LCD Corporation (“S-LCD”) which were sold in January 2012 in accordance with the Television Profitability Improvement Plan, and a 33.0 billion yen valuation allowance which Sony Ericsson recorded on certain of its deferred tax assets, which were both recorded in equity in net loss of affiliated companies in the same quarter of the previous fiscal year. In addition, although operating income significantly decreased in the Game segment, the Devices segment, which saw a significant increase in sales of image sensors, and the Pictures segment, which had a significant increase in motion picture revenues, also contributed to this improvement.
Restructuring charges, net, increased 12.2 billion yen year-on-year to 16.7 billion yen (192 million U.S. dollars). This increase was primarily due to restructuring initiatives in both the electronics business operations and Sony’s headquarters.
Equity in net loss of affiliated companies, recorded within operating income, decreased 108.4 billion yen year-on-year to 0.4 billion yen (4 million U.S. dollars). This improvement was primarily due to the recording of equity in net loss for S-LCD of 66.0 billion yen and equity in net loss for Sony Ericsson of 43.1 billion yen, which were both recorded in the same quarter of the previous fiscal year.
The net effect of other income and expenses was an expense of 17.0 billion yen (195 million U.S. dollars) in the current quarter, compared to an expense of 14.2 billion yen in the same quarter of the previous fiscal year. This deterioration was primarily due to a higher loss on the devaluation of securities investments, partially offset by a decrease in net foreign exchange losses.
Income before income taxes of 29.4 billion yen (338 million U.S. dollars) was recorded, compared to a loss of 105.9 billion yen recorded in the same quarter of the previous fiscal year.
Income taxes: During the current quarter, Sony recorded 25.9 billion yen (298 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 148.2 billion yen year-on-year to 10.8 billion yen (124 million U.S. dollars).
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