Post by The Ultimate Nullifier on Jan 30, 2017 3:43:25 GMT -6
deadline.com/2017/01/sony-pictures-962-million-charge-film-division-write-down-1201897260/
Sony Takes $962M Goodwill Charge In Pictures Division
Sony Corp is due to announce its Q3 earnings on Thursday this week, but ahead of that today in Tokyo, the company announced it is taking a goodwill impairment charge for the Pictures division of 112.1B yen ($962M). This is being recorded as an operating loss in the third quarter ending December 31, 2016 as a result of revising the future profitability projection for the studio’s motion pictures business. Sony Corp CEO Kazuo Hirai and outgoing Sony Entertainment CEO Michael Lynton jointly sent a note to employees shortly after the filing which highlighted Sony management’s commitment to Sony Pictures Entertainment.
The impairment charge is described as a “non-cash loss” that relates to a number of factors, including the purchase of the studio almost 30 years ago, and “dramatic shifts in the home entertainment space currently being felt throughout the entire industry.” A majority of the goodwill that was impaired, Sony said, was originally recorded at the time of the acquisition of Columbia Pictures Entertainment in 1989.
While underlying profitability projections of film performance were also reduced, Sony said the adverse impact is expected to be largely mitigated by measures that have been identified to improve the profitability of the business.
Hirai and Lynton said management takes the recording of a substantial impairment charge “very seriously.” They added, “Make no mistake, Sony Corp’s commitment to SPE remains unchanged. The value of high-quality content continues to rise. As we have stated on many occasions, including at SPE’s All Hands meeting at the end of last year, Sony Corp sees SPE as a very important part of Sony group, and will continue to invest to achieve long-term growth and increased profits in this space.”
The impact on the consolidated results forecast for the fiscal year ending March 31, 2017 is currently being evaluated and will be disclosed at the earnings announcement on Thursday.
MORE…
Sony Takes $962M Goodwill Charge In Pictures Division
Sony Corp is due to announce its Q3 earnings on Thursday this week, but ahead of that today in Tokyo, the company announced it is taking a goodwill impairment charge for the Pictures division of 112.1B yen ($962M). This is being recorded as an operating loss in the third quarter ending December 31, 2016 as a result of revising the future profitability projection for the studio’s motion pictures business. Sony Corp CEO Kazuo Hirai and outgoing Sony Entertainment CEO Michael Lynton jointly sent a note to employees shortly after the filing which highlighted Sony management’s commitment to Sony Pictures Entertainment.
The impairment charge is described as a “non-cash loss” that relates to a number of factors, including the purchase of the studio almost 30 years ago, and “dramatic shifts in the home entertainment space currently being felt throughout the entire industry.” A majority of the goodwill that was impaired, Sony said, was originally recorded at the time of the acquisition of Columbia Pictures Entertainment in 1989.
While underlying profitability projections of film performance were also reduced, Sony said the adverse impact is expected to be largely mitigated by measures that have been identified to improve the profitability of the business.
Hirai and Lynton said management takes the recording of a substantial impairment charge “very seriously.” They added, “Make no mistake, Sony Corp’s commitment to SPE remains unchanged. The value of high-quality content continues to rise. As we have stated on many occasions, including at SPE’s All Hands meeting at the end of last year, Sony Corp sees SPE as a very important part of Sony group, and will continue to invest to achieve long-term growth and increased profits in this space.”
The impact on the consolidated results forecast for the fiscal year ending March 31, 2017 is currently being evaluated and will be disclosed at the earnings announcement on Thursday.
MORE…