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Transcript of Analyst 20120427 001
Earnings Results for the Year Ended March 31, 2012
Analyst Meeting
April 27, 2012SOFTBANK CORP.
May 1, 2012 Version
2
DisclaimerThis 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the passage of time, information in this material (including, without limitation, forward-looking statements) could be superseded or cease to be accurate.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 Segment InformationThe “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”
and related “Guidance on the Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”
are being applied from FY2010 and are hereafter referred to as the “new standard.”
Segment financial results for FY2009 are shown
based on the new standard
for comparison purposes only and have neither been audited nor reviewed by our independent auditors. The new standard has not been applied to all financial information up to and including FY2008 presented herein.
3
AccountingConsolidated P/L Analysis 5Consolidated B/S Analysis 17Consolidated CF Analysis 27
Broadband Infrastructure Segment 67Fixed-line Telecommunications Segment 71Mobile Communications Segment 76
Operation
Finance
4
65
32
Kazuko Kimiwada
General Manager
Accounting, Internal Control
SOFTBANK CORP.
Accounting
4
5
Consolidated P/L Analysis
Accounting
6
126.8 151.2
126.9163.2
129.7
129.4
146.0
120.4
FY10 FY11
156.6
158.9
166.6
159.5
175.8
197.3
142.4
147.0
0
100
200
300
400
500
600
700
FY10 FY11
700.8 764.2
764.1 771.4
804.2
862.5784.8
754.7
0
1,000
2,000
3,000
FY10 FY11
19.494.7
122.4
57.4
32.8
65.4
63.6
47.4
FY10 FY11
+6.6%
<bn JPY>
Q1
Q2
Q3
Net Sales Operating Income Ordinary Income Net Income
Consolidated P/L Summary
+7.3%
629.1
189.7
3,004.6
520.4
675.2
313.7
3,202.4 +10.2%
+65.4%
573.6Q4
-136.6-113.7
360.9343.6
293.6283.6
367.6356.5
171.9190.0
1,944.5 2,144.8
3,004.63,202.4
FY10 FY11 7
Others
Elimination
<bn JPY>
Mobile Communications
Broadband Infrastructure
Fixed-line Telecommunications
Internet Culture
Mobile Communications
Broadband InfrastructureFixed-line Telecommunications
Internet Culture
-
Increase in telecom service revenue +161.8bnIncrease in subscribers +175.4bnDecrease in ARPU -16.6bn
-Increase in revenue from sales of mobile
+38.5bnhandsets and accessories etc.
Decrease in sales of Yahoo! BB ADSL -39.3bnIncrease in sales of Yahoo! BB hikari with FLET’S +13.3bn
Increase in revenue from network provision to Group companies
such as SBM
Decrease in MYLINE sales
Increase in revenue from listing and display advertising, game related services, information listing services, Yahoo! Shopping
Consolidated Net Sales
+200.3bn
-18.1bn
+11.0bn
+10.0bn
+197.7 (+6.6%)
(Main factors for the change)
8
- Decrease in net sales - Decrease in telecom service line usage fees mainly reflecting
a decrease in number of ADSL lines
Broadband Infrastructure
<bn JPY>
Mobile Communications
Fixed-line Telecommunications
Internet Culture
Others
Mobile Communications- Increase in net sales +200.3bn- Increase in COS, SGA -173.5bnIncrease in COS for mobile handsets in line with a rise in the number of mobile
handsets shippedIncrease in depreciation & amortization on installation of additional base stationsIncrease in sales commission and sales promotion expense in line with a rise in
the number of mobile handsets sold
Broadband Infrastructure
Fixed-line Telecommunications- Increase in net sales +11.0bn- Decrease in COS, SGA +8.9bn
Decrease in telecom equipment fees reflecting revised access charges between operators
Decrease in lease expenses due to an increase in equipment for which the lease term have been expired
Decrease in marketing sales commissions on a decline in new OTOKU Lineacquisitions
Internet Culture-Increase in net sales +10.0bn
Elimination
Consolidated Operating Income
+26.8bn
-8.8bn
+19.9bn
+6.5bn
+46.1 (+7.3%)
(Main factors for the change)
150.3 156.8
57.938.043.1
34.3
429.2402.4
629.1675.2
FY10 FY11
-18.1bn
+9.3bn
520.4 573.6
7.146.1
-62.2-104.0
-24.9
-2.7
-25.7
-19.2
17.3 11.3
-101.6-108.7
-112.9-126.0
9
<bn JPY>
Increase in operating incomeFY10
Ordinaryincome
FY11Ordinary income
Non-operating Income/Expense Ordinary Income
Non-operating Income/Expense and Ordinary Income
7.1
Net of increase in non-operating income/expense
+53.2 (+10.2%)
Non-operating income/expenses
(NET)
Non-operating income/expenses
(NET)
(Total non-operating expenses) (Total non-operating expenses)
Non-operating Income
Other non-operating expensesNon-operating income/expenses (NET)
Interest expense
Decrease in interest expense
41.8
Non-operating income/expenses
(NET)
*Mainly refinancing related expense of JPY 23.9bn (Q2: JPY 12.6bn, Q3:JPY 11.2bn) associated with refinancing SBM loan (the loan procured under a whole business securitization scheme in November 2006 as part of the loan for procurement of Vodafone K.K. acquisition finance) .
Refinancing related expense*
FY10 FY11
*
-19.0
6.6
88.3
20.1
2.8
9.2
4.7
-21.8
-13.9
-8.7
-4.2
-45.3
-39.8
58.6
-59.1-54.0
117.7
14.2
10
Special Income/Loss< bn JPY>
FY10 FY11
+98.4
Special income/loss(NET)
Special income/loss(NET)
Gain on sale of investment securities related to Yahoo! Inc. shares JPY 76.4bn(*1)
Special income/loss (NET)(7) Other special loss
(1) Gain on sale of investment securities(2) Dilution gain from changes in equity interest
*1. See page 29 of this presentation for details.2. Occurred in relation to the repayment of the SBM loan in October 2011
(3) Other special incomeDilution gain from changes in equity interest mainly relating to IPO of RenRen Inc.
(Total special income)
(Total special income)
(Total special loss)(Total special loss)
(5) Loss on liquidation of subsidiaries and affiliates
(1)
(2)
(3)
(4)
(5)
(6)
(4) Premium on advanced redemption of debt security
(7)
(6) Valuation loss on investment securities
(*2)
Loss on liquidation of subsidiaries and affiliates:relating to the liquidation of SOFTBANK’s subsidiary Charlton Acquisition LLP which held the Betfair Group plc shares as a holding company in the UK.
Valuation loss on investment securities: mainly associated with a drop in the stock price of Betfair Group plc
313.7
189.7
151.6
21.75.8
196.5
58.2
632.2313.7377.5
63.7
11
Net Income<bn JPY>
FY11 Net Income
Income before income taxes &
minority interests
Income taxes:
current
Minority interests
Net income
Income taxes:deferred
Income before minority interests
YoY Increase Factors
FY10Net income
Increase inIncome beforeincome taxes
Increase inIncome taxes
Increase in Minority interests FY11
Net income
+124.0 (+65.4%)
12
(Reference) FY11 Comprehensive Income
Changes during FY11
B/S FY10/Q4Balance
Compre- hensive Income
/loss
(Adjustment)Minority interest
equivalent
(Adjustment)Share of other
comprehensive income of affiliated companies
accounted for using equity method
B/SFY11/Q4Balance P/L
a b c d (a + b –
c + d) (b - c)
Income before minority interests 377.5 63.7 313.7
Other comprehensive lossUnrealized gain/loss on available-for-
sale securities 34.9 -25.7 -2.8 -1.4 10.5
Deferred gain/loss on derivatives under hedge accounting 11.2 -12.6 -0.4 - -0.9
Foreign currency translation adjustment -50.2 +21.3 +0.0 -1.9 -30.8Share of other comprehensive income of affiliated companies accounted for using equity method*
-3.4 - +3.4 -
Total other comprehensive loss -4.0 -20.5 -3.3 - -21.2
Comprehensive income 356.9 60.4 296.5
Comprehensive income attributable to owners of the parent
Net income
Comprehensive income attributable to minority interests
<bn JPY>
* Separately indicates the share of other comprehensive income of affiliated companies accounted for using equity method included in other accounts of comprehensive income
Minority interests in net income
13
A Income taxes: current 196.5(main breakdown)
1. BBM income taxes under consolidated tax return 74.5
2. SBM local taxes (out of scope for BBM consolidated tax return) 44.3
3. Yahoo Japan 64.0
B Income taxes: deferred 58.2(main breakdown)
4. SBM decrease in temporary difference(approximate accounts payable, allowance for point mileage, etc.)
26.2
5. SBM depreciation and amortization adjustments(occurred at time of SBM acquisition)
9.0
6. SBH decrease in temporary difference 26.0
7. SBB utilization of loss carryforwards, decrease in temporary difference, etc. 7.5
8. SBTM record deferred tax assets -18.4
9. Changes in effective statutory tax rate (corporate tax rate reduction19.6, Restoration surtax* -7.1)
12.4
10. Other temporary difference -4.7
Total income taxes (A+B) 254.7
FY11 Main Breakdown of Tax Expenses
Tax and Other Adjustments< bn JPY>
SB: SOFTBANK SBM: SOFTBANK MOBILE BBM: BB Mobile SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM SBH: SOFTBANK Holdings Inc.
*Restoration surtax for Securing Financial Resources Needed to Implement Measures to Recover from the Great East Japan Earthquake
14
FY11 Balance
Deferred Tax Assets and Liabilities (Ref.)< bn JPY>
Deferred tax assets:(main breakdown)
Depreciation and amortization 49.4Loss carryforwards 43.5Valuation of assets and liabilities of acquired consolidated subsidiaries at fair market value 30.2Investment securities 19.9Allowance for doubtful accounts 12.2Allowance for point mileage 12.1Accounts payable – other and accrued expenses 10.7Other 68.9
Gross deferred tax assets 247.5Less: valuation allowance -79.4
Total deferred tax assets 168.0
Deferred tax liabilities:(main breakdown)
Deferred taxable gain on a sale of shares of a subsidiary to a 100% owned subsidiary under Japanese group taxation regime -11.6
Unrealized gain on available-for-sale securities -4.9Others -11.0
Total deferred tax liabilities -27.6
Net deferred tax assets 140.4
15
Rate (%) <ref.> Amount (bn JPY)
Income before income tax 632.2
Statutory income tax rate 40.7% 257.2
(main factors of difference)
- Amortization of goodwill (mainly SOFTBANK MOBILE) 3.8% 24.2
- Changes in statutory tax rate 2.0% 12.4
- Decrease in valuation allowance -5.8% -36.7
- Dilution gain from changes in equity interest, net -1.3% -8.0
- Others 0.9% 5.4
Effective income tax rate 40.3% 254.7
FY11 Reconciliation Between Statutory Tax Rate and Effective Tax Rate
Difference in Tax Rate & Loss Carryforwards (Ref.)
16
Financial Results of Non-consolidated Subsidiaries and Affiliates
Net income/loss, interest-bearing debt at non-consolidated subsidiaries and affiliates not accounted for under the equity method
Number of Companies
Net Income/Loss(after consideration of
economic interest)
Interest-bearing Debt(not within
the SB Group)
Non-consolidated subsidiaries not under the equity method 60 JPY 190mil JPY 110mil
Non-consolidated subsidiaries under the equity method 3 - -
Affiliated companies not under the equity method 26 JPY -390mil N/A
Total 89 JPY -190mil JPY 110mil
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.
17
Consolidated B/S Analysis
Accounting
18
1,266.2
644.1
835.6
1,026.9
1,910.41,862.6
Mar 2011 Mar 2012
902.5
2,081.0
848.6
1,943.0
2,791.7 2,983.5
Mar 2011 Mar 2012
Fixed Assets
Current Assets Current Liabilities
Long-term Liabilities
<bn JPY>SBM Others
Consolidated B/S Summary
1,125.6
414.6
1,072.8
1,058.8
2,131.6
1,540.3
Mar 2011 Mar 2012
1,118.0
805.6
850.8
793.5
1,923.71,644.4
Mar 2011 Mar 2012
SBM: SOFTBANK MOBILE
19
Assets Mar 2011 Mar 2012 Variance Outline
Current assets 1,862.6 1,910.4 47.8SBM 1,026.9 644.1 -382.8Others 835.6 1,266.2 430.6Cash and deposits 861.6 1,016.2 154.5
SBM 408.0 49.8 -358.2
Increase provided by operating activities (+390.5), outlay due to acquisition of fixed assets (-356.5), repayment of SBM loan(-772.5),Repayment of securitization of installment sales receivables (-49.9),Sale and lease back of equipment newly acquired (procured +299.4, repaid -140.6)
Others 453.5 966.4 512.8SB: Mar 11 (199.0) >> Mar 12 (644.5)
Breakdown: 36th, 37th, & 38th Unsecured Straight Bond issue (+179.1), Borrowings (+439.4), CP (-25.0), Redemption of 25th & 27th Unsecured Straight Bond (-113.5)
Yahoo Japan: Mar 11 (173.8) >> Mar 12 (241.6)
Notes and accounts receivable-trade 657.7 661.2 3.5
SBM 498.1 491.8 -6.2Mobile handset installment sales receivables Mar 11 (252.1) >> Mar 12 (221.2)
including sale of installment sales receivables (-259.5)Telecom revenue receivables Mar 11 (172.3) >> Mar 12 (188.4)Mobile handsets sales receivables (to sales agents) Mar 11 (68.0) >> Mar 12 (75.8)
Others 159.6 169.4 9.7 SBB: Mar 11 (58.5) >> Mar 12 (59.7), SBTM: Mar 11 (44.8) >> Mar 12 (46.3)
Marketable securities 78.0 4.5 -73.5SBM - - -
Others 78.0 4.5 -73.5 SBH: Yahoo! Inc. shares (-73.5) repaid debt by transferring Yahoo! Inc. shares to CITIBANK, N.A.*
Merchandise and finished products 49.8 42.6 -7.2SBM 38.6 30.8 -7.8
Others 11.2 11.7 0.5
Deferred tax assets 90.9 56.4 -34.4SBM 45.2 26.2 -19.0Others 45.6 30.2 -15.3
Others 162.0 168.2 6.1
SBM 68.9 78.6 9.6
Others 93.1 89.6 -3.4 SBH: derivative assets (-22.2) decreased after settlement of forward contract regarding transfer of Yahoo! Inc. shares*
Allowance for doubtful accounts -37.7 -39.0 -1.2SBM -32.0 -33.1 -1.0Others -5.6 -5.8 -0.1
<bn JPY>
Consolidated B/S (1) Current Assets
*See page 29 for details. SB: SOFTBANK SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM SBH: SOFTBANK Holdings Inc.
20
Assets Mar 2011 Mar 2012 Variance OutlineFixed assets 2,791.7 2,983.5 191.8
SBM 1,943.0 2,081.0 137.9
Others 848.6 902.5 53.8
Property and equipment, net 1,113.4 1,296.3 182.9
SBM 809.6 964.4 154.8
Others 303.8 331.9 28.1
Building and structures 74.8 77.4 2.5
SBM 26.3 26.7 0.4
Others 48.4 50.6 2.1
Telecommunications equipment 840.8 988.5 147.7
SBM 713.5 851.4 137.8 Acquisition of telecommunications equipment (+244.8), Acquisition of antenna equipment (+22.2), depreciation etc. (-108.2)
Others 127.2 137.1 9.8 SBTM: Mar 11 (98.1) >> Mar 12 (98.3)SBB: Mar 11 (23.3) >> Mar 12 (31.3)
Telecommunications service lines 68.8 65.2 -3.6
SBM 7.4 8.0 0.5
Others 61.3 57.1 -4.1 SBTM: Mar 11 (61.3) >> Mar 12 (57.1)
Land 22.8 23.1 0.2
SBM 10.9 11.2 0.2
Others 11.9 11.9 -
Construction in progress 55.6 80.5 24.8
SBM 34.5 49.6 15.1
Others 21.1 30.8 9.6
Other 50.3 61.5 11.2
SBM 16.7 17.3 0.5
Others 33.5 44.2 10.6
<bn JPY>
Consolidated B/S (2) Tangible Assets
SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM
Acquisition of Fukuoka Yahoo! JAPAN Dome is a transaction recorded for the fiscal year ending March 2013. See page 30 for details.
21
<bn JPY>
Consolidated B/S (3) Intangible Assets, Investments and Other Assets
Assets Mar 2011 Mar 2012 Variance Outline
Fixed assets 2,791.7 2,983.5 191.8Intangible assets, net 1,120.3 1,126.5 6.1
SBM 1,002.0 1,011.0 9.0
Others 118.3 115.4 -2.8Goodwill 839.2 780.2 -58.9
SBM 775.7 724.2 -51.4 Decrease due to regular amortizationOthers 63.5 55.9 -7.5 Decrease due to regular amortization
Software 248.8 310.1 61.2
SBM 220.3 276.8 56.4
Others 28.4 33.3 4.8Other 32.2 36.1 3.8
SBM 5.9 9.9 4.0
Others 26.2 26.1 -0.1Investments and other assets 557.9 560.6 2.7
SBM 131.3 105.5 -25.8Others 426.5 455.1 28.5Investment securities 340.4 338.1 -2.2
SBM 0.8 0.7 -0.0Others 339.5 337.4 -2.1 Early redemption of WBS Class B2 Funding Notes (-30.6)
Deferred tax assets 109.1 104.3 -4.8
SBM 90.7 64.9 -25.7Others 18.4 39.3 20.9
Other 123.3 134.0 10.7SBM 49.3 51.2 1.8Others 73.9 82.8 8.8
Allowance for doubtful accounts (long-term) -15.0 -15.9 -0.9SBM -9.5 -11.4 -1.8Others -5.4 -4.5 0.9
Deferred charges 1.3 5.6 4.3SBM - - -Others 1.3 5.6 4.3
SBM: SOFTBANK MOBILE SB: SOFTBANK
Decreased due to the early redemption of WBS Class B2 Funding Notes* held by SB associated with the complete repayment of the SBM loan.
*Issued by J-WBS Funding K.K. in November 2006 to provide part of the funding for the SBM loan. SB acquired these bonds at face value of JPY 270bn during FY2009.
22
Liabilities Mar 2011 Mar 2012 Variance Outline
Current liabilities 1,644.4 1,923.7 279.3SBM 793.5 805.6 12.1Others 850.8 1,118.0 267.1Accounts payable-trade 193.6 190.5 -3.1
SBM 133.9 120.4 -13.5 Payment for mobile handsets, etc.
Others 59.7 70.1 10.4 SBB: Mar 11 (39.3) >> Mar 12 (41.5)
Short-term borrowings 410.9 403.1 -7.7SBM 49.9 - -49.9 Repayment of securitization of installment sales receivables (-49.9)
Others 361.0 403.1 42.1 SB: Mar 11 (263.6) >> Mar 12 (401.9)SBH: Mar 11 (93.3) >> Mar 12 (-) repayment of borrowings from CITIBANK, N.A.*
Commercial paper 25.0 - -25.0SBM - - -Others 25.0 - -25.0 SB: Mar 11 (25.0) >> Mar 12 (-)
Current portion of corporate bonds 128.5 144.9 16.4SBM - - -
Others 128.5 144.9 16.4SB: Redemption of 25th & 27th Unsecured Straight Bond (-113.5)
Transfer of 28th & 29th Unsecured Straight Bond from long-term liabilities (+95.0)Transfer of Convertible Bonds due 2013 from long-term liabilities (+49.9)
SBTM: Redemption of 2nd Unsecured Straight Bond (-15.0)Accounts payable-other 561.4 835.0 273.6
SBM 453.3 509.7 56.3
Others 108.0 325.3 217.2 SB: Accounts payable–other related to acquisition of preferred stock, etc. issued to Vodafone Group transferred from long-term liabilities in Q1(+200.0) ->Paid on April 2, 2012
Current portion of lease obligations 131.3 152.6 21.3SBM 111.4 126.8 15.3Others 19.8 25.8 5.9
Other 193.5 197.3 3.7SBM 44.8 48.6 3.7 Income taxes payable etc. (local taxes) Mar 11 (29.6) >> Mar 12 (31.8)
Others 148.7 148.6 -0.0Income taxes payable etc. BBM: Mar 11 (50.9) >> Mar 12 (54.1)
Yahoo Japan: Mar 11 (32.4) >> Mar 12 (34.0)
*See page 29 for details. SB: SOFTBANK SBM: SOFTBANK MOBILE SBB: SOFTBANK BB SBTM: SOFTBANK TELECOM SBH: SOFTBANK Holdings Inc. BBM: BB Mobile Vodafone Group: Vodafone International Holdings B.V. and Vodafone Overseas Finance Limited
Consolidated B/S (4) Current Liabilities<bn JPY>
23
Liabilities Mar 2011 Mar 2012 Variance Liabilities
Long-term liabilities 2,131.6 1,540.3 -591.3SBM 1,058.8 414.6 -644.2Others 1,072.8 1,125.6 52.8Corporate bonds 507.3 459.9 -47.4
SBM - - -
Others 507.3 459.9 -47.4
SB: 36th , 37th & 38th Unsecured Straight Bond issue (+180.0)28th & 29th Unsecured Straight Bond transferred to current liabilities (-95.0)Convertible Bonds due 2013 transferred to current liabilities (-49.9)Decrease due to the conversion of Convertible Bonds due 2014 into common stock (-49.9)
Phoenix JT: early redemption of the Subordinated Notes Due 2016 (-32.4)
Long-term debt 1,030.9 560.0 -470.8
SBM 772.5 - -772.5 SBM loan Mar 11 (772.5) >> Mar 12 (-)
Others 258.3 560.0 301.6SB: Mar 11 (257.9) >> Mar 12 (559.0)
Borrowings related to SBM loan refinance (+550.0) Deferred tax liabilities 26.5 20.3 -6.2
SBM - - -Others 26.5 20.3 -6.2
Allowance for point mileage 41.9 32.0 -9.8SBM 41.9 32.0 -9.8 Point service for customers
Others - - -
Lease obligations 199.7 347.6 147.9
SBM 173.4 316.8 143.4
Others 26.3 30.8 4.4
Other 325.0 120.2 -204.8
SBM 70.9 65.7 -5.1
Others 254.1 54.4 -199.6Accounts payable relating to Acquisition of preferred stock, etc. issued to Vodafone Group transferred to current liabilities (-200.0)
Note: Vodafone Group indicates Vodafone International Holdings B.V. and Vodafone Overseas Finance LimitedSBM loan: the loan procured under a whole business securitization scheme in November 2006 as part of the loan for procurement of Vodafone K.K. acquisition financeSB: SOFTBANK SBM: SOFTBANK MOBILE
<bn JPY>
Consolidated B/S (5) Long-term Liabilities
Repayment by SBM loan refinance: 1st SBM loan repayment (July 27 2011): JPY 369.4bn2nd SBM loan repayment (Oct 27 2011): JPY 284.5bn
SMB loan refinance: borrowings by SOFTBANK for total JPY 550.0bn1st borrowing (July 27 2011): JPY 352.5bn2nd borrowing (Oct 27 2011) : JPY 197.5bn
24
Equity Mar 2011 Mar 2012 Variance Outline
Equity 879.6 1,435.6 556.0
Shareholders’ equity 623.3 957.9 334.6
Common stock 188.7 213.7 25.0 Conversion of Convertible Bonds due 2014 into common stock
Additional paid-in capital 212.5 236.5 24.0 Conversion of Convertible Bonds due 2014 into common stock
Retained earnings 222.2 530.5 308.2 Net income (+313.7), dividend (-5.4)
Treasury stock -0.2 -22.9 -22.7 Acquisition of treasury stock
Valuation and translation adjustments -4.0 -21.2 -17.1
Unrealized gain/ loss on available-for-sale securities 34.9 10.5 -24.3 Decrease due to transfer of Yahoo! Inc. shares (-36.7)*
Deferred gain/loss on derivatives under hedge accounting 11.2 -0.9 -12.2 Decrease due to settlement of forward contract regarding
transfer of Yahoo! Inc. shares (-12.6)*
Foreign currencytranslation adjustments -50.2 -30.8 19.3 Recognized as loss on liquidation of subsidiaries and affiliates
relating to the liquidation of Charlton Acquisition LLP (+16.9)
Stock acquisition rights 0.7 0.8 0.1
Minority interests 259.6 498.0 238.3Issuance of preferred securities (restricted voting rights ) by SFJ (+200.0) Yahoo Japan: Mar 11 (215.6) >>Mar 12 (263.2)
<bn JPY>
Consolidated B/S (6) Equity
*See page 29 for details.SFJ: SFJ Capital Limited
2560
80
100
120
140
160
180
200
Mar 09 Jun Sep Dec Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12
GBP/JPY (TTM)EUR/JPY (TTM)USD/JPY (TTM)
<JPY> <Reference> Main exchange rate trend
<bn JPY>
-34.4 -36.7 -45.2 -50.2 -49.8 -53.0 -58.8
-30.8-31.6-30.5 -21.8
-51.4-32.5
-80
-60
-40
-20
0
20
40
60
Mar 09 Jun Sep Dec Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12
Foreign currency translation adjustments account
[Equity] Foreign Currency Translation Adjustments
450.3
-30.8
451.0451.3401.8399.6451.3401.2
434.1
43.0
-51.2
222.2
311.6
466.8 530.5
-22.9-22.9-11.0
10.5
43.8
34.9
24.3
31.3
14.5
11.2
25.114.5
-58.8-53.0-32.5 -49.8-50.2-30.5
936.6
835.2819.4
470.5
374.0
751.7
619.2
-100
0
100
200
300
400
500
600
700
800
900
1,000
Mar 09 Jun Sep Dec Mar 10 Jun Sep Dec Mar 11 Jun Sep Dec Mar 12
Common stock & additional paid-in capital* Accumulated deficit/retained earningsTreasury stock Unrealized gain/ loss on available-for-sale securitiesDeferred gain/ loss on derivatives under hedge accounting Foreign currency translation adjustmentsShareholders' equity
26
Equity ratio 19.1%
*Includes cash receipts for new stock subscriptions
[Equity] Shareholders’ Equity<bn JPY>
27
Consolidated CF Analysis
Accounting
1,014.5
200.0
338.7
-166.2
-35.2
87.9
-195.6
30.3
-455.0
632.2
847.1
-163.4
275.8
62.5
-19.6-88.2
30.1
-33.3
-124.2
-25.0
600.8
-919.6
179.1
28Note: significant items from the consolidated cash flow statement are shown here.
Purchase of property &equipment & intangibles
Income before income taxes
Depreciation & amortization
Amortization of goodwill
Increase in notes & accounts receivable
trade (non-installment)
Income taxes paid
Proceeds from long-term debt
Repayment of lease obligations
Repayment of long-term debt
Decrease in short-term borrowings, net
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
<bn JPY>
Issuance of bonds
Mar 11
Mar 12Proceeds from sale and lease back of equipment newly acquired
Consolidated Cash Flow Main Breakdown
Redemption of bonds
Gain on sale of marketable and investment securities, net
Purchase of marketable and investment securities
Income taxes paid -195.6Main Item:BB Mobile‘s income tax under consolidated tax return -71.3SBM local taxes -42.2 Yahoo Japan Consolidation -64.9
Decrease in commercial paper, net
Dilution gain from changes in equity interest, net
Proceeds from sale of marketable and investment securities
Proceeds from
issuance of preferred securities by a subsidiary
Decrease in mobile handset installment receivables
Operating CF+740.2
Investing CF-375.6
Financing CF-196.6
(Note) Cash flow impact from transfer of Yahoo! Inc. shares to CITIBANK and repayment of borrowings by settling forward contract:・Proceeds from sale of marketable
and investment securities: +JPY57.1bn・Repayment of long-term debt: -JPY57.1bn
(see page 29 for details)
Proceeds from advanced redemption ofdebt security
29
Repayment of Borrowings by Transfer of Yahoo! Inc. Shares Impact on Consolidated Financial Statements
Amounts borrowedUSD 1,135mil
Realized gain on forward contracts USD 392mil (no cash transfer)
Shares on book basisUSD 142mil
Offsetting borrowings
Proceeds from sale of marketable and
investment securities USD 743mil
P/L Financing CFB/S
Repayment of debt USD -743mil
Gain on sale of investment securitiesUSD 993mil
$1,135mil
Investing CF
Same amount
Land: 49.3bnBuildings 34.5bnBuildings 38.2bn
30
(Reference)Accounting Treatment for Acquisition of Fukuoka Yahoo! JAPAN Dome
FY2011
BS
Not recorded on the balance sheet Lease obligations
87.6bn
FY2012 - July 2015 -
-74.5bn((1) - (2) x 3 years 4 months)
CF
87.6bn
Finance leases in which the ownership of leased assets is transferred to lessees at the end of lease periods
Recorded on the consolidated financial statements
Acquisition of trust beneficiary interest
(Payment of 74.5bn)
Lease payments (Operating CF)-5.0bn/year Purchase of property and equipment*3
(Investing CF)-4.0bn/year
PLLease expense-5.0bn/year
Interest expense -1.0bn/yearDepreciation -1.1bn/year
DepreciationApprox. -1.1bn/year
Interest expense (Operating CF)-1.0bn/year
*1 GIC: the Government of Singapore Investment Corporation*2 As financial statement as of the end of February, the fiscal year end of FSHM, which entered into the contract, is reflected in the consolidated financial statements, this transaction will be recognized in the fiscal year ending March 31, 2013.*3 Payments of lease obligations for the related assets are recorded as “Purchase of property and equipment”
in investing activities due to the fact that these payments are
applied to the purchase price for the future acquisition of the trust beneficiary interest under the contract. *4 Amounts in BS, CF and PL are approximated calculations.
Old Contract (lease) New Contract (lease & acquisition of trust beneficiary interest
)
Finance leases in which the ownership of leased assets is not transferred to lessees at the end of lease periods
Accounted for as operating lease transactions with lease related notes
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 FSHM) 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.
Land: 49.3bn83.8bn
Purchase of property and equipment(Investing CF)
(1)
(2)
(3)
Declined by depreciation(3) x 3 years 4 months
Applied the former Accounting Standard for Lease Transactions,
thus accounted for as operating lease
<JPY>
32
Finance
Yoshimitsu Goto
General Manager Finance
SOFTBANK CORP.
1. Revise net interest-bearing debt reduction target
2. Enhance shareholder return, significant dividend increase
33
Achieved improvement of Financial Status
34
Achieved Strong Financial Status
March 2009 March 2012
Share price JPY 1,256 JPY 2,447Net interest-bearing debt JPY 1.9t JPY 0.5tNet interest-bearing debt
/EBITDA multiple 2.9 times 0.5 times
Net debt equity ratio 5.2 times 0.6 times
5 year CDS spread Exceeds 2,000bp 170bpJCR BBB A
Credit Rating S&P BB BBBMoody’s Ba2 Baa3
525.4
626.6678.6
787.6
930.7
1,013.7
0
200
400
600
800
1,000
FY06 FY07 FY08 FY09 FY10 FY11
35
EBITDA
25%
37%
23%
25%
29%
31%32%
21%
20%
25%
30%
35%
40%
FY06 FY07 FY08 FY09 FY10 FY11
SOFTBANKKDDINTT DOCOMO
EBITDA Margin<bn JPY>
EBITDA and EBITDA Margin
Note: 1. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
2. EBITDA Margin = EBITDA / net sales
Achieved JPY 1t EBITDA and margin of 30%.
*Created by SOFTBANK CORP. based on respective companies’publicly available information.
(NTT DOCOMO for FY11: estimation disclosed by NTT DOCOMO)
36*Free Cash Flow (FCF) = cash flows from operating activities + cash flows from investing activities
FY2011JPY 364.5bn
Aggregate JPY 1.3t
JPY 1t target(3 year aggregate )
Exceededtarget
FY2010JPY 561.3bn
FY2009JPY 390.8bn
Free Cash Flow
37
547.2
1,209.6
1,501.0
1,939.5
0
500
1,000
1,500
2,000
Mar 09 Mar 10 Mar 11 Mar 12
Exceeded target
Half(by the end of FY2011)
Net Interest-bearing DebtReduced JPY 1.4t in three years
Note: 1. Net interest-bearing debt = interest-bearing debt - cash position2. 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 2010 to 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)
<bn JPY>
502.9388.5660.8 604.8
963.2619.4
490.4428.4
84.584.5
745.5
959.71,184.8
221.9
49.9219.8
2,400.3
2,195.42,075.8
1,568.1
0
500
1,000
1,500
2,000
2,500
Mar 09 Mar 10 Mar 11 Mar 12
Securitization of installment sales receivablesobligationsSBM loan
Vodafone subordinate loan
Borrowings from other financial institutions, etc.
Bonds & CP
38
SOFTBANK (syndicated loan related to WBS refinancing) 550.0
SOFTBANK (other bank loans) 317.9
SOFTBANK (stock lending) 93.0
Other bank loans 23.0
Total 963.2
Interest-bearing Debt
<bn JPY>Breakdown of borrowings from other financial institutions, etc. <bn JPY>
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: from March 2010 to 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.
Reduced JPY 830.0bn in three years.Completed refinancing of acquisition finance of Vodafone K.K.Consolidate procurement at holding company level.
104.0
62.2
111.1112.3
0
20
40
60
80
100
120
FY08 FY09 FY10 FY11
Interest Expense Interest Coverage Ratio
39
8.9
16.3
7.16.0
0
2
4
6
8
10
12
14
16
18
FY08 FY09 FY10 FY11
<times>
Interest Expense
<bn JPY>
Significant reduction in interest expense along with refinance of acquisition finance of Vodafone K.K.
Note: 1. Interest coverage ratio = EBITDA / interest expenses2. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
36.9
139.2
188.6
257.2
763.5677.4
555.1423.8
460.8
694.3
866.1
1,020.8
0
200
400
600
800
1,000
Mar 09 Mar 10 Mar 11 Mar 12
40
Credit line facility size 201.0 161.0 187.0 180.0Unused portion 21.0 101.0 107.0 180.0
Exclude Yahoo! Japan consolidation
Yahoo! Japan consolidation
Cash Position
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
(April 2012)Payment related to acquisition of preferred stock, etc. issued to Vodafone Group: JPY 200.0bn
<bn JPY>
Full-scale introduction of group-wide cash management
due to full repayment of whole business securitization (WBS)
Starts integrated operation of group cash by holding company
41
※
SBM lease funding costs down by half
Lease Obligations SBM Lease funding costs
Mar 09
Lease Obligations
500.3
141.3
331.0334.2321.5
62.7
105.6 78.5
462.9409.5
563.1
439.8
0
200
400
600
800
1,000
Mar 09 Mar 10 Mar 11 Mar 12
Finance leases (accounted for as operating lease transactions)
Finance leases (lease obligations)
<bn JPY>
*Finance lease transactions in which the ownership of leased assets was not transferred to lessees and contracted before April 1, 2008.SBM: SOFTBANK MOBILE
*
Mar 10 Mar 11 Mar 12
<%>
42
4.1
1.1
3.32.9
1.30.5
1.9
0.0
1.0
2.0
3.0
4.0
5.0
FY06 FY07 FY08 FY09 FY10 FY11
including finance lease
Net interest-bearing debt/EBITDA multiple to mark 0.5
Net Interest-bearing Debt/EBITDA Multiple
<times>
Note: 1. Net interest-bearing debt = interest-bearing debt - cash position2. 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 2010 to September 2011, this excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) witha 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. Interest-bearing debt and net interest-bearing debt of FY2006 are calculated with retroactive adjustments by adding the cash receipts as collateral relating to marketable security lending transactions.
5. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
43
7.6
1.23.2
0.62.0
5.25.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
FY06 FY07 FY08 FY09 FY10 FY11
including finance lease
Net debt equity ratio to mark 0.6.
Net Debt/Equity Ratio
<times>
Note: 1. Net D/E ratio = interest-bearing debt/shareholders’ equity2. Net interest-bearing debt = interest-bearing debt - cash position3. 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 2010 to September 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.
4. 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)
5. Interest-bearing debt and net interest-bearing debt of March 2007 are calculated with retroactive adjustments by adding the cash receipts as collateral relating to marketable security lending transactions.
2,158.12,036.8
1,939.5
1,501.0
1,209.6
547.2
0
500
1,000
1,500
2,000
2,500
44
Net Interest-bearing Debt
29%
50% 49%
40%
32%
14%
55%
0%
10%
20%
30%
40%
50%
60%
70%
including finance lease
Debt Ratio (net interest-bearing debt basis)
Net interest-bearing debt to total assets ratio decreased sharply.
Debt ratio (net interest-bearing debt basis)
<bn JPY>
Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12
Note: 1. Net interest-bearing debt = interest-bearing debt - cash position2. 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 2010 to September 2011, this excludes the corporate bonds (WBS Class B2 Funding Notes, issued by J-WBS Funding K.K.) witha 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. Debt Ratio (net interest-bearing debt basis) = net interest-bearing debt / (total assets – cash and cash deposits)
28.8
108.6
43.1
96.7
189.7
313.7
0
100
200
300
FY06 FY07 FY08 FY09 FY10 FY11
45
Net Income
6.7%
11.2%
1.1%
9.8%
6.3%
3.5%1.6%
3.9%
0%
2%
4%
6%
8%
10%
12%
14%
FY06 FY07 FY08 FY09 FY10 FY11
SOFTBANKKDDINTT DOCOMO
Net Income / Sales
Net Income
<bn JPY>
*Created by SOFTBANK CORP. based on respective companies’publicly available information.
(NTT DOCOMO for FY11: estimation disclosed by NTT DOCOMO)
Continue to generate high level of net income.
242.7282.9
383.7 374.0
470.5
619.2
936.6
0
200
400
600
800
1,000
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12
46
Shareholders' Equity Equity Ratio
Equity Ratio
<bn JPY>
13.4%
8.4% 8.5%
10.5%
13.3%
19.1%
6.6%
0%
5%
10%
15%
20%
25%
Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12
Accelerated improvement of equity ratio.
0
100
200
300
400
500
600
0
500
1,000
1,500
2,000
2,500
CDS Bond Spread
FY08
Softbank CDS (5yrs)
(bp) (bp)
Apr Oct Apr Oct Apr AprOct
FY11FY09 FY10
Credit Spread
AprOct
FY12
Announced net interest-bearing debtreduction target
FY08 FY11FY09 FY10 FY12
Announced net interest-bearing debtreduction target
26th Unsecured Straight Corporate Bond(2.2yrs remaining)
34th Unsecured Straight Corporate Bond(3.8yrs remaining)
30th Unsecured Straight Corporate Bond(2.9yrs remaining)
35th Unsecured Straight Corporate Bond(5.8years remaining)
Apr Oct Apr Oct Apr AprOct AprOct
Source: CDS; Bloomberg dataBond spread data; calculated by SOFTBANK CORP. based on Japan Securities Dealers Association data.
CDS: Credit Default Swap
Significantly improved
47
JCR (A)A/A2
A-/A3
BBB+/Baa1
BBB/Baa2
BBB-/Baa3
BB+/Ba1
BB/Ba2
BB-/Ba3
B+/B1
S&P (BBB)
Moody’s (Baa3)
Highest rating ever
2006 2007 2008 2009 2010 2011 2012
A+/A1
Announcement of target to reduce
net interest-bearing debt
Acquisition of Vodafone K.K.
Completed refinance of acquisition finance of
Vodafone K.K.
Trend of Credit Rating of SOFTBANK
Upgrades since entering Mobile Communications business
JCR 3 notches BBB >> A
S&P 4 notches BB- >> BBB
Moody’s 3 notches Ba3 >> Baa3
(CY)
Investment grade
48
1.Complete refinance of acquisition finance of Vodafone K.K.2.Accelerated reduction of net interest-bearing debt3.Highest credit rating ever
Achieved improvement of financial status
49
Strengthen Financials
Shareholder Return
Shift from “strengthening financials” to “enhancing enterprise value”
StrategicGrowth
50
2.5 2.5 2.55.0 5.0
0
5
10
15
20
25
30
35
40
45
FY06 FY07 FY08 FY09 FY10 FY11
Dividend per Share
Enhance Shareholder Return
2.6 2.7 2.75.4 5.4
0
5
10
15
20
25
30
35
40
45
FY06 FY07 FY08 FY09 FY10 FY11
Total Amount of Dividends<JPY>
Significant dividend increase
40 43.9
<bn JPY>
(Plan) (Plan) 51
3.7%
1.6%
3.0%
4.1%
0%
1%
2%
3%
4%
5%
FY06 FY07 FY08 FY09 FY10 FY11
SOFTBANKKDDINTT DOCOMONTT
39%
14%
28%
49%
0%
10%
20%
30%
40%
50%
FY06 FY07 FY08 FY09 FY10 FY11
SOFTBANKKDDINTT DOCOMONTT
Significant improvement in payout ratio, dividend yield
Enhance Shareholder Return
Payout Ratio Dividend Yield
(Plan) (Plan)*Created by SOFTBANK CORP. based on respective companies’ publicly available information.(NTT DOCOMO for FY11: estimation disclosed by NTT DOCOMO)
52
FY2010 FY2011(Plan)
Dividend per share JPY 5 JPY 40Total amount of
dividends JPY 5.4bn JPY 43.9bn
Payout ratio 2.9% 14%
Dividend yield 0.15% 1.6%
<FY2011>
Stock buyback JPY 22.5bn<FY2012>
Significant increase in dividend
Enhance Shareholder Return
53
Content Amount Date
BorrowingsRefinance of acquisition finance of Vodafone K.K. (July: structure of syndicated loan, Oct: full repayment of SBM loan) 550.0 July 2011
Renewal of credit line facility 180.0 Sep 2011
Bonds
36th Unsecured Straight Corporate Bond(Fukuoka SoftBank HAWKS Bond)
100.0 June 2011
37th Unsecured Straight Corporate Bond 30.0 June 201138th Unsecured Straight Corporate Bond 50.0 Jan 2012
Others Issuance of preferred securities by a consolidated subsidiary 200.0 Sep 2011
<Procurements>
Company Name Invested Amount
InMobi Pte. Ltd. USD 100mil (8.0*)
Gilt Groupe Inc. USD 62.5mil (5.0*)
<Investments in Businesses>
Content Amount Date
Repayment of borrowings with shares (Yahoo! Inc.) held by a U.S. subsidiary USD 1,135mil (90.8*) Sep 2011
Acquisition of treasury stock 22.5 Sep - Oct 2011
Acquisition of Fukuoka Yahoo! JAPAN Dome 87.6 Mar 2012
<Others>
* Calculated based upon exchange rate of 1USD=80JPY.
Main Financing Activities of FY2011
<bn JPY>
54
Main Procurements in the Market During FY2011
36th UnsecuredStraight Corporate Bond
37th Unsecured Straight Corporate Bond
38th UnsecuredStraight Corporate Bond
Target Investors Mainly individual investors Institutional investors Institutional investors
Amount JPY 100.0bn JPY 30.0bn JPY 50.0bnInterest
Rate 1.00% 0.65% 0.42%
Term 5 years 3 years 2 years
Total issued amount JPY 180.0bnProcured at lowest interest rate ever in SOTBANK history
Issuer SFJ Capital Limited
Amount JPY 200.0bn
Dividend rate 2.04% (Step-up clause will be applied after May 2015)
Recorded on consolidated balance sheets as minority interestsimprove financial stability
<Bonds>
<Issuance of Preferred Securities>
Scheduled to be redeemed in May 2015 when become redeemable prior to maturity
Nikkei Veritas “Deal of the Year”retail bond 3 years consecutiveCapital Eye「 BEST ISSUER」2 years consecutive
55
Acquisition of Fukuoka Yahoo! JAPAN Dome
1. Significant reduction of cost paid to outside SB group
Acquired the Fukuoka Yahoo! JAPAN Dome at JPY 87.6bn from GIC group.(continue to lease until July 2015)
Mar 2012
2. Enhance the baseball business by making an attractive stadium
<Before acquisition>Expected cost
approx. JPY 150.0bn (Total of 23 years of contract period)
Expected cost approx. JPY 120.0bn-α
(α=market value of land & buildings)
Improvement of ordinary income by JPY 3.0bn per year.
CF
PL
* including assumed financing costs for 23 years.
*
<After acquisition>
A subsidiary of SOFTBANK will acquire and pay JPY 74.5bnJuly 2015
56
-Completed WBS refinance-Achieved the target of reducingnet interest-bearing debt by half
-Highest rating ever;JCR: A- >> AS&P: BB+ >> BBBMoody’s: Ba2 >> Baa3
* Based on the amount of the assets sold
-CAPEX: JPY 516.3bn-Investments in Business:InMobi, Gilt Groupe, etc.
-FCF: JPY 364.5bn-IPOs: Renren, Zynga
-Issuance of preferred securities:JPY 200.0bn
-Issuance of corporate bonds:JPY 180.0bn
-Lease procurementsapprox. JPY 330.0bn*
1. Gain foothold for further growth- Prioritized distribution of FCF to CAPEX- Support strategic business investments actively- Focus on value improvement of companies invested in
2. New phase of credit improvement- Full repayment of non recourse loan after WBS refinance- Solid reduction of debt towards zero net interest-bearing debt- Improve credit rating by strengthening financial base and
WBS refinance
3. Thorough focus on investors and market- Continue to pursue various & flexible procurement methods - Continue to enhance relationships with domestic and international financial institutions, access main markets
Balance between growth strategy and strengthening financial Status
Achievements to FY2011 Financial Strategies
57
FY2012 Financial Strategies
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
Shift focus from “strengthening financials” to “enhancing enterprise value”
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
58
Appendix
59
* Early redemption is possible on SOFTBANK's request for Convertible bond due 2013 in case certain conditions are met.
(Reference) Corporate Bond Details< mil JPY >
Company name Bond Issue date Maturity date Interest rate(%/year) Collateral Mar. 11
balanceMar. 12balance Change
27th series Unsecured Straight Bond(Fukuoka SoftBank HAWKS bond)
2009/6/11 2011/6/10 5.10 None 60,000 - -60,000
25th series Unsecured Straight Bond 2007/6/19 2011/6/17 3.39 None 53,500 - -53,500
28th series Unsecured Straight Bond 2009/7/24 2012/7/24 4.72 None 30,000 30,000 -
29th series Unsecured Straight Bond(Fukuoka SoftBank HAWKS bond)
2009/9/18 2012/9/18 4.52 None 65,000 65,000 -
Convertible Bond due 2013 * 2003/12/30 2013/3/31 1.50 None 49,998 49,988 -1031th series Unsecured Straight Bond 2010/6/2 2013/5/31 1.17 None 25,000 25,000 -
33th series Unsecured Straight Bond(Fukuoka SoftBank HAWKS bond)
2010/9/17 2013/9/17 1.24 None 130,000 130,000 -
38th series Unsecured Straight Bond 2012/1/27 2014/1/27 0.42 None - 50,000 50,000Convertible Bond due 2014 2003/12/30 2014/3/31 1.75 None 49,992 - -49,992
37th series Unsecured Straight Bond 2011/6/10 2014/6/10 0.65 None - 30,000 30,000
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(Fukuoka SoftBank HAWKS bond)
2011/6/17 2016/6/17 1.00 None - 100,000 100,000
35th series Unsecured Straight Bond 2011/1/25 2018/1/25 1.66 None 10,000 10,000 -
SOFTBANK TELECOM 2nd series Unsecured Straight Bond 2004/12/7 2011/12/7 2.88 None 15,000 ― -15,000Phoenix JT Subordinated Notes Due 2016 2004/12/24 2016/12/15 5.95 None 32,400 ― -32,400Other corporate bonds - - - - - 100 ― -100Total - - - - - 635,890 604,888 -31,002
SOFTBANK CORP.
60
25.0
130.0
95.0
50.049.9
200.0
Q1 Q2 Q4Q3
FY12
Q1 Q2 Q4Q3
FY13
(Reference) Bond Redemption Schedule
Payment related to acquisition of preferred stock, etc. issued to
Vodafone Group
<bn JPY>
SB straight bond
SB convertible bond
Others
61
1,638.8
739.7
1,883.1
312.3
436.9
828.4
2,195.42,075.8
1,568.1
0
500
1,000
1,500
2,000
2,500
Mar 10 Mar 11 Mar 12
Fixed Variable
1,511.31,703.1
1,019.9
492.3564.4
548.1
2,195.42,075.8
1,568.1
0
500
1,000
1,500
2,000
2,500
Mar 10 Mar 11 Mar 12
Long-term Short-term
53%
47%
21%
79%
14%
86%
22%
78%
27%
73%
35%
65%
Note: interest-bearing debt: short-term borrowings + commercial paper + bonds due for redemption within 1 year + bonds + long-term borrowingsLease obligations are not included.
For December 2010, 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. that were issued under the whole business securitization scheme associated with the acquisition of Vodafone K.K.
Interest-bearing Debt Long/Short and Fixed/Variable Ratio Trend
Stable short and variable ratio.
Variable ratio increased due to refinance of acquisition finance of Vodafone K.K..
Interest-bearing DebtLong/Short Ratio
Interest-bearing DebtFixed/Variable Ratio
<bn JPY> <bn JPY>
62
65
Kazuhiko FujiharaSenior Vice President, Director & CFO
SOFTBANK MOBILE Corp.
Senior Vice President, Director & CFOSOFTBANK BB Corp.
Senior Vice President, DirectorSOFTBANK TELECOM Corp.
Operation
402.4
620.4
429.2
684.1
61.043.1 50.2
34.3
Operating income EBITDA
66
85.6
38.0
105.0
57.9
Operating income EBITDA
Broadband Infrastructure Fixed-line Telecommunications
<bn JPY>
FY10
3 Telecommunications Businesses led consolidated operating income to reach record high (7 consecutive periods).
Mobile Communications
Overview of Telecommunications Businesses
FY11
Note 1. EBITDA = operating income (loss) + depreciation and amortization
(including amortization of goodwill) 2. Broadband Infrastructure: Broadband Infrastructure segment, Mobile Communications: Mobile Communications segment, SB: SOFTBANK3. 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.
Operating income EBITDA
-8.8
+26.8Broadband Infrastructure + Fixed-line Telecommunications
Operating income YoY+11.1
Operating income YoY SOFTBANK consolidated: +46.1Mobile Communications: +26.8% to SB consolidated: 58%
(Reference)
FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11 FY10 FY11
+19.9
67
Broadband Infrastructure Business
Operation
<BB>
68
11.8 15.9 17.8 16.2 14.1
12.617.5 15.6
13.2
12.5
10.3
16.3
17.217.5
15.215.918.5
15.4
20.1
14.116.818.2
15.713.8 50.2
61.055.6
70.3 70.965.2
0
20
40
60
80
100
FY06 FY07 FY08 FY09 FY10 FY11
5.4 8.6 10.4 13.7 11.6 10.26.1
10.311.7
13.211.0
9.4
6.012.114.3
11.3
7.7
10.88.6
9.4
7.3
9.210.69.6 34.3
47.243.1
48.3
39.7
26.8
0
40
80
FY06 FY07 FY08 FY09 FY10 FY11
Operating Income EBITDA
Profit decreased YoY. Efforts continued to increase lines.<bn JPY>
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Operating Income, EBITDA
Note: 1 Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only. 2 EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)
<BB>
69
5,160
4,810
4,300
3,770
3,150
2,600
2,740
930240
1,610
1,440
4,2104,080 4,1704,010
0
1,000
2,000
3,000
4,000
5,000
6,000Yahoo! BB hikari with FLET'S Cumulative contractsADSL Installed lines
3,5103,830
4,0204,080
1,6801,350 1,620
0
1,000
2,000
3,000
4,000
5,000
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
ADSL (installed line base)Yahoo! BB hikari with FLET'S
Note: 1. ADSL Installed lines: lines for which connection construction for ADSL line at central office of NTT East or NTT West is complete (including suspended plan).Yahoo! BB hikari with FLET’S cumulative contracts: users for which connection construction for FLET’S HIKARI line at central office of NTT East or NTT West is complete.
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)
<k lines> Number of Lines<JPY>
Number of lines: decreased in ADSL, increased in Yahoo! BB hikari with FLET’S. Net increase in total.
Yahoo! BB ADSL Lines and ARPU
FY08 FY09 FY10 FY11FY06 FY07 FY08 FY09 FY10 FY11
ARPU
FY10Q4
FY11Q4 Increment
ADSL 3,150 2,600 -550Yahoo! BB hikari with FLET’S 930 1,610 +680
TOTAL 4,080 4,210 +130
<BB>
5.73.84.6
12.5
47.6
9.314.5
21.222.116.8
0
20
40
60
80
100
FY05 FY06 FY07 FY08 FY09 FY10 FY11
70
(Reference) Annual plan
5.0 5.1 12.53.24.02.01.51.5 3.3 5.7 3.8 4.6
4.0 4.0 3.8 4.0 3.8 3.54.8
3.44.2 4.2
3.53.8
0
5
10
15
20
25
09/Q1 Q2 Q3 Q4 10/Q1 Q2 Q3 Q4 11/Q1 Q2 Q3 Q4
CAPEX
Depreciation & amortization
<bn JPY>CAPEX
(yearly trend)
CAPEX and Depreciation & Amortization (quarterly trend)
CAPEX (acceptance basis)
Q1
35.0
[FY]
26.7
Q2
Note: 1. Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only.2. 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.
Q3
Q4
Annual result: JPY 26.7bn (JPY 9.9bn YoY increase, JPY 8.3bn below plan)
71
Fixed-line Telecommunications
Operation
<Fixed>
3.56.6
12.9
4.74.3
6.9
14.3
5.76.5
10.2
15.5
8.6
14.1
15.1
-0.11.2 0.70.4-0.9
-2.6
1.3
7.6
-0.6
1.6
57.9
38.0
23.018.9
3.3-2.9
-5
0
5
10
15
20
25
30
35
40
45
50
55
60
FY06 FY07 FY08 FY09 FY10 FY11
12.6 11.1 14.6 17.923.9
10.2 11.315.3
18.5
25.8
27.3
19.6
27.4
27.8
12.2
16.1
17.1
8.9 12.4
17.3
21.7
13.010.7
18.7
67.0
47.942.5
64.3
85.6
105.0
0
20
40
60
80
100
FY06 FY07 FY08 FY09 FY10 FY11
72
Operating Income/Loss EBITDA
Sustained revenue & profit increase, through enhancement of corporate sales, efficient management, group synergies. <bn JPY>
*1. FY06/Q1: includes one-off event (reversal of JPY 2.5bn for retirement benefits)
2. FY2008: includes operating income of JPY 2.0bn of SOFTBANK IDC Solutions Corp. (merged with Yahoo Japan at the end of FY08)3. EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)4. Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only.
Q1
Q2
Q3
Q4
(*1)
Q1Q2Q3Q4
Operating Income, EBITDA
Q1Q2Q3Q4
(*2)
<Fixed>
0
2,000
4,000
6,000
8,000
10,000
12,000
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Large Corp. Total1,610
1,400
1,220
1,670 1,670 1,680
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
ConsumerSME (excl. SBTP)SME (SBTP)Large corp
73
Number of lines and ARPU in solid trend on enhancement of corporate sales
<JPY>Number of Lines ARPU<k lines>
Note: 1. ARPU: Average Revenue Per line (rounded to the nearest JPY 10) 2. SBTP: SOFTBANK TELECOM PARTNERS
Number of Lines and ARPU for OTOKU Line
Corporate lines:1,450KCorporate lines ratio: 86.2%
FY06 FY07 FY08 FY09 FY10 FY11FY06 FY07 FY08 FY09 FY10 FY11
<Fixed>
6.3
82.6
37.6
21.8
8.2
10.6
14.629.536.2
17.9
0
20
40
60
80
100
FY05 FY06 FY07 FY08 FY09 FY10 FY11
74
14.6
10.68.215.6
9.05.16.8
3.43.96.6
9.58.1
5.16.3
6.33.7
9.4 9.4 9.4 9.4 9.1 9.0 9.1 9.4 9.6 9.1
14.114.114.114.214.013.713.612.9
12.412.612.1
13.8
11.611.8
10.6
10.99.8 9.6
9.9
11.4
9.3
11.6
0
5
10
15
20
25
08/Q1Q2 Q3 Q409/Q1Q2 Q3 Q410/Q1Q2 Q3 Q411/Q1Q2 Q3 Q4
CAPEX
Depreciation & amortization
Depreciation & amortization + lease (OPEX)
<bn JPY>
CAPEX (yearly trend)
CAPEX and Depreciation & Amortization (quarterly trend)
Annual result: JPY 39.8bn (JPY 3.6bn YoY increase, JPY 1.8bn above plan)
CAPEX (acceptance basis)
Q1
(Reference) Annual plan
38.0
[FY]
39.8
Q2
Note: 1. Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only.2. 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.
Q3
Q4
76
Mobile Communications
Operation
<Mobile>
1,271.6 1,433.4
738.5699.4
2,172.0
1,971.1
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
FY2010 FY201177
270.5254.8347.5307.5
364.3
262.2 283.5317.7
368.3
331.1290.5
261.5
353.3
315.2
252.4277.2
1,433.4
1,271.6
1,121.91,031.1
0
200
400
600
800
1,000
1,200
1,400
FY08 FY09 FY10 FY11
Net sales increased by 10.2%(YoY increase of 12.7% in telecom service revenue).
SBM Consolidated Net Sales SBM Consolidated Net Sales(Quarterly Comparison)
<bn JPY>
Telecom service revenueSales of mobile handsets and accessories
+161.8
Q1
Q2
Q3
Q4
Telecom service revenue
+39.0
+200.8
SBM Consolidated Net Sales
SBM: SOFTBANK MOBILE
<bn JPY>
(+12.7%)
(+5.6%)
(+10.2%)
YoYYoY
+90.7
(+6.2%)
(+8.1%)
(+12.1%)
(+13.7%)
(+14.0%)(+11.1%)
(+13.7%)
+149.7
(+9.8%)
(+13.3%)
(+8.8%)
(+13.0%)
(+14.6%)
(+11.2%)
(+12.1%)
+38.0
+161.8
(+12.7%)
+46.5
+40.0
+37.2
+38.0
+40.5
+34.2
+36.9
+24.7
+29.0
+21.2
+15.6
<Mobile>
27.2 43.5 44.2 60.2102.6 116.4
29.350.6 43.8
71.4
104.5
133.5
96.3
56.9
53.7 46.7
83.3
107.2
82.787.9
26.542.2
36.4
45.7
402.4429.2
260.8
155.7174.5 171.3
0
100
200
300
400
FY06 FY07 FY08 FY09 FY10 FY11
78
Operating Income(Mobile Communications Segment)
Q1
Q2
Q3
Q4
2 months(May-Jun)
<bn JPY>
Operating Income/ EBITDA (SB Consolidated)
(+6.7%)
YoY+26.8
EBITDA(Mobile Communications Segment)
55.8 92.4 99.5 117.1 153.2 175.5
104.0 101.1132.2
157.0195.1
158.5
73.6
161.3
142.6
103.0108.3
104.0
154.9
100.0
112.2
148.8
80.6
87.9
620.4684.1
504.2
321.4
385.4 403.8
0
100
200
300
400
500
600
700
800
FY06 FY07 FY08 FY09 FY10 FY11
YoY +63.6
(+10.3%)
2 months(May-Jun)
*Since SOFTBANK CORP. established the Mobile Communications segment in FY2006 Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only. Note: EBITDA = operating income (loss) + depreciation and amortization (including amortization of goodwill)SB: SOFTBANK
<bn JPY>
Revenue and profit new record high*; operating income increased by 6.7% YoY.
Q1
Q2
Q3
Q4
<Mobile>
0
28.95
27.84
25.41
21.8820.63
18.59
15.91
0
5
10
15
20
25
30
6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3
2G 3G1,114
937
760
67
901
697
209
973
522
367
526532
412
633
361323
350
189
926
1,009
730
561
612
300
200
400
600
800
1,000
1,200
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
79
Number of Subscribers (quarterly net additions/cumulative)
Net Additions Cumulative Subscribers
Net additions in Q4 marked 11.1k (record high). Cumulative subs +3.54mil YoY (record high).
<k subs> <mil subs>
Note: the number of net subscriber additions and the number of cumulative subscribers include the number of prepaid mobile phones and communication module service subscribers.
FY06 FY07 FY08 FY09 FY10 FY11 FY06 FY07 FY08 FY09 FY10 FY11
(+3.54)
YoY comparison in ( )
<Mobile>
-150-130-110
-90-70-50-30-101030507090
AprMay JunJul AugSepOctNovDecJanFebMarAprMay JunJul AugSepOctNovDecJanFebMar
603
227
284
498
270
241
377
312
248
325324
277
239
299
192
245
239
276
216
251
230
333
289280
0
100
200
300
400
500
600
700
Apr MayJune July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Jan Feb Mar
80
<k subs>
Yearly net additions 3.54mil, MNP* 533k (MNP marked the all-time No.2)
Number of Monthly Net Additions
MNP Net Additions*
NTT DOCOMO
KDDI
<k subs>
FY10 FY11 FY10 FY11
FY103,532k
FY10768k
FY11 533k
(-234k)
Note 1.The number of net subscriber additions includes the number of prepaid mobile phones and communication module service subscribers. 2. MNP Net Additions: net of port-in/out through Mobile Number Portability. Created by SOFTBANK CORP.
Net Additions
FY113,540k(+8k)
All-time
#2
(k subs) FY06 FY07 FY08 FY09 FY10 FY11
Net Addition 699 2,578 2,047 1,244 3,532 3,540
MNP -186 318 273 257 768 533#1
SOFTBANK
<Mobile>
2.36%
1.93% 1.98%
1.78%
1.38%
1.33%
0.0%
1.0%
2.0%
3.0%
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
81
1.20%
1.02%
2.01%
1.13%1.19% 1.11%
0.90%
1.10%
0.98%
1.28%
0.85%
1.04%
0.0%
1.0%
2.0%
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Total 3G Postpaid
YoY: Churn rate increased (influenced by prepaid mobile phones, Photovision, mobile data communications devices, etc.)
Upgrade rate stabilized after first cycle of upgrades to iPhone 4S.
Churn Rate & Upgrade Rate
Note 1. For definition and calculation of the churn and upgrade rates, see page 93.2. Churn rate (3G postpaid): calculated with communication module service subscribers included in the number of subscribers and churn.3. Both churn rate and upgrade rate were inflated by 2G termination till FY09.
Upgrade RateChurn Rate
FY07 FY08 FY09 FY10 FY11FY07 FY08 FY09 FY10 FY11
1.32%
1.05%1.06%0.77%0.95%
3G postpaid (annual)All contracts (annual)
0.94%
1.00% 1.37% 0.98% 1.12%
2.20% 1.71% 1.71% 1.40%
Upgrade rate (annual)
1.59%
<Mobile>
82
Churn Rate Details (FY11/Q4)
Churn rate largely varies according to the history of handset upgrades.
0.64%
1.52%
1.10%
0.0%
0.5%
1.0%
1.5%
2.0%
Churn Rate of 3G Postpaid (FY11/Q4) <by history of handset upgrades>
3G postpaid Never upgraded handsets
(details)
Upgraded handsets
in the past
Note: Churn rate (3G postpaid): calculated with communication module service subscribers included in the number of subscribers and churn.
Churn rate of users who have never upgraded their SBM handsets (many of them are short-term users)
Churn rate of users who have upgraded their SBM handsets at least once in the past (many of them are long-term users)
SBM: SOFTBANK MOBILE
Figures for the same period of the previous fiscal year is shown in ( )
(0.98%)
(1.48%)
(0.47%)
<Mobile>
83
1,380 1,600 1,8202,140 2,370 2,530
3,830
2,710 2,0201,750
1,570 1,350
2,530
1,700
3,8904,230
5,210
4,310
3,830 3,890 3,940
0
1,000
2,000
3,000
4,000
5,000
6,000
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2 3 4
Voice ARPU
Data ARPU
<JPY>
-340
+10
QoQ
ARPU (Average Revenue Per User)
Note: ARPU: Average Revenue Per User per month (rounded to the nearest
JPY 10). Monthly Discounts (New Super Bonus Special Discount) are deducted from ARPU.For definition and calculation method of ARPU, refer to page 93.
FY08 JPY 4,070
FY07 JPY 4,650
QoQ: - JPY 340, data +JPY 10.
YoY: - JPY 50, data +JPY 160.
FY06 JPY 5,510
FY09JPY 4,070
(-690)
(+220)
(-260)
(+330)
(-180)
(+230)
YoY
Total
-50
-340 -220
Data ARPU
+160
Voice ARPU
<JPY> <JPY>
(-900)
(-480) (+60)
FY10JPY 4,210
FY06 FY07 FY08 FY09 FY10 FY11
(+50)
(+220)
(-1,120)
FY1JPY 4,150
Impact from access charge reduction. (refer to next page)
<Mobile>
-820
2,6102,4002,1401,8201,6001,380
2,580
2,100
2,4202,7003,1003,5204,0002,450
-180-810 -1,090 -950 -880 -800
<230><390><320><100>
3,890
4,2303,9403,8903,830
4,310
5,210
-1,500
-500
500
1,500
2,500
3,500
4,500
5,500
6,500
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Data ARPU (before Monthly Discounts) Voice ARPU (before Monthly Discounts)Monthly Discounts < Impact of access charge reduction >ARPU
(+60)
84
ARPU (Average Revenue Per User)
(-280)
(+260)
(+70)
(-400)
(+330)
(+140)
<JPY>
Total(-JPY 50)
YoY comparison in ( )
(+200)
YoYcomparison
YoY (Monthly Discounts referred to separately) Basic monthly charge plus voice:- JPY 320, data: +JPY 200 impact of Monthly Discounts: +JPY 60.
(Reference) Impact of Monthly Discounts
(+220)
(-280)
(-410)
FY06 FY07 FY08 FY09 FY10 FY11
(-490)
(+220)
(-630)
(-320)
Note: ARPU: Average Revenue Per User per month (rounded to the nearest
JPY 10). ARPU is reduced by Monthly Discounts (New Super Bonus Special Discount). Impact of access charge reduction : indicates impact of reduction relating to revised access charges between carriers (showing 12 month amount collectively)For definition and calculation method of ARPU, refer to
page 93.
<Mobile>
-1,200
-1,000
-800
-600
-400
-200
0
200
400
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
85
ARPU Increment
<JPY>
NTT DOCOMOKDDI
-JPY 50
Decreased by JPY 50 YoY
ARPU YoY Comparison
FY06 FY07 FY08 FY09 FY10 FY11
SOFTBANK
Note: 1. ARPU: Average Revenue Per User per month (rounded to the nearest
JPY 10). Monthly Discounts (New Super Bonus Special Discount) are deducted from ARPU.For definition and calculation method of ARPU, refer to page 93.
2. Calculated by SOFTBANK CORP. based on respective companies’
publicly available information.
<Mobile>
134.0 137.1 138.1 135.5 139.1 142.1
214.819.5
20.2 20.0
21.621.8 21.6
21.9
114.9 116.8 139.1137.3 141.8 114.7
117.0167.4157.7150.2140.6132.4126.2
188.6176.6 207.2200.6
21.7 21.820.9
22.0 23.8
270.5 283.5 290.5 277.2307.5 317.7
331.1 315.2 347.5364.3 368.3 353.3
0
50
100
150
200
250
300
350
400
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Other (not included in ARPU calculation)Data related revenueImpact of access charge reductionVoice related revenueTotal
(-2.9)
86
YoY comparison in ( )
(+ 39.7)
<bn JPY>
Trend of SBM Telecom Service Revenue
FY09 FY10 FY11
(+1.8)
Total(+38.0)
YoY
(+2.7)(+1.7)(+1.9)
(+ 42.9)(+ 38.4)(+ 35.9)
JPY 38.0bn increase YoY. Data drives increase in telecom service revenue.
Note: Voice related revenue consists of voice call charges and basic monthly charges, etc.. Data related revenue consists of packet communication charges, etc..
(-2.0)
(+ 38.2)
Revenue FY10 FY11 Change
Other 85.9 88.9 3.0
Data 652.0 811.4 159.3
Voice 533.6 533.1 -0.5
Total 1,271.6 1,433.4 161.8
<Mobile>
87
220
2,370
1,380 1,600 1,820 2,140 2,5302,530
1,5703,8302,710 2,020 1,750
1,7001,350
250
190
250280 290
220
1,2201,2801,230
1,640 1,450
220
1,190
<230><390><320><100>5,6305,610 5,790 5,760 5,630 5,470
5,320
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Data ARPU Voice ARPUBackup Service Package, etc. HS installment paymentImpact of access charge reduction
leap year
<JPY>
ARPUJPY 3,890
Average Cash Income Per Subscription (including HS installment payment)
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 93.Impact of access charge reduction: indicates impact of reduction relating to revised access charges between carriers (showing 12 month amount collectively )
Cash income per subscription decreasing slightly.
FY06 FY07 FY08 FY09 FY10 FY11
leap year
<Mobile>
52.9 72.137.4 32.4 25.9
84.0
79.2 50.9
38.7 39.1 65.3
98.3
71.2
52.9 47.9
104.9
60.3
70.065.2
143.8
93.6
52.0 116.3
146.6
0
50
100
150
200
250
300
350
400
450
FY06 FY07 FY08 FY09 FY10 FY11
88
25.965.247.939.132.4 65.3 116.3 84.0 98.3 93.6143.8 146.6
59.251.5
49.237.7
53.546.347.844.0 39.6 41.1
48.0 46.2 48.6
61.3
51.548.351.347.755.4
42.3 44.4 45.953.1 48.8
0
50
100
150
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
CAPEX (Mobile Communications Segment)Depreciation & amortization (Mobile Communications Segment)Reference: depreciation & amortization (SBM consolidated)
<bn JPY>CAPEX (yearly trend)
CAPEX and Depreciation & Amortization (quarterly trend)
11 months(May 06-
Mar 07)
2 months(May-Jun/06)
CAPEX (acceptance basis)
Q1
Q2
Q3
Note: Segment financial results: new standards are applied from FY2010. FY2009 results are shown based on the new standard for comparison purposes only. 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. <Reference> Under the former classification, increase in depreciation for FY11 (SBM consolidated) consists of JPY 5.8bn of depreciation and JPY 2.3bn of loss on disposal.
SBM: SOFTBANK MOBILE
(Reference) Annual plan
Annual result: JPY 422.7bn (YoY:+JPY71.2bn, JPY18.7bn above plan)
404.0
351.5
Q4
FY09 FY10 FY11
235.3
199.1 184.7
(+11.2)
YoY comparison in ( )
308.4
422.7
(+8.2)
<Mobile>
New Super Bonus Subscription Ratio
80%
82%
85%
72%78%
84%
57%
63%
74%
65%
58% 56%
0%
20%
40%
60%
80%
100%
Q2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Acquisitions subscription ratio (*1)Cumulative subscription ratio (*2)
89*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)
(includes Super Bonus)
New Super Bonus Subscription Ratio
FY06 FY07 FY08 FY09 FY10 FY11
Subscription ratio stable around 80%. (cumulative subscription ratio continues slight increase since Q3).
<Mobile>
442.1
256.8 226.6
362.2
417.3
-187.9
-307.5
-239.9 -259.5
5.4
1.049.9
163.6160.5162.8
260.4 265.8
212.4
202.2
221.2
224.2
5.3
4.6
9.8
18.7479.5
506.5
226.6230.6
442.1
256.8
0
100
200
300
400
500
600
Q2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Long-term balance
Balance of installment sales receivables securitization
90
Continued sale of installment sales receivables. Receivables balance is declining. (Decrease significantly smaller YoY.)
Installment Sales Receivables Balance
Installment Sales Receivables Balance
4th
securitization56.1
12th56.1
8th61.4
<Summary>FY11: JPY 30.1bn decreased (=increase in operating CF)…1FY10: JPY 185.2bn decreased (=increase in operating CF)…2Change: JPY -155.0bn (factor decreasing operating CF YoY)
<bn JPY>
FY07 FY07 FY08 FY09 FY10 FY11
…1-30.1
-185.2 …2
*1 increased due to strong sales*2 decreased due to continuous sale of receivables
(+55.0)*1
(-119.5)*2
(-185.2)...2
Occurred
SoldCollected
Installment Sales Receivables Balance
Mar 09 Mar 10 Mar 11
<bn JPY>YoY comparison in ( )
(-30.1)...1
<Mobile>
91
35.6 35.5
45.3
50.1
40.237.2 37.5 37.8
35.4 36.2
30.8 29.4
22.3 21.2
29.5 30.0
15.518.2 19.5
28.0 27.4 26.3
38.3
25.7
35.937.4
23.6
23.5
26.7
26.7
26.2
23.6 25.2
12.3
22.523.422.223.0
23.925.8
26.1
31.0
25.9
25.3
28.7
28.6
29.027.0
0
10
20
30
40
50
60
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4
Average acquisition cost per subscriberGross margin from sales of mobile handsets and accessories per unitAverage upgrade cost per subscriber
<k JPY>Average acquisition cost per subscriber = Average commission paid to sales agents per new subscription.
Average upgrade cost per subscriber = Average commission paid to sales agents per handset upgrade.
Gross Margin from Sales of Mobile Handsets and Accessories per Unit= gross margin from sales of mobile handsets and accessories / handsets sold(Gross Margin from Sales of Mobile Handsets and Accessories per Unit is based on an rough estimate.)
Note: handsets sold: total of new subscriptions and handset upgrades new subscriptions include prepaid mobile phones and communication modules. Upgrades include communication modules.
FY08 FY09 FY10 FY11
Average Acquisition and Upgrade Cost per Subscriber Gross Margin from Sales of Mobile Handsets and Accessories
QoQ: Average acquisition cost per subscriber increased due to change in sales initiatives and product mix.
<Mobile>
92
5.47.1
1.3 2.6 2.1
6.24.6
1.81.9
8.7
1.52.2 3.0
10.1
3.8
2.3 1.5
2.0
0.2
2.5
8.7
30.4
9.1
160
7.3
0
5
10
15
20
25
30
35
FY07 FY08 FY09 FY10 FY11
46.2
32.3
25.9
38.6
22.5
30.8
0
10
20
30
40
50
60
70
Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4 Q1 2 3 4FY07 FY08 FY09 FY10 FY11
<bn JPY>
FY10Q4
FY11Q4 YoY
Handsets sold (mil. units) 2.76 3.30 19.4%
Inventory(bn JPY) 38.6 30.8 -20.2%
*Handsets sold: total of new subscriptions and handset upgrades SBM: SOFTBANK MOBILE
SBM Inventory (on B/S) SBM Allowance for Doubtful Accounts of Installment Receivables and Bad Debt Loss
(on P/L)
Inventory maintains stable trend.
Allowances sustain steady trend.
Improvement in Management Efficiency
Q1
Q2
Q3
Q4
<bn JPY>
<Mobile>Definition and Calculation Method of ARPU, etc., in the Mobile Communications Business
1. Definition and calculation method of ARPUARPU(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 ARPUVoice ARPU = voice related revenue (such as voice call charges, basic monthly charges, revenues from incoming calls)
/ number of active subscribersData 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. 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 rateChurn 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 rateUpgrade 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.
93
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