Sony 2003 Annual Report Download - page 199

Consolidated Financial Information 2003
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minimum pension liability represents the excess of the accumulated benefit obligation over plan assets and
accrued pension and severance costs already recognized before recording the minimum pension liability. A
corresponding amount was recognized as an intangible asset to the extent of the unrecognized prior service
cost, and the balance was recorded as a component of accumulated other comprehensive income, net of tax.
The accumulated benefit obligations and the fair value of plan assets for the pension plans which Sony has
recognized the minimum pension liability were as follows:
Japanese plans Foreign plans
Yen in millions
Dollars in
millions Yen in millions
Dollars in
millions
March 31 March 31, March 31 March 31,
2002 2003 2003 2002 2003 2003
Accumulated benefit obligations ¥685,357 ¥843,463 $7,029 − ¥102,313 $853
Fair value of plan assets 445,499 405,009 3,375 − 63,024 525
16. Stockholders' equity
(1) Subsidiary tracking stock:
On June 20, 2001, Sony Corporation issued shares of subsidiary tracking stock in Japan, the economic
value of which is intended to be linked to the economic value of Sony Communication Network Corporation
(“SCN”), a directly and indirectly wholly owned subsidiary of Sony Corporation which is engaged in
Internet-related services. The subsidiary tracking stock holders have no direct rights in the equity or assets
of SCN or the assets of Sony Corporation. Except as summarized below, the shares of subsidiary tracking
stock have the same rights and characteristics as those of shares of common stock.
The dividend on the shares of this series of subsidiary tracking stock is payable only when the Board of
Directors of SCN has resolved to pay to its common stock holders a dividend in an amount per share of the
subsidiary tracking stock equal to the amount of SCN’s dividend per share of its common stock multiplied by
the Standard Ratio (as defined in the articles of incorporation), subject to statutory restriction on Sony
Corporation’s ability to pay dividends on its shares of capital stock and the maximum dividend amount (as
defined in the articles of incorporation). If the amount of dividends paid to the subsidiary tracking stock
holders is less than the amount, which should have been paid pursuant to the formula set forth above due to
the statutory restriction referred to above or for any other reason, such shortfall will be accumulated and such
cumulative amount will be paid to the subsidiary tracking stock holders for subsequent fiscal years. Any such
dividend on the subsidiary tracking stock is payable in priority to the payment of dividends to the common
stock holders. However, the subsidiary tracking stock holders have no right to participate in the dividends to
common stock holders. Furthermore, even if the Board of Directors of SCN does not take a resolution for the
payment of dividends to SCN’s common stock holders, Sony Corporation may decide to pay dividends to its
common stock holders.
The subsidiary tracking stock holders have the same voting rights as those of the common stock holders