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 Group Corp.
Consolidated Financial Report
For the three-month period ended June 30, 2017 (IFRS)Tokyo, August 7, 2017

1.

Financial Highlights(Millions of yen; amounts are rounded to the nearest million yen)

(1) Results of Operations(Percentages are shown as year-on-year changes)

Net income

Net income
attributable toowners of theparentTotal
comprehensive
incomeAmount%AmountAmount%Three-month period ended¥2,186,059 2.8 ¥479,273 50.1 ¥77,568 (78.2) ¥30,540 (88.8)
June 30, 2017

¥5,521(97.8) ¥233,569-

Three-month period ended¥2,126,521 2.9 ¥319,236 0.2 ¥356,361 (5.3) ¥272,351 8.9
June 30, 2016

¥254,157

19.1 ¥(103,069)-

OperatingincomeIncomebefore incometax

AmountAmountNet sales
Amount%%%Basic earnings per
share (yen)Diluted earnings per
share (yen)Three-month period ended
June 30, 2017

¥5.07

¥4.22

Three-month period ended
June 30, 2016

¥223.55¥222.22%Note:
Net sales, operating income, and income before income tax are presented based on the amounts from continuing operations only.

(2) Financial Position2.

Total assets

Total equity

Equityattributable toowners of theparentRatio of equity
attributable toowners of the parent
to total assets (%)

As of June 30, 2017¥24,883,131¥4,654,749¥3,773,017

15.2

As of March 31, 2017¥24,634,212¥4,469,730¥3,586,352

14.6

Dividends
Dividends per shareFirst quarter
Fiscal year ended
March 31, 2017
Fiscal year ending
March 31, 2018
Fiscal year ending
March 31, 2018
(Forecasted)

Note:
Revision of forecasts on the dividends: No

Second quarter

Third quarter

Fourth quarter

Total

(yen)

(yen)

(yen)

(yen)

(yen)

-

22.00

-

22.00

44.00

22.00

-

22.00

44.00

-

* Notes(1) Significant changes in scope of consolidation (changes in scope of consolidation of specified subsidiaries): Yes
Newly consolidated: None
Excluded from consolidation: One company
SoftBank Group Japan GK
Please refer to page 27 “(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 30,
2017” under “2. Notes to Summary Information” for details.
(2) Changes in accounting policies and accounting estimates[1] Changes in accounting policies required by IFRSs: Yes[2] Changes in accounting policies other than those in [1]: No[3] Changes in accounting estimates: No
Please refer to page 27 “(2) Changes in Accounting Policies” under “2. Notes to Summary Information” for details.
(3) Number of shares issued (common stock)[1] Number of shares issued (including treasury stock):
As of June 30, 2017:
1,100,660,365 shares
As of March 31, 2017:
1,100,660,365 shares[2] Number of treasury stocks:
As of June 30, 2017:11,158,876 shares
As of March 31, 2017:
11,378,076 shares[3] Number of average stocks during three-month period (April-June):
As of June 30, 2017:
1,089,359,397 shares
As of June 30, 2016:
1,136,931,899 shares* This interim consolidated financial report is not subject to interim review procedures.
* Note to forecasts on the consolidated results of operations and other items
The descriptions regarding the future are estimated based on the information that the Company is able to obtain at thepresent point and assumptions which are deemed to be reasonable. However, actual results may be different due to various
factors.
On August 7, 2017, the Company will hold an earnings results briefing for the media, institutional investors, and financial
institutions. This earnings results briefing will be broadcast live on our website in both Japanese and English athttps://www.softbank.jp/en/corp/irinfo/. The Earnings Results Data Sheet will also be posted on the Company’s website
around 4 p.m. on the same day at https://www.softbank.jp/en/corp/irinfo/presentations/.

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

(Appendix)
Contents
1. Results of Operations ...............................................................................................................................................

P. 3(1) Overview of Results of Operations ...................................................................................................................

P. 3

a. Consolidated Results of Operations ................................................................................................................

P. 3

b. Results by Segment ........................................................................................................................................

P. 7(2) Overview of Financial Position ........................................................................................................................ P. 20(3) Overview of Cash Flows .................................................................................................................................. P. 25(4) Forecasts ........................................................................................................................................................... P. 26

2. Notes to Summary Information ............................................................................................................................... P. 27(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 30, 2017 .................. P. 27(2) Changes in Accounting Policies ........................................................................................................................ P. 27

3. Condensed Interim Consolidated Financial Statements and Primary Notes.......................................................... P. 28(1) Condensed Interim Consolidated Statements of Financial Position .................................................................. P. 29(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income ..................................... P. 31(3) Condensed Interim Consolidated Statements of Changes in Equity ................................................................. P. 33(4) Condensed Interim Consolidated Statements of Cash Flows ............................................................................ P. 35(5) Significant Doubt about Going Concern Assumption ....................................................................................... P. 36(6) Notes to Condensed Interim Consolidated Financial Statements ...................................................................... P. 36

1

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Definition of Company Names and Abbreviations Used in this Appendix
Company names and abbreviations used in this appendix, except as otherwise stated or interpreted differently in thecontext, are as follows:
Company names / Abbreviations

Definition

SoftBank Group Corp.

SoftBank Group Corp. (standalone basis)

The Company

SoftBank Group Corp. and its subsidiaries*Each of the following abbreviations indicates the respective company, and its subsidiaries, if any.
SprintSprint Corporation

Brightstar

Brightstar Global Group Inc.

Arm

Arm Holdings plc

SVF

SoftBank Vision Fund (Note)

Alibaba
The first quarter

Alibaba Group Holding Limited
Three-month period ended June 30, 2017

The end of the first quarter

June 30, 2017

The previous fiscal year

Fiscal year ended March 31, 2017

The previous fiscal year-end

March 31, 2017

Note:
SoftBank Vision Fund consists of several funds which are composed of the following entities;
・ several general partners (“GPs”), each of which is a subsidiary of the Company;
・ several limited partnerships managed by the GPs, mainly SoftBank Vision Fund L.P.;・ newly-established holding entities for several of the portfolio company investments; and・ SB Investment Advisers (UK) Limited (“SBIA”), a wholly-owned UK subsidiary of the Company, which will provide
investment advice to each GP, and US and Japanese advisory companies supporting SBIA.
Refer to the following table for the relationships between each GP, the limited partnerships, and investments as of June30, 2017.
Main GPs

Main limited partnerships

SVF GP (Jersey) Limited

SoftBank Vision Fund L.P.

NVIDIA Corporation

SoftBank Vision Fund (AIV M1) L.P.

Guardant Health, Inc.

SoftBank Vision Fund (AIV M2) L.P.

N/A

SoftBank Vision Fund (AIV S1) L.P.

N/A

SB Delta Fund (Jersey) L.P.

N/A

SB Delta Fund GP (Jersey) Limited

2

Main expected investments

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

1. Results of Operations(1) Overview of Results of Operations
a. Consolidated Results of Operations(Millions of yen)Three months ended June 30
2016
2017
Continuing operations
Net sales
Operating income (excluding income from SVF)
Operating income
Income before income tax
Net income from continuing operations

ChangeChange %2,126,521
319,236
319,236
356,361
212,292

2,186,059
374,044479,273
77,56830,54059,53854,808160,037(278,793)(181,752)

2.8%
17.2%
50.1%
(78.2%)(85.6%)

Discontinued operations
Net income from discontinued operations

60,059-(60,059)-

Net income
Net income attributable to owners of the parent

272,351
254,157

30,5405,521(241,811)(248,636)(88.8%)(97.8%)

Reference: Average exchange rates used for translation

USD / JPY

Fiscal year ended
March 2017

Fiscal year ending
March 2018

Q1

Q2

Q3

Q4

Q1

¥109.07¥102.91¥108.72¥113.76¥111.61

About SoftBank Vision Fund
The Company established the SVF segment as a new reportable segment during the first quarter upon SVF having completed its first major closing in May 20, 2017 (the “Initial Closing”).
To enable investors to appropriately understand and assess the Company’s management performance, the Company
has presented operating income at two stages in the Condensed Interim Consolidated Statements of Income. “Operating
income (excluding income from SVF)” excludes income and loss arising from the SVF segment, which is presented as“Operating income from SVF.” Operating income and loss from SVF includes gain and loss on investments at SVF (realized gain and loss on sales of investments, unrealized gain and loss on valuation of investments, interest and dividend
income from investments, except for gain and loss on investments in subsidiaries) and operating expenses such as incorporation expenses of entities that comprise SVF, investment research expenses arising from the GPs and advisory companies, and administrative expenses arising from each entity.
For further details of SVF, please refer to “2. SVF” under “(6) Notes to Condensed Interim Consolidated Financial
Statements” in “3. Condensed Interim Consolidated Financial Statements and Primary Notes.”3

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

An overview of the consolidated results of operations for the first quarter is as follows:(Continuing Operations)(a) Net Sales
Net sales increased by ¥59,538 million (2.8%) year on year to ¥2,186,059 million. Net sales of the Sprint segment and theYahoo Japan segment increased, and the Arm segment was newly added. Meanwhile, net sales of the Domestic Telecommunications segment and the Distribution segment decreased.
(b) Operating Income (excluding income from SVF)
Operating income (excluding income from SVF) increased by ¥54,808 million (17.2%) year on year to ¥374,044 million.
Segment income increased by ¥86,619 million in the Sprint segment and ¥1,276 million in the Yahoo Japan segment.
Meanwhile, segment income decreased by ¥20,546 million in the Domestic Telecommunications segment and ¥4,315 in
the Distribution segment, while the newly-established Arm segment posted a segment loss of ¥6,935 million.
(c) Operating Income
As a result of adding operating income from SVF (segment income of the SVF segment) of ¥105,229 million to (b), operating income increased by ¥160,037 million (50.1%) year on year to ¥479,273 million. As of the end of the first quarter,
SVF had not made any investments. However, the changes in fair value from the previous fiscal year-end to the end of thefirst quarter of the investments that have been agreed to be transferred to SVF from the Company have been recognized as
valuation gain.
For further details regarding significant accounting policies of SVF, please refer to “2. SVF” under “(6) Notes to Condensed Interim Consolidated Financial Statements” in “3. Condensed Interim Consolidated Financial Statements and Primary Notes.”(d) Finance Cost
Finance cost increased by ¥8,763million (7.8%) year on year to ¥120,870 million, due to an increase in interest expense at
SoftBank Group Corp., although the interest expense at Sprint decreased.
(e) Income on Equity Method Investments
Income on equity method investments decreased by ¥33,832 million (95.4%) year on year to ¥1,634 million. This was mainly
due to a decrease in income on equity method investments related to Alibaba of ¥27,002 million (73.2%) year on year to ¥9,880
million.
Alibaba’s IFRS-based adjusted net income for the three months ended March 31, 2017 1 decreased by CNY 4,721 million(69.4%) year on year to CNY 2,078 million. Although Alibaba’s U.S. GAAP-based net income continued to expand steadily,
IFRS-based net income was significantly reduced after reconciliation adjustments that recognized (i) a loss on change infair value of the non-controlling interests of Alibaba’s subsidiaries (recognized as a financial liability due to the assignmentof a put option) and (ii) a negative adjustment for gain on sales of financial instruments at FVTPL held by Alibaba (under
IFRSs, a valuation gain on financial instruments at FVTPL had been previously recorded).

1

The Company applies the equity method to the financial statements of Alibaba on a three-month time lag, as it is impracticable to conform the reporting period of Alibaba due to the contract with Alibaba. Adjustments are made for significant transactions or events that occurred during the intervening period and which were publicly announced by Alibaba.

4SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(f) Gain on Sales of Equity Method Associates
Gain on sales of equity method associates was not recognized (gain of ¥204,233 million in the same period of the previous
fiscal year). In the same period of the previous fiscal year, the Company sold a portion of Alibaba shares to Alibaba andtwo Singaporean sovereign wealth funds.

(g) Derivative Gain and Loss
Derivative loss was ¥257,059 million compared to a gain of ¥21,511 million in the same period of the previous fiscal year.
This was mainly attributable to derivative loss of ¥259,677 million recorded in relation to a collar transaction included ina variable prepaid forward contract for Alibaba shares.
The collar transaction is measured at the end of each quarter based on fair value (primarily linked to the share price of
Alibaba). The cumulative derivative gain and loss for the three years, from the conclusion of the variable prepaid forward
contract on June 10, 2016 until the settlement date, will be a loss of $900 million, equal to the amount of derivative assets
initially recognized.
Note: For details of the variable prepaid forward contract, see “2. Transaction for sale of Alibaba shares by variable prepaid forward
contract” under “7. Interest-bearing debt” in “(6) Notes to Condensed Interim Consolidated Financial Statements” in “3. Condensed
Interim Consolidated Financial Statements and Primary Notes.”(h) Changes in Third-Party Interests in SVF
Changes in third-party interests in SVF was an increase of ¥43,589 million (negative impact on income; not recorded in
the same period of the previous fiscal year). SVF had not made any investments as of the end of the first quarter; however,within operating income from SVF, income attributable to third-party interests in SVF was recognized as an increase inthird-party interests in SVF.

(i) Other Non-operating Income and Loss
Other non-operating income was ¥18,179 million compared to a loss of ¥111,978 million in the same period of the previous
fiscal year. The primary components for the first quarter were as follows:(Millions of yen)

Gain (loss) from financial
instruments at FVTPL

Impairment loss on assets
classified as held for sale

Three months ended June 30
2016
2017
(30,283)
24,613(42,540)-

Primary components
Recognition of gain for the change in the fair value of investments, primarily in Southeast Asia and India, fromthe previous fiscal year-end to the end of the first quarter
Loss due to a difference between the valuation of the248,300,000 GungHo Online Entertainment, Inc. sharestendered by the Company in the same period of the previous fiscal year at the tender offer price of ¥294 pershare and their carrying amount on a consolidated basis

Note: See “14. Other non-operating income (loss)” under “(6) Notes to Condensed Interim Consolidated Financial Statements” in “3.
Condensed Interim Consolidated Financial Statements and Primary Notes” for details.

5SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(j) Income before Income Tax
As a result of (c) to (i), income before income tax decreased by ¥278,793 million (78.2%) year on year to ¥77,568 million.

(k) Income Taxes
Income taxes were ¥47,028 million, a decrease of ¥97,041 million (67.4%) year on year. The effective income tax burden
was 60.6% for the first quarter, compared with the statutory tax rate of 31.69%. This was mainly due to recording deferred
tax liabilities for gains from spectrum license exchanges at Sprint, while deferred tax assets for losses excluding these gains
at Sprint were not recorded.
Tax effects are recognized in principle for gain from financial instruments at FVTPL.

(l) Net Income from Continuing Operations
As a result of (j) and (k), net income from continuing operations decreased by ¥181,752 million (85.6%) year on year to¥30,540 million.

(Discontinued Operations)(m) Net Income from Discontinued Operations
Net income from discontinued operations was not recorded (income of ¥60,059 million in the same period of the previous
fiscal year). Income after income tax from Supercell Oy of ¥21,117 million and deferred tax expenses for investment
temporary differences of ¥38,942 million as a negative expense were recorded in the same period of the previous fiscal
year. Supercell Oy was excluded from the scope of consolidation on July 29, 2016.

(n) Net Income
As a result of (l) and (m), net income decreased by ¥241,811 million (88.8%) year on year to ¥30,540 million.

(o) Net Income Attributable to Owners of the Parent
After deducting net income attributable to non-controlling interests such as those of Yahoo Japan Corporation and Sprint
from (n), net income attributable to owners of the parent decreased by ¥248,636 million (97.8%) year on year to ¥5,521
million.

(p) Comprehensive Income
Comprehensive income improved by ¥336,638 million year on year to ¥233,569 million. Of this, comprehensive income
attributable to owners of the parent improved by ¥302,101 million year on year to ¥208,254 million.

6

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017b. Results by Segment
The Company’s reportable segments are components of business activities for which decisions on resource allocation andassessment of performance are made. The Company has six reportable segments: Domestic Telecommunications, Sprint,
Yahoo Japan, Distribution, Arm, and SVF. The Company established the SVF segment during the first quarter upon SVF
having completed its Initial Closing in May 20, 2017.

The main businesses and core companies of each reportable segment are as follows:
Main businesses

Core companies

Domestic Telecommunications· Provision of mobile communications services in Japan· Sale of mobile devices in Japan· Provision of broadband services to retail customers in Japan· Provision of telecom services to corporate customers in Japan,such as data communications and fixed-line telephone services

SoftBank Corp.
Wireless City Planning Inc.

Sprint· Provision of mobile communications services in the U.S.
· Sale and lease of mobile devices and sale of accessories in the
U.S.
· Provision of fixed-line telecommunications services in the U.S.

Sprint Corporation

Yahoo Japan· Internet advertising· e-commerce business· Membership services

Yahoo Japan Corporation
ASKUL Corporation

Distribution· Distribution of mobile devices overseas· Sale of PC software, peripherals, and mobile device accessories
in Japan

Brightstar Corp.
SoftBank Commerce & Service
Corp.

Arm

· Design of microprocessor intellectual property and related technology· Sale of software tools

Arm Holdings plc

SVF· Investment activities by SoftBank Vision Fund

SoftBank Vision Fund L.P.

· Fukuoka SoftBank HAWKS-related businesses

Fukuoka SoftBank HAWKS Corp.

Segments
Reportable segments

Other

Note: Income of reportable segments is defined as operating income.
Adjusted EBITDA of each reportable segment is calculated as follows:
segment income (loss) + depreciation and amortization ± other adjustments
Adjusted EBITDA of the SVF segment is obtained by adding or deducting unrealized gain and loss on valuation of investments (gains are deducted).

For historical principal operational data of each segment, their calculation methods and definitions of terms, see the “Earnings Results Data Sheet” on the Company’s website at www.softbank.jp/en/corp/irinfo/presentations/.

7

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(a) Domestic Telecommunications Segment

1.

Free cash flow increased 9.8% yoy to ¥76.5 billion

2.

Sales and income declined yoy due to focused promotions on the Home Bundle DiscountHikari Set and Giga Monster (net sales -0.8% yoy; segment income -8.6% yoy)3.

Brisk growth in smartphone and SoftBank Hikari fiber-optic service subscribers(Millions of yen)Three months ended June 30
2016
2017

ChangeChange %Net sales

761,763755,656(6,107)(0.8%)

Segment income

239,013

218,467(20,546)(8.6%)

Depreciation and amortization

112,266

111,006(1,260)(1.1%)

Adjusted EBITDA

351,279

329,473(21,806)(6.2%)

Free cash flow

69,70776,514

6,807

9.8%

OVERVIEWThe Company aims to generate a stable free cash flow from the domestic telecommunications business, even as Japan’s
telecommunications market approaches maturity. To achieve this goal, the Company is making efforts to expand thenumber of smartphone subscribers while streamlining its capital investment.
Specifically, the Company is focusing on promoting the Home Bundle Discount Hikari Set, which offers a discounton the communication charges of mobile communications services to customers subscribing to both mobile and broadband services such as SoftBank Hikari, as a means of acquiring and retaining smartphone subscribers. Furthermore, as
the low-cost smartphone market expands, the Company is also aggressively promoting expansion of the mobile communications service sister brand Y!mobile. In other initiatives, the Company is collaborating with Yahoo Japan Corporation, mainly in e-commerce, aiming to encourage these smartphone subscribers to make even greater use of Yahoo!
services.

FINANCIAL RESULTS(Millions of yen)Three months ended June 30
2016
2017
Telecom service revenue

602,378(3,373)(0.6%)

Mobile communications

480,067

458,607(21,460)(4.5%)

2

422,007402,908(19,099)(4.5%)

58,06055,699(2,361)(4.1%)

59,23766,447

77,571
66,20018,334(247)

31.0%(0.4%)

Product and other sales

156,012

153,278(2,734)(1.8%)

Total net sales

761,763755,656(6,107)(0.8%)

Service3

Broadband
Fixed-line telecommunications

3

Change %605,751

Telecom2

ChangeTelecom revenue of mobile communications services, etc., under the SoftBank and Y!mobile brands
Device warranty service revenue, content-related revenues, advertising revenues, etc.

8SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Net sales decreased by ¥6,107 million (0.8%) year on year to ¥755,656 million. Of this, telecom service revenue
decreased by ¥3,373 million (0.6%) to ¥602,378 million and product and other sales decreased by ¥2,734 million (1.8%)
to ¥153,278 million.
Telecom service revenue decreased due to a decrease in mobile communications revenue of ¥21,460 million (4.5%)
year on year, reflecting an increase in the total amount of discounts (negative impact on revenue) associated with growthin the cumulative number of applications of the Home Bundle Discount Hikari Set, as well as decreases in mobile data
communications device and PHS subscribers. The decrease in mobile communications revenue was partially offset by
an increase in broadband revenue of ¥18,334 million (31.0%) in line with subscriber growth for the SoftBank Hikari
fiber-optic service.
Product and other sales decreased mainly due to lower shipments of mobile data communications devices.

Segment income decreased by ¥20,546 million (8.6%) year on year to ¥218,467 million. This was due to the decreasein net sales, as well as an increase in operating expenses (cost of sales and selling, general and administrative expenses)
of 14,439 million (2.8%) year on year. The main fluctuations in operating expenses were as follows:
Components

YoY change(Millions of yen; %)Main factors for the change

Cost of products

2,182
2.1%

Decrease in reversal of provision for mobile devices in inventories

Sales commission fees

(6,284)(8.1%)

・Decrease in the average cost of sales commission fees for
smartphones
・Revised sales promotion for phones

Telecommunications network
charges

8,067
13.5%

Increase in fiber-optic connection charges for SoftBank
Hikari

Sales promotion expenses andadvertising expenses

5,799
18.0%

・Focused efforts on expanding sales of SoftBank Hikari fiber-optic services and Y!mobile smartphones
・Enhanced measures for phone customers; SUPER FRIDAY, 4 awarded points to long-term users, and awarded
additional points to users of Yahoo Japan Corporation ecommerce services

Depreciation and amortization(1,260)(1.1%)

Impact of decrease in capital expenditures in recent years

Adjusted EBITDA decreased by ¥21,806 million (6.2%) year on year to ¥329,473 million.

Free cash flow increased by ¥6,807 million (9.8%) year on year to ¥76,514 million. This was due to a decline in
expenditures for acquisition of telecommunications network equipment, which outweighed the decline in adjusted
EBITDA.

4

A promotion awarding free coupons for fast food to SoftBank smartphone subscribers

9SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Forecast for the Fiscal Year ending March 2018
For the fiscal year ending March 2018, segment income might decrease up to 7% year on year due to the impact of
medium-term growth measures such as the Home Bundle Discount Hikari Set, Giga Monster, and strengthening collaboration with Yahoo Japan Corporation. Free cash flow is projected to be over ¥500.0 billion, following the previous
fiscal year, even with an increase in capital expenditures and an increase in working capital associated with expansionof smartphone sales.

OPERATIONS
Mobile Communications Service
Subscribers (Main Subscribers)(Thousands)

March 31, 2017

June 30, 2017

Change32,40032,44848

Cumulative subscribers

Cumulative subscribers increased from the previous fiscal year-end as smartphones marked significant net additions
while feature phones and mobile data communications devices had net losses. In smartphones, the number of Y!mobile
subscribers continued to grow steadily, while SoftBank subscribers also grew briskly with the success of a promotion
encouraging customers to change over from feature phones. Mobile data communications devices saw a decline indemand due to the introduction of Data Flat-rate (20 GB) and Data Flat-rate (30 GB) (collectively known as “GigaMonster”) for smartphones in September 2016.

Home Bundle Discount Hikari Set Applications(Thousands)

March 31, 2017

June 30, 2017

ChangeMobile communications service

6,030

6,641

611

Broadband service

2,904

3,182

278

Number of Units Sold (Main Subscribers)(Thousands)

Three months ended June 30
2016
2017
New subscriptions

1,154

1,121

Device upgrades

1,199

1,277

Number of units sold

2,353

2,397

Change(33)
77
44

The number of units sold for mobile devices of main subscribers increased year on year, mainly due to increases in thenumber of units sold for smartphones. In new subscriptions, the number of units sold for Y!mobile smartphones increased,
while that of mobile data communications devices declined for the reason described above. In device upgrades, both
SoftBank and Y!mobile smartphones saw brisk numbers of units sold.

10SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

ARPU (Main Subscribers)(Yen)

Telecom ARPU

2016
4,050

Three months ended June 30
2017
3,830

Change(220)

Service ARPU

560

550

(10)

Total ARPU

4,610

4,380

(230)

Total ARPU declined year on year, mainly due to the dilutive impact of an increase in the compositional ratio of Y!mobile
smartphones, which have a relatively low service charge. Further penetration of the Home Bundle Discount Hikari Set
in the subscriber base also lowered ARPU by increasing the discount amount on telecom ARPU. These impacts werepartially offset by an increase in the compositional ratio of smartphone subscribers.

Churn Rate (Main Subscribers)
Three months ended June 30
2016
2017
Churn rate
5

Phone churn rate

Change

1.13%

1.13%

-

0.85%

0.79%

0.06 pp improvement

The overall churn rate was level year on year as the phone5 churn rate improved while the mobile data communications
device churn rate deteriorated. The phone churn rate improved due to fewer subscribers switching to other operators
under the Mobile Number Portability (MNP) system and the expansion of the Home Bundle Discount Hikari Set. The
mobile data communications device churn rate deteriorated due to a decline in demand for such devices following the
introduction of Giga Monster price plans for smartphones.

Broadband Service
Subscribers(Thousands)

March 31, 2017

June 30, 2017

Change

SoftBank Hikari

3,592

4,012

420

Yahoo! BB hikari with FLET’S

1,385

1,267

Yahoo! BB ADSL

1,168

1,124

(118)

Cumulative subscribers

6,145

6,403

(45)

258

The number of broadband service subscribers increased during the first quarter, led by SoftBank Hikari. The number of
SoftBank Hikari subscribers successfully increased due to focused efforts to expand sales of the Home Bundle DiscountHikari Set, acquisition of new subscribers during the high season for moving house, and a focused campaign to encourage users to switch over from other telecom carriers’ fiber-optic services.

5

Smartphones and feature phones within main subscribers; includes voice SIM subscriptions.

11SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(b) Sprint Segment

1.

Positive postpaid phone net additions for the eighth consecutive quarter2.

Segment income grew 2.9x yoy and net income turned positive, with a one-time gain and progress in cost reductions

3.

Adjusted free cash flow continued to be positive(Millions of yen)Three months ended June 30
2016
2017

ChangeChange %Net sales

873,923

910,423

36,5004.2%

Segment income

45,368

131,987

86,619190.9%

Depreciation and amortization

214,049

230,832

16,783

7.8%

Other adjustments

12,277(40,966)(53,243)-

Adjusted EBITDA

271,694

321,853

50,159

18.5%

U.S. dollar-based results (IFRSs)
Net sales(Millions of U.S. dollars)

8,012

8,157

145

1.8%

416

1,183

767

184.4%

1,962

2,068

106

5.4%

Other adjustments

113

(367)

(480)

-

Adjusted EBITDA

2,491

2,884

393

15.8%

Segment income
Depreciation and amortization

Reference: Disclosed by Sprint (U.S. GAAP)
Adjusted free cash flow

(Millions of U.S. dollars)

466

239

(227)

(48.7%)OVERVIEW
Sprint continued its effort to return to a growth trajectory by increasing net sales together with promoting large-scalecost reductions. To expand net sales, Sprint continues its effort to increase the number of postpaid phone subscribers,
which are the largest source of revenue and profit, by making full use of its ample spectrum holdings in ongoing improvements to network quality and value proposition. In cost reductions, Sprint expects a continuing progress for the
fiscal year ending March 2018 by increasing operational efficiency mainly related to its network.

FINANCIAL RESULTS
Results in U.S. dollars
Net sales increased by $145 million (1.8%) year on year to $8,157 million. Device revenue increased due to theincreased sales of used devices to third parties and an increase in mobile handset lease revenues. Meanwhile, telecom
service revenue declined despite postpaid net additions, mainly due to the further penetration of lower rate plans offeredin conjunction with device financing options and the dilutive impacts of a change in the device insurance service inJanuary 2017.

12

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Segment income increased by $767 million (184.4%) year on year to $1,183 million. This was due to the increasein net sales, as well as a decrease in operating expenses (cost of sales and selling, general and administrative expenses)of ¥129 million (1.8 %) year on year. Another contributing factor was the recording of gain on spectrum license exchange of $479 million under other operating income.
The main fluctuations in operating expenses were as follows:
Components

YoY change

Main factors for the change(Millions of U.S. dollars, %)Cost of products

126
8.8%

Increase in the cost of handsets associated with sales ofused devices to third parties

Depreciation and amortization

106
5.4%

Increase in leased device assets

Others(361)(9.1%)

Reduction of network related expenses and expenses associated with the device insurance service

Adjusted EBITDA increased by $393 million (15.8%) year on year to $2,884 million.

Adjusted free cash flow declined by $227 million (48.7%) year on year to $239 million (disclosed by Sprint, U.S.
GAAP). An increase in expenditure for acquisition of telecommunications network equipment and lower net proceedsof financings related to devices and receivables exceeded an increase in net cash provided by operating activities.
Results in yen
In yen terms, net sales increased by ¥36,500 million (4.2%) year on year to ¥910,423 million, segment income increasedby ¥86,619 million (190.9%) year on year to ¥131,987 million, and adjusted EBITDA increased by ¥50,159 million(18.5%) year on year to ¥321,853 million.
OPERATIONS
Cumulative Subscribers 6(Thousands)
March 31, 2017

June 30, 2017

ChangeChange excl.
special factors 7

31,576

31,518(58)(39)

26,07926,15374

88

Prepaid

8,688

8,719

31

35

Wholesale and affiliate

13,375

13,461

86

65

Cumulative subscribers

53,63953,69859

61

Postpaid(incl.) Phone6

Sprint is no longer reporting Lifeline program subscribers due to recent regulatory changes resulting in tighter program restrictions. Sprint has excluded them from the number of prepaid and wholesale and affiliate subscribers for all periods presented, and therefore they do not match the Company’s prior disclosures. See the “Earnings Results Data Sheet” on the Company’s website for details. The Lifeline program is a program where carriers in the U.S. receive a subsidy from a government fund to provide discounted services to low-income subscribers.
7
Factor 1: In May 2016, Sprint’s affiliate company acquired another operator. An affiliate company refers to a local wireless operator that sells andprovides Sprint-branded services and products with its own self-operated telecom network while paying Sprint for brand and spectrum usage. This resulted in adjustments to subscriber numbers that continued to occur after April 2017.
Factor 2: During the first quarter, 2,000 Wi-Fi connections were excluded from the postpaid subscriber base.

13

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Net Additions (Losses)6(Thousands)

Three months ended June 30
2016
2017

Change

180

(39)

(219)

173

88

(85)

Prepaid

(306)

35

341

Wholesale and affiliate

728

65

(663)

Total

602

61

(541)

Postpaid(incl.) Phone

Note: Excluding special factors7

Postpaid phone net subscriber additions were subdued at 88,000. New acquisitions increased, driven by various sales
promotion measures including unlimited data plans, but were partially offset by an increase in deactivations due tofurther intensified competition.
Furthermore, a net loss in tablet subscribers outweighed the net addition in phone subscribers, resulting in a net loss
in postpaid subscribers. Meanwhile, prepaid subscribers marked net addition again, continuing from the previous quarter.
Churn Rate (Postpaid)

Postpaid phone churn rate
Postpaid churn rate

Three months ended June 30
2016
2017
1.39%
1.50%
1.56%
1.65%

Change0.11 pp deterioration
0.09 pp deterioration

The postpaid phone churn rate increased due to intensified competition, as other operators introduced unlimited dataplans in the previous quarter following Sprint.
In the first quarter, Sprint changed the definition of certain gross additions and deactivation for the postpaid subscribers. A newly-acquired customer who leaves shortly after activation was previously counted as a deactivation but
is now counted as a deduction to gross additions. This change has no impact to net additions, but resulted in lower
gross additions and lower deactivations by an equal amount in the quarter. Without this change, postpaid phone churnwould have been 1.58%, and postpaid total churn would have been 1.73% in the quarter.
ABPU (Postpaid Phone)(U.S. dollars)

Three months ended June 30
2016
2017
ARPU
Average equipment billings per user

59.20
12.97

53.92
15.59

Postpaid phone ABPU

72.17

69.51

Change(5.28)
2.62(2.66)

Postpaid phone ABPU was relatively flat year on year, when adjusting for the dilutive impact of a change in the device
insurance service in January 2017.
< Initiatives to Reduce Interest Expenses >Sprint has started initiatives to reduce future interest payments while continuing to diversify its funding sources. During
the first quarter, Sprint redeemed approximately $1.6 billion of high interest corporate bonds before maturity.
More information about Sprint’s U.S. GAAP-based financial results and business operations is available on the investor
relations section of its website at investors.sprint.com/.

14

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(c) Yahoo Japan Segment(Millions of yen)Three months ended June 30
2016
2017

ChangeChange %Net sales

204,233

211,459

7,226

3.5%

Segment income

50,30851,584

1,276

2.5%

Depreciation and amortization

9,167

9,986

819

8.9%

Other adjustments-(4,929)(4,929)-Adjusted EBITDA

59,47556,641(2,834)(4.8%)

More information about Yahoo Japan Corporation’s financial results and business operations is available on the investor
relations section of its website at about.yahoo.co.jp/ir/en/.

(d) Distribution Segment(Millions of yen)Three months ended June 30
2016
2017
Net sales
Segment income

ChangeChange %315,499

297,755(17,744)(5.6%)

6,680

2,365

(4,315)(64.6%)

Depreciation and amortization

1,789

1,724

(65)

(3.6%)

Adjusted EBITDA

8,469

4,089

(4,380)(51.7%)(e) Arm Segment(Millions of yen)Three months ended June 30
2016
2017

ChangeChange %Net sales-

47,03747,037-

Segment loss-

(6,935)(6,935)-

Depreciation and amortization-

14,883

14,883-Adjusted EBITDA

-

7,948

7,948

-

OVERVIEW
Arm was consolidated into the Company on September 5, 2016, and now forms the Arm segment. Arm’s operations
are primarily the licensing of semiconductor intellectual property (IP), including the designs of energy-efficient microprocessors and associated technologies. Since the acquisition, Arm has been accelerating investment in research anddevelopment by hiring more engineers. With the expansion of its engineering capability, Arm intends to develop newtechnologies faster, with a focus on artificial intelligence, computer vision, and augmented reality. Arm is also investing in creating new revenue streams from adjacent markets, especially in the Internet of Things (IoT).
Net sales are comprised of (i) licenses to Arm technology, (ii) royalties arising from the resulting sale of licensees’
products based on Arm technology, and (iii) revenues from the sale of software tools.

15SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

FINANCIAL RESULTS
Net sales totaled ¥47,037 million.
Segment loss was ¥6,935 million. During the first quarter, Arm increased its employees, mainly engineers, by a net
330 people, up 6.8% overall from the previous fiscal year-end aiming to further strengthen its R&D capability. Arm has
also been enhancing the employee compensation system, including the start of a new performance-linked incentive
program. Operating expenses also included ¥13,342 million of amortization expenses recorded for intangible assets
recognized at the purchase price allocation for the Arm acquisition.
Adjusted EBITDA was ¥7,948 million.

Reference: Net sales in U.S. dollars
Net sales in this section are presented in U.S.-dollar terms as Arm’s revenue is primarily U.S. dollar-based.
(Millions of U.S. dollars)

Fiscal year ended
March 2017
Q3
Q4

Fiscal year ending
March 2018
Q1

(Pro forma)
2016
Jul. 1 - Sep. 30

Q2
Post-acquisition
2016
Sep. 6 - 30

Technology licensing

89

38

229

122

149

Technology royalties

240

82

248

258

250

Software and services

24

20

31

29

29

Total net sales

353

140

508

409

428

Net sales for the first quarter was $428 million. Technology licensing revenue can fluctuate quarter-to-quarter and licensing revenue reported in the first quarter was up 22% from the prior quarter to $149 million.

OPERATIONS
Licensing
Licenses signed
Apr.1 to June 30, 2017

Cumulative number oflicenses signed
June 30, 2017Classic (ARM7, ARM9, ARM11)-

500

Cortex-A

7297

Cortex-R

583

Cortex-M

20

445

Mali

9

157

Number of processor licenses signed

41

1,482

Note: Cumulative number of licenses signed includes extant licenses that are expected to generate royalties.

During the first quarter, Arm signed 41 processor licenses, reflecting the ongoing demand for Arm’s latest technology.
Of the customers signing licenses, 13 were new customers purchasing their very first Arm processor license. The customers who signed licenses with Arm in the first quarter intend to use Arm technology in a very broad range of end
markets, from connected sensors for IoT to smart consumer devices to machine-learning accelerator chips for servers.

16

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Royalty Units
The following analyses are based on the actual shipments of royalty units (chips incorporating Arm technology) by Arm
licensees for the three-month period ended March 31, 2017 as reported by licensees in royalty reports. Arm’s licensees
report their actual shipments of royalty units one quarter in arrears; therefore, the current quarter’s royalty unit analyses
are based on chips shipped in the prior quarter. In contrast, royalty revenues are accrued in the same quarter the chips
are shipped, based on estimates. This section is prepared solely for reference purposes to facilitate understanding ofArm’s operations and includes information prior to acquisition by the Company on September 5, 2016.

2016

Based on shipmentsfrom Jan. 1 to Mar. 31
2017

3.6 billion

4.7 billion

Classic (ARM7, ARM9, ARM11)

26%

17%

Cortex-A

19%

22%

Cortex-R

7%

8%Cortex-M

48%

53%

Royalty units as reported by Arm’s licensees
Breakdown by processor family

Arm’s licensees reported shipments of 4.7 billion Arm-based chips for the three-month period ended March 31, 2017.
This is an increase of approximately 28% over the same period of the previous fiscal year.
More information about Arm, its business and its technology can be found on the investor relations section ofArm’s website at www.arm.com/company/investors.

(f) SVF Segment(Millions of yen)Three months ended June 30
2016
2017

ChangeChange %Net sales

-

-

-

-

Segment income
Unrealized gain and loss on valuationof investments-

105,229

105,229--(106,871)(106,871)-

Adjusted EBITDA-(1,642)(1,642)-OVERVIEWThe Company established the SVF segment as a new reportable segment during the first quarter upon SVF having
completed its Initial Closing in May 20, 2017. The SVF segment covers the investment activities of SVF and certain
other investment vehicles managed or advised by SoftBank Investment Advisers. The purpose of SVF is to invest incompanies across a wide range of technology sectors. SVF’s investment period is, in principle, five years from its final
closing, with a minimum life of 12 years. SVF’s final closing is expected to occur no later than six months following
the Initial Closing.
For details of SVF, see “2. SVF” under “(6) Notes to Condensed Interim Consolidated Financial Statements” in “3.
Condensed Interim Consolidated Financial Statements and Primary Notes.”

17

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Initial Closing of SVF
Date: May 20, 2017
Committed capital: $93.2 billion
Limited partners and their committed capital;
SoftBank Group Corp.: maximum $28 billion, including in-kind contributions;
The Public Investment Fund of the Kingdom of Saudi Arabia, the Mubadala Investment Company of the United ArabEmirates, Apple, Foxconn Technology Group, Qualcomm Incorporated, and Sharp Corporation: maximum $65.2 billion in total

Structure of SVF
SVF consists of several funds which are composed of the following entities;
・ several GPs, each of which is a subsidiary of the Company;
・ several limited partnerships managed by the GPs, mainly SoftBank Vision Fund L.P.;・ newly-established holding entities for several of the portfolio company investments ; and・ SB Investment Advisers (UK) Limited (“SBIA”), a wholly-owned UK subsidiary of the Company, which will provide investment advice to each GP, and US and Japanese advisory companies supporting SBIA.

Refer to the following table for the relationships between each GP, the limited partnerships, and investments as of June30, 2017.
Main GPsSVF GP (Jersey) Limited

SB Delta Fund GP (Jersey) Limited

Main limited partnerships

Main expected investments

SoftBank Vision Fund L.P.

NVIDIA Corporation

SoftBank Vision Fund (AIV M1) L.P.

Guardant Health, Inc.

SoftBank Vision Fund (AIV M2) L.P.

N/A

SoftBank Vision Fund (AIV S1) L.P.

N/A

SB Delta Fund (Jersey) L.P.

N/A

The GPs will receive investment advice and certain investment execution and other services from SBIA once SBIA
is registered with the UK Financial Conduct Authority (FCA). Investment decisions for the various entities comprising
SVF are made by the Investment Committee established at the GPs or expected to be established at SBIA.

Results from the SVF segment
The portfolio companies that the Company is deemed to control under IFRSs are treated as subsidiaries of the Company
and their results of operations, assets, and liabilities are included in the Company’s consolidated financial statements.
Investments except for subsidiaries made by SVF, including investments in associates, are in principle treated as financial assets at FVTPL, and they are measured at fair value at the end of each quarter, and the change during the reporting
period is recognized in profit or loss.
Operating income and loss from the segment includes gain and loss on investments at SVF (realized gain and loss on
sales of investments, unrealized gain and loss on valuation of investments, interest and dividend income from investments, except for gain and loss on investments in subsidiaries) and operating expenses such as incorporation expenses

18

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017of entities that comprise SVF, investment research expenses arising from the GPs and advisory companies, and administrative expenses arising from each entity.
Intercompany transactions, such as management fees and performance fees to the GPs or SBIA paid out from each
limited partnership, are eliminated in consolidation. The results of operations, assets, and liabilities of SVF after eliminations are recorded in the Company's consolidated financial statements.

FINANCIAL RESULTS
Segment income was ¥105,229 million. The first quarter results primarily included unrealized gain and loss on valuationof investments that have been agreed to be transferred to SVF from the Company. These assets are expected to betransferred to SVF prior to the end of September 2017. As of the end of the first quarter, no investments were made by
SVF. The breakdown of segment income was as follows:(Millions of yen)Three months ended June 30
2016
2017

Major components

Gain and loss on investments
Unrealized gain and loss on valuationof investments

Operating expenses
Segment income--

106,871

The Company recorded changes in fair value during
the first quarter for the shares of NVIDIA Corporation, which are currently held by the Company andagreed to be transferred to SVF.

(1,642) Expenses for incorporation and administrations
105,229

Adjusted EBITDA was negative ¥1,642 million. Adjusted EBITDA was obtained by deducting unrealized gain andloss on investments from segment income.

Investments of SVF
The following are the main investments currently held by the Company that had been agreed to be transferred to SVF
as of the end of the first quarter. These are presented as “Investments from SVF accounted for using FVTPL” in the
Company’s condensed interim consolidated financial statements.
Main expected investments

Main businesses

Subsidiary
N /AFinancial assets at FVTPL
NVIDIA Corporation

Graphics processing unit (GPU) developer

Guardant Health, Inc.

Blood-based genomic cancer testing service

19SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(2) Overview of Financial Position(Millions of yen)March 31, 2017

June 30, 2017

ChangeChange %Total assets

24,634,212

24,883,131

248,919

1.0%

Total liabilities

20,164,482

20,228,382

63,9000.3%

Total equity

4,469,730

4,654,749

185,019

4.1%

Reference: Exchange rate at the end of the first quarter used for translation
USD / JPY

¥112.19¥112.00(¥0.19)(0.2%)

GBP / JPY

¥140.08¥145.79

¥5.71

4.1%

(a) Current Assets(Millions of yen)March 31, 2017

June 30, 2017

ChangeCash and cash equivalents

2,183,102

1,287,970(895,132)

Trade and other receivables

2,121,619

2,075,324(46,295)

Other financial assets

794,689

669,443(125,246)

Inventories

341,344355,956

14,612Other current assets

283,221378,416

95,195

Total current assets

5,723,975

4,767,109(956,866)

Primary components of the change
Components

Primary changes from the previous fiscal year-end

Cash and cash equivalents

Decreased mainly due to payments for acquisition of the following investment securities:
・Payments for acquisition of investments of ¥864,699 million
These payments were mainly for investments executed by the Company withthe plan of transferring them to SVF.
・Payments for acquisition of investments by SVF of ¥47,992 million
These payments were for the investments that have been agreed to be transferred to SVF from among the investments executed by the Company with theplan of transferring them to SVF.
See “(3) Overview of Cash Flows” for details of the other changes.

Other financial assets

Sprint sold part of commercial paper held for short-term investment.

20

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(b) Non-current Assets(Millions of yen)March 31, 2017

June 30, 2017

Change3,977,254

3,909,531(67,723)

1,926,072

1,892,462(33,610)

4,175,464

4,278,730

103,266(incl.) Arm

2,691,818

2,797,046

105,228

Intangible assets

6,946,639

6,972,312

25,673

FCC licenses 8

4,100,651

4,148,514

47,863

Technologies

522,894539,330

16,436

Customer relationships

448,806

422,522(26,284)

Trademarks

760,563

759,019(1,544)

Software722,934

727,118

4,184

Property, plant and equipment(incl.) Sprint
Goodwill

OthersInvestments accounted for using theequity method
Investments from SVF accounted forusing FVTPL

390,791

375,809(14,982)

1,670,799

1,687,057

16,258-483,278

483,278

Investment securities

1,106,409

1,698,344

591,935

Other financial assets

445,858

442,334(3,524)

Deferred tax assets

404,994

457,648

52,654

Other non-current assets

182,820

186,788

3,968

Total non-current assets

18,910,237

20,116,022

1,205,785

Primary components of the change

8Components

Primary changes from the previous fiscal year-end

Property, plant and equipment

Telecommunications network equipment of Sprint and SoftBank Corp. decreased due to depreciation exceeding the amount of newly-acquired assets.

Goodwill

Goodwill for Arm increased due to the weaker yen against the pound.

Investments from SVF accounted forusing FVTPL

The Company recorded fair values at the end of the first quarter of investments that have been agreed to be transferred to SVF. This includes theshares of NVIDIA Corporation that were reclassified from “Investment securities” and investment securities that were newly acquired during thefirst quarter.

Investment securities

The Company executed an additional investment in Xiaoju Kuaizhi Inc.,
which operates a ride-sharing service in China, and newly-acquired investment securities such as OSIsoft LLC, which provides industrial IoT solutions, with the plan of transferring them to SVF. Meanwhile, the Company
reclassified the shares of NVIDIA Corporation that have been agreed to betransferred to SVF from the Company, to investments from SVF accounted for using FVTPL.

Licenses issued by the U.S. Federal Communications Commission for use of specified spectrum

21SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(c) Current Liabilities(Millions of yen)March 31, 2017

June 30, 2017

Change2,694,093

3,287,520

593,427

1,139,734

1,748,048

608,314

Short-term borrowings

505,802

701,613

195,811

Current portion of long-term borrowings

433,983

434,389406

Current portion of corporate bonds

119,947

519,045

399,098

Others80,00293,001

12,999536,897545,859

8,962

Current portion of long-term borrowings

307,178

363,193

56,015Current portion of corporate bonds

219,365

173,785(45,580)

Others

10,3548,881(1,473)

1,017,462

993,613(23,849)

Short-term borrowings

161,862

129,988(31,874)

Current portion of long-term borrowings

387,349

396,618

9,269

Lease obligations

431,522440,306

8,784

Others36,72926,701(10,028)

Trade and other payables

1,607,453

Other financial liabilities

13,701

1,466,494
15,074(140,959)
1,373

Income taxes payables

256,218

77,190(179,028)

Provisions

56,36253,762(2,600)

Other current liabilities

599,096

638,465

39,369Total current liabilities

5,226,923

5,538,505

311,582

Interest-bearing debt
SoftBank Group Corp.

SprintOthersPrimary components of the change
Components

Primary changes from the previous fiscal year-end

Interest-bearing debt

SoftBank Group Corp.:
Current portion of corporate bonds increased, mainly due to transfers from non-current liabilities as the redemption became due within one year, as well as an increase in short-term borrowings due to drawing down of credit line facility.
Sprint:Current portion of long-term borrowings increased, mainly due to transfers from non-current
liabilities as the repayment became due within one year. Meanwhile, the current portion of
corporate bonds decreased due to early redemptions of certain corporate bonds.

Trade and otherpayablesTrade and other payables decreased at SoftBank Corp. due to a temporary increase at the previous fiscal year-end in sales commissions paid to dealers and accounts payable for mobile
devices. Trade and other payables also decreased at Sprint as accounts payable-other related
to telecommunications network equipment decreased after making payments.

Income taxes
payablesDuring the first quarter, the Company paid income taxes recognized and accrued at the previous fiscal year-end, such as income taxes on gains from the sale of Supercell Oy shares.

22SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(d) Non-current Liabilities(Millions of yen)March 31, 2017

June 30, 2017

Change12,164,277

11,612,879(551,398)

6,378,194

6,006,599(371,595)

Long-term borrowings

2,133,705

2,136,530

2,825

Corporate bonds

4,244,488

3,870,069(374,419)

1

-

(1)

4,024,390

3,858,951(165,439)

Long-term borrowings

1,044,116

1,030,560(13,556)

Corporate bonds

2,954,300

2,804,227(150,073)

25,974

24,164(1,810)1,761,693

1,747,329(14,364)

Long-term borrowings
Financial liabilities relating to sale of sharesby variable prepaid forward contract

199,804

197,958(1,846)

715,448

717,073

1,625

Lease obligations

787,124

779,037(8,087)

Others59,31753,261(6,056)

Derivative financial liabilities

254,146

471,889

217,743

Other financial liabilities

33,08373,22640,143

Defined benefit liabilities

108,172

108,018(154)

Provisions

138,730

137,747(983)

1,941,380

1,987,361

45,981Other non-current liabilities

297,771298,757

986

Total non-current liabilities

14,937,559

14,689,877(247,682)

Interest-bearing debt
SoftBank Group Corp.

OthersSprintOthersOthersDeferred tax liabilities

Primary components of the change
Components

Primary changes from the previous fiscal year-end

Interest-bearing debt

SoftBank Group Corp.:
Corporate bonds decreased, due to transfers to current liabilities of corporate bonds withmaturities of less than one year.
Sprint:Corporate bonds decreased, due to early redemptions of certain corporate bonds.

Derivative financial
liabilities

Derivative liabilities increased by ¥260,340 million due to recording derivative loss in relation to a collar transaction included in a variable prepaid forward contract for Alibaba
shares.

Note: For details about the transaction for sale of Alibaba shares by variable prepaid forward contract, see “(2) Transaction for saleof Alibaba shares by variable prepaid forward contract” under “7. Interest-bearing debt” in “(6) Notes to Condensed Interim Consolidated Financial Statements” in “3. Condensed Interim Consolidated Financial Statements and Primary Notes.”

23

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(e) Equity(Millions of yen)March 31, 2017

June 30, 2017

Change3,586,352

3,773,017

186,665

883,378

881,732(1,646)

4,469,730

4,654,749

185,019

14.6%

15.2%

0.6 ppTotal equity attributable to owners of the parent
Non-controlling interests
Total equity
Ratio of equity attributable to owners of the parent

Equity attributable to owners of the parent(Millions of yen)March 31, 2017

June 30, 2017

ChangeCommon stock

238,772

238,772-

Capital surplus

245,706

247,505

1,799

Retained earnings

2,958,355

2,939,186(19,169)

Treasury stock(67,727)(66,425)

1,302

Accumulated other comprehensive income

211,246

413,979

202,733

Available-for-sale financial assets

11,983

41,57429,591

Cash flow hedges
Exchange differences on translating foreign
operations(44,877)(26,583)

18,294244,140

398,988

154,848

Total equity attributable to owners of the parent

3,586,352

3,773,017

186,665

Primary components of the change
Components

Primary changes from the previous fiscal year-end

Retained earnings

The Company recorded net income attributable to owners of the parent of¥5,521 million. Meanwhile, cash dividends of ¥23,964 million were paid
for the year-end dividend for the fiscal year ended March 31, 2017.

Accumulated other comprehensive
incomeThe weaker yen against the pound caused an increase in exchange differences on translating foreign operations related to Arm.

24

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(3) Overview of Cash Flows(Millions of yen)Three months ended June 30
2016
2017

ChangeCash flows from operating activities

252,734

195,954(56,780)

Cash flows from investing activities(154,840)(1,068,352)(913,512)

Cash flows from financing activities

679,598(26,022)(705,620)(a) Cash Flows from Operating Activities
Net cash provided by operating activities decreased by ¥56,780 million year on year. This mainly reflects a year-onyear increase of ¥113,637 million in income taxes paid due to the payment in the first quarter of income taxes related
to the sale of Supercell Oy shares in the previous fiscal year.

(b) Cash Flows from Investing Activities
Primary components of the first quarter
Components

Primary details

Outlays for purchase of property, plant andequipment and intangible assets¥(284,038) million

Sprint acquired telecommunications network equipment andleased devices, and SoftBank Corp. acquired telecommunications network equipment.

Payments for acquisition of investments¥(864,699) million

This mainly represents the payments for investments executedby the Company with the plan of transferring them to SVF. Investments during the first quarter included Xiaoju Kuaizhi Inc.
and OSIsoft LLC.

Payments for acquisition of investment by SVF¥(47,992) million

This represents the payments for investments executed by theCompany during the first quarter that have been agreed to betransferred to SVF.

Payments for acquisition of marketablesecurities for short-term trading¥(77,066) million
Proceeds from sales/redemption of marketablesecurities for short-term trading¥178,134 million

These proceeds and payments are mainly associated withSprint’s short-term trading.

25SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(c) Cash Flows from Financing Activities
Primary components of the first quarter
Component
Increases in short-term interest-bearing debt, net¥176,788 million

Primary details
SoftBank Group Corp. procured funds to enhance its cash on
hand.

Proceeds from long-term interest-bearing debt
¥335,513 million
Proceeds from long-term borrowings¥219,167 million

SoftBank Corp. made a borrowing through securitization of installment sales receivables. Sprint made borrowings throughthe sale of future lease receivables and the securitization of installment sales receivables.

Proceeds from sale and leaseback of newly
acquired equipment¥116,346 million

SoftBank Corp. conducted a sale and leaseback for a purchaseof telecommunications network equipment by finance lease.

Repayment of long-term interest-bearing debt¥(480,920) million
Repayment of long-term borrowings¥(169,289) million

SoftBank Corp. repaid borrowings made through securitizationof installment sales receivables. Sprint also repaid borrowings.

Redemption of corporate bonds¥(177,328) million

Sprint conducted early redemptions of certain corporate bonds.

Repayment of lease obligations¥(118,610) million

SoftBank Corp. repaid lease obligations for telecommunications network equipment.

(4) Forecasts
The Company does not give forecasts of consolidated results of operations as they are difficult to project due to a numerous
uncertainties affecting earnings. For forecasts of the Domestic Telecommunications segment, see “Forecast for the Fiscal
Year ending March 2018” of “(a) Domestic Telecommunications Segment” under “b. Results by Segment” in “(1) Overview of Results of Operations.”

26

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

2. Notes to Summary Information(1) Significant Changes in Scope of Consolidation for the Three-month Period Ended June 30, 2017
(Specified subsidiary (one company) excluded from the scope of consolidation)
SoftBank Group International GK and SoftBank Group Japan GK conducted an absorption-type merger, with SoftBank
Group International GK as the surviving company, effective on April 24, 2017. As a result of the merger, SoftBank
Group Japan GK was dissolved and excluded from the scope of consolidation.
(2) Changes in Accounting Policies(Changes in accounting policies required by IFRSs)
The following standard is adopted from the three-month period ended June 30, 2017.
Standard
IAS 7(amendment)Interpretation
Statement of Cash Flows

Outline of the new/revised standard
Requirement for additional disclosure related to changes inliabilities arising from financing activities.

There is no significant impact on the condensed interim consolidated financial statements due to the adoption of theabove standard.

27

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

3. Condensed Interim Consolidated Financial Statements and Primary Notes(Definitions of company names and abbreviations used in the condensed interim consolidated financial statements andprimary notes)
Company names and abbreviations used in the condensed interim consolidated financial statements and primary notes,
except as otherwise stated or interpreted differently in the context, are as follows:
Company name / Abbreviation

Definition

SoftBank Group Corp.

SoftBank Group Corp. (stand-alone basis)

The Company

SoftBank Group Corp. and its subsidiaries*Each of the following abbreviations indicates the respective company, and its subsidiaries, if any.
SprintSprint Corporation

Brightstar

Brightstar Global Group Inc.

Arm

Arm Holdings plc

SVF

SoftBank Vision Fund*

Alibaba

Alibaba Group Holding Limited

Note:* SVF consists of several funds which are composed of the following entities;･ several general partners (“GPs”), each of which is a subsidiary of the Company;･ several limited partnerships, managed by the GPs, mainly SoftBank Vision Fund L.P.;･ newly-established holding entities for several of the portfolio company investments; and･ SB Investment Advisers (UK) Limited (“SBIA”), a wholly-owned UK subsidiary of the Company, which will provide
investment advice to each GP, and US and Japanese advisory companies supporting SBIA.
The relationship between each general partner, the limited partnerships, and main investments as of June 30, 2017 is as follows.

Main General Partner

Main Limited Partnerships

Main Expected Investments(GP)
SVF GP (Jersey) Limited

SB Delta Fund GP (Jersey) Limited

SoftBank Vision Fund L.P.

NVIDIA Corporation

SoftBank Vision Fund (AIV M1) L.P.

Guardant Health, Inc.

SoftBank Vision Fund (AIV M2) L.P.

N/A

SoftBank Vision Fund (AIV S1) L.P.

N/A

SB Delta Fund (Jersey) L.P.

N/A

28

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

(1) Condensed Interim Consolidated Statements of Financial Position(Millions of yen)

As ofMarch 31, 2017

As ofJune 30, 2017

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Inventories
Other current assets
Total current assets

2,183,102
2,121,619
794,689
341,344283,2215,723,975

1,287,970
2,075,324
669,443355,956
378,416
4,767,109

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets
Investments accounted for using the equity method
Investments from SVF accounted for using FVTPL
Investment securities
Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets

3,977,254
4,175,464
6,946,639
1,670,799
1,106,409
445,858
404,994
182,820
18,910,237
24,634,212

3,909,531
4,278,730
6,972,312
1,687,057
483,278
1,698,344
442,334
457,648
186,788
20,116,022
24,883,131

29

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

(Millions of yen)

As ofMarch 31, 2017

As ofJune 30, 2017

Liabilities and equity
Current liabilities
Interest-bearing debt
Trade and other payables
Other financial liabilities
Income taxes payables
Provisions
Other current liabilities
Total current liabilities

2,694,093
1,607,453
13,701
256,218
56,362
599,096
5,226,923

3,287,520
1,466,494
15,074
77,19053,762
638,4655,538,505

Non-current liabilities
Interest-bearing debt
Derivative financial liabilities
Other financial liabilities
Defined benefit liabilities
Provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

12,164,277
254,146
33,083
108,172
138,730
1,941,380
297,771
14,937,559

11,612,879
471,889
73,226108,018
137,747
1,987,361
298,757
14,689,877

Total liabilities

20,164,482

20,228,382

EquityEquity attributable to owners of the parent
Common stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive income
Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity

238,772
245,706
2,958,355(67,727)
211,246
3,586,352
883,378
4,469,730
24,634,212

238,772
247,505
2,939,186(66,425)
413,979
3,773,017
881,732
4,654,749
24,883,131

30

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(2) Condensed Interim Consolidated Statements of Income and Comprehensive Income

Condensed Interim Consolidated Statements of Income(Millions of yen)Three-month period ended Three-month period ended
June 30, 2016
June 30, 2017
Continuing operations
Net sales
Cost of sales
Gross profit

2,126,521(1,267,273)
859,2482,186,059(1,255,123)
930,936

Operating income (excluding income from SVF)
Operating income from SVF
Operating income
Finance cost
Income on equity method investments
Gain on sales of shares of associates
Derivative gain (loss)
Change in third-party interests in SVF
Other non-operating income (loss)
Income before income tax
Income taxes
Net income from continuing operations(507,841)(32,171)319,236
319,236(112,107)
35,466204,233
21,511(111,978)356,361(144,069)
212,292(589,361)
32,469374,044
105,229479,273(120,870)
1,634(257,059)(43,589)
18,17977,568(47,028)
30,540Discontinued operations
Net income from discontinued operations
Net income

60,059272,351

30,540254,157
18,194
272,351

5,521
25,01930,540174.9348.62
223.555.07
5.07

173.61
48.61
222.22

4.22
4.22

Selling, general and administrative expenses
Other operating income (loss)

Net income attributable to
Owners of the parent
Non-controlling interests

Earnings per share attributable to owners of the parent
Basic earnings per share (yen)Continuing operations
Discontinued operations
Total basic earnings per share
Diluted earnings per share (yen)Continuing operations
Discontinued operations
Total diluted earnings per share

31SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

Condensed Interim Consolidated Statements of Comprehensive Income(Millions of yen)Three-month period ended
June 30, 2016

Three-month period ended
June 30, 2017272,351

30,5409-9-14,909(18,556)

24,322
18,134(356,970)

153,947(14,812)6,626(375,429)

203,029(375,420)(103,069)

203,029
233,569(93,847)(9,222)(103,069)

208,254
25,315
233,569

Net income
Other comprehensive income, net of tax
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plan
Total items that will not be reclassified to profit
or loss
Items that may be reclassified subsequently to
profit or loss
Available-for-sale financial assets
Cash flow hedges
Exchange differences on translating foreign
operations
Share of other comprehensive income ofassociates
Total items that may be reclassified subsequently to
profit or loss
Total other comprehensive income, net of tax
Total comprehensive income
Total comprehensive income attributable to
Owners of the parent
Non-controlling interests

32SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(3) Condensed Interim Consolidated Statements of Changes in Equity
For the three-month period ended June 30, 2016
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2016
Comprehensive income
Net income
Other comprehensive
incomeTotal comprehensive
incomeTransactions withowners and othertransactions
Cash dividends
Transfer of accumulated
other comprehensive
income to retained
earnings
Purchase and disposalof treasury stock
Changes in interestsin subsidiaries
Changes in associates’interests in theirsubsidiaries
Share-based paymenttransactions
Transfer to held for sale
Other
Total transactions
with owners andother transactions
As of June 30, 2016

As of April 1, 2016
Comprehensive income
Net income
Other comprehensive
incomeTotal comprehensive
incomeTransactions withowners and othertransactions
Cash dividends
Transfer of accumulated
other comprehensive
income to retained
earnings
Purchase and disposalof treasury stock
Changes in interestsin subsidiaries
Changes in associates’interests in theirsubsidiaries
Share-based paymenttransactions
Transfer to held for sale
Other
Total transactions
with owners andother transactions
As of June 30, 2016

Commonstock
238,772

Capitalsurplus261,234

Retainedearnings
2,166,623

Treasurystock(314,752)

Accumulated
othercomprehensive
income261,736

Subtotal
2,613,613

Accumulated
othercomprehensive
income directly
associated withassets classified
as held for sale

-

Total
2,613,613--

254,157--

254,157-

254,157

-

-

-

-

(348,004)(348,004)-(348,004)--

254,157-(348,004)(93,847)-(93,847)--(24,085)--(24,085)-(24,085)

-

-

9

-

(9)

-

-

-

-

-

(230)

(80,090)-(80,320)-(80,320)

-

(933)

-

-

-

(933)

-

(933)

-

(326)

-

-

-

(326)

-

(326)

-

(34)

-

-

-

(34)

-

(34)

-

-

-

-

32,977-32,977-(32,977)---(1,293)(24,306)(80,090)

32,968(72,721)(32,977)(105,698)

238,772

259,941

2,396,474(394,842)(53,300)

2,447,045(32,977)

2,414,068

Noncontrollinginterests
891,658

Total equity
3,505,271

18,194(27,416)

272,351(375,420)(9,222)(103,069)(29,027)(53,112)---(80,320)

3,948

3,015

-

(326)

2,786

2,752

(2,215)(2,215)(24,508)(130,206)

857,928

3,271,996

33

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

For the three-month period ended June 30, 2017
(Millions of yen)
Equity attributable to owners of the parent

As of April 1, 2017
Comprehensive income
Net income
Other comprehensive
incomeTotal comprehensive
incomeTransactions with owners
and other transactions
Cash dividends
Purchase and disposal oftreasury stock
Changes in interests in
subsidiaries
Changes in associates’interests in theirsubsidiaries
Changes in interests inassociates’ capitalsurplus
Share-based paymenttransactions
Other
Total transactions withowners and othertransactions
As of June 30, 2017

Commonstock
238,772

Capitalsurplus245,706

Retainedearnings
2,958,355

Treasurystock(67,727)

-

-

5,521

-

-

-

Accumulated
othercomprehensive
incomeNoncontrollinginterests Total equity
883,378 4,469,730

211,246

Total
3,586,352

-

-

5,521

25,01930,540--202,733

202,733296

203,029

-

5,521

-

202,733

208,254

25,315

233,569--(23,964)--(23,964)(29,421)(53,385)

-

-

(726)

1,302

-

576

-

576

-

(2,995)---(2,995)

3,106

111

-

4,061

-

-

-

4,061

-

4,061

-

49

-

-

-

49

-

49

-

684

-

-

-

684

(399)

285

-

-

-

-

-

-

(247)

(247)

-

1,799

(24,690)

1,302-(21,589)(26,961)(48,550)

238,772

247,505

2,939,186(66,425)

413,979

3,773,017

881,732

4,654,749

34

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(4) Condensed Interim Consolidated Statements of Cash Flows(Millions of yen)

Cash flows from operating activities
Net income
Depreciation and amortization
Gain on investments at SVF
Finance cost
Income on equity method investments
Gain on sales of shares of associates
Derivative (gain) loss
Change in third-party interests in SVF
Other non-operating loss (income)
Income taxes
Decrease in trade and other receivables
Increase in inventories
Decrease in trade and other payables
Other
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refunded
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment, andintangible assets
Payments for acquisition of investments
Payments for acquisition of investments by SVF
Proceeds from sales/redemption of investments
Payments for acquisition of marketable securities for
short-term trading
Proceeds from sales/redemption of marketablesecurities for short-term trading
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Net cash used in investing activities
Cash flows from financing activities(Decrease) increase in short-term interest-bearing debt,
net
Proceeds from long-term interest-bearing debt
Repayment of long-term interest-bearing debt
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Decrease in cash and cash equivalents arising fromtransfer to assets classified as held for sale
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

35

Three-month period ended
June 30, 2016

Three-month period ended
June 30, 2017272,351
345,392
112,107(35,466)(204,233)(21,511)
110,365
111,057
62,083(67,016)(118,394)(56,867)
509,868
5,945(126,007)(137,322)
250
252,734

30,540371,991(106,871)
120,870(1,634)
257,059
43,589(18,179)
47,02861,489(98,530)(66,365)(88,292)
552,695
5,681(111,708)(250,959)
245
195,954(234,160)(284,038)(109,157)
322,788(864,699)(47,992)
5,867(70,099)(77,066)

5,866(74,921)700
4,143(154,840)

178,134(91,366)
127,841(15,033)(1,068,352)(21,413)

176,788

1,202,251(360,155)(80,515)(23,195)(28,982)(8,393)
679,598

335,513(480,920)(8)(23,162)(28,995)(5,238)(26,022)(77,367)

3,288(38,433)-

661,692
2,569,607
3,231,299(895,132)
2,183,102
1,287,970

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(5) Significant Doubt about Going Concern Assumption
There are no applicable items.
(6) Notes to Condensed Interim Consolidated Financial Statements
1. Significant accounting policies
The Company has newly adopted accounting policies due to completion of the first closing of SVF in May 2017. The
details are described in “Note 2. SVF.”
2. SVF(1) Summary of the transaction
a. First major closing
SVF, which is included in the scope of consolidation of the Company, completed its first major closing on May
20, 2017 with $93.2 billion of committed capital (“Initial Closing”). In addition to the Company, investors in
SVF include the Public Investment Fund of the Kingdom of Saudi Arabia, the Mubadala Investment Companyof the United Arab Emirates, Apple, Foxconn Technology Group, Qualcomm Incorporated, and Sharp
Corporation or their respective affiliates, collectively the “Limited Partners.” The final closing of SVF is
expected to occur no later than six months following the Initial Closing.
Under the Initial Closing, the Company has committed a maximum of $28 billion of capital to SVF, which
includes in-kind contributions. The other Limited Partners (“Third-Party Investors”) have committed amaximum aggregate amount of $65.2 billion.
The Company established “the SVF segment” during the three-month period ended June 30, 2017 as a newreportable segment due to the completion of the Initial Closing. The details are described in “Note 3. Segment
information.”b. Structure of SVF
SVF consists of several funds which are composed of the following entities;･ several general partners (“GPs”), each of which is a subsidiary of the Company;･ several limited partnerships managed by the GPs, mainly SoftBank Vision Fund L.P.;･ newly-established holding entities for several of the portfolio company investments; and･ SB Investment Advisers (UK) Limited (“SBIA”), a wholly-owned UK subsidiary of the Company, which
will provide investment advice to each GP, and US and Japanese advisory companies supporting SBIA.
The relationship between each general partner, the limited partnerships, and main investments as of June 30, 2017is as follows.
Main General Partner

Main Limited Partnerships

Main Expected Investments(GP)
SVF GP (Jersey) Limited

SB Delta Fund GP (Jersey) Limited

SoftBank Vision Fund L.P.

NVIDIA Corporation

SoftBank Vision Fund (AIV M1) L.P.

Guardant Health, Inc.

SoftBank Vision Fund (AIV M2) L.P.

N/A

SoftBank Vision Fund (AIV S1) L.P.

N/A

SB Delta Fund (Jersey) L.P.

N/A

36

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

The GPs will receive investment advice and certain investment execution and other services from SBIA once
SBIA is registered with the UK Financial Conduct Authority. Investment decisions for the various entities
comprising SVF are made by the Investment Committee established at the GPs or expected to be established at
SBIA. GP and SBIA are wholly-owned subsidiaries of the Company, as such the Company has control over
SVF’s limited partnerships and holding entities as stipulated in IFRS 10 “Consolidated Financial Statements.”
Accordingly, all entities that comprise SVF are consolidated by the Company. Intercompany transactions suchas management fees and performance fees to the GPs or SBIA paid out from each limited partnership, areeliminated in consolidation. The results of operation, assets and liabilities of SVF after eliminations arerecorded in the Company’s consolidated financial statements.
(2) Significant accounting policies
a. Portfolio company investments made by SVF
SVF will use the Limited Partners’ committed capital to invest mainly in companies that have superior
technologies or business models, and are expected to experience strong growth over the next five years fromthe final closing.
(a) Investments to subsidiaries
The portfolio companies that the Company is deemed to control under IFRS 10 are treated as subsidiaries of
the Company. Accordingly, their results of operations, assets and liabilities are included in the Company’s
consolidated financial statements. As of June 30, 2017, there were no such investments made by SVF.
The Company will transfer a portion of its shares of Arm Holdings plc (“Arm”) to SVF, and Arm willcontinue to be a subsidiary of the Company. The details are described in “(a) Contribution from theCompany to SVF (Transfer of a portion of shares of Arm)” under “c. Contribution from Limited Partners to
SVF.”(b) Investments except for subsidiaries
Investments except for subsidiaries made by SVF, including investments in associates, are managed inaccordance with SVF’s documented risk management policy or investment strategy, and the performance ofeach investment is reviewed on a fair value basis. Performance evaluation and investment decisions are
made by the relevant GP and the information is provided to the Company’s management; therefore, theseinvestments are recorded as financial assets at FVTPL upon initial recognition. Accordingly, theseinvestments are measured at fair value at the end of each quarter and the change during the reporting period
is recognized in profit or loss. Such investments that SVF made or investments that the Company and SVF
agreed to transfer to SVF from the Company are presented as “Investments from SVF accounted for using
FVTPL” in the condensed interim consolidated statements of financial position. The payments for theseinvestments are presented as “Payments for acquisition of investments by SVF” under cash flows frominvesting activities in the condensed interim consolidated statements of cash flows.
b. Results from SVF
Income and loss arising from the SVF segment are separated from operating income and loss arising from othersegments, recognized as a component of operating income, and presented as “Operating income from SVF” inthe condensed interim consolidated statements of income. Gain and loss on investments at SVF (realized gain
and loss on sales of investments, unrealized gain and loss on valuation of investments, interest and dividend
income from investments, except for gain and loss on investments in subsidiaries) and operating expenses suchas incorporation expenses of entities that comprise SVF, investment research expenses arising from GP andadvisory companies, and administrative expenses arising from each entity, are included in “Operating income
and loss from SVF.” The details are described in “Note 10. Operating income from SVF.”
c. Contribution from Limited Partners to SVF
SVF draws down a portion of its committed capital from its Limited Partners (a “Capital Call”).
Uncalled committed capital from Third-Party Investors is deemed to be a loan commitments and not subject to
IAS 39, “Financial Instruments: Recognition and Measurement,” and therefore this amount is not recorded in
the consolidated statements of financial position.

37

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(a) Contribution from the Company to SVF (Transfer of a portion of shares of Arm)The Company will contribute approximately 24.99% of the total number of issued shares of Arm (the “Arm
Shares”), all of which is owned by the Company, to SVF through an in-kind contribution (the “In-kindContribution”) in satisfaction of approximately $8.2 billion of the Company’s $28 billion commitment to
SVF.
At the Capital Call, the Company will be obligated to contribute a portion of the Arm Shares with a value
equivalent to the amount of the Capital Call issued to the Company. After (and to the extent that) the
aggregate amount of the Capital Call issued to the Company exceeds approximately $8.2 billion, theaggregate value of the In-kind Contribution, the Company will contribute cash in satisfaction of the Capital
Calls. The In-kind Contribution will be effected through the transfer of Arm shares to SVF, subject to thesatisfaction of preconditions related to regulatory approvals prescribed in SVF’s documents. Such
conditions include clearance from the Committee on Foreign Investments in the United States in respect of
the transfer of the Arm Shares. Pending delivery of the Arm Shares to SVF following satisfaction of suchconditions, a relevant portion of the Arm Shares will be pledged in favor of SVF.
After the completion of the In-kind Contribution of Arm Shares, Arm will continue to be a consolidated
subsidiary of the Company.
(b) Contribution from Third-Party Investors to SVF
The interests attributable to Third-Party Investors are classified as financial liabilities, “Third-party interests
in SVF” in the consolidated statements of financial position, due to the predetermined finite life (at least 12
years from the final closing) and contractual payment provision to each of the Limited Partners within thelimited partnership agreement. The amounts equivalent to the liabilities are recorded as “Other financial
liabilities” of non-current liabilities in the condensed interim consolidated statements of financial position
as of June 30, 2017. The liabilities are classified as “financial liabilities measured at amortized cost” upon
initial recognition. The amounts attributable to Third-Party Investors represent the amounts that would be
distributed in accordance with the limited partnership agreement in a theoretical liquidation scenario, andare disclosed on the consolidated statements of financial position as a liability. Changes in the interests ofThird-Party Investors are recognized through net profit or loss and presented as “Changes in third-party
interests in SVF” in non-operating income and loss in the condensed interim consolidated statements ofincome.
Contributions from Third-Party Investors to SVF will be included in “Contributions into SVF fromthird-party investors” under cash flows from financing activities in the consolidated statements of cash
flows. There were no such contributions for the three-month period ended June 30, 2017.

38

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

3. Segment information(1) Description of reportable segments
The Company’s reportable segments are components of business activities for which discrete financial
information is available, and such information is regularly reviewed by the Company’s Board of Directors inorder to make decisions about the allocation of resources and assess its performance.
The Company has six reportable segments: the Domestic telecommunications segment, the Sprint segment, theYahoo Japan segment, the Distribution segment, the Arm segment, and the SVF segment.
The Domestic Telecommunications segment provides, mainly through SoftBank Corp., mobile communications
services, sale of mobile devices, telecommunication services such as fixed-line telephone and data
communications services for corporate customers, and broadband services for retail customers in Japan.
The Sprint segment provides, through Sprint, mobile communication services, sale and lease of mobile devices,sale of mobile device accessories, and fixed-line telecommunications services in the U.S.
The Yahoo Japan segment provides, mainly through Yahoo Japan Corporation, Internet-based advertisingbusiness, e-commerce business, and membership services.
The Distribution segment provides, through Brightstar, distribution of mobile devices overseas, and through
SoftBank Commerce & Service Corp., sale of mobile device accessories, PC software, and peripherals in Japan.
The Arm segment provides, through Arm, designs of microprocessor intellectual property and related technology,
and the sale of software tools.
The SVF segment conducts, through SVF, investment activities in a wide range of technology sectors. The SVF
segment was newly established from the three-month period ended June 30, 2017, after the completion of theInitial Closing. Gain and loss on investments related to the shares agreed to be transferred to SVF and SVF’s
operating expenses are included in the reportable segment information for the three-month period ended June 30,
2017.
Information on business segments which are not included in the reportable segments is classified in “Other.”“Other” includes mainly Fukuoka SoftBank HAWKS-related business.
“Reconciliations” includes an elimination of intersegment transactions and the corporate general expenses
unallocated to each reportable segment. Expenses arising mainly from SoftBank Group Corp. and SB Group US,
Inc., which manages and supervises investment activities in the Internet, communication, and media fields
overseas, are included in the corporate general expenses.
(2) Net sales and income of reportable segments
Income of reportable segments is defined as “Operating income.” Intersegment transaction prices are determined
under the same general business conditions as applied for external customers.
The Company also discloses EBITDA (i.e., segment income and loss after addition of depreciation andamortization) and Adjusted EBITDA (i.e., EBITDA after addition or deduction of unrealized gain and loss on
valuation of investments and other adjustments (gains are deducted)) by each reportable segment. “Other
adjustments” are special items, such as acquisition-related costs and impairment loss mainly included in otheroperating income and loss.
Income and loss, which are not attributable to operating income and loss, such as financial cost and income andloss on equity method investments, are not managed by each reportable segment and therefore these income andlosses are excluded from the segment performance. Discontinued operations are not included.

39

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

For the three-month period ended June 30, 2016
(Millions of yen)

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

848,098

201,392

Distribution

Arm

Total

SVF

Net sales
Customers
Intersegment754,662

300,148--

2,104,300

7,101

25,8252,841

15,351--

51,118

Total

761,763

873,923

204,233

315,499--

2,155,418

Segment income

239,01345,36850,308

6,680

-

-

341,369

50,308

6,680

-

-

341,369

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

239,01345,368112,266

214,049

9,167

1,789

-

-

337,271

EBITDA

351,279

259,41759,475

8,469

-

-

678,640

Other adjustments-

12,277----

12,277

Adjusted EBITDA

351,279

271,694

59,475

8,469

-

-

690,917(Millions of yen)

Reconciliations

Other

Consolidated

Net sales
Customers

22,221-2,126,521

Intersegment

5,086(56,204)-

Total

27,307(56,204)

2,126,521

Segment income(4,458)(17,675)

319,236

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization(4,458)(17,675)

319,236

EBITDA

2,358

380

340,009(2,100)(17,295)

Other adjustments

659,245-

6,828

19,105Adjusted EBITDA(2,100)(10,467)

678,35040

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

For the three-month period ended June 30, 2017
(Millions of yen)

Reportable segments
Domestic
Telecommunications

Sprint

Yahoo
Japan

Distribution

Arm

Total

SVF

Net sales
Customers

747,029875,020

207,917

283,004

47,036-

Intersegment

8,627

35,403

3,542

14,751

1-

62,324

Total

755,656

910,423

211,459

297,755

47,037-2,222,330

Segment income

218,467

131,987

51,5842,365(6,935)105,229502,697

51,5842,365(6,935)105,229502,697

2,160,006

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization

218,467

131,987

111,006

230,832

9,986

1,724

14,883-

368,431

EBITDA
Unrealized gain and loss
on valuation of
investments in SVF
Other adjustments

329,473

362,819

61,570

4,089

7,948

105,229

871,128

Adjusted EBITDA

-

-

-

-

-

(106,871)(106,871)-(40,966)(4,929)---(45,895)

329,473

321,853

56,641

4,089

7,948

(1,642)

718,362(Millions of yen)

Reconciliations

Other

Consolidated

Net sales
Customers

26,053-

2,186,059

Intersegment

6,814(69,138)-

Total

32,867(69,138)

2,186,059

Segment income(6,747)(16,677)

479,273

Reconciliation from segment income to adjusted EBITDA
Segment income
Depreciation andamortization(6,747)(16,677)

479,273

EBITDA
Unrealized gain and loss
on valuation of
investments in SVF
Other adjustments

3,146

414

371,991(3,601)(16,263)851,264--(106,871)

-

1,612

(44,283)(3,601)(14,651)

700,110Adjusted EBITDA

41

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

4. Business combinations
Arm (adjustment of the provisional amount)
On September 5, 2016, the Company acquired all shares of Arm and Arm became a wholly-owned subsidiary of
the Company. Consideration transferred is allocated to acquired assets and assumed liabilities based on the fairvalue on the acquisition date. Allocation of the consideration was completed during the three-month period ended
June 30, 2017. The details of the adjustments from the provisional amounts are as follows. Due to the additional
analysis on the fair value of technologies, intangible assets increased by ¥5,250 million and deferred tax liabilities
increased by ¥958 million. As a result, goodwill decreased by ¥4,292 million.
(1) Consideration transferred and the component(Millions of yen)

Acquisition date
(September 5, 2016)
3,319,137

Payment for the acquisition by cash
Fair value of equity interest in Arm already held at thetime of the acquisition

47,867A

Total consideration transferred

3,367,004(2) Fair value of assets and liabilities, and goodwill on the acquisition date(Millions of yen)

Acquisition date
(September 5, 2016)
16,98459,782
119,090698,682
23,649Cash and cash equivalents
Trade and other receivables
Other current assets
Intangible assets
Other non-current assets
Total assets

918,187

Current liabilities
Deferred tax liabilities
Other non-current liabilities

61,930128,580
7,292

Total liabilities

197,802

Net assets

B

720,385

Goodwill

A-B

2,646,619

The above amount is translated at the exchange rate (GBP = JPY138.15) as of the acquisition date.

42

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

5. Property, plant and equipment
The components of the carrying amounts of property, plant and equipment are as follows:(Millions of yen)

As ofMarch 31, 2017
263,061
2,654,096
627,730
99,905
302,177
30,285
3,977,254

Buildings and structures
Telecommunications equipment
Equipment and fixtures
Land
Construction in progress
Other
Total

As of
June 30, 2017
261,6292,554,895
650,775
99,830274,425
67,9773,909,531

6. Intangible assets
The components of the carrying amounts of intangible assets are as follows:(Millions of yen)

As ofMarch 31, 2017
Intangible assets with indefinite useful lives
FCC licenses
Trademarks
Intangible assets with finite useful lives
SoftwareTechnologies
Customer relationships
Spectrum migration costs
Favorable lease contracts
Trademarks
Other
Total

43

As of
June 30, 2017

4,100,651
703,031

4,148,514
701,980

722,934
522,894448,806
103,814104,754
57,532
182,223
6,946,639

727,118
539,330
422,522102,149
101,384
57,039172,276
6,972,312

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

7. Interest-bearing debt
(1) Components of interest-bearing debt
The components of interest-bearing debt are as follows:(Millions of yen)

As ofMarch 31, 2017
Current
Short-term borrowings
Commercial paper
Current portion of long-term borrowings
Current portion of corporate bonds
Current portion of lease obligations
Current portion of installment payables
Total
Non-current
Long-term borrowings
Corporate bonds
Lease obligations
Financial liabilities relating to sale of shares by variable
prepaid forward contract*
Installment payables
Total

As of
June 30, 2017667,664
80,0001,128,510
339,462438,284
40,173
2,694,093

831,601
93,0001,194,200
692,880
446,485
29,354
3,287,520

3,377,625
7,233,838
807,606

3,365,048
6,709,322
798,084

715,448

717,073

29,76012,164,277

23,352
11,612,879

Note:* The details are described in “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract.”(2) Transaction for sale of Alibaba shares by variable prepaid forward contract
On June 10, 2016, West Raptor Holdings, LLC (“WRH LLC”), a wholly-owned subsidiary of the Company,
entered into a variable prepaid forward contract to sell Alibaba shares with a newly formed trust, Mandatory
Exchangeable Trust (the “Trust”), and received proceeds of ¥578,436 million ($5.4 billion) as advances received
on the sale.
The Trust, on the other hand, utilized Alibaba shares scheduled to be transferred from WRH LLC at the time ofsettlement under the contract and issued $6.6 billion of Mandatory Exchangeable Trust Securities (“Trust
Securities”) which are mandatorily exchangeable into American depositary shares (“ADSs”) of Alibaba. The
proceeds from the sale received by WRH LLC from the Trust was $5.4 billion, which is after certain amounts
from the $6.6 billion total of Trust Securities were deducted in order to purchase U.S. Treasury securities, which
would fund distributions on the Trust Securities, and to cover expenses for the issuance of the Trust Securities.
The settlement of the Alibaba shares based on the variable prepaid forward contract is conducted concurrently
with the exchange of Trust Securities. At the exchange date, which is expected to be the first scheduled trading
day after June 1, 2019, Trust Securities are exchanged for a certain number of ADSs, determined by reference tothe trading price of the ADSs at that time, and the number of Alibaba shares sold by the variable prepaid forward
contract is determined by this number of ADSs. A cap and a floor are set for the number of shares settled, and thevariable prepaid forward contract is classified as a hybrid financial instrument with embedded derivatives ofcollar transaction.
The Company accounts for the variable prepaid forward contract by bifurcating the main contracts and embedded
derivatives. The Company received ¥578,436 million and initially recognized ¥674,023 million as financial
liabilities relating to the sale of shares through the variable prepaid forward contract and ¥95,587 million as
derivative assets. Subsequent to initial recognition, financial liabilities relating to the sale of shares through the44

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017variable prepaid forward contract are measured at amortized cost and embedded derivatives are measured at fairvalue; ¥717,073 million (¥715,448 million as of March 31, 2017) is recognized as financial liabilities relating to
the sale of shares through the variable prepaid forward contract in interest-bearing debt (non-current liabilities)and ¥404,275 million (¥143,935 million as of March 31, 2017) is recognized as derivative financial liabilities(non-current liabilities) in the condensed interim consolidated statements of financial position as of June 30,
2017; ¥259,677 million (¥5,878 million of derivative loss for the three-month period ended June 30, 2016) isrecognized as a derivative loss in the condensed interim consolidated statements of income for the three-month
period ended June 30, 2017.
WRH LLC has the option (“cash settlement option”) to settle the variable prepaid forward contract by eitherdelivering cash or a combination of cash and Alibaba shares. If WRH LLC elects the cash settlement option, thecash equivalent to the fair value of the number of shares for the settlement, which is determined by the transaction
price of ADSs, will be paid.
Also, WRH LLC has the option (“early settlement option”) to settle the variable prepaid forward contract prior to
the scheduled settlement date. Settlement of the variable prepaid forward contract may be made prior to thescheduled settlement date if WRH LLC elects the early settlement option or under certain circumstances.
Alibaba shares held by WRH LLC are pledged as collateral. The Company continues to apply the equity method
to these shares and they are included in “Investments accounted for using the equity method” in the condensed
interim consolidated statements of financial position as of June 30, 2017. The carrying amount of Alibaba shares
pledged as collateral by the Company is ¥156,746 million as of June 30, 2017 (¥154,440 million as of March 31,2017).
Outline of the transaction
subsidiary
wholly owned subsidiaryWest Raptor Holdings, LLC
Approximately $5.4billion
for advances received
for the sale of Alibaba sharesby variable prepaid forward contract

third party to
SoftBank

Alibaba shares pledged as collateralby variable prepaid forward contract

Mandatory Exchangeable TrustOffering of Mandatory Exchangeable
Trust Securities (“Trust Securities”)$6.6 bn for the total issuanceamount of Trust Securities
Investors(3) Components of increase and decrease in short-term interest-bearing debt
The components of “(Decrease) increase in short-term interest-bearing debt, net” in the condensed interim
consolidated statements of cash flows are as follows:(Millions of yen)Three-month period ended Three-month period ended
June 30, 2016
June 30, 2017
(8,413)
163,788(13,000)
13,000(21,413)
176,788

Net (decrease) increase of short-term borrowings
Net (decrease) increase of commercial paper
Total

45

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(4) Components of proceeds from long-term interest-bearing debt
The components of “Proceeds from long-term interest-bearing debt” in the condensed interim consolidated
statements of cash flows are as follows:(Millions of yen)

Proceeds from long-term borrowings
Proceeds from issuance of corporate bonds
Proceeds from sale and leaseback of newly acquired
equipment
Proceeds from advances received for sale of shares by
variable prepaid forward contract
Total

Three-month period ended Three-month period ended
June 30, 2016
June 30, 2017
438,163
219,167
50,000135,652

116,346

578,436-

1,202,251

335,513(5) Components of repayment of long-term interest-bearing debt
The components of “Repayment of long-term interest-bearing debt” in the condensed interim consolidated
statements of cash flows are as follows:(Millions of yen)Three-month period ended Three-month period ended
June 30, 2016
June 30, 2017
(135,756)(169,289)(100,000)(177,328)(106,181)(118,610)(18,218)(15,693)(360,155)(480,920)

Repayment of long-term borrowings
Redemption of corporate bonds
Repayment of lease obligations
Payment of installment payables
Total

8. Foreign currency exchange rates
Exchange rates of the major currencies used for translating financial statements of foreign operations are as follows:(1) Rate at the end of the period
(yen)
As of
March 31, 2017112.19140.08As ofJune 30, 2017112.00145.79Three-month period ended
June 30, 2016
109.07
155.63(yen)
Three-month period ended
June 30, 2017111.61142.92USD
GBP(2) Average rate for the quarter

USD
GBP

46

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

9. Equity
The components of accumulated other comprehensive income are as follows:(Millions of yen)

As ofMarch 31, 2017

As ofJune 30, 2017

Available-for-sale financial assets

11,983

41,574

Cash flow hedges
Exchange differences on translating
foreign operations(44,877)(26,583)

244,140

398,988

211,246

413,979

Three-month period ended
June 30, 2016

Three-month period ended
June 30, 2017-

106,871-(1,642)
105,229Total
10. Operating income from SVF
The components of operating income from SVF are as follows:(Millions of yen)

Gain and loss on investments at SVF*
Unrealized gain and loss on valuation of
investments
Operating expenses
Total

Note:
* “Realized gain and loss on sales of investments” and “Interest and dividend income from investments” arenot recognized for the three-month period ended June 30, 2017.
11. Other operating income (loss)
The components of other operating income and loss are as follows:(Millions of yen)Three-month period ended
June 30, 2016

Three-month period ended
June 30, 2017(12,287)

53,435
6,186
558(13,066)(31,955)

10

928

-

4,929

(6,828)(32,171)(1,612)
32,469Sprint segment
Gain on spectrum license exchange1
Legal reserves2
Gain and loss on contract termination
Loss on disposal of property, plant andequipment3
Other
Yahoo Japan segment
Insurance income4
Company-wide
Expenses resulting from resignation of director5
Total

Notes:
1. License exchange gain resulting from exchange of certain portion of the telecommunications spectrum with othercarriers (non-cash transaction). The spectrum is recorded as FCC licenses in intangible assets.
2. Legal reserves recorded in the previous year were reduced due to the favorable development in pending legal
proceedings.

47

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017

3. For the three-month period ended June 30, 2017, mainly, ¥20,171 million of loss related to cell site construction
costs that are no longer expected to be used as a result of changes in Sprint’s network plans and ¥12,453 million
of loss resulted from the write-off of leased devices related to lease cancellations prior to the scheduled customer
lease terms where customers did not return the devices to Sprint are recognized.
4. Insurance proceeds related to a fire incident which occurred at a logistics center of ASKUL Corporation (ASKUL
Logi PARK Tokyo Metropolitan) in February 2017.
5. Expense resulting from resignation of Nikesh Arora from his position as a director. Resignation expense consistsof expenses which payment amounts are defined and expense which payment amount is to be defined dependingon the future share price of SoftBank Group Corp. shares. Expense based on the share price is settled in two
installments on June 2017 and March 2018. Payment amount is determined based on the share price of June 2017
and March 2018 respectively.
In addition to the entire expense which payment amount is defined, the Company measured the expense based on
SoftBank Group Corp. share price as of June 30, 2016 and recorded the expense of ¥1,811 million during thethree-month period ended June 30, 2016. The expense is remeasured every quarter end based on the stock price of
SoftBank Group Corp. until the determination of payment amount, and the changes are recognized through profit
or loss.

12. Finance cost
The components of finance cost are as follows:(Millions of yen)Three-month period ended
June 30, 2016

Three-month period ended
June 30, 2017(112,107)(120,870)

Interest expenses

13. Derivative gain (loss)¥259,677 million of derivative loss (¥5,878 million of derivative loss for the three-month period ended June 30,2016) related to collar transaction included in variable prepaid forward contract was recorded. The details aredescribed in “(2) Transaction for sale of Alibaba shares by variable prepaid forward contract” under “Note 7.
Interest-bearing debt.”

14. Other non-operating income (loss)
The components of other non-operating income and loss are as follows:(Millions of yen)

Foreign exchange loss
Gain and loss from financial instruments at
FVTPL*
Impairment loss on assets classified as held
for sale
Other
Total

Three-month period ended
June 30, 2016
(42,919)

Three-month period ended
June 30, 2017
(1,796)(30,283)

24,613(42,540)-

3,764(111,978)(4,638)18,179Note:* Gain and loss arising from financial instruments at FVTPL consist mainly of changes in fair value of preferred stock
investment including embedded derivatives designated as financial assets at FVTPL.

48

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 201715. Significant subsequent events(1) Issuance of USD-denominated Undated Hybrid Notes (with an Optional Interest Deferral)
On July 19, 2017, the Company issued USD-denominated Undated Subordinated NC6 Resettable Notes andUSD-denominated Undated Subordinated NC10 Resettable Notes (collectively, the “Hybrid Notes”).
The Hybrid Notes are classified as equity instruments in accordance with International Financial Reporting Standards
because the Company has the option to defer interest payments, the notes have no maturity date, and their payment
priority in the event of bankruptcy is subordinated to senior indebtedness, and other factors. They will be recorded as“equity” in the Company’s consolidated financial statements.
The details of the Hybrid Notes are as follows:1.

Total amount of issue

2.

Issue price

Undated Subordinated NC6 Resettable Notes

Undated Subordinated NC10 Resettable Notes

USD 2.75 billion(JPY 307.9 billion)

USD 1.75 billion(JPY 196.0 billion)

100% of the principal amount

100% of the principal amount

6.000% per annum

6.875% per annum*

3.

Initial interest rate

4.

Maturity date

None (Perpetual)

None (Perpetual)
The Company may, at its discretion, redeem theNC10 Notes on the first call date on July 19,
2027 or any interest payment date thereafter.

5.

Optional redemption

The Company may, at its discretion, redeem
the NC6 Notes on the first call date on July19, 2023 or any interest payment datethereafter.

6.

Interest payment

Payable semi-annually in arrear on January 19 and July 19 each year

7.

Expected closing dateJuly 19, 20178.

Collateral

None

9.

Guarantee

None

10.

Covenants

None

11.

Subordination

In the event of bankruptcy, etc., the Hybrid Notes shall be subordinated to all the Company’s
senior indebtedness (including domestic subordinated bonds issued in 2014 and 2015 by theCompany) and shall rank substantially pari passu with the domestic hybrid bonds issued in 2016
by the Company and its senior preference shares (if issued in the future) and senior to theCompany’s common stock.

12.

Listing

Singapore Exchange Securities Trading Limited

13.

Use of proceeds

The Company intends to use the proceeds of issuance of the Hybrid Notes for general corporate
purposes.

Note:* There is a step-up interest provision on the Undated Subordinated NC6 Resettable Note of 25bps on July 19, 2023 andadditional 75bps on July 19, 2038, and on the Undated Subordinated NC10 Resettable Note of 25bps on July 19, 2027 andadditional 75bps on July 19, 2042.

49

SoftBank Group Corp. Consolidated Financial Report
For the three-month period ended June 30, 2017(2) Consolidation of The Japan Net Bank, Limited
Yahoo Japan Corporation, at the Board of Directors’ meeting held by August 1, 2017, resolved to modify theshareholders agreement with Sumitomo Mitsui Banking Corporation on The Japan Net Bank, Limited (“The JapanNet Bank”) and entered into a modified agreement with Sumitomo Mitsui Banking Corporation. Along with suchmodification, Yahoo Japan Corporation plans to consolidate The Japan Net Bank by sending the majority of The
Japan Net Bank’s directors in the months ahead subject to the approval by the authorities concerned.
a. Overview of consolidation
In the Yahoo Japan segment, since its commencement of new strategies in the Commerce Business in October
2013, transaction volume has rapidly increased by means of various measures such as waiving store tenant fees,
point reward measures, and start of the Credit Card business. It is believed to strengthen its financial andpayment business further is necessary in order to revitalize the Commerce Business from here on. The ecosystemof its services in the Yahoo Japan segment will be reinforced through the consolidation of The Japan Net Bank.
In addition, Yahoo Japan Corporation will lead the management of The Japan Net Bank through the consolidation
and utilize the customer base and multi big data that Yahoo Group has fostered thus far to provide highvalue-added financial services for The Japan Net Bank customers.
The voting rights ratio in The Japan Net Bank held by the Company remains the same as before at 41.16% and
the Company does not hold a majority. However, the Company will make The Japan Net Bank its consolidated
subsidiary by sending the majority of The Japan Net Bank’s directors through the resolution in the Extraordinary
Meeting of the Shareholders’ of The Japan Net Bank planned to be held in October 2017.
b. Summary of acquiree
Name

The Japan Net Bank, Limited

Nature of businessBanking businessc. Acquisition date
The entity will be a consolidated subsidiary through the resolution in Extraordinary Meeting of the Shareholders’of The Japan Net Bank planned to be held in October 2017. The date of the Meeting has not yet been determinedat present.
d. Financial impact
The financial impact from the consolidation of The Japan Net Bank has not yet been determined at present.

50