Form 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of January 2005
Commission File Number: 001-06439
SONY CORPORATION
(Translation of registrant's name into English)
7-35 KITASHINAGAWA 6-CHOME, SHINAGAWA-KU, TOKYO, JAPAN
(Address of principal executive offices)
The registrant files annual reports under cover of Form 20-F.
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F,
Form 20-F X Form 40-F __
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934,
Yes_ No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):82-______
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SONY CORPORATION
(Registrant)
By:__ /s/ Katsumi Ihara
(Signature)
Katsumi Ihara
Executive Deputy President,
Group Chief Strategy Officer
and Chief Financial Officer
Date: January 27, 2005
List of materials
Documents attached hereto:
i) A press release regarding Results of Tracking Stock
6-7-35 Kita-shinagawa
Shinagawa-ku
Tokyo, 141-0001 Japan
No.05-002E
2005/1/27
14:30
Subsidiary Tracking Stock
Sony Communication Network Corporation
Consolidated Financial Results for the quarter ended December 31, 2004
Sony Communication Network Corporation (hereinafter, the "SCN Group"), a
subsidiary the performance of which is linked to a tracking stock issued by Sony
Corporation, announced today its consolidated results for the third quarter
ended December 31, 2004 (the period from October 1, 2004 to December 31, 2004)
and the nine-month period ended December 31, 2004 (the period from April 1, 2004
to December 31, 2004).
These results are based on the generally accepted accounting standards of
Japan.
- For the three months ended December 31, 2004, as in the prior quarter,
increase in revenue and a large increase in income compared to the year
earlier period.
During the quarter under review, sales increased 2.8% compared with the
year earlier period, to 9,854 million yen. Operating income of 902 million
yen was recorded, compared with an operating loss of 463 million yen in
the year earlier period. Ordinary income of 944 million yen, compared with
an ordinary loss of 504 million yen in the year earlier period, was
recorded. Net income increased 166.8% compared with the year earlier
period, to 778 million yen.
- So-net subscribers total 2.37 million, of which 610,000 are broadband
subscribers
Compared with the end of the year earlier period, the number of broadband
subscribers increased by 90,000 from 520,000 to 610,000. Also, the total
number of subscribers increased by 70,000 from 2.30 million at the end of
the year earlier period to 2.37 million.
- Fiscal Year 2004 Forecast
For the nine month period ended December 31, 2004, sales were 29,494
million yen compared with 28,604 million yen in the year earlier period.
Operating income was 2,402 million yen, compared with an operating loss of
926 million yen in the year earlier period. Ordinary income of 2,435
million yen was recorded, compared with a loss of 917 million yen in the
year earlier period, and net income of 3,538 million yen was recorded,
compared with a net loss of 92 million yen in the year earlier period.
Given these results for the first nine months of the fiscal year, there are
no changes to the forecast of consolidated results announced on October
28, 2004.
However, the expected number of So-net subscribers as of the end of the
year ending March 31, 2005 has been revised from 2.35 million to 2.40
million.
Consolidated Results for the quarter ended December 31, 2004 (Millions of Yen)
------------------------------------------------------------
Three months ended December 31
2003 2004 Change (%)
Sales 9,590 9,854 +2.8
Operating income (loss) (463) 902 -
Ordinary income (loss) (504) 944 -
Net income (loss) (292) 778 166.8
Consolidated Results for the nine-months ended December 31, 2004
----------------------------------------------------------------
(Millions of Yen)
Nine-months ended December 31
2003 2004 Change (%)
Sales 28,604 29,494 +3.1
Operating income (loss) (926) 2,402 -
Ordinary income (loss) (917) 2,435 -
Net income (loss) (92) 3,538 -
Summary of Consolidated Operations (October 1, 2004 to December 31, 2004)
----------------------------------
Regarding sales, during the quarter under review, sales increased 2.8% to
9,854 million yen, compared with 9,590 million yen in the year earlier period.
In the area of Internet provider services, the number of new subscribers to
ADSL and FTTH continued to increase at a steady pace. As a result, the number of
So-net broadband subscribers increased by 90,000 from the year earlier period to
610,000. However, the number of narrowband subscribers decreased, and as a
result, sales in this area decreased.
In the area of Internet-related services, sales increased. This was mainly a
result of an increase in content-related sales and viewer fees for CS
broadcasting, as well as an increase in sales at subsidiaries. Also, there was
an increase in the area of merchandise sales.
Furthermore, the total number of So-net subscribers at the end of the period
under review increased 70,000 from the end of the year earlier period, to 2.37
million. This was mainly a result of increases in broadband subscribers and
content users.
Regarding operating income, there was a significant improvement. During the
quarter under review, an operating profit of 902 million yen was recorded,
compared with an operating loss of 463 million yen in the year earlier period.
The main factor in the improvement was a series of cost reductions. For
example, for the item cost of sales, there were reductions in outsourcing costs
and network usage costs, as well as lease of servers and others, relating to the
integration of access points. Furthermore, for the item selling, general and
administrative expenses, although there were increases in costs relating to
customer acquisitions, there were reductions in costs for outsourcing work
stemming from more efficient use of call centers and from a significant review
of sales promotion expenses and television marketing campaigns. Also, the
quarter saw improvement in the profitability of subsidiaries.
Regarding ordinary income, there was significant improvement. During the
quarter under review, ordinary income of 944 million yen was recorded, compared
with an ordinary loss of 504 million yen in the year earlier period.
Under the item of non-operating income, equity income of 32 million yen was
recorded. The item of non-operating expenses included loss on disposal of
tangible fixed assets.
Regarding net income before income taxes, during the quarter under review,
there was an increase of 958.5%, to 1,441 million yen, from 136 million yen in
the year earlier period. This included an extraordinary gain of 532 million yen
under gain on sales of subsidiary stock, stemming from over-allotment proceeds
from the public offering of So-net M3. Inc. on the Tokyo Stock Exchange Mothers
Board. On the other hand, an extraordinary loss of 37 million yen was recorded
relating to a relocation of a part of call center. Also, the current and
deferred income taxes totaled 625 million yen. Minority interest income was 38
million yen.
Regarding net income, compared with net income of 292 million yen during the
year earlier period, net income during the quarter under review increased 166.8%
to 778 million yen.
Sales by Category
Three-months ended December 31, 2004
------------------------------------
Three months Percentage Three months Percentage Year-on-
ended of total ended of year
Dec. 31,2003 (%) Dec. 31,2004 total change
(millions (millions (%) (%)
of yen) of yen)
Operating Internet 7,656 79.8 7,124 72.3 (7.0)
revenue provider
services
Internet- 1,689 17.6 2,410 24.5 42.7
related
services
Merchandise sales 245 2.6 320 3.2 30.7
Total 9,590 100.0 9,854 100.0 2.8
Nine-months ended December 31, 2004
-----------------------------------
Nine-months Percentage Nine-months Percentage Year-on-
ended of total ended of year
Dec. 31,2003 (%) Dec. 31,2004 total change
(millions (millions (%) (%)
of yen) of yen)
Operating Internet 23,295 81.4 21,732 73.7 (6.7)
revenue provider
services
Internet- 4,657 16.3 6,988 23.7 50.1
related
services
Merchandise sales 653 2.3 774 2.6 18.6
Total 28,604 100.0 29,494 100.0 3.1
Operating revenue
ISP services
In this category, in order to meet customer needs, particularly for ADSL and
FTTH, the SCN Group worked at the end of the year to carry out customer
acquisition activities utilizing ADSL and FTTH. As a result, the number of
broadband So-net subscribers increased to 610,000, and the total number of
subscribers increased to 2.37 million. On the other hand, the impact of
narrowband subscribers canceling their service plans resulted in an overall
decrease in sales in this category of 7.0%, to 7,124 million yen. Such sales
accounted for 72.3% of total sales.
Internet-related services
In this category, sales of consolidated subsidiaries increased smoothly,
including those of travel-related site Skygate, Co., Ltd. and medical-related
site So-net M3 Inc. Also, there were increases in CS broadcasting viewer fees,
such as for Korean dramas, as well as increases in management fees for
authentication and settlement systems related to online games. As a result,
sales in this category during the quarter under review increased 42.7% to 2,410
million yen. Sales in this category accounted for 24.5% of total sales.
Merchandise sales
In this category, there were contributions from sales of products related to
fashion sites, as well as those related to sporting and theater events. As a
result, sales in this category during the quarter under review increased 30.7%
to 320 million yen. Sales in this category accounted for 3.2% of total sales.
Results of Consolidated Subsidiaries and of Affiliated Companies Accounted for
by the Equity Method
The SCN Group includes the following four consolidated subsidiaries: So-net
Sports.com Corp., So-net M3 Inc., So-net M3 U.S.A. Corp., and Skygate, Co., Ltd.
Regarding Label Gate Co., Ltd., accounted for by the equity method, although
there was a significant expansion of distributions, stemming from steps such as
the start of album downloads and an increase in the number of songs offered, the
company has not yet reached the stage of recording profits.
DeNA Co., Ltd. has continued to record profits by increasing the number of goods
offered for auctions and shopping, and at the same time it has strengthened
"mobaoku" its auction site for cellular phones.
As a result, during the quarter under review, equity income of 32 million yen
was recorded, compared with equity income of 14 million yen in the year earlier
period.
Also, on January 13, 2005, the listing of DeNA Co., Ltd. on the Tokyo Stock
Exchange Mothers Board was approved.
Cash Flow (April 1, 2004 to December 31, 2004)
Cash and cash equivalents were 10,120 million yen at the end of the nine-month
period ended December 31, 2004, an increase of 7,792 million yen from the end of
year earlier period, and an increase of 7,938 million yen from the end of the
prior fiscal year. During the nine-month period under review, the SCN Group
generated 3,090 million yen of cash in operating activities, generated 2,650
million yen of cash in investing activities, and generated 2,201 million yen of
cash in financing activities.
Cash flows from operating activities
During the nine-month period ended December 31, 2004, regarding cash flows from
operating activities, the SCN Group generated 3,090 million yen, compared with
the nine-month period ended December 31, 2003 when the SCN Group generated 41
million yen. During the period under review, the main factors included net
income before income taxes of 5,815 million yen, compared with a net loss before
income taxes of 305 million yen in the year earlier period. Included in net
income before income taxes during the period under review were gain on sale of
subsidiary stock of 2,876 million yen, 2,795 million yen larger than gain on
sale of investment in affiliate of 81 million yen in the year earlier period and
gain on issuance of subsidiary stock that was non-cash gain, of 1,823 million
yen, 1,209 million yen larger than gain on issuance of stock by equity investee
of 613 million yen in the year earlier period.
Cash flows from investing activities
During the nine-month period ended December 31, 2004, regarding cash flows from
investing activities, the SCN Group generated 2,650 million yen, compared with
the nine-month period ended December 31, 2003 when the SCN Group used 296
million yen. The main factor in the period under review was proceeds of 3,162
million yen stemming from gain on sales of subsidiary stock, which was the stock
offering when consolidated subsidiary So-net M3 Inc. listed on the Tokyo Stock
Exchange Mothers Board. Also, although repayment of loan from affiliate
companies decreased from 732 million yen in the year earlier period to 53
million yen, outlays for acquisition of intangible assets such as connection
services, e-commerce related systems, and homepage development were held down
through careful consideration to 476 million yen, from 728 million yen in the
year earlier period.
Cash flows from financing activities
During the nine-month period ended December 31, 2004, regarding cash flows from
financing activities, the SCN Group generated 2,201 million yen, while during
the nine-month period ended December 31, 2003, the SCN Group used 800 million
yen. During the period under review, this reflected the issuance of new stock at
the time of the listing of the Group's consolidated subsidiary So-net M3 Inc. on
the Tokyo Stock Exchange Mothers board.
For inquiries, please contact:
Sony Corp., IR Office
7-35, Kita-Shinagawa 6-chome Shinagawa-ku, Tokyo 141-0001 Tel: (03) 5448-2180
www.sony.co.jp/IR/
Sony Communication Network Corporation, IR Section
7-35, Kita-Shinagawa 4-chome Shinagawa-ku, Tokyo 141-0001 Tel: (03) 3446-7210
www.so-net.ne.jp/corporation/IR/
Condensed Consolidated Statements of Income (Unaudited)
For the three-months ended December 31, 2004 (Millions of yen)
-------------------------------------------- -----------------
Three-months ended December 31
2003 2004 Change
------------- --------------- ------
Sales 9,590 9,854 2.8%
Cost of sales 5,963 5,302
Gross profit 3,627 4,552
Selling, general and administrative 4,090 3,650
expenses
Operating income (loss) (463) 902 -%
Non-operating income
Equity in net income of affiliated 14 32
companies
Other 1 15 20 52
Non-operating expenses 56 10
Ordinary income (loss) (504) 944 -%
Extraordinary gain
Gain on sale of investment in 81 532
affiliate and subsidiary stock
Gain on issuance of stock by equity 613 695 1 533
investee and subsidiary stock
Extraordinary loss
Loss on withdrawal from certain 54 -
operations
Loss from relocation of certain - 54 37 37
business unit
Net income before income taxes 136 1,441 958.5%
Income tax current (132) 550
Income tax deferred (29) (162) 75 625
Minority interest income 6 38
Net income 292 778 166.8%
For the nine-months ended December 31, 2004 (Millions of yen)
------------------------------------------- -----------------
Nine-months ended December 31
2003 2004 Change
------------- --------------- ------
Sales 28,604 29,494 3.1%
Cost of sales 17,805 16,485
Gross profit 10,799 13,009
Selling, general and administrative 11,725 10,607
expenses
Operating income (loss) (926) 2,402 -%
Non-operating income
Equity in net income of affiliated - 41
companies
Other 208 208 85 126
Non-operating expenses
Equity in net loss of affiliated 4 -
companies
Other 194 198 93 93
Ordinary income (loss) (917) 2,435 -%
Extraordinary gain
Gain on sale of investment in 81 2,876
affiliate and subsidiary stock
Gain on issuance of stock by equity 613 1,823
investee and subsidiary stock
Gain on sale of fixed assets - 695 25 4,724
Extraordinary loss
Loss on revaluation of investments 28 878
in other securities
Loss on impairment of long-lived - 295
assets
Provision for allowance for doubtful - 133
accounts
Loss on withdrawal from certain 54 -
operations
Loss on issuance of stock by equity 1 0
investee
Loss from relocation of certain - 83 37 1,344
business unit
Net income (loss) before income (305) 5,815 -%
taxes
Income tax current (54) 1,990
Income tax deferred (179) (232) 229 2,219
Minority interest income 20 58
Net income (92) 3,538 -%
Condensed Consolidated Balance Sheets (Unaudited)
-------------------------------------------------
(Millions of yen)
December 31 March 31 December 31
2003 2004 2004
ASSETS ----------- --------- ------------
Current assets 7,836 7,363 15,408
----------- --------- ------------
Cash and bank deposit 644 840 3,553
Notes and account receivable, trade 3,871 3,891 3,869
Inventories 137 130 139
Deposits in Sony group company 1,684 1,342 6,567
Other 1,543 1,183 1,341
Allowance for bad debt (43) (23) (61)
Noncurrent assets 5,645 5,637 4,248
----------- --------- ------------
Property, plant and equipment 294 256 232
----------- --------- ------------
Intangible assets 2,407 2,263 2,156
----------- --------- ------------
Software 1,265 1,286 1,614
Goodwill 870 708 496
Other 271 269 47
Investment and other assets 2,945 3,118 1,860
----------- --------- ------------
Investment in affiliates and others 1,526 1,495 707
Other 1,419 1,623 1,242
Allowance for bad debt - - (89)
----------- --------- ------------
Total assets 13,481 13,001 19,656
----------- --------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 5,356 5,167 7,255
----------- --------- ------------
Account payable, trade 2,631 2,463 2,744
Accrued expense 2,021 1,711 1,613
Other 704 993 2,898
Long-term liabilities 130 140 431
--- --- ---
Total liabilities 5,487 5,306 7,686
----------- --------- ------------
Minority interest 53 58 793
----------- --------- ------------
Common stock 5,246 5,246 5,246
Additional paid-in capital 4,765 4,765 4,765
Retained earnings (accumulated losses) (2,054) (2,373) 1,164
Unrealized exchange gains (losses) of (14) - 1
investment securities
Foreign currency translation adjustments (1) (1) 1
----------- --------- ------------
Total stockholders' equity 7,942 7,636 11,177
----------- --------- ------------
Total liabilities and stockholders' 13,481 13,001 19,656
equity ----------- --------- ------------
Consolidated Statements of Cash Flow (Unaudited)
(Millions of yen)
Nine-months ended December 31
2003 2004
--------- ---------
I. Cash flows from operating activities
Net income (loss) before income taxes (305) 5,815
Depreciation and amortization 627 565
Loss on impairment of long-lived assets - 295
Amortization for goodwill 234 213
Equity in net loss (income) of affiliated 4 (41)
companies
Gain on issuance of stock by equity investee and (613) (1,823)
subsidiary stock
Loss on issuance of stock by equity investee 1 0
Loss on revaluation of investments in other 28 878
securities
Gain on sale of investment in affiliate and (81) (2,876)
subsidiary stock
Stock issuance costs - 13
Loss on withdrawal from certain operations 54 -
Loss from transfer of a part of call center - 37
Decrease in accrued bonuses (155) (171)
Increase in accrued severance costs for 23 15
employees
Increase in accrued severance indemnities for 13 13
directors
Increase (decrease) in allowance for bad debt (5) 127
Increase in customer incentive program - 74
Increase in other accruals - 4
Interest income (2) (5)
Interest expenses 3 0
Foreign exchange loss - 4
Loss on disposal of fixed assets 85 49
Loss on sales of tangible fixed assets 1 0
Gain on sales of tangible fixed assets (0) (25)
(Increase) decrease in account receivable, trade (69) 22
(Increase) decrease in inventories 141 (9)
Increase in other current assets (214) (255)
Increase in accounts payable, trade 203 280
Increase (decrease) in accrued expenses 112 (135)
Increase in other current liabilities 82 26
------- ---------
Sub Total 167 3,090
------- ---------
Receipt of interest 2 5
Payments for interest (3) (0)
Payments for income taxes (126) (5)
------- ---------
Net cash provided by operating activities 41 3,090
------- ---------
II. Cash flows from investing activities
Payment for securities investment (122) (10)
Proceeds from sales of securities investment 231 3,162
Payment for acquisition of fixed assets (34) (13)
Proceeds from sales of fixed assets 1 25
Payment for acquisition of intangible assets (728) (476)
Proceeds from sales of intangible assets 0 -
Payment for deposits (4) (5)
Proceeds from deposits 1 -
Payments for long term prepaid expenses (195) (42)
Payments for loan (178) (45)
Repayment of loan 732 53
------- ---------
Net cash provided by (used in) investing (296) 2,650
activities ------- ---------
III. Cash flows from financing activities
Payments of long term debt (800) -
Proceeds from issuance of subsidiary stock - 2,201
------- ---------
Net cash provided by (used in) financing (800) 2,201
activities ------- ---------
IV. Effect of exchange rate difference on cash and (1) (2)
cash equivalents
V. Increase (decrease) in cash and cash equivalents (1,056) 7,938
VI. Cash and cash equivalents at beginning of year 3,384 2,182
------- ---------
VII. Cash and cash equivalents at end of the period 2,328 10,120
======= =========
(Notes) Consolidated financial statements of the SCN Group are based on the
standards conforming with the Generally Accepted Accounting Principles in Japan.
(For reference)
(Millions of yen)
-----------------
Three-months ended Three-months ended Change
December 31, 2003 December 31, 2004 (%)
Increase in fixed assets 10 23 142.2
Increase in intangible assets 262 229 (12.6)
Depreciation of fixed assets 25 18 (29.0)
Amortization of intangible assets 203 152 (25.1)
Nine-months ended Nine-months ended Change
December 31, 2003 December 31, 2004 (%)
Increase in fixed assets 30 34 12.3
Increase in intangible assets 745 589 (20.9)
Depreciation of fixed assets 75 53 (28.7)
Amortization of intangible assets 494 441 (10.6)
Consolidated Results Forecast
-----------------------------
Regarding the forecast of the consolidated results for the fiscal year ending
March 31, 2005, there are no changes to the forecast announced on October 28,
2004, which appears below.
However, in connection with the public stock offering by DeNA Co., Ltd., which
is expected to occur during the quarter ending March 31, 2005, it is expected
that there will be a gain on issuance of stock by equity investee related to the
SCN Group's investment in DeNA Co., Ltd. Because the offering price has not been
set at the present time, the impact of this offering is not included in the
below forecast.
(For reference)
(Millions of yen)
Consolidated Results FY 03 actual FY 04 forecast Change
-------------------- ------------ -------------- ------
Sales 38,166 40,000 +4.8%
Operating income (loss) (870) 2,500 +3,370
Operating income (loss) (911) 2,500 +3,411
Net income (loss) (412) 3,300 +3,712
Cautionary statement:
---------------------
Statements made in this release with respect to Sony Corporation and Sony
Communication Network's ("SCN") current plans, estimates, strategies and beliefs
and other statements that are not historical facts are forward-looking
statements about the future performance of SCN. These statements are based on
management's assumptions and beliefs in light of the information currently
available to it. Therefore, SCN cautions you that a number of important risks
and uncertainties could cause actual results to differ materially from those
discussed in the forward-looking statements, and therefore you should not place
undue reliance on them.