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Earnings Results for the
Six-month Period
Ended September 30, 2012
(April to September 2012)
Supplemental Material
October 31, 2012
SOFTBANK CORP.
Disclaimer
This material was prepared based on information available and views held at the time it was made. Statements in this
material that are not historical facts, including, without limitation, plans, forecasts and strategies are “forward-looking
statements.”
Forward-looking statements are by their nature subject to various risks and uncertainties, including, without limitation, a
decline in general economic conditions, general market conditions, technological developments, changes in customer
demand for products and services, increased competition, risks associated with international operations, and other
important factors, each of which may cause actual results and future developments to differ materially from those
expressed or implied in any forward-looking statement. With the passage of time, information in this material (including,
without limitation, forward-looking statements) could be superseded or cease to be accurate.
SOFTBANK CORP. disclaims any obligation or responsibility to update, revise or supplement any forward-looking
statement or other information in any material or generally to any extent. Use of or reliance on the information in this
material is at your own risk.
Information contained herein regarding companies other than SOFTBANK CORP. and other companies of the SOFTBANK
Group is quoted from public sources and others. SOFTBANK CORP. has neither verified nor is responsible for the
accuracy of such information.
<Regarding Revenue Recognition In the Mobile Communications Segment>
In the Mobile Communications segment, net sales are mainly generated through telecom service revenue and sales of mobile handsets. The telecom
services consist of voice and data services and are recognized as revenue when services are provided to customers, based upon basic flat-rate monthly
charges plus usage of traffic in accordance with price plans subjected to discounts.
Sales of mobile handsets are recognized when merchandise is shipped to sales agents. The agents sell the mobile handsets to the customers mainly by
installment payments over a period of 24 months. SOFTBANK MOBILE Corp. purchases the installment sales receivables from the agents and collects the
installment sales receivables during the 24 months.
Activation fees from new customers are recognized as revenue when services are activated.
2
Accounting 4
Consolidated P/L Analysis 5
Consolidated B/S Analysis 17
Consolidated CF Analysis 28
Finance 31
Operation 49
Broadband Infrastructure Segment 51
Fixed-line Telecommunications Segment 55
Mobile Communications Segment 60
3
Accounting
4
Accounting
Consolidated P/L Analysis
5
Consolidated P/L Summary
<bn JPY>
Net Sales Operating Income Ordinary Income Net Income
800
3,202.4
3,000 Q4 700 675.2
804.2
600 142.4 573.6
Q3 500 +7.9% 129.7
2,000 862.5 +3.3% 159.5 +15.4%
402.7
1,586.1 400 373.2
1,535.6 129.4 363.0
314.4 313.7
Q2
300 210.6
771.4 819.2 197.3 182.0 63.6 -22.0%
1,000 163.2 32.8
200 217.2 169.4
122.4
Q1 78.7
764.2 766.9 100 175.8 192.1 180.9
151.2
94.7 90.6
0 0
FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12
6
Consolidated Net Sales
+50.4
(+3.3%) <bn JPY> (Main factors for the change)
1,586.1
1,535.6 Mobile Communications +27.5bn
- Increase in telecom service revenue +57.4bn
Increase in data-related revenue +67.1bn
Decrease in voice-related revenue -9.7bn
-Decrease in sales of mobile handsets and -29.9bn
accessories, etc.
1,048.4 Mobile
1,020.9
Communications
Broadband Infrastructure -4.9bn
Decrease in sales of Yahoo! BB ADSL -16.1bn
Increase in sales of Yahoo! BB hikari with FLET’S +6.5bn
82.3
Broadband Fixed-line Telecommunications +13.9bn
87.2 Infrastructure Increase in sales relating to projects for installing telecommunications
Fixed-line signal transfer stations
191.9 Increase in sales from provision of telecommunication lines to Group
178.0 Telecommunications
companies such as SBM
141.4 152.4 Internet Culture
Others
Internet Culture +10.9bn
173.7 188.2 Increase in revenue from sponsored-search advertising and interest-
match advertising via smartphones, display advertising, information
-65.8 -77.3 Elimination listing services.
FY11/Q1-2 FY12/Q1-2
•Voice-related revenue: voice call charges, revenues from incoming calls, basic monthly charges, etc. data-related revenue: packet communication charges, etc. 7
SBM: SOFTBANK MOBILE
Consolidated Operating Income
+29.5 (Main factors for the change)
(+7.9%) <bn JPY> Mobile Communications +16.2bn
+27.5 - Increase in
402.7 net sales -Increase in depreciation & amortization on installation of
additional base stations.
373.2 -Decrease in COS and sales commissions in line with an
- Increase in increased proportion of units sold that have lower cost of
-11.3 COS, SGA goods and acquisition cost per subscriber.
250.0 266.3 Mobile Broadband Infrastructure -0.1bn
Communications
- Decrease in
-4.9 net sales
-Decrease in operating expenses such as sales commissions
mainly reflecting a decrease in number of ADSL lines
+4.8 - Decrease in
COS, SGA
Fixed-line Telecommunications +7.3bn
Broadband +13.9 - Increase in
-Increase in COS relating to projects for installing
net sales
telecommunications signal transfer stations.
19.5 Infrastructure -Increase in COS relating to provision of telecommunication lines.
19.6 Fixed-line -6.6 - Increase in -Decrease in lease payments for Otoku Line equipment.
34.6 COS, SGA
27.2 Telecommunications
75.1 80.8 Internet Culture +5.7bn
Internet Culture
- Increase in
+10.9 net sales
Others
Elimination - Increase in -Increase in COS along with an increase in sales.
-5.2 COS, SGA
FY11/Q1-2 FY12/Q1-2
Positive impact on profit Negative impact on profit 8
Non-operating Income/Expense and Ordinary Income
Non-operating Income/Expense Ordinary Income <bn JPY>
Non-operating Income
Interest expense Net of increase FY12/Q1-2
Equity in losses of affiliated companies
in non-operating ordinary
Refinance related expense Increase in
Other non-operating expenses income/expense income
Non-operating income/expenses (NET)
operating
FY11/Q1-2 income 18.9
6.7 6.5 ordinary
29.5
income
-40.7 Decrease -17.8
in interest
expense*2
22.9
-18.1
Non-operating
income/expenses
18.9 (NET)
-39.7 314.4 +48.5 363.0
Non-operating
-1.2 income/expenses -10.3 (+15.4%)
-13.6 *1 (NET)
Non-operating (Total non-operating expenses)
income/expenses -46.3
(NET)
-58.7 Mainly due to a write-down of goodwill
-9.9 that arose when acquiring the shares of
(Total non-operating expenses) InMobi Pte. Ltd.
-65.5
FY11/Q1-2 FY12/Q1-2
*1. Mainly refinancing related expense associated with refinancing SBM loan
(the loan procured under a whole business securitization scheme as part of the loan for procurement of Vodafone K.K. acquisition finance)
2. As SOFTBANK MOBILE paid off its SBM loan in October 2011
9
Special Income/Loss and Income Before Income Taxes
Special Income/Loss Income Before Income Taxes < bn JPY>
(1) Gain on sale of investment securities
(2) Dilution gain from changes in equity interest Increase in Net of decrease
(3) Other special income ordinary
(4) Valuation loss on investment securities in special
(5) Other special losses income income/loss
Special income/loss (NET) FY11/Q1-2
(Total special income) income before 48.5
102.7 2.0 income taxes
97.9 FY12/Q1-2
Dilution gain from changes in
93.5 17.1 equity interest mainly related income before
Special income/loss to Renen Inc. IPO, etc. income taxes
(NET)
Gain on sale of investment
securities related to Yahoo!
Inc. shares JPY 76.4bn
83.5 408.0 358.6
-49.3
(-12.1%)
-97.9
(Total special income)
7.3 0.3 (3)
3.9 (2)
3.0 (1)
-8.9 -4.3 -8.5 (4)
Special income/loss
-0.2 (NET) -3.1 (5)
-9.1
(Total special loss)
-11.6
(Total special loss)
FY11/Q1-2 FY12/Q1-2
10
Net Income
<bn JPY>
FY12/Q1-2 Net Income YoY Decrease Factors
Income taxes:
Decrease in
current
FY11/Q1-2 income before
net income income taxes
Increase in
Decrease in minority
140.1 49.3 income taxes interests FY12/Q1-2
2.8 1.3 net income
Income taxes:
deferred Minority
15.6 interests
33.4
Income before 217.2
169.4
income taxes & Income before
minority interests minority interests Net income -47.8
358.6 202.8 169.4
-22.0%
11
(Reference) FY12/Q1-2 Comprehensive Income
<bn JPY>
Changes during FY12/Q1-2
(Adjustment)
Compre- Share of other
B/S hensive comprehensive income of B/S
(Adjustment) affiliated companies
FY11/Q4 Income Minority interest accounted for using equity
FY12/Q2
Balance /loss equivalent method Balance P/L
a b c d (a + b – c + d) (b - c)
Income before minority interests 202.8 33.4 169.4
Other comprehensive loss Minority interests in net income Net income
Unrealized gain/loss on available-for-
sale securities 10.5 -10.7 -1.1 -0.7 0.2
Deferred gain/loss on derivatives
under hedge accounting -0.9 0.1 0 - -0.8
Foreign currency translation
adjustment -30.8 -8.5 0 0 -39.3
Share of other comprehensive
income of affiliated companies - -0.6 - 0.6 -
accounted for using equity method*
Total other comprehensive loss -21.2 -19.7 -1.1 - -39.9
Comprehensive income 183.0 32.3 150.7
* Separately indicates the share of other Comprehensive income Comprehensive income
comprehensive income of affiliated companies
accounted for using equity method included in attributable to minority interests attributable to owners of the parent
other accounts of comprehensive income 12
Tax and Other Adjustments
FY12/Q1-2 Main Breakdown of Tax Expenses
< bn JPY>
A Income taxes: current 140.1
(main breakdown)
1. BBM income taxes under consolidated tax return 60.8
2. SBM local taxes (out of scope for BBM consolidated tax return) 30.3
3. Yahoo Japan 31.7
B Income taxes: deferred 15.6
(main breakdown)
4. SBTM utilization of loss carryforwards, decrease in temporary difference, etc. 8.7
5. SBM depreciation and amortization adjustments (occurred at time of SBM acquisition) 4.0
6. Other temporary difference 2.9
Total income taxes (A+B) 155.8
BBM: BB Mobile SBM: SOFTBANK MOBILE SBTM: SOFTBANK TELECOM
13
Deferred Tax Assets and Liabilities (Ref.)
FY12/Q2 Balance < bn JPY>
Deferred tax assets:
(main breakdown)
Depreciation and amortization 52.2
Loss carryforwards 32.5
Valuation of assets and liabilities of acquired consolidated subsidiaries at fair market value 26.7
Investment securities 21.6
Accounts payable – other and accrued expenses 11.3
Allowance for point mileage 10.7
Allowance for doubtful accounts 9.9
Other 62.7
Gross deferred tax assets 228.1
Less: valuation allowance -74.6
Total deferred tax assets 153.4
Deferred tax liabilities:
(main breakdown)
Deferred taxable gain on a sale of shares of a subsidiary to a 100%
-11.6
owned subsidiary under Japanese group taxation regime
Unrealized gain on available-for-sale securities -1.7
Others -12.0
Total deferred tax liabilities -25.4
Net deferred tax assets 127.9
14
Difference in Tax Rate (reference)
FY12/Q1-2 Reconciliation Between Statutory Tax Rate and Effective Tax Rate
Rate (%) <ref.> Amount (bn JPY)
Income before income tax 358.6
Statutory income tax rate 38.0% 136.3
(main factors of difference)
- Amortization of goodwill (mainly SOFTBANK MOBILE) 3.2% 11.4
- Equity in losses of affiliated companies 1.7% 6.1
- Others 0.5% 1.8
Effective income tax rate 43.4% 155.8
15
Financial Results of Non-consolidated Subsidiaries and Affiliates
Net income/loss, interest-bearing debt at non-consolidated subsidiaries and affiliates
Net Income/Loss Interest-bearing Debt
Number of
Companies (after consideration of (not within
economic interest) the SB Group)
Non-consolidated subsidiaries
not under the equity method 69 JPY 260mil JPY 410mil
Non-consolidated subsidiaries
under the equity method 3 - -
Affiliated companies not under
the equity method 25 JPY -170mil N/A
Total 97 JPY 80mil JPY 410mil
SOFTBANK CORP. owns 100% shares issued by WILLCOM, Inc. However, WILLCOM is in the process of reorganization
under the Corporate Reorganization Act and SOFTBANK does not have effective control over WILLCOM. Therefore,
WILLCOM is not treated as a subsidiary and not included in any of the above figures.
16
Accounting
Consolidated B/S Analysis
17
Consolidated B/S Summary
SBM Others
<bn JPY>
Current Assets Current Liabilities
1,910.4 1,931.7 1,923.7 1,807.8
644.1 612.5 805.6 802.2
1,266.2 1,319.1 1,118.0 1,005.6
Mar 2012 Sep 2012 Mar 2012 Sep 2012
Fixed Assets Long-term Liabilities
2,983.5 3,101.2
2,081.0 2,148.3
1,540.3 1,709.4
414.6 472.9
902.5 952.8 1,125.6 1,236.5
Mar 2012 Sep 2012 Mar 2012 Sep 2012
18
SBM: SOFTBANK MOBILE
Consolidated B/S (1) Current Assets
<bn JPY>
Assets Mar 2012 Sep 2012 Variance Outline
Current assets 1,910.4 1,931.7 21.2
SBM 644.1 612.5 -31.6
Others 1,266.2 1,319.1 52.8
Cash and deposits 1,016.2 1,096.7 80.5 See page 29 for details.
SBM 49.8 50.7 0.9
Others 966.4 1,045.9 79.5
Notes and accounts receivable-trade 661.2 601.2 -60.0
Mobile handset installment sales receivables Mar 12 (221.2) >> Sep 12 (170.5)
SBM including sale of installment sales receivables (-151.9)
491.8 434.9 -56.9 Telecom revenue receivables Mar 12 (188.4) >> Sep 12 (192.8)
Mobile handsets sales receivables (to sales agents) Mar 12 (75.8) >> Sep 12 (66.1)
Others 169.4 166.3 -3.1 SBB: Mar 12 (59.7) >> Sep 12 (54.3), SBTM: Mar 12 (46.3) >> Sep 12 (47.5)
Marketable securities 4.5 6.6 2.0
SBM - - -
Others 4.5 6.6 2.0
Merchandise and finished products 42.6 42.1 -0.4
SBM 30.8 29.2 -1.6
Others 11.7 12.9 1.1
Deferred tax assets 56.4 41.6 -14.8
SBM 26.2 21.7 -4.4
Others 30.2 19.8 -10.3
Others 168.2 177.4 9.1
SBM 78.6 104.3 25.7
Others 89.6 73.1 -16.5
Allowance for doubtful accounts -39.0 -34.2 4.7
SBM -33.1 -28.4 4.6
Others -5.8 -5.7 0.1
SBM: SOFTBANK MOBILE SB: SOFTBANK SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM
19
Consolidated B/S (2) Tangible Assets
<bn JPY>
Assets Mar 2012 Sep 2012 Variance Outline
Fixed assets 2,983.5 3,101.2 117.6
SBM 2,081.0 2,148.3 67.3
Others 902.5 952.8 50.3
Property and equipment, net 1,296.3 1,458.1 161.7
SBM 964.4 1,027.0 62.5
Others 331.9 431.1 99.2
Building and structures 77.4 117.2 39.8
SBM 26.7 27.5 0.7
FSBHM: increased mainly due to acquisition of Fukuoka Yahoo!
Others 50.6 89.7 39.1 JAPAN Dome. See page 30 for details.
Telecommunications equipment 988.5 1,024.6 36.1
Acquisition of telecommunications equipment (+37.7),
SBM 851.4 882.2 30.8
Acquisition of antenna equipment (+2.4), depreciation etc. (-37.3)
SBTM: Mar 12 (98.3) >> Sep 12 (98.6)
Others 137.1 142.3 5.2 SBB: Mar 12 (31.3) >> Sep 12 (34.7)
Telecommunications service lines 65.2 62.5 -2.6
SBM 8.0 7.7 -0.3
Others 57.1 54.8 -2.3 SBTM: Mar 12 (57.1) >> Sep 12 (54.8)
Land 23.1 73.8 50.7
SBM 11.2 11.2 0
FSBHM: increased mainly due to acquisition of Fukuoka Yahoo!
Others 11.9 62.6 50.6 JAPAN Dome. See page 30 for details.
Construction in progress 80.5 112.8 32.3
SBM 49.6 81.3 31.7
Others 30.8 31.4 0.6
Other 61.5 67.0 5.4
SBM 17.3 16.8 -0.4
Others 44.2 50.1 5.9
SBM: SOFTBANK MOBILE FSBHM: Fukuoka SOFTBANK HAWKS Marketing SBTM: SOFTBANK TELECOM SBB: SOFTBANK BB 20
Consolidated B/S (3) Intangible Assets,
Investments and Other Assets
<bn JPY>
Assets Mar 2012 Sep 2012 Variance Outline
Fixed assets 2,983.5 3,101.2 117.6
Intangible assets, net 1,126.5 1,128.0 1.4
SBM 1,011.0 1,015.3 4.3
Others 115.4 112.6 -2.8
Goodwill 780.2 750.8 -29.3
SBM 724.2 698.5 -25.7 Decrease due to regular amortization
Others 55.9 52.3 -3.6 Decrease due to regular amortization
Software 310.1 349.5 39.3
SBM 276.8 312.0 35.2 Mainly due to new acquisitions of telecommunications equipment
Others 33.3 37.4 4.0
Other 36.1 27.6 -8.4
SBM 9.9 4.7 -5.2
Others 26.1 22.8 -3.2
Investments and other assets 560.6 515.0 -45.5
SBM 105.5 105.9 0.4
Others 455.1 409.0 -46.0
Investment securities 338.1 291.6 -46.5
SBM 0.7 0.7 0
Privatization of Alibaba.com Limited (-51.2)*
Others 337.4 290.8 -46.5 Yahoo Japan: investment in ASKUL Corporation (+33.0)
Zynga Inc.: decline in share price (-20.9)
Deferred tax assets 104.3 104.9 0.6
SBM 64.9 65.6 0.7
Others 39.3 39.2 -0
Other 134.0 134.9 0.8
SBM 51.2 51.4 0.2
Others 82.8 83.4 0.6
Allowance for doubtful accounts (long-term) -15.9 -16.4 -0.4
SBM -11.4 -11.8 -0.4
Others -4.5 -4.5 0
Deferred charges 5.6 5.1 -0.5
SBM - - -
Others
*See page 25 for details.
5.6 5.1 -0.5
21
SBM: SOFTBANK MOBILE
Consolidated B/S (4) Current Liabilities
<bn JPY>
Liabilities Mar 2012 Sep 2012 Variance Outline
Current liabilities 1,923.7 1,807.8 -115.8
SBM 805.6 802.2 -3.4
Others 1,118.0 1,005.6 -112.3
Accounts payable-trade 190.5 190.3 -0.1
SBM 120.4 129.0 8.6
Others 70.1 61.2 -8.8 SBB: Mar 12 (41.5) >> Sep 12 (34.0)
Short-term borrowings 403.1 453.1 49.9
SBM - - -
Others 403.1 453.1 49.9 SB: Mar 12 (401.9) >> Sep 12 (452.0)
Current portion of corporate bonds 144.9 190.5 45.5
SBM - - -
SB: transfer of 31st and 33rd Unsecured Straight Bond from long-term liabilities (+155.0)
Others 144.9 190.5 45.5 redemption of 28th and 29th Unsecured Straight Bond (-95.0)
Accounts payable-other 835.0 591.2 -243.8
SBM 509.7 486.1 -23.5 Payment to sales agents (-26.1)
Others 325.3 105.0 -220.2 SB: payment for acquisition of preferred stock, etc. issued to Vodafone Group (-200.0)
Current portion of lease obligations 152.6 173.4 20.8
SBM 126.8 139.1 12.3
Others 25.8 34.2 8.4
Other 197.3 209.1 11.8
SBM 48.6 47.7 -0.8 Income taxes payable etc. (local taxes) Mar 12 (31.8) >> Sep 12 (31.7)
Income taxes payable etc. BBM: Mar 12 (54.1) >> Sep 12 (59.0)
Others 148.6 161.3 12.7 Yahoo Japan: Mar 12 (34.0) >> Sep 12 (32.7)
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SB: SOFTBANK BBM: BB Mobile
22
Consolidated B/S (5) Long-term Liabilities
<bn JPY>
Liabilities Mar 2012 Sep 2012 Variance Outline
Long-term liabilities 1,540.3 1,709.4 169.1
SBM 414.6 472.9 58.2
Others 1,125.6 1,236.5 110.8
Corporate bonds 459.9 414.9 -45.0
SBM - - -
SB: 31st and 33rd Unsecured Straight Bond transferred to current liabilities (-155.0)
Others 459.9 414.9 -45.0
issuance of 39th and 40th Unsecured Straight Bond (+110.0)
Long-term debt 560.0 628.6 68.5
SBM - - -
Others 560.0 628.6 68.5 SB: Mar 12 (559.0) >> Sep 12 (627.5)
Deferred tax liabilities 20.3 18.6 -1.7
SBM - - -
Others 20.3 18.6 -1.7
Allowance for point mileage 32.0 28.6 -3.4
SBM 32.0 28.6 -3.4 Point service for customers
Others - - -
Lease obligations 347.6 488.4 140.7
SBM 316.8 371.2 54.4
Others 30.8 117.1 86.3 FSBHM: increased mainly due to acquisition of Fukuoka Yahoo! JAPAN Dome. See page 30 for details.
Other 120.2 130.1 9.9
SBM 65.7 73.0 7.3
Others 54.4 57.1 2.6
SBM: SOFTBANK MOBILE SB: SOFTBANK FSBHM: Fukuoka SOFTBANK HAWKS Marketing
23
Consolidated B/S (6) Equity
<bn JPY>
Equity Mar 2012 Sep 2012 Variance Outline
Equity 1,435.6 1,520.7 85.1
Shareholders’ equity 957.9 1,046.5 88.6
Common stock 213.7 221.0 7.2 Conversion of Convertible Bonds due 2013 into common stock (+7.2)
Conversion of Convertible Bonds due 2013 into common stock (+7.2)
Additional paid-in capital 236.5 192.5 -44.0
Privatization of Alibaba.com Limited (-51.2) *
Retained earnings 530.5 655.8 125.3 Net income (+169.4), dividend (-43.9)
Treasury stock -22.9 -22.8 0
Valuation and translation adjustments -21.2 -39.9 -18.6
Unrealized gain/ loss on
available-for-sale securities 10.5 0.2 -10.3 Decline in share price of Zynga Inc, etc.
Deferred gain/loss on
derivatives under hedge accounting -0.9 -0.8 0.1
Foreign currency
translation adjustments -30.8 -39.3 -8.5
Stock acquisition rights 0.8 0.9 0
Minority interests 498.0 513.2 15.1 Yahoo Japan: Mar 12 (263.2) >>Sep 12 (281.9)
*See page 25 for details.
24
(reference) Impact of Alibaba.com Privatization (Q1)
Alibaba Group Holding Limited, of which SOFTBANK Group owns 31.8%, acquired the
shares of Alibaba.com Limited, a subsidiary of Alibaba Group Holding Limited, through a
takeover bid in June 2012 and privatized Alibaba.com Limited.
Because Alibaba Group’s financial statements are prepared in accordance with US GAAP
Alibaba Group recorded a decrease in additional paid-in capital.
Accordingly, SB Group recorded a decrease in additional paid-in capital amounting to JPY
51.2bn (for shares holding in Alibaba Group*).
<SOFTBANK and Alibaba Group Structure>
31.8% investment
Alibaba Group
Holding Limited
SB Decrease in additional
Group paid-in capital
JPY 51.2bn Consolidated
for shares holding in subsidiary
Alibaba Group
Privatized
Alibaba.com Limited
June 2012
*Alibaba Group Holding Limited
25
[Equity] Foreign Currency Translation Adjustments
<bn JPY>
20 Foreign currency translation adjustments account
0
-20 -30.8 -26.7
-32.5 -36.7 -39.3
-40 -45.2 -49.8
-51.4 -50.2 -53.0
-58.8
-60
-80
Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12 Jun Sep
<JPY> <Reference> Main exchange rate trend GBP/JPY (TTM
200 EUR/JPY (TTM)
180 USD/JPY (TTM)
160
140
120
100
80
60
Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12 Jun Sep 26
[Equity] Shareholders’ Equity
<bn JPY> Common stock & additional paid-in capital* Retained earnings
Treasury stock Unrealized gain/ loss on available-for-sale securities
Deferred gain/ loss on derivatives under hedge accounting Foreign currency translation adjustments
Shareholders' equity Equity ratio
1,100
20.0%
1,000 10.5
1,006.6
900
936.6 923.4
800
700 530.5 577.1 655.8
34.9
600
619.2
500 222.2
43.8
43.0 470.5
400
300
401.8 401.2 450.3 399.1 413.5
200
100
-22.9 -22.9 -22.8
0 -32.5 -50.2 -30.8 -26.7 -39.3
-100
Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12 Jun Sep
*Includes cash receipts for new stock subscriptions
27
Accounting
Consolidated CF Analysis
28
29
<bn JPY>
Sep 2012
1,097.0
Cash and cash equivalents at
the end of the period
Payments for repurchase of
-200.4
minority interests and long-tem debt
Payments for Acquisition of Preferred Stock, etc.
issued to Vodafone Group (total: JPY 412.5bn)
-93.1
Repayment of lease obligations
(1st payment: 212.5 paid in FY2010 / Q3)
2nd payment: 200.0 paid in FY2012 / Q1
Proceeds from sale and lease back of
167.0
Consolidated Cash Flow Main Breakdown
equipment newly acquired
-43.7
Cash dividends paid
Financing CF
-61.5
-95.0
Redemption of bonds
109.4
Proceeds from issuance of bonds
-134.0
Repayment of long-term debt
152.7
Proceeds from long-term debt
99.8
Increase in short-term borrowings, net
Note: significant items from the consolidated cash flow statement are shown here.
Proceeds from sale of marketable and
15.2
Investing CF
investment securities
-326.0
Purchase of marketable and
-57.2 investment securities
-272.8
Purchase of property &
equipment & intangibles
-115.7
-115.7
-55.9
-33.7
-30.5
Income taxes paid
Decrease in notes & accounts receivable
9.6
trade (non-installment)
BB Mobile‘s income tax under
Operating CF
Yahoo Japan Consolidation
Decrease in mobile handset installment
50.1
Income taxes paid
+473.3
consolidated tax return receivables
31.6
Amortization of goodwill
SBM local taxes
157.4
Depreciation & amortization
Main Item:
358.6
Income before income taxes
Cash and cash equivalents at
Mar 2012
1,014.5
the beginning of the period
(Reference)Accounting Treatment for Acquisition of Fukuoka Yahoo! JAPAN Dome
The SOFTBANK Group reached an agreement with GIC*1 group on the acquisition of the Fukuoka Yahoo! JAPAN Dome from GIC group on March 24, 2012 .
(Fukuoka SOFTBANK HAWKS Marketing Corp.*2 (or FSBHM) will acquire a trust beneficiary interest related to the dome on July 1, 2015)
This contract constitutes an integral part of the dome lease contract.
Old Contract (lease) New Contract (lease & acquisition of trust beneficiary interest )
- FY2011 FY2012 - July 2015 -
Finance leases in which the ownership of leased assets is not Finance leases in which the ownership of leased assets
transferred to lessees at the end of lease periods is transferred to lessees at the end of lease periods
Acquisition of
trust beneficiary interest
Accounted for as operating lease transactions Recorded on the consolidated balance statements (Payment of 74.5bn)
with lease related notes
<JPY>
Declined by depreciation(3) x 3 years and 4 months
Not recorded
on the balance sheet Buildings: 38.2bn Lease obligations Buildings: 34.5bn
BS Applied the former Accounting Standard
Land: 49.3bn 87.6bn (1) Land: 49.3bn
for Lease Transactions,
thus accounted for as operating lease
87.6bn 83.8bn
Interest paid (Operating CF)
Lease payments (Operating CF) -1.0bn/year Repayment of lease obligations
-5.0bn/year (Financing CF)
CF Repayment of lease obligations *3
(Financing CF) -74.5bn
-4.0bn/year (2) ((1) - (2) x 3 years and 4 months)
Lease expense Interest expense -1.0bn/year Depreciation
PL -5.0bn/year Depreciation -1.1bn/year (3) -1.1bn/year
*1 GIC: the Government of Singapore Investment Corporation
*2 As the fiscal year end of FSBHM, which entered into the contract, is the end of February, and the consolidated financial statements reflects FSBHM’s financial statements as of the end of
February, this transaction was reflected in the fiscal year ending March 31, 2013 (FY2012).
*3 Amounts in BS, CF and PL are approximated calculations.
30
Finance
31
Main Financing Activities of FY2012
<Procurements> <bn JPY>
Amount Date
Renewal of credit line facility 184.3 Aug 2012
Borrowings
Term loan 142.5 Sep 2012
39th Unsecured Straight Corporate Bond
100.0 Sep 2012
(Fukuoka SoftBank HAWKS Bond)
Bonds
40th Unsecured Straight Corporate Bond 10.0 Sep 2012
<Others>
Outline
Conversion of Convertible Bonds due 2013 into
JPY 14.4bn (as of end of Sep 2012)
common stock
EBITDA and EBITDA Margin
EBITDA margin keeps increasing
<bn JPY> EBITDA EBITDA Margin
45%
SOFTBANK
591.9 KDDI
600
NTT DOCOMO
533.1
40%
500
459.3 37%
35%
400 35%
31%
300
30%
200
25%
100
0 20%
FY10/Q1-2 FY11/Q1-2 FY12/Q1-2 FY10/Q1-2 FY11/Q1-2 FY12/Q1-2
Note: 1. EBITDA = operating income (loss) + depreciation and amortization (Source) Created by SOFTBANK CORP. based on respective companies’
(including amortization of goodwill) publicly available information. 33
2. EBITDA Margin = EBITDA / net sales
Interest-bearing Debt
Interest-bearing debt increased slightly due to procurements ahead
of schedule.
Breakdown of borrowings from other
<bn JPY> financial institutions, etc. <bn JPY>
2,500 SOFTBANK (syndicated loan
550.0
related to WBS refinancing)
2,075.8
SOFTBANK (other bank loans) 436.5
49.9
2,000 SOFTBANK (stock lending) 93.0
1,687.2
1,568.1 Other bank loans 2.2
745.5
Total 1,081.7
1,500
1,081.7
963.2 Securitization of installment
1,000 619.4 sales receivables obligations
SBM loan
500 Borrowings from other financial
660.8 604.8 605.4 institutions, etc.
Bonds & CP
0
Mar 11 Mar 12 Sep 12
Note: 1. Interest-bearing debt= short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowings.
Lease obligations are not included.
2. SBM loan: March 2011, excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.), which were substantially
a part of SBM loan, with a face value of JPY 27.0bn acquired by SOFTBANK CORP that were issued under the whole business securitization scheme
associated with the acquisition of Vodafone K.K.
34
Interest Expense
Significant reduction in interest expense along with refinance of
acquisition finance of Vodafone K.K.
Interest Expense <times> Interest Coverage Ratio
<bn JPY>
60
33.2
54.7
50 30
40.7
40
20
30
13.1
20 17.8
10
8.4
10
0 0
FY10/Q1-2 FY11/Q1-2 FY12/Q1-2 FY10/Q1-2 FY11/Q1-2 FY12/Q1-2
Note: 1. Interest coverage ratio = EBITDA / interest expenses
2. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill) 35
Cash Position
Sustain abundant cash position
<bn JPY>
1,200
1,103.4
1,020.8
1,000 Yahoo Japan consolidation
256.1
866.1
257.2
Exclude Yahoo Japan consolidation
800
188.6
600
400
847.2
763.5
677.4
200
0
Mar 11 Mar 12 Sep 12
Credit line facility size 187.0 180.0 184.3
Unused portion 107.0 180.0 84.3
Note:1.Cash position = cash and cash deposits + marketable securities included in current assets
(excludes Yahoo! Inc. shares held by a subsidiary of SOFTBANK CORP. in the United States of America)
2. Unused portion of credit line facility = credit line facility size - credit line borrowings
36
Lease Obligations
Actively utilizing lease financing for continuous enhancement of the network
<bn JPY>
1,000
Finance leases (accounted for as operating lease transactions) *
Finance leases (lease obligations) related to acquisition of Fukuoka Yahoo! Japan Dome
Finance leases (lease obligations)
800
681.1
19.1
600
563.1 85.5
62.7
409.5
400
78.5
576.4
500.3
200
331.0
0
Mar 11 Mar12 Sep 12
*Finance lease transactions in which the ownership of leased assets was not transferred to lessees and contracted before April 1, 2008.
37
Net Interest-bearing Debt
No significant changes
<bn JPY>
1,500
1,209.6
1,000
583.8
547.2
500
0
Mar 11 Mar 12 Sep 12
Note: 1. Net interest-bearing debt = interest-bearing debt - cash position
2. Interest-bearing debt: short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowings
Lease obligations are not included.
From March 2011, excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) with a face value of JPY 27.0bn
acquired by SOFTBANK CORP. that were issued under the whole business securitization scheme associated with the acquisition of Vodafone K.K.
3. Cash position = cash and cash deposits + marketable securities included in current assets (excludes Yahoo! Inc. shares held by a subsidiary of
SOFTBANK CORP. in the United States of America)
38
Interest-bearing Debt/EBITDA Multiple
Interest-bearing Debt/EBITDA multiple keeps low level
<times> Interest-bearing Debt/EBITDA <times> Net Interest-bearing Debt/EBITDA
3.0 3.0
2.7 Including finance leases Including finance leases
2.1 2.0
2.0 2.2 2.0
1.7
1.5 1.1
1.4 1.1
1.0
1.3
1.0
0.5 0.5
0.0 0.0
FY10 FY11 FY12/Q1-2 FY10 FY11 FY12/Q1-2
Note: 1. Net interest-bearing debt = interest-bearing debt - cash position
2. Interest-bearing debt= short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowings
Lease obligations are not included. For FY2010, this excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) with
a face value of JPY 27.0bn acquired by SOFTBANK CORP.
3. Cash position = cash and cash deposits + marketable securities included in current assets (excludes Yahoo! Inc. shares held by a subsidiary of SOFTBANK CORP. in the United
States of America)
4. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
5. Interest-bearing Debt/ EBITDA multiple for FY12/Q1-2 is calculated based on annualized EBITDA in Q1-2 result. 39
Debt/Equity Ratio
Low level of debt/equity ratio sustained
<times> <times>
Debt/Equity Ratio Net Debt/Equity Ratio
5.0 5.0
Including finance leases Including finance leases
4.0
4.0 4.0
3.0 3.4 3.0 2.6
2.3 2.4
2.0 2.0
2.0 1.3
1.7 1.7 1.2
1.0 1.0
0.6 0.6
0.0 0.0
Mar 11 Mar 12 Sep 12 Mar 11 Mar 12 Sep 12
Note: 1. D/E ratio = interest-bearing debt/shareholders’ equity
2.
3. Net interest-bearing debt = interest-bearing debt - cash position
4. Interest-bearing debt= short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowings. Lease obligations are not included.
For March 2011, this excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) with a face value of JPY 27.0bn
acquired by SOFTBANK CORP.
5. Cash position = cash and cash deposits + marketable securities included in current assets (excludes Yahoo! Inc. shares held by a subsidiary of SOFTBANK CORP. in the
United States of America)
40
Equity Ratio
JPY 1t of Shareholders’ Equity, Equity ratio reaches 20% level
<bn JPY>
Shareholders' Equity Equity Ratio
1,200 25%
1,006.6
1,000
20.0%
936.6 19.1%
20%
800
15%
13.3%
619.2
600
10%
400
5%
200
0 0%
Mar 11 Mar 12 Sep 12 Mar 11 Mar 12 Sep 12
41
Strategic
Growth
Strengthen Shareholder
Financials Return
Shift from “strengthening financials” to
“enhancing enterprise value”
42
FY2012 Financial Strategies
Shift focus from “strengthening financials”
to “enhancing enterprise value”
1. Pursue optimum leverage
- Define the leverage level allowing pursuit of both growth and stability
- Pursue growth strategy for timely response to investment opportunities
in growth areas
- Optimize funding costs
2. Increased flexibility to dynamic market change
- Expand more diversification of funding
- Focus on striking a right balance between direct and indirect financing
- Enhance the function of holding company through the Group-wide CMS
- Ensure analysis and management of market risk of our assets
3. Investor satisfaction focus
- Pursue greater shareholder return and establish shareholder return policy
- Aim to share growth scenarios and financial strategy with investors
through further communication
- Broaden investor base through participation in more markets
43
Appendix
44
(Reference) Corporate Bond Details
< mil JPY >
Interest
Maturity Mar. 12 Sep. 12
Company name Bond Issue date rate Collateral Change
date balance balance
(%/year)
28th series Unsecured Straight Bond 2009/7/24 2012/7/24 4.72 None 30,000 -30,000
29th series Unsecured Straight Bond 2009/9/18 2012/9/18 4.52 None 65,000 -65,000
(Fukuoka SoftBank HAWKS bond)
Convertible Bond due 2013 * 2003/12/30 2013/3/31 1.50 None 49,988 35,552 -14,436
31th series Unsecured Straight Bond 2010/6/2 2013/5/31 1.17 None 25,000 25,000
33th series Unsecured Straight Bond 2010/9/17 2013/9/17 1.24 None 130,000 130,000
(Fukuoka SoftBank HAWKS bond)
38th series Unsecured Straight Bond 2012/1/27 2014/1/27 0.42 None 50,000 50,000
37th series Unsecured Straight Bond 2011/6/10 2014/6/10 0.65 None 30,000 30,000
SOFTBANK CORP. 26th series Unsecured Straight Bond 2007/6/19 2014/6/19 4.36 None 14,900 14,900
30th series Unsecured Straight Bond 2010/3/11 2015/3/11 3.35 None 30,000 30,000
32th series Unsecured Straight Bond 2010/6/2 2015/6/2 1.67 None 25,000 25,000
34th series Unsecured Straight Bond 2011/1/25 2016/1/25 1.10 None 45,000 45,000
36th series Unsecured Straight Bond 2011/6/17 2016/6/17 1.00 None 100,000 100,000
(Fukuoka SoftBank HAWKS bond)
40th series Unsecured Straight Bond 2012/9/14 2017/9/14 0.732 None 10,000 10,000
39th series Unsecured Straight Bond 2012/9/24 2017/9/22 0.74 None 100,000 100,000
(Fukuoka SoftBank HAWKS bond)
35th series Unsecured Straight Bond 2011/1/25 2018/1/25 1.66 None 10,000 10,000
Total - - - - - 604,888 605,452 564
* Early redemption is possible on SOFTBANK's request for Convertible bond due 2013 in case certain conditions are met.
45
(Reference) Bond Redemption Schedule
<bn JPY>
SB straight bond
SB convertible bond
130.0
Q3 Q4 Q1 Q2 Q3 Q4
FY12 FY13
46
(Reference) Interest-bearing Debt
Long/Short and Fixed/Variable Ratio Trend
Both long/short ratio and fixed/variable ratio stable
Interest-bearing Debt Interest-bearing Debt
Long/Short Ratio Fixed/Variable Ratio
<bn JPY> <bn JPY>
Long-term Short-term Fixed Variable
1,800 1,687.2 1800 1,687.2
1,568.1 1,568.1
1,600 1600
1,400 643.6 1400
548.1 38%
1,200 35% 1200 828.4 946.9
53% 56%
1,000 1000
800 800
600 600
1,019.9 1,043.5
400 65% 62% 400 739.7 740.2
47% 44%
200 200
0 0
Mar 12 Sep 12 Mar 12 Sep 12
Note: interest-bearing debt: short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowings
Lease obligations are not included.
47
Operation
49
Overview of Telecommunications Businesses
Telecommunications businesses led consolidated operating income to
reach record high (7 consecutive periods). <bn JPY>
Broadband Infrastructure Fixed-line Telecommunications Mobile Communications
Operating income YoY
SOFTBANK consolidated: +29.5
Mobile Communications: +16.2
% to SB consolidated: 55%
(Reference)
Operating income YoY
412.8
SOFTBANK consolidated: +29.5 370.6
Broadband Infrastructure + +16.2
Fixed-line Telecommunications :+7.2
% to SB consolidated: 24%
266.3
250.0
+7.3
-0.1
49.8 57.8
19.6 19.5 27.4 27.2 27.2 34.6
FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12 FY11 FY12
Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2 Q1-2
Operating income EBITDA Operating income EBITDA Operating income EBITDA
Note 1. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
2. From FY2011/ Q3, depreciation & amortization includes loss on disposal of fixed assets included in operating expenses.
Depreciation and amortization for the previous year has been reclassified and restated accordingly.
50
3..Broadband Infrastructure: Broadband Infrastructure segment, Mobile Communications: Mobile Communications segment, SB: SOFTBANK
Operation
Broadband Infrastructure Segment
51
Operating Income, EBITDA <BB>
Profit remained on the same level YoY.
Operating Income EBITDA
<bn JPY> <bn JPY>
100
60
80
43.1 61.0
60
40 Q4 9.6 Q4 13.8 50.2
34.3
10.8 6.0 15.2 10.3
Q3
Q3 40
8.6 12.5
22.7 31.9
20 19.6 19.5 27.4 27.2
Q2 11.0 Q2 15.6
9.4 10.0 20 13.2 13.9
Q1 11.6 Q1 16.2
10.2 9.4 14.1 13.2
0 0
FY10 FY11 FY12 FY10 FY11 FY12
Note: EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
52
Yahoo! BB Subscribers and ARPU <BB>
Number of subscribers: decreased in ADSL, increased in Yahoo! BB hikari with FLET’S.
<k subs> Number of Subscribers ARPU
<JPY>
Yahoo! BB hikari with FLET'S Cumulative subscribers
5,000
Yahoo! BB ADSL Cumulative subscribers 5,000 Yahoo! BB ADSL (cuulative subscribers base)
4,500
Yahoo! BB hikari with FLET'S
4,550 4,090 4,140 4,230
50
4,030 4,050 4,080
4,000 4,040 4,000 3,950
570 3,650
3,500 1,270 3,390
3,460 1,860
3,000 3,000
2,870
2,500
2,360
2,000 2,000
1,660 1,710
1,450
1,500
FY11 FY12
Q2 Q2
Increment 1,040
1,000 Yahoo! BB ADSL 2,870 2,360 -510 1,000
Yahoo! BB hikari with FLET’S 1,270 1,860 +590
500
TOTAL 4,140 4,230 +80
0 0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12
Note: 1. ADSL subscribers: subscribers for which connection construction for ADSL subscribers at central office of NTT East or NTT West is complete (including suspended plan).
Yahoo! BB hikari with FLET’S cumulative subscribers: users for which connection construction for FLET’S HIKARI line at central office of NTT East or NTT West is complete and who are provided services.
2. Yahoo! BB hikari with FLET’S: a broadband connection service that combines the Internet connection service Yahoo! BB and the FLET’S HIKARI fiber-optic connection provided by NTT East and NTT West.
FLET’S and FLET’S HIKARI are registered trademarks of NTT East and NTT West.
3. ARPU (revenue per installed line): average revenue per user (rounded to the nearest JPY 10)
53
CAPEX (acceptance basis) <BB>
Annual plan: JPY 27.0bn (Q2 28% completed)
CAPEX and Depreciation & Amortization CAPEX
(quarterly trend) (yearly trend)
<bn JPY> <bn JPY>
25 60
CAPEX
50
20 Depreciation & amortization
40
15
Annual plan
30 27.0
26.7
10
20 12.5
16.8
4.2 4.2 4.0 Q4 5.1
5 3.8 3.5 3.4 3.5 3.8 3.4 4.6
3.4 10 5.0 9.6
Q3
6.6 3.8 7.4
3.3 3.2 5.0 5.1 5.7 3.8 4.6 12.5 2.6 4.8 Q2 3.2 4.8
Q1 3.3 5.7
0 0 2.6
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY10 FY11 FY12
FY10 FY11 FY12
Note: From FY2011/ Q3, depreciation & amortization includes loss on disposal of fixed assets included in operating expenses.
Depreciation and amortization for the previous quarters has been reclassified and restated accordingly. 54
Operation
Fixed-line Telecommunications Segment
55
Operating Income, EBITDA <Fixed>
Sustained revenue & profit increase, through enhancement of
corporate sales, efficient management, group synergies.
<bn JPY> Operating Income <bn JPY> EBITDA
120
105.0
60 57.9 100
27.8
15.1 85.6
80
Q4 27.4
40 38.0
27.3
15.5 34.6 60 57.8
Q4 14.1 49.8
27.2 Q3 21.7
19.0 40 30.6
36.5 25.8
20 Q3 10.2 14.3
13.6 Q2 18.5
20
Q2 6.9
15.5 23.9 27.1
12.9 Q1 17.9
Q1
6.6
0 0
FY10 FY11 FY12 FY10 FY11 FY12
*1. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
56
Number of Lines and ARPU for OTOKU Line <Fixed>
Solid trend in number of lines and ARPU on enhancement of corporate sales
Number of Lines ARPU
<k lines> <JPY>
Large corp SME (SBTP) SME (excl. SBTP) Consumer
2,000
10,000
Large corp. Total
1,800
1,680 1,690 9,000
1,650 1,670
1,600
8,000
1,500
1,400
7,000
1,200
6,000
1,000 5,000
Corporate lines:1,470k
800 Corporate lines ratio: 87.0% 4,000
600 3,000
400 2,000
200 1,000
0 0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12
Note: 1. ARPU: Average Revenue Per line (rounded to the nearest JPY 10)
2. SBTP: SOFTBANK TELECOM PARTNERS
57
CAPEX (acceptance basis) <Fixed>
Annual plan: JPY 43.0bn (Q2 38% completed)
CAPEX and Depreciation & Amortization CAPEX
(quarterly trend) (yearly trend)
<bn JPY> <bn JPY>
60
25
CAPEX
Depreciation & amortization Annual plan
Depreciation & amortization + lease (OPEX) 50
20 43.0
39.8
40
36.2
15 13.8
12.4 12.6 12.1 14.6
11.6 11.8 11.6 30
10.6
Q4 15.6
9.7 9.7
10 11.4 10.9
9.4 9.8 9.6 9.6 9.9 9.7 9.7
9.1 20 10.6
16.5
Q3 9.0 14.6
5 11.4 8.2
6.3 9.0 15.6 6.3 8.2 10.6 14.6 8.2 8.2 8.2
5.1 10
Q2 6.3
6.3 8.2
Q1 5.1
0 0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY10 FY11 FY12 FY10 FY11 FY12
Note: From FY2011/ Q3, depreciation & amortization includes loss on disposal of fixed assets included in operating expenses.
Depreciation and amortization for the previous quarters has been reclassified and restated accordingly. 58
Operation
Mobile Communications Segment
60
SBM Consolidated Net Sales <Mobile>
YoY: net sales increase by 3.1%.
SBM Consolidated Net Sales SBM Consolidated Net Sales
<bn JPY>
(Quarterly Comparison)
<bn JPY> Telecom service revenue
Sales of mobile handsets and accessories Telecom service revenue
1,400
YoY
1,600
YoY +161.8 1,433.4
1,200
1,400 (+12.7%)
1,065.5 1,271.6
1,033.7 +31.8 353.3
+38.0
1,000 (+3.1%) 1,200
Q4 315.2 (+12.1%)
296.2
321.8 -25.6
1,000
800 (-8.0%)
368.3
+37.2
800 Q3 331.1 769.2
(+11.2%) 711.8
600
625.3 391.9
600 +27.6
711.8 +57.4 769.2 +46.5 364.3
400 (+8.1%) Q2 317.7 (+14.6%)
(+7.6%)
400
200 +40.0 +29.8
200 Q1 307.5 347.5 377.3
(+13.0%) (+8.6%)
0 0
FY11 Q1-2 FY12/Q1-2 FY10 FY11 FY12
SBM: SOFTBANK MOBILE 61
Operating Income/ EBITDA (SB Consolidated) <Mobile>
Revenue and profit new record high;*1
operating income increased by 6.5% YoY.
Operating Income EBITDA
(Mobile Communications Segment) (Mobile Communications Segment)
<bn JPY> <bn JPY>
1,000
500 YoY 900
YoY
+16.2
429.2 800 +42.1
(+6.5%)
402.4 (+11.4%)
400 700 684.1
82.7
620.4
Q4 87.9 154.9
600
Q4 148.8
300 96.3
266.3 500 158.5
Q3 107.2 250.0 412.8
161.3
207.2 400 Q3 370.6
200 138.2 310.3
133.5 300 213.4
Q2 104.5 195.1
Q2 157.0
200
100
116.4 128.1 100 175.5 199.4
Q1 102.6 Q1 153.2
0 0
FY10 FY11 FY12 FY10 FY11 FY12
Note: 1. Since SOFTBANK CORP. established the Mobile Communications segment in FY2006
2. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
3. SB: SOFTBANK 62
Number of Subscribers
(quarterly net additions/cumulative) <Mobile>
Net additions in Q2 759k. Cumulative subs +3.56mil YoY
<k subs> Net Additions <mil subs> Cumulative Subscribers
1,200
30.46
1,114 2G 3G (+3.56)
30 YoY comparison in ( )
1,009
1,000 26.90
926 937
901
25
23.47
800 760
753 759
21.32
730
19.63
697 20
17.05
600 15.31
15
400
10
200 5
0 0 0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3
FY10 FY11 FY12 FY06 FY07 FY08 FY09 FY10 FY11 FY12
Note: the number of net subscriber additions and the number of cumulative subscribers include the number of prepaid mobile phones and 63
communication module service subscribers.
Number of Monthly Net Additions <Mobile>
Q2 net additions 759k, MNP* 34k.
<k subs>
Net Additions MNP Net Additions*
700
YoY comparison in ( )
<k subs> YoY comparison in ( )
600
90
FY11/Q2
120k KDDI
70
500
50
FY12/Q2
759k 30
400
FY11/Q2
760k (-0.6k) 10 SoftBank
-10 FY12/Q2
300 -30 34k
(-86k)
-50
200 -70 NTT DOCOMO
-90
100 -110
-130
0 -150
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
FY11 FY12 FY11 FY12
Note 1.The number of net subscriber additions includes the number of prepaid mobile phones and communication module service subscribers. 64
2. MNP Net Additions: net of port-in/out through Mobile Number Portability. Created by SOFTBANK CORP.
Churn Rate & Upgrade Rate <Mobile>
YoY: churn rate improved in total and postpaid. Upgrade rate increased.
Churn Rate 3.0%
Upgrade Rate
Total Postpaid
1.09%
1.03% 1.06%
0.96% 2.0%
1.0%
1.02% 1.67%
0.96% 1.00%
0.92%
1.42%
1.31%
1.0%
1.05%
0.0% 0.0%
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY10 FY11 FY12 FY10 FY11 FY12
Note 1. For definition and calculation of the churn and upgrade rates, see page 77.
2. Churn rate (postpaid): calculated with communication module service subscribers and devices without voice communalization functionality 65
included in the number of subscribers and churn.
Churn Rate Details (FY12/Q2) <Mobile>
Churn rate largely varies according to the history of handset upgrades.
Churn Rate of Postpaid (FY12/Q2)
<by history of handset upgrades>
2.0%
(details)
Figures for the same period of
the previous fiscal year is shown in ( )
1.5% 1.35%
(1.41%)
1.00% Churn rate of users who have never upgraded
(1.02%)
1.0% their SBM handsets
(many of them are short-term users)
0.58%
(0.60%)
0.5%
Churn rate of users who have upgraded
their SBM handsets at least once in the past
0.0%
Upgraded (many of them are long-term users)
postpaid Never upgraded
handsets
handsets in the past
Note: 1. Churn rate (postpaid): calculated with communication module service subscribers and devices without voice communalization functionality
included in the number of subscribers and churn.
2. SBM: SOFTBANK MOBILE
66
ARPU (Average Revenue Per User) <Mobile>
QoQ: JPY +50, data JPY +40
YoY: JPY -230, data JPY +60
<JPY> YoY comparison in ( )
FY08 FY09 FY10 FY11
JPY 4,070 JPY 4,070 JPY 4,210 JPY 4,150
5,000
Voice ARPU QoQ YoY
Data ARPU <JPY> <JPY>
4,500 4,300 4,310
4,170 4,150 4,070
(+150) (+10) 4,020 +50 -230 Total
4,000 (-630) (-20) 3,890
3,500 1,490
1,780 1,480 +10 -290 Voice
2,020 1,350
2,160 (-150) (-230)
3,000 2,460
(-300)
(-880)
2,500
2,000
2,580 +40 +60 Data
1,500 2,540
2,520 2,530
2,290
1,000 1,990 (+300) (+240)
1,710
(+280)
(+250)
500
0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12
Note: ARPU: Average Revenue Per User per month (rounded to the nearest JPY 10).
ARPU is discounted by Monthly Discounts (New Super Bonus Special Discount). For definition and calculation method of ARPU, refer to page 77.
67
(Reference) Impact of Monthly Discounts
ARPU (Average Revenue Per User) <Mobile>
YoY (Monthly Discounts referred to separately)
Basic monthly charge + voice: JPY -370, data: JPY +100
impact of Monthly Discounts: JPY +40. YoY comparison in ( )
<JPY> Data ARPU (before Monthly Discounts) Voice ARPU (before Monthly Discounts)
Monthly Discounts < Impact of access charge reduction > YoY
6,500
ARPU comparison
5,500
Total
<320> <390>
<100> <230> (JPY -230)
4,170 4,150 4,300 4,310
4,500 4,020 4,070
2,920 2,570
3,500 3,190 2,230
3,460 (-270) (-350) 2,210
(-270)
(-380) (-370)
2,500
2,620
1,500 2,570 2,670
1,990 2,300
1,710 (+310) (+270) (+100)
(+280)
500 (+250)
-920 -840 -820 -800
-500 -1,000 -1,030
(+40)
(-500) (-30) (+110) (+90)
-1,500
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12
Note: ARPU: Average Revenue Per User per month (rounded to the nearest JPY 10).
ARPU is discounted by Monthly Discounts (New Super Bonus Special Discount). For definition and calculation method of ARPU, refer to page 77.
68
(reference) ARPU (excluding communication modules) <Mobile>
QoQ:JPY +70, data +JPY +50
YoY: JPY -180, data +JPY +100
FY08 FY09 FY10 FY11 YoY comparison in ( )
JPY 4,070 JPY 4,110 JPY 4,360 JPY 4,400
<JPY>
Voice ARPU *
QoQ YoY
5,000
Data ARPU * <JPY> <JPY>
*excluding communication 4,550
4,440 4,370
4,500 modules
4,300 +70 -180 Total
4,180 (+110)
4,170 (+270)
4,000 (0)
1,610
1,900 +20 -290 Voice
3,500 1,590
2,090
(-190)
2,170 (-90)
3,000 2,460 (-290)
2,500
2,000
2,760 +50 +100 Data
1,500 2,710
2,660
2,350
1,000 2,000 (+300)
(+350)
1,720 (+290)
500
0
FY08 FY09 FY10 FY11 FY12
Note: ARPU: Average Revenue Per User per month (rounded to the nearest JPY 10).
ARPU is discounted by Monthly Discounts (New Super Bonus Special Discount). For definition and calculation method of ARPU, refer to page 77.
69
Trend of SBM Telecom Service Revenue <Mobile>
JPY 27.6bn increase YoY. Data growth (JPY 32.0bn) contributes significantly.
Other (not included in ARPU calculation)
<bn JPY> Voice-related revenue YoY
Impact of access charge reduction
Data-related revenue Total
450 Total (+27.6)
YoY comparison in ( )
391.9
400 377.3
364.3 24.7
23.4
(+2.8)
350 21.9
317.7
300 283.5 20.9 134.6
130.2
262.2 141.8 (-7.2)
20.2
250 19.6 (+2.7)
139.1
(+1.5)
200 137.1
143.0 (-5.9)
150
223.7 232.6
100 200.6 (+32.0)
157.7 (+ 42.9)
126.2 (+31.5)
50 99.6 (+26.6)
0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12 70
Note: voice related revenue consists of voice call charges, revenues from incoming calls, basic monthly charges, etc. Data related revenue consists of packet communication charges, etc.
Average Cash Income Per Subscription
(including HS installment payment) <Mobile>
Cash income per subscription decreasing slightly.
Data ARPU Voice ARPU
Backup Service Package, etc. HS installment payment
<JPY> <Impact of access charge reduction>
7,000
5,990 5,980 5,930
6,000 leap year
5,750
<100> 5,430 5,420
<320>
1,540 1,540 1,370 <390>
1,220 <230>
5,000 1,190
1,130
270 230
280 290
220 220
4,000
1,780
2,020 1,480 1,490
2,160
3,000 2,460
ARPU
2,000 JPY 4,070
2,580
2,520 2,540
2,290
1,000 1,990
1,710
0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12
Note: cash income per subscription = ARPU + handset installment payment + backup service package, etc (rounded to the nearest JPY10)
For definition and calculation method of ARPU, refer to page 77.
Impact of access charge reduction: indicates impact of reduction relating to revised access charges between operators (showing amount for twelve months as if 71
reflected in one time)
CAPEX (acceptance basis) <Mobile>
Annual plan: accelerated CAPEX (increase plan by 90.0bn), depreciation & amortization
increasing trend.
<bn JPY>
CAPEX and Depreciation & Amortization CAPEX
(quarterly trend) (yearly trend)
CAPEX (Mobile Communications Segment)
Annual plan
Depreciation & amortization (Mobile Communications Segment)
Reference: depreciation & amortization (SBM consolidated)
590.0
600
150
500
422.7
400
351.5
100
146.6
300
61.3 59.0 62.9 Q4 143.8
53.1 48.8 51.5 51.5 93.6 216.4
50 42.3 44.4 45.9 59.2 58.4 62.2 200 182.4
48.0 46.2 48.6 49.2 Q3 116.3
98.3
134.0
37.7 39.6 41.1 100 91.3
25.9 65.3 116.3 143.8 84.0 98.3 93.6 146.6 82.4 134.0
Q2 65.3
84.0 82.4
0 0
Q1 25.9
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY10 FY11 FY12 FY10 FY11 FY12
Note: From FY2011/ Q3, depreciation & amortization includes loss on disposal of fixed assets included in operating expenses.
Depreciation and amortization for the previous quarters has been reclassified and restated accordingly.
SBM: SOFTBANK MOBILE
72
New Super Bonus Subscription Ratio <Mobile>
Acquisitions subscription ratio stable Continued sale of installment sales receivables.
around 80%.
New Super Bonus Subscription Ratio <bn JPY>
Installment Sales Receivables Balance
(includes Super Bonus) Long-term balance
600
Acquisitions subscription ratio (*1)
Balance of installment sales receivables securitization
Cumulative subscription ratio (*2)
100% 525.5
500
87% 87% 478.5
84% 13.7
83% 81%
80% 80%
72% 79% 400
71% 294.6
-52.3
61% 243.1 332.9
60% 58% 7.4
57%
300
55% 256.8 -50.4
48%
6th 226.6
securiti 201.8 204.5
40% zation 10th
200 5.6 194.1
57.2 49.9
5.7 176.2
5.6
20% 100 189.0
173.7 171.7 188.4
170.5
123.6
0 9.8
0% Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Q2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12
*1 Acquisitions subscription ratio: ratio of New Super Bonus subscribers to postpaid subscribers (new/ upgrade)
*2 Cumulative subscription ratio: ratio of New Super Bonus subscribers to total subscribers (excluding subscribers whose Monthly Discounts ended) 73
Average Acquisition Cost per Subscriber
Gross Margin from Sales of Mobile Handsets and Accessories <Mobile>
Decline due to increased proportion of units sold with lower cost of % of sales.
Average acquisition cost per subscriber
<k JPY> = Average commission paid to sales agents per new subscription.
Gross Margin from Sales of Mobile Handsets and Accessories per Unit
60 Average acquisition cost per subscriber = gross margin from sales of mobile handsets and accessories / units sold
(Gross Margin from Sales of Mobile Handsets and Accessories per Unit is based on an
Gross margin from sales of mobile handsets and accessories per unit rough estimate.)
50.1
50
45.3
40.2
38.3 37.4
40 35.9 37.2 37.5 37.8
35.6 35.5 35.4 36.2
30.8
29.5 30.0 29.4
30 26.7 26.2 26.5
23.6
22.3 23.0
21.2 26.7
25.7
23.5 23.6 25.2 22.2 23.4 22.5
20
15.5 14.9 17.3
12.3
10
0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
FY08 FY09 FY10 FY11 FY12
Note: units sold: total of new subscriptions and handset upgrades
new subscriptions include prepaid mobile phones and communication modules. 74
Improvement in Management Efficiency <Mobile>
Inventory maintained appropriate level Influenced by reversal of allowances.
SBM Inventory (on B/S) SBM Allowance for Doubtful Accounts of
<bn JPY> Installment Receivables and Bad Debt Loss (on P/L)
45 <bn JPY>
10
9.1
40
36.5
8.7
8 Q4 2.3 1.5
35
30
29.2 6
Q3 2.2 3.0
25
4
20 1.9
20.9 Q2
2.0
15
14.9 2
FY11 FY12
YoY Q1 2.6
10 Q2 Q2 2.1
Handsets sold 1.0
(mil. units) 2.66 2.99 12.5% 0
5 -0.6
Inventory
(bn JPY)
20.9 29.2 39.1%
0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 -2
FY10 FY11 FY12 FY10 FY11 FY12
*Handsets sold: total of new subscriptions and handset upgrades SBM: SOFTBANK MOBILE
75
(Reference) Number of Subscribers of Willcom
(quarterly net additions/cumulative) <Mobile>
Net additions in Q2 marked 117k. Cumulative subs 4.81mil (+660k YoY).
<k subs> Net Additions (PHS) <mil subs> Cumulative Subscribers (PHS)
300
(Reference) PHS + 3G in < >
6
242 245 YoY comparison in ( )
250
200 <5.03 >
160 5
158
150 140 <4.59>
<4.49>
117 <4.33>
104
100 4.81
4 4.59 <3.90> +0.66
4.43
50
4.15
3.78
0
3
-50
-100 2
-105
-130
-150
-200 1
-250 -230
-300 0
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3
FY10 FY11 FY12 FY08 FY09 FY10 FY11 FY12
76
Definition and Calculation Method of ARPU, etc.,
in the Mobile Communications Business <Mobile>
1. Definition and calculation method of ARPU
ARPU Average Revenue Per User per month (rounded to the nearest ¥10)
ARPU = (voice related revenue + data related revenue) / number of active subscribers
= voice ARPU + data ARPU
ARPU (excluding communication modules) = (voice-related revenue + data-related revenue - communication modules-related revenue)
/ number of active subscribers (excluding communication modules)
Voice ARPU = voice related revenue (such as voice call charges, basic monthly charges, revenues from incoming calls)
/ number of active subscribers
Data ARPU = data related revenue (such as packet communication charges) / number of active subscribers
Number of active subscribers: total of monthly numbers of active subscribers for the relevant period ((subscribers at the beginning of the
month + subscribers at the end of the month)/2).
Number of active subscribers is based on SOFTBANK MOBILE Corp.’s cumulative subscribers including prepaid mobile phones,
communication modules and devices that do not have voice communication functionalities.
Number of active subscribers used in the calculation of ARPU (excluding communication modules) excludes communication modules.
Revenues from incoming calls: access charges received from other operators for voice calls from their customers on their network to
SoftBank mobile phones as a charge for the services provided in the SOFTBANK MOBILE Corp. service area.
2. Definition and calculation method of churn rate
Churn rate in Mobile Communications churn / number of active subscribers rounded off to the nearest 0.01%
Churn total number of subscribers that churned during the relevant period
Number of active subscribers: total of monthly numbers of active subscribers for the relevant period ((subscribers at the beginning of the
month + subscribers at the end of the month)/2).
Number of active subscribers is based on SOFTBANK MOBILE Corp.’s cumulative subscribers including prepaid mobile phones,
communication modules and devices that do not have voice communication functionalities.
3. Definition and calculation method of upgrade rate
Upgrade rate in Mobile Communications number of upgrades / number of active subscribers (rounded off to the nearest 0.01%)
Number of upgrades total number of upgrades during the relevant period
Number of active subscribers: total of monthly numbers of active subscribers for the relevant period ((subscribers at the beginning of the
month + subscribers at the end of the month)/2).
Number of active subscribers is based on SOFTBANK MOBILE Corp.’s cumulative subscribers including prepaid mobile phones,
communication modules and devices that do not have voice communication functionalities. 77
* The names of other companies, other logos, product names, service names, brands, etc., mentioned in this material are
registered trademarks or trademarks of SOFTBANK CORP. or the applicable companies.
* Unauthorized copying of this material and use of the information or the data in this material in whole or in part are not permitted.
