ANNUAL REPORT 1997 Year Ended March 31, 1997 Sony Is One of the World’S Premier Names in Electronics and Entertainment
Total Page：16
File Type：pdf, Size：1020Kb
ANNUAL REPORT 1997 Year Ended March 31, 1997 Sony is one of the world’s premier names in electronics and entertainment. Established in 1946, the company is now a globally active organization whose name is widely recognized as a mark of excellence on trend-setting products as well as a range of music, movie, and other entertainment software. Sony has always drawn on leading technology to carve out new markets. This drive is now focusing on digital and network technologies. Under the “Digital Dream Kids” concept, Sony aims to harness the potential of digital technology to continue supplying hardware and software that are sources of enjoyment for customers around the world. CONTENTS Financial Highlights ............................................... 1 Involved in the Community .................................... 31 To Our Shareholders .............................................. 2 Founders/Board of Directors and Officers .............. 32 Sony’s President Looks Ahead ................................ 4 Financial Review ................................................... 33 Feature Section ...................................................... 6 Quarterly Financial and Stock Information ............. 37 At a Glance ............................................................ 10 Five-Year Summary of Selected Financial Data ...... 38 Review of Operations Composition of Sales and Operating Revenue by Geographic Area and Business Group............ 39 Video Equipment................................................ 12 Consolidated Balance Sheets ................................. 40 Audio Equipment ............................................... 15 Consolidated Statements of Income Televisions ......................................................... 18 and Retained Earnings ........................................ 42 Other Products ................................................... 21 Consolidated Statements of Cash Flows ................. 43 Music Group ...................................................... 24 Notes to Consolidated Financial Statements ........... 44 Pictures Group ................................................... 27 Report of Independent Accountants ....................... 62 Concerned for the Environment ............................. 30 Investor Information ............................................... 63 Statements made in this annual report with respect to Sony’s plans, strategies, and beliefs as well as other statements that are not historical facts are forward-looking statements, which involve risks and uncertainties. Potential risks and uncertainties include, without limitation, general economic conditions in Sony’s markets, exchange rates, and Sony’s ability to continue to win acceptance of its products, which are offered in highly competitive markets characterized by continual new product introductions, rapid developments in technology, and subjec- tive and changing consumer preferences. Financial Highlights Sony Corporation and Consolidated Subsidiaries Year ended March 31 Dollars in thousands Yen in millions except per share except per share amountsPercent change amounts 1996 19971997/1996 1997 OPERATING RESULTS FOR THE YEAR Sales and operating revenue. ¥4,592,565 ¥5,663,134 +23.3% $45,670,435 Operating income . 235,324 370,330 +57.4 2,986,532 Income before income taxes . 138,159 312,429 +126.1 2,519,589 Net income . 54,252 139,460 +157.1 1,124,677 Per share: Net income . ¥ 134.0 ¥ 309.2 +130.7% $ 2.49 Cash dividends . 50.0 55.0 0.44 AT YEAR-END Stockholders’ equity . ¥1,169,173 ¥1,459,428 +24.8% $11,769,581 Total assets . 5,045,725 5,680,342 +12.6 45,809,210 Number of employees . 151,000 163,000 Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥124=U.S.$1, the approximate Tokyo foreign exchange market rate as of March 31, 1997, as described in Note 3 of Notes to Consolidated Financial Statements. 2. As of March 31, 1997, Sony Corporation had 1,074 consolidated subsidiaries. It has applied the equity accounting method with respect to its 26 affiliated companies. 3. Refer to Note 2 of Notes to Consolidated Financial Statements, regarding the accounting policy for the earnings per share computation. Sales and Operating Net Income (Loss) Net Income (Loss) Revenue per Share (Billion ¥) (Billion ¥) (¥) 5,663 139 309 4,593 4,001 3,991 3,744 134 54 92 36 42 15 (293) (697) ’93 ’94 ’95 ’96 ’97 ’93 ’94 ’95 ’96 ’97 ’93 ’94 ’95 ’96 ’97 1 Sony Corporation Annual Report 1997 To Our Shareholders We are pleased to report that Sony celebrated its 50th anniversary during the fiscal year by posting record sales and earnings. Determined to build on this momentum over the next fifty years, we are taking steps to change ourselves by bringing about a Re-Generation from within the company. Sony has consistently introduced audiovisual equipment that brings new meaning to the word “fun” in consumer electronics. The company has also continued to provide excitement through music and filmed entertainment. Today, the markets for entertainment hardware and software are being redefined by the forces of digital and networking technologies. Moreover, the advent of digital satellite broadcasting and other types of electronic distribution is enhancing the value of all types of entertainment software. Sony’s course of action is clear. We are emphasizing information technology as a key element in the company’s future business development. We will continue to promote the incorporation of digital technology in our hardware and software businesses. Information technology will also add value to our vast store of music and filmed entertainment assets. As this process unfolds, we believe it is critical that we extend our business domain to encompass broadcasting and other forms of electronic distribution. Record-Setting Performance In the fiscal year ended March 31, 1997, consolidated sales and operating revenue rose to an all-time high of ¥5,663 billion ($45,670 million). This was the result of higher sales in all business segments —Electronics, Entertainment, and Insurance and Financing—combined with the progressive weakening of the yen. In the field of audiovisual equipment, sales of digital camcorders, MiniDisc systems, and other digital products climbed sharply. Our home video game business continued to expand worldwide and made a significant contribution to consolidated results. Falling sales prices impacted the perfor- mance of personal computer-related semiconductors and CD-ROM drives. In the entertainment field, highly successful releases included Celine Dion’s hit album Falling Into You, and Jerry Maguire, a blockbuster movie starring Tom Cruise. Consolidated operating income was ¥370 billion ($2,987 million), income before income taxes was ¥312 billion ($2,520 million), and net income was ¥139 billion ($1,125 million)—each representing a record high. We will continue to work toward achieving even better profitability. New Management Structure In light of the ongoing diversification and globalization of Sony’s operations, management decided in May 1997 to reform the Board of Directors and to create the new position of corporate executive of- ficer. This new system provides a clear division between individuals responsible for policy-making and oversight and those responsible for operational management. Our objective is to ensure that Sony has the solid management base necessary to support sustained growth. Regarding the Board of Directors, we plan to increase the number of outside directors and to promote candid and meaningful discussions 2 Sony Corporation Annual Report 1997 Nobuyuki Idei Norio Ohga President and Chief Operating Officer Chairman and Chief Executive Officer by adjusting the size of the Board as appropriate. By establishing the position of corporate executive officer, we intend to strengthen Sony’s ability to manage business operations. These proposals will be implemented after obtaining approval at the General Meeting of Shareholders on June 27, 1997. Dream Creation Since its inception, Sony has sought to create new markets and provide new lifestyle concepts to consumers. We are committed to remaining close to our customers and bringing new meaning to the word “fun” in electronics and entertainment. Guided by this commitment, we will strive to develop new business fields involving hardware, software, and the electronic distribution of contents —all part of the never-ending challenge of creating and realizing new dreams. May 8, 1997 Norio Ohga Nobuyuki Idei Chairman and Chief Executive Officer President and Chief Operating Officer 3 Sony Corporation Annual Report 1997 Sony’s President Looks Ahead Having celebrated its 50th anniversary in 1996, Sony is looking ahead to many more years of growth and prosperity. Rapid changes in technology, markets, and consumer preferences are giving rise to unprecedented challenges—and opportunities. President Nobuyuki Idei explains how Sony is laying the groundwork for another half century of progress. What is the meaning of “Digital Dream Kids”? The Digital Dream Kids concept defines the future direction of our product development activities. We aim to fulfill the dreams of customers worldwide who are captivated by the potential of digital technology. To do so, we must strive to supply products that are unique and fun to use. This is why we at Sony have to become digital dream kids mesmerized by new technologies. All of our hardware and software must be based on the premise of providing enjoyment. What are Sony’s top priorities