TIDM56ID
RNS Number : 1419Q
Softbank Corp
29 July 2010
This English translation of the financial report was prepared for reference
purposes only and is qualified in its entirety by the original Japanese version.
The financial information contained in this report is derived from our
unaudited consolidated financial statements appearing in item 3 of this report.
SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORT
For the three-month period ended June 30, 2010
Tokyo, July 29, 2010
(Percentages are shown as year-on-year changes)
(1) Results of Operations
+----------------+----------------+-------+------------+-------+------------+-------+-----------+--------+
| (Millions of yen; amounts less than one million yen are omitted.) |
+--------------------------------------------------------------------------------------------------------+
| | Net sales | Operating | Ordinary | Net income |
| | | income | income | |
+ +------------------------+--------------------+--------------------+--------------------+
| | Amount | % | Amount | % | Amount | % | Amount | % |
+----------------+----------------+-------+------------+-------+------------+-------+-----------+--------+
| Three-month | JPY700,840 | 5.2 | JPY156,603 | 44.6 | JPY126,844 | 61.0 | JPY19,438 | (29.0) |
| period ended | | | | | | | | |
| June 30, 2010 | | | | | | | | |
+----------------+----------------+-------+------------+-------+------------+-------+-----------+--------+
| Three-month | JPY666,334 | 2.9 | JPY108,290 | 27.3 | JPY78,797 | 45.2 | JPY27,383 | 41.4 |
| periodended | | | | | | | | |
| June 30, 2009 | | | | | | | | |
+----------------+----------------+-------+------------+-------+------------+-------+-----------+--------+
| | |
+--------------------------------------------------------------+-----------------------------------------+
| | Net income | Net income | |
| | per | per | |
| | share-basic | share-diluted | |
| | (yen) | (yen) | |
+----------------+------------------------+--------------------+-----------------------------------------+
| Three-month | JPY17.96 | JPY17.39 | |
| period ended | | | |
| June 30, 2010 | | | |
+----------------+------------------------+--------------------+-----------------------------------------+
| Three-month | JPY25.33 | JPY24.45 | |
| periodended | | | |
| June 30, 2009 | | | |
+----------------+----------------+-------+------------+-------+------------+-------+-----------+--------+
(2) Financial Condition
+----------------+--------------+------------+------------+---------------+
| (Millions of yen; amounts less than one million yen are omitted.) |
+-------------------------------------------------------------------------+
| | Total | Total | Equity |Shareholders' |
| | assets | equity | ratio (%) | equity |
| | | | | per share |
| | | | | (yen) |
+----------------+--------------+------------+------------+---------------+
| As of June 30, | JPY4,270,968 | JPY993,529 | 11.0 | JPY434.83 |
| 2010 | | | | |
+----------------+--------------+------------+------------+---------------+
| As of March | JPY4,462,875 | JPY963,971 | 10.5 | JPY434.74 |
| 31, 2010 | | | | |
+----------------+--------------+------------+------------+---------------+
Note: Shareholders'equity (consolidated)
As of June 30, 2010: JPY470,633 million
As of March 31, 2010: JPY470,531 million
2. Dividends
+--------------+----------+----------+----------+------------+----------+
| | Dividends per share |
+--------------+--------------------------------------------------------+
| (Record | First | Second | Third | Fourth | Total |
| date) | quarter | quarter | quarter | quarter | |
+--------------+----------+----------+----------+------------+----------+
| | (yen) | (yen) | (yen) | (yen) | (yen) |
| | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Fiscal | - | 0.00 | - | 5.00 | 5.00 |
| year ended | | | | | |
| March 31, | | | | | |
| 2010 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Fiscal | - | | | | |
| year | | | | | |
| ending | | | | | |
| March 31, | | | | | |
| 2011 | | | | | |
+--------------+----------+----------+----------+------------+----------+
| Fiscal | | 0.00 | - | 5.00 | 5.00 |
| year | | | | | |
| ending | | | | | |
| March 31, | | | | | |
| 2011 | | | | | |
|(Forecasted) | | | | | |
+--------------+----------+----------+----------+------------+----------+
Revision of forecasts on the dividends: No
3. Forecasts on the consolidated operation results for the fiscal year
ending in March 2011 (April 1, 2010 - March 31, 2011)
(Percentages are shown as year-on-year changes)
(Millions of yen)
+--------------------------+---------------+----------------+
| | Operating income |
+--------------------------+--------------------------------+
| First-half financial | JPY - | - (%) |
| year | | |
+--------------------------+---------------+----------------+
| Full financial year | JPY500,000 | 7.3(%) |
+--------------------------+---------------+----------------+
Revision of forecasts on the consolidated operation results: No
4. Others (Please refer to page 18 "2. Others" for details)
(1) Significant Changes in Scope of Consolidation: No
Note: Existence or non existence of significant changes in scope of
consolidation of specified subsidiaries
(2) Application of simple accounting methods or special accounting methods for
preparation for the consolidated financial statements: No
Note: Existence or non existence of application of simple accounting
methods or special accounting methods for the consolidated financial statements
(3) Changes in accounting principles, procedures, disclosure methods, etc.,
used in the presentation of the consolidated financial statements
[1] Changes due to revisions in accounting standards: Yes
[2] Changes other than those in [1]: No
Note: Existence or non existence of changes in accounting principles,
procedures, disclosure methods, etc., used in the presentation of the
consolidated financial statements
(4) Number of shares issued (Common stock)
[1] Number of shares issued (including treasury stock):
As of June 30, 2010: 1,082,526,378 shares
As of March 31, 2010: 1,082,503,878 shares
[2] Number of treasury stock:
As of June 30, 2010: 176,045 shares
As of March 31, 2010: 174,775 shares
[3] Weighted average number of common stock:
As of June 30, 2010: 1,082,335,888 shares
As of June 30, 2009: 1,081,005,310 shares
* Implementation status of quarterly review procedures
This quarterly consolidated financial report is not subject to quarterly review
procedures based on Financial Instruments and Exchange Act and the review
procedures for the quarterly consolidated financial statements were being
conducted when this report was disclosed.
* Note to forecasts on the consolidated operating results and other items
The forecast figures are estimated based on the information which SOFTBANK CORP.
is able to obtain at the present point and assumptions which are deemed to be
reasonable. However, actual results may be different due to various factors.
Please refer to page 16 "1. Qualitative Information Regarding Three-month Period
Results (3) Earnings Forecasts" for details of notes to precondition and usage
for forecasts.
(Appendix)
Content
+----------+-------------------------------------------------------+------+
| 1. Qualitative Information Regarding Three-month Period | |
| Results | |
+------------------------------------------------------------------+------+
| | (1) Qualitative Information Regarding Consolidated | p. 2 |
| | Results of Operations | |
+----------+-------------------------------------------------------+------+
| | 1. Consolidated Results of Operations | p. 2 |
+----------+-------------------------------------------------------+------+
| | 2. Results by Business Segment | p. 5 |
+----------+-------------------------------------------------------+------+
| | (Reference 1: Principal Operational Data) | p. 9 |
+----------+-------------------------------------------------------+------+
| | (Reference 2: Capital Expenditure and Depreciation) | p. |
| | | 11 |
+----------+-------------------------------------------------------+------+
| | (2) Qualitative Information Regarding Consolidated | p.12 |
| | Financial Position | |
+----------+-------------------------------------------------------+------+
| | 1. Assets, Liabilities and Equity | p.12 |
+----------+-------------------------------------------------------+------+
| | 2. Cash Flows | p.14 |
+----------+-------------------------------------------------------+------+
| | (Reference Major Financing Activities) | p.15 |
+----------+-------------------------------------------------------+------+
| | (3) Earnings Forecasts | p.16 |
+----------+-------------------------------------------------------+------+
| | (4) The SOFTBANK Group | p.17 |
+----------+-------------------------------------------------------+------+
| 2. Others | |
+------------------------------------------------------------------+------+
| | (1) Significant Changes in Scope of Consolidation | p.18 |
+----------+-------------------------------------------------------+------+
| | (2) Application of Simple Accounting Methods or | p.18 |
| | Special Accounting Methods for Preparation for the | |
| | Consolidated Financial Statements | |
+----------+-------------------------------------------------------+------+
| | (3) Changes in Accounting Principles, Procedures, | p.18 |
| | Disclosure Methods, etc., Used in the Presentation of | |
| | the Consolidated Financial Statements | |
+----------+-------------------------------------------------------+------+
| 3. Consolidated Financial Statements | |
+------------------------------------------------------------------+------+
| | (1) Consolidated Balance Sheets | p.19 |
+----------+-------------------------------------------------------+------+
| | (2) Consolidated Statements of Income | p.21 |
+----------+-------------------------------------------------------+------+
| | (3) Consolidated Statements of Cash Flows | p.22 |
+----------+-------------------------------------------------------+------+
| | (4) Significant Doubt About Going Concern | p.24 |
| | Assumption | |
+----------+-------------------------------------------------------+------+
| | (5) Significant Changes in Shareholders` Equity | p.24 |
+----------+-------------------------------------------------------+------+
| | (6) Basis of Presentation of Consolidated Financial | p.24 |
| | Statements | |
+----------+-------------------------------------------------------+------+
| | (7) Notes | p.25 |
+----------+-------------------------------------------------------+------+
1. Qualitative Information Regarding Three-month Period Results
(1) Qualitative Information regarding Consolidated Results of Operations
1. Consolidated Results of Operations
<Overview of results for the first quarter of the fiscal year ending March 31,
2011 (three-month period from April 1 to June 30, 2010)>
Reflecting steady performance at its Mobile Communications business, the
SOFTBANK Group (hereafter "the Group") achieved a JPY34,505 million (5.2%)
increase in consolidated net sales compared with the same period of the previous
fiscal year (April 1 to June 30, 2009, hereafter "year-on-year") to JPY700,840
million. Operating income for the three-month period ended June 30, 2010
(hereafter "the period") increased by JPY48,313 million (44.6%) to JPY156,603
million. This growth in consolidated revenue and profit was driven by earnings
growth in the Mobile Communications segment, from an increase in the number of
mobile subscribers and an increase in ARPU1. Ordinary income grew JPY48,047
million (61.0%) to JPY126,844 million. Net income declined JPY7,945 million
(29.0%) to JPY19,438 million, this was mainly due to an increase in total income
taxes of JPY44,879 million.
Notes:
Definition of terms: as used in this consolidated financial report for the
three-month period ended June 30, 2010, references to "the Company," "the Group"
and "the SOFTBANK Group" are to SOFTBANK CORP. and its consolidated subsidiaries
except as the context otherwise requires or indicates.
1. Average Revenue Per User.
Revenue and number of mobile phone
subscribers include prepaid mobile phones and communication module service
subscribers.
For the Mobile Communications segment, the term "ARPU" used alone indicates the
total of the basic monthly charge plus voice ARPU plus data ARPU.
The main factors affecting earnings for the period were as follows:
(a) Net Sales
Net sales totaled JPY700,840 million, for a JPY34,505 million (5.2%)
year-on-year increase. This was mainly due to an increase in the number of
mobile subscribers and an increase in ARPU in the Mobile Communications segment.
(b) Cost of Sales
The cost of sales declined JPY10,425 million (3.3%) year-on-year to JPY307,180
million, mainly from lower depreciation and amortization expenses in the Mobile
Communications segment due to the termination of 2G mobile phone service.
(c) Selling, General and Administrative Expenses
Selling, general and administrative expenses declined JPY3,381 million (1.4%)
year-on-year to JPY237,055 million.
This was mainly due to a year-on-year decrease in sales commissions2 in the
Mobile Communications segment as a result of less handset upgrades after the
termination of 2G service in March 2010, while there were more handset upgrades
to 3G service in the same period of the previous fiscal year leading up to this
termination.
Note:
2. Sales commissions paid to sales agents per new subscription and upgrade
purchase.
(d) Operating Income
As a result, operating income totaled JPY156,603 million, for a JPY48,313
million (44.6%) year-on-year increase.
(e) Non-operating Income / Expenses, net
The Group recorded a net non-operating loss of JPY29,759 million, which was
JPY266 million larger than the JPY29,492 million net non-operating loss in the
same period of the previous fiscal year. This was mainly JPY27,789 million in
interest expenses.
(f) Ordinary Income
Ordinary income therefore totaled JPY126,844 million, marking a JPY48,047
million (61.0%) year-on-year increase.
(g) Special Income
Special income totaled JPY926 million.
(h) Special Loss
The special loss was JPY9,606 million. Loss on adjustment for changes of
accounting standard for asset retirement obligations of JPY7,099 million was
recorded.
(i) Income Taxes
Provisions for current income taxes were JPY34,101 million, additional tax
expenses of JPY26,450 million were recorded as income taxes - correction, and
provisions for deferred income taxes were JPY25,373 million. Current income
taxes increased by JPY14,244 million year-on-year, this was mainly the result of
loss carryforwards under the BB Mobile Corp. (hereafter "BB Mobile") income
taxes under consolidated tax return3 being utilized fully in the previous fiscal
year. The income taxes - correction were recorded in response to a correction
and ruling notice received by Yahoo Japan Corporation (hereafter "Yahoo Japan")
from the Tokyo Regional Taxation Bureau on June 30, 2010. Refer to page 28, "3.
Consolidated Financial Statements - Notes Consolidated Statements of Income - 4.
Income taxes - corrections" for details. Yahoo Japan paid the relevant
additional income taxes on July 1, 2010.
Note:
3. BB Mobile and its subsidiaries including SOFTBANK MOBILE Corp. (hereafter
"SOFTBANK MOBILE"), adopt the consolidation taxation system.
(j) Minority Interest in Net Income
Minority interests in net income totaled JPY12,800 million, primarily from
profit recorded at Yahoo Japan.
(k) Net Income
As a result of the above, net income totaled JPY19,438 million, for a JPY7,945
million (29.0%) year-on-year decline.
The Group is strengthening its cash-flow-oriented management, and aims to reduce
its JPY1,939,520 million of net interest-bearing debt4 as of the end of March
2009 by half over three years (by the end of March 2012) and to zero over six
years (by the end of March 2015). To achieve this, the Group plans to generate
an aggregate total of at least JPY1 trillion in free cash flow5 over the three
years from fiscal 2009 (period from April 1, 2009, to March 31, 2012, previous
fiscal year). As a result of strong performance in the Mobile Communications
segment, free cash flow totaling JPY57,768 million was recorded during the
period. Net interest-bearing debt at the end of the period was JPY1,498,895
million.
Notes:
4. Net interest-bearing debt: interest-bearing debt - cash
position.
Interest-bearing debt: short-term borrowings + commercial paper +
current portion of corporate bonds + corporate bonds + long-term borrowings.
Lease obligations are excluded.
This also excludes the corporate bonds (WBS
Class B2 Funding Notes, issued by J-WBS Funding K.K.) with a face value of
JPY27,000 million acquired by the Company during the previous fiscal year that
were issued under the whole business securitization financing scheme associated
with the acquisition of Vodafone K.K.
Cash position: cash and cash deposits
+ marketable securities recorded as current assets.
5. Free cash flow: cash flows from operating activities + cash flows from
investing activities.
2.
Results by Business Segment
From this period the "Accounting Standard for Disclosures about Segments of an
Enterprise and Related Information" (ASBJ Statement No.17, March 27, 2009) and
the "Guidance on the Accounting Standard for Disclosures about Segments of an
Enterprise and Related Information (ASBJ Guidance No.20, May 21, 2008) are
applied. Hereafter the accounting standard and the guidance on the accounting
standard applied in the same period of the previous fiscal year will be referred
to as "former standard", while those applied in this period will be referred to
as "new standard."
Net sales and operating income for the period are compared on a year-on-year
basis, based on the new standard.
Note:
Principal operational data is shown on pages 7-8 "(Reference 1: Principal
Operational Data)."
(a) Mobile Communications
+-----------+-----------+-----------+-------------+-------------+-------------+
| (Millions of yen) |
+-----------------------------------------------------------------------------+
| | Three-month Period |Three-month |(Reference) |(Reference) |
| | Ended | Period | Change | Change % |
| | June 30, 2009 | Ended |(d)=(c)-(b) | (d)÷(b) |
| | | June 30, | | |
| | | 2010 | | |
+ +-----------------------+-------------+ + +
| | (Former | (New | | | (New |
| |standard) |standard) | | | standard) |
| | (a) | (b) | | | (c) |
+-----------+-----------+-----------+-------------+-------------+-------------+
| Net | 407,304 | 407,285 | 441,078 | 33,793 | 8.3% |
| sales | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
|Operating | 60,260 | 60,235 | 102,657 | 42,422 | 70.4% |
| income | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
· 696,600 net subscriber additions for the period
· ARPU6 for the period was JPY4,290, a JPY260 year-on-year increase. Data ARPU
was JPY2,250, a JPY370 year-on-year increase
<Analysis of Results>
The segment's net sales increased by JPY33,793 million (8.3%) year-on-year to
JPY441,078 million. Telecom service revenue grew on an increase in the number
of mobile subscribers combined with an increase in ARPU. Sales commissions
decreased as a result of less handset upgrades mainly due to the termination of
2G service while there were more handset upgrades to 3G service in the same
period of the previous fiscal year leading up to this termination in March 2010.
As a result, operating income increased by JPY42,422 million (70.4%)
year-on-year to JPY102,657 million, as a result of an increase in net sales and
decreased decrease in sales commissions etc.
Note:
6. Rounded to the nearest JPY10.
<Number of Mobile Phone Subscribers>
Net subscriber additions (new subscribers minus cancellations) for the period
totaled 696,6007, on continued strong sales of iPhone8 and PhotoVision. As a
result, the cumulative subscribers at the end of the period stood at
22,573,2007, increasing SOFTBANK MOBILE's cumulative subscriber share 0.6 of a
percentage point year-on-year, to 19.9%9.
Notes:
7. The number of net subscriber additions and the number of cumulative
subscribers include prepaid mobile phones and communication module service
subscribers.
Net subscriber additions for communication modules for the
period totaled 169,800, and the total number of communication module service
subscribers as of June 30, 2010 was 707,300.
8. iPhone is a trademark of Apple Inc.
The iPhone trademark is used
under license from Aiphone K.K.
9. Calculated by the Company based on Telecommunications Carriers
Association statistical data.
<ARPU>
ARPU for the period rose JPY260 year-on-year to JPY4,290. The sum of basic
monthly charge and voice ARPU declined JPY120 year-on-year to JPY2,030, due to
revised access charges between carriers and an increase in devices like
PhotoVision that do not have voice communication functionality. On the other
hand, data ARPU rose JPY370 year-on-year to JPY2,250. This was mainly the
result of an increase in the number of data-intensive iPhone subscribers, the
termination of the non-data-intensive 2G service, and also a further increase in
data telecommunication use by non-iPhone subscribers.
<Churn Rate and Upgrade Rate>
The churn rate10 for the period was 1.02%, which was 0.03 of a percentage point
lower year-on-year. There was no longer a negative impact on churn associated
with the termination of 2G service, while the number of customers completing
their installment handset payments increased and some of these customers
churned.
The upgrade rate10 for the period was 1.18%, which was 0.55 of a percentage
point lower year-on-year. This was mainly due to a decrease in upgrades as a
result of the termination of 2G service in March 2010.
Note:
10. Includes prepaid mobile phones and communication module service
subscribers.
<Average Customer Acquisition Commission>
The average customer acquisition commission11 for the period declined JPY12,900
year-on-year to JPY37,200. This was primarily the reflection of a temporary
rise in the average customer acquisition commission in the same period of the
previous fiscal year as a result of corporate marketing activities. An increase
in the portion of sales represented by devices such as PhotoVision, which have a
low customer acquisition commission, also contributed to the decline.
Note:
11. Commissions (average) paid to sales agents per new subscription.
New subscriptions include prepaid mobile phones and communication modules.
(b)
Broadband Infrastructure
+-----------+-----------+-----------+-------------+-------------+-------------+
| (Millions of yen) |
+-----------------------------------------------------------------------------+
| | Three-month Period |Three-month |(Reference) |(Reference) |
| | Ended | Period | Change | Change % |
| | June 30, 2009 | Ended |(d)=(c)-(b) | (d)÷(b) |
| | | June 30, | | |
| | | 2010 | | |
+ +-----------------------+-------------+ + +
| | (Former | (New | | | (New |
| |standard) |standard) | | | standard) |
| | (a) | (b) | | | (c) |
+-----------+-----------+-----------+-------------+-------------+-------------+
| Net | 53,806 | 53,431 | 49,323 | (4,108) | (7.7%) |
| sales | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
|Operating | 13,903 | 13,779 | 11,696 | (2,083) | (15.1%) |
| income | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
<Overview of Operations>
This segment's net sales decreased by JPY4,108 million (7.7%) year-on-year to
JPY49,323 million. This is mainly because the trend of decreasing revenue on a
decline in the number of charged lines12 of ADSL service continued. Operating
income decreased by JPY2,083 million (15.1%) year-on-year to JPY11,696 million,
as a result of a decrease in net sales and an increase in sales-related expenses
incurred in connection with customer acquisitions for Yahoo! BB hikari with
FLET'S13.
The cumulative number of Yahoo! BB hikari with FLET'S contracts
totaled 405,000 as of the end of the period, which combined with installed
lines14 of ADSL service brought the total number of users to 4,014,000.
Notes:
12. Number of installed lines excluding customers whose basic monthly charge
is free under campaigns or other promotional initiatives.
13. A broadband connection service that combines the Internet connection
service Yahoo! BB and the FLET'S HIKARI fiber-optic connection provided by
NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION ("NTT East") and NIPPON
TELEGRAPH AND TELEPHONE WEST CORPORATION ("NTT West"). FLET'S and FLET'S HIKARI
are registered trademarks of NTT East and NTT West.
14. Number of lines for which connection construction for ADSL line at central
office of NTT East or NTT West is complete.
(c) Fixed-line Telecommunications
+-----------+-----------+-----------+-------------+-------------+-------------+
| (Millions of yen) |
+-----------------------------------------------------------------------------+
| | Three-month Period |Three-month |(Reference) |(Reference) |
| | Ended | Period | Change | Change % |
| | June 30, 2009 | Ended |(d)=(c)-(b) | (d)÷(b) |
| | | June 30, | | |
| | | 2010 | | |
+ +-----------------------+-------------+ + +
| | (Former | (New | | | (New |
| |standard) |standard) | | | standard) |
| | (a) | (b) | | | (c) |
+-----------+-----------+-----------+-------------+-------------+-------------+
| Net | 86,758 | 86,758 | 85,876 | (882) | (1.0%) |
| sales | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
|Operating | 3,493 | 3,512 | 6,661 | 3,149 | 89.7% |
| income | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
<Overview of Operations>
The segment's net sales decreased by JPY882 million (1.0%) year-on-year to
JPY85,876 million. The decrease is mainly a result of the continued decrease in
revenue from relay connection voice services including MYLINE and international
telephone services. Operating income increased by JPY3,149 million (89.7%) to
JPY6,661 million. Despite the continuing decline in revenue, there was a
significant profit increase as a result of decreases in lease payments on
equipment for the OTOKU Line service.
(d) Internet Culture
+-----------+-----------+-----------+-------------+-------------+-------------+
| (Millions of yen) |
+-----------------------------------------------------------------------------+
| | Three-month Period |Three-month |(Reference) |(Reference) |
| | Ended | Period | Change | Change % |
| | June 30, 2009 | Ended |(d)=(c)-(b) | (d)÷(b) |
| | | June 30, | | |
| | | 2010 | | |
+ +-----------------------+-------------+ + +
| | (Former | (New | | | (New |
| |standard) |standard) | | | standard) |
| | (a) | (b) | | | (c) |
+-----------+-----------+-----------+-------------+-------------+-------------+
| Net | 65,156 | 65,149 | 68,405 | 3,255 | 5.0% |
| sales | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
|Operating | 31,717 | 32,113 | 35,572 | 3,459 | 10.8% |
| income | | | | | |
+-----------+-----------+-----------+-------------+-------------+-------------+
<Overview of Operations>
The segment's net sales increased by JPY3,255 million (5.0%) year-on-year to
JPY68,405 million Growth at Yahoo Japan was related to a year-on-year recovery
in listing and display advertising and growth in Yahoo! Shopping's transaction
value. Operating income increased by JPY3,459 million (10.8%) year-on-year to
JPY35,572 million. In addition to the growth in net sales, reduced
communication costs etc. and a decrease in depreciation and amortization costs
as a result of continued efforts in efficient management and cost reductions
contributed to the increase in profit.
(Reference 1: Principal Operational Data)
(a) Mobile Communications
+--------------+-------------+----------+----------+--------+------------+------------+
| SoftBank mobile phones |
+-------------------------------------------------------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | | March 31, |
| | | 2011 |
+ +---------------------------------------------------------+------------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Thousands) |
+-------------------------------------------------------------------------------------+
| Net | 323.3 | 360.7 | 350.3 | 209.4 | 1,243.7 | 696.6 |
| additions1 | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Postpaid) | 359 | 395 | 383 | 507 | 1,645 | 645 |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Prepaid) | (36) | (34) | (33) | (297) | (401) | 51 |
+--------------+-------------+----------+----------+--------+------------+------------+
| Market | 32.3 | 31.5 | 35.6 | 13.4 | 26.5 | 45.4 |
| share2 (%) | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| Cumulative | 20,956.2 | 21,316.9 | 21,667.2 | | 21,876.6 | 22,573.2 |
|subscribers1 | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (3G) | 19,455 | 20,238 | 20,885 | | 21,876.6 | 22,573.2 |
| (2G) | 1,501 | 1,079 | 782 | | - | - |
+--------------+-------------+----------+----------+--------+------------+------------+
| Market | 19.3 | 19.4 | 19.6 | | 19.5 | 19.9 |
| share2 | | | | | | |
| (%) | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Yen per month) |
+-------------------------------------------------------------------------------------+
| ARPU3 | 4,030 | 4,150 | 4,200 | 3,890 | 4,070 | 4,290 |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Basic | 2,150 | 2,160 | 2,150 | 1,750 | 2,050 | 2,030 |
| monthly | | | | | | |
| charge + | | | | | | |
| voice) | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Data) | 1,880 | 1,990 | 2,060 | 2,140 | 2,020 | 2,250 |
+--------------+-------------+----------+----------+--------+------------+------------+
| (Yen) |
+-------------------------------------------------------------------------------------+
| Average | 50,100 | 35,900 | 37,400 | 40,200 | 40,500 | 37,200 |
| acquisition | | | | | | |
| cost per | | | | | | |
| subscriber4 | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| (% per month) |
+-------------------------------------------------------------------------------------+
| Churn rate1 | 1.05 | 1.24 | 1.16 | 2.01 | 1.37 | 1.02 |
+--------------+-------------+----------+----------+--------+------------+------------+
| (3G | 0.87 | 1.07 | 0.99 | 1.28 | 1.06 | 0.99 |
| postpaid) | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
| Upgrade | 1.73 | 1.81 | 1.53 | 1.78 | 1.71 | 1.18 |
| rate1 | | | | | | |
+--------------+-------------+----------+----------+--------+------------+------------+
Notes:
1. Includes the number of prepaid mobile phones and communication module
subscribers.
2. Calculated by the Company based on Telecommunications Carriers
Association statistical data.
3. Average Revenue Per User (rounded to the nearest JPY10).
Revenue and number of mobile phone subscribers include prepaid
mobile phones and communication modules.
For the Mobile Communications segment, the term "ARPU" used
alone indicates the total of the basic monthly charge plus voice ARPU plus
data ARPU.
4. Commissions (average) paid to sales agents per new subscription.
New subscriptions include prepaid mobile phones and communication modules.
(b)
Broadband Infrastructure
+------------+--------+--------+--------+-------+----------+----------+
| ?Yahoo! BB ADSL? | (Thousands) |
+------------------------------+--------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | | March |
| | |31, 2011 |
+ +---------------------------------------------+----------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+------------+------------+--------+--------+--------+-------+----------+
| Installed | 4,158 | 4,040 | 3,908 | | 3,769 | 3,609 |
| lines5 | | | | | | |
+------------+--------+--------+--------+-------+----------+----------+
| Charged | 3,769 | 3,657 | 3,533 | | 3,389 | 3,221 |
| lines6 | | | | | | |
+------------+--------+--------+--------+-------+----------+----------+
| (Yen per month) |
+---------------------------------------------------------------------+
| Average | 4,260 | 4,260 | 4,250 | 4,210 | | 4,200 |
| user | | | | | | |
| payment | | | | | | |
| per | | | | | | |
| charged | | | | | | |
| line7 | | | | | | |
+------------+--------+--------+--------+-------+----------+----------+
| (% per month) |
+---------------------------------------------------------------------+
| Churn | 2.12 | 1.80 | 1.96 | 2.20 | 2.02 | 2.26 |
| rate8 | | | | | | |
+------------+--------+--------+--------+-------+----------+----------+
Notes:
5. Number of lines for which connection construction for ADSL line at
central office of NTT East or NTT West is complete.
6. Number of installed lines excluding customers whose basic monthly charge
is free under campaigns or other promotional initiatives.
7. Rounded to the nearest JPY10.
8. Average ratio of customer lines with a history of payment, for which a
cancellation application has been filed during the relevant period.
(c) Fixed-line Telecommunications
+-------------+-------+-------+-------+--------+----------+----------+
| OTOKU Line | (Thousands) |
+-----------------------------+--------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | | March |
| | |31, 2011 |
+ +-------------------------------------------+----------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+-------------+-------------+-------+-------+-------+--------+----------+
| Lines | 1,631 | 1,652 | 1,657 | | 1,669 | 1,668 |
+-------------+-------+-------+-------+--------+----------+----------+
| (Yen per month) |
+--------------------------------------------------------------------+
| ARPU9 | 6,390 | 6,280 | 6,450 | 6,830 | | 6,610 |
+-------------+-------+-------+-------+--------+----------+----------+
Note:
9. Average Revenue Per User (rounded to the nearest JPY10).
(d) Internet Culture
+------------+------------+--------+--------+---------+----------+----------+
| | (Millions) |
+----------------------------------+----------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | | March |
| | |31, 2011 |
+ +---------------------------------------------------+----------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+------------+------------+--------+--------+---------+----------+----------+
| Yahoo! JAPAN |
+---------------------------------------------------------------------------+
| Total | 46,445 | 46,378 | 42,779 | 46,882 | | 48,722 |
| monthly | | | | | | |
| page | | | | | | |
| views10 | | | | | | |
+------------+------------+--------+--------+---------+----------+----------+
| Unique | 229 | 189 | 197 | 209 | | 224 |
|browsers11 | | | | | | |
+------------+------------+--------+--------+---------+----------+----------+
| Yahoo! Auctions |
+---------------------------------------------------------------------------+
| Average | 20 | 20 | 23 | 23 | | 22 |
| number of | | | | | | |
| total | | | | | | |
| listed | | | | | | |
| items12 | | | | | | |
+------------+------------+--------+--------+---------+----------+----------+
Notes:
10. Number of accesses to Yahoo! JAPAN Group websites during the last month of
each quarter.
11. Number of browsers accessing a Yahoo! JAPAN service during the last month
of each quarter.
12. Daily average number of items posted during the last month of each
quarter.
(Reference 2: Capital Expenditure and Depreciation)13
(a) Capital Expenditure (acceptance basis)
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| (Millions of yen) |
+--------------------------------------------------------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | |March 31, |
| | | 2011 |
+ +-----------------------------------------------------+-----------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Mobile | 32,408 | 39,148 | 47,921 | 65,291 | 184,770 | 25,987 |
| Communications | | | | | | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Broadband | 1,588 | 1,590 | 2,095 | 4,068 | 9,343 | 3,319 |
| Infrastructure | | | | | | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Fixed-line | 3,710 | 3,939 | 3,436 | 6,893 | 17,979 | 5,112 |
|Telecommunications | | | | | | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Internet | 1,085 | 1,264 | 1,450 | 2,327 | 6,128 | 1,906 |
| Culture | | | | | | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Others | 1,571 | 915 | 678 | 1,528 | 4,693 | 1,216 |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
| Consolidated | 40,364 | 46,858 | 55,582 | 80,109 | 222,915 | 37,542 |
| total | | | | | | |
+--------------------+-------------+---------+--------+--------+-----------+-----------+
(b) Depreciation (excluding amortization of goodwill)
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| (Millions of yen) |
+-------------------------------------------------------------------------------------+
| | Fiscal Year Ended March 31, 2010 | Fiscal |
| | | Year |
| | | Ending |
| | |March 31, |
| | | 2011 |
+ +----------------------------------------------------+-----------+
| | Q1 | Q2 | Q3 | Q4 | Full | Q1 |
| | | | | | Year | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Mobile | 42,732 | 43,377 | 44,656 | 45,569 | 176,337 | 36,636 |
| Communications | | | | | | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Broadband | 4,373 | 4,366 | 4,095 | 4,188 | 17,023 | 4,234 |
| Infrastructure | | | | | | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Fixed-line | 8,982 | 8,837 | 8,669 | 8,803 | 35,292 | 9,104 |
|Telecommunications | | | | | | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Internet | 2,366 | 2,441 | 2,492 | 2,563 | 9,864 | 2,169 |
| Culture | | | | | | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Others | 1,353 | 1,243 | 1,401 | 1,427 | 5,426 | 1,445 |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
| Consolidated | 59,809 | 60,266 | 61,314 | 62,553 | 243,944 | 53,590 |
| total | | | | | | |
+--------------------+-------------+--------+--------+--------+-----------+-----------+
Note:
13. Capital expenditure and Depreciation for the fiscal year ended March 31,
2010 is calculated based on the new standard. Capital expenditure and
Depreciation for the e-Commerce segment for the fiscal year ended March 31, 2010
is included in "Others."
(2)
Qualitative Information regarding Consolidated Financial Position
1. Assets, Liabilities and Equity
Assets, liabilities, and equity at the end of the period were as follows:
(Millions of yen)
+-------------+-------------------+-------------------+-----------+--------+
| | As of June 30, | As of March 31, | YoY | YoY |
| | 2010 | 2010 | | (%) |
+-------------+-------------------+-------------------+-----------+--------+
| Total | 4,270,968 | 4,462,875 | (191,907) | (4.3%) |
| assets | | | | |
+-------------+-------------------+-------------------+-----------+--------+
| Total | 3,277,438 | 3,498,903 | (221,464) | (6.3%) |
|liabilities | | | | |
+-------------+-------------------+-------------------+-----------+--------+
| Total | 993,529 | 963,971 | 29,557 | 3.1% |
| equity | | | | |
+-------------+-------------------+-------------------+-----------+--------+
(a) Current Assets
Current assets at the end of the period totaled JPY1,512,457 million, for a
JPY181,983 million (10.7%) decline from the previous fiscal year-end. The
primary components of the change were as follows:
·Cash and deposits decreased by JPY81,282 million from the previous fiscal
year-end. Although sales operations were favorable, cash and cash deposits
decreased mainly due to the tax payment at Yahoo Japan and BB Mobile income
taxes under consolidated tax return and repayments on borrowings including the
SBM loan1.
·Notes and accounts receivable-trade decreased by JPY102,515 million. This was
mainly because of collections on installment sales receivables from the previous
fiscal year-end shopping season mainly at SOFTBANK MOBILE and sales of
installment sales receivables at SOFTBANK MOBILE.
Note:
1. The funds procured for the acquisition of Vodafone K.K. were refinanced
in November 2006 via a whole business securitization program.
(b) Fixed Assets
Fixed assets totaled JPY2,756,602 million at the end of the period, for a
JPY9,880 million (0.4%) decrease from the previous fiscal year-end. The primary
components of the change were as follows:
·Total property and equipment decreased JPY5,603 million from the previous
fiscal year-end. A decrease of JPY38,239 million mainly related to depreciation
of telecommunications equipment, and increases of JPY21,900 million mainly as a
result of new acquisitions of telecommunications equipment and JPY10,735 million
reflecting the application of an accounting standard for asset retirement
obligations.
·Total intangible assets decreased JPY17,121 million from the previous fiscal
year-end. This was because of a decrease in goodwill of JPY15,650 million
caused by the regular amortization at SOFTBANK MOBILE and SOFTBANK TELECOM Corp.
·Investments and other assets increased by JPY12,844 million from the previous
fiscal year-end, mainly from a JPY14,632 million increase in investment
securities.
(c)
Current Liabilities
Current liabilities at the end of the period totaled JPY1,282,485 million, for a
JPY96,393 million (7.0%) decrease from the previous fiscal year-end. The
primary components of the change were as follows:
·Accounts payable-other and accrued expenses declined by JPY96,199 million from
the previous fiscal year-end. This was mainly because of SOFTBANK MOBILE's
payments of agency commissions for the previous fiscal year-end shopping season
and of accounts payable for equipment.
·The current portion of corporate bonds increased by JPY93,500 million from the
previous fiscal year-end. Transfers were made from corporate bonds under
long-term liabilities in the amounts of JPY53,500 million for the 25th Unsecured
Straight Corporate Bond and JPY60,000 million for the 27th Unsecured Straight
Corporate Bond, as the redemption dates came to be within one year, while the
redemption of the 24th Unsecured Straight Corporate Bond resulted in payments of
JPY20,000 million.
·Short-term borrowings decreased by JPY47,923 million from the previous fiscal
year-end. This was mainly the result of repayments of borrowings procured via
the securitization of installment sales receivables at SOFTBANK MOBILE.
·Income taxes payable decreased by JPY37,340 million. This was mainly because
of BB Mobile's income tax payments under consolidated tax return and tax
payments at Yahoo Japan.
(d) Long-term Liabilities
Long-term liabilities totaled JPY1,994,953 million at the end of the period, for
a JPY125,071 million (5.9%) decrease from the previous fiscal year-end. The
primary components of the change were as follows:
·Long-term borrowings decreased by JPY65,943 million. This was mainly because
SOFTBANK MOBILE repaid JPY46,988 million of its SBM loan.
·Corporate bonds outstanding decreased by JPY63,867 million from the previous
fiscal year-end. This included reductions of JPY113,500 million in total for
the 25th Unsecured Straight Corporate Bond and the 27th Unsecured Straight
Corporate Bond, which were transferred to current liabilities, while the
issuance of the 31st and 32nd Unsecured Straight Corporate Bonds increased the
amount by a total of JPY50,000 million.
(e) Equity
Equity totaled JPY993,529 million at the end of the period, for a JPY29,557
million (3.1%) increase from the previous fiscal year-end. Retained earnings
increased JPY9,189 million, totaling JPY52,260 million at the end of the period.
Minority interests came to JPY522,364 million, an increase of JPY29,401
million. This was mainly due to the change in the scope consolidation of SB
Asia Infrastructure Fund L.P., from an affiliate under equity method to a
consolidated subsidiary. This change reflects the adoption of Accounting
Standards Codification Topic (ASC) 810, Consolidations formerly SFAS No.167,
Amendments to FASB Interpretation No. 46 (R) (SFAS 167) applied at certain
subsidiaries of the Company in the United States of America.
2.
Cash Flows
Cash flow activities during the period were as follows.
Cash and cash equivalents at the end of the period totaled JPY605,492 million,
for a JPY82,189 million decrease from the previous fiscal year-end.
(Millions of yen)
+----------------------+----------------+----------------+-----------+
| | Three-month | Three-month | YoY |
| | Period Ended | Period Ended | |
| | June 30, 2009 | June 30, 2010 | |
+----------------------+----------------+----------------+-----------+
| Cash flows from | 132,087 | 132,998 | 911 |
|operating activities | | | |
+----------------------+----------------+----------------+-----------+
| Cash flows from | (75,511) | (75,230) | 281 |
|investing activities | | | |
+----------------------+----------------+----------------+-----------+
| (Reference) Free | 56,576 | 57,768 | 1,192 |
| cash flow | | | |
+----------------------+----------------+----------------+-----------+
| Cash flows from | (31,337) | (140,735) | (109,397) |
|financing activities | | | |
+----------------------+----------------+----------------+-----------+
(a) Cash Flows from Operating Activities:
Net cash provided by operating activities totaled JPY132,998 million (compared
with JPY132,087 million provided in the same period of the previous fiscal
year).
Income before income taxes and minority interests totaled JPY118,164 million,
while non-cash items of JPY53,590 million in depreciation and amortization and
JPY15,650 million in amortization of goodwill were recorded as positive.
Receivables-trade decreased by JPY106,163 million due to collections on
installment sales receivables from the previous fiscal year-end shopping season
at SOFTBANK MOBILE etc., and sales of installment sales receivables at SOFTBANK
MOBILE.In addition, income taxes paid of JPY98,558 million were recorded for a
JPY79,166 million year-on-year increase. This was mainly due to increased
income tax payments at BB Mobile's income tax under consolidated tax return and
at Yahoo Japan.
(b) Cash Flows from Investing Activities:
Net cash used in investing activities was JPY75,230 million (compared with
JPY75,511 million used in the same period of the previous fiscal year).
Capital expenditures, mainly at telecommunications-related businesses, resulted
in outlays of JPY58,689 million for property and equipment and intangibles.
Purchases of marketable and investment securities resulted in JPY20,315 million
in cash outlays.
As a result, free cash flow (the combined net cash flows from operating
activities and investing activities) for the period was a positive JPY57,768
million (compared with a positive JPY56,576 million in the same period of the
previous fiscal year), for a year-on-year increase of JPY1,192 million.
(c) Cash Flows from Financing Activities:
Net cash used in financing activities was JPY140,735 million (compared with
JPY31,337 million used in the same period of the previous fiscal year).
Repayments of long-term borrowings totaled JPY120,184 million, outlays for the
repayment of lease obligations came to JPY49,115 million, and JPY20,404 million
was used for the redemption of corporate bonds. On the other hand, corporate
bond issues generated JPY49,787 million and long-term borrowings raised
JPY20,000 million.
(Reference)
Major Financing Activities
The major financing activities in the period were as follows:
+------------------+--------------------+--------------------+--------------------+
| Item | Company Name | Details | Summary |
+------------------+--------------------+--------------------+--------------------+
| Issue bonds | SOFTBANK CORP. | Issue of the 31st | Issue date: June |
| | | Unsecured Straight | 2, 2010 |
| | | Corporate Bond | Redemption date: |
| | | | May 31, 2013 |
| | | | Procured amount: |
| | | | JPY25,000 million |
| | | | Interest rate: |
| | | | 1.17%/year |
| | | | Use: redemption of |
| | | | bonds which will |
| | | | mature by the end |
| | | | of June 2011 |
+ + +--------------------+--------------------+
| | | Issue of the | Issue date: June |
| | | 32nd Unsecured | 2, 2010 |
| | | Straight | Redemption date: |
| | | Corporate Bond | June 2, 2015 |
| | | | Procured amount: |
| | | | JPY25,000 million |
| | | | Interest rate: |
| | | | 1.67%/year |
| | | | Use: redemption of |
| | | | bonds which will |
| | | | mature by the end |
| | | | of June 2011 |
+------------------+--------------------+------------------+--------------------+
| Bond redemption | SOFTBANK CORP. | 24th Series of | Redemption date: |
| | | Unsecured Straight | April 26, 2010 |
| | | Bond | Redeemed amount: |
| | | (Fukuoka SoftBank | JPY20,000 million |
| | | HAWKS Bond) | |
+------------------+--------------------+--------------------+--------------------+
| Securitization | SOFTBANK MOBILE | Procurement of | Procurement date: |
| of receivables | Corp. | funds totaling | June 29, 2010 |
| (recorded as | | JPY10,000 million | Redemption method: |
| borrowings) | | accompanying | monthly |
| | | securitization of | pass-through |
| | | mobile phone | repayment |
| | | installment sales | Use: capital |
| | | receivables | expenditure and |
| | | (recorded as | repayment |
| | | borrowings) | of funds raised |
| | | | via the whole |
| | | | business |
| | | | securitization |
| | | | financing scheme |
+------------------+--------------------+--------------------+--------------------+
| Repayment of | SOFTBANK MOBILE | Repayment of | Repayment of funds |
| securitization | Corp. | JPY55,657 million. | procured through |
| of receivables | | | securitization of |
| | | | receivables |
+------------------+--------------------+--------------------+--------------------+
| Increase or | SOFTBANK MOBILE | Decrease of | Repayment of funds |
| decrease in debt | Corp. | JPY46,988 million | raised via the |
| (excluding | | | whole |
| securitization | | | business |
| of | | | securitization |
| receivables) | | | financing scheme |
| | | | |
+ +--------------------+--------------------+--------------------+
| | Yahoo Japan | Decrease of | |
| | Corporation | JPY10,000 million | |
| | | | |
+------------------+--------------------+--------------------+--------------------+
(3)
Earnings Forecasts
The Group is forecasting consolidated operating income of JPY500,000 million for
the fiscal year ending March 31, 2011.
Consolidated net sales are subject to, among others, rapid changes in the
Group's main markets, the Internet and telecommunications industry. There is,
therefore, a possibility that new sales methods will be introduced in the future
in response to changes in the market situation, making it difficult to publicly
disclose a forecast for consolidated net sales.
Forecasts for consolidated ordinary income and consolidated net income are also
difficult to publicly disclose because the performance of the Company's various
holdings of investment securities and investments via funds is subject to
changes in the market environment and other factors, making equity in earnings
under the equity method and valuation gain and loss on investment securities
difficult to project.
In this market environment, it is difficult to make forecasts, and because the
Group is managed with an emphasis on full-year results, interim forecasts are
not disclosed.
(4)
The SOFTBANK Group
As of June 30, 2010, the Group's business segments were comprised of the
following consolidated subsidiaries and equity method companies. The segments'
main businesses were as follows.
+------------+--------------------+--------------+----------------------------+----------------------------+
| Business Segments |Consolidated | Equity Method | Main Business of Segment |
| |Subsidiaries | Non-consolidated | and Name of Business |
| | | Subsidiaries and | |
| | | Affiliates | |
+---------------------------------+--------------+----------------------------+----------------------------+
| Reportable | Mobile | 3 | 1 | Provision of mobile |
| segments | Communications | | | communication services and |
| | | | | sale of mobile phones |
| | | | | accompanying the services |
| | | | | etc. |
| | | | | (Core company: SOFTBANK |
| | | | | MOBILE Corp.) |
+ +--------------------+--------------+----------------------------+----------------------------+
| | Broadband | 3 | - | Provision of high-speed |
| | Infrastructure | | | Internet connection |
| | | | | service, IP telephony |
| | | | | service, and provision of |
| | | | | content etc. |
| | | | | (Core company: SOFTBANK BB |
| | | | | Corp. (Note) ) |
+ +--------------------+--------------+----------------------------+----------------------------+
| | Fixed-line | 2 | - | Provision of fixed-line |
| | Telecommunications | | | telecommunications etc. |
| | | | | (Core companies: SOFTBANK |
| | | | | TELECOM Corp. (Note)) |
+ +--------------------+--------------+----------------------------+----------------------------+
| | Internet | 12 | 10 | Internet-based advertising |
| | Culture | | | operations, e-commerce |
| | | | | site operations such as |
| | | | | Yahoo! Auctions and Yahoo! |
| | | | | Shopping etc. |
| | | | | (Core company: Yahoo Japan |
| | | | | Corporation (Note)) |
+------------+--------------------+--------------+----------------------------+----------------------------+
| Others | 93 | 67 | Distribution of PC |
| | | | software and peripherals, |
| | | | Fukuoka SOFTBANK HAWKS |
| | | | related businesses, etc. |
+---------------------------------+--------------+----------------------------+----------------------------+
| Total | 113 | 78 | |
+------------+--------------------+--------------+----------------------------+----------------------------+
Note:
Although SOFTBANK BB Corp., SOFTBANK TELECOM Corp. and Yahoo Japan Corporation
are included as consolidated subsidiaries in the Broadband Infrastructure,
Fixed-line Telecommunications and Internet Culture segments, respectively,
SOFTBANK BB Corp., SOFTBANK TELECOM Corp. and Yahoo Japan Corporation operate
multiple businesses and therefore their operating results are allocated to
multiple business segments.
[Listed Companies]
The Company's five following subsidiaries were listed on domestic stock
exchanges as of June 30, 2010:
+------------------------+----------------------+
| Company Name | Listed Exchange |
+------------------------+----------------------+
| Yahoo Japan | Tokyo Stock Exchange |
| Corporation | 1st section |
| | Jasdaq Securities |
| | Exchange |
+------------------------+----------------------+
| SOFTBANK TECHNOLOGY | Tokyo Stock Exchange |
| CORP. | 1st section |
+------------------------+----------------------+
| Vector Inc. | Osaka Securities |
| | Exchange Hercules |
+------------------------+----------------------+
| ITmedia Inc. | Tokyo Stock Exchange |
| | Mothers |
+------------------------+----------------------+
| Carview Corporation | Tokyo Stock Exchange |
| | Mothers |
+------------------------+----------------------+
2. Others
(1) Significant Changes in Scope of Consolidation (Changes in Scope of
Consolidation of Specified Subsidiaries)
There are no significant changes in scope of consolidation.
(2) Application of simple accounting methods or special accounting methods for
preparation for the consolidated financial statements
There are no applicable items.
(3) Changes in accounting principles, procedures, disclosure methods, etc.,
used in the presentation of the consolidated financial statements
[1] Application of accounting standard for equity method of accounting for
investments
"Accounting Standard for Equity Method of Accounting for Investments"
(Accounting Standards Board of Japan (ASBJ) Statement No. 16, March 10, 2008)
and "Practical Solution on Unification of Accounting Policies Applied to
Associates Accounted for Using the Equity Method" (Practical Issues Task Force
(PITF) No. 24, March 10, 2008) were applied and necessary adjustments for the
consolidated accounting were made for the period ended June 30, 2010. The
effect of this change is not material for the period ended June 30, 2010.
[2] Application of accounting standard for asset retirement obligations
"Accounting Standard for Asset Retirement Obligations" (ASBJ Statement No. 18,
March 31, 2008) and "Guidance on Accounting Standard for Asset Retirement
Obligations" (ASBJ Guidance No. 21, March 31, 2008) were applied as of April 1,
2010. The effect of this change in operating income and ordinary income is not
material and income before income taxes and minority interests decreased by
JPY7,469 million for the period ended June 30, 2010.
1. Asset retirement obligations which are recorded in the consolidated balance
sheets
The Group reasonably estimated removal costs and recorded the asset retirement
obligations mainly for the corporate head quarter building, certain data and
network centers located in the rental properties under the rental contracts.
Useful periods of 2 years to 33 years and discount rates from 0.1% to 2.3% are
applied for the estimation of asset retirement obligations.
2. Asset retirement obligations which are not recorded in the consolidated
balance sheets
The Group has obligations to restore mobile phone base stations and telephone
line facilities for transmission to their original conditions under the rental
contracts. However, considering business continuity, the removal of these
facilities is difficult and the possibility of executing the obligation to
restore these facilities to their original conditions is extremely low, and
therefore, the asset retirement obligations are not recorded at the period ended
June 30, 2010.
3. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Millions of yen)
+--------------------------------+-----------------+-----------------+
| | As of | As of |
| | June 30, 2010 | March 31, 2010 |
+--------------------------------+-----------------+-----------------+
| | Amount | Amount |
+--------------------------------+-----------------+-----------------+
| ASSETS | | |
+--------------------------------+-----------------+-----------------+
| Current assets: | | |
+--------------------------------+-----------------+-----------------+
| Cash and deposits | JPY608,770 | JPY690,053 |
+--------------------------------+-----------------+-----------------+
| Notes and accounts receivable | 714,034 | 816,550 |
| - trade | | |
+--------------------------------+-----------------+-----------------+
| Marketable securities | 3,569 | 4,342 |
+--------------------------------+-----------------+-----------------+
| Merchandise and finished | 39,208 | 37,030 |
| products | | |
+--------------------------------+-----------------+-----------------+
| Deferred tax assets | 63,721 | 74,290 |
+--------------------------------+-----------------+-----------------+
| Other current assets | 117,320 | 106,733 |
+--------------------------------+-----------------+-----------------+
| Less: | (34,168) | (34,559) |
| Allowance for doubtful | | |
| accounts | | |
+--------------------------------+-----------------+-----------------+
| Total current assets | 1,512,457 | 1,694,440 |
+--------------------------------+-----------------+-----------------+
| | | |
+--------------------------------+-----------------+-----------------+
| Fixed assets: | | |
+--------------------------------+-----------------+-----------------+
| Property and equipment, net: | | |
+--------------------------------+-----------------+-----------------+
| Buildings and structures | 75,438 | 68,182 |
+--------------------------------+-----------------+-----------------+
| Telecommunications equipment | 696,450 | 706,283 |
+--------------------------------+-----------------+-----------------+
| Telecommunications service | 72,748 | 72,983 |
| lines | | |
+--------------------------------+-----------------+-----------------+
| Land | 22,385 | 22,401 |
+--------------------------------+-----------------+-----------------+
| Construction in progress | 27,694 | 34,634 |
+--------------------------------+-----------------+-----------------+
| Other property and equipment | 50,381 | 46,218 |
+--------------------------------+-----------------+-----------------+
| Total property and equipment | 945,099 | 950,703 |
+--------------------------------+-----------------+-----------------+
| | | |
+--------------------------------+-----------------+-----------------+
| Intangible assets, net: | | |
+--------------------------------+-----------------+-----------------+
| Goodwill | 885,118 | 900,768 |
+--------------------------------+-----------------+-----------------+
| Software | 222,242 | 208,915 |
+--------------------------------+-----------------+-----------------+
| Other intangibles | 27,903 | 42,702 |
+--------------------------------+-----------------+-----------------+
| Total intangible assets | 1,135,264 | 1,152,386 |
+--------------------------------+-----------------+-----------------+
| | | |
+--------------------------------+-----------------+-----------------+
| Investments and other assets: | | |
+--------------------------------+-----------------+-----------------+
| Investment securities and | 384,660 | 370,027 |
| investments in unconsolidated | | |
| subsidiaries | | |
| and affiliated companies | | |
+--------------------------------+-----------------+-----------------+
| Deferred tax assets | 141,019 | 152,654 |
+--------------------------------+-----------------+-----------------+
| Other assets | 173,576 | 164,950 |
+--------------------------------+-----------------+-----------------+
| Less: | (23,017) | (24,238) |
| Allowance for doubtful | | |
| accounts | | |
+--------------------------------+-----------------+-----------------+
| Total investments and other | 676,238 | 663,394 |
| assets | | |
+--------------------------------+-----------------+-----------------+
| Total fixed assets | 2,756,602 | 2,766,483 |
+--------------------------------+-----------------+-----------------+
| Deferred charges | 1,908 | 1,951 |
+--------------------------------+-----------------+-----------------+
| Total assets | JPY4,270,968 | JPY4,462,875 |
+--------------------------------+-----------------+-----------------+
Consolidated Balance Sheets
(Millions of yen)
+--------------------------------+--------------------+----------+--------------------+
| | As of | As of |
| | June 30, 2010 | March 31, 2010 |
+--------------------------------+--------------------+-------------------------------+
| | Amount | Amount |
+--------------------------------+--------------------+-------------------------------+
| LIABILITIES AND EQUITY | | |
+--------------------------------+-------------------------------+--------------------+
| Current liabilities: | | |
+--------------------------------+-------------------------------+--------------------+
| Accounts payable - trade | JPY146,726 | JPY158,942 |
+--------------------------------+-------------------------------+--------------------+
| Short-term borrowings | 390,037 | 437,960 |
+--------------------------------+-------------------------------+--------------------+
| Current portion of corporate | 147,900 | 54,400 |
| bonds | | |
+--------------------------------+-------------------------------+--------------------+
| Accounts payable - other | 355,209 | 451,408 |
| and accrued expenses | | |
+--------------------------------+-------------------------------+--------------------+
| Income taxes payable | 63,143 | 100,483 |
+--------------------------------+-------------------------------+--------------------+
| Current portion of lease | 113,118 | 109,768 |
| obligations | | |
+--------------------------------+-------------------------------+--------------------+
| Other current liabilities | 66,350 | 65,914 |
+--------------------------------+-------------------------------+--------------------+
| Total current liabilities | 1,282,485 | 1,378,878 |
+--------------------------------+-------------------------------+--------------------+
| Long-term liabilities: | | |
+--------------------------------+-------------------------------+--------------------+
| Corporate bonds | 384,656 | 448,523 |
+--------------------------------+-------------------------------+--------------------+
| Long-term debt | 1,215,642 | 1,281,586 |
+--------------------------------+-------------------------------+--------------------+
| Deferred tax liabilities | 30,781 | 30,482 |
+--------------------------------+-------------------------------+--------------------+
| Liability for retirement | 15,519 | 15,557 |
| benefits | | |
+--------------------------------+-------------------------------+--------------------+
| Allowance for point mileage | 46,843 | 47,215 |
+--------------------------------+-------------------------------+--------------------+
| Lease obligations | 202,964 | 224,484 |
+--------------------------------+-------------------------------+--------------------+
| Other liabilities | 98,546 | 72,175 |
+--------------------------------+-------------------------------+--------------------+
| Total long-term liabilities | 1,994,953 | 2,120,024 |
+--------------------------------+-------------------------------+--------------------+
| Total liabilities | 3,277,438 | 3,498,903 |
+--------------------------------+-------------------------------+--------------------+
| Equity: | | |
+--------------------------------+-------------------------------+--------------------+
| Common stock | 188,771 | 188,750 |
+--------------------------------+-------------------------------+--------------------+
| Additional paid-in capital | 213,088 | 213,068 |
+--------------------------------+-------------------------------+--------------------+
| Retained earnings | 52,260 | 43,071 |
+--------------------------------+-------------------------------+--------------------+
| Less: Treasury stock | (228) | (225) |
+--------------------------------+-------------------------------+--------------------+
| Total shareholders' equity | 453,892 | 444,665 |
+--------------------------------+-------------------------------+--------------------+
| Unrealized gain on | 33,469 | 43,864 |
| available-for-sale securities | | |
+--------------------------------+-------------------------------+--------------------+
| Deferred gain on derivatives | 20,062 | 14,528 |
| under hedge accounting | | |
+--------------------------------+-------------------------------+--------------------+
| Foreign currency translation | (36,791) | (32,525) |
| adjustments | | |
+--------------------------------+-------------------------------+--------------------+
| Total valuation and | 16,740 | 25,866 |
| translation adjustments | | |
+--------------------------------+-------------------------------+--------------------+
| Stock acquisition rights | 531 | 476 |
+--------------------------------+-------------------------------+--------------------+
| Minority interests | 522,364 | 492,963 |
+--------------------------------+-------------------------------+--------------------+
| Total equity | 993,529 | 963,971 |
+--------------------------------+-------------------------------+--------------------+
| Total liabilities and equity | JPY4,270,968 | JPY4,462,875 |
+--------------------------------+-------------------------------+--------------------+
| | | | |
+--------------------------------+--------------------+----------+--------------------+
(2) Consolidated Statements of Income
(Millions of yen)
+-------------------------------+------------------+------------------+
| | Three-month | Three-month |
| | period ended | period ended |
| | June 30, 2009 | June 30, 2010 |
+-------------------------------+------------------+------------------+
| |April 1, 2009 to |April 1, 2010 to |
| | | |
| | June 30, 2009 | June 30, 2010 |
+-------------------------------+------------------+------------------+
| | Amount | Amount |
+-------------------------------+------------------+------------------+
| Net sales | JPY666,334 | JPY700,840 |
+-------------------------------+------------------+------------------+
| Cost of sales | 317,606 | 307,180 |
+-------------------------------+------------------+------------------+
| Gross Profit | 348,727 | 393,659 |
+-------------------------------+------------------+------------------+
| Selling, general and | 240,437 | 237,055 |
| administrative expenses | | |
+-------------------------------+------------------+------------------+
| Operating income | 108,290 | 156,603 |
+-------------------------------+------------------+------------------+
| Interest income | 118 | 529 |
+-------------------------------+------------------+------------------+
| Foreign exchange gain, net | 383 | - |
+-------------------------------+------------------+------------------+
| Equity in earnings of | - | 216 |
| affiliated companies | | |
+-------------------------------+------------------+------------------+
| Other non-operating income | 1,718 | 2,476 |
+-------------------------------+------------------+------------------+
| Non-operating income | 2,220 | 3,222 |
+-------------------------------+------------------+------------------+
| Interest expense | 27,490 | 27,789 |
+-------------------------------+------------------+------------------+
| Foreign exchange loss, net | - | 152 |
+-------------------------------+------------------+------------------+
| Equity in losses of | 632 | - |
| affiliated companies | | |
+-------------------------------+------------------+------------------+
| Other non-operating expenses | 3,591 | 5,039 |
+-------------------------------+------------------+------------------+
| Non-operating expenses | 31,713 | 32,981 |
+-------------------------------+------------------+------------------+
| Ordinary income | 78,797 | 126,844 |
+-------------------------------+------------------+------------------+
| Dilution gain from changes in | 789 | 520 |
| equity interest | | |
+-------------------------------+------------------+------------------+
| Unrealized appreciation on | 866 | 52 |
| valuation of investments and | | |
| loss on sale of investments | | |
| at subsidiaries in the U.S., | | |
| net | | |
+-------------------------------+------------------+------------------+
| Other special income | 752 | 353 |
+-------------------------------+------------------+------------------+
| Special income | 2,408 | 926 |
+-------------------------------+------------------+------------------+
| Valuation loss on investment | 924 | 1,431 |
| securities | | |
+-------------------------------+------------------+------------------+
| Impairment loss | 797 | - |
+-------------------------------+------------------+------------------+
| Loss on adjustment for | - | 7,099 |
| changes of accounting | | |
| standard for asset retirement | | |
| obligations | | |
+-------------------------------+------------------+------------------+
| Other special losses | 290 | 1,075 |
+-------------------------------+------------------+------------------+
| Special loss | 2,012 | 9,606 |
+-------------------------------+------------------+------------------+
| Income before income taxes | 79,193 | 118,164 |
+-------------------------------+------------------+------------------+
| Income taxes: | | |
+-------------------------------+------------------+------------------+
| Current | 19,856 | 34,101 |
+-------------------------------+------------------+------------------+
| Correction | - | 26,450 |
+-------------------------------+------------------+------------------+
| Deferred | 21,189 | 25,373 |
+-------------------------------+------------------+------------------+
| Total income taxes | 41,046 | 85,925 |
+-------------------------------+------------------+------------------+
| Income before minority | - | 32,238 |
| interests | | |
+-------------------------------+------------------+------------------+
| Minority interests in net | 10,763 | 12,800 |
| income | | |
+-------------------------------+------------------+------------------+
| Net income | JPY27,383 | JPY19,438 |
+-------------------------------+------------------+------------------+
(3) Consolidated Statements of Cash Flows
+-------------------------------------+---------------+---------------+
| (Millions of yen) |
+---------------------------------------------------------------------+
| | Three-month | Three-month |
| | period ended | period ended |
| |June 30, 2009 |June 30, 2010 |
+-------------------------------------+---------------+---------------+
| |April 1, 2009 |April 1, 2010 |
| | to | to |
| |June 30, 2009 |June 30, 2010 |
+-------------------------------------+---------------+---------------+
| Cash flows from operating | | |
| activities: | | |
+-------------------------------------+---------------+---------------+
| | | |
+-------------------------------------+---------------+---------------+
| Income before income taxes and | JPY79,193 | JPY118,164 |
| minority interests | | |
+-------------------------------------+---------------+---------------+
| | | |
+-------------------------------------+---------------+---------------+
| Adjustments for: | | |
+-------------------------------------+---------------+---------------+
| Depreciation and amortization | 59,809 | 53,590 |
+-------------------------------------+---------------+---------------+
| Amortization of goodwill | 15,323 | 15,650 |
+-------------------------------------+---------------+---------------+
| Impairment loss | 797 | - |
+-------------------------------------+---------------+---------------+
| Equity in losses (earnings) of | 632 | (216) |
| affiliated companies | | |
+-------------------------------------+---------------+---------------+
| Dilution gain from changes in | (767) | (518) |
| equity interest, net | | |
+-------------------------------------+---------------+---------------+
| Valuation loss on investment | 924 | 1,431 |
| securities | | |
+-------------------------------------+---------------+---------------+
| Unrealized appreciation on | (866) | (52) |
| valuation of investments and loss | | |
| on sale of investments at | | |
| subsidiaries in the U.S., net | | |
+-------------------------------------+---------------+---------------+
| Foreign exchange (gain) loss, net | (461) | 162 |
+-------------------------------------+---------------+---------------+
| Interest and dividend income | (278) | (672) |
+-------------------------------------+---------------+---------------+
| Interest expense | 27,490 | 27,789 |
+-------------------------------------+---------------+---------------+
| Changes in operating assets, and | | |
| liabilities | | |
+-------------------------------------+---------------+---------------+
| Decrease in receivables - trade | 50,306 | 106,163 |
+-------------------------------------+---------------+---------------+
| Decrease in payables - trade | (11,643) | (14,087) |
+-------------------------------------+---------------+---------------+
| Other, net | (42,868) | (51,314) |
+-------------------------------------+---------------+---------------+
| Sub-total | 177,592 | 256,090 |
+-------------------------------------+---------------+---------------+
| | | |
+-------------------------------------+---------------+---------------+
| Interest and dividends received | 343 | 652 |
+-------------------------------------+---------------+---------------+
| Interest paid | (26,455) | (25,185) |
+-------------------------------------+---------------+---------------+
| Income taxes paid | (19,392) | (98,558) |
+-------------------------------------+---------------+---------------+
| Net cash provided by | 132,087 | 132,998 |
| operating activities | | |
+-------------------------------------+---------------+---------------+
- Continued -
Consolidated Statements of Cash Flows (Continued)
+-------------------------------------+---------------+---------------+----------+
| (Millions of yen) |
+--------------------------------------------------------------------------------+
| | Three-month | Three-month | |
| | period ended | period ended | |
| |June 30, 2009 |June 30, 2010 | |
+-------------------------------------+---------------+---------------+----------+
| |April 1, 2009 |April 1, 2010 | |
| | to | to | |
| |June 30, 2009 |June 30, 2010 | |
+-------------------------------------+---------------+---------------+----------+
| | | | |
+-------------------------------------+---------------+---------------+----------+
| Cash flows from investing | | | |
| activities: | | | |
+-------------------------------------+---------------+---------------+----------+
| Purchase of property and equipment, | JPY (76,616) | JPY (58,689) | |
| and intangibles | | | |
+-------------------------------------+---------------+---------------+----------+
| Purchase of marketable and | (4,132) | (20,315) | |
| investment securities | | | |
+-------------------------------------+---------------+---------------+----------+
| Proceeds from sale of marketable | 3,819 | 2,510 | |
| and investment securities | | | |
+-------------------------------------+---------------+---------------+----------+
| Acquisition of interests in | (40) | - | |
| subsidiaries newly consolidated, | | | |
| net of cash acquired | | | |
+-------------------------------------+---------------+---------------+----------+
| Other, net | 1,457 | 1,264 | |
+-------------------------------------+---------------+---------------+----------+
| Net cash used in investing | (75,511) | (75,230) | |
| activities | | | |
+-------------------------------------+---------------+---------------+----------+
| | | | |
+-------------------------------------+---------------+---------------+----------+
| Cash flows from financing | | | |
| activities: | | | |
+-------------------------------------+---------------+---------------+----------+
| Decrease in short-term borrowings, | (23,129) | (9,662) | |
| net | | | |
+-------------------------------------+---------------+---------------+----------+
| Increase in commercial paper, net | 2,000 | - | |
+-------------------------------------+---------------+---------------+----------+
| Proceeds from long-term debt | 80,247 | 20,000 | |
+-------------------------------------+---------------+---------------+----------+
| Repayment of long-term debt | (123,537) | (120,184) | |
+-------------------------------------+---------------+---------------+----------+
| Proceeds from issuance of bonds | 59,202 | 49,787 | |
+-------------------------------------+---------------+---------------+----------+
| Redemption of bonds | (2,647) | (20,404) | |
+-------------------------------------+---------------+---------------+----------+
| Exercise of warrants | 2,105 | 41 | |
+-------------------------------------+---------------+---------------+----------+
| Proceeds from issuance of shares to | 367 | 222 | |
| minority shareholders | | | |
+-------------------------------------+---------------+---------------+----------+
| Cash dividends paid | (1,957) | (4,303) | |
+-------------------------------------+---------------+---------------+----------+
| Cash dividends paid to minority | (4,444) | (9,886) | |
| shareholders | | | |
+-------------------------------------+---------------+---------------+----------+
| Proceeds from sale and lease back | 2,763 | 5,350 | |
| of equipment newly acquired | | | |
+-------------------------------------+---------------+---------------+----------+
| Repayment of lease obligations | (21,856) | (49,115) | |
+-------------------------------------+---------------+---------------+----------+
| Other, net | (450) | (2,579) | |
+-------------------------------------+---------------+---------------+----------+
| Net cash used in financing | (31,337) | (140,735) | |
| activities | | | |
+-------------------------------------+---------------+---------------+----------+
| | | | |
+-------------------------------------+---------------+---------------+----------+
| Effect of exchange rate changes on | (354) | (1,076) | |
| cash and cash equivalents | | | |
+-------------------------------------+---------------+---------------+----------+
| Net increase (decrease) in cash and | 24,883 | (84,043) | |
| cash equivalents | | | |
+-------------------------------------+---------------+---------------+----------+
| Increase in cash and cash | 126 | 1,919 | |
| equivalents due to newly | | | |
| consolidated subsidiaries | | | |
+-------------------------------------+---------------+---------------+----------+
| Decrease in cash and cash | (807) | (64) | |
| equivalents due to exclusion of | | | |
| previously consolidated | | | |
| subsidiaries | | | |
+-------------------------------------+---------------+---------------+----------+
| Cash and cash equivalents, | 457,644 | 687,681 | |
| beginning of the period | | | |
+-------------------------------------+---------------+---------------+----------+
| Cash and cash equivalents, end of | JPY481,846 | JPY605,492 | |
| the period | | | |
+-------------------------------------+---------------+---------------+----------+
(4) Significant Doubt about Going Concern Assumption
There are no applicable items for the three-month period ended June 30, 2010.
(5) Significant Changes in Shareholder's Equity
There are no applicable items for the three-month period ended June 30, 2010.
(6) Basis of Presentation of Consolidated Financial Statements
(Items described in "2. Others (3) Changes in accounting principles, procedures,
disclosure methods, etc., used in the presentation of the consolidated financial
statements" on page 18 are excluded.)
1. Changes in scope of consolidation
(1) Changes in scope of consolidation for the three-month period ended June 30,
2010 are as follows:
<Increase>
+--------------------------+------------------------------------+
| 7 companies | |
+--------------------------+------------------------------------+
| Significant changes: | |
+--------------------------+------------------------------------+
| SB Asia Infrastructure Fund L.P. and its 6 consolidated |
| subsidiaries |
+--------------------------+------------------------------------+
<Decrease>
+--------------------------+------------------------------------+
| 3 companies | |
+--------------------------+------------------------------------+
(2) The number of consolidated subsidiaries after the changes:
113 companies
2. Changes in scope of equity method
(1) Changes in scope of equity method are as follows:
<Increase>
+--------------------------+------------------------------------+
| 16 companies | |
+--------------------------+------------------------------------+
| Significant changes: | |
+--------------------------+------------------------------------+
| SB Asia Infrastructure Fund L.P.'s 12 affiliates under |
| equity method |
+---------------------------------------------------------------+
| | |
+--------------------------+------------------------------------+
<Decrease>
+--------------------------+------------------------------------+
| 2 companies | |
+--------------------------+------------------------------------+
| Significant changes: | |
+--------------------------+------------------------------------+
| SB Asia Infrastructure | |
| Fund L.P. | |
+--------------------------+------------------------------------+
(2) The number of non-consolidated subsidiaries and affiliated companies under
the equity method after the changes:
Non-consolidated subsidiaries under the equity method: 6 companies
Affiliated companies under the equity method: 72 companies
(Changes in accounting principles and procedures)
Effective April 1, 2010, certain subsidiaries of the Company that apply
generally accepted accounting principles in the United States of America adopted
Accounting Standards Codification (ASC) 810, Consolidations, formerly SFAS No.
167, Amendments to FASB Interpretation No. 46(R) (SFAS 167).
As a result of the application of the accounting standard, the scope of SB Asia
Infrastructure Fund L.P. changed from an affiliate under equity method to a
consolidated subsidiary.
The effect of this change is not material for the period ended June 30, 2010.
(7) Notes
(Consolidated Balance Sheets)
1. Accumulated depreciation of property and equipment
+-----------+---------+-----------+---------+
| As of June 30, | As of March 31, |
| 2010 | 2010 |
+---------------------+---------------------+
| 1,077,022 |million | 1,048,584 |million |
| | yen | | yen |
+-----------+---------+-----------+---------+
| | | | |
+-----------+---------+-----------+---------+
2. Additional entrustment for debt assumption of bonds (As of June 30, 2010)
SOFTBANK MOBILE has entrusted cash for the repayment of the straight bonds
listed in the following table based on debt assumption agreements with a
financial institution. The bonds are derecognized in the Company's consolidated
balance sheets.
The trust had collateralized debt obligations ("CDO") issued by a Cayman Islands
based Special-Purpose Company ("SPC"). The SPC contracted a credit default swap
agreement secured by debt securities (corporate bonds), which referred to a
certain portion of the portfolio consisting of 160 referenced entities. Since
defaults (credit events under the agreement) of more than a certain number of
referenced entities occurred, JPY75,000 million in total was reduced from the
redemption amount of the CDO in April 2009 and an additional entrustment was
required for the reduced amount.
As a result, for the amount required as the additional entrustment of JPY75,000
million, a long term accounts payable was recognized as a recognized subsequent
event (Type I subsequent event) and included in "Other liabilities" of long-term
liabilities in the consolidated balance sheets, and it was recorded as special
loss in the consolidated statements of income for the year ended March 31, 2009.
As of June 30, 2010, since the maturity for the additional entrustment was
within one year, the accounts payable was included in "Accounts payable-other
and accrued expenses" of current liabilities in the consolidated balance sheets.
Mizuho Corporate Bank, Ltd and the Company set up a credit line facility
contract in order to support the repayments of the bonds issued by SOFTBANK
MOBILE.
As of June 30, 2010
+-----------------+----------+-----------+----------+-----------+----------+----------------+
| Subject Bonds | | Issue | | Maturity | | Amount of |
| | | date | | date | | transferred |
| | | | | | | bond |
+-----------------+----------+-----------+----------+-----------+----------+----------------+
| Third Series | | August | | August | | 25,000 |
| Unsecured Bond | | 19, 1998 | | 19, 2010 | | |
+-----------------+----------+-----------+----------+-----------+----------+----------------+
| Fifth Series | | August | | August | | 25,000 |
| Unsecured Bond | | 25, 2000 | | 25, 2010 | | |
+-----------------+----------+-----------+----------+-----------+----------+----------------+
| Seventh Series | | September | | September | | 25,000 |
| Unsecured Bond | | 22, 2000 | | 22,2010 | | |
+-----------------+----------+-----------+----------+-----------+----------+----------------+
| Total | | | | | | 75,000 million |
| | | | | | | yen |
+-----------------+----------+-----------+----------+-----------+----------+----------------+
3. Secured loans
(1) Assets pledged as collateral for secured liabilities
[1] For short-term borrowings and long-term debt
Assets pledged as collateral and secured liabilities by consolidated
subsidiaries are as follows:
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+---------+---------+----------+
| | | As of June 30, 2010 | | As of March 31, | |
| | | | | 2010 | |
+---------------------------------------+------------+--------------------------------------------+-+-------------------+----------+
| Assets pledged as collateral: | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+---------+---------+----------+
| Cash and deposits | | 224,840 | | | 213,098 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+---------+---------+----------+
| | Notes and accounts receivable - trade | | 255,878 | | | 273,231 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+---------+--------------------+
| Buildings and structures | | 11,957 | | | 12,133 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+---------+---------+----------+
| | Telecommunications equipment | | 188,332 | | | 182,945 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+---------+--------------------+
| | Telecommunications service lines | | 83 | | | 86 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+---------+--------------------+
| | Land | | 10,635 | | | 10,633 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+---------+--------------------+
| Investment securities and investments | | 64,976 | | | 81,701 | | |
| in unconsolidated subsidiaries and | | | | | | | |
| affiliated companies | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+---------+---------+----------+
| | Investments and other assets - other | | 15,157 | | | 17,225 | |
| | assets | | | | | | |
+----------+---------------------------------------+------------+-----------------------+---------+-+---------+--------------------+
| Total | | 771,861 | million yen | | 791,054 |million | |
| | | | | | | yen | |
+---------------------------------------+------------+-----------------------+--------------------+-+---------+---------+----------+
| | | | | | | | | | | | |
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+---------+---------+----------+
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+-----------+---------+----------+
| | | As of June 30, 2010 | | As of March 31, | |
| | | | | 2010 | |
+---------------------------------------+------------+--------------------------------------------+-+---------------------+----------+
| Secured liabilities: | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+-----------+---------+----------+
| Accounts payable - trade | | 1,119 | | | 1,674 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+-----------+---------+----------+
| | Short-term borrowings | | 1,202 | | | 1,928 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+-----------+--------------------+
| Long - term debt | | 1,035,860 | | | 1,086,707 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+-----------+---------+----------+
| Total | | 1,038,182 | million yen | | 1,090,310 | million | |
| | | | | | | yen | |
+---------------------------------------+------------+-----------------------+--------------------+-+-----------+---------+----------+
| | | | | | | | | | | | |
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+-----------+---------+----------+
Consolidated subsidiaries shares owned by SOFTBANK MOBILE, SOFTBANK MOBILE
shares owned by BB Mobile Corp. and BB Mobile Corp. shares owned by Mobiletech
Corporation are pledged as collateral for long-term debt (totaled to JPY986,702
million and JPY939,714 million, as of March 31, 2010 and June 30, 2010,
respectively) resulting from the acquisition of SOFTBANK MOBILE, in addition to
the assets pledged as collateral above.
[2] For borrowings of investee
Assets pledged as collateral for third party's liability are as follows:
+----------------------------+-+------------+---------+-+--------+---------+
| | | As of June 30, 2010 | | As of March 31, |
| | | | | 2010 |
+----------------------------+-+----------------------+-+------------------+
| Assets pledged as | | | | | | |
| collateral: | | | | | | |
+----------------------------+-+------------+---------+-+--------+---------+
| Investment securities and | | 2,000 |million | | 2,000 |million |
| investments in | | | yen | | | yen |
| unconsolidated | | | | | | |
| subsidiaries and | | | | | | |
| affiliated companies | | | | | | |
+----------------------------+-+------------+---------+-+--------+---------+
(2) Borrowings by securitization of receivables
[1] The securitization of installment sales receivable of SOFTBANK MOBILE
Cash proceeds through the securitization of installment sales receivables of
SOFTBANK MOBILE, excluding that qualify for derecognition criteria of a
financial asset, were included in "Short-term borrowings" (JPY175,359 million
and JPY147,276 million, as of March 31, 2010 and June 30, 2010, respectively)
and "Long-term debt" (JPY44,454 million and JPY26,879 million, as of March 31,
2010 and June 30, 2010, respectively). The amounts of the senior portion of the
securitized installment sales receivables (JPY219,813 million and JPY174,156
million, as of March 31, 2010 and as of June 30, 2010, respectively) were
included in "Notes and account receivable-trade", along with the subordinated
portion held by the SOFTBANK MOBILE. The trustee raised the funds through asset
backed loans based on the receivables.
[2] The securitization of receivables for ADSL services of SOFTBANK BB
SOFTBANK BB transferred its senior portion of the securitized present and future
receivables for ADSL services* to a SPC (a consolidated subsidiary), and the SPC
raised the funds through asset backed loans based on the receivables (JPY10,504
million and JPY8,032 million, as of March 31, 2010 and June 30, 2010,
respectively) from a financial institution. Cash proceeds through the asset
backed loans are included in the "Short-term borrowings" (JPY6,660 million and
JPY6,660 million, as of March 31, 2010 and June 30, 2010, respectively) and
"Long-term debt" (JPY3,844 million, and JPY1,372 million, as of March 31, 2010
and June 30, 2010, respectively).
Note:* A certain portion of present and future (through March 2012) receivables
realized through the ADSL services provided by SOFTBANK BB.
(3) Borrowings by security lending agreements
Cash receipts as collateral from financial institutions, to whom the Company
lent a portion of shares in its subsidiary under security lending agreements are
presented as follows:
+----------------------------+------------+---------+---------+---------+----------+
| | As of June 30, 2010 | As of March 31, 2010 |
+----------------------------+----------------------+------------------------------+
| Short-term borrowings | 114,000 | million | 114,000 | million | |
| | | yen | | yen | |
+----------------------------+------------+---------+---------+---------+----------+
| | | | | | |
+----------------------------+------------+---------+---------+---------+----------+
(4) Others
A consolidated subsidiary purchased assets by installments, and the
assets of which ownership was not transferred to the consolidated subsidiary and
its installment payables are as follows:
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+--------+---------+----------+
| | | As of June 30, 2010 | | As of March 31, | |
| | | | | 2010 | |
+---------------------------------------+------------+--------------------------------------------+-+------------------+----------+
| Assets of which ownership is not | | | | | | | |
| transferred: | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| Buildings and structures | | 57 | | | 35 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| | Telecommunications equipment | | 18,989 | | | 16,710 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+--------+--------------------+
| Construction in progress | | 2,161 | | | 1,538 | | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| | Software | | 7,498 | | | 4,755 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+--------+--------------------+
| | Other intangibles | | 463 | | | 12 | |
+----------+---------------------------------------+------------+-----------------------+---------+-+--------+--------------------+
| | Investments and other assets - other | | 368 | | | 240 | |
| | assets | | | | | | |
+----------+---------------------------------------+------------+-----------------------+---------+-+--------+--------------------+
| Total | | 29,539 | million yen | | 23,292 |million | |
| | | | | | | yen | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| | | | | | | | | | | | |
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+--------+---------+----------+
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+--------+---------+----------+
| | | As of June 30, 2010 | | As of March 31, | |
| | | | | 2010 | |
+---------------------------------------+------------+--------------------------------------------+-+------------------+----------+
| Installment payables: | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| Accounts payable - other and accrued | | 5,352 | | | 4,148 | | |
| expenses | | | | | | | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| | Long term liability - other | | 26,760 | | | 20,741 | |
| | liabilities | | | | | | |
+----------+---------------------------------------+------------+-----------------------+---------+-+--------+--------------------+
| Total | | 32,113 | million yen | | 24,889 |million | |
| | | | | | | yen | |
+---------------------------------------+------------+-----------------------+--------------------+-+--------+---------+----------+
| | | | | | | | | | | | |
+----------+----------------------------+----------+-+----------+------------+----------+---------+-+--------+---------+----------+
(Consolidated Statements of Income)
1. Selling, general and administrative expenses
+---------------------------+-----+---------+---------+-+---------+---------+
| | Three-month | Three-month |
| | period ended | period ended |
| | June 30, 2009 | June 30, 2010 |
+---------------------------------+---------------------+-------------------+
| Sales commission and | | 119,364 | million | | 114,135 | million |
| sales promotion expense | | | yen | | | yen |
+---------------------------+-----+---------+---------+-+---------+---------+
| Provision for allowance | | 3,608 | | | 3,755 | |
| for doubtful accounts | | | | | | |
+---------------------------+-----+---------+---------+-+---------+---------+
2. Unrealized appreciation on valuation of investments and loss on sale of
investments at subsidiaries in the United States of America, net
Certain subsidiaries of the Company in the United States of America qualify as
investment companies under the provisions set forth in Financial Services -
Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC
946) and account for investment securities in accordance with ASC 946.
The net changes in the fair value of the investments are recorded as unrealized
appreciation on valuation of investments and loss on sale of investments at
subsidiaries in the U.S., net and loss on sale of investments, computed based on
the acquisition cost, is also included in this account. The unrealized
appreciation on valuation of investments and loss on sale of investments
included in unrealized appreciation on valuation of investments and loss on sale
of investments at subsidiaries in the U.S., net in the consolidated statements
of income are as follows:
+----------------------------+---+--------+---------+----------+--------+---------+
| | Three-month period ended | Three-month |
| | June 30, 2009 | period ended |
| | | June 30, 2010 |
+--------------------------------+-----------------------------+------------------+
| Unrealized appreciation on | 1,340 | | 179 | |
| valuation of investment | | | | |
| at subsidiaries in the | | | | |
| U.S.,net | | | | |
+--------------------------------+--------+--------------------+--------+---------+
| Loss on sale of investments | (473) | | (127) | |
| at subsidiaries in the | | | | |
| U.S.,net | | | | |
+--------------------------------+--------+--------------------+--------+---------+
| Total | | 866 | million | | 52 | million |
| | | | yen | | | yen |
+----------------------------+---+--------+---------+----------+--------+---------+
| | | | | | | |
+----------------------------+---+--------+---------+----------+--------+---------+
3. Impairment loss (For the period ended June 30, 2009)
Goodwill at a subsidiary of the Internet culture segment was recorded as an
impairment loss of JPY797 million in the consolidated statements of income since
the future cash flows were not expected to be generated.
4. Income taxes - corrections (For the period ended June 30, 2010)
Yahoo Japan received a correction notice from Tokyo Regional Taxation Bureau on
June 30, 2010. Yahoo Japan acquired all the shares of SOFTBANK IDC Solutions
Corp. from the Company in February 2009 and merged it in March 2009. At the
merger, loss carryforwards held by SOFTBANK IDC Solutions Corp. were carried and
utilized by Yahoo Japan. The notice corrects this tax treatment insisting that
the treatment was to reduce Yahoo Japan's income taxes inappropriately.
Additional income taxes of JPY 26,450 million were recorded as income taxes -
correction for the period ended June 30, 2010 and were paid on July 1, 2010.
Yahoo Japan will submit a request for reconsideration to the national tax
tribunal, separately bring legal suit depending on the situation, and thoroughly
argue its position on this matter.
(Consolidated Statements of Cash Flows)
1. Reconciliation of cash and cash equivalents to the amounts presented in the
accompanying consolidated balance sheets
+----------------------------+--+----------+---------+--+----------+---------+
| | As of June 30, 2009 | As of June 30, |
| | | 2010 |
+-------------------------------+-----------------------+--------------------+
| Cash and deposits | 482,799 | million | 608,770 | million |
| | | yen | | yen |
+-------------------------------+----------+------------+----------+---------+
| Marketable securities | 4,057 | | 3,569 | |
+-------------------------------+----------+------------+----------+---------+
| Time deposits with original | (1,383) | | (3,641) | |
| maturity over three months | | | | |
+-------------------------------+----------+------------+----------+---------+
| Stocks and bonds with | (3,626) | | (3,205) | |
| original maturity over three | | | | |
| months | | | | |
+-------------------------------+----------+------------+----------+---------+
| Cash and cash equivalents | | 481,846 |million | | 605,492 | million |
| | | | yen | | | yen |
+----------------------------+--+----------+---------+--+----------+---------+
| | | | | | | |
+----------------------------+--+----------+---------+--+----------+---------+
2. Scope of Purchase of property and equipment, and intangibles in the
consolidated statements of cash flows
"Purchase of property and equipment, and intangibles" are comprised of cash
outflows from purchasing property and equipment, and intangible assets
(excluding goodwill) and long-term prepaid expenses.
3. Proceeds from sale and lease back of equipment newly acquired
Once SOFTBANK MOBILE and others purchase telecommunications equipment for the
purpose of assembly, installation and inspection, SOFTBANK MOBILE and others
sell the equipment to lease companies for sale and lease back purposes. The
leased asset and lease obligation are recorded in the consolidated balance
sheets.
The cash outflows from the purchase of the equipment from vendors are included
in "Purchase of property and equipment, and intangibles" and the cash inflows
from the sale of the equipment to lease companies are included in "Proceeds from
sale and lease back of equipment newly acquired."
(Segment Information)
1. Business segment information
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| For the three month period ended June 30, 2009 (Millions of |
| yen) |
+-----------------------------------------------------------------------------------------------------------------------------------------------------+
| | Mobile | Broadband | Fixed-line | Internet |e-Commerce | Others | Total |Elimination |Consolidated |
| |Communications |Infrastructure |Telecommunications | Culture | | | | | |
| | | | | | | | | or | |
| | | | | | | | | Corporate | |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| Net | | | | | | | | | |
| sales | | | | | | | | | |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| (1) | JPY405,095 | JPY52,674 | JPY76,467 | JPY64,131 | JPY51,788 | JPY16,175 | JPY666,334 | JPY- | JPY666,334 |
| Customers | | | | | | | | | |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| (2) | 2,209 | 1,131 | 10,291 | 1,024 | 2,424 | 4,491 | 21,572 | (21,572) | - |
| Inter-segment | | | | | | | | | |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| Total | 407,304 | 53,806 | 86,758 | 65,156 | 54,213 | 20,667 | 687,906 | (21,572) | 666,334 |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
| Operating | JPY60,260 | JPY13,903 | JPY3,493 | JPY31,717 | JPY940 | JPY(880) | JPY109,435 | JPY(1,145) | JPY108,290 |
| income | | | | | | | | | |
| (loss) | | | | | | | | | |
+---------------+----------------+----------------+--------------------+-----------+------------+-----------+------------+-------------+--------------+
Notes:
1. Business segments are categorized primarily based on the nature of business
operations, type of services, and similarity of sales channels which the
SOFTBANK Group uses for its internal management purposes.
2. The main business segments are as follows:
Mobile Communications: Provision of mobile communication services and sale of
mobile phones accompanying the services etc.
Broadband Infrastructure: Provision of ADSL and fiber-optic high-speed
Internet connection service, IP telephony service, and provision of contents
etc.
Fixed-line Telecommunications: Provision of fixed-line telecommunications
service etc.
Internet Culture: Internet-based advertising operations, portal business, and
auction business etc.
e-Commerce: Distribution of PC software and such hardware as PCs and
peripherals, enterprise solutions, and e-commerce businesses, including business
transaction platform (B2B) and consumer-related e-commerce (B2C) etc.
Others: Technology Services, Media & Marketing, Overseas Funds, and other
businesses
2. Geographic segment information
For the three month period ended June 30, 2009(Millions of yen)
+----------+-------------------+------------+----------+----------+------------+-------------+--------------+
| | Japan | North | Others | Total |Elimination |Consolidated |
| | | America | | | or | |
| | | | | | corporate | |
+------------------------------+------------+----------+----------+------------+-------------+--------------+
| Net sales | | | | | | |
+------------------------------+------------+----------+----------+------------+-------------+--------------+
| | (1) Customers | JPY664,275 | JPY259 | JPY1,799 | JPY666,334 | JPY- | JPY666,334 |
+----------+-------------------+------------+----------+----------+------------+-------------+--------------+
| | (2) Inter-segment | 95 | - | - | 95 | (95) | - |
+----------+-------------------+------------+----------+----------+------------+-------------+--------------+
| | Total | 664,370 | 259 | 1,799 | 666,429 | (95) | 666,334 |
+----------+-------------------+------------+----------+----------+------------+-------------+--------------+
| Operating income (loss) | JPY110,222 | JPY(315) | JPY(178) | JPY109,729 | JPY(1,438) | JPY108,290 |
+----------+-------------------+------------+----------+----------+------------+-------------+--------------+
Notes:
1. Net sales by geographic region are recognized based on geographic location of
the operation.
2. Significant countries in each region are as follows:
North America: United States of America and Canada
Others: Europe, Korea, China, Singapore, and others
3. Overseas sales
Disclosure of overseas sales for the three-month period ended June 30, 2009 was
omitted because the total overseas sales were less than 10% of total
consolidated sales.
4. Reportable segment information
(Additional Information)
"Accounting Standard for Disclosures about Segments of an Enterprise and Related
information" (ASBJ Statement No. 17, March 27, 2009) and "Guidance on Accounting
Standard for Disclosures about Segments of an Enterprise and Related
information" (ASBJ Guidance No. 20, March 21, 2008) were applied for the period
ended June 30, 2010.
(1) Over view of reportable segments
Reportable segments of the Company are components of an entity about which
separate financial information is available and such information is evaluated
regularly by the board of directors in deciding how to allocate resources and in
assessing performance.
The Company as a pure holding company assigns core operating companies to
primary businesses. The core operating companies develop comprehensive business
strategies for the products and services and perform business activities.
Accordingly, the Company's segments are separated based on the products and
services provided by the core operating companies, and 4 segments, "Mobile
Communications," "Broadband Infrastructure," "Fixed-line Telecommunications,"
and "Internet Culture" are treated as reportable segments.
"Mobile Communications" business provides mobile communication services and sale
of mobile phones accompanying the services. "Broadband Infrastructure" business
provides high-speed Internet connection service, IP telephony service, and
contents. "Fixed-line Telecommunications" business provides fixed-line
telecommunication services. "Internet Culture" business provides Internet-based
advertising operations, e-commerce site operations such as Yahoo! Auctions and
Yahoo! Shopping.
(2) Net sales and segment income or loss of reportable segments
For the three month period ended June 30, 2010
(Millions of yen)
+----------+-----+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| | | Reportable segments | Other | Total |Reconciliations | Amounts |
| | | | (Note1) | |to consolidated | in |
| | | | | | statement of | consolidated |
| | | | | | income (Note2) | statement of |
| | | | | | |income(Note3) |
+----------+-----+----------------------------------------------------------------------------+ + + + +
| | | Mobile | | | | | Broadband | Fixed-line | Internet | Subtotal |
| | |Communications | | | | |Infrastructure |Telecommunications | Culture | |
+----------+-----+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| Net sales | | | | | | | | | |
+----------------+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| Customers | JPY438,520 | JPY48,552 | JPY73,199 | JPY67,142 | JPY627,414 | JPY73,425 | JPY700,840 | JPY- | JPY700,840 |
+----------------+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| Inter-segment | 2,558 | 770 | 12,677 | 1,262 | 17,268 | 8,457 | 25,726 | (25,726) | - |
+----------------+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| Total | 441,078 | 49,323 | 85,876 | 68,405 | 644,683 | 81,882 | 726,566 | (25,726) | 700,840 |
+----------------+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
| Segment income | JPY102,657 | JPY11,696 | JPY6,661 | JPY35,572 | JPY156,587 | JPY2,562 | JPY159,150 | JPY(2,546) | JPY156,603 |
+----------+-----+----------------+------------+------------+-----------------+---------------+----------------+--------------------+-----------------+---------------+
Notes:
1. The PC software and peripherals distribution business and Fukuoka SOFTBANK
HAWKS related business are included in "Other."
2. Amounts in the column "Reconciliations to consolidated statement of income"
of JPY(2,546) represents elimination of intersegment transactions and expenses
of the corporate division of the Company, which totaled JPY537 million and
JPY(3,084) million, respectively.
3. Segment income is adjusted with operating income in the consolidated
statements of income.
(Leases)
Finance lease transactions
(As a lessee)
(1) Finance leases in which the ownership of leased assets is transferred to
lessees at the end of lease periods
[1] Details of lease assets are as follows:
Tangible assets, mainly telecommunications equipment in the Mobile
Communications segment.
[2] Depreciation method for lease assets
The depreciation method is the same as the method used for fixed assets
possessed by each subsidiary and the Company.
(2) Finance leases in which the ownership of leased assets is not transferred
to lessees at the end of lease periods
[1] Details of lease assets are as follows:
Tangible assets, mainly telecommunications equipment in the Fixed-line
Telecommunications segment.
[2] Depreciation method for lease assets
The straight-line method is adopted over the period of the finance leases,
assuming no residual value.
Lease transactions contracted before April 1, 2008 are continuously permitted to
be accounted for as operating lease transactions, and as if capitalized
information is as follows:
(1) Amounts equivalent to acquisition costs, accumulated depreciation, and
accumulated impairment loss of leased property for each period:
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | | As of June 30, | | As of March 31, | |
| | | 2010 | | 2010 | |
+----------------------------+-+---------------------+-+--------------------+-+
| Telecommunications | | | | | | | |
| equipment and | | | | | | | |
| telecommunications service | | | | | | | |
| lines | | | | | | | |
+----------------------------+-+-----------+---------+-+----------+---------+-+
| | Acquisition cost | | 141,063 | | | 141,093 | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (72,133) | | | (67,776) | | |
| | depreciation | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (33,232) | | | (33,232) | | |
| | impairment loss | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Net leased property | | 35,698 | million | | 40,084 | million | |
| | | | | yen | | | yen | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| Buildings and structures | | | | | | | |
+----------------------------+-+-----------+---------+-+----------+---------+-+
| | Acquisition cost | | 46,729 | | | 46,730 | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (12,493) | | | (11,909) | | |
| | depreciation | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | - | | | - | | |
| | impairment loss | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Net leased property | | 34,236 | million | | 34,820 | million | |
| | | | | yen | | | yen | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| Property and equipment - | | | | | | | |
| others | | | | | | | |
+----------------------------+-+-----------+---------+-+----------+---------+-+
| | Acquisition cost | | 15,879 | | | 16,113 | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (10,635) | | | (10,223) | | |
| | depreciation | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (1,242) | | | (1,242) | | |
| | impairment loss | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Net leased property | | 4,002 | million | | 4,647 | million | |
| | | | | yen | | | yen | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| Intangible assets | | | | | | | |
+----------------------------+-+-----------+---------+-+----------+---------+-+
| | Acquisition cost | | 9,045 | | | 9,070 | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (7,060) | | | (6,669) | | |
| | depreciation | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (290) | | | (290) | | |
| | impairment loss | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Net leased property | | 1,695 | million | | 2,110 | million | |
| | | | | yen | | | yen | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| Total | | | | | | | |
+----------------------------+-+-----------+---------+-+----------+---------+-+
| | Acquisition cost | | 212,718 | | | 213,007 | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (102,321) | | | (96,579) | | |
| | depreciation | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Accumulated | | (34,765) | | | (34,765) | | |
| | impairment loss | | | | | | | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
| | Net leased property | | 75,631 | million | | 81,662 | million | |
| | | | | yen | | | yen | |
+----+-----------------------+-+-----------+---------+-+----------+---------+-+
Long-term prepaid expenses relating to a lease contract, in which the contract
term and payment term are different, as of March 31, 2010 and June 30, 2010 were
JPY25,157 million and JPY25,971 million, respectively and are included in "Other
assets" of investments and other assets in the consolidated balance sheets.
Current portion of long-term prepaid expenses related to the lease contract in
the amount of JPY670 million and JPY624 million as of March 31, 2010 and June
30, 2010 are included in "Other current assets" in the consolidated balance
sheets.
(2) Obligations under finance lease at the end of each period:
+---------------------------+-+----------+---------+-+---------+---------+-+
| | | As of June 30, | | As of March 31, | |
| | | 2010 | | 2010 | |
+---------------------------+-+--------------------+-+-------------------+-+
| | | | | | | | |
+---------------------------+-+----------+---------+-+---------+---------+-+
| Due within one year | | 24,840 | | | 26,191 | | |
+---------------------------+-+----------+---------+-+---------+---------+-+
| Due after one year | | 73,251 | | | 79,431 | | |
+---------------------------+-+----------+---------+-+---------+---------+-+
| Total | | 98,091 | million | | 105,623 | million | |
| | | | yen | | | yen | |
+---------------------------+-+----------+---------+-+---------+---------+-+
| | | | | | | | |
+---------------------------+-+----------+---------+-+---------+---------+-+
| Balance of allowance for | | 8,987 | million | | 10,776 | million | |
| impairment loss on leased | | | yen | | | yen | |
| property | | | | | | | |
+---------------------------+-+----------+---------+-+---------+---------+-+
(3) Lease payments, payment of the lease obligation for impaired leased
property, amounts equivalent to depreciation, and interest expense for each
period:
+--------------------------+-+----------+---------+-+----------+---------+-+
| | | Three-month | | Three-month | |
| | | period ended | | period ended | |
| | | June 30, 2009 | | June 30, 2010 | |
+--------------------------+-+--------------------+-+--------------------+-+
| Lease payments | | 9,584 | million | | 7,802 | million | |
| | | | yen | | | yen | |
+--------------------------+-+----------+---------+-+----------+---------+-+
| Payment of the lease | | 2,171 | | | 1,788 | | |
| obligation for impaired | | | | | | | |
| leased property | | | | | | | |
+--------------------------+-+----------+---------+-+----------+---------+-+
| Depreciation expense | | 6,137 | | | 5,032 | | |
+--------------------------+-+----------+---------+-+----------+---------+-+
| Interest expense | | 2,348 | | | 1,980 | | |
+--------------------------+-+----------+---------+-+----------+---------+-+
(4) Calculation method used to determine the amount equivalent to depreciation
and interest expense:
The amount equivalent to depreciation is computed using the straight-line method
over the period of the finance leases, assuming no residual value.
The amount equivalent to interest expense is calculated by subtracting
acquisition costs from the total lease payments and allocated over the lease
periods based on the interest method.
(Investment in Debt and Equity Securities)
As of March 31, 2010
1. Held-to-maturity debt securities
(Millions of yen)
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | Classification | As of March 31, 2010 |
+------+ +------------------------------------------------------+
| | | Carrying Amount | Fair Value |Differences |
+------+-------------------------+-------------------------+--------------+-------------+
| | Corporate bonds | JPY1,499 | | JPY1,344 | | JPY(155) | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| | | Total | JPY1,499 | | JPY1,344 | | JPY(155) | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | | | | | | | | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
2. Marketable and investment securities at fair value
(Millions of yen)
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | Classification | As of March 31, 2010 |
+------+ +------------------------------------------------------+
| | | Carrying Amount | Investment |Differences |
| | | | Cost | |
+------+-------------------------+-------------------------+--------------+-------------+
| (1) | Equity securities | JPY101,095 | | JPY30,351 | | JPY70,743 | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| (2) | Debt securities | 28,957 | | 26,673 | | 2,283 | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| (3) | Others | 3,408 | | 3,064 | | 344 | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| | | Total | JPY133,460 | | JPY60,089 | | JPY73,371 | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | | | | | | | | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
Note: Investment securities held by certain subsidiaries in the United States of
America which apply ASC 946 are described in below "3. Investment securities
evaluated at fair value under the provisions set forth in Financial Services-
Investment Companies of the FASB Accounting Standards Codification."
3. Investment securities evaluated at fair value under the provisions set forth
in Financial Services - Investment Companies of the FASB Accounting Standards
Codification
Certain subsidiaries of the Company in the United States of America qualify as
investment companies under the provisions set forth in Financial Services -
Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC
946) and account for investment securities in accordance with ASC 946.
The carrying amounts of the investment securities at fair value recorded in the
consolidated balance sheets as of March 31, 2010 were as follows:
As of March 31, 2010
Carrying amounts of investment securities at fair value : 15,316
million yen
As of June 30, 2010
1. Held-to-maturity debt securities
(Millions of yen)
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | Classification | As of June 30, 2010 |
+------+ +------------------------------------------------------+
| | | Carrying Amount | Fair Value |Differences |
+------+-------------------------+-------------------------+--------------+-------------+
| | Corporate bonds | JPY999 | | JPY849 | | JPY(150) | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| | | Total | JPY999 | | JPY849 | | JPY(150) | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | | | | | | | | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
2. Marketable and investment securities at fair value
(Millions of yen)
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | Classification | As of June 30, 2010 |
+------+ +------------------------------------------------------+
| | | Carrying Amount | Investment |Differences |
| | | | Cost | |
+------+-------------------------+-------------------------+--------------+-------------+
| (1) | Equity securities | JPY91,473 | | JPY31,163 | | JPY60,310 | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| (2) | Debt securities | 29,555 | | 27,086 | | 2,468 | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| (3) | Others | 3,047 | | 3,103 | | (55) | |
+------+-------------------------+----------------------+--+-----------+--+-----------+-+
| | | Total | JPY124,077 | | JPY61,353 | | JPY62,723 | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
| | | | | | | | | |
+------+------+------------------+----------------------+--+-----------+--+-----------+-+
Note: Investment securities held by certain subsidiaries in the United States of
America which apply ASC 946 are described in below "3. Investment securities
evaluated at fair value under the provisions set forth in Financial Services-
Investment Companies of the FASB Accounting Standards Codification."
3. Investment securities evaluated at fair value under the provisions set forth
in Financial Services - Investment Companies of the FASB Accounting Standards
Codification
Certain subsidiaries of the Company in the United States of America qualify as
investment companies under the provisions set forth in Financial Services -
Investment Companies of the FASB Accounting Standards Codification Topic 946(ASC
946) and account for investment securities in accordance with ASC 946.
The carrying amounts of the investment securities at fair value recorded in the
consolidated balance sheets as of June 30, 2010 were as follows:
As of June 30, 2010
Carrying amounts of investment securities at fair value : 14,620
million yen
(Per Share Data)
1. Shareholders' equity per share
+------------------------------------------+----------+--------------+----------+--------------+
| | | As of | | As of |
| | | June 30, | | March 31, |
| | | 2010 | | 2010 |
+------------------------------------------+----------+--------------+----------+--------------+
| Shareholders' equity per share (yen) | | JPY434.83 | | JPY434.74 |
+------------------------------------------+----------+--------------+----------+--------------+
2. Net income per share and basic data for computation of the per share data
+----------+------------------------------------------+----------+----------+----------+--------------+----------+--------------+----------+
| | | Three-month | | Three-month | |
| | |period ended | |period ended | |
| | | June 30, | | June 30, | |
| | | 2009 | | 2010 | |
+---------------------------------------------------------------------------+----------+--------------+----------+--------------+----------+
| Net income per share - primary (yen) | | 25.33 | | 17.96 | |
+---------------------------------------------------------------------------+----------+--------------+----------+--------------+----------+
| Net income per share - diluted (yen) | | 24.45 | | 17.39 | |
+---------------------------------------------------------------------------+----------+--------------+----------+--------------+----------+
| | | |
+-----------------------------------------------------------------------------------------------------+----------+-------------------------+
| Basic data for computation of the per share data | Three-month | | Three-month | |
| |period ended | |period ended | |
| | June 30, | | June 30, | |
| | 2009 | | 2010 | |
+--------------------------------------------------------------------------------------+--------------+----------+--------------+----------+
| 1. Net income (in millions of yen) | | 27,383 | | 19,438 | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| 2. Amounts not allocated to shareholders | | - | | - | |
| (in millions of yen) | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| 3. Net income allocated to common stock outstanding | | 27,383 | | 19,438 | |
| (in millions of yen) | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| | 4. Weighted average number of common stock | | 1,081,005 | | 1,082,335 | |
| | outstanding | | | | | |
| | during each period (unit: thousand of shares) | | | | | |
+----------+-----------------------------------------------------+---------------------+--------------+----------+--------------+----------+
| 5. Adjustment for net income used to calculate net | | | | | |
| income per share - diluted | | | | | |
| (in millions of yen) | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| - Interest expense (net of tax) | | 240 | | 240 | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| - Adjustments for net income used to calculate | | (7) | | (21) | |
| diluted net income | | | | | |
| per share in consolidated subsidiaries and | | | | | |
| affiliated companies | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| -Total | | 233 | | 219 | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| 6. Increase of common stock used to calculate net | | 48,582 | | 48,299 | |
| income per share- diluted (unit: thousand of | | | | | |
| shares) | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| 7. Significant changes in residual securities which | | - | | - | |
| do not dilute net income per share | | | | | |
+-----------------------------------------------------+--------------------------------+--------------+----------+--------------+----------+
| | | | | | | | | |
+----------+------------------------------------------+----------+----------+----------+--------------+----------+--------------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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