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 nine-month period ended December 31, 2012
Tokyo, January 31, 2013

1. FINANCIAL HIGHLIGHTS(1) Results of Operations(Percentages are shown as year-on-year changes)(Millions of yen; amounts less than one million yen are omitted.)

Net sales

Operating income

Ordinary income

Net income

Amount%Amount%Amount%Amount%Nine-month period ended
December 31, 2012

¥2,509,790

4.7¥600,148

12.6¥529,419

19.3¥235,367(5.9)

Nine-month period ended
December 31, 2011

¥2,398,192

6.6¥532,783

10.5¥443,934

11.0¥250,081

75.7

Note: Comprehensive income
Nine-month period ended December 31, 2012:
Nine-month period ended December 31, 2011:

Nine-month period ended
December 31, 2012
Nine-month period ended
December 31, 2011

¥354,233 million (48.8) %¥238,124 million (54.4) %Net income
per share－basic(yen)

Net income
per share－diluted(yen)¥213.79¥209.97¥227.83¥221.85(2) Financial Condition(Millions of yen; amounts less than one million yen are omitted.)

Total assets

Total equity

Equity ratio (%)

As of December 31, 2012

¥5,511,551¥1,673,407

20.6

As of March 31, 2012

¥4,899,705¥1,435,640

19.1

Note: Shareholders’equity
As of December 31, 2012:
As of March 31, 2012:¥1,136,857 million¥936,693 million

2. Dividends(Record date)

First quarter

Second quarter

Dividends per share
Third quarter

Fourth quarter

Total

(yen)

(yen)

(yen)

(yen)

(yen)

-

0.00

-

40.00

40.00

-

20.00

20.00

40.00

Fiscal year ended
March 31, 2012
Fiscal year ending
March 31, 2013
Fiscal year ending
March 31, 2013
(Forecasted)
Note:
Revision of forecasts on the dividends: No

3. Forecasts on the consolidated operation results for the fiscal year ending in March 2013 (April 1, 2012 – March 31, 2013)
The Group is continuing to focus on network expansion and customer acquisition in the Mobile Communications segment. As its
customer base continues to expand steadily from these efforts, the Group’s earnings base will increase. As a result, the Group isforecasting a year-on-year increase in both consolidated net sales and operating income, and is confidently projecting that
consolidated operating income will exceed ¥700 billion for its fiscal year ending March 31, 2013.

* Notes(1) Significant changes in scope of consolidation (Changes in scope of consolidation of specified subsidiaries):
Newly Consolidated: Two companies StarburstⅠ, Inc., StarburstⅡ, Inc.

Yes

Note: Please refer to page 20 “2. Notes on the Summary Information” for details.

(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 December 31, 2012:
As of March 31, 2012:

1,115,489,458 shares
1,107,728,781 shares[2] Number of treasury stock:
As of December 31, 2012:
As of March 31, 2012:

9,183,744 shares
9,213,962 shares[3] Weighted average number of common stock:
As of December 31, 2012:
As of December 31, 2011:

1,100,942,038 shares
1,097,670,072 shares* Implementation status of quarterly review proceduresThis quarterly consolidated financial report is not subject to quarterly review procedures based on Financial Instruments and Exchange Act and thereview 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 19 “1. Qualitative Information
Regarding Nine-month Period Results (3) Qualitative Information Regarding Consolidated Earnings Forecasts” for details of notes to precondition andusage for forecasts.
On January 31, 2013 SoftBank Corp. will hold an earnings results briefing for financial institutions, institutional investors, and the media. This
briefing will be broadcast live on our Web site in both Japanese and English (http://www.softbank.co.jp/en/irinfo/).
The Earnings Results Data Sheets will also be posted on SoftBank Corp.'s Web site around 7 p.m. on the day of the announcement:(http://www.softbank.co.jp/en/irinfo/library/presentation/)

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Appendix)
Contents

Qualitative Information Regarding Nine-month Period Results(1) Qualitative Information Regarding Consolidated Results of Operations
1. Consolidated Results of Operations
2. Results by Business Segment（Reference 1: Principal Operational Data）（Reference 2: Definition and Calculation Method of ARPU, etc., in the Mobile
Communications Business）（Reference 3: Capital Expenditure and Depreciation）(2) Qualitative Information Regarding Consolidated Financial Position
1. Assets, Liabilities, and Equity
2. Cash Flows（Reference: Major Financing Activities）(3) Qualitative Information Regarding Consolidated Earnings Forecasts
2. Notes on the Summary Information
3. Consolidated Financial Statements(1) Consolidated Balance Sheets(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive
Income(3) Consolidated Statements of Cash Flows(4) Significant Doubt about Going Concern Assumption(5) Additional Information(6) Notes(7) Derivative Transactions(8) Segment Information(9) Significant Changes in Shareholders’ Equity(10) Significant Subsequent Events
1.

1

p. 2
p. 2
p. 2
p. 5
p.10
p.12
p.13
p.14
p.14
p.17
p.19
p.19
p.20
p.21
p.21
p.23
p.27
p.29
p.29
p.33
p.36
p.37
p.37
p.38

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 20121.

Qualitative Information Regarding Nine-month Period Results(1) Qualitative Information Regarding Consolidated Results of Operations
1.

Consolidated Results of Operations< Overview of results for the nine-month period from April 1 to December 31, 2012 >For the nine-month period ended December 31, 2012 (hereafter “the period”), the SoftBank Group (hereafter “theGroup”) achieved consolidated net sales of ¥2,509,790 million, a ¥111,598 million (4.7%) increase compared withthe same period of the previous fiscal year (April 1 to December 31, 2011, hereafter “year on year”), with a¥67,365 million (12.6%) increase in operating income to ¥600,148 million.

Ordinary income grew ¥85,484

million (19.3%) to ¥529,419 million. Net income declined ¥14,714 million (5.9%) to ¥235,367 million.
Note:
Definition of terms: as used in this consolidated financial report for the nine-month period from April 1, 2012 to December 31, 2012,references to “the Company,” “the Group,” and “the SoftBank Group” are to SoftBank Corp. and its consolidated subsidiaries except as thecontext otherwise requires or indicates.

The main factors affecting earnings for the period were as follows:(a) Net Sales
Net sales totaled ¥2,509,790 million, for a ¥111,598 million (4.7%) year-on-year increase. This was mainly due
to increased telecom service revenue, primarily from steady growth in the number of mobile phone subscribers.

(b) Cost of Sales
Cost of sales increased ¥62,454 million (5.7%) year on year to ¥1,163,227 million.

This was primarily due to anincrease in depreciation and amortization in the Mobile Communications segment, mainly due to the installationof additional base stations.

(c) Selling, General, and Administrative Expenses
Selling, general, and administrative expenses declined by ¥18,221 million (2.4%) year on year to ¥746,413 million.
This was mainly because of a decrease in the total amount of sales commissions1 in the Mobile Communications
segment, resulting from an increase in the proportion of units sold having a lower acquisition cost per subscriber
among total units sold, while iPhone2 sales sustained a strong trend.

(d) Operating Income
As a result, operating income totaled ¥600,148 million, for a ¥67,365 million (12.6%) year-on-year increase. The
operating margin rose 1.7 percentage points year on year to 23.9%.

1
2

Sales commission paid to sales agents per new subscription and upgrade.
iPhone and iPad are trademarks of Apple Inc. The iPhone trademark is used under license from Aiphone K.K.

2

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(e) Non-operating Income / Expenses
Non-operating income totaled ¥11,653 million, a ¥3,312 million (39.7%) year-on-year increase. Non-operating
expenses were ¥82,382 million, a ¥14,806 million (15.2%) year-on-year decrease. The non-operating expenses
primarily reflected interest expense of ¥26,394 million, equity in losses of affiliated companies of ¥22,998 million,
and financing related expenses of ¥19,026 million.

The equity in losses of affiliated companies was mainly due

to a write-down of goodwill that arose relating to InMobi Pte. Ltd. The financing related expenses were mainly
attributable to costs associated with the funds procured pursuant to a bridge loan facility of up to ¥1.65 trillion,
entered into in December 2012 (hereafter, “the bridge loan”) in connection with the proposed acquisition of
NYSE-listed Sprint Nextel Corporation (hereafter “Sprint”).

For further details of the bridge loan please refer topage 29 “(5) Additional Information” under “3. Consolidated Financial Statements.”
Moreover, in the same period of the previous fiscal year, the Group recorded refinancing related expenses of¥24,906 million for refinancing part of the SBM loan.3(f) Ordinary Income
Ordinary income therefore totaled ¥529,419 million, for a ¥85,484 million (19.3%) year-on-year increase.

(g) Special Income
Special income totaled ¥10,256 million, for a ¥98,166 million year-on-year decrease.

This was mainly becauseof decreases in gain on sale of investment securities and dilution gain from changes in equity interest. In thesame period of the previous fiscal year, a gain on sale of investment securities of ¥83,687 million was recorded,
mainly due to the delivery of shares of U.S. company Yahoo! Inc. to CITIBANK, N.A. In addition, a dilution
gain from changes in equity interest of ¥18,375 million was recorded, mainly in relation to the Company’s equity
method affiliate Renren Inc.’s listing on the New York Stock Exchange.

(h) Special Loss
Special loss was ¥13,945 million, for a ¥20,093 million year-on-year decrease.

A valuation loss on investment

securities of ¥10,514 million was recorded, mainly associated with a drop in the stock price of NASDAQ-listed
Zynga Inc., in which the Group holds shares.

Moreover, in the same period of the previous fiscal year, theCompany recorded a valuation loss on investment securities of ¥9,321 million and a premium expense on
advanced repayment of long-term debt of ¥21,875 million in relation to repayment of the SBM loan by SoftBank
Mobile Corp.

(i) Income Taxes
Provisions for current income taxes were ¥214,519 million and provisions for deferred income taxes were ¥21,912
million.

Total income taxes increased ¥14,865 million year on year to ¥236,431 million. The actual effective

tax rate4 for the period was 45.0%.

3
4

The loan procured in November 2006 under a whole business securitization scheme as part of the loan for procurement of the acquisition financefor Vodafone K.K. (currently SoftBank Mobile Corp.). The loan was fully repaid in October 2011.
Total income taxes divided by income before income taxes and minority interests.

3SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(j) Minority Interests in Net Income
Minority interests in net income totaled ¥53,931 million, mainly related to net income recorded at Yahoo Japan
Corporation.

(k) Net Income
As a result of the above, net income totaled ¥235,367 million, for a ¥14,714 million (5.9%) year-on-year decrease.

(l) Comprehensive Income
Comprehensive income totaled ¥354,233 million, for a ¥116,109 million (48.8%) year-on-year increase. Of this,comprehensive income attributable to owners of the parent was ¥300,711 million, for a ¥106,209 million (54.6%)
year-on-year increase.

4SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

2. Results by Business Segment
Note:
Principal operational data are shown on pages 10-11 “(Reference 1: Principal Operational Data).”(a) Mobile Communications(Millions of yen)

Nine-month Period
Ended
December 31, 2011

Nine-month Period
Ended
December 31, 2012

ChangeChange %Net sales

1,619,177

1,697,881

78,704

4.9％

Operating income

346,478

389,933

43,45512.5％

5・ 2,373,000 net subscriber additions

for the period
8・ ARPU for the third quarter was ¥4,050, a ¥170 year-on-year decrease.
8
Data ARPU amounted to ¥2,610, a ¥80 year-on-year increase.
67< Revenue Recognition >In the Mobile Communications segment, net sales are mainly generated through telecom service revenue and salesof mobile handsets. The telecom services consist of voice and data services and are recognized as revenue whenservices are provided to customers, based upon basic flat-rate monthly charges plus usage of the network inaccordance with price plans, and subject to discounts.
Sales of mobile handsets are recognized when merchandise is shipped to sales agents. The agents sell themobile handsets to the customers, mainly by installment payments over a period of 24 months. SoftBank Mobile
Corp. purchases the installment sales receivables from the agents and collects the installment sales receivables
during the 24 months.
Activation fees from new customers are recognized as revenue when services are activated.

< Overview of Operations >The segment’s net sales increased by ¥78,704 million (4.9%) year on year to ¥1,697,881 million.

The main factor

behind the increase was a steady increase in telecom service revenue resulting from growth in the number ofmobile phone subscribers. Meanwhile, sales of mobile handsets declined due to a decrease in handsets shipped.9
The segment’s operating expenses increased ¥35,249 million (2.8%) year on year to ¥1,307,948 million. The
principal cause of this increase was higher depreciation and amortization recorded, mostly relating to theinstallation of additional base stations. Meanwhile, the segment saw a decline in sales commissions in line withan increased proportion of subscribers that have lower acquisition cost per subscriber among total units sold.
Operating income increased by ¥43,455 million (12.5%) year on year to ¥389,933 million.
5
6
7
8
9

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 517,700.
For definition and calculation method of ARPU, refer to page 12 “(Reference 2: Definition and Calculation Method of ARPU, etc., in the Mobile
Communications Business).”
The three month period ended December 31, 2012 (from October 1 to December 31, 2012)
Compared to the three month period ended December 31, 2011 (from October 1 to December 31, 2011)
Handsets shipped: the number of handsets shipped (sold) to agents5SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

< Number of Mobile Phone Subscribers >Net subscriber additions (new subscribers minus cancellations) for the period totaled 2,373,000.

This was2

primarily the result of steady sales of iPhone, iPad and Mimamori Phone (handset with security buzzer).

As aresult, the cumulative number of subscribers10 at the end of the period stood at 31,322,000, raising SoftBank
Mobile Corp.’s cumulative subscriber share by 1.4 percentage points year on year, to 24.3%.11< Number of Mobile Handsets Shipped and Units Sold >Handsets shipped for the period decreased by 182,000 year on year to 8,476,000. This was mainly the result of adecrease in conventional mobile handsets shipped while the number of iPhones shipped increased.
The number of units sold (total number of new subscriptions and handset upgrades) for the period increased by
425,000 year on year to 9,426,000. Of units sold, new subscriptions increased by 240,000 year on year to
5,276,000, while handset upgrades increased by 185,000 year on year to 4,151,000.
The increase in units sold was mainly due to the success of various iPhone sales promotions.12< ARPU >ARPU for the third quarter (based on cumulative subscribers including communication modules) decreased ¥170
year on year8 to ¥4,050. Out of this, voice ARPU declined ¥250 year on year to ¥1,450 and data ARPU rose ¥80
year on year8 to ¥2,610.
The decline in voice ARPU mainly reflects dilution due to an increase in devices that do not have voicecommunication functionality (such as iPad and mobile data communications devices) and a decrease in revenues
from incoming calls, 13 which was the result of a reduction in interconnection charges between operators.
Moreover, a discount on voice ARPU that had been in effect since the sales promotion14 executed at the time of
the iPhone 4S launch during the third quarter of the previous fiscal year expired during the third quarter, cancellingthe effect.
On the other hand, the increase in data ARPU was mainly the result of the continuing increase in the number ofhigh data ARPU smartphone subscribers, although the increase in subscribers to low data usage products such as
Mimamori Phone has also had a dilution effect on data ARPU.

In particular, an increase in subscribers tosmartphones compatible with the next-generation high-speed LTE service contributed to the rise in data ARPU.

10
11
12
13
14

The cumulative number of subscribers includes prepaid mobile phones and communication module service subscribers.
of communication module service subscribers at the end of the period was 2,567,700.

The cumulative number

Calculated by the Company based on Telecommunications Carriers Association statistical data.
Calculated from the numbers of subscribers of NTT DOCOMO, INC., KDDI CORPORATION, and SoftBank Mobile Corp.
Including a promotion for new and upgrading customers offering discounts, a promotion for existing customers which allows a family member to
use their old handset (if they make a new subscription), etc.
Interconnection charges received from other operators for voice calls from their customers on their network to SoftBank mobile phones as acharge for the services provided in the SoftBank Mobile Corp. service area.
A promotion where customers upgrading from 3G/3GS to iPhone 4/4S can have an amount equal to the remaining installment payment balance
for their old handset deducted from the basic monthly charge, etc.

6SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

< Churn Rate and Upgrade Rate >The churn rate15 for the third quarter was 1.12%, which was 0.01 of a percentage point higher year on year. 8
The upgrade rate15 for the third quarter was 2.10%, which was 0.26 of a percentage point lower year on year. 8
This was mainly because whereas iPhone 4S was launched during the third quarter in October 2011, iPhone 5 waslaunched in September 2012, so that customers’ upgrades to iPhone 5 were spread across the second and the third
quarters.

< Average Acquisition and Upgrade Cost per Subscriber >The average acquisition cost per subscriber16 for the third quarter declined ¥800 year on year8 to ¥24,900.
The average upgrade cost per subscriber17 for the third quarter increased ¥4,500 year on year8 to ¥30,300.

The

main reason for this was a review of the pricing strategy and sales commissions of core products.

15
16
17

For definition and calculation of the churn and upgrade rates, see page 12 “(Reference 2: Definition and Calculation Method of ARPU, etc., in the
Mobile Communications Business).”
The average commission paid to sales agents per new subscription. New subscriptions include prepaid mobile phones and communication
modules.
The average commission paid to sales agents per handset upgrade. Upgrades include communication modules.

7SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(b) Broadband Infrastructure(Millions of yen)

Nine-month Period
Ended
December 31, 2011

Nine-month Period
Ended
December 31, 2012

Net sales

129,790

122,851(6,938)(5.3%)

Operating income

28,30529,038732

2.6%

The segment’s net sales decreased by ¥6,938 million (5.3%) year on year to ¥122,851 million.

This was mainly

ChangeChange %< Overview of Operations >because of an increase in the share of sales accounted for by Yahoo! BB hikari with FLET'S,18 which has arelatively lower ARPU.19

On the other hand, the cumulative number of Yahoo! BB subscribers (total of the

cumulative number of Yahoo! BB ADSL subscribers and the cumulative number of Yahoo! BB hikari with FLET’S
subscribers20) at the end of the period increased year on year.
Operating income increased by ¥732 million (2.6%) year on year to ¥29,038 million.

This was mainly due toa decrease in sales commissions.
The cumulative number of Yahoo! BB subscribers at the end of the period totaled 4,222,000 for an increase of
13,000 from March 31, 2012. Out of this, the cumulative number of Yahoo! BB ADSL subscribers stood at
2,271,000, a decrease of 329,000 from March 31, 2012, and the cumulative number of Yahoo! BB hikari with
FLET’S subscribers totaled 1,951,000, an increase of 343,000 from March 31, 2012.
(c) Fixed-line Telecommunications(Millions of yen)

Nine-month Period
Ended
December 31, 2011

Nine-month Period
Ended
December 31, 2012

Net sales

270,057

287,779

17,722

6.6％

Operating income

42,84652,159

9,312

21.7％

The segment’s net sales increased by ¥17,722 million (6.6%) year on year to ¥287,779 million.

This was mainly

ChangeChange %<Overview of Operations>due to recording sales related to projects for installing telecommunications signal transfer stations and an increasein provision of telecommunication lines to Group companies such as SoftBank Mobile Corp.
Operating income increased by ¥9,312 million (21.7%) to ¥52,159 million. This was due to the increase in net
sales, combined with a decrease in lease payments for OTOKU Line equipment and a decrease in interconnection
charges paid to other operators at SoftBank Telecom Corp., following a reduction in interconnection charges
between operators.
18

19
20

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.
Average Revenue Per User
Number of users for which connection construction for FLET’S HIKARI lines at the central offices of NTT East or NTT West is complete andwho are provided with services.

8

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(d) Internet Culture(Millions of yen)

Nine-month Period
Ended
December 31, 2011

Nine-month Period
Ended
December 31, 2012

Net sales

215,942

239,42123,478

10.9％

Operating income

114,982

129,094

14,111

12.3％

ChangeChange %<Overview of Operations>
The segment’s net sales increased by ¥23,478 million (10.9%) year on year to ¥239,421 million. Overall revenue
growth was driven by revenue from listing advertising,21 at Yahoo Japan Corporation as a result of strengthening
various functions to enhance advertising efficiency and a vigorous sales drive. There was also an increase inrevenue from display advertising,22 including growth in advertisements on Prime Display.

Revenues frominformation listing services, such as recruiting and real estate information, also rose substantially. Growth inservices such as game-related services and data center-related also contributed to higher overall sales.
Operating income increased by ¥14,111 million (12.3%) year on year to ¥129,094 million. This was primarily
the result of the increase in net sales, as well as efforts to reduce costs such as business outsourcing expenses andadvertising expenses.

21

Text-based advertisements charged on a cost-per-click basis. From January 2013 the name of this category changed to “promotion advertising.”
22 Graphical, Flash and video advertising that appears next to content on the Internet. Prime Display advertising is a form of display advertising
shown on pages other than Yahoo! JAPAN’s top page. From January 2013 the name of this category changed to “premium advertising.”

9SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Reference 1: Principal Operational Data）(a) Mobile Communications
Fiscal Year Ended March 31, 2012
Q1

Q2

Q3

Fiscal Year Ending March 31, 2013

Q4

Q1

Full Year

Q2

Q3(Thousands)

Net additions23(Postpaid)(Prepaid)
Market share24
among 4 operators (%)
Market share24
among 3 operators (%)

730.0
697.5
32.5

759.7
744.8
14.9

936.9
943.5
(6.6)

1,113.7
1,131.0(17.3)

3,540.3
3,516.8
23.5

753.1
772.1
(19.0)

759.1
771.0(11.9)

860.8
872.2(11.4)

42.7

40.4

-

-

-

-

-

-

49.1

46.2

42.4

45.8

45.6

47.5

47.9

48.7

26,138.7

26,898.4

27,835.3

28,949.0

29,702.1

30,461.2

31,322.0

21.6

21.8

-

-

-

-

-

22.2

22.5

22.9

23.3

23.6

23.9

24.3

2,493

2,395

3,770

3,025

11,682

2,359

2,631

3,486

2,550
1,564
987

2,665
1,624
1,040

3,787
1,848
1,938

3,300
2,127
1,173

12,301
7,163
5,138

2,586
1,663
923

2,997
1,718
1,279

3,843
1,894
1,949

ARPU27

4,210

4,310

4,230

3,890

4,150

4,020

4,070

4,050

(Voice)28(Data)

1,780
2,440

1,780
2,520

1,700
2,530

1,350
2,530

1,650
2,510

1,480
2,540

1,490
2,580

1,450
2,610

36,20030,80025,70029,40030,30026,50023,00024,90029,00028,60025,80026,30027,10027,00026,40030,300

Churn rate31(Postpaid)

1.08
1.03

1.09
1.02

1.11
1.04

1.20
1.10

1.12
1.05

1.03
0.96

1.06
1.00

1.12
1.06

(% per month)
Upgrade rate31

1.28

1.31

2.36

1.38

1.59

1.05

1.42

2.10

(Thousands)

Cumulative
subscribers23
Market share24
among 4 operators (%)
Market share24
among 3 operators (%)(Thousands)

Number ofhandsets shipped25(Thousands)

Units sold26(New subscriptions)(Handset upgrades)(Yen per month)(Yen)

Average acquisition cost
per subscriber29(Yen)

Average upgrade cost
per subscriber30(% per month)

23
24

25
26
27
28
29
30
31

Includes the number of prepaid mobile phones and communication module service subscribers.
Calculated by the Company based on Telecommunications Carriers Association statistical data.
4 operators: NTT DOCOMO, INC., KDDI CORPORATION, eAccess Ltd. and SoftBank Mobile Corp.
3 operators: NTT DOCOMO, INC., KDDI CORPORATION, and SoftBank Mobile Corp.
From December 2011, net additions and cumulative subscribers of eAccess Ltd. are no longer disclosed to the Telecommunications Carriers
Association. Therefore, from the third quarter of the fiscal year ended March 2012, the market share among 4 operators has not been calculated.
Handsets shipped: the number of handsets shipped (sold) to agents
Units sold: the total number of new subscriptions and handset upgrades
For definition and calculation method of ARPU, refer to page 12 “(Reference 2: Definition and Calculation Method of ARPU, etc., in the Mobile
Communications Business).”
Calculated including basic monthly charge.
The average commission paid to sales agents per new subscription. New subscriptions include prepaid mobile phones and communication
modules.
The average commission paid to sales agents per handset upgrade. Upgrades include communication modules.
For definition and calculation of the churn and upgrade rates, see page 12 “(Reference 2: Definition and Calculation Method of ARPU, etc., in the
Mobile Communications Business).”

10SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Reference)
Fiscal Year Ended March 31, 2012
Q1

Q2

Q3

Q4

4,430
1,880
2,550

4,550
1,900
2,660

4,490
1,820
2,670

4,140
1,450
2,690

Fiscal Year Ending March 31, 2013
Full Year

Q1

Q2

Q3

4,300
1,590
2,710

4,370
1,610
2,760

4,370
1,570
2,800

(Yen per month)

ARPU27(excluding
communication
modules）(Voice) 28(Data)

4,400
1,760
2,640

(b) Broadband Infrastructure
Yahoo! BB
Fiscal Year Ended March 31, 2012
Q1

Q2

Q3

Q4

4,118

4,145

4,175

3,009

2,873

2,737

3,710

3,650

3,580

3,510

2.56

2.43

2.35

2.44

1,109

1,272

1,437

1,620

1,660

1,670

Fiscal Year Ending March 31, 2013
Full Year

Q1

Q2

Q3

4,209

4,238

4,227

4,222

2,600

2,467

2,364

2,271

3,450

3,390

3,330

2.45

2.60

2.12

2.16

1,608

1,771

1,863

1,951

1,670

1,710

1,720

(Thousands)

Yahoo! BB
cumulative
subscribers32
Yahoo! BB ADSL
(Thousands)

Cumulative
subscribers(Yen per month)

ARPU33(% per month)

Churn rate

Yahoo! BB hikari with FLET'S(Thousands)

Cumulative
subscribers34(Yen per month)

ARPU33

1,680(c) Fixed-line TelecommunicationsOTOKU Line
Fiscal Year Ended March 31, 2012
Q1

Q2

Q3

1,669

1,679

1,678

6,650

6,570

6,550

Q4

Fiscal Year Ending March 31, 2013
Full Year

Q2

Q3

1,684

1,692

1,688

6,530

6,390

6,510

Q1

(Thousands)

Cumulative
lines

1,685

(Yen per month)

ARPU33

6,790

32

Total of the cumulative number of Yahoo! BB ADSL subscribers and the cumulative number of Yahoo! BB hikari with FLET’S subscribers.
33
Average Revenue Per User: average revenue per contract (rounded to the nearest ¥10)
34
Number of users for which connection construction for FLET’S HIKARI line at the central offices of NTT East or NTT West is complete and whoare provided with services.

11SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Reference 2: Definition and Calculation Method of ARPU, etc., in the Mobile Communications Business)
1.

Definition and calculation method of ARPU
ARPU（Average Revenue Per User per month）(rounded to the nearest ¥10)
ARPU = (voice-related revenue + data-related revenue) / number of active subscribers= voice ARPU + data ARPU
ARPU (excluding communication modules) = (voice-related revenue + data-related revenue - communication
modules-related revenue) / number of active subscribers (excluding communication modules)
Voice ARPU = voice-related revenue (such as voice call charges, revenues from incoming calls, basic monthly charges)/ number of active subscribers
Data ARPU = data-related revenue (such as packet communication charges) / number of active subscribers
Number of active subscribers:

the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month)/2).
The number of active subscribers is based on SoftBank Mobile Corp.’s
cumulative subscribers including prepaid mobile phones, communication modules,and devices that do not have voice communication functionalities.
Number of active subscribers used in the calculation of ARPU (excluding
communication modules) excludes communication modules.

Revenues from incoming calls:

interconnection charges received from other operators for voice calls from theircustomers on their network to SoftBank mobile phones as a charge for the services
provided in the SoftBank Mobile Corp. service area.

2.

Definition and calculation method of churn rate
Churn rate ＝ churn / number of active subscribers（rounded to the nearest 0.01%）
Churn ＝ total number of subscribers that churned during the relevant period
Number of active subscribers:

the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month)/2).
The number of active subscribers is based on SoftBank Mobile Corp.’s
cumulative subscribers including prepaid mobile phones, communication modules,and devices that do not have voice communication functionalities.

3.

Definition and calculation method of upgrade rate
Upgrade rate in Mobile Communications ＝ number of upgrades / number of active subscribers (rounded to the nearest
0.01%)
Number of upgrades ＝ total number of upgrades during the relevant period
Number of active subscribers:

the total of the monthly numbers of active subscribers for the relevant period((subscribers at the beginning of the month + subscribers at the end of the month)/2).
The number of active subscribers is based on SoftBank Mobile Corp.’s
cumulative subscribers including prepaid mobile phones, communication modules,and devices that do not have voice communication functionalities.

12SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Reference 3: Capital Expenditure and Depreciation)(a) Capital Expenditure (acceptance basis)（Millions of yen）

Fiscal Year Ended March 31, 2012

Fiscal Year Ending March 31, 2013

Q1

Q2

Q3

Q4

Full Year

Q1

Q2

Q3

MobileCommunications

84,076

98,39993,675

146,613422,766

82,464

134,003

164,660

Broadband
Infrastructure

5,739

3,861

4,638

12,523

26,762

2,671

4,819

6,192

Fixed-line
Telecommunications

6,320

8,281

10,654

14,621

39,877

8,236

8,280

10,586

Internet Culture

3,349

4,609

3,743

4,218

15,921

4,942

3,194

6,310

Others

1,710

5,338

2,041

1,958

11,047

94,970

1,942

2,179

Consolidated total

101,196

120,490

114,753

179,935

516,375

193,286

152,240

189,929(b) Depreciation and Amortization (excluding amortization of goodwill)（Millions of yen）

Fiscal Year Ended March 31, 2012
Q1

Q2

Q3

Q4

46,202

48,69149,26659,295

3,540

3,452

3,507

9,188

9,684

Internet Culture

2,291

OthersConsolidated total

MobileCommunications
Broadband
Infrastructure
Fixed-line
Telecommunications

Fiscal Year Ending March 31, 2013
Q1

Q2

Q3

203,455

58,46762,26766,3193,894

14,395

3,441

3,475

3,545

9,957

10,96939,800

9,749

9,777

9,845

2,395

2,703

2,896

10,288

2,636

3,134

3,170

1,521

1,592

2,350

2,421

7,886

2,185

2,349

2,349

62,74465,81667,78579,478275,825

76,48081,00485,23013

Full Year

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(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, 2012

As of December 31, 2012

ChangeChange %Total assets

4,899,705

5,511,551

611,846

12.5％

Total liabilities

3,464,065

3,838,143

374,078

10.8％

Total equity

1,435,640

1,673,407

237,767

16.6％(a) Current Assets
Current assets at the end of the period totaled ¥2,026,401 million, for a ¥115,948 million (6.1%) increase fromMarch 31, 2012, (hereafter “the previous fiscal year-end”).

The primary components of the change were as

follows:
・ Cash and deposits increased by ¥45,554 million from the previous fiscal year-end.
・ Notes and accounts receivable-trade decreased by ¥42,363 million from the previous fiscal year-end.

Thisdecrease was mainly the result of continued sales of installment sales receivables at SoftBank Mobile Corp.
・ Other current assets increased by ¥116,871 million from the previous fiscal year-end, primarily because of anincrease of ¥60,762 million in derivative assets included in other current assets. This increase in derivative
assets was mainly due to the conclusion of a foreign currency forward contract for approximately US$17 billion,
which was entered into to hedge foreign exchange risk for the period until final payments are made for the
proposed acquisition of Sprint, coupled with the yen’s depreciation. Please refer to page 29 “(5) Additional
Information” under “3. Consolidated Financial Statements” for details about the Sprint transaction.

(b) Fixed Assets
Fixed assets totaled ¥3,480,543 million at the end of the period, for a ¥496,990 million (16.7%) increase from theprevious fiscal year-end. The primary components of the change were as follows:
・ Property and equipment increased ¥250,902 million from the previous fiscal year-end.

The main increases

were ¥112,642 million in telecommunications equipment, ¥50,715 million in land, and ¥42,398 million inbuildings and structures. The increase in telecommunications equipment was primarily due to new acquisitionsof equipment such as base stations in order to strengthen the communications network in the Mobile
Communications segment. The increases in land, buildings and structures were due primarily to recording thelease asset relating to the Yahoo! JAPAN Dome (hereafter, “the Yahoo! Dome”) on the consolidated balance
sheet for the first quarter (the three-month period from April 1, 2012 to June 30, 2012). In accordance withtransitional measures, after the revision of the accounting standard for leases effective from April 1, 2008, thelease contract relating to the Yahoo! Dome continued to be accounted for as an operating lease transaction, while
being classified as a finance lease that did not transfer ownership of the leased property to the lessee. Fukuoka
SOFTBANK HAWKS Marketing Corp. entered into a purchase contract in March 2012 to acquire a trust
beneficiary interest in the Yahoo! Dome in July 2015. As a result, the lease contract was reclassified as afinance lease that is deemed to transfer ownership of the leased asset to the lessee and recorded as a lease asset

14

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

on the consolidated balance sheet. Although SOFTBANK HAWKS Marketing Corp. entered into this contract
in March 2012, since SOFTBANK HAWKS Marketing Corp.’s fiscal year ends in February its financial
statements are reflected in the consolidated financial statements with a one-month lag. Therefore, this isreflected in the consolidated financial statements for the period.
・ Total intangible assets increased ¥3,869 million from the previous fiscal year-end.

This was mainly because

software increased by ¥55,824 million as a result of new acquisitions of telecommunications equipment. On
the other hand, goodwill decreased by ¥44,374 million resulting from regular amortization of the goodwill
recorded when the Company acquired SoftBank Mobile Corp., SoftBank Telecom Corp., and others.
・ Investments and other assets increased by ¥242,218 million from the previous fiscal year-end.

This wasmainly due to a ¥237,456 million increase in investment securities. The primary components of the increase
were an increase of ¥268,744 million due to the acquisition by Company subsidiary Starburst II, Inc. of a
US$3.1 billion convertible bond issued by Sprint, and Yahoo Japan Corporation’s acquisition of 42.6% of theshares (voting rights at the time of acquisition) of ASKUL Corporation for ¥33,038 million.

Please refer topage 29 “(5) Additional Information” under “3. Consolidated Financial Statements” for details about the Sprint
transaction. These were partially offset by a decrease of ¥51,207 million as a result of Alibaba Group Holding
Limited, a Company equity method affiliate, acquiring the shares of Alibaba.com Limited, a subsidiary of
Alibaba Group Holding Limited, through a privatization completed in June 2012.

For details of theprivatization of Alibaba.com Limited, please refer to page 37“(9) Significant Changes in Shareholders’ Equity”
under “3. Consolidated Financial Statements.”

Also a decrease of ¥21,196 million, mainly associated with thedrop in the stock price of Zynga Inc., was recorded.

(c) Current Liabilities
Current liabilities at the end of the period totaled ¥2,081,213 million, for a ¥157,488 million (8.2%) increase fromthe previous fiscal year-end.

The primary components of the change were as follows:

・ Short-term borrowings increased ¥305,473 million from the previous fiscal year-end.

This was mainly

attributable to the initial draw-down in December 2012 of ¥250 billion under the bridge loan facility of up to an
aggregate of ¥1.65 trillion concluded with a financial institution in the same month in connection with funding
the proposed acquisition of Sprint.

Please refer to page 29 “(5) Additional Information” under “3.

Consolidated Financial Statements” for details about the bridge loan.
・ Accounts payable – other and accrued expenses decreased by ¥209,900 million from the previous fiscal

year-end. This was mainly the result of the payment of an accounts payable – other of ¥200,000 million to theVodafone Group in April 2012 by the Company.
・ The current portion of corporate bonds increased by ¥43,202 million from the previous fiscal year-end.

This

was mainly due to reclassifications from long-term liabilities in the amounts of ¥25,000 million for the 31st
Unsecured Straight Corporate Bond and ¥130,000 million for the 33rd Unsecured Straight Corporate Bond.
Meanwhile, redemptions of corporate bonds in the amounts of ¥30,000 million for the 28th Unsecured Straight
Corporate Bond and ¥65,000 million for the 29th Unsecured Straight Corporate Bond are also reflected.

15

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(d) Long-term Liabilities
Long-term liabilities totaled ¥1,756,930 million at the end of the period, for a ¥216,590 million (14.1%) increase
from the previous fiscal year-end.

The primary components of the change were as follows:・ Lease obligations increased by ¥173,395 million from the previous fiscal year-end.

This was mainly due to thereclassification of the lease contract concluded by SOFTBANK HAWKS Marketing Corp. related to the Yahoo!
Dome from finance leases that do not transfer ownership of the leased property to the lessee to finance leases
that are deemed to transfer ownership of the leased property to the lessee (please refer to “(b) Fixed Assets” onpage 14 for details). Another factor was an increase in new acquisitions of telecommunications equipment
through lease transactions.
・ Long-term debt increased ¥63,695 million from the previous fiscal year-end.
・ Corporate

bonds decreased ¥45,000 million from the previous fiscal year-end.

This was due toreclassifications of corporate bonds from long-term to current liabilities in the amounts of ¥25,000 million forthe 31st Unsecured Straight Corporate Bond and ¥130,000 million for the 33rd Unsecured Straight Corporate
Bond as the redemption date came to be within one year. On the other hand, the Company issued corporate
bonds in the amount of ¥100,000 million for the 39th Unsecured Straight Corporate Bond and ¥10,000 million
for the 40th Unsecured Straight Corporate Bond.

(e) Equity
Equity totaled ¥1,673,407 million at the end of the period, for a ¥237,767 million (16.6%) increase from theprevious fiscal year-end.
20.6%.

The equity ratio increased 1.5 percentage points from the previous fiscal year-end to

The primary components of the change were as follows:(Shareholders’ equity)
Shareholders’ equity increased ¥134,818 million from the previous fiscal year-end to ¥1,092,765 million.
・ At the end of the period, common stock totaled ¥222,202 million, an increase of ¥8,404 million.

This was theresult of the conversion of the Convertible Bond Due 2013 into the common stock of the Company.
・ Additional paid-in capital decreased by ¥42,823 million from the previous fiscal year-end.

This primarilyreflected a decrease of ¥51,207 million as a result of Alibaba Group Holding Limited, a Company equity
method affiliate, acquiring the shares of Alibaba.com Limited, a subsidiary of Alibaba Group Holding Limited,through a privatization completed in June 2012 (please refer to page 37 “(9) Significant Changes inShareholders’ Equity” under “3. Consolidated Financial Statements” for details). On the other hand, theconversion of the Convertible Bond Due 2013 into the common stock of the Company increased shareholders’equity by ¥8,393 million.
・ Retained earnings increased ¥169,163 million from the previous fiscal year-end.

This was primarily because

net income of ¥235,367 million was recorded, although this was partially offset by a year-end dividend for theyear ended March 31, 2012 of ¥43,940 million, and an interim dividend for the year ending March 31, 2013 of¥22,104 million, making a combined total of ¥66,044 million in retained earnings.

16

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Valuation and translation adjustments)
Valuation and translation adjustments of ¥44,091 million were recorded as credit at the end of the period, a¥65,344 million increase from the previous fiscal year-end.
・ Net unrealized gain on available-for-sale securities was ¥1,256 million at the end of the period, a ¥9,310 million

decrease from the previous fiscal year-end.

This decrease was mainly associated with the drop in the stock

price of Zynga Inc.
・ Deferred gain on derivatives under hedge accounting improved by ¥37,136 million from the previous fiscal

year-end to ¥36,143 million and recorded as credit.

This was mainly attributable to the conclusion of a foreign

currency forward contract with a financial institution in relation to the foreign currency payment related to theacquisition of Sprint announced in October 2012 by the Company, coupled with the yen’s depreciation. Hedge
accounting is applied to the contract as a scheduled transaction. Please refer to page 36 “(7) Derivative
Transactions” under “3. Consolidated Financial Statements” for details.
・ Foreign currency translation adjustments improved by ¥37,518 million from the previous fiscal year-end to a

¥6,691 million recorded as credit at the end of the period. This was due to yen’s depreciation.
(Minority interests)
・ Minority interests totaled ¥535,605 million at the end of the period, for a ¥37,558 million increase from theprevious 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 ¥1,061,966 million, for a ¥47,407 million increase fromthe previous fiscal year-end.
(Millions of yen)

Nine-month Period
Ended
December 31, 2011

Nine-month Period
Ended
December 31, 2012

ChangeCash flows from operating activities

507,434

595,379

87,945

Cash flows from investing activities(270,692)(746,093)(475,400)(Reference) Free cash flow

236,741(150,713)(387,455)

Cash flows from financing activities(322,209)

191,148

513,358(a) Cash Flows from Operating Activities
Net cash provided by operating activities totaled ¥595,379 million (compared with ¥507,434 million provided in
the same period of the previous fiscal year). The primary components of the change were as follows:・ Income before income taxes and minority interests totaled ¥525,730 million.
・ The main items added to income before income taxes and minority interests were ¥242,715 million in

depreciation and amortization, and ¥47,655 million in amortization of goodwill.
・ Receivables – trade declined by ¥45,160 million (increase in cash flow).

This decrease was mainly the resultof continued sales of installment sales receivables at SoftBank Mobile Corp.
・ Income taxes paid was ¥215,840 million.

17

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(b) Cash Flows from Investing Activities
Net cash used in investing activities was ¥746,093 million (compared with ¥270,692 million used in the same
period of the previous fiscal year). The primary components of the change were as follows:・ Outlays for purchase of property and equipment, and intangibles came to ¥432,751 million.

The main factor

was capital expenditure in the telecommunications-related businesses.
・ Outlays for purchase of marketable and investment securities were ¥314,274 million.

This was mainly due tothe acquisition by Company subsidiary Starburst II, Inc. of a US$3.1 billion convertible bond issued by Sprint,
and Yahoo Japan Corporation’s acquisition of 42.6% of the shares (voting rights at the time of acquisition) of
ASKUL Corporation for ¥33,038 million.

As a result, free cash flow (the combined net cash flows from operating activities and investing activities) for theperiod was a negative ¥150,713 million (compared with a positive ¥236,741 million in the same period of theprevious fiscal year), for a year-on-year decrease of ¥387,455 million.

(c) Cash Flows from Financing Activities
Net cash provided by financing activities was ¥191,148 million (compared with ¥322,209 million used in the same
period of the previous fiscal year). The primary components of the change were as follows:(Items increasing cash flows)
・ Proceeds included ¥350,357 million from an increase in short-term borrowings, net, ¥258,894 million from thesale and leaseback of equipment newly acquired, ¥152,848 million from long-term debt, and ¥109,431 million
from issuance of bonds.
(Items decreasing cash flows)・ Outlays included ¥200,444 million for payments for repurchase of minority interests and long-term debt,¥139,612 million for the repayment of lease obligations, ¥134,154 million for the repayment of long-term debt,¥95,000 million for the redemption of bonds, and ¥65,205 million for the payment of dividends. The payments
for repurchase of minority interests and long-term debt are the amount paid to the Vodafone Group in April
2012, and various related fees.

Please refer to page 35 “6. Payments for repurchase of minority interests andlong-term debt in (6) Notes (Consolidated Statements of Cash Flows)” under “3. Consolidated Financial
Statements” for details.

18SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(Reference: Major Financing Activities)
The major financing activities in the period were as follows:
Item
Bond issuances

Company Name

Details
39th Unsecured Straight Corporate Bond
(Fukuoka SoftBank HAWKS Bond)

SoftBank Corp.

40th Unsecured Straight Corporate Bond

Bond
redemption

Increase or
decrease in debt

28th Unsecured Straight Corporate Bond

SoftBank Corp.

SoftBank Corp.

Summary
Issue date: September 24, 2012
Redemption date: September 22, 2017
Total amount of issue: ¥100,000 million
Interest rate: 0.74%/year
Issue date: September 14, 2012
Redemption date: September 14, 2017
Total amount of issue: ¥10,000 million
Interest rate: 0.732%/year
Redemption date: July 24, 2012
Redemption amount: ¥30,000 million

29th Unsecured Straight Corporate Bond
(Fukuoka SoftBank HAWKS Bond)

Redemption date: September 18, 2012
Redemption amount: ¥65,000 million

Increase of ¥368,600 million

Mainly bridge loan concluded to provide
funds for the proposed acquisition of Sprint.
For further details of the bridge loan please refer to page
29 “(5) Additional Information” under “3. Consolidated
Financial Statements.”

Execute saleand lease back

SoftBank Mobile Corp. etc.

Procurement of ¥258,894 million

Capital expenditure via finance leases(3) Qualitative Information Regarding Consolidated Earnings Forecasts
The Group is continuing to focus on network expansion and customer acquisition in the Mobile
Communications segment.

As its customer base continues to expand steadily from these efforts, the Group’s

earnings base will increase.

As a result, the Group is forecasting a year-on-year increase in bothconsolidated net sales and operating income, and is confidently projecting that consolidated operating income
will exceed ¥700 billion for its fiscal year ending March 31, 2013.
The Company has decided to adopt International Financial Reporting Standards (IFRS) for its
consolidated financial statements commencing with its fiscal year ending March 2014. For such fiscal year,in accordance with IFRS and including the results of Sprint (proposed acquisition scheduled to be finalized
mid 2013) the Group is projecting consolidated operating income of approximately ¥700 billion.

Moreover,in accordance with the currently adopted Japan-GAAP consolidated operating income of the domestic
business (excluding Sprint) is projected to amount to ¥800 billion.
For the fiscal year ending March 31, 2015 the Group expects to reach a record high consolidated operating
income in accordance with IFRS and including Sprint.

19

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

2. Notes on the Summary Information(1) Significant Changes in Scope of Consolidation
Changes in Scope of Consolidation of Specified Subsidiaries (Two companies)
The Company plans to acquire Sprint Nextel Corporation and make it a subsidiary. In the process of this acquisition, the Company
newly established Starburst ⅠInc. and Starburst Ⅱ Inc., subsidiaries in the U.S., and included them in the scope of consolidation.

20

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As ofMarch 31, 2012

As of
December 31, 2012

AmountAmountASSETS
Current assets:
Cash and deposits¥1,016,251¥1,061,805

661,287

618,924

Marketable securities

4,575

6,590

Merchandise and finished products

42,61850,426

Deferred tax assets

56,46935,496

Other current assets
Less:
Allowance for doubtful accounts
Total current assets

168,264

285,136

Notes and accounts receivable - trade(39,014)(31,980)

1,910,452

2,026,401

Buildings and structures

77,404

119,803

Telecommunications equipment

988,541

1,101,183

Telecommunications service lines

65,213

61,174Land

23,17573,890Construction in progress

80,501

122,538

Other property and equipment

61,55568,705

Total property and equipment

1,296,393

1,547,296

Goodwill

780,242735,867

Software310,151

365,975

Other intangibles

36,12028,5401,126,514

1,130,383

Investment securities

338,198

575,655

Deferred tax assets

104,327

103,211

Other assets
Less:
Allowance for doubtful accounts
Total investments and other assets

134,076

139,388(15,957)(15,391)

560,644

802,863

Total fixed assets

2,983,553

3,480,543

Deferred charges

5,699

4,606

Total assets¥4,899,705¥5,511,551

Fixed assets:
Property and equipment, net:

Intangible assets, net:

Total intangible assets
Investments and other assets:

21

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

Consolidated Balance Sheets(Millions of yen)
As ofMarch 31, 2012

As of
December 31, 2012

AmountAmountLIABILITIES AND EQUITYCurrent liabilities:
Accounts payable - trade¥190,532¥169,198

Short-term borrowings

403,167

708,640

Current portion of corporate bonds
Accounts payable - other and accrued expenses

144,988

188,190835,053625,152

Income taxes payable

125,116

114,985

Current portion of lease obligations

152,682

186,310

Other current liabilities

72,18488,736

Total current liabilities

1,923,725

2,081,213

Corporate bonds

459,900

414,900

Long-term debt

560,070

623,765

Deferred tax liabilities

20,37016,672

Liability for retirement benefits

14,953

14,734

Allowance for point mileage

32,07425,605

Lease obligations

347,699

521,094

Other liabilities

105,272

140,157

Total long-term liabilities

1,540,339

1,756,930

Total liabilities

3,464,065

3,838,143

Common stock

213,797

222,202

Additional paid-in capital

236,562

193,739

Retained earnings
Less:
Treasury stock
Total shareholders’ equity

530,534

699,697(22,947)(22,873)

957,947

1,092,765

10,566

1,256

Long-term liabilities:

Equity:Unrealized gain on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustments(993)

36,143(30,826)

6,691

Total valuation and translation adjustments(21,253)

44,091

898

945

Minority interests

498,047535,605

Total equity

1,435,640

1,673,407

Total liabilities and equity¥4,899,705¥5,511,551

Stock acquisition rights

22

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
For the nine-month period ended December 31, 2011 and 2012
Consolidated Statements of Income(Millions of yen)

Nine-month period ended
December 31, 2012
April 1, 2012 to
December 31, 2012
AmountNine-month period ended
December 31, 2011
April 1, 2011 to
December 31, 2011
AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income¥2,398,192¥2,509,790

1,100,772

1,163,227

1,297,419

1,346,562

764,635

746,413532,783

600,148

Interest income

1,632

1,721

Other non-operating income

6,708

9,932

8,340

11,65353,271

26,394

3,632

22,998-19,026

Non-operating income
Interest expense
Equity in losses of affiliated companies
Financing related expenses
Refinancing related expenses
Other non-operating expenses

24,906-

15,378

13,962Non-operating expenses

97,18882,382

Ordinary income

443,934

529,419

Gain on sale of investment securities

83,687

4,170

Dilution gain from changes in equity interest
Unrealized appreciation on valuation of investments andgain on sale of investments at subsidiaries in
the U.S., net
Other special income

18,375

3,984

2,175

-

4,185

2,100

Special income
Valuation loss on investment securities
Unrealized loss on valuation of investments and loss onsale of investments at subsidiaries in the U.S., net
Premium expense on advanced repayment oflong-term debt
Other special losses

108,422

10,256

9,321

10,514-

1,393

21,875

-

2,842

2,038

Special loss
Income before income taxes and minority interests
Income taxes:

34,03913,945518,317525,730

146,401

214,519

75,165

21,912

221,566

236,431

296,751

289,298

46,66953,931¥250,081¥235,367

Current
Deferred
Total income taxes
Income before minority interests
Minority interests in net income
Net income

23SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

Consolidated Statements of Comprehensive Income(Millions of yen)

Nine-month period ended
December 31, 2011
April 1, 2011 to
December 31, 2011
AmountIncome before minority interests
Other comprehensive income (loss)
Unrealized loss on available-for-sale securities
Deferred gain (loss) on derivatives under hedge
accounting
Foreign currency translation adjustment
Share of other comprehensive income (loss) of affiliatedcompanies accounted for using equity method
Total other comprehensive income (loss)

Nine-month period ended
December 31, 2012
April 1, 2012 to
December 31, 2012
Amount296,751

289,298(35,949)(9,287)(12,746)

37,133(3,328)29,119(6,602)

7,970(58,626)

64,935Comprehensive income

238,124354,233

Comprehensive income attributable to:
Owners of the parent

194,502

300,711

43,62253,522

Minority interests

24SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

For the three-month period ended December 31, 2011 and 2012
Consolidated Statements of Income(Millions of yen)Three-month period ended
December 31, 2012
October 1, 2012 to
December 31, 2012
AmountThree-month period ended
December 31, 2011
October 1, 2011 to
December 31, 2011
AmountNet sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income¥862,545¥923,680

429,804

450,756

432,740

472,923

273,179

275,536

159,560

197,386

Interest income
Foreign exchange gains

367

1,066

-

1,236

Other non-operating income

1,391

2,759

Non-operating income
Interest expense
Equity in losses of affiliated companies
Financing related expenses
Refinancing related expenses
Other non-operating expenses

1,758

5,062

12,522

8,554

2,410

4,835

-

17,346

11,300

-

5,636

5,302

Non-operating expenses

31,86936,039Ordinary income

129,449

166,409

Gain on sale of investment securities
Unrealized appreciation on valuation of investments andgain on sale of investments at subsidiaries in
the U.S., net
Gain on step acquisitions

159

1,125

130

-

-

1,778

Premium on advanced redemption of debt securities

4,185

-

Other special income

1,216

-

5,691

2,904

401

1,992

-

69

21,875

-

2,608

186

24,8842,249

110,256

167,064

45,03974,363

17,8276,250

62,86680,61347,39086,451

14,56020,516¥32,829¥65,934

Special income
Valuation loss on investment securities
Unrealized appreciation on valuation of investments andloss on sale of investments at subsidiaries in
the U.S., net
Premium expense on advanced repayment oflong-term debt
Other special losses
Special loss
Income before income taxes and minority interests
Income taxes:
Current
Deferred
Total income taxes
Income before minority interests
Minority interests in net income
Net income

25SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

Consolidated Statements of Comprehensive Income(Millions of yen)Three-month period ended
December 31, 2011
October 1, 2011 to
December 31, 2011
AmountIncome before minority interests
Other comprehensive income (loss)
Unrealized gain on available-for-sale securities
Deferred gain on derivatives under hedge accounting

Three-month period ended
December 31, 2012
October 1, 2012 to
December 31, 2012
Amount47,39086,451

1,186

1,444

193

36,962(142)

37,677(6,828)

8,644(5,592)

84,729Comprehensive income

41,798171,181Comprehensive income attributable to:
Owners of the parent

28,128

149,968

13,66921,212Foreign currency translation adjustment
Share of other comprehensive income (loss) of affiliatedcompanies accounted for using equity method
Total other comprehensive income (loss)

Minority interests

26

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(3) Consolidated Statements of Cash Flows(Millions of yen)

Nine-month period ended
December 31, 2011

Nine-month period ended
December 31, 2012

April 1, 2011 to
December 31, 2011

April 1, 2012 to
December 31, 2012

Cash flows from operating activities:
Income before income taxes and minority interests¥518,317¥525,730

Adjustments for:
Depreciation and amortization

196,347

242,715

Amortization of goodwill

46,93647,655Equity in losses of affiliated companies

3,632

22,998(18,176)(3,602)

Dilution gain from changes in equity interest, net
Valuation loss on investment securities
Unrealized (appreciation) loss on valuation of investments and(gain) loss on sale of investments at subsidiaries in the U.S., net

9,321

10,514(2,175)

1,393

Gain on sale of marketable and investment securities, net(83,677)(3,757)

Foreign exchange gain, net(12)(2,020)Interest and dividend income(3,586)(2,524)

Interest expense

53,271

26,394

Changes in operating assets and liabilities
Decrease in receivables - trade

1,482

45,160Decrease in payables - trade(17,649)(22,418)

43,450(53,124)

747,484

835,114

3,235

2,146

Interest paid

(52,179)(26,041)

Income taxes paid

(191,105)(215,840)

507,434

595,379

Other, net
Sub-totalInterest and dividend received

Net cash provided by operating activities- Continued -27

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

Consolidated Statements of Cash Flows (Continued)(Millions of yen)

Nine-month period ended
December 31, 2011

Nine-month period ended
December 31, 2012

April 1, 2011 to
December 31, 2011

April 1, 2012 to
December 31, 2012

Cash flows from investing activities:
Purchase of property and equipment, and intangibles¥(357,633)¥(432,751)

Purchase of marketable and investment securities
Proceeds from sale of marketable and investment securities(26,775)(314,274)

80,25818,307

Proceeds from advanced redemption of debt security
Acquisition of interests in subsidiaries newly consolidated,
net of cash acquired
Other, net

30,375-(53)(2,040)3,136(15,334)(270,692)(746,093)(Decrease) increase in short-term borrowings, net(124,148)

350,357

Decrease in commercial paper, net(25,000)-

Proceeds from long-term debt

600,675

152,848

Repayment of long-term debt

(918,615)(134,154)

Proceeds from issuance of bonds

129,354

109,431

Redemption of bonds(163,437)(95,000)

282

526

Proceeds from issuance of preferred securities by a subsidiary

200,000-

Cash dividends paid

(5,385)(65,205)

Cash dividends paid to minority shareholders
Proceeds from sale and leaseback of equipment newly acquired(16,899)(16,516)

198,529

258,894

Repayment of lease obligations(111,531)(139,612)-(200,444)

Other, net(86,032)(29,976)

Net cash (used in) provided by financing activities(322,209)

191,148(1,238)

4,985(86,706)

45,419

68

3,781

(734)

(1,794)

847,155

1,014,558¥759,782¥1,061,966

Net cash used in investing activities
Cash flows from financing activities:

Proceeds from issuance of shares to minority shareholders

Payments for repurchase of minority interests and long-term debt

Effect of exchange rate changes
on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Increase in cash and cash equivalents due to newly consolidated
subsidiaries
Decrease in cash and cash equivalents due to exclusion ofpreviously consolidated subsidiaries
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period

28SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(4) Significant Doubt about Going Concern Assumption
There are no applicable items for the nine-month period ended December 31, 2012.

(5) Additional Information
For the nine-month period ended December 31, 2012 (from April 1 to December 31, 2012)
Acquisition of Sprint Nextel Corporation
On October 15, 2012, the Company and Sprint Nextel Corporation (“Sprint”) in the U.S. entered into a series of definitive
agreements under which the Company will invest approximately $20.1 billion (the “transaction”) in Sprint, consisting ofapproximately $12.1 billion to be paid to Sprint shareholders and $8.0 billion of new capital to be used, amongst other purposes,
to strengthen Sprint’s balance sheet.
The transaction, which has been approved by the Boards of Directors of both the Company and Sprint, is subject to approval ata meeting of the Sprint shareholders, customary antitrust, Federal Communications Commission and other regulatory
approvals and the satisfaction or waiver of other closing conditions, including accuracy of representations and warranties.
The companies expect the closing of the transaction to occur in mid-2013. As a result of the transaction the Company will
own approximately 70% of the fully-diluted (as used herein, not giving effect to out-of-the-money options) shares of New
Sprint (as defined below), which will own 100% of the shares of Sprint.
(1) Purposes of acquisition[1] Enables the Company to establish an operating base as one of the largest mobile Internet companies in the world. The combined
subscriber base will be one of the largest1 between the U.S. and Japan, and the combined mobile telecom service revenue will
rank third2 amongst global operators.
[2] Enables the Company to leverage its deep expertise in smartphones and next-generation mobile networks, and its track recordof success in competing in mature markets with large incumbents, to enhance Sprint’s competitiveness in the U.S.
[3] Provides Sprint $8.0 billion of new capital for its mobile network, strategic investments, and balance sheet as part of its
continued efforts to fortify its operating base towards future growth.
Notes:
1. Based on Wireless Intelligence data, TCA data, and disclosed material by relevant companies. U.S. as of June 2012, and Japan as of
September (eAccess Ltd. data as of August 2012).
2. Based on disclosures by global mobile operators such as China Mobile and Verizon Wireless (January to June 2012).

(2) Outline of acquisition[1] Establishment of subsidiaries
The Company has formed a new U.S. holding company, Starburst I, Inc. (HoldCo), and two further subsidiaries, Starburst II,
Inc. (New Sprint), which is owned directly by HoldCo, and Starburst III, Inc. (Merger Sub), which is owned directly by New
Sprint and indirectly by HoldCo.
Via New Sprint, the Company invested $3.1 billion in Sprint in the form of a newly‐issued convertible bond (Bond) on
October 22, 2012 (EST). The Bond has a 1.0% coupon rate with a seven-year maturity and, if the merger agreement isterminated prior to completion of the merger (as defined in [2] below), subject to regulatory approval, will be convertible, or if
the merger (as defined in [2] below) is completed, will be converted, at $5.25 per share into 16.4% of outstanding Sprintcommon shares on a post-issuance basis (subject to customary adjustments).

29

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012[2] Merger
Following receipt of Sprint shareholders and regulatory approvals and the satisfaction or waiver of the other closing conditions
to the transaction, the Company will capitalize, through HoldCo, New Sprint with an additional approximately $17.0 billion.
Approximately $12.1 billion will be distributed to Sprint shareholders as merger consideration. Merger Sub will merge withand into Sprint as a result of which:(a) Sprint will become a wholly-owned subsidiary of New Sprint.
(b) In aggregate, Sprint shareholders will receive, in exchange for their Sprint shares approximately 30% of the fully-diluted
equity of New Sprint and approximately $12.1 billion cash.
(c) Individual Sprint shareholders will have the right to elect to receive, for each share of Sprint that they own, either (i) $7.30
in cash or (ii) one share of New Sprint stock, subject to proration if shareholders in the aggregate elect more than the total
amount of cash or stock consideration, as applicable (which would result in the receipt of a mix of cash and stock).
(d) Holders of Sprint stock options will receive stock options in the New Sprint.
(e) The Bond will be converted into shares of Sprint, with the value of such shares reflected (together with the Company’s
additional investment) in the approximately 70% of the fully-diluted equity of New Sprint which HoldCo will hold after
consummation of the merger.
(f) New Sprint will issue a 5 year warrant for approximately 55 million shares of New Sprint with an exercise price of
U$5.25 per share (Warrant) to HoldCo.
(g) New Sprint is expected to succeed Sprint’s New York Stock Exchange listing as a publicly traded company in the US.
Other key terms include:(a) The Company must pay Sprint a termination fee of $600 million if the merger does not close because the Company does
not obtain financing.
(b) Sprint must pay the Company a termination fee of $600 million if the merger does not close because Sprint accepts asuperior offer by a third party.
(c) Sprint must pay up to $75 million of the Company’s expenses if Sprint’s shareholders do not approve the transaction attheir shareholder meeting.

30

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

[3] Post-transaction (fully-diluted basis)
Post-transaction:(a) The Company will own, through HoldCo, approximately 70% of New Sprint shares and Sprint shareholders will own
approximately 30% of New Sprint shares in aggregate on a fully-diluted basis.
(b) New Sprint will retain $4.9 billion of the $17.0 billion contribution by the Company, which, in combination with the $3.1
billion purchase price for the Bond, represents an $8.0 billion dollar contribution to the New Sprint balance sheet.
(c) Sprint’s current CEO Dan Hesse will be the CEO of New Sprint.
(d) New Sprint will have a 10-member board of directors, including three members from the current Sprint Board of
Directors as well as the CEO.
(e) Sprint’s headquarters will continue to be in Overland Park, Kansas.

31

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(3) New Sprint’s number of shares to be acquired, acquisition price and state of share ownership before and after acquisition[1] Number of shares held before transfer

0 shares(number of voting rights: 0)(voting rights holding ratio: 0.0%)[2] Number of shares to be acquired

3,241,403,146 shares*[3] Acquisition priceTotal amount invested: approx.$20.1 billion
Advisory fees and others: to be determined[4] Number of shares held after transfer

3,241,403,146 shares*(number of voting rights: 3,241,403,146 )(voting rights holding ratio: 70.0%)

Note:* Based on Sprint’s fully-diluted shares (as of October 15, 2012, calculated not giving effect to out-of-the-money options) and giving
effect to full exercise of the warrant.

(4) Financing
In order to raise necessary funds for the transaction, on December 18, 2012, the Company entered into a bridge loan agreement
for a maximum amount of ¥1.65 trillion with financial institutions as mentioned below. The loan procured under theagreement is planned to be refinanced as medium and long term loan.
Summary of the loan agreement[1] Borrower

The Company[2] Mandated
lead arrangers(MLAs)

Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Deutsche Bank AG, Tokyo Branch[3] Date of
execution

December 18, 2012[4] Maximum total
amount ofborrowing[5] Loandrawdown date
[6] Use of loan
proceeds[7] Maturity[8] Collateral[9] Guarantors¥1.65 trillion(Breakdown)
Facility A: ¥250 billion
Facility B: ¥1.4 trillion
Facility A:December 21, 2012
Facility B: At the time of the Sprint acquisition
Facility A: Investment in Sprint in the form of newly-issued convertible bonds (restore balanceof cash on hand used for the investment in Sprint in the form of newly-issued convertible
bonds in October 2012)
Facility B: Investment in and resulting acquisition of Sprint
December 17, 2013(a) Shares of StarburstⅠ, Inc. held by the Company(b) Shares of StarburstⅡ, Inc. and all other assets held by Starburst Ⅰ, Inc.
(c) Sprint convertible bonds and all other assets held by StarburstⅡ, Inc.*(a) Pre-transaction: StarburstⅠ, Inc. and StarburstⅡ, Inc.
(b) Post-transaction: StarburstⅠ, Inc., SoftBank Mobile Corp., SoftBank BB Corp. and
SoftBank Telecom Corp.

Note:* Until immediately prior to, but subject to the occurrence of, the Company’s acquisition of Sprint.

32

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(5) Foreign currency forward contracts
Following receipt of Sprint shareholders and regulatory approvals and the satisfaction or waiver of the other closing conditions
to the transaction, in addition to a $3.1 billion convertible bond subscribed on October 22, 2012, the Company will capitalize,
through HoldCo, New Sprint with an additional approximately $17.0 billion. The Company makes foreign currency forward
contracts to hedge foreign exchange risk related to the additional investment and hedge accounting is applied to the contracts.
Please refer to “(7) Derivative Transaction” for details.
(6) Outline of Sprint[1] Name

Sprint Nextel Corporation[2] Address

6200 Sprint Parkway, Overland Park, Kansas[3] Name and title of representative

Daniel R. Hesse, Chief Executive Officer and President[4] Business description

Telecommunications[5] Paid-in capital$46,716 million（as of December 31, 2011）[6] Date of foundation

November 15, 1938

(6) Notes(Consolidated Statements of Income)
1. Financing related expenses
For the nine-month period ended December 31, 2012 (from April 1 to December 31, 2012)
It is primarily associated with a bridge loan agreement for a maximum amount of ¥1.65 trillion, which was entered into on
December 18, 2012, in order to raise the necessary funds for the acquisition of Sprint.
2. Refinancing related expense
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
It is primarily ¥23,943 million of procurement expense related to the total amount of ¥550.0 billion financing based on the
resolution of the board meeting held on July 21, 2011 and cancellation expense of interest-rate swap to hedge interest rate risks
along with the repayment of SBM loan.*Note:*¥1,366.0 billion loan to SoftBank Mobile Corp. 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 Corp.). This loan was paid off on October 27,
2011.

3. Gain on sale of investment securities
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
The gain on sale of investment securities for the current period is primarily attributable to a ¥76,430 million gain on sale of Yahoo!
Inc. shares. In connection with the Company’s financing of approximately $1,135 million from CITIBANK, N.A. through its
U.S. subsidiary in February 2004, certain forward contracts (“collar transaction”) were entered into, which allowed the obligation
to be settled at maturity by delivering Yahoo! Inc. shares held by the Company’s subsidiary. The forward contracts were toeffectively hedge the variability of cash flows associated with the future market price of the underlying securities.
During the nine-month period ended December 31, 2011, the obligation under the forward contracts was settled at maturity byeffectively delivering the shares of Yahoo! Inc. (book basis of $142 million) to CITIBANK, N.A. The cash proceeds received
by the Company’s subsidiary from delivering the shares of Yahoo! Inc. to CITIBANK, N.A. were then remitted to repay the
related obligation. “Gain on sale of investment securities” of ¥76,430 million ($993 million) was recorded as a result of settling
the forward contracts.

33

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

As of September 30, 2010, the shares of Yahoo! Inc. were reclassified to “Marketable securities” under current assets from
“Investment securities and investments in unconsolidated subsidiaries and affiliated companies” under investment and otherassets. This was to coincide with the reclassification of the related obligation under current liabilities, of which the remaining
period until maturity was less than one year. Accordingly, the gain on sale from this transaction was recorded as “Gain on saleof investment securities.”
4. Unrealized appreciation (loss) on valuation of investments and gain (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 ASC 946 and account for investment securities in accordancewith ASC 946.
The net changes in the fair value of the investments are recorded as unrealized appreciation (loss) on valuation of investments
and gain (loss) on sale of investments at subsidiaries in the U.S., net and gain (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 gain
(loss) on sale of investments included in unrealized appreciation (loss) on valuation of investments and gain (loss) on sale ofinvestments at subsidiaries in the U.S., net in the consolidated statements of income are as follows:
Nine-month period ended
December 31, 2011
Unrealized appreciation (loss) on valuation of investment
at subsidiaries in the U.S., net
Gain (loss) on sale of investments
at subsidiaries in the U.S., net
Total

Nine-month period ended
December 31, 2012

1,985

(113)

189

(1,279)2,175 million yen(1,393)

million yen

5. Premium expense on advanced repayment of long-term debt
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
As a result of the refinancing of SBM loan, a premium expense occurred for the advanced repayment of the entire loan on
October 27, 2011.

(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 of marketable and investment securities and repayment of long-term debt
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
As described in “3. Gain on sale of investment securities under (Consolidated Statements of Income),” the shares of Yahoo! Inc.
held by the Company's U.S. subsidiary were delivered to CITIBANK, N.A. in connection with the settlement of the obligation
under the forward contracts (“collar transaction”). The cash receipts of ¥57,191 million ($743 million) equaled the fair value ofthe shares delivered and were recorded as “Proceeds from sale of marketable and investment securities.” The proceeds
received of ¥57,191 million were then remitted to repay the obligation and recorded as “Repayment of long-term debt.”
The difference between the obligation balance of $1,135 million at maturity and the $743 million of proceeds from delivering
the shares of Yahoo! Inc. that were remitted to CITIBANK, N.A. in full settlement of the obligation was recognized as a realized
gain on the forward contracts. Therefore, the balance of the obligation after deduction of the realized gain on the forward
contracts, which was equal to the fair value of Yahoo! Inc. shares, was recorded under “Repayment of long-term debt.”

34

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

3. Proceeds from advanced redemption of debt security
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
In January 2010, the Company acquired corporate bonds issued by J-WBS Funding K.K. to provide part of the funding for the
SBM loan under the whole business securitization scheme associated with the acquisition of Vodafone K.K. (currently SoftBank
Mobile Corp.) and recorded the corporate bonds as “Investment securities” on the consolidated balance sheet. These areproceeds from the advanced redemption of the corporate bonds with accompanying the repayment of the entire SBM loan in
October 2011.
4. Proceeds from issuance of preferred securities by a subsidiary
For the nine-month period ended December 31, 2011 (from April 1 to December 31, 2011)
They are proceeds from the issuance of preferred securities with limited voting right (preferred securities which have the natureof a stock prescribed in Financial Instruments and Exchange Act Article 2 (1) (ix), which is a part of securities described in
Financial Instruments and Exchange Act Article 2 (1) (xvii)) to investors through public offering in Japan by the Company’s
consolidated subsidiary, SFJ Capital Limited.
5. Proceeds from sale and leaseback of equipment newly acquired
Once SoftBank Mobile Corp. and others purchase telecommunications equipment for the purpose of assembly, installation andinspection, SoftBank Mobile Corp. 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, andintangibles” under cash flows from investing activities and the cash inflows from the sale of the equipment to lease companies
are included in “Proceeds from sale and leaseback of equipment newly acquired” under cash flows from financing activities.
6. Payments for repurchase of minority interests and long-term debt
For the nine-month period ended December 31, 2012 (from April 1 to December 31, 2012)
In April 2006, BB Mobile Corp issued class 1 preferred stock-series 1 and stock acquisition rights to Vodafone International
Holdings B.V. and obtained a subordinated loan from Vodafone Overseas Finance Limited as a series of financing transactions
for the Group’s acquisition of Vodafone K.K. (currently SoftBank Mobile Corp.). In November 2006, refinancing of the funds
for the acquisition was conducted, and SoftBank Mobile Corp. assumed BB Mobile Corp’s subordinated loan.
In December 2010, the Company acquired aforementioned all class 1 preferred stock-series 1 and stock acquisition rights issued
by BB Mobile Corp. to Vodafone International Holdings B.V., and all principal and accrued interest of a long-term loan
receivable from SoftBank Mobile Corp. held by Vodafone Overseas Finance Limited for the total amount of ¥412,500 million.
Amounting to ¥212,500 million out of the total amount and the remaining amount of ¥200,000 million were paid with the related
expenses associated with the acquisition (¥63 million in December 2010 and ¥444 million in April 2012) in December 2010 andin April 2012, respectively.

35

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

(7) Derivative Transactions
Derivative transactions to which the Company applied hedge accounting
Currency Related
As of December 31, 2012
(Millions of yen)

Hedge accounting
methodNature of transaction

Hedged items

Contract amount

Fair valueOver 1 year

Foreign currency forward
contracts :to buy:U.S. dollars
Deferral hedge
accounting

Scheduled transactions forinvestment denominated inforeign currencies1¥1,411,990¥-¥59,370

Scheduled transactions forsales denominated inforeign currencies

106

-

(9)

¥-

¥59,361

Foreign currency forward
contracts:
to sell:
U.S. dollars
Total¥1,412,096

Note:
1. Foreign currency forward contract is for a scheduled additional investment of $17.0 billion in New Sprint through HoldCo in the U.S.
regarding the acquisition of Sprint.
2. Fair value is based on information provided by financial institutions.
(Millions of yen)

Hedge accounting
methodNature of transaction

Hedged items

Contract amount

Fair valueOver 1 year

Foreign currency forward
contracts:
to buy:Alternative method

U.S. dollars

Accounts payable - other

¥164

¥-

¥-

Euro

Accounts payable - trade

1,035

-

-

Accounts receivable - trade

106

-

-

¥1,306¥-¥-

Foreign currency forward
contracts:
to sell:
U.S. dollars
Total
Note:
For certain accounts payable - other, accounts payable - trade, and accounts receivable - trade denominated in foreign currencies for which
foreign currency forward contracts are used to hedge the foreign currency fluctuations, fair value of the derivative financial instrument isincluded in fair value of the accounts payable - other, accounts payable - trade, and accounts receivable - trade as hedged items.

36SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(8) Segment Information
1. Net sales and segment profit or loss of reportable segments for the nine-month period ended December 31, 2011
(Millions of yen)
Reportable segments
Other 1
MobileBroadband

Fixed-line

InternetCommunications

Infrastructure

Telecommunications

Culture¥1,613,652¥118,404¥214,623

Reconciliations to

Amounts inconsolidated

consolidated

statement of income 2statement of income 3¥2,398,192¥-¥2,398,192

Total

Subtotal

Net sales
Customers¥213,050¥2,159,730¥238,461

5,525

11,38555,433

2,892

75,23726,314

101,551(101,551)

-

Total

1,619,177

129,790

270,057

215,9422,234,967

264,775

2,499,743(101,551)

2,398,192

Segment profit¥346,478¥28,305¥42,846¥114,982¥532,613¥9,481¥542,095¥(9,311)¥532,783

Inter-segment

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 ¥(9,311) million represent elimination of intersegment
transactions and expenses of the corporate division of the Company, which totaled ¥819 million and ¥(10,131) million, respectively.
3. Segment profit is adjusted with operating income in the consolidated statement of income.

2. Net sales and segment profit or loss of reportable segments for the nine-month period ended December 31, 2012
(Millions of yen)
Reportable segments
Other 1

Total

Reconciliations to

Amounts inconsolidated

consolidated

statement of income 2statement of income 3

MobileBroadband

Fixed-line

InternetCommunications

Infrastructure

Telecommunications

Culture¥1,692,616¥103,992¥223,640¥237,067¥2,257,316¥252,473¥2,509,790¥-¥2,509,790

5,265

18,85964,1392,354

90,61829,452120,070(120,070)

-

Total

1,697,881

122,851

287,779

239,4212,347,934

281,925

2,629,860(120,070)

2,509,790

Segment profit¥389,933¥29,038¥52,159¥129,094¥600,225¥9,347¥609,573¥(9,424)¥600,148

Subtotal

Net sales
Customers
Inter-segment

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 ¥(9,424) million represent elimination of intersegment
transactions and expenses of the corporate division of the Company, which totaled ¥809 million and ¥(10,234) million, respectively.
3. Segment profit is adjusted with operating income in the consolidated statement of income.

(9) Significant Changes in Shareholders’ Equity
For the nine-month period ended December 31, 2012 (from April 1 to December 31, 2012)
Alibaba Group Holding Limited, the Company’s affiliate company under the equity method, acquired the shares of Alibaba.com
Limited, a subsidiary of Alibaba Group Holding Limited, through its takeover bid in June 2012 and conducted the privatizationof Alibaba.com Limited. Financial statements of Alibaba Group Holding Limited were prepared in accordance withaccounting principles generally accepted in the U.S., and Alibaba Group Holding Limited recorded the change in the interests in
its controlled subsidiary as a decrease in additional paid-in capital.
The Company applied “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using theEquity Method (Practical Issues Task Force No.24)” for the transaction, and as a result, additional paid-in capital decreased by¥51,207 million.

37

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012(10) Significant Subsequent Events
For the nine-month period ended December 31, 2012 (from April 1 to December 31, 2012)
Share exchange between the Company and eAccess Ltd. and partial transfer of eAccess Ltd. shares
The Company and eAccess Ltd. (“eAccess”) completed a share exchange (the “Share Exchange”). The Company became thesole parent company of eAccess and eAccess became a wholly-owned subsidiary effective January 1, 2013.
eAccess acquired all common shares held by the Company and newly issued class A shares (without voting rights) and class B
shares (with voting rights) to the Company on January 17, 2013. The Company transferred 66.71 % of class B shares (withvoting rights) to 11 third-party purchasers based on the share transfer agreement on the same date. eAccess became theCompany’s affiliated company as a result of the transaction.
Note:
Rights on class A shares are the same as that of class B shares, except for voting rights.

Details of the Share Exchange and the partial transfer of shares are as follows:
1. The Share Exchange between the Company and eAccess(1) Purpose of the Share Exchange
The Group resolved to exchange shares, aiming to establish a structure which will allow both companies to combine
management resources effectively and efficiently, and accelerate the penetration of the mobile broadband service throughmaking eAccess a group company of the Company.
(Effects of making eAccess a group company)[1] Shared utilization of mobile communications network[2] Mutual collaboration on efficient operation of base station sites[3] Creation of synergies(2) Method of the Share Exchange
The Company and eAccess completed the Share Exchange and the Company became the sole parent company of eAccessand eAccess became the wholly-owned subsidiary of the Company effective January 1, 2013, in accordance with the shareexchange agreement between the Company and eAccess dated October 1, 2012, as amended on November 2, 2012.
The Share Exchange was conducted as a simplified share exchange under Article 796, Paragraph 3, of the Companies Act,
which did not require approval of the general meeting of shareholders of the Company, while it was approved at the special
and general meeting of shareholders of eAccess held on December 7, 2012.
(3) Details of the Share Exchange
20.29 common shares of the Company are exchanged into 1 common share of eAccess. Total number of granted
common shares of the Company was 69,871,312. All granted shares were newly issued and treasury shares held by theCompany were not granted.
The acquisition amount of eAccess common shares (accompanying costs are not included) based on the Share Exchange is¥219,395 million,* which was the fair value of the granted common shares of the Company at one day before the effective
date of the Share Exchange.
Note:*69,871,312 shares (number of granted shares) × ¥3,140 (closing share price of the Company at Tokyo Stock Exchange 1st section as ofDecember 28, 2012)38

SoftBank Corp. Consolidated Financial Report
For the nine-month period ended December 31, 2012

2. Partial transfer of eAccess shares(1) Reason for partial transfer of eAccess shares
eAccess provides mobile communications service under the EMOBILE brand and operates mobile data communications
services for its MVNO (Mobile Virtual Network Operator) contractors. The Company decided to transfer a part of its
shares in eAccess to the 11 third-party purchasers in order for eAccess to maintain a certain degree of independence, which
the Company believes will facilitate the continued expansion of eAccess’ business.
In November 2012, the Company explained to the Ministry of Internal Affairs and Communications that it was considering
reducing its voting rights in eAccess to less than one-third after making eAccess a wholly-owned subsidiary. The Ministryof Internal Affairs and Communications subsequently reported this to the Radio Regulatory Council (an advisory panel tothe Minister of Internal Affairs and Communications) in the same month.
(2) Companies to which the shares were transferred
・Alcatel-Lucent Participations
・Telefonaktiebolaget L M Ericsson
・Comverse, Inc.
・Samsung Asia Pte. Ltd.
・Nokia Siemens Networks Holdings Singapore Ltd.
・Orix Corporation
・JA Mitsui Leasing, Ltd.
・Century Tokyo Leasing Corporation
・Fuyo General Lease Co., Ltd.
・Sumitomo Mitsui Finance and Leasing Company, Limited
・Mitsubish UFJ Lease & Finance Company Limited(3) The number of shares transferred, and the number of shares held before and after the transfer
The Company transferred 100 class B shares each to 11 purchasers listed in “(2) Companies to which the shares weretransferred.” Shares held before and after the transfer are as follows:
Before the share transfer

Class of shares

Shareholder

Number of shares held

Ownership %Class A shares(without voting rights)

The Company

218,777 shares

100.00%Class B shares(with voting rights)

The Company

1,649 shares

100.00%Total

The Company

220,426 shares

100.00%After the share transfer

Class of sharesClass A shares(without voting rights)
Class B shares(with voting rights)

Total

Shareholder

Number of shares held

The Company
The Company
Other shareholders(11 third-parties)
The Company
Other shareholders(11 third-parties)

Ownership %218,777 shares

100.00%549 shares
1,100 shares

33.29%
66.71%

219,326 shares
1,100 shares

99.50%
0.50%(4) Other
The share transfer is not expected to have a material impact on the Company’s consolidated results for the fiscal year ending
March 2013.

39