Page 4 - To Our Shareholders
2 Sony continued to face a challenging business environment during the fiscal year ended March 31, 2004. Nevertheless, our sales increased as a result of higher sales to outside customers in the Electronics segment and higher revenue in the Financial Services segment. Measures taken to bolster our l...
Page 5 - “Continuing to be One of the World’s Leading Consumer Brands”; Sony with You
3 3 Cautionary Statement Statements made in this annual report with respect to Sony’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the futureperformance of Sony. Forward-looking statements include, but are no...
Page 6 - – Nobuyuki Idei, Chairman
4 4 Continuing to be oneof the world’s leadingconsumer brands – Nobuyuki Idei, Chairman By successfully executing “Transformation 60,” Sony is enacting bold reforms that will create new value and generate growth What is your assessment of the currentoperating environment, and what areSony’s primary ...
Page 7 - Transformation 60
5 “Transformation 60” is a road map fortransforming Sony into a globalcompany of the 21st century for theyear 2006, Sony’s 60th anniversary Transformation 60 “Transformation 60” — a group-wide mid-termcorporate strategy“Transformation 60” has set in motion sweeping reformsfor the entire Sony Group. ...
Page 12 - A stellar performer at the Montreux Jazz Festival; A fascination with innovation
10 Claude Nobs CEO, Montreux Jazz Festival Born in Switzerland in 1936, Claude Nobs gave up a career as a chef to found the Montreux Jazz Festival in 1967. Now a 17-day event heldevery July and attended by 200,000 people annually, the festival has grown to feature a wide range of music, from jazz to...
Page 13 - A look inside Sony’s DNA
11 SonyProducts File01– 06 A look inside Sony’s DNA “To establish an ideal factory that stresses a spirit of freedom and open- mindedness, and where engineers with sincere motivation can exercise their techno- logical skills to the highest level” This statement of the purpose of incorporation from S...
Page 14 - File 01: Flat panel television “WEGA”
12 Making the television experience more realistic and user friendly Powered by Wega EngineHigh-definition technologies and high resolutiondifferentiate Sony’s televisions Sony has almost half a century of experience intelevision development. Throughout its history,Sony has pursued the ideal in pict...
Page 15 - File 02: DVD recorder “Sugoroku”
13 Automatic recording of your favorite programs and many other amazing features Introducing a DVD recorder with intelligentrecording functionality Sony has earned a solid reputation for devisingnew ways to record television programs throughthe launch of such products as the Clip-On harddisk recorde...
Page 16 - PSX—A world of entertainment in one box; File 03: DVD recorder “PSX”
14 PSX—A world of entertainment in one box An industry first: The convergence of games andelectronics in a single unitEnhanced user control thanks to a GUI that issupported by PlayStation 2 technology PSX arose from the idea of making a consumerAV product using state-of-the-art semiconductortechnolo...
Page 18 - Fun to carry around and take photos; File 05: Digital Still Camera “Cybershot”
16 The new Cybershot: Fun to carry around and take photos Cybershot DSC-T1—The result of Sony’s desire tocreate an entirely new digital still camera Featuring a large, easy-to-see LCD monitor and5.1 megapixel CCD in an ultra-compact, slimbody, the Cybershot DSC-T1 has been a best-selling digital sti...
Page 19 - Capture it on DVD and watch it on a DVD player; File 06: Video Camera “DVD Handycam”
17 Capture it on DVD and watch it on a DVD player The first-generation consumer DVD based videocamera, DVD Handycam, was a huge hit in the U.S.In developing the next generation of models,further miniaturization is the key Sony’s video camera, DVD Handycam, was amajor hit in the U.S. market during th...
Page 20 - The future of key components
18 Cell: The next generation, multi-purpose microprocessor To reinforce its competitive strength in its core electronics business, Sony is seeking to differ- entiate its products by implementing a vertically integrated business model that incorporates internally produced proprietary semiconductors, ...
Page 25 - Sony first caught my eye when I was a young child; Good instructors should listen to themselves; Eikou Sumura
23 Ikebana (the ancientJapanese art of flowerarrangement) and leadingedge technology don’tseem like natural partners,yet Ms. Eikou Sumura hasbeen using a recordableWalkman for more than 20years to refine her teachingskills in this ancientart form. Sony standsfor captivatingproducts Sony first caught...
Page 26 - r e s e a r c h & d e v e l o p m e n t; Strategic fields for the
24 R & D r e s e a r c h & d e v e l o p m e n t Sony’s R&D strategy The importance of R&D and its management Sony’s philosophy regarding R&D was set forth by Masaru Ibuka in the Founding Prospectus when he established the company: “To estab- lish an ideal factory that stresses a...
Page 27 - R&D activities for the fiscal year ended March 31, 2004; Long-term research fields
25 R&D activities for the fiscal year ended March 31, 2004 ■ R&D Expenses (Billion ¥) ■ Composition of FY2003 R&D Expenses R&D expenses totaled ¥514.5 billion forthe fiscal year ended March 31, 2004,which amounted to ¥71.4 billion, or 16%,more than in the previous fiscal year. Therat...
Page 30 - The art of manufacturing—Adding value and driving Sony’s growth; How Sony makes its products; Craftsmanship; Sony
28 The art of manufacturing—Adding value and driving Sony’s growth Constant manufacturing innovation propelsproduct creation at Sony Sony views manufacturing as a core competence. Over the years, Sony has introduced many revolu- tionary products as only Sony can do. To cope with rapidly changing mar...
Page 32 - components that give the Sony Group its solid competitive edge.; The inside story from Sony’s Nagasaki Fab
30 Isahaya City in Nagasaki Prefecture, in Japan, is the home to Sony’s strategic semiconductor production base. Since 2000, Nagasaki Fab* has produced state-of-the-art semiconductors and continues to be an industry-leading manufacturing facility. Nagasaki Fab produces the key components that give t...
Page 36 - A l e j a n d r o M. L o p e z; Transcending ages; Cineza—
34 A l e j a n d r o M. L o p e z Sony’s technology: Transcending ages and generations Mr. Alejandro M. Lopez is thePresident of beacon communica-tions k.k., an advertising companythat has produced numeroustelevision commercials. Here, heshares some of his thoughts onunique ways to use Sony products...
Page 37 - I choose Sony for many reasons
35 L a n c e L e e Sony, a brandthat I can trust I choose Sony for many reasons My first Sony product was a color television in a wooden cabinet. Since then, I have purchased many other products made by Sony, including a video cassette recorder, tape cassette player and MD player. Sony products are ...
Page 38 - At a
36 04 03 02 4,897 41 4,940 –1 5,286 –35 売上高 営業利益（損失） Televisions Video Audio Principal Products Home audio, portable audio, car audioand car navigation systems Fiscal Year in Review Sales decreased 9%, owing to decliningprices for MD Walkmans, CDWalkmans and other portable audioproducts as well as ...
Page 42 - Convergence; Mobile Electronics
Home Electronics Financial Services Convergence – A Key to Sony’s With a strong foundation in semiconductor technologies, and with the convergence of home and mobile electronics, Sony is continuing to produce the most fascinating consumer brand goods in the world Sony is implementing a growth strate...
Page 43 - Constant Transformation
Home Electronics Mobile Electronics Game Entertainment Financial Services Other Entertainment Game Other Constant Transformation The convergence of pictures and music entertainment: Redefining Sony as a global media and content company In addition to the convergence of its electronics and entertainm...
Page 46 - Mobile
44 Once products are reduced to pocketsize, demand for them skyrockets Walkman changed how people enjoy music. Similarly, the video camera and the digital still camera have transformed the recording of images into something anyone can enjoy. The conclusion is clear: In the consumer electron- ics sec...
Page 48 - Game
46 Cumulative Production Shipments of PlayStation Hardware by Geographic Region (as of May 18, 2004) Japan and Asian region 20.72 million units (Launch date: Dec. 3, 1994) North America 39.67 million units (Launch date: Sept. 9, 1995) Europe (PAL region) 39.61 million units (Launch date: Sept. 29, 1...
Page 50 - A music store for the digital age; Entertainment
48 Capitalizing on the strength of Sony’s core assets – content and devices – the entertain- ment businesses have embraced a convergence philosophy and are successfully driving the digital age forward. We are creating new forms of content and services to deliver consumers the 21st century entertainm...
Page 51 - MUSIC BUSINESS
49 MUSIC BUSINESS video downloads. In addition to generating revenues for Sony, these services provide distribu- tion opportunities for artists along with greater convenience and flexibility for consumers. Moreover, Sony’s entertainment companies are positioning themselves for the next genera- tion ...
Page 52 - PICTURES BUSINESS; mobile phone
50 PICTURES BUSINESS The Chaku-Uta ® mobile phone ringtone download service In Japan, the rising popularity of third-generationmobile phones is sparking rapid growth in demandfor SMEJ’s Chaku-Uta ® , which allows users to use a CD passage as a ringtone. These downloadshave grown into a ¥10 billion m...
Page 55 - Sony Life; Sony Assurance
53 Sony Finance International, Inc. Sony Finance International, Inc. is involved in theprovision of credit card, e-commerce paymentprocessing and leasing operations. In 2002, thecompany began issuing its eLIO-branded cards,which were created specifically for Internet shoppingand incorporated Sony’s ...
Page 56 - Internet Service Provider; Other
54 Integrated Circuit (IC) Card Business Internet Service Provider The Internet environ- ment in Japan is chang- ing rapidly. At the end of March 2004, out of more than 36 million Internet users currently in Japan, over 14 million are using a broadband connection. In this climate, Sony is taking ste...
Page 57 - Sony’s Advertising Around the World
55 Japan— QRIO robot Latin America— Net MD Walkman China— DVD player Europe— DVD Handycam Canada— Flat panel television Sony’s Advertising Around the World To promote its products and brand, Sony conducts advertising around the world in a style that matches the cultures and customs of individual cou...
Page 58 - Corporate Governance
56 Corporate Governance *Outside Director Structure of New Sony Corporate Governance System Board of Directors (1) Determination of fundamental management policies for the Sony Group(2) Supervision of execution of the Sony Group’s business operations(3) Determination of Directors organizing each com...
Page 60 - New Members of the Board and Corporate Executive Officers
58 Nobuyuki Idei Sony CorporationChairman, RepresentativeCorporate Executive Officer Kunitake Ando Sony CorporationPresident, RepresentativeCorporate Executive Officer Teruo Masaki Sony CorporationExecutive Deputy President,Corporate Executive Officer New Members of the Board and Corporate Executive...
Page 61 - Consolidated Financial Information
59 Consolidated Financial Information Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Five-Year Summary of Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Quarterly Financial and Stock Information . . . . . . . . . ...
Page 62 - OPERATING RESULTS; Operating and Financial Review and Prospects
60 OPERATING RESULTS Operating Results for the Fiscal Year Ended March 31, 2004 compared with the Fiscal Year Ended March 31, 2003 OVERVIEW Although the global economy showed some signs of growth in the fiscal year ended March 31, 2004, the political situation, especially in Iraq, and concern about ...
Page 79 - CASH FLOWS
77 Compared with the previous fiscal year, net cash provided by operating activities decreased, due to a year on year increase in notes and accounts receivable, trade during the fiscal year ended March 31, 2004, com- pared with a year on year decrease during the fiscal year ended March 31, 2003. The...
Page 81 - LIQUIDITY AND CAPITAL RESOURCES
79 LIQUIDITY AND CAPITAL RESOURCES Sony’s financial policy is to secure adequate liquidity and financing for its operations and to maintain the strength of its balance sheet. Sony’s mid-term fund requirements are ex- pected to increase due to restructuring charges and investments in research, develo...
Page 82 - THE USE OF EVA
80 In addition, there are no financial covenants that would cause an acceleration of the obliga- tion in the event of a downgrade in Sony’s credit ratings, in any of Sony’s material financ- ing agreements. RATINGS In order to facilitate access to global capital markets, Sony obtains credit ratings f...
Page 83 - TREND INFORMATION
81 Research and development costs for the fiscal year ended March 31, 2004 increased 71.4 billion yen, or 16.1 percent, to 514.5 billion yen, compared with the previous fiscal year. The ratio of research and development costs to sales (excluding the Financial Services segment) increased from 6.4 per...
Page 86 - CRITICAL ACCOUNTING POLICIES
84 the amortization of deferred insurance acquisi- tion costs in the Financial Services segment are expected to decrease, total expenses for de- preciation and amortization in the Electronics and Game segments are expected to increase. RESEARCH AND DEVELOPMENT Sony expects research and development c...
Page 90 - RECENT PRONOUNCEMENTS
88 CONSOLIDATION OF VARIABLE INTEREST ENTITIES In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51”, which addresses consolidation by a primary beneficiary of a VIE. FIN No. 46 became effective immediately for all new VIEs creat...
Page 91 - Five-Year Summary of Selected Financial Data
89 Dollars in millions except Yen in millions per share except per share amounts amounts 2000 2001 2002 2003 2004 2004 FOR THE YEAR Sales and operating revenue . . . . . . . . . . . . . . . . . . . . . . ¥6,686,661 ¥7,314,824 ¥7,578,258 ¥7,473,633 ¥7,496,391 $72,081 Operating income . . . . . . . . ...
Page 93 - Quarterly Financial and Stock Information
91 Yen in billions except per share amounts 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2003 2004 2003 2004 2003 2004 2003 2004 Sales and operating revenue . . . . . . . . . . . . . ¥1,721.8 ¥1,603.8 ¥1,789.7 ¥1,797.0 ¥2,307.7 ¥2,323.4 ¥1,654.4 ¥1,772.2 Operating income (loss) . . . . . . . . . ...
Page 94 - Segment Information
92 Sales and Operating Revenue by Business Segment Dollars in Yen in millions millions* Year ended Year ended March 31 March 31 2002 2003 2004 2004 Electronics— Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥4,772,550 ¥4,543,313 ¥4,758,...
Page 98 - Consolidated Balance Sheets
96 Consolidated Balance Sheets Sony Corporation and Consolidated Subsidiaries – March 31 Dollars in millions Yen in millions (Note 3) 2003 2004 2004 ASSETS Current assets: Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ ...
Page 100 - Consolidated Statements of Income
98 Dollars in millions Yen in millions (Note 3) 2002 2003 2004 2004 Sales and operating revenue: Net sales (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥7,058,755 ¥6,916,042 ¥6,883,478 $66,187 Financial service revenue . . . . . . . . . . . . . ....
Page 102 - Consolidated Statements of Cash Flows
100 Dollars in millions Yen in millions (Note 3) 2002 2003 2004 2004 Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥ 15,310 ¥115,519 ¥ 88,511 $ 851 Adjustments to reconcile net income to net cash...
Page 104 - Consolidated Statements of Changes in Stockholders’ Equity
102 Consolidated Statements of Changes in Stockholders’ Equity Sony Corporation and Consolidated Subsidiaries – Year ended March 31 Yen in millions Accumulated Subsidiary Additional other Treasury tracking Common paid-in Retained comprehensive stock, at stock stock capital earnings income cost Total...
Page 107 - Stock Information
105 Stock Information (Year ended March 31) 2000 2001 2002 2003 2004 Stock Price (¥) At year-end 14,500 8,900 6,700 4,200 4,360 High 16,950 15,100 10,340 7,530 4,670 Low 5,360 7,510 3,960 4,070 2,720 Annual Increase/Decrease + 164.8% – 38.6% – 24.7% – 37.3% +3.8% Number of Shares Outstanding at Year...
Page 108 - Stock Acquisition Rights and Bond Information
106 Stock Acquisition Rights and Bond Information (As of March 31, 2004) Straight Bonds Name Date of issue Years Interest rate (%) Total amount of issue Outstanding balance The sixth (2) series of unsecured bonds October 23, 1998 7 2.00 ¥15,000 million ¥15,000 million The seventh (2) series of unsec...
Page 109 - Investor Information
107 SONY CORPORATION 7-35, Kitashinagawa 6-chome, Shinagawa-ku,Tokyo 141-0001, JapanPhone: 81-(0)3-5448-2111 Facsimile: 81-(0)3-5448-2244 INVESTOR RELATIONS OFFICES If you have any questions or would like a copy ofour Form 20-F, filed with the U.S. Securities andExchange Commission, or Annual Report...
