TIDM56ID
RNS Number : 5512L
Softbank Corp
02 August 2011
Replacement
The following amendments have been made to the '1st Quarter
Results' announcement released on July 28, 2011 at 7:30 under RNS
No 2464L.
Amendments are underlined.
Amended Items
1. Qualitative Information Regarding the Three-month Period
Results
(1) Qualitative Information Regarding Consolidated Results of
Operations
Reference 1: Principal Operational Data
(a) Mobile Communications
<Before revision>
SoftBank mobile phones
------------------------------ -----------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
============== ------------------------------------------ -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
============== ------ ------ ------ -------- -------- =========================
(Thousands)
Net
additions(1) 696.6 901.0 925.7 1,008.1 3,532.1 700.0
-------------- ------ ------ ------ -------- -------- -------------------------
(Postpaid) 645.3 833.6 865.4 975.3 3,319.6 667.5
(Prepaid) 51.3 67.4 60.3 33.5 212.5 32.5
-------------- ------ ------ ------ -------- -------- -------------------------
Market
share(2)
(%) 45.4 53.5 55.8 40.0 48.0 40.9
-------------- ------ ------ ------ -------- -------- -------------------------
<After revision>
SoftBank mobile phones
------------------------------ -----------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
============== ------------------------------------------ -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
============== ------ ------ ------ -------- -------- =========================
(Thousands)
Net
additions(1) 696.6 901.0 925.7 1,008.8 3,532.1 730.0
-------------- ------ ------ ------ -------- -------- -------------------------
(Postpaid) 645.3 833.6 865.4 975.3 3,319.6 697.5
(Prepaid) 51.3 67.4 60.3 33.5 212.5 32.5
-------------- ------ ------ ------ -------- -------- -------------------------
Market
share(2)
(%) 45.4 53.5 55.8 40.8 48.0 42.7
-------------- ------ ------ ------ -------- -------- -------------------------
The full amended text is shown below.
------------------------------------------------------------------------
----------------------------------------------------
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 2 of this report.
SOFTBANK CORP.
CONSOLIDATED FINANCIAL REPORT
For the three-month period ended June 30, 2011
Tokyo, July 28, 2011
1. FINANCIAL HIGHLIGHTS
(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 income Ordinary income Net income
---------------- --------------------- ---------------------- --------------------- ----------------------------
Amount % Amount % Amount % Amount %
---------------- ----------- -------- ----------- --------- ----------- -------- ---------- ----------------
Three-month
period ended
June 30, 2011 764,237 9.0 175,825 12.3 151,230 19.2 94,791 387.6
---------------- ----------- -------- ----------- --------- ----------- -------- ---------- ----------------
Three-month
period ended
June 30, 2010 700,840 5.2 156,603 44.6 126,844 61.0 19,438 (29.0)
---------------- ----------- -------- ----------- --------- ----------- -------- ---------- ----------------
Note: Comprehensive income
Three-month period ended June 30, 2011:
JPY 104,007 million (329.6%)
Three-month period ended June 30, 2010:
JPY 24,207 million ( - %)
---------------------------------------------------------------
Net income
per share Net income
basic per share diluted
(yen) (yen)
---------------- --------------------- ----------------------
Three-month
period ended
June 30, 2011 87.35 83.91
---------------- --------------------- ----------------------
Three-month
period ended
June 30, 2010 17.96 17.39
---------------- --------------------- ----------------------
(2) Financial Condition
(Millions of yen; amounts less than one million yen are omitted.)
-------------------------------------------------------------------------
Total assets Total equity Equity ratio (%)
------------------ -------------- ------------------ -----------------
As of June 30,
2011 4,483,109 1,013,162 16.8
-----------------
As of March 31,
2011 4,655,725 879,618 13.3
------------------ -------------- ------------------ -----------------
Note: Shareholders' equity (consolidated)
As of June 30, 2011: JPY 751,777 million
As of March 31, 2011: JPY 619,252 million
2. Dividends
Dividends per share
---------------- ------------------------------------------------------------
First Second Third Fourth
(Record date) quarter quarter quarter quarter Total
---------------- ------------- ----------- ----------- ----------- ------
(yen) (yen) (yen) (yen) (yen)
Fiscal year
ended March
31, 2011 - 0.00 - 5.00 5.00
---------------- ------------- ----------- ----------- ----------- ------
Fiscal year -
ending March
31, 2012
---------------- ------------- ----------- ----------- ----------- ------
Fiscal year ending March 31, - - - -
2012 (Forecasted)
------------------------------- ----------- ----------- ----------- ------
Note:
Revision of forecasts on the dividends: No
Dividend for the fiscal year ending March 31, 2012 is planned to
be increased from JPY 5 for the fiscal year ended March, 2011,
however it is not determined at this point. The concrete amount of
dividend will be announced promptly upon resolution.
3. Forecasts on the consolidated operation results for the
fiscal year ending in March 2012 (April 1, 2011 - March 31,
2012)
(Percentages are shown as year-on-year changes)
Net sales Operating Ordinary Net income Net
income income income
per
share
basic
(yen)
----------- -------------- -------------- -------------- -------------- -------
Amount % Amount % Amount % Amount %
(millions (millions (millions (millions
of yen) of yen) of yen) of yen)
----------- ---------- ---------- ---------- ---------- -------
First-half - - - - - - - - -
financial
year
----------- ---------- ---------- ---------- ---------- -------
Full - - - - - - - - -
financial
year
----------- ---------- ---------- ---------- ---------- -------
Note:
Revision of forecasts on the operation results: No
The SOFTBANK Group is planning to focus on network expansion and
customer acquisition in the Mobile Communications segment. The
initiatives for achieving these strategies need to be planned and
adjusted flexibly according to circumstances. Since this involves
numerous unconfirmed elements which could impact revenue and
profit, it is difficult to disclose numerical earnings forecasts.
However, revenue and operating income are expected to increase year
on year. To improve disclosure of information for shareholders and
investors, the earnings forecast will be disclosed when deemed to
be reasonable.
4. Others
(1) Significant Changes in Scope of Consolidation (Changes in
Scope of Consolidation of Specified Subsidiaries): No
(2) Application of special accounting methods for preparation
for the consolidated financial statements: No
(3) Changes in accounting policies, accounting estimates and
retrospective restatements in the consolidated financial
statements
[1] Changes due to revisions in accounting standards: No
[2] Changes other than those in [1]: No
[3] Changes in accounting estimates: No
[4] Retrospective restatements: No
(4) Number of shares issued (Common stock)
[1] Number of shares issued (including treasury stock):
As of June 30, 2011: 1,107,728,781 shares
As of March 31, 2011: 1,082,530,408 shares
[2] Number of treasury stock:
As of June 30, 2011: 183,322 shares
As of March 31, 2011: 180,503 shares
[3] Weighted average number of common stock:
As of June 30, 2011: 1,085,217,816 shares
As of June 30, 2010: 1,082,335,888 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) Qualitative Information Regarding Consolidated Earnings
Forecasts" for details of notes to precondition and usage for
forecasts.
SOFTBANK CORP.'s Earnings Results Briefing will be held for
media, institutional investors, and financial institutions on July
28, 2011 followed by the Analysts Briefing for institutional
investors and financial institutions on July 29, 2011. The Earnings
Results Briefing will be streamed live on the Company's Web site in
Japanese and English at (http://www.softbank.co.jp/en/irinfo/). The
material used in the Analysts Briefing will be uploaded the day
before the briefing and the video on demand will be made available
as soon as possible on the Company's Web site afterwards.
(Appendix)
Contents
1. Qualitative Information Regarding Three-month Period p.2
Results
(1) Qualitative Information Regarding Consolidated p.2
Results of Operations
1. Consolidated Results of Operations p.2
2. Results by Business Segment p.4
Reference 1: Principal Operational Data p.8
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) Qualitative Information Regarding Consolidated p.16
Earnings Forecasts
2. Consolidated Financial Statements p.17
(1) Consolidated Balance Sheets p.17
(2) Consolidated Statements of Income and Consolidated p.19
Statements of Comprehensive
Income
(3) Consolidated Statements of Cash Flows p.21
(4) Significant Doubt About Going Concern Assumption p.23
(5) Notes p.23
(6) Segment Information p.24
(7) Significant Changes in Shareholders' Equity p.24
(8) Significant Subsequent Events p.25
1. Qualitative Information Regarding the Three-month Period
Results
(1) Qualitative Information Regarding Consolidated Results of
Operations
1. Consolidated Results of Operations
<Overview of results for the three-month period from April 1
to June 30, 2011>
For the three-month period ended June 30, 2011 (hereafter "the
period"), the SOFTBANK Group (hereafter "the Group") achieved
consolidated net sales of JPY 764,237 million, a JPY 63,397 million
(9.0%) increase compared with the same period of the previous
fiscal year (April 1 to June 30, 2010, hereafter "year on year"),
with a JPY 19,221 million (12.3%) increase in operating income to
JPY 175,825 million. This consolidated revenue and profit growth
was driven by strong performance in the Mobile Communications
segment. Ordinary income grew JPY 24,385 million (19.2%) to JPY
151,230 million. Net income rose JPY 75,352 million (387.6%) to JPY
94,791 million. This was largely attributable to a year-on-year
rise of JPY 19,430 million in special income, and a JPY 25,724
million decline in total income taxes.
Note:
Definition of terms: as used in this consolidated financial
report for the three-month period from April 1, 2011, to June 30,
2011, 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.
The main factors affecting earnings for the period were as
follows:
(a) Net Sales
Net sales totaled JPY 764,237 million, for a JPY 63,397 million
(9.0%) year-on-year increase. This was mainly the result of strong
growth in the number of mobile phone subscribers combined with a
rise in the number of mobile handsets shipped(1) in the Mobile
Communications segment.
Note:
1. Handsets shipped: handsets shipped (sold) to agents.
(b) Cost of Sales
Cost of sales rose JPY 34,159 million (11.1%) year on year to
JPY 341,340 million. This was mainly due to higher cost of goods on
the increase in the number of mobile handsets shipped in the Mobile
Communications segment, along with higher depreciation and
amortization expenses mainly relating to the installation of
additional base stations.
(c) Selling, General and Administrative Expenses
Selling, general and administrative expenses grew JPY 10,016
million (4.2%) year on year to JPY 247,071 million. This was mainly
because of increased sales commissions(2) associated with the
increase in the number of mobile handsets sold(3) in the Mobile
Communications segment.
Notes:
2. Sales commissions paid to sales agents per new subscription
and upgrade purchase.
3. Handsets sold: total of new subscriptions and handset
upgrades.
(d) Operating Income
As a result, operating income totaled JPY 175,825 million, for a
JPY 19,221 million (12.3%) year-on-year increase. The operating
margin rose 0.7 of a percentage point year on year, to 23.0%.
(e) Non-operating Income / Expenses
Non-operating income totaled JPY 3,262 million, a JPY 39 million
year-on-year increase. Non-operating expenses stood at JPY 27,857
million, a JPY 5,124 million year-on-year decrease. This was mainly
because interest expense decreased by JPY 5,382 million as SOFTBANK
MOBILE Corp. (hereafter "SOFTBANK MOBILE") continued to repay
borrowings.
(f) Ordinary Income
Ordinary income therefore totaled JPY 151,230 million, for a JPY
24,385 million (19.2%) year-on-year increase.
(g) Special Income
Special income totaled JPY 20,356 million. Dilution gain from
changes in equity interest amounted to JPY 15,424 million. The main
component of this was a dilution gain from changes in equity
interest of JPY 13,950 million recorded mainly in relation to the
Company's equity method affiliate Renren, Inc.'s listing on the New
York Stock Exchange, in May 2011.
(h) Special Loss
Special loss was JPY 380 million.
(i) Income Taxes
Provisions for current income taxes were JPY 27,954 million and
provisions for deferred income taxes were JPY 32,246 million. Total
income taxes decreased JPY 25,724 million year on year to JPY
60,200 million. The decrease in total income taxes was mainly
attributable to the absence of JPY 26,450 million of income
taxes-corrections recorded in the previous fiscal year.
(j) Minority Interests in Net Income
Minority interests in net income totaled JPY 16,215 million,
mainly through booking net income at Yahoo Japan Corporation
(hereafter "Yahoo Japan").
(k) Net Income
As a result of the above, net income totaled JPY 94,791million,
for a JPY 75,352 million (387.6%) year-on-year increase.
(l) Comprehensive Income
Comprehensive income was JPY 104,007 million. Of this,
comprehensive income attributable to owners of the parent was JPY
87,877 million and comprehensive income attributable to minority
interests came to JPY 16,129 million.
2. Results by Business Segment
Note:
Principal operational data is shown on pages 8-10 "(Reference 1:
Principal Operational Data)."
(a) Mobile Communications
(Millions of yen)
------------------------------------------------------------------------------
Three-month Three-month
Period Ended June Period Ended June
30, 2010 30, 2011 Change Change %
------------------ ------------------ ------------------ ------- ---------
Net sales 441,078 514,090 73,012 16.6%
------------------ ------------------ ------------------ ------- ---------
Operating income 102,657 116,491 13,834 13.5%
------------------ ------------------ ------------------ ------- ---------
730,000 net subscriber additions(4) for the period
ARPU(5) for the period was JPY 4,210, an JPY 80 year-on-year
decrease. Out of this, data ARPU amounted to JPY 2,440, a JPY 190
year-on-year increase.
Notes:
4. The number of net subscriber additions includes prepaid
mobile phones and communication module service subscribers. Net
communication module service subscriber additions for the period
totaled 158,800.
5. Average Revenue Per User (rounded to the nearest JPY 10).
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.
< Overview of Operations >
The segment's net sales increased by JPY 73,012 million (16.6%)
year on year to JPY 514,090 million. The revenue growth was driven
by a continuing strong upward trend in the number of mobile phone
subscribers combined with an increase in the number of mobile
handsets shipped. In expenses, the segment saw higher cost of goods
on the increase in the number of mobile handsets shipped, and an
increase in sales commissions on the higher number of handsets
sold. In addition, there was a rise in depreciation and
amortization expenses mainly relating to the installation of
additional base stations. As a result, operating income increased
by JPY 13,834 million (13.5%) year on year to JPY 116,491
million.
<Number of Mobile Phone Subscribers>
Net subscriber additions (new subscribers minus cancellations)
for the period totaled 730,000. This net increase was primarily the
result of strong sales of smartphones such as iPhone(6) and
Android(TM 7) handsets. As a result, the cumulative number of
subscribers(8) at the end of the period stood at 26,138,700,
raising SOFTBANK MOBILE's cumulative subscriber share by 1.7
percentage points year on year, to 21.6%.(9)
Notes:
6. iPhone is a trademark of Apple Inc. The iPhone trademark is
used under license from Aiphone K.K.
7. Android is a trademark or a registered trademark of Google
Inc.
8. The number of cumulative subscribers includes prepaid mobile
phones and communication module service subscribers. The cumulative
number of communication module service subscribers at the end of
the period was 1,467,400.
9. Calculated by the Company based on Telecommunications
Carriers Association statistical data.
< Number of Mobile Handsets Sold/ Shipped >
The number of mobile handsets sold increased by 388,000 year on
year to 2,550,000, while handsets shipped for the period increased
by 442,000 year on year to 2,493,000. These increases were mainly
the result of a favorable sales and shipment trend of iPhone and
Android handsets.
<ARPU>
ARPU for the period declined JPY 80 year on year to JPY 4,210.
Out of this, the sum of the basic monthly charge and voice ARPU
declined JPY 260 year on year to JPY 1,780, reflecting an increase
in devices which do not have voice communication functionality and
revised access charges between carriers. On the other hand, data
ARPU rose JPY 190 year on year to JPY 2,440. This was mainly the
result of the continuing increase in the number of data-intensive
iPhone subscribers.
<Churn Rate and Upgrade Rate>
The churn rate(10) for the period was 1.08%, which was 0.06 of a
percentage point higher year on year. This was primarily because of
an increased number of contract terminations of corporate
customers.
The upgrade rate(10) for the period was 1.28%, which was 0.1 of
a percentage point higher year on year. This was mainly the result
of steady upgrades to smartphones such as iPhone 4 and Android
handsets.
Note:
10. Calculated with prepaid mobile phones and communication
module service subscribers included in the number of subscribers,
churn and upgrades, respectively.
<Average Acquisition Cost per Subscriber>
The average acquisition cost per subscriber(11) for the period
declined JPY 1,000 year on year to JPY 36,200.
Note:
11. Average commission paid to sales agents per new
subscription. New subscriptions include prepaid mobile phones and
communication modules.
(b) Broadband Infrastructure
(Millions of yen)
------------------------------------------------------------------------------
Three-month Three-month
Period Ended Period Ended June
June 30, 2010 30, 2011 Change Change %
------------------ ----------------- ------------------ -------- ---------
Net sales 49,323 44,019 (5,303) (10.8%)
------------------ ----------------- ------------------ -------- ---------
Operating income 11,696 10,221 (1,474) (12.6%)
------------------ ----------------- ------------------ -------- ---------
<Overview of Operations>
The segment's net sales decreased by JPY 5,303 million (10.8%)
year on year to JPY 44,019 million. This was mainly because of the
continued decreasing trend in revenue, on a decline in the number
of charged lines(12) for the ADSL service. Operating income
decreased by JPY 1,474 million (12.6%) year on year to JPY 10,221
million.
Net subscriber additions for Yahoo! BB hikari with FLET'S(13)
for the period totaled 177,000, bringing the cumulative number of
contracts at the end of the period to 1,109,000. Combined with
installed lines(14) for the ADSL service, this brought the total
number of users to 4,118,000.
Notes:
12. Number of installed lines excluding customers whose basic
monthly charge is free under promotion 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 Three-month
Period Ended June Period Ended June
30, 2010 30, 2011 Change Change %
------------------ ------------------ ------------------ ------- ---------
Net sales 85,876 87,492 1,615 1.9%
------------------ ------------------ ------------------ ------- ---------
Operating income 6,661 12,913 6,251 93.8%
------------------ ------------------ ------------------ ------- ---------
<Overview of Operations>
The segment's net sales increased by JPY 1,615 million (1.9%)
year on year to JPY 87,492 million. Inter-segment sales increased
due to network provision to the Group telecommunication companies
such as SOFTBANK MOBILE, and contributed to the overall segment's
revenue growth. On the other hand, net sales to third-parties
decreased, primarily as a result of the continued decrease in
revenue from relay connection voice services such as MYLINE.
Operating income increased by JPY 6,251 million (93.8%) to JPY
12,913 million. This was mainly due to the increase in net sales,
combined with a decrease in telecommunications equipment fees as a
result of revised access charges between carriers.
(d) Internet Culture
(Millions of yen)
------------------------------------------------------------------------------
Three-month Three-month
Period Ended June Period Ended June
30, 2010 30, 2011 Change Change %
------------------ ------------------ ------------------ ------- ---------
Net sales 68,405 69,610 1,205 1.8%
------------------ ------------------ ------------------ ------- ---------
Operating income 35,572 36,605 1,032 2.9%
------------------ ------------------ ------------------ ------- ---------
<Overview of Operations>
The segment's net sales increased by JPY 1,205 million (1.8%)
year on year to JPY 69,610 million. This was mainly due to revenue
growth at Yahoo Japan on an increase in listing advertising, as
well as growth in game related services and data center and Yahoo!
Shopping sales. While Yahoo Japan saw a decrease in advertisements
from some major advertisers due to the impact of the Great East
Japan Earthquake of March 11, 2011. Operating income increased by
JPY 1,032 million (2.9%) year on year to JPY 36,605 million. This
was primarily the result of a decrease in communications expenses
in connection with improved operational efficiency due to direct
ownership of data centers, although sales promotion expenses
increased.
(Reference 1: Principal Operational Data
(a) Mobile Communications
SoftBank mobile phones
--------------------------------------- ---------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
================= ---------------------------------------------------- -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
================= --------- --------- --------- -------- --------- =========================
(Thousands) Net
additions(1) 696.6 901.0 925.7 1,008.8 3,532.1 730.0
----------------- --------- --------- --------- -------- --------- -------------------------
(Postpaid) 645.3 833.6 865.4 975.3 3,319.6 697.5
(Prepaid) 51.3 67.4 60.3 33.5 212.5 32.5
----------------- --------- --------- --------- -------- --------- -------------------------
Market share(2)
(%) 45.4 53.5 55.8 40.8 48.0 42.7
----------------- --------- --------- --------- -------- --------- -------------------------
Cumulative
subscribers(1) 22,573.2 23,474.2 24,399.9 25,408.7 26,138.7
----------------- --------- --------- --------- -------- --------- -------------------------
Market share(2)
(%) 19.9 20.3 20.8 21.3 21.6
----------------- --------- --------- --------- -------- --------- -------------------------
(Thousands)
Number of
handsets
sold(3) 2,162 2,712 2,605 2,763 10,242 2,550
----------------- --------- --------- --------- -------- --------- -------------------------
(Thousands)
Number of
handsets
shipped(4) 2,051 2,687 2,736 2,542 10,016 2,493
----------------- --------- --------- --------- -------- --------- -------------------------
(Yen per month)
ARPU(5) 4,290 4,300 4,310 3,940 4,210 4,210
----------------- --------- --------- --------- -------- --------- -------------------------
(Basic monthly
charge + voice) 2,030 2,020 1,980 1,570 1,890 1,780
(Data) 2,250 2,290 2,330 2,370 2,310 2,440
----------------- --------- --------- --------- -------- --------- -------------------------
(Yen) Average
acquisition
cost per
subscriber(6) 37,200 37,500 37,800 35,400 36,900 36,200
----------------- --------- --------- --------- -------- --------- -------------------------
(% per month)
Churn rate(7) 1.02 0.96 0.91 1.02 0.98 1.08
----------------- --------- --------- --------- -------- --------- -------------------------
( )
(3G postpaid) 0.99 0.92 0.86 0.98 0.94 1.03
----------------- --------- --------- --------- -------- --------- -------------------------
Upgrade rate(7) 1.18 1.67 1.43 1.33 1.40 1.28
----------------- --------- --------- --------- -------- --------- -------------------------
Notes:
1. Includes the number of prepaid mobile phones and
communication module service subscribers.
2. Calculated by the Company based on Telecommunications
Carriers Association statistical data.
3. Handsets sold: total of new subscriptions and handset
upgrades.
4. Handsets shipped: handsets shipped (sold) to agents.
5. Average Revenue Per User (rounded to the nearest JPY 10).
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.
6. Average commissions paid to sales agents per new
subscription.
New subscriptions include prepaid mobile phones and
communication modules.
7. Calculated with prepaid mobile phones and communication
module service subscribers included in the number of subscribers,
churn and upgrades, respectively.
(b) Broadband Infrastructure
Yahoo! BB ADSL
----------------------------- -------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
================= ---------------------------------------------- -------------------------
Q1 Q2 Q3 Q4 Full Year Q1
================= ====== ======== ====== ====== ============ =========================
(Thousands)
Installed
lines(8) 3,609 3,457 3,291 3,150 3,009
----------------- ------ -------- ------ ------ ------------ -------------------------
(Yen per month)
ARPU(9 10) 3,960 3,950 3,890 3,830 3,710
----------------- ------ -------- ------ ------ ------------ -------------------------
(% per month)
Churn rate(11) 2.46 2.39 2.66 2.65 2.54 2.56
----------------- ------ -------- ------ ------ ------------ -------------------------
Yahoo! BB hikari with
FLET'S
----------------------------- -------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
================= ---------------------------------------------- -------------------------
Q1 Q2 Q3 Q4 Full Year Q1
================= ====== ======== ====== ====== ============ =========================
(Thousands)
Cumulative
contracts(12) 405 575 783 932 1,109
----------------- ------ -------- ------ ------ ------------ -------------------------
(Yen per month)
ARPU(9) 1,310 1,450 1,500 1,620 1,620
----------------- ------ -------- ------ ------ ------------ -------------------------
Broadband
Lines
------------- ---------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
============= ------------------------------------ -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
============= ====== ====== ====== === ======= =========================
(Thousands)
Total
users(13) 4,014 4,032 4,074 4,082 4,118
------------- ------ ------ ------ --- ------- -------------------------
Notes:
8. Number of lines for which connection construction for ADSL
line at central office of NTT East or NTT West is complete.
9. Average Revenue Per User: average revenue per user (rounded
to the nearest JPY 10).
10. Starting in the first quarter of the fiscal year ending
March 2012, the index was changed to "ARPU" with the number of
installed lines as the denominator. According to the new definition
ARPU for each quarter of the fiscal year ended March 31, 2011 has
been retroactively adjusted.
11. Starting in the first quarter of the fiscal year ending
March 2012 the churn rate is calculated with number of installed
lines as the denominator. According to the new definition the churn
rate for each quarter of the fiscal year ended March 2011 has been
retroactively adjusted.
12. Number of users for which connection construction for FLET'S
HIKARI line at central office of NTT East or NTT West is
complete.
13. Total of the number of installed lines of Yahoo! BB ADSL and
cumulative contracts of Yahoo! BB hikari with FLET'S.
(c) Fixed-line Telecommunications
OTOKU Line
----------------- ------------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
================= --------------------------------------- -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
=================
(Thousands)
Lines 1,668 1,667 1,662 1,671 1,669
----------------- ------ ------ ------ ------ ------- -------------------------
(Yen per month)
ARPU(14) 6,600 6,570 6,610 6,930 6,650
----------------- ------ ------ ------ ------ ------- -------------------------
14. Average Revenue Per User: average revenue per line (rounded
to the nearest JPY 10).
(d) Internet Culture(15)
Yahoo! JAPAN
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
========================== ------------------------------------------- -------------------------
Full
Q1 Q2 Q3 Q4 Year Q1
============== ========== ======= ======= ======= ======= ======= =========================
(Millions)
Total
monthly page New
views(16) standard 48,043 - - 49,564 52,160
-------------- ---------- ------- ------- ------- ------- ------- -------------------------
Former
standard 48,722 49,671 46,756 54,631 -
------------------------- ------- ------- ------- ------- ------- -------------------------
Monthly
unique New
browsers(17) standard 218 - - 222 244
-------------- ---------- ------- ------- ------- ------- ------- -------------------------
Former
standard 224 226 222 238 -
------------------------- ------- ------- ------- ------- ------- -------------------------
Yahoo! Auctions and shopping related(18)
(Billions of
yen)
Transaction value
(quarterly total) 231.5 - - 232.8 241.7
-------------------- ------ ------ ------
Notes:
15. Yahoo Japan has changed its items and method of its
quarterly disclosure information starting with the fourth quarter
of the fiscal year ended March 31, 2011. The figures Yahoo Japan
discloses starting the fourth quarter of the fiscal year ended
March 31, 2011 are referred to as the "new standard", while those
previously disclosed are referred to as the "former standard."
16. Number of accesses to Yahoo! JAPAN Group Web sites during
each quarter
New standard: quarterly average. Figures for the second and
third quarter of the fiscal year ended March 31, 2011 are not
disclosed by Yahoo Japan.
Former standard: number of total monthly page views during the
last month of each quarter.
17. Number of browsers accessing Yahoo! JAPAN services during
each quarter
New standard: quarterly average. Figures for the second and
third quarter of the fiscal year ended March 31, 2011 are not
disclosed by Yahoo Japan.
Former standard: number of browsers during the last month of
each quarter.
18. Shopping related includes Yahoo! Shopping, Yahoo! Ticket and
Yahoo! Travel transaction values.
(Reference 2: Capital Expenditure and Depreciation)
(a) Capital Expenditure (acceptance basis)
Millions of yen
-------------------------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
==================== ---------------------------------------------- ---------
Full
Q1 Q2 Q3 Q4 Year Q1
==================== ======= ======= ======== ======== ======== =========
Mobile
Communications 25,987 65,387 116,324 143,826 351,525 84,076
-------------------- ------- ------- -------- -------- -------- ---------
Broadband
Infrastructure 3,319 3,294 5,076 5,160 16,850 5,739
-------------------- ------- ------- -------- -------- -------- ---------
Fixed-line
Telecommunications 5,112 6,362 9,095 15,665 36,236 6,320
-------------------- ------- ------- -------- -------- -------- ---------
Internet Culture 1,906 1,908 2,783 4,114 10,713 3,349
-------------------- ------- ------- -------- -------- -------- ---------
Others 1,216 1,559 1,148 1,340 5,265 1,710
-------------------- ------- ------- -------- -------- ======== =========
Consolidated
total 37,542 78,513 134,428 170,107 420,591 101,196
-------------------- ------- ------- -------- -------- -------- ---------
(b) Depreciation (excluding amortization of goodwill)
Millions of yen
------------------------------------------------------------------------------
Fiscal
Year
Ending
March
31,
Fiscal Year Ended March 31, 2011 2012
==================== --------------------------------------------- ---------
Full
Q1 Q2 Q3 Q4 Year Q1
==================== ======= ======= ======= ======= ========= =========
Mobile
Communications 36,636 37,636 40,051 42,668 156,993 45,214
-------------------- ------- ------- ------- ------- --------- ---------
Broadband
Infrastructure 4,234 3,968 3,965 3,672 15,840 3,424
-------------------- ------- ------- ------- ------- --------- ---------
Fixed-line
Telecommunications 9,104 9,242 9,290 8,997 36,634 8,921
-------------------- ------- ------- ------- ------- --------- ---------
Internet Culture 2,169 2,307 2,412 2,533 9,422 2,291
-------------------- ------- ------- ------- ------- --------- ---------
Others 1,445 1,482 1,608 1,508 6,045 1,521
-------------------- ------- ------- ------- ------- --------- =========
Consolidated
total 53,590 54,637 57,329 59,379 224,937 61,374
-------------------- ------- ------- ------- ------- --------- ---------
(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 March 31, As of June 30,
2011 2011 YoY YoY %
------------------- ---------------- --------------- ---------- -------
Total assets 4,655,725 4,483,109 (172,615) (3.7%)
------------------- ---------------- --------------- ---------- -------
Total liabilities 3,776,107 3,469,947 (306,159) (8.1%)
------------------- ---------------- --------------- ---------- -------
Total equity 879,618 1,013,162 133,544 15.2%
------------------- ---------------- --------------- ---------- -------
(a) Current Assets
Current assets at the end of the period totaled JPY 1,658,549
million, for a JPY 204,067million (11.0%) decrease from the
previous fiscal year-end. The primary components of the change were
as follows:
Cash and deposits decreased by JPY 117,230 million from the
previous fiscal year-end. This is mainly due to repayments of
borrowings, such as the SBM loan,(1) and income tax payments for BB
Mobile's income tax under consolidated tax return(2) and at Yahoo
Japan.
Notes and accounts receivable-trade decreased by JPY 52,600
million. This was mainly because of sales of installment sales
receivables at SOFTBANK MOBILE.
Notes:
1. The loan procured under a whole business securitization
scheme as part of the loan for procurement of the acquisition
finance for Vodafone K.K. (currently SOTBANK MOBILE).
2. BB Mobile and its wholly owned subsidiaries including
SOFTBANK MOBILE adopt the consolidated taxation system.
(b) Fixed Assets
Fixed assets totaled JPY 2,822,572 million at the end of the
period, for a JPY 30,846million (1.1%) increase from the previous
fiscal year-end. The primary components of the change were as
follows:
Total property and equipment increased JPY 34,654 million from
the previous fiscal year-end, primarily on a JPY 77,276 million
increase from new acquisitions of telecommunications equipment.
Total intangible assets decreased JPY 11,095 million from the
previous fiscal year-end. This was mainly because of a JPY 15,643
million decrease resulting from regular amortization of the
goodwill recorded when the Company acquired SOFTBANK MOBILE and
SOFTBANK TELECOM Corp. On the other hand, software increased by JPY
6,812 million as a result of new acquisitions of telecommunications
equipment.
Investments and other assets increased by JPY 7,287 million from
the previous fiscal year-end. This was mainly because of a JPY
13,942 million increase in investment securities.
(c) Current Liabilities
Current liabilities at the end of the period totaled JPY
1,539,666 million, for a JPY 104,741 million (6.4%) decrease from
the previous fiscal year-end. The primary components of the change
were as follows:
Accounts payable-other and accrued expenses increased by JPY
180,536 million from the previous fiscal year-end. This was mainly
the result of transferring JPY 200,000 million from long-term
liabilities-other to current liabilities as an amount scheduled to
be paid to Vodafone International Holdings B.V. and Vodafone
Overseas Finance Limited (hereafter "the Vodafone Group") in April
2012, as part of a transaction made with the Vodafone Group in
December 2010.
The current portion of corporate bonds decreased by JPY 113,500
million from the previous fiscal year-end. This was mainly due to
payments of JPY 60,000 million to redeem the 27(th) Unsecured
Straight Corporate Bond, and JPY 53,500 million to redeem the
25(th) Unsecured Straight Corporate Bond.
Income taxes payable decreased by JPY 75,824 million. This was
mainly because payments were made for income tax payable at the
previous fiscal year-end while income tax payable was recorded for
the period, for BB Mobile's income tax under consolidated tax
return and at Yahoo Japan.
Short-term borrowings decreased by JPY 62,330 million from the
previous fiscal year-end. This was mainly because the Company
repaid short-term borrowings, and SOFTBANK MOBILE continued to
repay borrowings procured via the securitization of installment
sales receivables.
(d) Long-term Liabilities
Long-term liabilities totaled JPY 1,930,281 million at the end
of the period, for a JPY 201,417 million (9.4%) decrease from the
previous fiscal year-end. The primary components of the change were
as follows:
Long-term liabilities-Other decreased by JPY 197,486 million.
This was mainly due to transfer of JPY 200,000 million to accounts
payable-other and accrued expenses for the above-mentioned payment
scheduled for April 2012 as part of a transaction with the Vodafone
Group, since the payment date came to be within one year.
Long-term borrowings decreased by JPY 88,088 million. This was
mainly because SOFTBANK MOBILE repaid JPY 118,671 million of its
SBM loan. On the other hand, there was an increase in the Company's
long-term borrowings.
Corporate bonds increased JPY 79,998 million from the previous
fiscal year-end. This increase mainly reflects an increase of JPY
100,000 million from the issuance of the 36(th) Unsecured Straight
Corporate Bond and JPY 30,000 million from the issuance of the
37(th) Unsecured Straight Corporate Bond. On the other hand, the
Company's Convertible Bonds Due 2014 (balance at the previous
fiscal year-end JPY 49,992 million; hereafter "the Convertible
Bonds") were converted into common stock of the Company.
(e) Equity
Equity totaled JPY 1,013,162 million at the end of the period,
for a JPY 133,544 million (15.2%) increase from the previous fiscal
year-end. The equity ratio rose 3.5 percentage points from the
previous fiscal year-end to 16.8%. The primary components of the
change were as follows:
(Shareholders' equity)
Shareholders' equity increased JPY 139,437 million from the
previous fiscal year-end to JPY 762,759 million.
At the end of the period common stock totaled JPY 213,797
million and additional paid-in capital was JPY 237,522 million.
This result includes the conversion of abovementioned Convertible
Bonds into common stock of the Company during the period, which
increased common stock by JPY 25,022 million and additional paid-in
capital by JPY 25,011 million.
Retained earnings totaled JPY 311,689 million at the end of the
period, for a JPY 89,412 million increase from the previous fiscal
year-end. This was primarily because net income of JPY 94,791
million was recorded, while payment of dividends from retained
earnings of JPY 5,411 million was recorded.
(Valuation and translation adjustments)
Valuation and translation adjustments of JPY 10,982 million were
recorded as debit at the end of the period, a JPY 6,913 million
decrease from the previous fiscal year-end. This was primary a
result of a decrease in unrealized gain on available-for-sale
securities of JPY 10,535 million from the previous fiscal
year-end.
(Minority interests)
Minority interests totaled JPY 260,586 million at the end of the
period, for a JPY 924 million increase from the previous fiscal
year-end.
2. Cash Flows
Cash flows during the period were as follows:
Cash and cash equivalents at the end of the period totaled JPY
729,809 million, for a JPY 117,346 million decrease from the
previous fiscal year-end.
(Millions of yen)
Three-month Three-month
Period Ended Period Ended
June 30, 2010 June 30, 2011 YoY
--------------------------- --------------- --------------- ---------
Cash flows from operating
activities 132,998 107,035 (25,963)
--------------------------- --------------- --------------- ---------
Cash flows from investing
activities (75,230) (76,172) (942)
=========================== =============== =============== =========
(Reference) Free cash
flow 57,768 30,863 (26,905)
=========================== =============== =============== =========
Cash flows from financing
activities (140,735) (146,980) (6,244)
--------------------------- --------------- --------------- ---------
(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled JPY 107,035
million (compared with JPY 132,998 million provided in the same
period of the previous fiscal year).
Income before income taxes and minority interests totaled JPY
171,206 million and non-cash items were recorded as positive. The
main components of non-cash items are JPY 61,374 million in
depreciation and amortization and JPY 15,673 million in
amortization of goodwill (both items increase cash flow), and JPY
15,387 million from dilution gain from changes in equity interest,
net (decrease in cash flow). Receivables-trade decreased (increase
in cash flow) by JPY 51,923 million mainly due to the sale of
installment sales receivables at SOFTBANK MOBILE. Meanwhile,
payables-trade decreased by JPY 36,927 million due to payments made
for mobile handsets procured at the end of the previous fiscal year
at SOFTBANK MOBILE.
Income taxes paid of JPY 107,027 million were recorded, for a
JPY 8,468 million year-on-year increase.
(b) Cash Flows from Investing Activities
Net cash used in investing activities was JPY 76,172 million
(compared with JPY 75,230 million used in the same period of the
previous fiscal year).
Capital expenditures, mainly at telecommunications-related
businesses, resulted in outlays of JPY 77,800 million for purchase
of property and equipment, and intangibles. Meanwhile, JPY 12,867
million was spent for purchases of marketable and investment
securities, while proceeds from sale of marketable and investment
securities generated JPY 13,569 million.
As a result, free cash flow (the combined net cash flows from
operating activities and investing activities) for the period was a
positive JPY 30,863 million (compared with a positive JPY 57,768
million in the same period of the previous fiscal year), for a
year-on-year decrease of JPY 26,905 million.
(c) Cash Flows from Financing Activities
Net cash used in financing activities was JPY 146,980 million
(compared with JPY 140,735 million used in the same period of the
previous fiscal year).
Outlays were recorded in the amounts of JPY 149,641 million for
repayments of long-term debt, JPY 113,500 million for redemption of
corporate bonds, JPY 49,793 million for decrease in short-term
borrowings, net, and JPY 33,603 million for the repayment of lease
obligations. On the other hand, proceeds from issuance of bonds
generated JPY 129,370 million, proceeds from long-term debt were
JPY 50,675 million and proceeds from the sale and lease back of
equipment newly acquired were JPY 44,532 million.
(Reference:Major Financing Activities)
The major financing activities in the period were as
follows:
Item Company Details Summary
Name
--------------- ------------ ------------------ ---------------------------
Bond issuances SOFTBANK 36(th) Unsecured Issue date:
CORP. Straight June 17, 2011
Corporate Bond Redemption
(Fukuoka SoftBank date: June 17,
HAWKS Bond) 2016 Total
amount of
issue: JPY
100,000
million
Interest rate:
1.00%/year
--------------- ------------ ------------------ ---------------------------
37(th) Unsecured Issue date:
Straight June 10, 2011
Corporate Bond Redemption
date: June 10,
2014 Total
amount of
issue: JPY
30,000 million
Interest rate:
0.65%/year
--------------- ------------ ------------------ ---------------------------
Bond SOFTBANK 27(th) Unsecured Redemption date: June 10,
redemption CORP. Straight 2011 Redeemed amount: JPY
Corporate Bond 60,000 million
(Fukuoka SoftBank
HAWKS Bond)
--------------- ------------ ------------------ ---------------------------
25(th) Unsecured Redemption date: June 17,
Straight 2011 Redeemed amount: JPY
Corporate Bond 53,500 million
--------------- ------------ ------------------ ---------------------------
Repayment of SOFTBANK Repayment of JPY Repayment of funds
securitization MOBILE 23,419 million procured via
of Corp. securitization of mobile
receivables handsets installment sales
receivables
------------------ ---------------------------
Repayment of SOFTBANK Repayment of JPY Repayment of
debt MOBILE 118,671 million funds raised
(excluding Corp. via the whole
securitization business
of securitization
receivables financing
scheme
--------------- ------------ ------------------ ---------------------------
Capital SOFTBANK New capital Funds newly
expenditure by MOBILE expenditure via procured
financial Corp. etc. leases during the
lease period: JPY
44,532
million
--------------- ------------ ------------------ ---------------------------
Please refer to page 25, "2. Consolidated Financial Statements -
(8) Significant Subsequent Events" regarding the refinancing of the
loan procured under a whole business securitization scheme (SBM
loan).
(3) Qualitative Information Regarding Consolidated Earnings
Forecasts
The Group is planning to focus on network expansion and customer
acquisition in the Mobile Communications segment. The initiatives
for achieving these strategies need to be planned and adjusted
flexibly according to circumstances. Since this involves numerous
unconfirmed elements which could impact revenue and profit, it is
difficult to disclose numerical earnings forecasts. However,
revenue and operating income are expected to increase year on
year.
To improve disclosure of information for shareholders and
investors, the earnings forecast will be disclosed when deemed to
be reasonable.
2. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Millions of yen)
As of As of
March 31, 2011 June 30, 2011
-------------------------------------- -------------------
Amount Amount
-------------------------- -------------------------------------- -------------------
ASSETS
Current assets:
Cash and deposits 861,657 744,427
Notes and
accounts
receivable -
trade 657,774 605,173
Marketable
securities 78,099 69,057
Merchandise and
finished products 49,887 40,723
Deferred tax assets 90,907 64,663
Other current assets 162,068 175,135
Less: Allowance
for doubtful
accounts (37,778) (40,632)
-------------------------- -------------------------------------- -------------------
Total current assets 1,862,617 1,658,549
-------------------------- -------------------------------------- -------------------
Fixed assets:
Property and equipment,
net:
Buildings and
structures 74,867 74,560
Telecommunications
equipment 840,839 876,155
Telecommunications
service lines 68,856 67,786
Land 22,882 22,884
Construction in
progress 55,663 52,900
Other property and
equipment 50,339 53,815
-------------------------- -------------------------------------- -------------------
Total property
and equipment 1,113,447 1,148,102
-------------------------- -------------------------------------- -------------------
Intangible assets, net:
Goodwill 839,238 823,594
Software 248,872 255,685
Other intangibles 32,233 29,970
-------------------------- -------------------------------------- -------------------
Total intangible
assets 1,120,345 1,109,249
-------------------------- -------------------------------------- -------------------
Investments and other
assets:
Investment
securities and
investments in
unconsolidated
subsidiaries
and affiliated
companies 340,436 354,379
Deferred tax assets 109,145 103,886
Other assets 123,360 122,169
Less: Allowance for
doubtful accounts (15,008) (15,214)
-------------------------- -------------------------------------- -------------------
Total investments
and other
assets 557,933 565,220
-------------------------- -------------------------------------- -------------------
Total fixed assets 2,791,726 2,822,572
-------------------------- -------------------------------------- -------------------
Deferred charges 1,381 1,987
Total assets 4,655,725 4,483,109
-------------------------- -------------------------------------- -------------------
Consolidated Balance Sheets
(Millions of yen)
As of As of
March 31, 2011 June 30, 2011
-------------------------------------- -------------------
Amount Amount
---------------------------- -------------------------------------- -------------------
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable -
trade 193,644 156,589
Short-term borrowings 410,950 348,619
Commercial paper 25,000 20,000
Current portion of
corporate bonds 128,500 15,000
Accounts payable -
other and accrued
expenses 561,421 741,958
Income taxes payable 115,355 39,531
Deferred tax
liabilities 7,104 6,418
Current portion of
lease obligations 131,305 134,551
Other current
liabilities 71,125 76,997
---------------------------- -------------------------------------- -------------------
Total current
liabilities 1,644,407 1,539,666
---------------------------- -------------------------------------- -------------------
Long-term liabilities:
Corporate bonds 507,390 587,388
Long-term debt 1,030,959 942,871
Deferred tax
liabilities 26,582 26,929
Liability for
retirement benefits 14,414 14,396
Allowance for point
mileage 41,947 39,605
Lease obligations 199,769 205,939
Other liabilities 310,636 113,150
---------------------------- -------------------------------------- -------------------
Total long-term
liabilities 2,131,699 1,930,281
---------------------------- -------------------------------------- -------------------
Total liabilities 3,776,107 3,469,947
---------------------------- -------------------------------------- -------------------
Equity:
Common stock 188,775 213,797
Additional paid-in
capital 212,510 237,522
Retained earnings 222,277 311,689
Less: Treasury stock (240) (249)
---------------------------- -------------------------------------- -------------------
Total shareholders'
equity 623,321 762,759
---------------------------- -------------------------------------- -------------------
Unrealized gain on
available-for-sale
securities 34,920 24,384
Deferred gain on
derivatives under
hedge accounting 11,224 14,530
Foreign currency
translation
adjustments (50,213) (49,897)
Total valuation and
translation
adjustments (4,068) (10,982)
---------------------------- -------------------------------------- -------------------
Stock acquisition
rights 703 798
---------------------------- -------------------------------------- -------------------
Minority interests 259,661 260,586
---------------------------- -------------------------------------- -------------------
Total equity 879,618 1,013,162
---------------------------- -------------------------------------- -------------------
Total liabilities and
equity 4,655,725 4,483,109
---------------------------- -------------------------------------- -------------------
(2) Consolidated Statements of Income and Consolidated
Statements of Comprehensive Income
Consolidated Statements of Income (Millions of yen)
Three-month period Three-month period
ended ended
June 30, 2010 June 30, 2011
------------------- --------------------
April 1, 2010 to April 1, 2011 to
June 30, 2010 June 30, 2011
------------------- --------------------
Amount Amount
----------------------------------- ------------------- --------------------
Net sales 700,840 764,237
Cost of sales 307,180 341,340
Gross Profit 393,659 422,897
Selling, general and
administrative expenses 237,055 247,071
----------------------------------- ------------------- --------------------
Operating income 156,603 175,825
----------------------------------- ------------------- --------------------
Interest income 529 560
Dividend income 142 1,146
Equity in earnings of affiliated
companies 216 -
Other non-operating income 2,333 1,555
----------------------------------- ------------------- --------------------
Non-operating income 3,222 3,262
----------------------------------- ------------------- --------------------
Interest expense 27,789 22,407
Equity in losses of affiliated
companies - 863
Other non-operating expenses 5,192 4,586
----------------------------------- ------------------- --------------------
Non-operating expenses 32,981 27,857
----------------------------------- ------------------- --------------------
Ordinary income 126,844 151,230
----------------------------------- ------------------- --------------------
Gain on sale of investment
securities 118 4,932
Dilution gain from changes
in equity interest 520 15,424
Unrealized appreciation on
valuation of investments and
loss on sale of investments
at subsidiaries in the
U.S.,net 52 -
Other special income 235 -
----------------------------------- ------------------- --------------------
Special income 926 20,356
----------------------------------- ------------------- --------------------
Valuation loss on investment
securities 1,431 196
Unrealized loss on valuation
of investments at
subsidiaries in the
U.S.,net - 76
Other special losses 8,174 107
Special loss 9,606 380
----------------------------------- ------------------- --------------------
Income before income taxes
and minority interests 118,164 171,206
----------------------------------- ------------------- --------------------
Income taxes:
Current 34,101 27,954
Corrections 26,450 -
Deferred 25,373 32,246
----------------------------------- ------------------- --------------------
Total income taxes 85,925 60,200
----------------------------------- ------------------- --------------------
Income before minority interests 32,238 111,006
----------------------------------- ------------------- --------------------
Minority interests in net income 12,800 16,215
Net income 19,438 94,791
----------------------------------- ------------------- --------------------
Consolidated Statements of Comprehensive Income
(Millions of yen)
Three-month period Three-month period
ended ended
June 30, 2010 June 30, 2011
------------------- --------------------
April 1, 2010 to April 1, 2011 to
June 30, 2010 June 30, 2011
------------------- --------------------
Amount Amount
----------------------------------- ------------------- --------------------
Income before minority interests 32,238 111,006
Other comprehensive loss
Unrealized loss on
available-for-sale securities (9,698) (10,283)
Deferred gain on derivatives
under hedge accounting 5,916 3,403
Foreign currency translation
adjustment (4,976) (2,234)
Share of other comprehensive
income of affiliated
companies accounted for
using equity method 727 2,114
----------------------------------- ------------------- --------------------
Total other comprehensive loss (8,030) (6,998)
----------------------------------- ------------------- --------------------
Comprehensive income 24,207 104,007
----------------------------------- ------------------- --------------------
Comprehensive income attributable
to
Comprehensive income
attributable to owners of
the parent 10,312 87,877
Comprehensive income
attributable to minority
interests 13,894 16,129
----------------------------------- ------------------- --------------------
(3) Consolidated Statements of Cash Flows
(Millions of yen)
--------------------------------------------------------------------------------------------------------------------------
Three-month period Three-month period
ended ended
June 30, 2010 June 30, 2011
--------------------------------- -----------------------------------
April 1, 2010 to April 1, 2011 to
June 30, 2010 June 30, 2011
-------------------------------------------------- --------------------------------- -----------------------------------
Cash flows from operating activities:
Income before income taxes and minority
interests 118,164 171,206
Adjustments for:
Depreciation and amortization 53,590 61,374
Amortization of goodwill 15,650 15,673
Equity in (earnings) losses of affiliated
companies (216) 863
Dilution gain from changes in equity
interest, net (518) (15,387)
Valuation loss on investment securities 1,431 196
Unrealized (appreciation) loss on
valuation of investments and loss
on sale of investments at subsidiaries
in the U.S., net (52) 76
Gain on sale of marketable and
investment securities, net (80) (4,956)
Foreign exchange loss (gain), net 162 (75)
Interest and dividend income (672) (1,706)
Interest expense 27,789 22,407
Changes in operating assets, and
liabilities
Decrease in receivables - trade 106,163 51,923
Decrease in payables - trade (14,087) (36,927)
Other, net (51,234) (31,459)
-------------------------------------------------- --------------------------------- -----------------------------------
Sub-total 256,090 233,208
Interest and dividend received 652 1,786
Interest paid (25,185) (20,931)
Income taxes paid (98,558) (107,027)
Net cash provided by operating activities 132,998 107,035
-------------------------------------------------- --------------------------------- -----------------------------------
- Continued -
Consolidated Statements of Cash Flows (Continued)
(Millions of yen)
------------------------------------------------------------------------------
Three-month period Three-month period
ended ended
June 30, 2010 June 30, 2011
------------------- -------------------
April 1, 2010 to April 1, 2011 to
June 30, 2010 June 30, 2011
------------------------------------ ------------------- -------------------
Cash flows from investing
activities:
Purchase of property and
equipment, and intangibles (58,689) (77,800)
Purchase of marketable and
investment securities (20,315) (12,867)
Proceeds from sale of
marketable and
investment securities 2,510 13,569
Acquisition of interests
in subsidiaries newly
consolidated, net of
cash acquired - (53)
Other, net 1,264 978
------------------------------------ ------------------- -------------------
Net cash used in investing
activities (75,230) (76,172)
------------------------------------ ------------------- -------------------
Cash flows from financing
activities:
Decrease in short-term
borrowings, net (9,662) (49,793)
Decrease in commercial paper,
net - (5,000)
Proceeds from long-term debt 20,000 50,675
Repayment of long-term debt (120,184) (149,641)
Proceeds from issuance of
bonds 49,787 129,370
Redemption of bonds (20,404) (113,500)
Proceeds from issuance of
shares to minority
shareholders 222 224
Cash dividends paid (4,303) (4,746)
Cash dividends paid to
minority shareholders (9,886) (14,926)
Proceeds from sale and
lease back of equipment
newly acquired 5,350 44,532
Repayment of lease
obligations (49,115) (33,603)
Other, net (2,538) (571)
------------------------------------ ------------------- -------------------
Net cash used in financing
activities (140,735) (146,980)
------------------------------------ ------------------- -------------------
Effect of exchange rate
changes on cash and cash
equivalents (1,076) (517)
------------------------------------ ------------------- -------------------
Net decrease in cash and
cash equivalents (84,043) (116,634)
------------------------------------ ------------------- -------------------
Increase in cash and cash
equivalents due to newly
consolidated
subsidiaries 1,919 23
Decrease in cash and cash
equivalents due to
exclusion of previously
consolidated
subsidiaries (64) (734)
Cash and cash equivalents,
beginning of the period 687,681 847,155
------------------- -------------------
Cash and cash equivalents, end of
the period 605,492 729,809
------------------------------------ ------------------- -------------------
(4) Significant Doubt about Going Concern Assumption
There are no applicable items for the three-month period ended
June 30, 2011.
(5) Notes
(Consolidated Statements of Income)
Unrealized appreciation (loss) 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 (loss) 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 (loss) on valuation of investments and loss on sale of
investments included in unrealized appreciation (loss) 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 Three-month
period ended period ended
June 30, 2010 June 30, 2011
Unrealized appreciation (loss)
on valuation of investment at
subsidiaries in the U.S.,net 179 (76)
Loss on sale of investments at
subsidiaries in the U.S.,net (127) -
------ ------ ----------------
million
Total 52 yen (76) million yen
(Consolidated Statements of Cash Flows)
1. 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.
2. 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
under sale and lease back arrangements. 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."
(6) Segment Information
1. Net sales and segment profit or loss of reportable segments
for the three-month period ended June 30, 2010
(Millions of yen)
Reconciliations Amounts in
to consolidated consolidated
Other statement of statement of
Reportable segments (1) Total income (2) income (3)
--------------------------------------------------------------------------- ------- -------- ---------------- -------------
Mobile Broadband Fixed-line Internet
Communications Infrastructure Telecommunications Culture Subtotal
--------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
Net sales
Customers 438,520 48,552 73,199 67,142 627,414 73,425 700,840 - 700,840
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
profit 102,657 11,696 6,661 35,572 156,587 2,562 159,150 (2,546) 156,603
---------------- --------------- --------------- ------------------- --------- --------- ------- -------- ---------------- -------------
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) million represent elimination
of intersegment transactions and expenses of the corporate division
of the Company, which totaled JPY 537 million and JPY (3,084)
million, respectively.
3. Segment profit is adjusted with operating income in the
consolidated statements of income.
2. Net sales and segment profit or loss of reportable segments
for the three-month period ended June 30, 2011
(Millions of yen)
Reconciliations Amounts in
to consolidated consolidated
Other statement of statement of
Reportable segments (1) Total income (2) ( ) income (3)
---------------------------------------------------------------------------- ------- -------- ---------------- -------------
Mobile Broadband Fixed-line Internet
Communications Infrastructure Telecommunications Culture Subtotal
---- ------------ --------------- --------------- ------------------- --------- ---------- ------- -------- ---------------- -------------
Net sales
Customers 512,216 40,764 69,718 68,631 691,330 72,906 764,237 - 764,237
Inter-segment 1,874 3,255 17,773 978 23,882 8,649 32,531 (32,531) -
------------------ --------------- --------------- ------------------- --------- ---------- ------- -------- ---------------- -------------
Total 514,090 44,019 87,492 69,610 715,213 81,556 796,769 (32,531) 764,237
------------------ --------------- --------------- ------------------- --------- ---------- ------- -------- ---------------- -------------
Segment
profit 116,491 10,221 12,913 36,605 176,231 2,405 178,637 (2,811) 175,825
------------------ --------------- --------------- ------------------- --------- ---------- ------- -------- ---------------- -------------
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 (2,811) million represent elimination
of intersegment transactions and expenses of the corporate division
of the Company, which totaled JPY 259 million and JPY (3,071)
million, respectively.
3. Segment profit is adjusted with operating income in the
consolidated statements of income.
(7) Significant Changes in Shareholders' Equity
There are no applicable items for the three-month period ended
June 30, 2011.
(8) Significant Subsequent Events
For the three-month period ended June 30, 2011
Refinance of SBM loan
The Board of Directors of the Company passed a resolution on
July 21, 2011 to execute a JPY 550.0 billion loan with a syndicate
of 17 financial institutions in Japan and overseas, and the Company
borrowed a partial loan amount of JPY 352.5 billion on July 27,
2011. This arrangement is to refinance the JPY 1,366.0 billion loan
to SOFTBANK MOBILE (hereafter "SBM loan", JPY 653.9 billion of
which was outstanding as of the end of June 2011) procured in
November 2006 by Mizuho Trust & Banking Co., Ltd, the "Tokutei
Kingai Trust Trustee" under the whole business securitization
scheme. The SBM loan was associated with the series of financing
transactions for the Company to acquire Vodafone K.K (currently
SOFTBANK MOBILE). SOFTBANK MOBILE repaid JPY 369.4 billion on July
27, 2011 and will pay JPY 284.5 billion on October 27, 2011 to pay
off the SBM loan with the funds procured by the Company and its
fund in hand.
1. Summary of the financing
Name of lender Syndicate group comprising a total of
17 financial institutions in Japan and
overseas including the co-mandated lead
arrangers, Mizuho Corporate Bank, Ltd.
and four other financial institutions
--------------------------- -------------------------------------------------
Total amount of borrowings JPY 550.0 billion
(1) Facility A1: JPY 100.0 billion
(2) Facility A2: JPY 252.5 billion
(3) Facility B: JPY 197.5 billion
--------------------------- -------------------------------------------------
Interest rate (1) Facility A1: 1 month TIBOR +
spread (variable rate) (2)
Facility A2: 3 months TIBOR +
spread (variable rate) (3)
Facility B: 3 months TIBOR +
spread (variable rate) Reference
1: As of July 25, 1 month TIBOR
0.18% As of July 25, 3 months
TIBOR 0.34% Reference 2: Spread
ranges from 0.75% to 1.275%
based on the Company's issuer
rating. Spread based on the
rating as of July 25:1.125%
--------------------------- -------------------------------------------------
Loan execution date July 27, 2011: JPY 352.5 billion
(Installment) October 27, 2011: JPY 197.5 billion
--------------------------- -------------------------------------------------
Repayment schedule March 27, 2013: JPY 150.0 billion
(Scheduled payment) March 27, 2014: JPY 200.0 billion
March 27, 2015: JPY 200.0 billion
--------------------------- -------------------------------------------------
Main financial covenants The amount of the Company's net assets
at the end of the year must not fall
below 75% of the Company's net assets
at the end of the previous year.
The consolidated balance sheets of the
Company and BB Mobile Corp. at the end
of the year must not show a net capital
deficiency. The balance sheets of SOFTBANK
MOBILE, SOFTBANK BB, and SOFTBANK TELECOM
at the end of the year must not show
a net capital deficiency.
--------------------------- -------------------------------------------------
Collateral/Guarantee Not applicable
--------------------------- -------------------------------------------------
2. Purpose and effect of the refinance
The refinance aims to significantly reduce the Company's
interest burden, by enabling the Company to obtain financing at an
interest rate reflecting the improvement of the Company's credit
status. Interest expenses for the SBM loan of JPY 50,928 million
and JPY 11,527 million were recorded in the consolidated statements
of income for the year ended March 31, 2011 and three-month period
ended June 30, 2011, respectively. Complete repayments of the SBM
loan will lift the financial covenants stipulated in the SBM loan
Agreement and terminate the security interest associated with the
SBM loan for the three-month period ending December 31, 2011.
(Reference) Assets pledged as collateral for the SBM loan
As of June 30, 2011
Cash and deposits 235,485
Notes and accounts receivable
- trade 309,737
Buildings and structures 11,396
Telecommunications equipment 295,258
Telecommunications service
lines 68
Land 10,747
Investments and other
assets - other assets 9,990
Total 872,684 million
yen
Note: 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 in
addition to the assets pledged as collateral above.
3. Others
The Company expects to record approximately JPY 23.0 billion as
non-operating expenses and JPY 22.0 billion as special loss in the
consolidated statements of income for the year ending March 31,
2012. This includes cost associated with the abovementioned
syndicated loan, the repayments of the SBM loan (cancel fee for
interest hedge, etc.) and prepayment premium.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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