Press Release

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November 20, 2000

Sony Begins Preparations to Issue Japanese Version of "Tracking Stock"
Proposal to issue new stock linked to performance of Sony Communication Network Corporation

[This press release should not be regarded as an offer to buy or sell the above mentioned Tracking Stock. The Tracking Stock which Sony is currently considering issuing will not be registered under the U.S. Securities Act of 1933 and will not be offered or sold in the United States.]

(Tokyo, Japan)
Sony Corporation has decided to begin preparations to issue a Japanese version of "Tracking Stock" which is intended to be linked to the performance of a subsidiary company. Preparations will be made to issue a new class of stock, separate from Sony common stock, which is intended to track the performance of Sony Communication Network Corporation (SCN). SCN is a 100% owned domestic subsidiary of Sony which engages in ISP, content and internet-platform related businesses. In Japan there is no precedent for the issuance of a class of stock which is intended to represent the corporate value of a group subsidiary. An Extraordinary Meeting of Shareholders is scheduled to be held on January 25, 2001 (with a record date for voting at such meeting of December 6, 2000) to consider and approve the necessary changes in Sony's Articles of Incorporation with a view to issuing this Tracking Stock promptly thereafter depending upon market conditions. In making these preparations, Sony will take into account all the necessary institutional requirements for issuing a Tracking Stock within the framework of the current Commercial Code in Japan and will cooperate with all relevant parties. The Stock will also be issued with due regard to the market environment. Sony intends to grant shareholders of the Tracking Stock the right to receive a dividend linked to SCN's dividend and voting rights as shareholders of Sony.

Tracking Stocks have been used by companies in the USA to highlight the value of strategic business divisions and as a method for funding and corporate restructuring while maintaining full parent company ownership. Sony has determined that the issuing of Tracking Stock could be an effective method for pursuing decentralized/integrated corporate governance. It will serve to highlight the value of core businesses, while retaining full parent company ownership, thus maintaining overall group consistency, synergy with other divisions and strategic flexibility.
SCN, an internet company which concentrates on network-based contents and platform business, is a core company for Sony in its drive to become a broadband entertainment company. By introducing this Tracking Stock, Sony aims to further the growth of SCN, while it remains a 100% member of the Sony group. In addition, SCN's synergy with other group divisions is expected to contribute to an overall enhancement of group corporate value.
In January of this year, stock swap transactions were completed whereby three listed companies became wholly-owned subsidiaries of Sony. These transactions are part of Sony's management strategy to maximize overall group corporate value. The issue of Tracking Stock for SCN should be seen as an integral part of this strategy.

About Tracking Stock
Tracking Stock is designed so that the stock price is linked to the performance of a certain division or subsidiary of a listed company. Effectively, the capital relationship is maintained, but the independence of a certain division is heightened, as the parent company aims for effects similar to a spin-off or a partial IPO. There have been almost 40 precedents for this in the United States since the 1980s. The first Tracking Stock was issued in 1984 when General Motors bought EDS, the information processing services company.

About SCN
SCN commenced operations in 1996. Starting from its core business as an ISP (So-net) it has developed various content-based online services such as PostPet, a pet-like e-mail software. Online shopping services with Smash, an original settlement system, are also available.

Company Profile

Sony Communication Network Corporation (SCN)
November 1, 1995
Operational Start:
January 15, 1996 (as ISP)
Gotenyama Hills, 4-7-35 Kita-Shinagawa, Shinagawa-ku,
Tokyo 140-0001
Senji Yamamoto (President)
480 million yen (as of March 31, 2000)
25.5 billion yen (as of March 31, 2000)
Equity Holders:
Sony Corporation (40%)
Sony Music Entertainment (Japan) Inc. (40%)
Sony Finance International, Inc. (20%)
ISP business, Contents business and Platform business
Home Page:

Business Profile (as of end October 2000)
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