6-7-35 Kita-shinagawa
Shinagawa-ku
Tokyo, 141-0001 Japan
No.05-024E
2005/4/27
15:00
Subsidiary Tracking Stock
Sony Communication Network Corporation
Consolidated Financial Results for the year ended March 31, 2005
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 year ended March
31, 2005 (the period from April 1, 2004 to March 31, 2005).
These results are based on the generally accepted accounting standards of
Japan.
- For the year ended March 31, 2005, achieved the large sales, largest income.
During the year under review, sales increased 3.0% compared with the
previous fiscal year, to 39,302 million yen. Operating income of 2,624
million yen and ordinary income of 2,540 million yen were recorded. Net
income of 4,107 million yen was recorded, which included gain on issuance of
stock by equity investee and subsidiary stock stemming from their public
offerings. Each of these figures were records.
- So-net subscribers total 2.45 million, of which 640,000 are broadband
subscribers
The number of broadband subscribers increased by 16.4% from 550,000 at the
end of the year earlier period to 640,000. Also, the total number of So-net
subscribers increased by 6.5% from 2.30 million at the end of the year
earlier period to 2.45 million.
- Fiscal Year 2005 Forecast
For the year ending March 31, 2006, the SCN Group aims for double-digit
growth based on further expansion of Internet-related services and revenue
growth in Internet provider services. In terms of profitability, the SCN
Group expects a decrease in income due to increases in investments in the
portal area and customer acquisition costs.
Consolidated Results for the year ended March 31, 2005
------------------------------------------------------
(Millions of Yen)
Year ended March 31
2004 2005 Change (%)
Sales 38,166 39,302 +3.0
Operating income (loss) (870) 2,624 -
Ordinary income (loss) (911) 2,540 -
Net income (loss) (412) 4,107 -
Summary of Operational Results and Financial Condition
a. Operational Results
Summary of Consolidated Operations (April 1, 2004 to March 31, 2005)
----------------------------------
During the year under review, Japan was struck by a series of natural disasters
including typhoons, floods, and earthquakes. With regards to the Japanese
economy, household consumption expenditures were rather weak. However, personal
consumption of digital consumer electronics and automobiles propped up the
economy, and investment in capital goods in the non-manufacturing sector turned
to a firmer trend. Due to such factors, the economic recovery continued.
In the Internet sector, the number of users in the market as a whole increased,
with the number of always-on-broadband Internet users, including users of ADSL,
FTTH, and cable, passing 18 million as of the end of December 2004.
Under these economic conditions, the SCN Group worked to strengthen its contents
services for broadband. The SCN Group began to offer services such as "My
So-net," "So-net Blog," and "So-net Mini-homepage Service," all of which are
personal services to be used enjoyably on an individual basis.
Furthermore, the SCN Group actively implemented measures in order to acquire
broadband connection subscribers, including promotional campaigns for free
installation and connection, new subscriber promotional activities in
conjunction with telecoms carriers, and phone-based informational efforts aimed
at transitioning users to broadband.
As a result of these factors, at the end of March 2005, the total number of
So-net subscribers was 2.45 million, an increase of 150,000, or 6.5%, over the
year earlier total of 2.30 million. Within this total, the number of broadband
So-net subscribers (including users of such services as "Flets" which is
operated by regional NTT East and NTT West Corporations) was 640,000, an
increase of 90,000 (16.4%) over the year earlier figure of 550,000.
Regarding sales, during the year under review, sales increased 3.0% to 39,302
million yen, compared with 38,166 million yen in the year earlier period.
In the area of Internet provider services, the number of new subscribers to ADSL
and FTTH increased. However, the number of narrowband subscribers decreased and
there was the effect of free promotional campaigns. As a result, sales in this
area decreased.
In the area of Internet-related services, sales increased. This was a result of
an increase in sales of mobile phone-related contents; viewer fees for CS
broadcasting and streaming video, mainly of Korean dramas; contributions from
sales of DVDs; and strength in sales at consolidated subsidiaries So-net M3 Inc.
and Skygate, Co., Ltd..
In the area of merchandise sales, sales strongly increased as a result of sales
of cards for using the wireless connection service "Bitwarp" and sales of goods
related to animation and J-League.
Regarding operating income, there was a significant improvement. During the year
under review, an operating profit of 2,624 million yen was recorded, compared
with an operating loss of 870 million yen in the year earlier period.
Regarding the main factors in the improvement, in cost of sales, although there
were increases in line costs associated with increases in the number of
broadband subscribers, there were reductions in outsourcing costs associated
with the integration of access points, in network usage costs, and in leasing
costs for servers and such, so the cost of sales ratio improved over the year
earlier period. Furthermore, in selling, general, and administrative expenses,
although there were increases in sales-related costs for customer acquisition,
there were decreases in outsourcing costs stemming from transitioning from
temporary workers to contractors, which went along with more efficient use of
call centers. The SCN Group also reviewed sales and marketing costs.
Regarding ordinary income, there was significant improvement. During the year
under review, ordinary income of 2,540 million yen was recorded, compared with
an ordinary loss of 911 million yen in the year earlier period.
Also, 205 million yen of non-operating income was recorded, which included 50
million yen of dividends received and equity income of 52 million yen. 289
million yen of non-operating expenses were recorded, which included loss on
disposal of tangible fixed assets and loss on leasing contracts of 164 million
yen.
Regarding net income before income taxes, during the year under review, income
of 6,494 million yen was recorded, compared with a loss of 534 million yen in
the year earlier period. This included an extraordinary gain of 5,501 million
yen which included gain on sale of subsidiary stock of 2,876 yen from the public
offering of So-net M3, Inc. on the Tokyo Stock Exchange Mothers Board and gain
on issuance of stock by equity investee and subsidiary stock of 2,599 million
yen related to So-net M3, Inc. and DeNA Co., Ltd. On the other hand, under
extraordinary loss, with regards to investment in others that are not publicly
traded, there was a decrease in valuations stemming from a worsening of
financial conditions in investee companies and as a result, a loss on
revaluation of investments in other securities of 978 million yen was recorded.
Also, a provision for allowance for doubtful accounts of 182 million yen was
recorded. In addition, a loss on impairment of long lived assets of subsidiaries
of 295 million yen was recorded. As a result, extraordinary loss totaled 1,546
million yen. Furthermore, current and deferred income tax charges of 2,282
million yen were recorded, and minority interest income of 105 million yen was
recorded.
Regarding net income, compared with a net loss of 412 million yen during the
year earlier period, net income during the year under review was 4,107 million
yen.
Sales by Category
Year ended March 31, 2005
-------------------------
Year ended Percentage Year ended Percentage Year-on-
March 31, 2004 of total March 31, 2005 of year
(millions of (%) (millions of total change
yen) yen) (%) (%)
Operating Internet 30,731 80.5 28,720 73.1 (6.5)
revenue provider
services
Internet- 6,523 17.1 9,396 23.9 44.0
related
services
Merchandise sales 912 2.4 1,185 3.0 29.9
Total 38,166 100.0 39,302 100.0 3.0
Three-months ended March 31, 2005
---------------------------------
Three-months Percentage Three-months Percentage Year-on-
ended March of total ended March of year
31, 2004 (%) 31, 2005 total change
(millions of (millions of (%) (%)
yen) yen)
Operating Internet 7,491 78.3 6,989 71.3 (6.7)
revenue provider
services
Internet- 1,812 19.0 2,408 24.5 32.9
related
services
Merchandise sales 260 2.7 411 4.2 58.4
Total 9,562 100.0 9,807 100.0 2.6
Operating revenue
ISP services
------------
In this category, the SCN Group worked to enrich its broadband-focused new
service plans, including ADSL, FTTH, and wireless, as well as its service areas.
Also, in the area of value-added connection services, the SCN Group added the IP
phone service "So-net Phone" to its FTTH plans.
- Connection Services
-------------------
- FTTH
- So-net Hikari (TEPCO (Tokyo Electric)) (UCOM) apartment course V100
established
- ADSL (higher speeds, expanded area)
- 1M, 50M courses started
- Wireless LAN (increase in service's availability to different model
types)
- MVNO bitwarp PDA course available on a total of 12 model types
- Valued-added Connection Services
--------------------------------
- So-net Phone-introduction of set offerings for all broadband plans
- Start of So-net Phone P' service
- Start of "Site Select" contents-filtering service
- Start of offering of McAfee security service
Although there was an increase in unit prices related to the increased
proportion of broadband subscribers, there was a negative impact from free
promotional campaigns throughout the year as well as a decrease in narrowband
subscribers. As a result, sales of Internet provider services for the year ended
March 31, 2005 were 28,720 million yen, a decrease of 6.5% compared with the
prior fiscal year. Such sales accounted for 73.1% of total sales, a decrease of
7.4 percentage points.
Internet-related services
-------------------------
In this category, as in the prior fiscal year, the SCN Group actively worked to
develop and introduce broadband contents. At the same time, the SCN Group worked
to make its content operations more efficient by careful focus and selection
- Broadband contents
------------------
o Korean dramas enjoyable over the Internet and CS broadcasting
- Personal services
-----------------
o Individualized portal service "My So-net"
o Communication interface "So-net Mini-homepage Service"
o Communication interface "So-net MonDo"
- Regarding to consolidated subsidiaries, affiliated companies
------------------------------------------------------------
o So-net M3. Inc. Increases in member doctors and "MR-kun" adopting
companies.
o Skygate, Co., Ltd. With recognition of the site's ease of use,
sales were about double.
Also, sales of consolidated subsidiaries expanded. As a result of these factors,
sales in this category during the year under review increased 44.0% to 9,396
million yen. Sales in this category accounted for 23.9% of total sales, an
increase of 6.8 percentage points.
Merchandise sales
In this category, throughout the year there were increases in sales of products
related to fashion sites, as well as theatrical-related DVDs. Also, there were
healthy sales of PC cards for using the "bitwarp" PDA plan and of goods related
to sports, such as soccer, and animation. As a result, sales in this category
during the year under review increased 29.9% to 1,185 million yen. Sales in this
category accounted for 3% of total sales, an increase of 0.6 percentage points.
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. ("SSC"), So-net M3 Inc. ("M3"), So-net M3 U.S.A. Corp., and
Skygate, Co., Ltd. ("SG"). The SCN Group includes the following two affiliated
companies accounted for by the equity method: Label Gate Co., Ltd. ("LG") and
DeNA Co., Ltd. ("DeNA"). During the year under review, equity in net income of
affiliated companies of 52 million yen was recorded, compared to a loss of 30
million yen in the year earlier period. This was a result of an increase in
profitability at DeNA, although LG continued to record a loss.
Among these companies, SG, a consolidated subsidiary, raised the recognition
level of its site through increased usage of its services, including air ticket
purchases and hotel reservations. However, although its sales were good, it
continued to suffer from a severe situation in terms of profitability. Also, M3
and DeNA listed on the Tokyo Stock Exchange Mothers Board in September 2004 and
February 2005, respectively.
b. Analysis of Financial Condition
Assets, Liabilities, Stockholders' Equity
At the end of the year under review, total assets were 21,091 million yen, an
increase of 8,090 million yen over the end of the year earlier period. This was
mainly due to an increase in current assets of 8,689 million yen.
The increase in current assets was mainly due to increases in the combined
amounts of deposits in Sony Group company and cash and bank deposits of 8,459
million yen (as a result of proceeds from the sales and issuance of M3 stock) as
well as deferred tax assets increasing by 190 million yen. Non-current assets
decreased by 599 million yen. While software increased, there were decreases in
amortization of goodwill and loss on impairment of certain investments in others
as well as a decrease in deferred tax assets stemming from usage of tax loss
carryforward.
On the other hand, total liabilities at the end of the year under review
increased by 3,174 million yen. This was due to an increase in current
liabilities of 2,925 million yen and an increase in long term liabilities of 249
million yen. The increase in current liabilities was mainly due to the recording
of account payable related to Sony Group consolidated tax.
Minority interest was 840 million yen at the end of the year under review, an
increase of 781 million yen over the year earlier period, due to the listing of
M3.
Shareholders' equity increased by 4,135 million yen over the year earlier period
mainly by recording net income of 4,107 million.
Cash Flow
Cash and cash equivalents were 10,640 million yen at the end of the year ended
March 31, 2005, an increase of 8,459 million yen from the end of the year
earlier period. During the year under review, the SCN Group generated 3,911
million yen of cash in operating activities, generated 2,349 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 year ended March 31, 2005, regarding cash flows from operating
activities, the SCN Group generated 3,911 million yen, compared with the year
ended March 31, 2004 when the SCN Group generated 129 million yen. During the
period under review, the main factors included net income before income taxes
of 6,494 million yen, compared with a net loss before income taxes of 534
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 and gain on issuance of stock by equity investee and
subsidiary stock of 2,599 million yen not related to cash inflows.
Cash flows from investing activities
During the year ended March 31, 2005, regarding cash flows from investing
activities, the SCN Group generated 2,349 million yen, compared with the year
ended March 31, 2004 when the SCN Group used 529 million yen. The main factor
in the period under review was proceeds from sales of subsidiary stock of 3,162
million yen, by the stock offering when consolidated subsidiary So-net M3 Inc.
listed on the Tokyo Stock Exchange Mothers Board.
Cash flows from financing activities
During the year ended March 31, 2005, regarding cash flows from financing
activities, the SCN Group generated 2,201 million yen, while during the year
ended March 31, 2004, 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 140-0001 Tel: (03) 3446-7210
www.so-net.ne.jp/corporation/IR/
Condensed Consolidated Statements of Income
For the year ended March 31, 2005
---------------------------------
(Millions of yen)
Year ended March 31
2004 2005 Change
------------- ------------- ------
Sales 38,166 39,302 3.0%
Cost of sales 23,569 22,056
Gross profit 14,598 17,245
Selling, general and administrative 15,468 14,622
expenses
Operating income (loss) (870) 2,624 -%
Non-operating income
Equity in net income of affiliated - 52
companies
Other 261 261 152 205
Non-operating expenses
Equity in net loss of affiliated 30 -
companies
Other 271 302 289 289
Ordinary income (loss) (911) 2,540 -%
Extraordinary gain
Gain on issuance of stock by equity 613 2,599
investee and subsidiary stock
Gain on sale of investment in 81 2,876
affiliate and subsidiary stock
Gain on sale of fixed assets - 695 25 5,501
Extraordinary loss
Loss on revaluation of investments 90 978
in other securities
Loss on impairment of long-lived 87 295
assets
Writeoff of goodwill 84 -
Loss on withdrawal from certain 56 -
operations
Loss on issuance of stock by equity 1 1
investee
Provision for allowance for doubtful - 182
accounts
Loss from relocation of certain - 76
business unit
Extraordinary depreciation - 318 14 1,546
Net income (loss) before income (534) 6,494 -%
taxes
Income tax current 16 2,360
Income tax deferred (163) (147) (77) 2,282
Minority interest income 25 105
Net income (loss) (412) 4,107 -%
For the three-months ended March 31, 2005
-----------------------------------------
(Millions of yen)
Three-months ended March 31
2004 2005 Change
------------- ------------- ------
Sales 9,562 9,807 2.6%
Cost of sales 5,763 5,571
Gross profit 3,799 4,237
Selling, general and administrative 3,743 4,015
expenses
Operating income 56 221 294.9%
Non-operating income
Equity in net income of affiliated - 11
companies
Other 53 53 67 78
Non-operating expenses
Equity in net loss of affiliated 26 -
companies
Other 77 103 195 195
Ordinary income 6 105 1757.5%
Extraordinary gain
Gain on issuance of stock by equity - 777
investee
Extraordinary loss
Loss on revaluation of investments 62 100
in other securities
Loss on issuance of stock by equity 0 0
investee
Loss on withdrawal from certain 2 -
operations
Loss on impairment of long-lived 87 -
assets
Write-off of goodwill 84 -
Provision for allowance for doubtful - 49
accounts
Loss from relocation of certain - 39
business unit
Extraordinary depreciation - 235 14 202
Net income (loss) before income (229) 680 -%
taxes
Income tax current 70 370
Income tax deferred 15 85 (306) 64
Minority interest income 5 46
Net income (loss) (320) 569 -%
Condensed Consolidated Balance Sheets
-------------------------------------
(Millions of yen)
March 31 March 31 Difference
2004 2005
ASSETS --------- --------- -----------
Current assets 7,363 16,052 8,689
--------- --------- -----------
Cash and bank deposit 840 3,861 3,021
Notes and account receivable, trade 3,891 3,755 (136)
Inventories 130 212 82
Deposits in Sony group company 1,342 6,779 5,438
Deferred tax assets 356 546 190
Other 828 967 140
Allowance for bad debt (23) (69) (46)
Noncurrent assets 5,637 5,039 (599)
--------- --------- -----------
Property, plant and equipment 256 181 (75)
--------- --------- -----------
Furniture and fixtures 162 122 (40)
Other 94 59 (35)
Intangible assets 2,263 2,126 (137)
--------- --------- -----------
Software 1,286 1,576 290
Goodwill 708 425 (283)
Other 269 126 (144)
Investment and other assets 3,118 2,732 (386)
--------- --------- -----------
Investment in affiliates and others 1,495 1,471 (24)
Deferred tax assets 773 642 (132)
Other 849 739 (110)
Allowance for bad debt - (119) (119)
--------- --------- -----------
Total assets 13,001 21,091 8,090
--------- --------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 5,167 8,092 2,925
--------- --------- -----------
Account payable, trade 2,463 2,553 90
Accrued expense 1,711 1,936 226
Accrued income taxes 197 877 680
Accrued bonuses 239 244 4
Accrued customer incentive program 81 145 64
Other accruals - 4 4
Other 475 2,333 1,858
Long-term liabilities 140 388 249
--------- --------- -----------
Accrued severance costs for employees 93 111 18
Accrued severance indemnities for 47 49 2
directors
Other - 228 228
--------- --------- -----------
Total liabilities 5,306 8,481 3,174
--------- --------- -----------
Minority interest 58 840 781
--------- --------- -----------
Common stock 5,246 5,246 -
Additional paid-in capital 4,765 4,765 -
Retained earnings (accumulated losses) (2,373) 1,734 4,107
Unrealized gain on investment securities - 27 27
Foreign currency translation adjustments (1) (0) 1
--------- --------- -----------
Total stockholders' equity 7,636 11,771 4,135
--------- --------- -----------
Total liabilities and stockholders' equity 13,001 21,091 8,090
--------- --------- -----------
Consolidated Statements of Additional Paid-in Capital and Retained Earnings and
Accumulated Losses
(millions of yen)
Item Year ended Year ended
March 31, 2004 March 31, 2005
-------------- --------------
Additional Paid-in Capital
Balance at beginning of fiscal year 4,765 4,765
-------------- --------------
Balance at the end of period 4,765 4,765
-------------- --------------
Retained Earnings (Accumulated Losses)
Balance at beginning of fiscal year (1,961) (2,373)
Increase
Net income - 4,107
Decrease
Net loss 412 -
-------------- --------------
Balance at the end of period (2,373) 1,734
-------------- --------------
Consolidated Statements of Cash Flow
(Millions of yen)
Year ended March 31
2004 2005
I. Cash flows from operating activities ------- -------
Net income (loss) before income taxes (534) 6,494
Depreciation and amortization 836 753
Extraordinary depreciation - 14
Loss on impairment of long-lived assets 87 295
Amortization for goodwill 311 283
Write-off of goodwill 84 -
Gain on issuance of stock by equity investee and (613) (2,599)
subsidiary stock
Loss on issuance of stock by equity investee 1 1
Equity in net loss (income) of affiliated 30 (52)
companies
Loss on revaluation of investments in other 90 978
securities
Gain on sale of investment in affiliate and (81) (2,876)
subsidiary stock
Stock issuance costs - 13
Loss on withdrawal from certain operations 56 -
Loss from relocation of certain business unit - 76
Increase in accrued bonuses 22 4
Increase in accrued severance costs for employees 28 18
Increase in accrued severance indemnities for 17 2
directors
Increase (decrease) in allowance for bad debt (24) 165
Increase in customer incentive program 81 64
Increase in other accruals - 4
Interest income and dividends (9) (57)
Interest expenses 3 0
Foreign exchange loss - 2
Loss on disposal of fixed assets 93 91
Loss on sales of tangible fixed assets 10 0
Gain on sales of tangible fixed assets (1) (25)
(Increase) decrease in account receivable, trade (89) 136
(Increase) decrease in inventories 149 (82)
Increase in other current assets (136) (269)
Increase in accounts payable, trade 36 90
Increase (decrease) in accrued expenses (199) 186
Increase in other current liabilities 61 146
------- -------
Sub Total 309 3,855
------- -------
Receipt of interest and dividends 9 57
Payments for interest (3) (0)
Payments for income taxes (186) (1)
------- -------
Net cash provided by operating activities 129 3,911
------- -------
(Millions of yen)
Year ended March 31
2004 2005
------- -------
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 (37) (45)
Proceeds from sales of fixed assets 4 26
Payment for acquisition of intangible assets (971) (749)
Proceeds from sales of intangible assets 0 -
Payment for deposits (4) (5)
Proceeds from deposits 1 -
Payments for long term prepaid expenses (203) (46)
Payments for loan (178) (55)
Repayment of loan 749 71
------- -------
Net cash provided by (used in) investing (529) 2,349
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) (1)
cash equivalents
V. Increase (decrease) in cash and cash equivalents (1,202) 8,459
VI. Cash and cash equivalents at beginning of year 3,384 2,182
------- -------
VII. Cash and cash equivalents at end of the period 2,182 10,640
======== =======
(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)
Year ended Year ended Change
March 31, 2004 March 31, 2005 (%)
Increase in fixed assets 32 45 42.7
Increase in intangible assets 942 828 (12.1)
Depreciation of fixed assets* 110 108 (1.4)
Amortization of intangible 657 604 (8.1)
assets*
Three-months ended Three-months ended Change
March 31, 2004 March 31, 2005 (%)
Increase in fixed assets 2 12 486.1
Increase in intangible assets 197 239 21.2
Depreciation of fixed assets* 35 55 56.8
Amortization of intangible 164 163 (0.5)
assets*
* Included extraordinary depreciation of fixed assets shown as loss on
withdrawal from certain operations and loss from relocation of certain business
unit in the consolidated statement of income, as well as loss on impairment of
long-lived assets (excluding the portion related to lease assets).
Consolidated Results Forecast
-----------------------------
The SCN Group consolidated results forecast for the year ending March 31, 2006
is as follows.
(Millions of yen)
Consolidated Results Forecast Year-on-year Change
-------------------- -------- -------------------
Sales 43,500 +11%
Operating income 1,300 (50%)
Ordinary income 1,500 (41%)
Net income 700 (83%)
The above forecast is based on the following assumptions:
- The number of So-net subscribers at the end of the year ending March 31,
2006 is expected to be 2.80 million.
- Within the total number of subscribers, the number of broadband
subscribers is expected to be 800,000.
- Sales for certain categories are expected to be as follows:
Internet provider services
29,300 million yen (+2.0% over the previous fiscal year)
Internet-related services (included Merchandise sales)
14,200 million yen (+34.2% over the previous fiscal year)
Cautionary statement:
---------------------
With regards to the consolidated results for the year ending March 31, 2005
which are described in this press release, current plans, forecasts, strategies,
and beliefs, as well as statements that are not historical facts, are
forward-looking statements about the future performance of Sony Corporation and
the SCN Group. These forwards looking statements about future performance are
not limited to statements that use words, such as "beliefs," "expectation,"
"strategy," "forecast," "prospect," "anticipate," or "possibility," which
explain future operational activities, results, happenings, and conditions. From
time to time, oral or written forward-looking statements may also be included in
other materials released to the public. 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.